How to Invent and Protect Your Invention: A Guide to Patents for Scientists and Engineers

8.3 BUSINESS METHOD PATENTS

In the past few years, the PTO started to issue patents covering computer-implemented business methods and Internet operations. Traditionally, the PTO did not grant patents on business methods because they were regarded as abstract ideas, which are nonpatentable. However, in 1998 the Court of Appeals for the Federal Circuit (CAFC), the main patent court just below the Supreme Court, ruled that the intention of patent laws was to protect any method that yields a “useful, concrete, and tangible” result. [The spirit of this decision is perfectly in line with the Supreme Court's decision in the epochal Chakrabarty case (see Section .1.1). In Chakrabarty, the use of the tiny word any from Section 101 of the Patent Law led to the patenting of a live microorganism and spawned the biotechnology industry.] In response to the ruling of the CAFC, the PTO started issuing patents to large corporations (e.g., IBM, GE, Hewlett-Packard) on computer-implemented business methods. This ruling also spawned significant new companies (e.g., eBay, Amazon) whose existence largely depends on patentable business practices.

Business method patents usually consist of a method or apparatus for “performing data processing” used in connection with or operating an aspect of an economic enterprise. A business method may also be defined as “a method of operating any aspect of an economic enterprise.” In the United States, business method patents have been issued primarily for new types ...