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 method"?'
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.
e-Business Methods
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 perspective.
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 process.
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 methods.
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 community.
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.
