Advantages & Disadvantages of Issuance of Business Patents

By Shelly Morgan

Patents are essential to the health of businesses that rely on research and development because they give the inventor the right to exclude others from making, using or selling the invention. This right to exclude others enables a company to have a corner on a particular market. All patents include claims, which precisely define what is novel about the invention. One type of claim -- the business method claim -- remains controversial among inventors, patent attorneys and courts.

Patents are essential to the health of businesses that rely on research and development because they give the inventor the right to exclude others from making, using or selling the invention. This right to exclude others enables a company to have a corner on a particular market. All patents include claims, which precisely define what is novel about the invention. One type of claim -- the business method claim -- remains controversial among inventors, patent attorneys and courts.

Definitions

Business method claims define a particular way of doing business. They include inventions pertaining to business cryptography, postage metering, incentive programs, coupons, e-shopping, inventory methods and other common business practices. This type of claim was very popular during the tech boom in the late 1990s when electronic shopping carts, electronic auctions and "one click" methods of doing business were new.

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Controversy

The validity of business method claims has been debated in the U.S. Congress, federal courts and the European Patent Office. This area of law is complex and different authorities have different opinions. If you want to patent an invention that solely concerns a method for doing business, you need to consider whether such a method is patentable in a particular jurisdiction. While business methods can be patented in the U.S., they are not patentable in nations that are signatories to the European Patent Convention.

Disadvantages

A House of Representatives subcommittee report noted that business method patents can have a chilling effect on business. One speaker characterized many of these patents as little more than "age-old business practices" that took on a new gloss simply because they were conducted over the Internet. Another speaker warned that these patents would have the effect of foreclosing entire markets to competition. These speakers expressed concerns about the long-term validity of business method patents.

Advantages

A paper from the University of Santa Clara Law School notes that one justification for business method patents is that businesses need this patent protection to take full advantage of new developments. Granting the right to exclude others from using an invention gives the patent holder the time to restructure a business in a time of rapid change. The U.S. Patent and Trademark Office continues to grant business method patents. Therefore, they remain vital business assets that can be used to prevent others from practicing the patented business method.

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Elements of a Patent

References

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Categories of Patent Protection

The purpose of a patent is to give an inventor a limited-time monopoly over all benefits to be derived from the invention. To carry out that purpose, federal patent laws give patent holders certain exclusive rights during the term of the patent. This means that the patent holder retains total control over the production, use and distribution of the invention. These categories of patent protection apply to all three types of patents: utility patents, design patents and plant patents.

Can Products Be Similar Without Violating Patent Laws?

Products can be very similar without violating patent laws because patents do not protect products. Patents protect inventions. This subtle distinction explains why very similar products do not automatically violate patent laws. If you believe your invention is so similar to another that it might infringe on the invention, you should consider consulting legal counsel or an online legal service because the penalties for infringement can be very steep.

Patent Benefits

The purpose of the U.S. government issuing patents is to reward inventive and entrepreneurial ideas in this country. Federal patent law protects inventors from copycats and clones to provide a financial incentive to continued invention. A patent is essentially a legal monopoly for a specific period of time over the new invention. The patent gives the inventor the exclusive right to benefit from the invention. Generally, a utility patent provides a 20-year monopoly, while a design patent provides a shorter 14-year monopoly.

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