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I try to keep up on the trends in business-model patents, which are also referred to as software patents. The classification might even be broader than that these days, but today I want to get your opinion-- to see it I'm up to date-- or at least in the ball park.
As of yet, no new legislation has been passed to further restrict of inhibit the approval of software patents.
I always like to use priceline.com as an example. In my mind, what distinguished them was not so much the application for the patent, or the idea itself, but their willingness to defend it.
Question: If hypothetically Amazon.com had yet to release their system of mutual feedback, wouldn't that too possibly qualify as a new business model? I think so.
Now if I had an idea for a new Internet based business model, am I correct that once I file the patent disclosure form with the patent office, I have one year to actually file the patent, and am protected during the course of the year, where I can then freely solicit venture capital for development of that project.
Seems like a simple formula. Lets just say, I or someone had a GREAT idea for a business model. Working from that as a hypothesis: does the patent disclosure process offer sufficient protection so that confidential disclosure agreements are no longer necessary, at least in regard to the first year?
As of yet, no new legislation has been passed to further restrict of inhibit the approval of software patents.
I always like to use priceline.com as an example. In my mind, what distinguished them was not so much the application for the patent, or the idea itself, but their willingness to defend it.
Question: If hypothetically Amazon.com had yet to release their system of mutual feedback, wouldn't that too possibly qualify as a new business model? I think so.
Now if I had an idea for a new Internet based business model, am I correct that once I file the patent disclosure form with the patent office, I have one year to actually file the patent, and am protected during the course of the year, where I can then freely solicit venture capital for development of that project.
Seems like a simple formula. Lets just say, I or someone had a GREAT idea for a business model. Working from that as a hypothesis: does the patent disclosure process offer sufficient protection so that confidential disclosure agreements are no longer necessary, at least in regard to the first year?
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Re: software patents...
Wed, August 24, 2005 - 4:51 PMI am not sure what you mean by 'filing the disclosure at the patent office" - do you mean filing a provisional application? or filing a patent application?
from what little I know - and I am not an expert, investors (such as venture capitalists) have small regard for provisionals, the counsel I have talked to regard them as being almost valueless. The value of an unexamined patent application is somewhat greater, however you may have to get an opinion letter from 2nd attorney to add credibility to the value of your application.
I think your statement about the value of a patent being a function of the owners willingness to defend it is true.
As far as business model patents, I used to work for a prior art search firm, and they (as a generalization) found it very straight-forward to find invalidating art against business method patents, so that (as a generalization) it seemed like (at that time) the business method patents had very little value. Without disclosing any specific patents, the concept of on-line auctions predates the world wide web by over 10 years - cattle breeding stock has been auctioned out of feedlots across America and buyers in Chicago and other locations simultaneous bid over what was effectively a network. Many of the fundamental online auction & bidding patents were easily invalidated.
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Re: software patents...
Wed, August 24, 2005 - 10:39 PMFirst, there is a distinction between business method patents and software patents. Many business methods utilize a computer which may lead to the confusion.
Business method patents are just what the name indicates, a patent on a method of doing business. So the guy that invented credit card transactions could have patented that method of doing business, even though (at least in the old days) they did not involve the use of a computer. If you have been following the case law, the big case that started the business method patent craze was State Street Bank.
In order to be patentable, a business method, like any other invention, must be new and novel over the prior art. I think that the PTO has some difficulty in identifying relevant prior art to many business method patents and therefore many issue which should not. For instance, I think priceline.com has a patent on a business method they call "upselling" and I heard that KFC is a licensee (Don't quote me on that) Using the upselling method, instead of giving change to a customer the cashier will have a list of products he can offer instead... ie. if the change is 69 cents the cashier may be able to offer a 75 cent small soda or dessert. Now, I have to believe that there have been mom-and-pop stores out there that have offered a licorice or peppermint stick in lieu of change. If so such is prior art and in my opinion the upselling patent claims would not be novel or at least obvious in light of that prior art.
Nevertheless many business method patents have issued and a few of them are actually bringing in license fees.
