Business method patents grant exclusive rights to use and license a particular method of doing business for a specified period of time. To file for one, the method must be novel, materially useful, and non-obvious. They are controversial and subject to legal challenges, but proponents argue they incentivize innovation and compensate for development costs. However, the transparency of many business methods can make it difficult to prove ownership.
A business method patent is a legal protection for a particular method of doing business by granting the patent holder exclusive rights to use and license that technique for use by others for a specified period of time. Such patents have a long history, with various patent offices registering examples as far back as the 18th century. They are also a subject of controversy and discussion, as some critics believe they are too vague to be meaningful.
To file for a business method patent, a company must be able to meet a number of criteria. The first is the novelty. Someone can’t patent something already widespread and accepted, like accepting credit cards as a form of payment. The patent must also be for something materially useful; abstract, unclear and frivolous “inventions” are not subject to patent. Also, a business method patent must be non-obvious in nature. This can be a tough test to pass, as it has to be new, implying that it doesn’t already exist and at the same time it can’t be something people would logically develop on their own.
Internet commerce provides a number of examples of situations where companies use a business method patent filing to protect certain business processes. These can include new ways of running e-commerce, as well as tactics for engaging with customers. People can challenge patents if they feel they are too vague, don’t meet standards, or infringe existing patents, and some business method patent legal challenges are successful in court.
One problem with this type of patent is the fact that many business methods are transparent in nature. As companies adopt new business methods, other companies may follow suit before they have time to file for a patent. The method will no longer be new and the company cannot receive protections as it may find it difficult to prove who invented it and when. In the case of proprietary business methods that occur behind the scenes, it may be easier to provide evidence to support a business method patent on the basis that the procedure is critical to the operations of a business and allows the business to perform a service in a new or unique way.
Proponents believe that, just like other inventions, new business methods should receive patent protection. This compensates people for their investment in developing new business methods and creates an incentive for innovation, with the patent acting as a reward for developing new concepts. With a commercial method patent, a company can choose to keep a method for itself or license it to other companies for a fee with the goal of recouping some of the development costs.
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