Business Method Update and BriefingBusiness Method Update and Briefingfor thefor the

Business Methods Partnership Meeting Business Methods Partnership Meeting

July 15, 2009July 15, 2009

by

Wynn Coggins Group Director, Technology Center 3600

wynn.coggins@uspto.gov

What is a “ Business What is a “ Business Method”?Method”?

The term “Business Method” is a generic term that has been used to describe many types of process and apparatus claims over the years.

There has been confusion regarding business method claims vs. other process and apparatus claims.

Not all “business method”- type claims are classified in Class 705. Only computer-implemented processes related to e-commerce, the Internet and data processing involving finance, business practices, management or cost/price determination are classified in Class 705. Other process claims are classified and examined according to their structure or field of use. For example, gaming methods and teaching

methods which are often considered business methods are classified elsewhere.

What is a “ Business What is a “ Business Method”?Method”?

Class 705Class 705

Title:Data processing: Financial, Business Practice, Management, or Cost/Price Determination

Definition: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 or services

Class 705 Comprises:Class 705 Comprises:

A collection of 20+ A collection of 20+ financial and business data financial and business data processing areas.processing areas.

Its four largest categories Its four largest categories are:are:

The Four The Four Categories….Categories….

1. Determining Who Your Customers Are, and the Products/Services They Need/Want. Operations Research Operations Research

- Market Analysis- Market Analysis

2. Informing Customers You Exist, Showing Them Your Products & Services, and Getting Them to Purchase. Advertising ManagementAdvertising Management Catalog SystemsCatalog Systems Incentive ProgramsIncentive Programs Redemption of CouponsRedemption of Coupons

The Four The Four Categories….Categories….

3.3. Exchanging Money and Exchanging Money and Credit Before, During, and Credit Before, During, and After the Business After the Business Transaction.Transaction.

The Four Categories….The Four Categories….

Credit and Loan Processing

Point of Sale Systems

Billing

Funds Transfer

Banking

Clearinghouses

Tax Processing

Investment Planning

4.4. Tracking Resources, Tracking Resources, Money, And Products.Money, And Products. Human Resource ManagementHuman Resource Management SchedulingScheduling AccountingAccounting Inventory MonitoringInventory Monitoring

The Four Categories….The Four Categories….

Class 705 WorkgroupsClass 705 Workgroups3620, 3680, 36903620, 3680, 3690

3620 Workgroup

AU 3621 - Business Cryptography, Andrew Fischer, SPE

AU 3622 - Incentive Programs/Coupons, Eric Stamber, SPE

AU 3623 - Operations Research/Voting, Beth Van Doren, SPE

AU 3625 - E-shopping, Jeffrey Smith, SPE

AU 3626 - Health Care/Insurance, Christopher (Luke) Gilligan

AU 3627 - Point-of-Sale/Inventory/Accounting, F. Ryan Zeender, SPE

AU 3628 - Cost/Price, Reservations, Transportation John Hayes, SPE

AU 3629 – Business Processing, John Weiss, SPE

3680 Workgroup

AU 3685 – Business Cryptography, Calvin Hewitt, SPE

AU 3686 – Health Care/Insurance, Jerry O’Conner, SPE

AU 3687 - Point-of-Sale/Inventory/Accounting, Matthew Gart, SPE

AU 3688 - Incentive Programs/Coupons, Robert Weinhardt, SPE

AU 3689 - Business Processing, Janice Mooneyham, SPE

Class 705 WorkgroupsClass 705 Workgroups3620, 3680, 36903620, 3680, 3690

Class 705 WorkgroupsClass 705 Workgroups3620, 3680, 3690 3620, 3680, 3690

3690 Workgroup (Finance and Banking)

AU 3691 - Finance & Banking, Alexander Kalinowski, SPE

AU 3692 - Finance & Banking, Kambiz Abdi, SPE

AU 3693 - Finance & Banking, James (Jay) Kramer, SPE

AU 3694 - Finance & Banking, James Trammell, SPE

AU 3695 – Finance & Banking, Charles Kyle, SPE

AU 3696 – Finance & Banking, Tom Dixon, SPE

Filing Trends in Filing Trends in Class 705Class 705

Business Methods Filing History

0

2000

4000

6000

8000

10000

12000

14000

16000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Fiscal Year

Ap

pli

cati

on

s F

iled

Pendency in Class 705 Pendency in Class 705 (At Mid-year 2009)(At Mid-year 2009)

