Can You Patent a Process?

Processes are patentable under the U.S. Patent Act if they meet certain criteria. A process patent is a form of utility patent that covers methods of changing the functionality or characteristics of a material during a particular use. The patent-holder is granted exclusive protections and rights to that process for 20 years.

When one patents a business method or, in some cases, a computer program, this is a form of patenting a process. It's now possible to patent subscription-based services, targeted advertising networks, online auction sites, portal sites, email systems, and even discussion forums.

As our society has evolved, intellectual property (IP) issues have evolved along with it. What constitutes IP these days is so much more than the newest machine or physical invention. Today we have genetically modified seeds, new strands of DNA, computer software, chemical formulae, and more. As these issues become more complex, patent law has to evolve to address new concerns. For example, one can now patent business models and software through the US Patent and Trademark Office (USPTO).

Since being made available, software patents have experienced widespread popularity. In 1997, there were only 1,000 software patents filed. In 2007, that number skyrocketed to 11,000.

The Basics of Patents

At its most basic, the U.S. Patent Act says that you can be granted a patent if you create or discover one of the following:

  • A process
  • A machine
  • A composition of matter
  • A manufacturing technique
  • A useful and new improvement on any of the above

The patent gives you exclusive protections and rights to your invention for 20 years.

Which Business Methods Can Be Patented?

Not every business method or process is patentable. In fact, there are strict limitations and classes of business methods that can be patented under the USPTO. Of these, the most common is financial data processing (class 705). This class covers computer processes that involve business practices, finance, price determination, or management. Other classifications of eligible business model processes include gaming, education, and agriculture (classes 273, 434 and 47, respectively).

Generally speaking, the USPTO differentiates between a business model and a business method. That is, there is a legal line between your strategy or vision and your actual means of doing business. To be patentable, just like any invention, the art, method, or process must be useful, novel, and non-obvious. Disclosure has to be complete to the point that anyone with general knowledge of the industry can comprehend how it works.

These qualifications are outlined in Section 101 of the U.S. Patent Act. They carry three exceptions. One cannot patent laws of nature, abstract ideas or physical phenomena. Likewise, printed matter cannot be patented; it is instead protected by copyright laws. In addition, the Supreme Court has generally taken the stance that patent law interpretations will be based on common and ordinary language usage.

Early Guidelines for Patentability

The first case that clearly established that software governing business processes could be patented was 1997's State Street Bank v. Signature Financial. Since that time, there have been high-profile cases involving such notable companies as Amazon and Priceline. Since patents grant sole rights to innovations for a period of 20 years from the date of filing, businesses look to patent just about anything they can.

In 2007, the USPTO published Interim Guidelines for Examination of Patent Applications for Patent Subject Matter Eligibility. These guidelines were written in response to a skyrocketing number of business methods patent applications during the prior decade. Through this publication, the USPTO set the criteria for a process to be patentable. Specifically, it must either be tied to a specific machine or work to transform physical matter in some way. Examples include a method to vulcanize rubber or smelt ore.

In 2008, the U.S. Court of Appeals for the Federal Circuit ruled that this test formed the sole benchmark for determining patentability of a process or business method. This decision regarded Bernard Bilski's patent application for his risk management strategy against energy market price changes.

Bilski v. Kappos

This 2008 ruling created a great deal of tension in the software industry. Suddenly many of the patents issued up to that point could now be deemed ineligible, even those that were accomplished by a computer. Then came the 2010 Supreme Court ruling on Bilski v. Kappos (originally Bilski v. Doll), which overturned the prior decision, holding that the Bilski test was one useful metric for determining whether something could be patented — but not the only one.

Bilski had filed to challenge the refusal of his patent application. He sought to patent both the idea of hedging risk and the method by which it could apply to energy markets. However, since abstract ideas can't be patentable, the courts ruled that his concept wasn't eligible.

The courts felt they needed to set a high bar in such situations to avoid giving people monopolies over things that could damage innovation and competition. They also felt, however, that there wasn't an ordinary and common use interpretation of the wording of patent law that would exclude methods.

In the end, though Bilski wasn't able to patent his idea, his case did ensure that other metrics can now be used when determining whether a process is eligible to be patented.

Lingering Problems

Other than a process requiring a useful, concrete, and tangible result to be eligible for patent, no further guidance was offered. The courts have yet to develop new criteria to determine what processes can be patented. A few recent cases, including Prometheus v. Mayo and Research Corp v. Microsoft, have given some insight into the court's stance moving forward, but there has yet to be a final word.

Problems have arisen specifically in the terms "useful" and "result" from the decision delivered all the way back in the State Street case. Since utility is already included in patent law, does "useful" refer to something different, or is it just reaffirming the existing language? Likewise, does the requirement for a result then make the process itself meaningless in the face of what it accomplishes? If nothing else, these questions make it difficult to have a consistent benchmark.

Another issue with software patents is that unlike other fields, there aren't comprehensive sources of prior art for comparison. For example, Medline allows efficient searching of medical technology, and Chem Abstracts allows a search of chemistry innovations. Since every patent requires disclosing prior art, a one-stop database to search software methods would make it far easier to pursue patents.

