In the past year, the patenting of business methods has featured
prominently in the US headlines. For example, Amazon.com's US
patent infringement action against barnesandnoble.com has become a
high-profile case, in which Amazon has alleged infringement of its
"One-Click" patent.
Priceline's action against Microsoft's Expedia site, based on
the former's reverse auction patent for hotel price-matching, has
also evoked interest.
These actions follow on from the 1998 US State Street Bank case,
which specifically held that business methods could be patented
provided that they were novel, non-obvious and produced a "concrete
and tangible result".
It is expected that more than 1,000 business method patents will
be filed in the US in the year 2000.
But what about the UK and Europe? Under the UK Patents Act 1977
and equivalent European legislation, business methods as such are
excluded from patent law. Despite this legal hurdle, it is often
possible to obtain business method patent protection by claiming
the method together with some form of apparatus, which produces a
technical effect or makes a technical advance over the prior
art.
This is getting quite close to software patents and indeed the
European Patent Office has already accepted some patents, such as
EP 0 749 081 which covers a computer-based information distribution
system for delivering information and advertising to subscribers
during their computers' inactive periods.
Concepts
However, business methods by their very nature tend to be more
"idea-based" or conceptual than software. There may, for instance,
be a number of technical ways to implement a patented business
method and full protection might be difficult to obtain.
Careful claims drafting is required to ensure that all the
inventive technical aspects of implementing the business method are
identified and then claimed in the patent application.
Be alert to
- Always consider whether a business method which you have
devised is suitable to patent, preferably in all relevant
jurisdictions, but at least in the US for Internet-related business
methods. Remember, the Internet is global. Keep the other guy off
your patch.
- The business method must be novel and inventive and produce a
real tangible result. It must not have been disclosed to any
third-parties before the patent application is filed, save under
the protection of a confidentiality agreement, otherwise novelty
value can be lost.
- Bear in mind that obtaining a patent requires disclosure of the
business method to the public and some inventions are better kept
confidential and protected as a trade secret. However, many
business methods will become public knowledge in any event as and
when you implement them.
- It is becoming increasingly important to search for adverse
patents when implementing new business methods in order to avoid
your new business method infringing on other people's intellectual
property. Remember that your Internet site may be held to be
sufficiently interactive to enable a US court to claim jurisdiction
over you, even if you and your server are in the UK. If so, you
could be sued for infringement of your competitor's US business
method patent in a US court - a very expensive experience both in
terms of damages and legal costs.
- Remember software patents too.
For further information please contact George Godar, DLA partner
and national head of intellectual property, on 020-7796 6269