Pendency to First Action = 31.6 months

•Down from 41.4 months at the mid year 2008.•For comparison, corps-wide pendency to first action = 26.9 months

Pendency to Issue/Abandonment = 46.1 months

•Down from 56.3 months at mid year 2008•For comparison, corps-wide pendency to issue/abandonment = 33.7 months

Top Assignees for Patent Grants in Top Assignees for Patent Grants in Class 705 (2004-2008)Class 705 (2004-2008)

IBM = 345 PITNEY-BOWES =

112 FUJITSU = 93 SONY = 91 HP = 70 MICROSOFT = 83

NCR = 56 HITACHI = 53 FIRST DATA

CORPORATION = 51 12 TECHNOLOGIES US

= 50 CONTENTGUARD = 48 JP MORGAN CHASE

BANK = 43

Examiner GrowthExaminer Growth

Year FY ‘01 FY ’02 FY ’03 FY ‘04 FY ’05 FY ’06_ FY’07 FY ’08 FY ‘09

Number of

Examiners 77 125 110 116 133 147 260 300 328

Patents 433 492 495 289 711 1,191 1,330 1,643 **

Issued

** End of year Data Not Yet Available.

Business Methods Web Business Methods Web SiteSite http://www.uspto.gov/web/menu/pbmethohttp://www.uspto.gov/web/menu/pbmethod/d/

Filings and Issue Data (1997 – 2008)

• Updated annually

Guidelines on when an electronic document is considered prior art.

103 rejection examples Class 705 core databases and classification definitions MPEP 2106 – Examination guidelines for business

methods• Guidance for Examining Process Claims in view of In re

Bilski, signed January 7, 2009 The paper “Successfully Preparing and Prosecuting a

Business Method Patent Application”

Examples of what is posted:

Prior ArtPrior Art

The USPTO is always looking for ways to ensure that examiners have the best prior art as early as possible in the examination process.  When examiners have the right

art in front of them, they make the right decisions. 

Reaching Out to Our Reaching Out to Our Industry PartnersIndustry Partners

We have successfully partnered with industry to gain valuable input on prior art resources. They have shared: Databases; Books, Technical Reports, and

Conference Proceedings, Journals; and

Web-based Resources

Prior User Rights for Business Prior User Rights for Business Method Patents - Defense to Method Patents - Defense to Infringement 35 U.S.C. 273Infringement 35 U.S.C. 273

In the American Inventors Protection Act of 1999 (AIPA), Congress created a defense to infringement suits with respect to any subject matter that would otherwise infringe one or more claims for a business method in the patent being asserted against a person, if such person had, acting in good faith, actually reduced the subject matter to practice at least 1 year before the effective filing date of such patent, and commercially used the subject matter before the effective filing date of such patent. • This defense alone does not invalidate the patent

itself – simply allows the accused infringer relief against an infringement suit.

• We are not aware of any decision on a § 273 defense.

Legal Update

• In re Bilski • U.S. Court of Appeals for the Federal

Circuit (CAFC) issued the en banc ruling 10/30/08.

• The court’s opinion addressed the standards applicable in determining whether a claimed method constitutes a statutory “process” under 35 U.S.C. 101.

• On June 1, 2009, the United States Supreme Court granted certiorari and will review the CAFC ruling.

Legal UpdateLegal Update

• Examiners have been instructed to follow the current patent subject matter eligibility guidelines appearing in MPEP 2106, with the modification set forth in the January 7, 2009 memorandum entitled “Guidance for Examining Process Claims in view of In re Bilski.”

Legal Update

The January 7, 2009 memorandum has been provided to assist examiners in determining whether a method claim qualifies as a patent eligible process under 35 USC § 101. A method claim must meet a specialized,

limited meaning to qualify as a patent-eligible process claim.  As stated in Bilski, the test for a method claim is whether the claimed method is (1) tied to a particular machine or apparatus, or (2) transforms a particular article to a different state or thing.  This is called the “machine-or-transformation test.”

If neither of these requirements is met by the claim, the method is not a patent eligible process under § 101 and should be rejected as being directed to non-statutory subject matter.

Legal Update

An example of a method claim that would not qualify as a statutory process would be a claim that recites purely mental steps.

Thank YouThank You