Patent it

So you want to be the next Bill Gates, but you don’t want to be a nerd? You want to make zillions on the Internet, but you don’t know the difference between a megabyte and a dog bite?

Now you can. A recent important court decision has helped create a race to the United States Patent and Trademark Office — and you don’t want to be left behind.

Historically, it was widely believed that under U.S. patent law, an invention required the physical transformation of an object.

Metal was hardened, a tire cornered better, the humidity in a room was controlled, plastic was made more durable, etc. However, in July 1999, a United States court decided State Street Bank & Trust Co. vs. Signature Financial Group, a case involving patent infringement. The important thing to note is that the parties suing over a patent infringement were banks. Since when are bankers inventors?

Since now, or more specifically, since the State Street Bank case, in which the invention was a “hub and spoke” mutual fund, which permits multiple mutual funds with the same investment objectives to form a legal partnership. Each individual fund is a spoke that invests its individual assets in a common stock portfolio, or hub. This financial and legal structure provides tax benefits, improved efficiencies and reduced and shared expenses.

The Signature Financial Group filed a patent application covering its data processing system used to manage a hub and spoke mutual fund. When a competitor, State Street Bank, heard about Signature’s system, it copied it and began using it. Signature sued for patent infringement and won.

The State Street Bank case has become a catalyst; helping to generate a flood of patent applications directed to inventions that historically were not considered patentable subject matter. These patent applications, known as “business method patents,” seek to protect ways of doing business.

Examples of the type of business methods that are being patented include supplier and customer service methods, procedures for sales, distribution, billing and collections, training, product testing and creation methods, methods of gathering market intelligence, general data management and order processing, and the handling of returned products. Some of the more famous business method patents which have been awarded include the Priceline.com patent and the Amazon.com “one click” ordering system.

Wherever you work, in whatever field, it’s important to know about the opportunities presented by business method patents. If you work in a business that has not considered patents, such as one that doesn’t manufacture a product, you need to open your mind to business methods patents.

They’re not just for geeks anymore.

Roger Emerson is a shareholder in the intellectual property law firm of Emerson & Associates. He can be reached at [email protected].