Australia: E-Commerce And Patent Protection

Last Updated: 11 November 2004
Article by Ross McFarlane

Presented at the 2004 Seoul International Conference on Intellectual Property & Commercialization
(LES Korea and AIPPI Korea)

In 1886, a telegraph operator was able to obtain a shipment of watches that was refused by a local jeweller. Using the telegraph, he sold all the watches to fellow operators and railroad employees. Within a few months, he had made enough money to leave his job and start his own store. The telegraph operator's name was Richard Sears and his company later became Sears, Roebuck & Company. By using the telegraph to facilitate the sale of the watches, Richard Sears was engaging in e-commerce.

E-commerce is short for electronic commerce, and is simply the idea of replacing traditional business activity with business activity that is executed using any information and communication technology (ICT). Whilst this activity is not new, it is the widespread adoption of the internet that has led to the importance of e-commerce to business today. The internet enables organisations to cut through the boundaries of time and geography by putting store owners and customers all over the world into virtual contact with each other to engage in commerce.

E-commerce joins the worlds of technology and business, and in so doing has blurred the distinction between the two. As use of the internet to electronically transact business has grown, legislators have struggled to determine to what extent protection is needed for this hybrid of commerce and technology.

  • The importance of e-commerce today
  • Why all the controversy?
  • Patents that protect e-commerce
  • Jurisdiction issues
  • Is e-commerce somehow 'different'?
  • E-commerce patent criticisms
  • The future

The Importance Of E-Commerce Today

In developed countries having mature ICT and a high number of internet users, e-commerce is a rapidly expanding sector of the economy responsible for generating increasingly significant amounts of revenue.

The value of revenue generated from e-commerce globally in 2003 has been estimated at between US$1,408 billion and US$3,878 billion.1Much of the hype about e-commerce has resulted from stories about business-to-customer (B2C) e-commerce, where companies sell selected products and services to an internet-literate audience willing to buy online. However, a much greater proportion of e-commerce is conducted from business-to-business (B2B). In B2B e-commerce, businesses interact either in an established supply chain or with new trading partners. The share of B2B tractions in the total world of e-commerce has been estimated at around 95 per cent, and the relative importance of B2B and B2C transactions is not expected to change in the medium term.

B2B e-commerce revenue

In 2001, B2B online sales in the United States amounted to US$995 billion, or 93.3 per cent of all e-commerce activity in that country. E-commerce activity is concentrated in a few industry groups within each sector. The leading adopters are manufacturers, where e-commerce accounted in 2001 for 18.3 per cent of the total value of all shipments, and merchant wholesalers, with 10 per cent of total sales. Independent estimates of the value of B2B trade in the European Union put it at between US$185 billion and US$200 billion at the end of 20022.

In the economies of the Asia-Pacific region, adoption of e-commerce is increasingly being perceived by enterprises as the natural future of business. Governments in the region tend to prioritise the improvement if infrastructure and upgrading of skills that are necessary to participate effectively in the digital economy. As a consequence, B2B e-commerce is growing rapidly, from about US$120 billion in 2002 to around US$200 billion in 2003 and US$300 billion (projected) in 20043

B2C e-commerce revenue

B2C e-commerce revenue is smaller than that of B2B e-commerce but still generates significant revenue. In the United States, official figures provided by the US Bureau of the Census indicate that online retail sales in 2002 amounted to US$43.5 billion, a 26 per cent increase over 2001. For some products, online sales have become very important: 32 per cent of all software, 17 per cent of tickets for events and 12 per cent of all books were sold online in the United States in 20024. The number of people buying travel related services (ticket purchase, car rentals, hotel reservations) online in the United States generated online sales of US$22.6 billion5 in 2002.

In the European Union, e-commerce sales in 2002 are estimated at US$28.29 billion. A study among credit card users6 in the major European markets showed that all categories of products registered fast growth in online sales in 2002, from 47 per cent for home electronics to 112 per cent for computing and sports. The fastest growing retail e-commerce sector in Western Europe, according to this study, was air travel, whose online sales grew an amazing 1,236 per cent in one year.

