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Should Business Methods Be Patentable?

The non-patentability of business method patents under Indian law is one of the principal areas in the IP realm where the Indian Patent Act still falls short and differs from other nations. A business method is “a method of operating any component of an economic enterprise,” according to one definition. Business approach  patent is a type of patent that reveals a new concept for a method of conducting business that makes a specific use of technology and enables an inventor to protect it. Since they are a relatively new type of patents, the appropriateness of patenting business procedures has been the subject of various reviews. Businesses devote a significant amount of their resources to innovation and the creation of new, distinctive systems, so they naturally want to preserve their creative processes.

Business Method Patentability in the USA

In light of Ex Parte Lundgren, Appeal No. 2003-2088, another type of patent offered by the United States Patent and Trademark Office (USPTO) is a business method patent (BPAI 2005). This kind of patent typically protects a business strategy that incorporates technology to create a fresh approach to conducting company. 

With the 1998 decision in State Street Bank & Trust Co. v. Signature Financial Group Inc., business process patents have only been legal in the US. This decision established the rule that a claimed invention was eligible for patent protection in the United States if it entailed some sort of practical application for the first time. This viewpoint significantly increased the number of business method and software patents. The SC, however, believed that the growing number of business-method patents might be too imprecise and have questionable validity.

Business Method Patents Around the World

  • Europe: According to Article 52 of the European Patent Convention, any plans, guidelines, or techniques for engaging in mental actions, playing games, or conducting business are not subject to patentability (2c)
  • Japan: Business methods are well-known in Japan and fall within the category of patentable subject matter. Yet, patents aren’t just given out for business processes; they must always have a technological component that is both concrete and actual in order to be granted.
  • India: Section 3 of the Indian Patent Act deals with inventions that are deemed ineligible for patent protection. It states that any mathematical method, business method, computer programme per se, or algorithm is not eligible for patent protection under Indian law. They do, however, turn patentable if a novel approach resolves a “technical” issue and a system is created using it.

The Case For Allowing Business Method Patents In India

Investor confidence in our system might rise as a result of allowing business processes to be copyrighted or incorporating business method patents into the Indian Patents Act, leading to increased investment in our infrastructure and other initiatives.

The significance and benefit of patenting a business process are demonstrated by the Netflix instance. In 2003, it received a patent for its computer-implemented method of letting clients rent movies and TV episodes. Later blockbuster was the target of a patent infringement lawsuit brought by Netflix in 2006, but the case was ultimately resolved out of court.

Thus, it is evident that business patent methods will improve India’s business climate because they enable businesses that invest significant sums of money in the development of their enterprises through original business concepts to protect themselves and prevent rivals from copying their concepts or works.

The absence of an industrial application, which is a key requirement to qualify as an invention, was a major factor in the history of business method inventions filed in India. The question of whether the invention qualifies as a business method and is therefore not patentable can only be considered after the invention has been determined to be an invention.

Courts And Business Method Patents

Few writers in the Amazon case questioned the one-click patent to Amazon.com on the grounds that it was a “unplanned mutation.” In this case, Barnes & Noble was given a court order to stop employing the aforementioned function. This instance exemplifies the problems that may occur if a company patent is upheld in nations with developing technology.

Guidelines published by the Indian Patent Office in 2016 have offered a more objective approach for determining whether the subject matter relates to a business process. The claimed subject matter would need to be looked at as a whole if it implements a technological procedure or involves a specific device. In such a situation, it is conceivable that the subject matter under examination may be patentable if the invention’s core ideas do not relate to a business approach. This is also in line with the guidelines established by the IPAB in the Yahoo v. Controller decision, where the court determined that the subject matter was unpatentable since the “technological innovation” did not fit the definition of a business method.

Due to the obvious statutory language explicitly prohibiting business processes, the IPAB specifically abstained from issuing business method patents. However, the court believed that uniform procedures should be implemented at Indian patent offices to improve compliance with procedures used by and lessons learned from comparative law.

Author: Mahima Agarwal, Legal Intern at PA Legal.

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