Patent showdown Featured

9:49am EDT January 26, 2005
Corporate educators and trainers face numerous challenges as they work to build an effective training program. To meet these challenges, many firms now employ training methods that utilize technology, such as the Internet, to assist with their training efforts.

While many companies have sought to partner with third-party providers to help develop their education offerings, others have chosen the build-your-own programming route.

While building technology-based education programs in-house may offer benefits -- namely the ability to customize for a company's own unique education needs --there are potential costs and risks. And one of the least-talked-about, yet potentially most significant risks lies in the area of patent infringement.

The business method patent

Beginning with the landmark State Street Bank & Trust Co. v. Signature Financial Group Inc. court decision in 1998, business method patents have become an important addition to the intellectual property landscape. In simple terms, business method patents are patents obtained on how a business process is carried out.

These patents do not necessarily require the existence of a tangible item, which most people associate with patents, but instead may focus on how a company performs certain business functions. Following the State Street decision, if such a process meets certain criteria established by the United States Patent and Trademark Office, then a process may be patentable as a business method.

Some of the best known business method patents include Amazon.com's one-click purchase, Yahoo's delivery of ads based on keyword searching and Priceline's name-your-own-price bidding method. Many business method patents are tied to Internet business ideas and much publicity related to these patents generally focuses on business processes that utilize the Internet. Since 1998, numerous patents have been issued for business methods that impact corporate education, with most containing a technology component.

Here are a few.

* Patent No. 5,489,213 covers employee training that includes a method for conducing ethical training.

* Patent No. 6,513,042 held by Test.com claims to hold the patent for conducting tests over the Internet.

* Patent No. 6,514,079 covers occupational training using certain methods in which multimedia presentations are employed.

The importance of patent awareness

Anyone who develops in-house programming for corporate training and education, especially if such programming includes the use of technology components, would be wise to appreciate the nature of business method patents for several important reasons.

First, as stated in patent law, patents give the patent holder the right to "exclude others from making, using, offering for sale or selling the invention throughout the United States or importing the invention into the United States" for a period that is generally 20 years from the date the patent application is filed. Consequently, for corporate educators and trainers whose organizations spend resources developing custom training applications, their actions may, in fact, lead to an infringement lawsuit if the custom work duplicates a patented process.

Such infringement could result in hugely expensive legal costs and, if one loses an infringement lawsuit, may result in expensive settlement costs. Those involved in custom development of education and training applications should understand the importance of performing research to ensure their work is not violating patents held by others.

Second, and on a more positive side, those developing learning methods should recognize that their methods may be patentable. If so, the methods may offer a competitive advantage to the developer because the patent may legally exclude others from offering the same.

At the very least, learning developers who feel their work is unique to the market should explore the patent option by contacting a patent professional.

Paul Christ, Ph.D. is an associate professor of marketing and director of MBA Programs at West Chester University of Pennsylvania. West Chester University's MBA Program serves the educational and training needs of students and corporate clients from its off-campus, state-of-the-art graduate business center located off the Boot Road exit of Route 202 in West Chester. For more information on the WCU MBA, visit www.wcumba.org or call (610) 425-5000.