Ask ten different patent practitioners about how they write their background sections and you may get ten different answers. After taking care of the bare minimum requirements, the differences tend to come down to personal style. This is an explanation of my personal style.
The background section of the application merely has to show that there is a need in the art for the invention. I like to use the background section to give a very broad overview of the art and set the stage for the invention to follow. In the broadest strokes possible, I show the need for the invention.
Some people have suggested eliminating the background section altogether. The thinking is that the background can be a trap for overstating the prior art. Often, it is very difficult for the inventor to define what an ordinary person skilled in the art knows. A very talented and knowledgeable inventor may think that something is well known because he understands it well. In truth, the inventor may be so far ahead of the field that he overstates the prior art.
The result is that the background as explained by the inventor may assume that the person of ordinary skill knows and understands much more than they do. When this writing style is carried into the specification, the writer often overlooks details that an ordinary person skilled in the art might not know. Also, sometimes the invention is actually in those details, and when we forget to include them, we can run into problems while arguing with the patent examiner.
I try to probe deeply into the current state of the art with the inventor. When the inventor describes the current state of the art, I ask how long the technology has been used and by whom. If it is used in house and seems like a proprietary technique that is not generally shared outside the company, I ask what other companies do in the same situation and what personal knowledge, if any, does the inventor have.
In several cases, I have found that there may be a proprietary technique that has never been shared outside the company but has been around for a long time. The internally developed technology may be much further along than the commonly appreciated state of the art, even though the inventor assumes that it is commonplace.
Of course, an inventor may try to make the invention out to be too broad, by grossly understating the prior art. A similar line of questioning, focusing on the concrete examples of the prior art and how those examples are known will be needed to give a more balanced view of the background.
Knowing the true background and prior art of the invention is crucial for writing claims of the appropriate breadth and including the proper level of detail in the detailed description. Overstating the background may lead to unnecessarily narrow claims and, at worst case, a description that does not enable one of ordinary skill to practice the invention. Understating the background leads to overly broad claims and a lengthy description that may unnecessarily disclose trade secrets that cannot be protected by claims.
Having worked out some reasonable perspective of the applicable prior art of the invention, I try to summarize all of it in three or four paragraphs in the background section of the patent. I state the general area of the technology and a couple of the shortcomings that are addressed by the invention. If I am unsure about whether a statement might overstate the prior art, I tend to leave it out.