Hot on the Trail: Business Methods and Intellectual Property

THIS POSTING TO BE UPDATED IN LIGHT OF RECENT PATENT OFFICE AND LOWER COURT RULINGS REGARDING BUSINESS METHODS PATENT ELIGIBILITY

It breaks your heart watching friends forsake opportunities assuming that their brainchildren cannot be patented.  This happens more often than you might think even in tech-savvy Austin.  As one Internet-based entrepreneur said, “All we do is simply find information on the Web, put it together, and make a profit.  If that’s all it takes, everyone ought to be getting patents.”  Another Internet-based entrepreneur stated, “It’s hard to see how moving money around the Internet can be patentable.” 

The news has not yet apparently reached everyone that one year ago (in Bilski v. Kappos) the Supreme Court extended patent eligibility to business methods.

In response, many financial service companies charged to the Patent Office.  They actually began stampeding in 1998 following the State Street Bank decision.  In State Street, the Federal Circuit Court of Appeals decided that a hub-and-spoke network used for managing mutual funds was patentable.  As a result, Visa now has at least 170 published patent applications.  Bank of America has 381.  eBay has 399.  Clearly, many financial players think that business methods are patentable and worth patenting.

So it’s ironic that an entrepreneur can be hot on their business and technology development trails while letting their IP trail go cold.  Admittedly, simply finding information on the Web or just moving money around electronically alone probably won’t suffice for a patent.  But that misstates the patentability tests.  Briefly, patent eligible business methods which are also useful, new, and non-obvious can receive patent protection.  These questions usually distill down to how closely the method (simple or not) resembles pre-existing methods.  Moreover, if an entrepreneur invested their blood, sweat, and tears to build a system up from an idea, it seems that they might have created something more than simply surfing the Web or moving money around.  And, that “something” just might be patentable. 

For more information about patents and the patent process please see www.villhard patents.com.