Qualifications for a Business Method Patent

Have you developed a unique online ordering process or an innovative Internet advertising plan? Then, you may be able to get an Internet patent.

An Internet patent, also called a business method patent, combines the use of software or the Internet with business methodology. Unlike a mechanical invention which is an actual physical object, a business method is a process or a sequence of actions used to complete a specific task or produce a specific product or service.

If a company obtains a business method patent, then they can stop other companies from using the patented business method for about 17 years. Or, a patent owner can charge others a fee to use it.

In order to qualify for a patent, the business method must meet four requirements.

The method or software must be:

  • Patentable – It cannot be a law of nature, a natural phenomenon, an abstract idea, or a general concept.
  • Useful – in other words, it must provide a concrete, tangible result.
  • Novel or different in some way from previous methods or software. Plus it cannot have been used publicly or written about in a published document.
  • Non-obvious – that is, it would not be obvious to someone with ordinary skills in the technical arts.

Want some more clarification on the qualifications for a business method patent, feel free to contact us at Brannon Sowers & Cracraft PC.

What is Fair Use?

Fair is fair – right? Well, in the world of copyright fair use, fair depends on the usage of your particular situation. Fair use refers to the doctrine which allows people limited usage of a copyrighted work for purposes that include commentary, criticism, education, research, and news reporting.

To determine whether you are within fair use, Section 107 of the U.S. Copyright Act calls for a balanced application of these four factors:

1. The purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
Nonprofit educational purposes are generally favored over commercial, but they are not all considered fair use. You must apply all four factors to determine fair use, so the purpose alone, is not sufficient. As for the character of use, “transformative” is favored over simple reproductions of a work. When the work has been transformed into something new or combined with a different media, fair use is more likely to be found.

2. The nature of the copyrighted work;
Courts tend to give greater protection to creative works such as art, music, poetry and films than to nonfiction works. In addition, commercially available educational works are generally disfavored as fair use.

3. The amount and substantiality of the portion used in relation to the copyrighted work as a whole;
There is no specific number of words, lines, or notes that may safely be taken without permission which can make this rather tricky. Generally the more you use, the less likely it is fair use. However, Courts have ruled that even uses of small amounts may be excessive if they take the “heart of the work.”

4. The effect of the use upon the potential market for or value of the copyrighted work.
This means that if you could have realistically purchased or licensed the copyrighted work, fair use may not be applicable as you are de-valuing the copyrighted work.  “Effect” is also closely linked to “purpose.” If your purpose is research, market effect may be difficult to prove, but if your purpose is commercial, then adverse market effect may be easier to prove.

The distinction between “fair use” and infringement may be unclear and not easily defined, so it is important to weigh all four of the above factors when determining fair use of a copyrighted work. Still confused? Come speak with one of our attorneys here at Brannon Sowers & Cracraft.

Intellectual Property and Business: When Knowing Isn’t Enough

In a world that makes accessing information seem effortless, protecting intellectual property can be seem like a full time job.

While it might seem a like fairly modern concept, the term intellectual property has been recorded as early as 1845, according to Merriam-Webster’s Collegiate Dictionary. There it is defined as “property (as an idea, invention, or process) that derives from the work of the mind or intellect” but also “an application, right, or registration relating to this.” Some scholars say the concept extends much further back in history, but today it has been cast into the spotlight as the ease and speed of transmission of data on a global scale make protecting proprietary information more important than ever.

In modern practice, intellectual property is something of an umbrella term that covers inventions, literary and artistic works, symbols, names, images, and designs used for business purposes. More broadly, this can be any proprietary intangible asset that has value.

Intellectual property is broadly divided into two main areas: 1) industrial property, which includes inventions, trademarks, and designs; and 2) copyright, which includes literary and artistic works such as writing, photographs, and architectural designs. Legally defined categories of intellectual property in the United States include patents, copyrights, trademarks, and trade secrets.

Intellectual property rights in the form of patents typically grant the originator an exclusive right to the use of the creation for a certain period of time.

Copyrights do not protect ideas, but they do protect how they are expressed.

Trademarks are used to protect names and identifying marks of products and/or businesses. Trademarks are aimed distinguishing competitors from each other in an easily recognizable way.

