What a business method patent is

People usually think of patents as applying to concrete inventions, like a new kind of wrench or a self-opening prescription pill bottle. A business method patent is another type of patent that is available from the United States Patent and Trademark Office (USPTO). This type of patent usually patents a business method that is combined with technology, resulting in a new way of doing business.

Business method patents have only been permitted in the United States since 1998, when State Street Bank & Trust Co. v. Signature Financial Group Inc. was decided.

Example of a business method patent

An example of a business method patent would be an anti-fraud ATM machine that reads the ATM card and processes transactions, but also uses software to send the customer a secure code on their cell phone so they can verify the transaction.

The difference between a business method patent and a process patent

When you patent a business method, you receive a patent for the specific business method you've created, which usually involves some type of technology. This is different from a process patent, which patents the way that some type of physical material has its characteristics or functionality changed through a specific process. The business method itself is at the center of the business method patent.

Business methods you can patent

To patent a business method, the invention must be novel and nonobvious. And a business method has to be more than just an idea to be patentable.

The Supreme Court ruled in Bilski v. Kappos that a method of hedging risk and its application to a specific market was not eligible for a patent. The standard for patentability for a business method is that it must be a process that creates a useful, concrete, and tangible result. Plus, the business method must involve some kind of technology, hardware, or equipment. So, the patent is about the interaction of the technology item with a method or way of doing business that—when combined together—is unique and different from anything else developed previously.

How to apply for a business method patent

To apply for a business method patent, you must complete a utility patent application—the business method patent is a subset of utility patents—which will include details about your business method. When writing a business method patent application, your description should clearly explain the method you have invented and how it interacts with the technology or equipment, as well as a detailed description of the software involved (note that software can be copyrighted but not patented).

The patent application will go through a review process where it is examined, and there may be questions from the examiner that you will want to answer as quickly as possible. It can take two to three years from the date of filing to receive a business method patent. The business method patent can cost thousands of dollars, since you will likely need to hire a patent attorney to handle the paperwork. You will also have to pay the applicable USPTO fees.

Because of the complexities and legalities involved, you may want to work with an online services provider to be sure that you're protecting all of your intellectual property—from patents, to trademarks, to copyrights.