Protecting Ideas – Focus on Business Process Patents

January 4, 2008

Ideas lead to inventions, new art forms, novel business concepts, new designs and much more. One of the most frequently asked questions we receive concerns how to protect ideas.

There is no single answer to explain how best to protect an idea because it all depends on the idea. An idea for a new TV game format will involve different legal issues to one for a new product design . The one standard piece of advice to anyone with an idea is to keep it under wraps – at least until you find out how best to protect your idea, and whether you could turn it into a patent.

What about registering copyright?

Prospective clients occasionally want to deposit material with us to register their copyright. They assume depositing drawings will strengthen their position if others copy a product featured in their writing or drawing. Depositing material would at best help provide evidence that the work was created before the date it was deposited. This could be useful were action subsequently taken against a copyist, but it serves little purpose if what were copied was itself not original. Nor would it serve a purpose if what were copied was the idea embodied in the words or drawing. If your idea is patentable, a patent and not copyright is what you need to protect it from copyists.

Is it patentable?

The problem with great ideas is that someone else has already thought of them. A patent search will help establish how novel the idea is, and whether it displays the necessary ‘inventive step’ to constitute an invention.

For an idea to be a patentable invention the idea needs to be more than just abstract, it must make a technical contribution to the stock of human knowledge. For example, it needs to be something that makes a machine or device work better, more productively, faster or more cheaply.

Although you don’t need to build a model of an invention to make sure that it actually works, you do need to be able to explain how the idea might work when applied in a real world example representing it. Most commonly, an inventor writes down an idea and draws pictures or flow charts of how the idea will look or be practised. Typical inventions are physical objects and products, or enhancements of existing products.

It is important that the invention should not have been shown publicly until after the patent application is officially filed. If you allow the public to see a newly developed product, or process, before filing your application, it becomes impossible validly to patent it because it is then no longer novel. It is considered to have been in the public domain. But if you must disclose the idea to a potentially interested party before you file a patent application, we can advise you on how to draw up a confidentiality, or non disclosure agreement, which will bind the recipient of the information to secrecy.

Business Process Patents

In the past 10 years business and marketing methods have been patentable in the USA following a Federal court ruling in State Street Bank & Trust Co. v. Signal Financial Group, Inc. The case decided that US patent laws were intended to protect any method, whether or not it required the aid of a computer, so long as it produced a useful, concrete and tangible result.

A business method is classified as a process, because it is not a physical object like a mechanical invention or chemical composition – new online ordering processes or a unique internet advertising scheme are patents that usually combine software with business methodology. For example, Amazon.com’s famous “1-Click” system for expediting online orders was granted a patent in the US in September 1999. What this means in practice is that other companies operating on the web would be stopped by Amazon from building their own versions of a one click system for buying goods or services online. Cybersettle.com has stopped others building their own bidding systems due to its extensive patent rights and tendency to send cease and desist letters. It took National Arbitration Forum to court.

USA, UK or Europe?

Many people believe, wrongly, that business process patents are unlikely to be granted by the UK Intellectual Property Office (IPO) or European Patent Office (EPO), and that it is possible for UK businesses to obtain business process patents in the USA only. Certainly the standards operated by these 3 Patent Offices are, confusingly, different. But in fact thousands of software implemented business patents are granted by the EPO, the significant difference from the US being that the EPO and the UK-IPO demand a technical contribution, For the EPO, you must identify a non-obvious and novel technical solution to a technical problem, as seen in the eyes of a technical person skilled in that field. Even if the invention is a pure business or economic concept, its implementation may involve a technical character sufficient to render it patentable.

For an internet business its site will be accessible globally, so in practice a US patent may be enough of a monopoly even for a UK company. Indeed, such is the power and attraction of the US market that it is the main area for exploitation, so even if the invention lacks a technical contribution because it is a pure business or economic concept, and hence cannot be patented in Europe, a US patent alone can be commercially very worthwhile.

Getting in first

In certain cases – for example, if the invention is not yet fully developed, or for cost reasons, it may be preferable to file the initial application in the UK, followed by an overseas application within 12 months, claiming ‘priority’ from the date of the UK application. This means that the overseas application is in effect backdated to the UK filing date. You are then effectively filing most cheaply in order to buy a year to see whether it is worth filing overseas applications.

How long?

It is likely to take 3-4 years from the initial filing date until a patent is issued. The application is published about 18 months after filing. While it is not possible to sue a competitor so as to stop it from using the process until the patent is actually granted, regardless of whether the competitor copied the method or stumbled upon it independently, the published application serves as notice to the world of your application proceeding toward a granted patent. Moreover, if the patent is infringed, it is usually possible to claim compensation from the infringer from the date of publication and not merely from the date of grant. The patent is then valid for 20 years from the date of filing, subject to payment of appropriate periodic fees. The most important value of any patent is the potential it has for providing a competitive advantage since it effectively provides a monopoly for the patent holder by legally excluding others.

Conclusion

Patents are for protecting technical ideas. They are powerful tools to stop copyists but precisely because of their power they have to be rigorously examined to ensure they have novelty and are not obvious. A badly drafted patent with ‘holes’ in it for a copyist to pass through without infringing wastes money and does not provide any, or adequate, protection. Business method patents present an area of special difficulty where expert guidance is needed even more than usual.