Some types of
software or internet business methods may qualify for a patent. However,
this doesn’t necessarily mean that you should apply for one. There are
several reasons to hesitate.
Factors that May Lead You NOT to Apply
- By the time you get a patent, your invention may be worthless. It
generally takes two to three years to obtain a software or
business-method incredible pace of change in the software and Internet
industries, your invention may be obsolete and worthless by the time you
receive your patent. For a patent to add real value to your business,
you need to feel confident that the invention you are patenting will not
soon be outdated by newer technology.
- Software and Internet patents are suspect. Because
the United States Patent and Trademark Office (PTO) has had problems
deciding what kinds of software and Internet business methods really are
patentable, patents on these inventions are suspect. The fact that the
PTO issues a patent doesn’t mean the patent is valid. It only means that
a particular examiner has decided that a patent should issue on your
invention. If you should later go to court to enforce the patent, the
infringer may be able to successfully prove that the patent never should
have issued in the first place. In other words, a judge can (and often
does) second guess the patent examiner and—assuming your adversary
appeals—an appellate judge can second guess the first judge. This
second-guessing routine, which is potentially a problem for all patents,
is especially troublesome for software and Internet business methods
patents. This is primarily because the PTO lacks both sufficient
personnel who are qualified to examine software-related applications and
comprehensive information about previous software developments (the
prior art in this particular field). Simply, it’s well known that many
software and Internet business methods patents have been and continue to
be improperly issued. The fact that you get such a patent may be little
more than an invitation to spend piles of money on lawyers and courts
in an unsuccessful effort to enforce it against attacks on its validity.
In addition, passage of the America Invents Act may have sounded the death knell for business method patents.
- Only the powerful (or very determined) can play the patent game. Seeking
and then enforcing a patent can cost a bundle. The cost depends on
several factors, including the subject matter of the patent, the
complexity of the examination process and lawyer's fees. Unless you do
it yourself -- in which case the costs are much reduced -- you can
expect to pay between $3,000 and $15,000 to acquire a software or
Internet business method patent. After a patent is issued, the owner
must pay maintenance fees to the PTO after 3.5, 7.5 and 11.5 years. Of
course, if the patent is challenged -- and many are -- the costs can
- Therefore you
will want to make a cost-benefit analysis, weighing the costs of
obtaining and maintaining the patent over its up to 17–19-year life
against the probability that you really will be able to commercially
profit from it.
Factors that May Lead You to Apply
As a general rule, seeking a software or Internet business methods
patent is unwise unless you are reasonably sure that your invention
deserves a patent and at least one of the following is true:
- You are economically strong enough to fund patent litigation should
the need for it arise (patent litigation is hellishly expensive because
you must hire lawyers—commonly in excess of $100,000).
- You are stubborn and savvy enough to take time to understand how the
patent system works and willing to do some or all of your own legal
work (a good-sized hill to climb, but others have done it, with huge
- The innovation is sufficiently important to another company to cause
it to come to terms with you if you have the patent (by purchasing your
patent rights or paying you for a license to use the innovation).
- You own a lot of patents and are a big enough player in the industry
to wheel and deal with other patent holders by trading them the right
to use your patents in exchange for your being able to use theirs.
- You know your idea will change the course of a particular field, and
without a patent on it you risk forfeiting the credit and profit from
the idea to others, who may then obtain their own patent and freeze you
- You think the patent will impress prospective financial backers that
your business really is special (venture capitalists have been known to
tell start-ups to come back and see them after they have obtained a
- You are looking ahead to possibly selling your business and want to increase its value.