The patentability of so-called "business methods"
has been a hot topic in the area of patent law over the past
few years. The current position in Australia and the US is that
an invention is not excluded from patentability simply because
it might involve a method of doing business. However, before
delving into the intricacies of what might and might not be
patentable, a better place to start is with a more fundamental
question: 'what is a "business
The term "business method" has been used to
describe a wide spectrum of inventions. We have identified
three broad categories into which these inventions tend to
fall, as discussed below.
In broad terms, e-business methods are inherently performed
in the context of a computer system. Although they may be
claimed without direct reference to a computer system, it is
clear from the context that a computer system would be required
for implementation of the method.
This category primarily describes methods implemented by the
likes of web-based businesses, including novel value-add
functionalities provided by interactive websites. Whilst there
might not be anything particularly novel or inventive in the
coding and scripting underlying such websites, the manner in
which they interact with users and/or deliver information can
be particularly commercially significant. The methods for which
patent protection are sought typically have no significance
beyond the context of computer implementation.
In terms of patentability, e-business methods tend to be
more heavily affected by laws relating to the patentability of
software inventions. In that sense, so long as the
patentability of software is not in dispute, this category of
business method is relatively secure from a patentability
Computer Implementable Methods
Computer implementable methods are, at least in theory, able
to be performed in the absence of a computer system. However,
from a practical perspective, computer implementation would
typically be necessary for real-world commercial operation.
Inventions of this sort are common in the fields of gaming,
promotions, marketing, banking, and so on.
Patent protection for such methods can be defined in terms
of both the software functionalities required to implement the
method, or in terms of the method itself at a higher level of
abstraction. By taking the former approach, it is often
possible to distance the technology from the stigma sometimes
associated with business methods.
Pure Business Methods
These are business methods where computer implementation
would be generally irrelevant, or at most incidental. Although
it may be possible to create software for partially or fully
automating such a method, the software would be of limited
commercial significance in the overall context of the
invention. Rather, obtaining commercially useful protection
hinges on monopolising the underlying concept or thought
Pure business methods are often readily differentiated from
the other categories, due to a lack of defined
"inputs" and "outputs". Whereas methods
belonging to the former categories can be conceptualised in
terms of receiving some form of information, processing that
information, and providing a result, a pure business method is
often characterised by a number of steps that, when performed
in combination, achieve a goal or status. Common examples
include risk management methods and asset protection
Patent Examiners in Australia and the US tend to more
heavily scrutinise pure business methods. In Australia,
Examiners look for evidence of some "useful product",
in terms of a physical phenomenon or effect resulting from the
working of a method. The position of US Examiners is similar,
requiring a method to produce a result that is useful, tangible
and concrete. In absence of a recognisable input or output,
these standards can be difficult to satisfy.
Looking ahead, the patentability of business methods will be
considered in detail by a US appeals court later this year. In
fact, the court initiated the proceedings in question of its
own accord to consider this very issue, and the outcome of
these deliberations is keenly awaited by the global patent
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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