For many years, the
USPTO took the position that "methods of doing business" were not
patentable. However, court’s
1998 decision in State Street Bank & Trust Co. v. Signature Financial Group
opened the doors for patenting novel methods of doing business. The court rejected the theory that a method of
doing business was excluded subject matter. The
USPTO continued to require, however, that business method inventions must
apply, involve, use or advance the "technological arts" in order to
be patentable.
So when is a business method non-obvious? In re Bilski is a
case dealing with the patentability of business method. Bernard Bilski and Rand
Warsaw applied for a patent on methods for hedging risks for commodities
trading via a fixed bill system.
The patent is a method to provide a fixed bill energy
contract to consumers. So consumers pay a fixed price for their future energy
consumption in advance of winter based on their past energy usage. This way, if
any given winter is usually freezing and require more energy for heating, consumers
are protected by the fixed bill. However, if any given winter is usually warm
and therefore require less energy, consumers would still have to pay for the
fixed bill even though in reality they consume less compared to what they paid
for.
The examiner rejected
the patent on the grounds that "the invention is not implemented on a
specific apparatus and merely manipulates an abstract idea and solves a purely
mathematical problem without any limitation to a practical application,
therefore, the invention is not directed to the technological arts."
I did a similar blogpost that looked at the validity of patents on computerized business methods, or software in a broader sense. The federal courts ruled that the patents were too abstract to be patentable. However, I personally don't think it is a matter of abstraction that make it difficult for software to be patentable, it is more about the nature of software that makes it tricky. Most programmers who are considered ordinary people with skills in the arts can probably construct something very similar when given the same problem to solve, therefore anything that's programmed for a purpose can be considered obvious. Just my take on this subject
ReplyDeleteI've never really thought that a business process could be argued as patentable! This is clearly very interesting because business processes are the livelihood of a lot of businesses. A recent example is lyft and uber. Besides the basic app, their selling point is the business process of car service and transactions. One can argue that it should be patentable. Yet, I will go back to why there are patents in the first place and argue that they should not be patentable as it would not encourage any advancement in inventive progress. Therefore it is not necessary, companies need to rely on just being better at the business process to survive!
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