B2C e-commerce activity remains modest in the Asia-Pacific region in comparison to B2B transactions. According to some estimates, B2C revenues amounted to some US$15 billion in 2002, increasing to US$26 billion in 2003. This represents about 10 per cent of global B2C online sales. The vast majority of this revenue in generated in Japan, Australia and South Korea.

Why All The Controversy?

Whenever public understanding of the law changes dramatically, there is typically a negative reaction from at least part of the public. In the context of patents, this occurred in the early 1980s when the courts began allowing patents to issue on living organisms (bacteria, genetically engineered organisms, etc). Opponents of patents for this subject matter protested that patenting life forms would open floodgates that would be difficult to close, and that it would be immoral to grant ownership in, for example, a genetically engineered organism. In the end, such patents have been found to be instrumental in the expansion of the biotechnology industry, and most people now see the benefits of this perceived expansion of patent law.

Software patents

Similarly, in the 1980s and 1990s, when courts around the world declared that software was patentable (and authorities such as the European Patent Office began allowing claims to computer programs in spite of an exclusion in the European Patent Convention to the patenting of computer programs per se), programmers and others involved in the software industry were alarmed. To many people in the software industry, patents are the antithesis of how they envisage the software industry should operate. Many programmers see themselves operating in a collegial quasi-university environment, sharing experiences and techniques with colleagues, without concern for patents or other commercial impediments. The increased commerciality of technology companies, and the realisation that software often provides these companies with their sole competitive advantage over competitors, has led to an acceptance of software patents as a commercially valuable tool in today's business world.

Business method patents

More recently, with the courts and patent offices around the world allowing increasing numbers of business method patents (and pronouncing that business methods are to be judged according to the same criteria as patents to any other subject-matter7many commentators have objected that patent law now covers non-technical areas that were never intended to be, and never should be, the subject of patent protection.

Because it so firmly confirmed the demise of the 'business method' exception to patentability in the United States – and was relied upon by numerous international courts and patent offices – the famous State Street decision8 is now commonly understood to have given rise to the rapid growth of business method patent filings in the late 1990s. Moreover, because the particular 'business method' at issue in this decision was a network-based data processing system for managing a financial services configuration, many 'business methods' are now commonly equated with internet and e-commerce technology.

However, the term 'business method' is not limited to internet and e-commerce technology. One of the more newsworthy (and arguably frivolous) 'business method' patents relates to a method of teaching a janitor to clean a building more efficiently by using a training book with step-by-step instructions and illustrations9! Strictly speaking, it is more accurate to refer to some e-commerce activities as a type of 'business method' rather than to use the term 'business method' to refer to internet and e-commerce technology in general.

Even if they were not discredited by association with some of the more controversial business method patents, the open source community and organisations such as the World Wide Web Consortium (W3C) have taken the view that use of the internet should be free to all and unencumbered by patents. Once again, patent protection is perceived to have been extended into new, forbidden territory and, predictably, a cry of outrage has again been heard.

E-commerce patents

This sense of disquiet is greatly exacerbated in the field of e-commerce. By introducing software and computing technology into the traditional world of commerce, organisations that have never considered themselves to be 'technology' based and that do not have an R & D department – such as banks, retailers and travel agents – are now confronted with the prospect of having to defend themselves against patent infringement proceedings and deal with patent issues in the course of their daily business. And as we have seen, the financial stakes involved in e-commerce activities today are high and the impact of patent infringement can be significant.

Patents That Protect E-Commerce

Patents directed to e-commerce activities are most highly concentrated in the United States Patent and Trade Mark Office main classification 705 ('Data processing: financial, business practice, management, or cost/price determination') and the International Patent Classification G06F-17/60 ('Digital computing or data processing equipment or methods, specially adapted for specific functions – administrative, commercial, managerial, supervisory or forecasting purposes'). However, not all inventions in these classes relate to e-commerce, and e-commerce inventions can be found in a variety of other classes depending upon the nature of the technology used for their implementation.

