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While the U.S. Patent and Trademark Office (USPTO) did not used to grant business method patents, claiming that a process could not be patented if it was simply an abstract idea, in 1998, a federal court ruled that 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." State Street Bank & Trust Co. v. Signal Financial Group, Inc. 149 F.3d 1368 (Fed. Cir. 1998) cert denied 119 S. Ct. 851 (1999). In the six months following the ruling, patent filings for software/Internet business methods increased by 40% and the USPTO created a new classification for applications: "Data processing: financial, business practice, management or cost/price determination."
The Cost of a Business Method Patent
The cost of obtaining a business method patent depends on several factors, including the subject matter of the patent, the complexity of the examination process, and whether a lawyer's fees are involved. You can expect to pay between $3,000 and $15,000 to acquire a business method patent unless you do it yourself, in which case the costs are much reduced. After a patent is issued, the owner must pay maintenance fees to the USPTO after 3.5, 7.5, and 11.5 years. Of course, if the patent is challenged -- and many are -- the costs can skyrocket.
Timeline for Obtaining a Patent
It usually takes two and a half to three years from the date of filing an application until a business method patent is issued. The period between filing and issuance is called the "pendency period." A patent owner cannot stop a competitor from using the process during the pendency period, regardless of whether the competitor purposefully copied the method or stumbled upon it independently. Only after a patent is actually issued can a company stop another from using making or selling the process. The patent is then valid for 20 years from the date of filing.
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