Patenting E-Commerce, Internet, and Business Inventions
Recent changes in the U.S. patent laws have made a hospitable environment for patenting e-commerce, Internet, and business inventions. Such inventions may include: a new way of marketing and/or distributing a product using the Internet; a new way of marketing and/or distributing a product, which does not require the Internet; a new speech or image processing routine used for transmitting and receiving signals via the Internet; a new way to instruct students; a new technique for providing financial advice; a new method for providing security for a building; or a new way to do business.
In this article, a discussion of patents is first presented, how to obtain a patent is next discussed, and finally patents for e-commerce, Internet, and business inventions are discussed. This article addresses only U.S. patents.
What is a patent?
A patent is a type of intellectual property. In general, intellectual property is an intangible creation by a human that can be protected by the law, although not all intangible creations are legally protectable. Intellectual property is distinguishable from real property (e.g., land) and tangible property (e.g., a car). Four types of intellectual property are: patents, trade secrets, trademarks, and copyrights.
A U.S. patent provides the right to exclude others from practicing an invention; it does not provide the right to practice the invention. This is an important distinction, and one that is often overlooked. In particular, a patent provides a bundle of rights for excluding others from practicing the invention, including the right to exclude others from making the invention, using the invention, selling the invention, offering the invention for sale, and importing the invention.
A U.S. patent only provides this bundle of rights in the United States. To obtain patent rights in other countries, patent applications must be filed in the countries where patent protection is desired.
There are three types of patents: utility patents, design patents, and plant patents. A utility patent is issued for an invention of a process, a machine, an article of manufacture, a composition of matter (e.g., a chemical compound), or a useful improvement of one of these. A design patent is issued for an invention of an ornamental design for an article of manufacture. A plant patent is issued for an invention of certain plants. This discussion addresses only utility patents.
For utility patents, two types of patent applications can be filed, namely a so-called regular patent application and a provisional patent application. A regular patent application is examined and can eventually issue as a patent. A provisional patent application is not examined, will never issue as a patent, and is used to establish a date of invention for a subsequent regular patent application. A provisional patent application has a term of one year. The remainder of this discussion addresses regular patent applications.
The term of a U.S. patent depends on the filing date of the patent application which results in the grant of a patent. For patent applications filed on or after June 8, 1995, the patent term is the time from the patent issue date to 20 years from the earliest effective filing date of the patent application. The following figure illustrates a patent term for a patent application filed on or after June 8, 1995 and which does not claim priority to a previously filed patent application:
Hence, for a patent issuing from a patent application filed on or after June 8, 1995, the term of the patent depends on the time that the patent application is pending in the U.S. Patent and Trademark Office. For patent applications filed prior to June 8, 1995, the patent term is either the time from the patent issue date to 20 years from the earliest effective filing date of the patent application, as illustrated in the figure above, or 17 years from the patent issue date, whichever is longer. Further, due to a recent patent law change, the patent term may be extended for certain delays during the pendency of the patent application at the U.S. Patent and Trademark Office.
How to Obtain a Patent
Before filing a U.S. patent application, an inventor should generally consider the following questions:
(1) Was the invention offered for sale in the United States, and if so, when?
(2) Was the invention disclosed in a printed publication, and if so, when?
(3) Was the invention publicly disclosed in the United States without an executed written confidentiality agreement, and if so, when?
(4) Who are the inventors?
An affirmative answer to the first part of any of questions (1)-(3) may cost an unwary inventor potential patent rights. In general, to preserve U.S. patent rights, a patent application must filed within one year after any event in questions (1)-(3), and to preserve foreign patent rights, a patent application should be filed prior to any event in questions (1)-(3).
Once question (4) is answered, an employer may find that one of the inventors is not required to assign the inventor's rights in the patent application to the employer. This may be the case if the inventor is not under an employment agreement or is an independent contractor. In general, to avoid this problem, an employer should take appropriate measures to ensure that patent rights for the appropriate type of inventions are assigned to the employer.