E-commerce patent filings

Measurement of e-commerce patent activity is necessarily approximate due to the imprecise definition of the field and the limit of patent office classification systems. The United States Patent and Trade Mark Office received 330 patent applications in this field in 1995, increasing to 2821 received in 1999, 7800 in 2000, 8700 in 2001 and an estimated 5000 in 2002. The decline in the number of patent applications filed in 2002 corresponds no doubt to the global crash. Figures for US granted e-commerce patents show a similar rise, fall and possible stabilisation, with 585 granted in 1999, 899 in 2000, 433 in 2001 and an estimated 492 in 200210.

In Japan, patent filings in this field jumped from 4100 in 1999 to 19000 in 2000. The number appears to have peaked in late 2000 and since gradually decreased, with 18,000 applications received in 2001. Despite the large number of filings, only 246 e-commerce patents were granted in 200111.

IP Australia received 23 e-commerce patent applications in 1995, rising to 265 received in 2000 and 430 in 200112.

For both Australia and the United States, e-commerce patents still only comprise a small proportion of the total number of patent applications filed and granted (0.3–0.4%). Although e-commerce patents comprise a significant 4 per cent of total applications in Japan, granted e-commerce patents only make up approximately 0.2 per cent of all patents granted.

Types of e-commerce patents

A recent study13 has shown that internet-enabled e-commerce patents generally fall into three broad categories: 'Internet business model' patents, 'Internet business technique' patents and 'Internet software technique' patents14.

'Internet business model' patents

This category of patents describes relatively broad models for doing business via the internet and are the sort of patents that most observers would think of as 'business method' patents.

The reverse auction model patent for purchasing airline tickets is an example15. The first two steps of the main claim of this well-known patent basically define the inputting by the buyer of their offer and their payment data. The third step is the outputting by Priceline of that offer to a plurality of sellers. The fourth step involves the inputting by the seller of an acceptance. The fifth step describes Priceline's provision of the payment to the seller. This claim is not limited to any particular goods or services being sold, although the use of a computer and a credit card account is needed for the transaction.

The patent portfolio also includes US Patent No. 5,797,127 directed to pricing, selling and exercising options to purchase airline tickets, and US Patent No. 5,794,207 that covers a cryptographically assisted commercial network system designed to facilitate buyer-driven conditional purchase vehicles.

CyberGold Inc. has obtained granted patents for the immediate payment to browsers for paying attention to banner ads. US Patent Nos. 5,855,008 and 5,794,210 are both directed to attention brokerage models. Juno On-Line Services Inc. is the owner of a number of patents covering offline interactive advertising models, including United States Patent No. 5,848,397 directed to scheduling the presentation of messages to computer users and US Patent No. 5,838,790 covering an advertisement authentication system in which advertisements are downloaded for offline display. Inc. is the owner of Australian Patent No. 710,469 covering a model for interactive marketing by the distribution of discount coupons over the Internet. Onsale Inc. has obtained several patents directed to a multi-person interactive auction model, including Australian Patent No. 717,594.

'Internet business technique' patents

These patents are narrower in scope than 'Internet business model' patents and relate to means for solving a specific business-related problem rather than the implementation of a broad business model.

One example of this type of patent is Australian Patent No. 707,690. This patent relates to automatically increasing the level of funds in a smart card when the funds on that card have dropped below a predetermined limit. A card reader at a point of sale is linked into a banking network, and when the user attempts to conduct a transaction for which there are insufficient funds stored on the card, the vendor's card reader makes a connection into the banking network to replenish the card with additional funds. The transaction is controlled by the user by means of a PIN or the like.

Another example is Australian Patent No. 716,268 directed to an e-commerce payment system in which a user is presented with an image of a bill to be paid so that, prior to paying for a particular service the user can check that all details in relation to whether the service was or was not provided. For example, in order to pay a telephone bill, the user would be presented with an image of the bill in order to verify that the calls for which the user was being charged were in fact made. A payment system of this nature retrieves the image of the bill from the service supplier and displays that image to the user, and, when the user authorises payment, extracts funds from the user's account and transfers those funds to the service supplier.

