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Expanding Preconceptions of Patentable Matter posted on April 5, 2007

No way that someone patented a method for putting a golf ball, right? Think again.

STILL KICKING YOURSELF FOR NOT GETTING around to patenting that social networking website you dreamed of years ago? See, for example, San Francisco–based social networking site Friendster’s U.S. Pat. No. 7,069,308, titled “System, method and apparatus for connecting users in an online computer system based on their relationships within social networks.”

Or how about that technique for purchasing a product online using a single click, thereby facilitating excessive online spending? Amazon.com has a patent for that: the much-loathed “one click” U.S. Pat. No. 5,960,411, titled “Method and system for placing a purchase order via a communications network.”

While such inventions have been characterized as being technical in nature, companies are increasingly seeking protection for innovations that lie outside common preconceptions of what is patentable subject matter. In 1980, the Supreme Court stated that anything made under the sun by man is patentable, which resulted in a dramatic increase in biotechnology patent filings. However, despite this clear pronouncement, there was still some uncertainty regarding some types of patents. It was not until 1998 after the Court of Appeals for the Federal Circuit, which handles appeals arising from federal district court patent trials, clarified that there is no prohibition on obtaining patents for methods of doing business. That was when the number of patent filings claiming methods of conducting an economic enterprise grew exponentially.

This latter decision coincided with Web 1.0 and, as a result, a large number of patent applications related to internet-related inventions began to sprout up. In addition, as a result of this decision, other companies and, in particular, financial institutions also began seeking patent protection on a wide variety of topics, including tax strategy. Wealth Transfer Group’s U.S. Pat. No. 6,567,790, titled “Establishing and managing grantor retained annuity trusts funded by nonqualified stock options,” is a prime example.

Companies need to appreciate that recent, seemingly distorted perceptions of patent law are nothing more than shoehorning hot new technologies into the ageless “old-school” classes of patentable inventions. The patent statute explicitly opens up patentability to “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.”

For example, while Amazon’s “one-click” patent may seem ridiculous to some, this concept is claimed as a method requiring no less than six discrete process steps or interactions between a client system and a server system. That being said, there are still a handful of patents that have been issued that garner significant attention as being “odd” by incorporating human actions into the scope of protection. Examples? How the patenting of a method of putting a golf ball (U.S. Pat. No. 5,127,650), a method of safely lifting objects (U.S. Pat. No. 5,498,162) and a method of styling one’s hair to conceal baldness (U.S. Pat. No. 4,022,227) and the like.

Another key point to be mindful of is that patent rights are proscribed only by the “claims” at the end of a patent document, and not by the general idea behind, or title of, a patent. Thus, while Friendster may tout patent coverage for a social network system to connect users of a network, a glance at their broadest claim reveals no less than three distinct steps executed by a computer system, and which require specifically recited logic for being executed.

The main point is that while preconceptions of patentable subject matter appear to be expanding beyond sanity, such expansion is actually grounded in a legal foundation that is both reasonable and not unanticipated. For companies, this means that no product of creativity or innovation, no matter how small, should be overlooked as a possible property asset that can be commercialized in a variety of profitable ways. In order to effect such a mandate, companies often need to change their corporate culture to ensure that innovators do not simply dismiss their innovations as being commonplace. Best practices suggest that the formation of an internal patent committee can be effective in soliciting new patent applications and overseeing their preparation, filing and prosecution. Once a company has insight into its various innovations, it can then make a determination as to which areas are projected to give the greatest return on the investment required to prepare and file patent applications.