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Patent - Business Method Patents - Part II
from: Michael RussellIn this second article on business method patents we're going to
continue our discussion on what happens when two companies are
battling it out for the same patent.
There are two ways that an Internet patent can be used. The
first way is to use it offensively against a major competitor to
help eat into their market share. The second way is to use it
defensively against a major competitor who is threatening to sue
based on one of their patents. Case studies show that most
companies are less likely to go to court when the opposing
company can show that it has a patent. Usually these companies
agree to a truce by cross licensing each other's patents.
Here is an example of this.
Company A and Company B both sell tickets online. This includes
services for exchanging unwanted tickets and also earning
rewards for being a frequent purchaser. Company A happens to
hold a patent on a method of exchanging tickets. Company B has a
patent on a way of exchanging rewards points. Even though each
company believes that the other company is infringing on their
patent neither one goes to court over it. Instead they decide to
cross license their patents so that each company can perform
both services, exchanging tickets and rewards points.
So how is it determined who gets a patent? What happens when
business A applies for a patent but business B can show that it
was using the method for a year prior to filing? Business B can
either stop the patent from going through right then and there
or it can wait and invalidate the patent at a later time. The
key to this whole procedure is that the use of business B's
method MUST have been public knowledge prior to business A
filing for a patent. If business B used the patent
confidentially then business A will be granted the patent even
though business B used the method first. However, in a 1999
amendment to this law, even though business A gets the patent,
business B can still use the method without any penalty.
An example of this is as follows. Business A has been using a
certain method of accounting for many years but never disclosed
it to the general public. Company B, over the course of time and
totally unaware that business A has already created this method,
develops the method themselves and files for a patent. When
company B finds out that company A has been using this
accounting method they file a lawsuit against company A. Company
B is granted their patent but company A is allowed to continue
its use of the method without any penalty of law.
Just as a note. If company A had been using the method publicly
before company B filed for the patent, the patent issued to
company B would have been invalidated or possibly would have
never been granted at all.
In the next article in this series we're going to discuss the
legal requirements for getting a business method patent.
About the author:
Michael Russell
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