Since 1998 business methods have been patentable in the United States. This is thanks to the decision of the United States Court of Appeals in State Street Bank & Trust Co. v. Signature Financial Group, Inc., which categorically and unceremoniously did away with what had previously been come to be known as the business method exception to patentability. Essentially, the business method exception said that no method of doing business deserved patent protection. The Federal Circuit pointed out that the business method exception had never been invoked by either the Federal Circuit or its predecessor court the CCPA. Furthermore, the case frequently cited for establishing the business method exception did not ultimately rely on that exception to deny patentability, meaning it was nothing more than dicta. The Court explained that “[s]ince the 1952 Patent Act, business methods have been, and should have been, subject to the same legal requirements for patentability as applied to any other process or method.”
The importance of State Street Bank is that business methods were considered patentable subject matter, and that led to an ever increasing number of business method applications being filed at the United States Patent Office. The volume of business method patents is staggering, and in part a function of the fact that business methods are only patentable in the United States. The volume is also partly a function of the fact that business methods seem easy to explain, at least conceptually, so many individuals see this as a way to easily invent, particularly given the importance of the Internet to commerce today.
In order to have a patentable business method it is necessary for the invention to accomplish some practical application. In other words, in order for a business method to be patentable it must produce a “useful, concrete and tangible result.” The purpose of this requirement is to limit patent protection to inventions that possess a certain level of “real world” value, as opposed to subject matter that represents nothing more than an idea or concept (which is not patentable), or is simply a staring point for future investigation or research. It is, therefore, critically important that the description of the business method be as complete as possible, which means that the description must clearly identify the invention.
While there is not yet a requirement that a business method be associated with a computer implementation, most business method inventions today are inextricably linked to some form of computer implementation, and I opined that the United States Court of Appeals for the Federal Circuit would at some point during 2008 make such a requirement. See An End to Business Method Patents? The Federal Circuit did make such a determination in In re Bilski, and that decision has brought into question the future of not only business method patents, but also the future of software patents. For more see A Blow to Software Patents and Why Not Allow Software Patents?
While the Federal Circuit seems to want to do away with both business method patents and, at least to some extent software patents, there is still room for innovations to achieve at least some protection, albeit rather indirect protection, provided that there is some kind of tangible and real connection with a computer, a computer system or an overall tangible architecture created to enable the method.
In typical business method patent applications today a computer implementation is frequently carried out over the Internet or some other communications network. In order to adequately identify the business method invention that is linked to a computer implementation the following requirements apply: