Patenting Business Method in India
Business method patents* basically relates to business methods or business systems or like. In common terms it can be said as a method of operating any aspect of an economic enterprise. It is a part of a larger family of patents known as utility patents, which protect inventions, chemical formulas, processes, and other discoveries. This includes new types of cross licensing, e-commerce, insurance, banking, tax compliance etc.
A business method is classified as a process, because it is not a physical object. Business Method Patents were not considered as a subject matter** for protection under Patent Law. Earlier Business Method was considered as an abstract idea. But by a decision by a Federal Court*** even Business Method have been granted patent protection.
The major reasons for negating the inventions relating to business methods filed in India was lack of industrial applicability, which is one of the major conditions to qualify as an invention.
Whether the same is non-patentable being a business method may be considered only if the subject is first found to be an invention.
In India, business method patents were available to be granted. But the amendment of 2002 changed all that. Act 38 of 2002, viz. The Patents (Amendment) Act, 2002, with effect from May 20, 2003 specifically declared ‘a mathematical or business method or a computer programme per se or algorithms, are not subject matter of an ‘invention’ within the meaning of the patent statute’.
The advantage of granting a business method patent is that a business method patent creates the artificial scarcity needed to preserve market power and restores the incentive to innovate.
The disadvantage of granting a business method patent is that if a patent is granted for a business method, then it would obstruct new technological research for the next 20 years to come. Granting a patent on business method would create a monopolistic situation.
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*Section 101 of US Patent Act defines Inventions which are capable of Patent protection. Section 100 Title 35, United States Code, was amended to provide for improvements in the quality of patents on certain inventions. Thus, ‘Business Method Patent Improvement Act of 2000’’was passed.
**The first case of this kind was filed in the year 1908. In Hotel Security case the question was whether business methods can be said to be patentable
*** State Street Bank v. Signature Financial Group, Inc. 149 F.3d 1368 (Fed. Cir. 1998)
