Microsoft Seeks Pay-As-You-Go Computer Patent

By Gene Quinn
January 12, 2009

I don’t usually get all caught up into writing about pending patent applications that have published, because we all know that there are just crazy patent applications that are filed and published that will never see the light of day.  My personal all-time favorite is the walking through walls training system, which relates to a training system that enables a human being to acquire sufficient hyperspace energy in order to pull the body out of dimension so that the person can walk through solid objects such as wooden doors.  But the published application I write about today is one that is a bit scary for reasons that go far beyond the patent world.  In an application published on Christmas 2008, Microsoft is trying to patent  a metered pay-as-you-go computing experience, which would give Microsoft exclusive rights to giving away computers for free, or virtually for free, and then charging a user fee for every hour the computer is used.  What makes this application scary is not just the fact that Microsoft filed it, but that Microsoft has such a dominant position in the market that this could realistically become the future standard.

I don’t know about you, but I am not thrilled at all with the idea of having to pay $1 per hour for every hour of computer use.  Just for business use that easily reach a minimum of $50 per week, which would mean $2,600 per year before you factor in personal use.  Now I realize that computers do not have a very long useful life any more, but even with a laptop you ought to get 2 years, and I paid a lot less for my laptop than $5,200. So where did I come up with the $1 per hour figure?  It is right there in the patent application Microsoft filed.  The application says:

Charging for the various bundles may be by bundle and by duration. For example, the Office bundle may be $1.00 per hour, the Gaming bundle may be $1.25 per hour and the Browsing bundle may be $0.80 per hour. The usage charges may be abstracted to “units/hour” to make currency conversions simpler. Alternatively, a bundle may incur a one-time charge that is operable until changed or for a fixed usage period.

But that is just one of the things that ought to scare you about this application.  For example, when Microsoft talks about current business models it is lamented that:

For hardware and software manufacturers and resellers, this business model requires more or less a one chance at the consumer kind of mentality, where elasticity curves are based on the pressure to maximize profits on a one-time sale, one-shot-at-the-consumer mentality.

So apparently there is a fair amount of disdain for anything that would exhaust rights of the manufacturers at the time of sale.  In order to get around the patent exhaustion doctrine and the first sale doctrine, the type of business transaction needed would be a license, so say goodbye to the days of owning your own computer if Microsoft gets its way!  Who would want to put anything personal on a computer that you don’t own and instead is owned by the Borg themselves?

The reason we have to worry about this becoming the way of the future is because Microsoft rightly explains in the application that hardware manufacturers and software companies are going to be making more money from this type of pay-as-you-go rental of a computer.  On this point the patent application explains:

Because hardware yields and software duplication costs allow very low cost on the margin of increased performance, manufacturers and software developers may see an overall increase in revenues when their product is available to users on a per-access or subscription basis that reflects actual consumption. Certainly the overall technology experience is that when given an opportunity to have increased capability, users migrate to it. Thus, users get the performance they want and sellers get incremental sales from a greatly-expanded user base that would have never considered a one-time purchase of a fairly exotic-looking and high-price hardware or software component.

I cannot see how this invention is one that ought to be patentable, particularly given the recent decision of the United States Court of Appeals for the Federal Circuit in In re Bilski, which dealt a significant blow to the patentability of software and computer processes.  Those familiar with the Bilski decision will recall that the Federal Circuit has now required that in order to protect software and computer processes we revert to what was done before the State Street decision, which is to focus on the machine and treating software as if it is not the invention but to patent the machine itself that has unique functionality thanks to some black magic provided by the unpatentable product (i.e., software) whose name cannot be uttered.  In truth, many patent practitioners were never quite comfortable with State Street and have been doing this all along to cover the bases, but for those clients who wanted cheap software patents rather than paying $25,000+ for an application, Bilski pretty much killed your patents and applications, but I digress.

The first claim in this Microsoft patent application reads:

1. A method of operating a computer with scalable performance comprising: presenting a catalog of options related to scalable performance of the pay-per-use computer; presenting a price associated with each of the options; receiving a selection of an option from the catalog of options; calculating a total price of operation of the computer corresponding to the selection of the option; configuring the computer to operate in accordance with the selection of the option; and accumulating charges for operation of the computer according to the total price.

It would seem to me that Bilski will present significant hurdles for this claim, and all of the other claims in this patent as it has been published.  There is quite a lot of disclosure here, although I am not sure that any of it is really new or nonobvious, but that is a question for another day.  Assuming there is a patentable invention here it would be easy enough to use this disclosure to write claims that comply with Bilski.  But even if there is no patentable subject matter, the invention is not new and/or it is obvious, this application is still scary because even without a patent the industry could move in this direction.

At a time when our economy is in dire straights the thought of having to pay at least 500% more for a computer is enough to make my stomach turn.  I wish I had never seen this patent application in the first place.  At least then I could be blissfully ignorant.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and President & CEO ofIPWatchdog, Inc.. Gene founded IPWatchdog.com in 1999. Gene is also a principal lecturer in the PLI Patent Bar Review Course and Of Counsel to the law firm of Berenato & White, LLC. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

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Discuss this

There are currently 2 Comments comments.

  1. Computer Rental Company April 3, 2009 2:13 am

    Great article!

    I don’t think that Microsoft’s new step is justifiable. Pay as you go computer patent would be an overkill to computer users worldwide. Since Microsoft share the huge market in the computing environment, this would totally create a huge commotion when this is fully implemented.

  2. Christopher October 27, 2009 10:29 am

    All the more reason to switch to Linux.