TEXAS PROTECTION FOR YOUR BUSINESS METHOD

The new area in patent law that needs some attention is the business method patent. Currently, there is no definition highlighting what a business method patent is, but it’s known that it relates to a method of doing business. This specific type of patent can be obtained for any kind of business method but typically relates to automated businesses and e-commerce methods. Unlike patents for tangible inventions, business method patents focus on methods or processes used in commerce. Here are some examples of business method patents:

1. Amazon's One-Click Purchasing: Amazon's patented "one-click" purchasing method allows users to make purchases with a single click, eliminating the need to go through a multi-step checkout process.
2. Google's PageRank Algorithm: Google's patented PageRank algorithm is a method for determining the relevance of web pages in search engine results based on their incoming links and other factors.
3. PayPal's Online Payment System: PayPal holds several patents related to its online payment system, including methods for transferring funds between users and facilitating secure online transactions.
4. Netflix's Recommendation Algorithm: Netflix has patented algorithms for recommending movies and TV shows to users based on their viewing history, ratings, and preferences.

Class 705 - What Does it Mean?

Class 705 is where most business matters fall under when they must be placed under a generic term. The Federal Circuit has not quite defined the specific subject matter of business methods, but the Patent Office uses class 705 to classify patents that claim an “apparatus for or utilized in the practice, administration, or management of an enterprise, or in the processing of financial data.”

Do You Think Your Business Method is Patentable?

If your business method is original, and no obvious, it has the potential to be protected under the patent laws. The patent law has established standard requirements that must be met for your business method to have patentability. Once registered, you would hold all of the same rights as any other patent holder. Business methods that can meet the requirements for patents are those that source a large amount of revenue to companies. For instance, Amazon’s “1- Click Shopping” idea was patented. Their system allows shoppers to place an order by the simple click of a button. The website has organized where a customer’s information is store and then used to facilitate the transaction.

In patent law, business methods are an evolving topic, as one could not receive a patent in the past for these methods but now can. Historically, it has been proven that the “business method” exception has prevented companies from patenting their methods and has been cited by cases from more than a century ago. In Gottschalk v. Benson and Parker v. Flook, the Supreme Court has ruled that even if computer software is a major component to many business methods, it can not be patented due to being too similar to mathematics and the laws of nature. In 1981, patent prosecution extended to software finally. The Supreme Court switched directions after a ruling in Diamond v. Diehr precluding that just because a business method utilized computer software does not prevent them from being patentable. This in return, broadened the scope for protection available to software related inventions.

Later in 1998, the Federal Courts officially decided that after the ruling in State Street Bank v Signature Financial, that business methods were patentable. This decision was formed from a patent on a “hub and spoke” which automates a data processing system based off calculations to transfer assets to a pool of mutual funds. With the courts finding the business method exception to be poorly thought out, they concluded that it would be inappropriate to prevent an invention from being patentable simply for using a computer in connection with the invention. Leading to the final decision in 2005, the Board of Patent Appeals and Interferences ruled in Ex Parte Lundgren that a business method can be patented regardless of whether the method is used in conjunction with a computer.