Trade secrets refer to formulas, patterns, devices or bodies of data that give the user a competitive advantage.

While intellectual property is afforded these protections under U.S. federal and/or state laws, it is not always afforded the same level of protection internationally. This can mean the loss of proprietary information by means of theft and/or unauthorized duplication that can be detrimental to any organization, whether or not it does business internationally. The issue of safeguarding intellectual property across borders remains hotly debated and is often associated with losses of competitive advantage and incentives to innovate that are often seen as the underlying basis for intellectual property rights.

What Constitutes a Trade Secret?

Trade secrets are protected under a number of state, federal, and in some instances, international laws. They are a form of protection that exists largely as long as the information remains a secret.

Merriam-Webster’s Collegiate Dictionary defines a trade secret as “something (as a formula) which has economic value to a business because it is not generally known or easily discoverable by observation and for which efforts have been made to maintain secrecy.”

In practice, a trade secret could be any information used in a business that may represent a competitive advantage. Trade secrets could be the use of a certain method of producing a good or a method of providing a service, such as a recipe or a computer algorithm. Trade secrets are treated in such a way as to reasonably keep the public or competition from learning about them, unless they are improperly acquired, such as by means of a violation of a non-disclosure agreement or by theft.

One advantage of trade secrets compared to other forms of protection is that they are potentially longer lived. A patent, for example, is typically granted for a period of 20 years, while copyright protection, though it may be extended for decades longer, is not forever.

For example, a patent protects against the unlicensed use of the patented device or process even by someone who might discover it on his or her own. In essence, it is a limited form of monopoly awarded to the inventor. However, when a patent is registered and issued, any secrecy is lost.

A trade secret can be something that is patentable, but it does not necessarily have to be.  The novelty that is necessary for a patent to be issued is not required for something to be deemed a trade secret. For example, it is possible for other people to know of a trade secret who have discovered the same process or formula by independent means.

Unlike other forms of intellectual property, such as patents, copyrights, and trademarks, a trade secret does not have to be registered with the government. Rather, trade secret security is a matter of keeping the information confidential. Who is allowed to know of a trade secret is at the discretion of a business owner, so it might be shared with employees or board members who have been directed not to disclose the information.

If the trade secret is revealed in breach of a non-disclosure agreement, it may be possible to sue for damages. However, once a trade secret is revealed, it may not be possible for it to become a secret once more.

Importance of Having an Attorney Review Your Contract

A significant portion of our business practice involves drafting, revising, and reviewing contracts, and we frequently receive requests for contract reviews from prospective clients.  All too often, however, this review is requested after the contract has already been signed, at which point we can only provide information and clarification regarding the agreement which is already in place.  As one might imagine, this is not the ideal time to seek a contractual review.  By consulting with an attorney BEFORE actually signing a contract, one can ensure the document fairly and accurately represents the intent of the parties signing the agreement.

While many contracts, such as credit card receipts, are never expected to be read, let alone reviewed, any agreement involving a significant amount of money or time should be reviewed by an attorney.  Many contracts appear to be standard “boilerplate” or non-negotiable, but this is not always the case.  Frequently, with the help of a competent attorney, terms and conditions can be modified, added, or removed to protect your interests.  Occasionally, even inadvertent errors can be corrected to the benefit of both parties.  Having a contract reviewed by an attorney is a small price to pay in order to reduce or eliminate potentially significant future risk or exposure.

Most of the agreements you sign will have been drafted by the other party, and therefore will tend to favor the interests of that party.  An attorney can make sure your interests are also considered and protected, and can help explain, modify, or eliminate the confusing “legalese” which is often illegible to most normal humans.  It is much easier and cheaper to address an issue before it becomes a problem.  When it comes to signing a contract, this could not be more true, as there is often nothing that can be done to modify a signed agreement.

When entering into any transaction which involves a significant amount of money or time, it is best to have an agreement in place that has been reviewed by an attorney.  Even if the other party does not offer a written agreement, it may be in your best interest to consult with an attorney to have an agreement drafted to document the transaction.  Proper preparation beforehand can help to prevent significant headaches and unexpected consequences down the road.


