Business method patent
Business method patents are a class of patents and one of many legal aspects of business. There is a sustained debate as to what extent such patents should be granted. They may be constituted very important assets of some Internet-related companies.
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Background
In general, any invention is eligible for patent protection if passes the tests of patentable subject matter, novelty, inventive step (or non-obviousness) and industrial application (or utility). (See also: patentability)
A business method may be defined as "a method of operating any aspect of an economic enterprise" [1].
Legal situation
The legal situation as to whether new business methods are allowed as patentable subject matter varies from legal jurisdiction to jurisdiction.
Canada
Pure business methods cannot be patented in Canada because of its pre-constitutional (in 1982) subordination to British Common Law. Article 1(2)(c) of the Patent Law of 1977 “It is hereby declared that the following (among other things) are not inventions for the purposes of this Act, that is to say, anything which consists of …. a scheme, rule or method for performing a mental act, playing a game or doing business, or a program for a computer;”
European Patent Convention
Under the European Patent Convention, "Schemes, rules and methods for (...) doing business" are not regarded as being inventions and are not patentable, "to the extent that a European patent application or European patent relates to such subject-matter or activities as such". (Article 52(2)(c) and (3)).
But if a new method solves a technical, rather than a purely administrative, problem then it may indeed be patentable. (For example, an improved design of letter-franking machine).
Japan
Patents are not issued solely for business methods. The business method must contain a technical aspect that is both tangible and real.
However this requirement may be satisfied simply by specifying that the method is implemented using a computer.
United States
In State Street Bank v. Signature Financial Group, Inc., (47 USPQ 2d 1596 (CAFC 1998)), the court upheld the fact that a business process patent may be granted on the same basis as any other invention. The court further confirmed this principle with AT&T Corporation v. Excel Communications, Inc., (50 USPQ 2d 1447 (Fed. Cir. 1999)). These two cases eliminated the business process exception from the US patent common law.
As of 2001, the USPTO required that business method inventions must apply, involve, use or advance the "technological arts". This was based on an unpublished decision of the US board of appeals and interferences, Ex Parte Bowman, 61 USPQ2d 1665, 1671 (Bd Pat. App. & Inter. 2001). This requirement could be met by merely requiring that the invention be carried out on a computer.
But in October 2005 a majority decision of the board in Ex Parte Lundgren, Appeal No. 2003-2088 (BPAI 2005), ruled that the "technological arts" requirement could not be sustained [2], as no such requirement existed in law.
In light of Ex Parte Lundgren, the USPTO has issued interim guidelines for patent examiners to determine if a given claimed invention meets the statutory requirements of being a process, manufacture, composition of matter or machine (35 USC 101) [3]. These guidelines assert that a process, incuding a process for doing business, must produce a concrete, useful and tangible result in order to be patentable. It does not matter if the process is within the traditional technological arts or not. A price for a financial product, for example, is considered to be a concrete useful and tangible result (see State Street Bank decision).
The USPTO has reasserted its position that literary works, compositions of music, compilations of data, legal documents (such as insurance policies), and forms of energy (such as data packets trasmitted over the Internet), are not considered "manufactures" and hence, by themselves, are not patentable. Nonetheless, the USPTO has requested comments from the public on this postion.
Classification
In the 8th edition of the International Patent Classification (IPC), which will enter into force on January 1, 2006, a special subclass has been created for business methods: "G06Q". In the previous editions, business methods were classified in "G06F17/60". This is purely a classification matter and will not change the patent laws however.
See also
- Software patent
- Software patent debate
- Patentability
- State Street Bank decision
- Pension Benefits System Partnership, decision T 931/95 of August 9, 2000 of the Boards of Appeal of the European Patent Office (EPO)