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The Patent Office defines Business Methods Patents as those patents classified under Class 705 — Data Processing: Financial, Business Practice, Management or Cost/Price Determination. The high level definition put forward by USPTO is machines and methods for performing data processing or calculation operations in the:
- Practice, administration or management of an enterprise, or
- Processing of financial data, or
- Determination of the charge for goods and services.
PTO defines four categories as business methods patents but includes a fifth in class 705 which has do with business cryptography and digital security. Way Better Patents™ uses its own group titles to describe what is going on in the Business Methods to make it easier to understand the types of inventions . They conform to the USPTO groupings but are a little easier to understand. Business methods patents can also be found in other US patent classes.While Class 705 is the class most closely with Business Methods Patents there are other places you can find business methods patents.
Planning and Innovation
Determining who your customers are and the products and services they want or need. USPTO describes this as Operations Research and Market Analysis.
Marketing, Selling, Evangelizing
Patents about informing customers that you exist, showing them your products and services and encouraging and providing incentives for them to make purchases. This covers advertisement management, catalog systems, incentive programs and redemption of coupons.
Exchanging Money for Stuff
This group of business methods patents covers all aspects of exchanging money and credit before, during, and after a business transaction. This includes what you would expect — credit and loan processing, point of sale systems, billing, funds transfer, banking, clearing houses, tax processing and investment planning. (Investment planning seems a little out of place.)
Minding the Store
Here you will find the patents that deal with tracking resources, money and products. USPTO places patents having to do with human resource management, scheduling, accounting, and inventory monitoring in this group.
A Protection Racket
The fifth and final group has to do with encryption and digital security. USPTO groups business cryptography here. When USPTO does its business methods presentations this group is not called out specifically as business methods patents but since it resides in Class 705 it is part of the business methods picture.
A Business Methods Invention You've Probably Used
One of the most well known business methods patents is the Single Action Ordering System — the Amazon.com One Click Patent, Method and System for Placing A Purchase Order Via a Communications Network — US Patent 5,960,411. If you've paid with one click at Amazon or bought an app on the iTunes store you've used some of the elements of this patent. The patent has been reexamined and it's scope has been narrowed over time but it still provides an understandable example of a business method patent with no obvious moving parts.
The One Click Patent Sample Claim
6. A client system for ordering an item comprising:
an identifier that identifies a customer;
a display component for displaying information identifying the item;
a single-action ordering component that in response to performance of only a single action, sends a request to a server system to order the identified item, the request including the identifier so that the server system can locate additional information needed to complete the order and so that the server system can fulfill the generated order to complete purchase of the item; and
a shopping cart ordering component that in response to performance of an add-to-shopping-cart action, sends a request to the server system to add the item to a shopping cart.
Business Methods Snapshot
Class 705: Data processing: Financial, Business Practice, Management, or Cost/Price Determination was created in 2000 to classify business methods patents. This class was derived from old Class 364 - a data processing classification.
The average pendency period from filing date to issuance date was 38 months. Pendency to First Action averaged 19 months.
The Numbers - Year, Grants, Allowance Rate, Examiners
The numbers that follow were published by USPTO on July 26, 2012. The numbers reflect activity through end of the government fiscal year (September 30th) for all years except 2012 which reflects numbers through Q3 - June 30, 2012.
|Allowance Rate||# of Examiners|
* Thru Q3
Top Business Method Patent Assignees
The Top Assignees as presented at the 2012 Business Method Partnership Meeting. Entities are not in order.
|International Business Machines Corp.||Microsoft||SAP AG|
|Wells Fargo Bank||JDA Software Group, Inc.||Sony Corp.|
|Trading Technologies Int'l, Inc.||Pitney Bowes, Inc.||Google, Inc.|
|Accenture Global Services, Inc.||JP Morgan Chase||Fujitsu Ltd.|
|American Express Travel Related Services Company, Inc.||NCR Corp.||eBay, Inc.|
|Hewlett-Packard Development Company, L.P.||Oracle International Corp.||Intuit, Inc.|
|Amazon Technologies, Inc.||Morgan Stanley|
The average pendency period from filing date to issuance date was 19.7 months, ranging between 2.9 and 53.8 months.
Business Method Patents can also be found in areas addressing specific inventions that deal with transactions such as gaming and education.
Not all business methods claims are filed in Class 705. Business Method patents can also be found in the following US Patent Classes
Where The Rest of the Business Method Patents Live
|Class||Title||Business Methods Inventions Found There|
|340||Communications: Electrical||Credit, Banking or Finance, Item Inventorying, Space Allocation (reservation systems)|
|379||Telephonic Communications||Credit Authorization, Televoting, Sales, Ordering, or Banking Systems, Billing, Advertisement|
|700||Data Processing, Generic Control System or Specific Application||Resource Allocation, Job Scheduling, Bill of Materials, Ordering, Filing, Price Adjustment, Data Collection and Reporting (Sales, inventory)|
|708||Electrical Computers: Arithmetic Processing and Calculating||Business Devices (Billing Memorandum)|
|235||Registers||Price Determination, Banking and Credit Card Systems, Inventory and Voting (voting machines)|
|703||Data Processing: Structural Design, Modeling, Simulation or Emulation||Modeling by Mathematical Expression, Simulating Electronic Device or Electrical System|
|707||Data Processing: Database and File Management or Data Structures|
|709||Electrical Computers and Digital Processing Systems: Multicomputer Data Transferring||Computer Conferencing, Resource Allocation or Monitoring, Network Access Regulation, Data Routing|
|726||Information Security||Access Control, Prevention of Unauthorized Use of Data Including Prevention of Piracy, Privacy Violations, Limitations on Copies (Intellectual property protection and cyber security methods)|
Business Methods Patents are prosecuted by Technology Center 3600 — Transportation, Construction, Electronic Commerce, Agriculture
The 315+ Patent Examiners are organized into Work Groups and Art Units. Understanding how the patent examiners are organized provides insight into the subject matter being patented.
Business Method Patent Examiners have a 70% affirmance rate. (Affirmance is patent speak for when an applicant appeals an examiner's decision.)
3620 Work Group
|Art Unit||Subject Matter|
|3628||Cost/Price, Reservations, Transportation|
|3680 Work Group|
|3690 Work Group|
|3691||Finance & Banking|
|3693||Finance & Banking|
|3694||Finance & Banking|
|3695||Finance & Banking|
|Business Practice Specialist (Patentability)|