This post is part of a series of posts entitled A Legal Guide to the Internet. For a comprehensive list of articles contained in this series, click here.
While it is perhaps easy to comprehend the patentability of a machine, manufacture or other piece of “hardware,” it is not as readily apparent for other less “tangible” inventions, such as software and related computer processes.
Software, computer processes, and graphical user interfaces are but a few examples of on-line technology available for patent protection. Autility patent can protect inventive functions, methods, systems or algorithms, including applied mathematical formulas, which are used or embodied in a software product. The following provides some guidance on the types of subject matter that on-line business owners and operators should recognize as potentially patentable. As software is the main patentable subject matter for Internet transactions, this discussion will focus on software. However, similar principles apply to other patentable subject matter.
First, entrepreneurs may want to sell a product by way of the Internet. Where the business is merely acting as a retail distribution center, any intellectual property rights in the product vest with the designer of the product, not the business owner. However, many businesses develop their own products to be sold via traditional and electronic commerce channels. In these cases, business owners should consider whether the product or products themselves are worthy of patent protection.
Potential patent protection related to the on-line business does not end there, however. Even where the product(s) being sold is not the creation of the business owner, patentable subject matter may lie in the manner in which the business avails itself to the electronic purchasers. For example, a unique software program or application developed to facilitate purchasing products from the on-line store can be patentable in and of itself. Aprogram created to more quickly and efficiently display or order products could be successfully patented if novel and non-obvious over presently-existing software applications. Further, the purpose of the on-line store may be to sell a service, rather than a deliverable product. A good example of such a service is software used to make financial transactions or stock trades. No product is actually delivered, but a service is provided for a cost. In these cases, business owners may market their service as being better than the competition. What makes the service “better” could potentially be a patentable invention, and an issued patent could give the patent owner a competitive edge.
Business owners may proclaim that they are software-illiterate, and are incapable of inventing sophisticated, patentable software. Even if this is true, it does not prevent the proprietor from “owning” the patent rights. If development of such software requires the business owner to seek professional services from a software company or individual programmer, the patent rights can be retained by requiring, via contract, that the program’s creator assign all patent rights to the business owner.
