Can You File a Patent Application for a Business Method / Process?

I am happy to provide an updated answer for this question as the Supreme Court issued an opinion in 2015 involving this area of patent law. In Alice Corp. v. CLS Bank International, a patent troll sued a consortium of banks for using patents that were “designed to facilitate the exchange of financial obligations between two parties by using a computer system as a third-party intermediary.” In other words, the patent dispute was over a business method. A bunch of amicus briefs were submitted by tech companies like Google and LinkedIn, who feared the repercussions if this business method was held not to be a valid patent.

The highest court in the land held that the patent was an “abstract idea” and therefore, not patentable pursuant to 35 U.S.C. § 101. Specifically, the Court found “the method claims, which merely require generic computer implementation, fail to transform that abstract idea into a patent-eligible invention.” The framework to determine if the business method is just an abstract idea has two parts:  (1) determine if the claim at issue is directed toward an abstract idea; and (2) examine the elements of the claim to determine whether it contains an “inventive concept” sufficient to transform the abstract idea into a patent-eligible application. Pretty confusing right?

The vague advice from Supreme Court has caused a dramatic effect in the lower courts. In fact, just a few days ago IP Watchdog posted an article “Federal Circuit guidance is needed because district courts are misapplying Alice.” Therein, the author describes that “Federal Circuit guidance is needed because many district courts have misapplied Alice and sidestepped the rigorous factual analysis that has historically been required, and should still be required, prior to patent invalidation under Section 101. Over 7,500 claims in 150 patents have been invalidated as a matter of law.”

The precedent from Alice should make inventors wary of drafting a provisional patent application on their own. It is really important to consult a seasoned patent attorney that will ensure your method rises up to the level of patentability.

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