Patent - Business Method Patents - Part I

In this first of a series of articles we're going to discuss a specific type of patent called a business method patent.

If a company develops a new method for conducting an e-commerce business they may be able to prevent other companies from using this method for almost twenty years.

The truth is, since 1998 an increasing number of software and Internet companies have been issued patents for designing new ways of doing business. Examples would be new online ordering processes or a unique Internet advertising method. These kind of patents which are usually the combination of software and business methods are called business method patents or Internet patents.

The reason these patents are important is because a company that develops such a patent can keep other companies from using these business methods for 17 years. And if the owner wants, he can make additional money from the patent by licensing out to other companies. If there is a large enough market, the company may make more money from the licenses than from the patent itself.

A very good example of a business method patent is Amazon.com's 1-click payment method. This system allows a customer to bypass the traditional address and credit card forms as long as the customer has an account with Amazon. After clicking on the payment button the order automatically goes through. This patent was granted to Amazon.com in September 1999. The patent number is U.S. Pat No. 5,960,411.

Business method patents are actually a part of a larger family of patents called utility patents. These protect inventions, chemical formulas, processes and other discoveries. A business method is technically classified as a process. The reason is because it is not a physical object like a machine or some form of chemical compound.

During most of the last century the patent office issued very few business method patents. The reason for this is that they claimed that a process could not be patented if it was an abstract idea. The same thing was also said about software because software was said to be unpredictable algorithms.

That all changed in 1998. In July of that year a federal court upheld a patent for a method of calculating the net asset value of mutual funds. The court ruled that patent laws were intended to protect any method regardless of what it was, even an idea. As long as it produced a useful, concrete and tangible result. With this ruling the court made idea and software patents a reality again. After this ruling, business method patents increased by 40%. Also, that year, the U.S. Patent and Trademark Office created a new classification for business method patents. The classification is stated as "Data processing: financial, business practice, management or cost/price determination."

Many patents since this time have been issued for online shopping programs, Amazon's 1-click being the best example. However, because of the gray area of these patents, not having a physical product, an additional layer of review was added to the patent determination process. Technology specialists have been hired specifically to review these type of patent applications.

In the next article in this series we're going to discuss how to go about applying for a business method patent.

Michael Russell
Your Independent guide to Patents

Understanding Trademarks And Copyrights

If youve put a substantial amount of work into your business, then you will want to protect the fruits of your labor. If you don't want your competitors to be able to take what youve done and exploit it, youre going to need to take some steps to protect yourself.

1. What's In A Name?

Your business name is the first thing that your customers will see - it has to, therefore, be memorable and easily identifyable. If your customers know your name, then youve already won the first step to getting them to trust you and recommend you to others. You can register a trademark to protect that - a logo or word that distinguishes you from your competition. Coca-Cola, for example, is a trademark of the Coca-Cola Company - if I start selling my own drink and calling it Coca-Cola, or even something like Cocoa-Cooler, then they can sue and force me to stop.

2. More About Trademarks

A trademark doesn't stop with just the name of your business, but can also be obtained for the products you sell. If you have, for example, the blendmaster 5000, you can trademark the name blendmaster. Trademarks can not be obtained for common words. For example, Apple computer doesn't own the word apple. If you are going to get a trademark, however, be sure it's worth it, because they will cost several hundred dollars.

3. Extention Of Trademark

A trademark can be given away and usually only applies in the country where you registered it. Also, your right to use the mark will only last a set amount of years, usually a decade.

4. What Is Copyright?

A copyright is like a trademark, except it costs nothing. The moment you write, draw, or record anything, you have copyright by creation. If someone else tries to copy it without your permission, you can sue. This article you are reading right now, for example, has copyright, although the author (me) has chosen to give away certain parts of it for free. This applies to other things as well, music, graphics, etc. Please note that microchips fall under a unique classification of copyright law and the rules are not the same. Usually, copyright lasts for fifty years after your death.

If you want to give people permission to freely use and redistribute something youve made (like this article, for example), then you have the legal right to do this. You can even give up your copyright on a piece of work altogether, simply by writing on it that you no longer want to own the copyright. It's that simple. Chances are, however, that youll want more protection, not less.

For more great trademark related articles and resources check out http://www.homebusinessuniversity.info

Is Your Domain Name A Trademark Infringement?

I recently received an email from a concerned, fellow Internet business owner, asking for my opinion on an issue that could literally destroy his Internet business and the business of several other domains involved.

He had received legal notice from a prominent company, stating that he needed to relinquish his use and rights to his web site domain name because it contained three letters that infringed upon their trademark and their domain name. This same company also contacted several other Internet business owners and made similar demands.

Should a company that registers a specific trademark have the ability to destroy numerous businesses that legitimately registered domain names? Should a company that registers a trademark have the responsibility of ensuring that a domain name registration agency doesn't issue domain names that may be a trademark infringement? Or should an Internet business have the responsibility of making sure a potential name doesn't Infringe upon a registered trademark? Where does the responsibility lie?

Ultimately, the responsibility lies with the domain name registrant, as the trademark laws that apply in the hard copy world also apply on the Internet.

Any company that registers a trademark has the right to protect their trademark and has the right to notify you that your domain name is infringing upon their trademark. Why? If your domain name has the potential of confusing the public into thinking the trademark holder is somehow affiliated with your web site, they may bring infringement claims against you. The courts would have to make the decision based upon the trademark laws and if your domain name, in fact, has the potential of confusing the public.

Domain name registrants can protect themselves as well. If you have a registered domain name that doesn't infringe upon any trademarks, you too may be able to register a trademark. Registering a domain name as a trademark isn't easy, but it can be done. Although you can't register the http://www.or the .com, if the use of your name fits the laws criteria, it can be registered. You should consult with an attorney familiar with the Internet, trademarks and the laws prior to registering your domain name as a trademark. For a complete explanation, visit:

http://www.uspto.gov/web/offices/tac/notices/guide299.htm

As stated by the United States Patent and Trademark Office, http://www.uspto.gov/ "A mark composed of a domain name is registerable as a trademark or service mark only if it functions as a source identifier. The mark as depicted on the specimens must be presented in a manner that will be perceived by potential purchasers as indicating source and not as merely an informational indication of the domain name address used to access a web site." In other words, the use of a domain name must not be used simply as an address to direct customers to your web site, but must be used to identify the products or services of the business claiming the trademark, which provides products or services via the Internet.

If you're in the market for a domain name, you may want to consider searching the Trademark Electronic Search System, http://tess.uspto.gov/bin/gate.exe?f=login&p_lang=english&p_d=trmk prior to registering a domain name. By researching the trademark regulations and knowing your rights, whether you hold a trademark or a domain name, you may be able to avoid the possibility of litigation.

Shelley Lowery is the author of the highly acclaimed ebook series, Web Design Mastery -- an in-depth guide to professional web design that is rapidly becoming known as the "Bible" for professional web design. http://www.webdesignmastery.com