To obtain a patent, a patent application must satisfy several statutory requirements: eligible subject matter, novelty, nonobviousness, utility, and proper disclosure, which includes a written description, enablement, and best mode. Of these requirements, novelty and nonobviousness generally address whether the invention claimed in the patent application has been disclosed previously or is an obvious modification of whatever has been disclosed previously. Further, the requirement of eligible subject matter dictates, in general, what type of inventions may receive patents.
The basic patenting process has several typical steps. Initially, an invention disclosure describing the invention should be prepared, and a search of the relevant literature should be conducted to ascertain whether the invention has been published or patented. If the search is clear, a patent application is prepared and filed with the U.S. Patent and Trademark Office. Usually, a back-and-forth correspondence occurs between the inventor and the Patent Examiner over the scope of the claims of the patent application. If the Patent Examiner determines the patent application has met all of the requirements, a patent is issued from the patent application.
Patents for E-Commerce, Internet, and Business Inventions
Recent changes in the practice of the U.S. Patent and Trademark Office and in the case law redefining eligible subject matter have made patenting e-commerce, Internet, and business inventions possible. In 1996, the U.S. Patent and Trademark Office issued the Guidelines for Computer-Implemented Inventions. These Guidelines are generally used to determine whether a patent application for a computer or software invention meets the requirement for eligible subject matter of a patent. Prior to 1996, the Office's position was not as receptive to the patenting of computer and software inventions. Now, according to the Guidelines, although a patent cannot be obtained for unembodied software per se, a patent can be obtained for a computer operated with software, a method of operating a computer using software, a computer-readable medium embodying software, and an electronic signal embodying software.
In 1998, the U.S. Court of Appeals for the Federal Circuit clarified the scope of eligible subject matter with the caseState Street Bank & Trust Co. v. Signature Financial Group Inc., 149 F.3d 1368 (Fed. Cir. 1998), cert. denied, 67 U.S.L.W. 3302 (U.S. Jan. 11, 1999) (No. 98-657). In this case, the Federal Circuit announced that business methods are eligible subject matter for a patent. Prior to the State Street Bank decision, the law was unclear as to whether a patent could be obtained for a business method. Further, in State Street Bank, the court reaffirmed the patenting of computer-related inventions.
These recent developments in the patent laws have opened the floodgates for patenting e-commerce, Internet, and business inventions. For example, if all the patenting requirements are satisfied, a patent can be obtained for an invention in e-commerce (e.g., a new way of marketing and/or distributing a product using the Internet), an invention in the providing of Internet services (e.g., a new type of network architecture for the Internet), an invention relating to a software paradigm implemented using the Internet (e.g., a new speech or image processing routine used for transmitting and receiving signals via the Internet); or an invention relating to a new business method (e.g., a new way of marketing and/or distributing a product, which does not require the Internet; a new way to instruct students; a new technique for providing financial advice; a new method for providing security for a building; or a new way to do business). Such an invention is eligible subject matter for a patent even though the invention may or may not employ the Internet and may be a combination of software and a business method, solely software, or solely a business method.
Conclusion
With the innovations occurring in e-commerce, on the Internet, and in business, inventors and employers should be aware that patents can be obtained for these inventions and pursue protecting their investment in developing the innovations through the patenting process.
To assist in protecting the investment in innovations by a company, an intellectual property attorney can help with the following:
- Analyze the company's innovations to identify patentable inventions and recommend a process for obtaining patent protection for the identified patentable inventions;
- Review the company's procedures for assigning patent rights from the company's inventors to the company to ensure that the company is the owner of the patent rights;
- Arrange for prior art patentability searches of the company's inventions;
- Prepare patent applications for the company's inventions and file them in the U.S. Patent and Trademark Office and other patent offices around the world;
- Prosecute the filed patent applications before the U.S. Patent and Trademark Office and other patent offices around the world, including conducting interviews with the Patent Examiners;
- Provide advice to the company on the licensing of the company's patents; and
- Enforce the company's patents against patent infringers. In addition, if a patent is ever asserted against a company, an intellectual property attorney can assist with the following:
- Analyze the patent and the assertion of patent rights against the company;
- Advise the company on the licensing of the asserted patent; and
- Defend the company against the assertion of patent rights.