BY NELSON PAVLOSKY

In print | September 29, 2005

Chain stores, restaurant chains, coffee shop chains — these are the soulless entities that Swatties love to hate. Chains like Starbucks crush local coffee shops out of existence, just as ClearChannel eliminated local radio, and Barnes & Noble is exterminating independent bookstores. Yet despite the might of corporate chains, independent coffee houses survive, as evidenced by the Starbucks Delocator at Delocator.net, which provides a list of “non-corporate cafes” in your zip code alongside the list of Starbucks locations. When I arrive in a new town, it is heartening to see a list of local shops that haven’t gone under. Although Starbucks may have a practical monopoly on coffee shops in many areas, it doesn’t have a legal monopoly enforced by the government; there is still hope.

But what if it did? What if Starbucks legally owned the idea of selling coffee in a coffee shop, and could sue its competitors out of existence, in addition to its ordinary competition-annihilating practices? This may be the future of business in our country, if people continue to be granted patents on business methods. In 1998, a federal circuit court decided in the State Street Bank case that “mathematical algorithms” and “methods of doing business” are patentable, contrary to long-standing precedent. Since this case, there has been a flood of business method and software patents, which often make ridiculously broad claims over basic concepts. One of the more famous examples is Amazon.com’s “one-click” patent: Amazon claims to have patented the practice of saving a customer’s information so that they only have to click once to buy something in an online store. Excessive patents do not merely threaten e-commerce, however, but also bricks-and-mortar stores everywhere.

Take for example Cereality, a new chain of “cereal bars” which opened a branch on UPenn’s campus last year. When you go to a Cereality cafe, you can ask the baristas to mix two cereals and a topping together for you, and they will give it to you in a Chinese food take-out container. Normally I would cheer on such a whimsical business model, but unfortunately for potential rivals, Cereality has applied for a patent on several of their business methods, including “displaying and mixing competitively branded food products” and adding “a third portion of liquid.” Cereality’s Web site quotes USA Today as saying, “The latest fast-food concept is so absurdly simple […] how can it fail?” This simplicity is precisely what makes Cereality’s “patent pending” cafes so disturbing. Cereality has already issued legal threats to competitors Bowls, a cereal joint in Gainesville, Fla., and the Cereal Bowl in Miami, leaving no doubt that if their patent is granted they will use it to shut down independent cereal cafes.

I question whether patents are necessary to encourage people to come up with new ways of doing business; it seems to me that such innovation is just part of being a successful entrepreneur. Does Cereality need a government-granted monopoly on cereal bars in order to turn a profit? I doubt it. Their founders seem to have the same killer business instincts that propelled chains like McDonalds to national prominence, and according to the Independent Florida Alligator, Cereality has already forged partnerships with PepsiCo/Quaker Oats and the “Got Milk” campaign. If another cereal magnate arises to challenge Cereality, do they deserve to be sued out of existence? Should mom-and-pop cereal bars have to license Cereality’s patents in order to do business? If Cereality won’t put a cafe in our town, should we be barred from starting one ourselves? I say no. Let the customers decide where they want to buy and eat their cereal, and allow for some diversity in the marketplace.

Nelson is a senior. You can reach him at npalvos1@swarthmore.edu.

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