One disadvantage of a business method patent over a non-business method patent is that the legislature has created a uniqued defense to infringement of business method patent. That is the if the alleged infringer can show that it had been using the method, but kept it as a trade secret, prior to the patentee "inventing" it, then ther is no infringement.
Now about protecting your business method. If your only looking for protection within the United States, you have one year from the date you publicly use or disclose your invention in which to file your patent application. In the U.S. only the inventor may obtain a patent (so someone can't copy your invention and apply for a patent), and if two people independently invent the same invention, the first to invent is entitled to the patent (not the first to file his application). SO in theory, you are protected as long as you get your patent applcation on file within a year of using or disclosing your invention.
Nevertheless its always a good idea to get your patent application filed as quickly as possible. Your patent rights don't acrue until after your patent issues, which can take 1.5 to 3 years or more. During this time, anyone can make use of your invention, and only when your patent actually issues can you demand that they stop.
Well, as you can tell, its a pretty complex area of the law and I've only scratched the surface... so I must offer my disclaimner:
(The information provided herein is not intended to be legal advice, but merely conveys general information related to legal issues. The information provided is not guaranteed to be correct, complete, or current. I make no warranty, expressed or implied, about the accuracy or reliability of the information provided (although I'm usually right). You should not use this information as a substitute for retaining competent legal counsel (I research things better when I'm getting paid).
Furthermore, this communication is not intended to create any legal relationship between you or any reader and me.)
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Re: software patents...
Thu, August 25, 2005 - 8:22 PMThanks for your posts, George & Rick.
Years ago inventors used to put their ideas in an envelope and send it to themselves as registered mail, then keep the envelop as proof of conception. Then the patent office came up with the "disclosure" form, which they didn't even read, but just kept it on file as proof of initial design. Is this now called a "provisional patent" It's a very simple form right? Doesn't cost much either.
Anyway, as a long time software author who has seen many unique programs copied, next time I want to go for the patent. Notice I didn't say get a patent. Of course I want a patent, but that may not happen for any number of reasons. My logic goes like this. If I've got a unique idea and am willing to send in a patent application and $350, I can then use the phrase "patent pending" which will keep competitors at bay, maybe for years, while I wrangle with the patent office over rights. I may even need to file a secondary application. (Still get to use patent pending.) I think as far as marketing leverage goes that $350 is a major bargain.
Of course, IF I really want the patent then I'll take my time with the initial application and find an attorney who has a track record. A buddy of mine has got an idea. I want to encourage him. He says, he's got an attorney a friend recommended. He's completely confident of putting something potentially valuable in the hands of an attorney someone recommended just because he was an "attorney". Gads NO, I said. Any attorney who knows his way around a patent application would be willing to file for you-- to collect the fee-- for the initial filing and then FEES for all the additional correspondence required afterwords. But unless they've got a track record, that's probably all the'll do. Don't expect a patent to be granted, I said.
In order to actually receive the patent, your best changes are going with an attorney who has already been granted similar patents. Do a patent search. See if their name appears as attorney of record. How many have they done this year? That's the guy I want to go with.
Hey, I'm just a programmer. I think I know what I'm talking about. I'm sure there's a lot more too it. I'm sure I'll learn a LOT of hard lessons the first time through. That's why I thought I'd talk to you guys. Maybe save myself some grief.
Thanks for the brief update Rick! EXCELLENT reading! I found it chocked full of good advice and insightful perspective. Let me tell you why I'm thinking about these patents again. This month's "Business 2.0" cover story is, "50 million dollars to be awarded by 18 venture capitalists." Something like that. It's like a contest, send an email pitch in and if they like it, if they believe you can make it happen, you get funded.
Hey. I thought I'd give it a try. I design normalized relational database tables in my sleep. I SEE SO MANY new business models that no one has ever done before. At this point my basic strategy is to reveal one, to make a point, to impress someone with my expertise. There are SO many. Some I think would just be good for society. Let them have it. Lets see IF these really are GREAT ideas or... maybe I've just deluded myself. Run a test. Don't spend too much time on it until you know. That's my philosophy. -
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Unsu...
Re: software patents...
