Following the Federal Circuit's 1998 decision in State Street Bank & Trust Co. v. Signature Financial Group, Inc. holding that there was no per se exclusion from patentability for software-implemented business methods, the number of applications for and grants of such patents on increased dramatically. A large number of critics castigated them for two primary reasons: First, some contended that patents should simply not be allowed on such subject matter. Second, a much larger number of critics asserted that these patents were of singularly inferior quality because they had been issued without due consideration to the relevant prior art-documentary evidence of what others had done in the past.

In response to these criticisms, the United States Patent and Trademark Office (PTO) instituted an initiative in March 2000 that it called the Second Pair of Eyes Review, intended to make it more difficult to obtain business method patents. Among other features, the SPER program called for a second-level review upon allowance for patent applications in Main Class 705.

Each of the authors had independently conducted previous research leading us to conclude that software-implemented business method patents cited prior art that was not inferior in quantity or quality to other types of patents, and that the many prior art-related criticisms were not supported by empirical evidence. Although some business method patents undoubtedly were of low quality, one finds low-quality patents in all fields. Be that as it may, we believe it important to empirically assess the effects of the SPER initiative. The program requires substantial resources, and if it has not had significant positive effects, these wasted resources constitute a tax on innovation because the PTO is supported by user fees. Perhaps a more important reason for evaluating SPER's effects, however, is that the PTO declared it to be a success and announced plans to expand it to other fields. Whether or not the agency expands the program in the near term, it is important to know whether targeting patent reforms at particular technology fields is a model that should ever be replicated.