Wednesday, May 1, 2013

Business Method Patents and 35 U.S.C. § 101 (a synopsis)


35 U.S.C. 101 Inventions patentable.
"Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title." 

In the recent past, software was not patentable. The prevailing rationale was that computer code was not patentable subject matter because it primarily involved intellectual steps.  However, computer related innovation was a great driving force of the world economy.  The policy of protecting intellectual property drives the redefinition of patentable subject matter. Section 101 of the patent statute, covers patentable subject matter.  The Untied States left the age of steam engines and steel manufacturing decades ago. As our world matures into the information age, the patent system must find some way to protect new forms of innovation.  

In 1996, the United States Patent Office took matters into their own hands and decided to treat software as patentable, and then later methods of doing business on a computer the same as any other computer process patent.  None of these patents were carefully scrutinized until the State Street Bank case in the summer of 1999. The United States Federal Circuit Court of Appeals held in State Street Bank & Trust Co. v. Signature Financial Group, Inc. that business models were patentable.  Before this case, "methods of doing business" were not considered patentable subject matter.

The PTO then issued thousands of pure business method patents over the years, some having no computer element involved.  More recently, business method patents were struck down as not patentable in In re Bilski, 545 F.3d 943, 88 U.S.P.Q.2d 1385 (Fed. Cir. 2008), United States Court of Appeals for the Federal Circuit (CAFC) which was a 180 degree trun from the State Street Bank ruling over a decade ago.  The Supreme Court then ruled on the matter, but narrowly not providing as much guidance as many would have expected.  

It will be interesting to see how the courts distinguish between an abstract idea and an Internet apparatus. 

Note also: One may not patent nuclear bombs.  See Atomic Energy Act of 1954, 42 U.S.C. 2181 (a).

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