'Internet software technique' patents

This category of patents cover inventions for making the internet more efficient and effective for conducting e-commerce by solving a technical software problem.

An example of a patent in this category is US Patent No. 6,003,077, entitled 'Computer network system and method using domain name system to locate MIB module specification and web browser for managing SNMP agents'. Another example is US Patent No. 6,005,939, entitled 'Method and apparatus for storing an internet user's identity and access rights to world wide web resources'.

Other patents in this category are to be directed to inventions such as techniques for encrypting data transmitted between the Server and the Payment Processing Gateway and techniques for authenticating the identity of the customer at the Merchant web site. Patents of this type emphasise the solution to a software problem much more than the solution to a business problem.

Jurisdiction Issues

Many e-commerce patents do not provide optimal protection for e-commerce inventions due to inappropriate claiming strategy. Patent protection is territorial—a patent granted in Australia only protects the owner from infringement in Australia. However, many e-commerce systems are implemented across a distributed network, such as the Internet, between software-enabled devices in different countries. A claim listing the steps carried out in an e-commerce system by devices in more than one country will arguably never be infringed.

Claim category selection is therefore important when considering the protection provided by patents directed to e-commerce systems which are implemented by devices or apparatus in different jurisdictions. Claims should be drafted in the 'software machines'16, 'software processes'17, 'software in memory'18and 'software per se'19 formats to cover not only the entire business process, and system for performing the business process, but also to cover (i) the features of, (ii) process steps performed by, and (iii) software used in individual devices within, the system. In e-commerce systems, this would typically mean at least including claims directed to both the server system and the client system, and operations performed by each of those systems.

Is E-Commerce Somehow "Different"?

An argument is often put that patent protection is not suitable for e-commerce inventions because patents were intended to protect technology whereas e-commerce relates to business. A related argument is that inventions in this area are merely improvements on existing technology, and so special considerations need to be taken into account when determining whether patent protection is suitable or harmful. The central claim behind these arguments is that e-commerce inventions are somehow different to inventions in other fields and should be denied patent protection.

Is e-commerce somehow 'different' and is it subject matter that should be excluded from patent protection?

How e-commerce works

Before addressing this question, let us consider what e-commerce really involves. Since most discussion about e-commerce and patent protection has resulted from stories about B2C e-commerce, we shall briefly look at the following simplified example of a B2C e-commerce system.

To initiate a B2C e-commerce transaction, a customer uses his or her personal computer (called a 'Client') to access a web server (called a 'Server') via the internet. The Server hosts the web site of a company (called a 'Merchant') from which the customer wishes to purchase a product or a service. The Server is able to access a database maintaining a catalogue of products or services able to be purchased by the customer.

When the Client accesses the Server, content from the database is 'served' to the Client for display and the customer selects a product or service to purchase. Data identifying the customer, an account to which the purchase is to the charged and other information, such as a delivery address, are transmitted from the Client to the Server over a secure connection (for example, using the secure sockets layer web security protocol).

Typically, the Merchant web site will include a shopping cart type system to enable one or more products or services to be selected by the customer and temporarily stored in a virtual shopping cart. When the customer wants to conclude the purchase, the customer proceeds to a check-out page where the customer confirms their purchases and all products are processed at once.

The Server then transmits the information sent by the Client to a Payment Processing Gateway which handles the secure, real-time encrypted account information and co-ordinates the transaction.

The Payment Processing Gateway communicates with the Merchant's bank to process the movement of funds to complete the transaction. This includes debiting funds from a bank account at the Customer's bank and ensuring that funds are then deposited into the Merchant's designated bank account.

How e-commerce systems are designed

Each of the interconnected entities in the above-described B2C system communicate with each other using a set of protocols called a protocol stack. A protocol stack is a prescribed hierarchy of software layers, starting from the application layer at the top (the source of the data being sent) to the physical layer at the bottom (transmitting the bits on the wire). The protocol stack resides in each client and server, and the layered approach lets different protocols be swapped in and out to accommodate different network architectures. (The OSI model is an ISO standard for worldwide communications that defines a framework for implementing protocols in seven layers20.)

The advantage of using a protocol stack in communications system design is that each layer can be considered independently. Each layer relies upon the functionality of all other layers below it. Improvements can be made to the functionality of the application layer, for example, without concern for the impact this may have on any of the other layers in the protocol stack. System designers can, and do, develop new and inventive functionality in each layer of the protocol stack in isolation of all other layers. Patents are routinely granted for these inventions.

As you move from the bottom of the protocol stack to the top, the functionality of each layer becomes progressively broader and more generic. Each successive layer becomes less concerned with hard technology and more concerned with conceptual notions of functionality. Whereas the physical layer (layer 1) deals with electrical signalling and cabling matters, for example, the presentation layer (layer 6) deals with algorithms and techniques for data encryption and conversion.

Each of the three above-mentioned categories of e-commerce patents, namely 'Internet business model' patents, 'Internet business technique' patents and 'Internet software technique' patents, can be seen as a simple extension to a conventional protocol stack model used by systems engineers to design communications systems, including e-commerce systems.

A new 'Internet software technique' invention for authenticating the identity of the customer at the Merchant web site builds upon communication techniques used in the lower layers of the protocol stack used by the network entities in an e-commerce system. Use of the protocol stack enables improvements in each layer to be designed in a modular fashion, that is, without consideration to the techniques used in the underlying layers. In that regard, developing a new customer authentication technique for use in e-commerce involves exactly the same design considerations as a development to any other layer in the protocol stack.

Similarly, a new 'Internet business technique' invention in an e-commerce payment system, involving the presentation to a user of an image of a bill to be paid for verification of the bill details, is an invention that builds upon any software techniques and functionality provided for in lower layers of the extended protocol stack. 'Internet business model' inventions similarly build on underlying functionality provided by Internet business techniques, Internet software techniques and techniques implemented in the other layer of the extended protocol stack used by designers of e-commerce and other communications systems.

The modular nature of software design when using a protocol stack means that an invention made in the higher level functionality of entities that carry out e-commerce transactions has exactly the same nature and merit, and involves the same intellectual 'leap', as an invention made in the lower level functionality of those entities. Simply put, inventions in the field of e-commerce are the same as any inventions in any other field and are no less deserving of patent protection, provided of course those inventions are new and inventive.

E-Commerce Patent Criticisms

Overly broad claims

Many patents are criticised on the basis that their claims are too broad, and attempt to extend the scope of the patent to cover more than the actual system created by the inventor. An example of an e-commerce patent that has been criticised for this reason is an 'attention brokerage' patent21 held by CyberGold Inc. for a system that pays internet users to click on banner advertisements. CyberGold claims that this patent gives it the 'sole right to pay consumers online incentives'.

When examining these criticisms, one must distinguish between truly ground-breaking inventions that should be entitled to broad protection, poorly examined patents that have claims that are too broad (and are therefore invalid), and patents with narrow claims where the patent owner incorrectly asserts in a press release that it has a patent on a whole section of e-commerce.

Novelty and Obviousness

Another criticism of many e-commerce patents is that they cover subject matter that is not novel or is obvious. Is it an invention to take a well-known method of doing business and, for the first time, carry out that business method online? One example of a patent criticised for claiming subject matter that is not novel is's reverse auction patent. 22 Using's system, internet users submit the price ('bid') that they are willing to pay for goods and services to potential vendors. If a vendor accepts a bid, a sale takes place.

However, this criticism does not take account of the fact that an inventive step often lies in identifying the problem itself. The solution itself can seem simple once the problem has been formulated.

