Intellectual Property Newsletters

Business Methods As Patents

It was the growing use of computers in business that forced the courts to decide once and for all whether business methods could be patented, and indeed, many patented business methods involve the use of computers to do business on the Internet, sometimes referred to as "e-commerce." The aftermath of the 1998 court decision was a flood of business-method and e-commerce patent applications, which quickly created problems for the United States Patent and Trademark Office (USPTO). If an invention has been used in commerce or described in literature for more than a year before a patent application for that invention is filed, it cannot be patented because under the rules of the USPTO, the invention is no longer new. Because of the vast amount of literature that might reveal that an invention is not new (called the "prior art"), it was very difficult for patent examiners, particularly those not well-versed in computer technologies, to review all of the prior art to determine whether an invention was in fact new, particularly in a field that is experiencing such rapid change and progress. Accordingly, the USPTO has been widely criticized for issuing business-method and e-commerce patents for business methods that have already been in extensive use or that are obvious extensions of existing business methods, forcing the USPTO to adjust to a rapidly evolving patent landscape.

Patentable Subject Matter

Patent law specifies the general field of subject matter that may be patented as well as the conditions under which a patent may be obtained. In the language of the applicable statute, any person who "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." Under law, patents are granted on new inventions of-or useful improvements on-things in the following categories:

Provisional Patent Applications

For many years, there was only one type of patent application, which required the submission of a specification, which is a detailed description of the invention; a claim or claims, which delineate the specific aspects of the invention for which patent protection is sought; any necessary drawings; an oath or declaration that the inventor believes him or herself to be the original and first inventor of the invention; and the filing fee. In 1994, the Uruguay round of negotiations on the General Agreements on Tariffs and Trade, commonly known as "GATT," resulted in the formation of the World Trade Organization (WTO) and the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), to which the United States became a member and signatory, respectively. TRIPS requires that WTO members provide strong intellectual property rights and, in the context of patents, provide foreign inventors with access to their patent systems and the full protection of their patent laws. One important aspect of TRIPS was that a foreign inventor could establish a priority date in other TRIPS-member countries upon the filing of a patent application in his or her own country as long as a regular patent application was filed within the TRIPS-member country within a certain amount of time.

The Audio Home Recording Act of 1992

The Audio Home Recording Act of 1992 (AHRA) is an amendment to the United
States Federal Copyright Act of 1976. It provides that parties who import or manufacture "digital audio recording devices and media" must make payments to the United States Copyright Office. These payments are meant to act as the royalties that those who have copyrighted music have presumably lost through the consumer use of digital audio recording devices. The royalty fees are invested in specific U.S. securities and then disbursed to copyright holders yearly through the U.S. Copyright Office

The First Sale Doctrine

A copyright owner's right of distribution is limited by the first sale doctrine, which is an exception to the Copyright Act. The first sale doctrine is a legal principle that limits the rights to control content after a work has been sold for the first time. The first sale doctrine states that once a copyright owner sells a copy of his or her work to another, the copyright owner relinquishes all further rights to sell or otherwise dispose of that copy.