Determining Who Gets a Patent
What happens if a competing business claims that it was already using the particular method that is the subject of a patent application? If Business A files for a business method patent, but Business B can show that it was using the method publicly more than a year prior to the filing, Business B can thwart the patent application or, if necessary, invalidate the patent later. The key is that Business B's use of the method must have been public. If Business B used the method confidentially, the patent will be issued to Business A. However, under a 1999 amendment to the patent law, if Business B used the method confidentially before Business A filed for a patent, it can continue using the method without liability for infringement.
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Company A has been using a business accounting method for years, but never publicly disclosed it. Company B independently develops the method and obtains a patent on it. Company B sues Company A. Under the amendment to the patent law, Company A has not infringed the patent.
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If Company A had been using the method publicly for more than year before the patent application was filed, Company B's patent would be invalidated or, more likely, never would have been granted in the first place.
Legal Requirements for Getting a Business Method Patent
In order to qualify for patent protection, a business method or software must meet four requirements:
- The method or software must fall within the classes of patentable subject matter. Anything that is created by humans falls within these classes; laws of nature, natural phenomena, and abstract ideas do not.
- The method or software must be useful. This requirement is fairly easy to satisfy because any functional purpose will suffice. A business need only demonstrate that its method or software provides some concrete tangible result. For example, the Amazon 1-Click patent provides a tangible result -- an expedited purchase.
- The method or software must be novel. This requirement means the method must have an aspect that is different in some way from all previous knowledge and inventions. This requirement is discussed in more detail below.
- The method or software must be nonobvious, meaning that someone who has ordinary skill in the specific technology could not easily think of it. This, too, is discussed just below.
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