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Home >> Questions & Answers >> Is an invention based on a method of doing business patentable?

A method of doing business

A method of doing business developed and used by a business differentiates that business from its competitors, and when this method is patented, a business can prevent its competitors from making any use of the method or a method similar to it.

 

Is an invention based on a method of doing business eligible for a patent in Israel?


In 1999, the Registrar of Patents received a patent application for a new method for the promotion of products and/or services. The decision issued by the Registrar was that an invention based on a business method is not patentable.
 

Section 3 of the Patent Law of 1967 states:


"An invention, whether a product or a process in any field of technology, that is novel, beneficial, has industrial use and inventive step – is patentable."

In other words, you can get a patent on an invention when the following conditions are met: (1) the invention encompasses a product or a process in a field of technology, (2) the invention is new (an invention that was not published before the date of filing the patent application), (3) the invention has an inventive step (an invention that is not obvious to a personal skilled in the art on the basis of reports published before the date of filing the patent application), and (4) the invention is beneficial and has an industrial application.

The examination of the 1999 patent application stressed that because a business method does not belong to a field of technology, as required by law, an invention based on a business method is not considered to be patentable in Israel. However, the story did not end there.  The applicant claimed that the business method in question is carried out by a computer program, which is naturally associated with technology.  But even this argument was not accepted, because Israel does not consider a computer program patentable, but is considered a literary work.

You can summarize that as is the case in most countries, Israel does not grant patents to inventions based on a method of doing business, even if the method is carried out by a computer program.

On the other hand, if a hybrid invention incorporates a device or system, a computer program and a method of doing business and if the invention is not based principally on the business method, but is based on the device or system, then this invention may be granted a patent.  For such a hybrid invention, it is important to contact an experienced patent attorney, since correct drafting of the patent application and emphasizing the definition of what is the "heart of the invention" will contribute to the decision made by the Registrar of Patents.

 

What about the United States?


Unlike in Israel and many other countries, in the United States the situation is different.

In 2010, a U.S. court ruled that inventions based on a method of doing business are patentable. This unprecedented ruling was issued by the U.S. Court of Appeals in Bilski v. Kappos.

Bilski invented a method of doing business to hedge consumer risk.  The invention for the method was examined and found not patentable.

Although the U.S. Court of Appeals affirmed the decision that the Bilski business method invention is not patentable, it at the same time ruled that the machine-or-transformation test should not be the only test for patentability.  The court further explicitly ruled that inventions based on business methods can also be granted a patent in certain instances.

It is important to note that the U.S. Court of Appeals did not define the terms or provide another test that will decide whether inventions based on business methods are patentable, but as mentioned, this ruling set a precedent by stating that inventions based on business practices may be eligible for a patent.

To summarize, in the United States, an invention based on a business method could be considered patentable under certain conditions – the decision on Bilski opened a certain window, but still, even today, it is impossible to clearly define these conditions, and applying the tests for determining whether or not an invention based on a business method is patentable is no simple task.  Ask Dr. Sharona Lahav to learn more about filing your method of doing business patent application with the United Stated Patent and Trademark Office.
 
Dr. Sharona Lahav - Patent Attorney    
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