Issues of Disclosure

One problem inherent to the patent system is that full disclosure of the invention has to be included in the application, which is then published. The reason for this is that when patents run out, they become, in a sense, public property. Then anyone is allowed to access, use, and improve upon the innovation.

This means, of course, that the disclosure has to be complete and clear. Anyone with a general knowledge of the subject matter should be able to reproduce the work. It's also where the "concrete and tangible" aspect of the State Street benchmark comes into play. This aspect is more important than the "useful" and "result" phrasing.

As the courts have clarified, a software process that simply transfers a well-known business practice to the internet or computers is not patentable. Software patents have to be rooted in computer technology and must overcome an issue that is both relevant and likewise rooted in the computer world. In order to establish this, full and clear disclosure at the technological level is essential from the first application you file.

Complications to Process a Patent for Computer Programs

Computer programs are tricky. The program itself can be copyrighted, while the techniques that it embodies can be patented by establishing that the method is intrinsically linked to the computer technology. In order to firmly establish that your business method is linked to computer technology and implementation, you must establish a number things in your application:

  1. Clearly identify the real-world value of the process. Generally explain how it works and what it accomplishes. This can be done using flow charts and covered from several viewpoints.
  2. Clearly identify the computer's role in accomplishing the process and how it functions to implement the process. This aspect should be as technical as possible. Include minimum and recommended configurations.
  3. Provide an overview of the method's implementation in terms of system usage. Describe the relationship between the computer and the controller. Explain how all elements work together to facilitate the process.
  4. Provide a description of the best means to carry out the innovation, through disclosing how the software functions. Flow charts are highly recommended in this regard.
  5. If needed, disclose some of the code used. This is especially helpful when seeking a provisional application. However, you don't need to disclose the exact code if the function is clear from specifications and a skilled programmer could easily reproduce said functions.

Patents vs. Trade Secrets

Due to the sheer number of people seeking patent protection over their business practices, obtaining such a patent can be difficult. The USPTO and the courts are very strict with these sorts of patents out of a fear of overstepping their bounds. They also want to avoid damaging the spirit of innovation that patents are designed to protect.

Because of this, many companies choose to use trade secrets to protect their processes. Trade secrets allow you to protect your business practice by holding those who acquire your secrets liable for damages. However, you must demonstrate that they may have gained those secrets illicitly or improperly, whether through illegal means or via a breach of duty. Reverse engineering is not improper under the law.

Of course, the secret needs to qualify as a valid trade secret under the following criteria:

  • It has not been known to any outside businesses.
  • Its existence is known only to limited employees.
  • You have taken strong efforts to protect the secret and the steps you took to develop it.

The problem with trade secrets is that once it has been revealed, it is no longer a secret. You can recover damages when a trade secret is violated, but you won't be able to use that form of protection anymore.

Patenting Medical Procedures

Medical procedures can also be patented. There's an urban myth that the Heimlich maneuver (also called the upper abdominal thrust) is patented. While this is not true, Heimlich did patent a number of devices, including tracheal tubing and a respiratory exerciser. In addition, there are over 100 patents for medical processes issued every month. In 2007, for example, a veterinarian successfully sued someone for infringing their patented cat declawing process.

The one catch is that federal law prohibits suing a doctor for infringing on medical process patents, such as when a surgeon needs to use one in the operating room. However, you can still patent a process if it's related to medical procedures.

Mental Processes

Many cases have been focused on whether mental processes are statutory subject matter. While it may seem like mental processes are included under Section 101, it's actually not that simple. For instance, the Supreme Court case Cochrane v. Deener ruled that only actions that transform the subject are processes. However, this leaves the question of whether this definition excludes other types of processes that don't involve a physical transformation.

In AT&T v. Excel Communications, it was decided that other processes could be included. The Court decided that physical transformation wasn't a firm requirement. It was only an example of how someone could apply an algorithm to a useful application. The Supreme Court's use of "e.g." in an earlier decision was meant to indicate physical transformation as an example, not a requirement.

The best way to view mental processes is in terms of judgement. If a process requires mental steps that include making a subjective judgment by whoever is performing the process, then it is not eligible for patent. The reason for this is that it doesn't fulfill the disclosure requirement in Section 112. Patents must include full instructions for how to perform a process. Since you can't teach a judgment call, any process that includes such a step cannot be patented.

The Prior Use Defense

Thanks to the America Invents Act of 2011, broader protections are available to those accused of infringing a patent, based on prior use of patented or protected inventions. However, to use this defense, the company must prove that it had been using the invention continuously for at least since a full year before the patent was filed. It can be hard to produce documentation to this effect. This defense can't be extended to customers, acquirers, or vendors.

If the defendant can't prove prior use, the plaintiff can get damages and attorney's fees. In addition, such a defense can only be used if the patent was issued after September 15, 2011.

Finding Help to Patent a Process

Obtaining a process patent can be a very tricky prospect. It requires the right combination of experience and knowledge not only of patent law but of the application process. If you're looking for help, advice, and guidance on your patent application, post your legal need on UpCounsel's marketplace. Our member attorneys are drawn from only the top rated lawyers in their field. They've attended institutes like Harvard and Yale and have represented Fortune 500 companies. Log on and see what they can do to assist your efforts to patent a process today.