In many e-commerce systems, the gap between an idea and the implementation of that idea can be small. Patent specifications that describe e-commerce systems in terms of conventional computers interconnected by an internet 'cloud' and a series of simple flow-charts convey the idea to the lay person that e-commerce is too simple to merit patent protection. This criticism ignores the fact that e-commerce system design is often highly conceptual and a detailed technical disclosure is often not required in an e-commerce patent specification, since a skilled software engineer would generally have no difficulty writing software code to provide desired system functionality from generalised schematic diagrams and flow charts.

The advent of e-commerce patents has led to an interesting development in considerations of obviousness. It has been suggested that the notional person skilled in the art will not always be a software developer or systems engineer who implements the software design, but may also be the person who conceived of the design in the first place23. Persons adept in the ways of business and commercial methodology, rather than 'technologists', might appear to play a more prominent role in defining this person given the importance of factors of non-obviousness like commercial success, or long felt and unsolved needs in the relevant field of art. Since many e-commerce patents deal more with business-related problems than hard technology problems, a skilled business manager may be the most appropriate notional skilled person who foresees present problems in e-commerce and proposes new ways of doing business to overcome these problems, rather than a programmer or similar technician who merely implements the business manager's designs.

Limitations of prior art databases

There is no comprehensive database of e-commerce prior art which can be searched by inventors and patent examiners to determine whether an e-commerce invention is anticipated by the prior art. This may lead to e-commerce patents being granted for non-novel or obvious subject matter.

In turn, these problems make searches of prior art relating to e-commerce expensive, time-consuming and inconclusive, and further affects patent quality by discouraging inventors from conducting thorough prior art searches prior to filing patent applications.

The relevance of the prior art cited by patent examiners in relation to e-commerce patent applications is often questionable. Researchers in traditional fields of technology are driven to regularly publish articles in scientific journals and the like and are named as inventors in patent applications, thereby generating prior art that can be relied upon and searched by patent examiners. Software developers, systems engineers, business managers and others involved in e-commerce are usually not driven to publish the results of their developments, and therefore relevant prior art in the field of e-commerce is often limited.

Poor examination by patent offices

Another criticism of e-commerce patents is the perceived poor quality of the examination leading to the grant of those patents. Poor quality or rushed examination of e-commerce patent applications is contributed to by failure of many applicants to cite relevant prior art24, the perceived inexperience or lack of familiarity of some patent examiners with the relevant technology25 and evaluation of patent examiner performance in a manner which focuses on speed rather than thoroughness.

However, an analysis26 of 1093 e-commerce patents issued over a ten year period by the USPTO has shown these patents fared well in terms of the amount of prior art cited. Contrary to critics' arguments, the average number of total (patent and non-patent) prior art references in a patent was, at 24.9, larger for e-commerce patents than for general patents (15.16). The same was the case for the non-patent prior art reference averages: the e-commerce patent average, at 10, was larger than that for general patents (2.37). This is especially relevant to the debate over whether e-commerce patents are being properly reviewed by the USPTO inasmuch as most of the prior art for a business method would be expected to come from non-patent resources (eg, business and academic literature, websites, and software).

Complaints about poor patent office examination may therefore have more to do with difficulty of patent examiners in identifying relevant prior art, rather than poor examination as such.

The Future

Although it has been in existence since 1969 (as the ARPANET), it is only since the advent of graphics-based web browsers and platform independent e-mail in the mid 1990s that the internet has been widely adopted27.e-Commerce activity has flourished in the last few years, due in part to increased levels of broadband penetration and reduced fears about online security.

New technology is providing customers with better, easier and more ways of engaging in e-commerce. Mobile-commerce, or m-commerce, involves the use of smart phones and handheld computers with wireless connections to place orders and transact business over the internet. Consumers are free to engage in m-commerce wherever they have mobile signal coverage. New push-technology sales and marketing techniques are already being developed for this new market sector.

New types of products are increasingly being purchased by consumers. In the United Kingdom alone, Apple's iTunes Music Store customers are downloading songs at the rate of 2.5 million songs a wee28.

