Patents protect inventions. Patentable inventions include new and useful processes, machines, manufactures or compositions of matter, as well as any new and useful improvement thereof. Patent protection is not available under either state or common law. Under federal patent law , an inventor can obtain the right to prevent others from making, using or selling a particular invention. While patents formerly remained in force for 17 years from the date of their issuance, patents now expire 20 years from the date of their filing. Bear in mind that a patent does not allow its holder to do anything, only to prevent others from utilizing the invention.
Patent protection is not available for all types of inventions. Patent law does not protect any ideas, any obvious combinations of pre-existing devices, illegal or immoral matter, pure research, or anything that is simply a novelty or curiosity. Items such as perpetual motion machines are summarily rejected by the United States Patent and Trademark Office.
Examples of patents can be found on the governmental web site, www.uspto.gov. Patents typically consist of a brief description of the background and pre-existing technology, a detailed description of the preferred embodiment of the invention, drawings and/or flowcharts associated with the invention, an abstract of the invention, and one or more claims. The claims are each a one-sentence description of the invention which, preferably, are broad enough to differentiate the invention over any pre-existing devices or obvious combination thereof. The claims, however, must be narrow enough so as not to include any extraneous matter, which would serve as a limitation to the enforceable scope of the patent.
If an infringer copies the functional elements of a patented device, they may be liable for infringement. To determine infringement, a court looks at a particular claim within the patent to determine if each element thereof, or its equivalent, can be found in the accused device. If the accused device does indeed include every element of the claim, the device infringes and the infringer is liable to the patent holder for associated damages. Regardless of the number of claims included within the patent, if the accused device infringes a single claim, the infringer is liable for the same amount of damages as if the infringer had infringed every claim of the patent. While it is infringement to make, use or sell a device which infringes a valid, non-expired patent, it is not an infringement to patent an otherwise infringing device.
As an example, if an inventor were to invent a chair and receive a patent thereon, a subsequent inventor could file and obtain a patent on a chair with arms. Neither the first patent owner nor the second patent owner could make the chair with arms without infringing the other’s patent. However, the parties could negotiate a cross-license where both parties pay each other a royalty in exchange for being allowed to manufacture the improved device. If an entity is found to have infringed a patent, the available remedies include an injunction, as well as the patent holder’s damages. In the case of willful infringement, treble damages and attorney fees may also be available.
Prior to 1998, it was generally thought that methods of doing business were not protectable under existing patent laws. However, in State Street Bank & Trust Co., v. Signature Financial Group, Inc., the Court of Appeals for the Federal Circuit on July 23, 1998, decided that “A (computer) programmed with … software … (is) statutory subject matter, even if the … result is expressed in numbers.”
Subsequent to that decision, business entities throughout the world have filed thousands of “business method” applications, many relating to Internet commerce, in hopes of obtaining exclusive rights to completing certain transactions online. Some of the most notable “business method” applications include those issued to Amazon.com for secure credit card processing, Priceline.com for reverse auctions, Lycos for its spider technology, and Cybergold for paying individuals to examine advertisements. Shortly after the State Street decision, the United States Patent and Trademark Office identified several problems with its existing patent application review process.
Typically, if an inventor files a patent application on a novel mousetrap, the Examiner accesses the mousetrap patent file and compares the new application against the existing technology. The problem associated with “business method” applications is that, prior to 1998, no such applications were allowed. Subsequent to 1998, when an Examiner received a patent application for such a “business method,” the Examiner attempted to access the associated “business method” patent file only to find no existing patents. There was no standardized method in place to examine existing technology outside of the Patent Office.
Many such applications were summarily allowed, despite the inclusion of elements that had been in the public domain for many years. In an attempt to address the problem of business method applications issuing on public domain materials, the United States Patent and Trademark Office has adopted new protocols to more thoroughly examine such applications. These protocols appear to be eliminating the issuance of overly broad Internet related patents. They have not, however, retroactively eliminated any erroneously granted “overbroad” Internet patents. Additionally, these new protocols are slow and costly. Unfortunately, for many information technology related businesses, these new protocols have proven too expensive and time consuming. Either the business runs out of money before the process is completed, or the patent fails to issue before the technology is outdated. The United States Patent and Trademark Office is working to correct these deficiencies, but it is unlikely the process will be completely streamlined anytime soon.
If you have a “business method” you wish to protect, all is not lost. Even if your patent application gets bogged down in the Patent Office for several years or even if the Patent Office eventually denies your patent application, you still have a safe bet of maintaining “patent pending” status for several years. Depending on how you file your patent application, it is possible to keep the filing date and the contents of the patent application confidential. This makes it difficult for competitors to determine if your pending patent will issue tomorrow, or three years from now. This uncertainty may be just enough to slow down a competitor or deter the competitor from the market entirely. Business method patents can be very beneficial; they just require a little extra analysis to determine whether the potentially larger benefits outweigh the extra time and costs involved.