People often call my office wanting to patent a business method. Any such patent requires utility, novelty, and non-obviousness. There are certainly historical examples of patented business methods: a computer company patented its computerized accounting system (used to manage mutual investment structure); eBay patented an “electronic design to facilitate the sale of goods between private individuals by establishing a central authority to promote trust among participants.” Yet, identifying a potentially valid business method for patent protection is like locating a small treasure in a large trash heap. The vast majority of business methods are not patentable and only protectable insofar as they are trade secrets.
The reason that business methods are difficult to patent is because they tend to be reducible to an idea. Whether considering a copyright, trade dress, or patent, mere ideas are not protectable under any legislation. The Copyright Office and the Patent and Trademark Office (PTO) will only register some manifest expression of ideas. Sometimes, ideas can be protected through a non-disclosure agreement. Such an agreement was central at the beginning of the lawsuit between the company that makes Barbie and the company that makes Bratz: the toy designer had a contract specifically mentioning ownership of his ideas as related to his position at Mattel.
The 2014 Supreme Court decision in Alice Corp. v. CLS Bank International was emphatic that to patent a business method, it must be more than an abstract idea (e.g., an algorithm or some general principal). The inventor must add “something extra” that embodies an “inventive concept.” In fact, three justices issued a concurring opinion stating that business methods of any kind are categorically outside the patent system.
Since Alice Corp., the PTO has rejected the vast majority of applications for business methods. It appears that the sun is setting on the very notion of a patented business method. Still, if you believe you have a method that fulfills the requirements for a patent, then please let me know and I will put you in touch with a great patent agent. Otherwise, I will be happy to discuss the options involved with protecting trade secrets via contract.