Revenue from e-commerce activities will continue to grow as new types of e-commerce activity develop and existing types of e-commerce activity expand. As the financial stakes involved in e-commerce grow, so too will companies' desire to exclude competitors from their market space by obtaining patent protection for their e-commerce inventions.

Where there are patents and money, there will be licensing and litigation. In mid-2003 considerable controversy was generated in Australia by an e-commerce patent application by Canadian firm DE Technologies for a method of making an international purchase of a product using a computer system29.

Similar patents were granted to DE Technologies in the US and New Zealand in late 2002. DE Technologies has initiated aggressive patent enforcement action against a number of mid-sized companies in New Zealand, in which it is offering licensing arrangements that include a sign-on fee, royalties and a cost per transaction document generated. Concerns about the potential cost impost on businesses engaged in e-commerce has generated much public and media interest in New Zealand and Australia.

Active use like this by patentees of their e-commerce patent rights is occurring around the world, most notably in the United States. Given the significant growth in revenue from e-commerce activities and the widespread adoption of e-commerce in business, e-commerce patents will become an increasingly important issue for many companies in a wide variety of industries.


1 United Nations Conference on Trade and Development – e-Commerce and Development Report 2003

2 Forrester Research and International Data Corp as quoted in Newsweek (2003)

3 eMarketer

4 Forrester Research

5 Ibid.

6 Visa International study quoted in eMarketer Inc.

7 State Street Bank & Trust Co. v Signature Financial Group, Inc. 149 F.3d 1368 (1998)

8 Ibid.

9 United States Patent 5,851,117

10 ACIP – Report on a Review of the Patenting of Business Systems, 2003

11 Ibid.

12 Ibid.

13 'The Business Method Patent Myth', John R. Allison & Emerson H. Tiller, 2003

14 Other commentators have chosen to distinguish between 'administrative method' patents that protect back-office methods that increase productivity or reduce organizational or production costs and 'customer service method' patents that protect services consumed by customers or methods relating to pricing, advertising or other marketing concerns ('Business Method Patents and Patent Floods', Michael J. Meurier, 2002

15 US Patent 5,794,207

16 A programmable apparatus for doing a function comprising:
(a) means for doing a first function,
(b) etc.

17 A process to be performed on or with the aid of a computer, comprising the steps of:
(a) doing a first step
(b) doing a second step,
(c) etc.

18 A computer readable memory, encoded with data representing a computer program, that can be used to direct a computer, comprising:
(a) means for doing a first function,
(b) means for doing a second function,
(c) etc.

19 A computer program element comprising computer program code means to make the computer execute:
(a) a first function,
(b) a second function,
(c) etc.

20 The Open System Interconnection (OSI) model defines a framework for implementing protocols in seven hierarchically-arranged layers, namely (from top to bottom) the application, presentation, session, transport, network, data link (MAC) layer and physical layers.

21 U.S. Patent No. 5,794,210.

22 U.S. Patent No. 5,794,207.

23 'Journey Through The Amazon: An exploration of §103 relative to software-related patents, Jeffrey Travis

24 Gregory Aharonian, 'Does the Patent Office Respect the Software Community?' In Internet Patent News Service 15 May 1999.

25 R Sachs, 'Software Patents and Internet Business Methods in the Wake of State Street Bank' In Fenwick & West's firm newsletter, Fall 1998. Reproduced in Internet Patent News Service 2 February 1999.

26 'The Business Method Patent Myth', John R. Allison & Emerson H. Tiller, 2003

27 TechEncyclopedia
28 'Apple notches up 50m music downloads' from

29 The main patent claim involved the following steps:
(a) selecting a language and currency in which to view product descriptions and prices;
(b) selecting a product to purchase;
(c) retrieving price, code and shipping information about the selected product;
(d) calculating the total cost of purchasing the product and shipping it internationally;
(e) receiving the order and confirming payment, and
(f) accepting and invoicing the order.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.