Fri, August 26, 2005 - 7:31 AMIn general, I would love to know who the person was that originated the mail to myself idea so I can beat him over the head with a copy of the patent code.
Over the thirteen+ years I have been in the patent biz, I have found more people who think this is some kind of wizbang "cheap mans patent."
Unfortunately, in my view, it is nothing but a piece of paper and a trap for the unweary.
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Re: software patents...
Fri, August 26, 2005 - 8:21 AMI'll bring my copy of the MPEP and we can both beat him.
Mailing yourself a copy of your disclosure is no better than dating the disclosure and placing it in a safe place.
The issue of trying to document a date of conception arises because the U.S., unlike many other countries, provides that the first person to invent something is entitled to a patent over someone who later independently invents it but files their patent application first. (Notice I said later "invents" -- someone who copies the invention of another is not entitled to a patent at all, because he is not the inventor)
Since the date of conception is sometimes critical in determining who has the right to a patent, it is important that inventor be able to provide evidence ot the date of conception. The better the evidence, the more likely it is that the person who has to decide the issue is going to believe that the evidence is true.
The evidence can be the inventor's declaration signed under penalty of perjury that he invented the invention on a certain date. While such a declaration may ultimately carry the day, it could become suspect, since the inventor has a vested interest in the outcome and may have a selective memory.
Better than just a declaration might be a declaration accompanied by a signed and dated disclosure. If the inventor executes a declaration under oath that says "I drafted the attached disclosure on May 16, 1999 and dated it that day.. it will be more believable than the inventor just declaring "I invented it on May 16, 1999. At least the person making the decision can understand how the can recall the date of invention and also can objectively look at the disclosure to see if it contains all the elements of the invention.
An even better method, one used by most companies, is to keep laboratory notebooks in which the inventors describe their inventions contemporaneously with the thought process, A good practice is for the inventor to sign and date each page of the notebook after drafts it and then have a person who understands the technology, but who is not personally involved in the invention, sign and date the pages as a witness.
If a dispute ever arises with respect to the date of conception, the relevant portions of the laboratory notebook can be produced and the inventor can declare under oath that he drafted the notebook entry on May 16, 1999 and if that is in dispute the "witness" (who ideally has no vested interest in the outcome) can come in and declare under oath that he witnessed and dated the notbook entry on May 18, 1999. This method provides pretty persuasive evidence of the date of conception.
The U.S.P.T.O's disclosure program allows an inventor to send in a disclosure of his invention. If the date of conception ever becomes an issue, then there is some objective evidence that the inventor had concieved of the invention prior to the date the disclosure was filed. The problem with using this service is many times an invention is created over time with many revisions. You might invent a two wheeled vehicle today, and next week figure out it works really well if you put pedals and a chain on it to power it, then the following month determine that putting a motor on it makes it even better. If you sent in your disclosure after you invented the two wheeled vehicle, but ultimately filed a patent application claiming 1. a two wheeled vehicle, 2. a bicycle and 3. a moped, the disclosure would only evidence the date of conception of the invention of the two wheeled vehicle but not the bicycle or the moped.
So whats the problem with mailing yourself the disclosure of the invention certified mail? It does not provide any more evidence of the date of conception than just signing the disclosure and putting it in a safe place. The inventor will have to declare that he put the disclosure in the envelope prior to sending it (to eliminate the possibility that he sent himself an empty unsealled envelope in May 1999 and stuffed it later in 2004) , and based on the postmark he knows he sent it May 16, 1999. This is no different than the inventor declaring that he dated the papers on May 16, 1999.
OK enough of my rambling I need to go Bill Bill Bill....
BUT NOT BEFORE THE DISCLAIMER:::
(The information provided herein is not intended to be legal advice, but merely conveys general information related to legal issues. The information provided is not guaranteed to be correct, complete, or current. I make no warranty, expressed or implied, about the accuracy or reliability of the information provided (although I'm usually right). You should not use this information as a substitute for retaining competent legal counsel (I research things better when I'm getting paid).
Furthermore, this communication is not intended to create any legal relationship between you or any reader and me.)
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