E-Business 101, Part 5: Intellectual Property - Patents
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Patent law provides rights in new and useful articles of manufacture, compositions or improvements thereof. In general, a utility patent may provide a limited right for up to twenty years to prevent others from making, using, offering for sale or selling an invention covered by the patent. Recent decisions of the U.S. Court of Appeals for the Federal Circuit have opened the floodgates for patents covering software implemented processes and business methods of the nature frequently developed and implemented by an E-business.
Unlike copyrights, which are generated automatically upon fixation of an original work of authorship in a tangible medium of expression, or trademark rights, which are generated upon use of a trademark, no U.S. patent right exists until the U.S. Patent and Trademark Office grants it. Thus, an e-Business must decide whether or not to pursue patent protection. Currently many E-businesses are obtaining patent rights in many aspects of their Web based operations, including those directed to order processing, Web site interfaces, financial management and transactions, advertising, and digital product delivery. Unfortunately, it is very easy for an E-business to jeopardize its ability to file for a patent, particularly in foreign countries.
Optimally, the patent review process is an integral part of the E-business' research and development efforts and, perhaps, even a key part of determining how to allocate resources for market and product development. Of course, before an E-business can patent an invention, it must first recognize the invention prior to losing its rights to file a patent application for the invention. Regular intellectual property audits can help the discovery process. In addition, an E-business should routinely ask itself many questions designed to uncover potentially patentable inventions, such as: (1) what bottlenecks or problems are the E-business trying to solve and how is the E-business overcoming these bottlenecks or problems?; (2) what is the "holy grail" in the E-business' industry and how is the E-business trying to find or implement it; (3) what pioneering work is the E-business doing?; (4) where is the E-business trying to cut costs or waste and how is it doing so?; (5) what enhancements or features are the E-business' customer's asking for?; and (6) what work is the E-business doing in its core competency and how is it different from what has been done before?
Considerations that might be taken into account when an E-business decides whether or not to file a patent application on a particular invention include: (1) is the invention patentable?; (2) can be invention be protected as a trade secret?; (3) will a patent provide marketing appeal of help raise venture capital?; (4) can potential patent infringers be discovered and pursued?; (4) is filing a patent application the best use of the E-business' time, financial and employee resources?; (5) is the invention part of the E-business' core technology or is it fringe technology?; and (6) would a defensive publication be more effective or practical?
While intellectual property assets can provide many benefits to an E-business, patents and other forms of intellectual property by themselves will not solve many of the problems facing an E-business. For example, ownership of a patent will not improve a Web site's conversion of mere visitors into people taking action (e.g., making purchases) on the Web site, increase the transaction capabilities of the Web site, enable the Web site to fulfill and deliver orders better, or reduce credit card fraud. However, such intellectual property assets provide significant opportunities for an E-business to leverage the work already being done by the E-business and to obtain a return on resources already expended by the E-business.
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