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Patentability of Business Method Patents
from: Michael CohenMore frequently, many of my clients have been approaching me
regarding the topic of patenting their unique business model,
i.e. methods of doing business. So can a method of doing
business be patentable? Yes. In 1998, the United States Court of
Appeals for the Federal Circuit ruled that the patent laws did
extend to protect any method so long as it produced a "useful,
concrete and tangible result." The case spawned a slew of
"business method patents" and "Internet patents." The most cited
example of business method patents has been Amazon's "One-Click"
system, which allows a prior customer to place a new order
without having to reenter the customer's address and credit card
data when placing an order online (U.S. Pat. No. 5,960,411).
Some other examples of business method patents are: an internet
auction system in which a user names the highest prices they are
willing to pay and the first seller gets the purchase (U.S. Pat.
No. 5,794,207); a method that gives a monetary incentive to
citizens to view political messages on the Internet (U.S. Pat.
No. 5,855,008).
Business method patents have raised quite a controversy over the
years, primarily because many felt that the United States Patent
and Trademark Office ("USPTO") had issued many undeserving
business method patents. What may have been a response to the
criticism, in 2001 the USTPO required that business method
inventions must apply, involve, use or advance the
"technological arts." The requirement essentially meant that it
could be met by requiring that the invention be carried out by a
computer.
However, in October 2005, the USPTO held that there is no
requirement of the "technological arts." The USPTO reached that
conclusion in Ex parte Lundgren, Appeal No. 2003-2088 (BPAI
2005) which focused on a patent application that claimed a
"method of compensating a manager."
So what does all this mean to prospective inventors? The
Lundgren case has essentially expanded the scope of business
methods patents by giving inventors the opportunity to pursue
patent protection for inventions that do not have a
technological aspect. Therefore, business method patent
applications such as the one in Lundgren, (which claimed a
method of steps for determining the salary of an executive so as
to foster competition among other executives) which were
initially rejected by the USPTO, are now getting allowed and
ultimately issued. Now before everyone starts getting trigger
happy for business method patents, the USPTO did provide
guidelines that should be met. The patent should either
transform an article or physical object to a different state or
thing, or, the claim method should produce a useful, concrete
and tangible result. For now, it appears that the Lundgren case
has rekindled some of the optimism of business method patents
that has been extinguished for quite some time.
About the author:
© 2006 Michael N. Cohen, Esq. This article is not intended as a
substitute for legal advice. The specific facts that apply to
your matter may make the outcome different than would be
anticipated by you. You should consult with an attorney familiar
with the issues and the laws.
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