1. Importance of Business Method Patents
2. The US Patent Process

Importance of Business Method Patents

Process patents have been especially important as part of the Internet economy. Throughout the 1990s and 2000s, numerous hardware, software, and Internet inventions and processes have been patented and supported a variety of new products and developments for the overall economy.

Business method patents are a subset of process patents. They remain in force for roughly 17 years and grant the owner exclusive economic use and licensing rights for the process.

This patent can remain essential for an entire business model, especially in the Internet age.

For example, early in the 2000s, Netflix received a patent for computer-based content streaming. Blockbuster, a major video renting company at the time, was sued by Netflix in 2006 for infringing on this patent which resulted in a settlement.

Business method patents are subdivided into various classes depending on industry, such as processes for financial data. For processes relating to financial data, patents are only given for certain ones related to computer processing regarding topics such as price analysis or management.

There are many other business models that have industry-specific patent guidelines. These include sectors such as agriculture, video games, and the education industry.

Business method patents have been rapidly growing in recent years.

Since 2007, many of these patents have been governed by the USPTO's "Interim Guidelines." These guidelines explain the general criteria for a business method being patentable, such as it modifying actual physical objects or being inherently connected to a particular machine. The USPTO's test was known as the "machine versus transformation" test and essentially meant that patents for business processes had to pass one of those tests.

However, in 2010, the U.S. Court of Appeals' Federal Circuit determined that the USPTO's "machine versus transformation" test could not be the only criteria for determining whether patents could be granted. Rather, it was determined to be an important factor but not the only binary test.

Therefore it was determined that for business processes that are related to computer mechanisms, such as hardware or software, it needed to meet certain criteria:

  • The process had to clearly be shown to have a real economic and business benefit.
  • The process actually does the useful business process.
  • The mechanism used to create the process is properly described, such as software.
  • The actual results of the business process that are manifested in the computer.

The US Patent Process

Process patents are a sub-type of utility patents. Process patents are meant to grant exclusive rights to the owner for a particular business or mechanical process.

A patent's story doesn't just begin when it is formally granted or filed for. Rather, patents really begin when an idea becomes unique and definitive enough to materialize into an invention that is patentable. This comes from building on and analyzing other public ideas to then form a new push forward in knowledge and innovation.

Before filing for a patent, you should conduct a patent search that helps in determining if the idea has already been created before or is new and patentable. If the patent search shows you that there are likely not other patents similar to the invention already, then it is time to file the initial patent application.

This initial application is called a provisional application. They secure your patent's filing date and are not usually rejected by the USPTO. The provisional application should be nonetheless done carefully to maximize its benefit. The provisional application ought to have a relatively wholesome description of the invention.

In order to actually begin the process of getting a patent, you will need to file a "non-provisional" application. The non-provisional application will begin the formal process of the USPTO's examination process.

The USPTO will do an initial review of the non-provisional application for completeness. Since 2013, the requirements for a sufficient initial application that secures your filing date no longer requires pictures and specific patent classifications.

Despite it not being required, drawings with your application can be beneficial. If the application is considered incomplete by the USPTO, they will send a request for additional information and other materials.

If you need help with filing your patent, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.