Welcome back to our course on protecting business innovations via patents.

We're going to talk today about software and

business process patents, specialized kinds of patents.

In terms of this session overview,

we're going to introduce you to what is a software patent,

what is a business process patent, and why does the US allow these?

And why do other countries not?

And if you want to get a software patent or business process patent

in another country outside the US, look, what are your options?

If they don't allow them, what can you do?

Well let's first look at what is a software patent?

There's lots of controversy about software patents, and lots of questions,

and many countries don't like them, many people within the US don't like them.

But let's first look at what isn't.

A software is normally protected by copyright.

And copyright protects expression, or your artistry of how you do something.

Patent protects function, or what you do.

The function is what you do, that's what's protected by a patent, not how you do it,

or how you express it, or how it appears, that's what copyright would protect.

And an example of its function that was protected by a patent was

Amazon's one-click, the idea that you could go into Amazon and

click on one button and buy a product and be done.

Go in, pick a product, click one, buy one-click, and leave.

Now, you might say, well, I can do the same thing in iTunes, or

in a Android app system on my phone, and that's true.

And the reason you can do that is that Amazon's one-click patent was overturned.

If you had not had that overturned, in order to do that function,

they would have had to license that.

But the Supreme Court found that this patent that was issued was too broad and

too close to an idea, so it was overturned, but

certainly got some controversy at the time.

Another example of patents being issued is there have been over 2,000 patents of

various types issued on software related to driverless cars,

being able to detect objects, being able to interpret, the images from LIDAR, or

other systems, being able to interpret visual images.

These driverless car apps are generally

software only in terms of their value creation and

new product innovation, and

they're not a physical tangible product.

But they are valuable, useful applications that are used in a business process.

In this case, driving a car without a person in it, it's not really the car,

but the act of recognizing something, or a voice response for

a online banking application with natural language recognition today.

These are software app patent examples.

Closely related to a software patent is a business process patent.

And sometimes people say what's the difference?

Well, and there's a lot of overlap.

And to some extent, it reached the point where the patent office was looking

at almost every business process patent was also a software patent.

And they issued a rule on business process patents that

say it must be more than just doing a known business online.

It's not enough to just take something that we're doing in the physical world,

and traditionally have known quite well how to do, and make it in software, or

make it online.

That's obvious, and you're not going to give a patent on that.

It must be more useful, more insightful.

One of the oldest examples of a business process

patent though that was not software was over 200 years ago.

A business process patent was issued on a new patent,

a new process called life insurance.

Up until that point, the only insurance was on factories, or ships,

or machines, or buildings, or furniture.

This company came up with an innovation that said we could insure somebody's life.

And when they die, it would pay out if it's before the end of the policy period.

That life insurance product was a patented monopoly product for 20 years.

Obviously that was over 200 years ago, and now it's no longer in patent.

Everybody can offer that.

It was an example of a business process which had nothing to do with IT.

It was nothing to do with software, but

was a business process that a patent was issued on.

And a somewhat IT related patent was a patent for

State Street Bank on how to organize their IT back end,

the data processing system, which was a little bit of IT, but not really software.

It was more a patent on a business process that was for

implementation of a software solution.

That's what a business process patent is.

Now why does the US do this?

Well as I mentioned, business process patents have been around a long time.

In fact, the US has been issuing business process

patents almost since the beginning of patent law in America.

Other countries also used to allow business process patents.

But France, Germany, UK and many other countries several hundred years

ago decided that there are too many problems.

And they stopped issuing business process patents, for

some reasons that have some validity.

We'll get to that in a minute.

In the case of the US, we never stopped.

In America, these patents are still being issued.

Software patents are more recent.

Up until 1994, generally,

the rule of law in the US was that software could not be patented by itself.

It had to be part of a system or other solution.

In 1994, the Supreme Court heard a case on a software only patent application

that had been rejected by the government Patent Trademark Office.

And the Supreme Court overturned the government decisions and

said if software is novel, useful, and not obvious,

it can be patented, even if there is no hardware or

product of any kind associated with a software alone could be patented.

Ever since that ruling, the law of the United States clearly is

software can be patent, like or not, agree or disagree,

doesn't matter, the Supreme Court has ruled, it is done.

In 1996, after two years of debates, the Patent Trademark Office came

out with a ruling that said yes, we will acknowledge software can be patented,

and will be issued patents if it meets the criteria.

But software itself is not a business process.

Software must be part of a business process, or

part of a product, which is useful.

The software itself is not useful,

it is used to do something which is useful for society.

So it has to be part of a process, or

part of a product that makes the software then useful in doing something.

Why do other countries deny these patents?

Well, one of the arguments is software's too close to an idea.

Similar to Amazon one-click,

they say we're rejecting all software patents as being too close to an idea.

US rejects some for that reason, but not all.

They say patents should protect useful products.

That's what patent law was designed originally to do.

The process idea slipped in early on, and one of the things that they found is these

business process attracted a lot of litigation, some of which is by

a group often referred to with somewhat of derision as patent trolls.

We'll talk more about patent trolls in session three in this module.

For now, just know that's one of the arguments against allowing

business process patents, or software patents in other countries.

They think the US patent control system is a problem.

They think the frequency of litigation is a problem, and

they don't want to go play that game.

So what do you do if you have a software or business process that you want to get

a patent on, not just in the US, but outside?

Well, the best way to have a chance of getting a patent outside the US is to

combine your solution with hardware.

Mix your software or your business process with hardware, file a patent application

for the combined solution, which includes your hardware component.

And the hardware may not be entirely novel or unique.

It probably should be proprietary, but it may be a modest part of the solution.

The same thing that works in Europe isn't a bad solution in the US as well.

So in summary, the US allows patents on software and business processes,

most other countries do not.

These kinds of patents are complex and often litigated.

But combining software and business processes with hardware can

make it easier to get around limitations or restrictions on getting a patent.

Thank you.

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4.1 Software patents & business process patents

Protecting Business Innovations via Patent

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