Premises Liability: One Accident Could Cost You Your Business, Part 2

If you are a property owner, anyone coming through your door or walking along the sidewalk outside could be a plaintiff naming you as the adverse party in a premises liability suit. While not all accidents are preventable, there are several ways a property owner can limit the risks of an accident that can trigger a premises liability suit.

To begin, a property owner needs to be reasonably aware of any dangers on and around the premises. That means making sure that a property, whether it is commercial or private, is kept in good condition. Many hazards, including common causes of slip-and-fall accidents such as snow covered sidewalks and leaking gutters, are very obvious and can be dealt with directly. Other common causes of accidents that involve premises liability include crumbling steps, missing or broken handrails, falling objects, inadequate lighting, unmarked or concealed holes or excavations, and unsecured mats.

Conducting routine inspections of a property can help to identify any changes in structural and safety conditions. If a hazard is identified, steps should be taken to clearly identify the problem. For repair or renovation work involving contractors, it is important that the business has a certificate of insurance on file to further limit your liability while a company representative is performing any work on site.

For business owners, it can be helpful to establish an ongoing hazard awareness program among employees. For example, a written maintenance procedure could include a routine inspection schedule and a checklist to look for hazards that could cause an accident.  The policy should make clear the procedures for reporting a maintenance issue or liability hazard and the proper steps for alerting visitors to avoid any hazard until it has been repaired or removed. Having a written record of repairs, replacements, and renovations can also prove valuable.

Another way of protecting a business from premises liability claims is to purchase premises liability insurance. This form of insurance protects a property owner from claims that a person was injured while on the premises. Such policies protect against payments as the result of bodily injury, property damage, medical expenses, the cost of defending lawsuits, and settlement bonds or judgments as part of an appeals process.  However, when comparing policies, it is important to understand the limits in terms of both scope and coverage.

Inspections ordered by an insurance underwriter can help to identify deficiencies in a property’s liability, such as a gutter downspout that drains onto a walkway, the presence (or absence) of a snow removal program or a missing or loose handrail on a flight of steps can pose hazards for both visitors and passersby. Some underwriters automatically request a survey of a property in order to determine what, if any, hazards exist.

Not all accidents can be avoided, of course, but it is possible to correct many of the unsafe conditions in and around a property that can trigger a premises liability suit. As always, it’s better to be safe than sorry.

Premises Liability: One Accident Could Cost You Your Business, Part 1

Accidents will happen, but in today’s litigious society, when they involve premises liability, they can come at more of a cost than ever. Don’t let it cost you your business.

Premises liability involves the breach of duty of care that is owed by an owner or occupier of property to protect invitees from dangerous conditions and defects on a property. Common incidents that can lead to premises liability claims can range from a slip and fall on a public sidewalk to a slip and fall on the way into or out of a home office that generates foot traffic, such part of a home that has been set up to serve as an accounting office or hair salon. Regardless of the type of property or injury involved, property owners are liable for all injuries incurred due to hazards associated with their property, whether it is a home, a business, or a business operated from home.

The legal theory behind premises liability is that property owners have a duty to make sure that anyone, whether invited or not, is reasonably safe while on the property. If a property owner does not make the property reasonably safe and someone is injured while there, then he or she can be held liable. This may be a viewed as a combination of the property owner’s fault as well as that of the injured person(s), and it can be a matter of determining the amount of liability for each party.

We’ve all heard of someone slipping on a public sidewalk and bringing a lawsuit for injuries suffered. For example, a lawsuit may be brought if someone is walking on a sidewalk and trips over an uneven section or crack and was injured as a result. In that event, a claim might be made against the town, which owns and maintains the sidewalk.  But what if someone were walking on  a stretch of public sidewalk adjacent to a business and slipped from a patch of snow that had not be cleared away? Who would be responsible? Here, premises liability would point to the business owner for not keeping a pathway directly outside its premises free from debris that could cause harm to either guests or passersby.

The principle of duty of care owed by an owner of a property to protect invitees and visitors also applies to those who aren’t invited. For example, if a property owner were aware of a trespasser, but didn’t warn him or her of a hazard on the property, such as a guard dog indicated by a sign, then the property owner could be held accountable if injuries were sustained as a result of any physical encounter.

In short, the duty of care in premises liability can be breached if:

1. The property owner is aware that dangerous conditions located on the property have caused or are likely to cause injury to another party.

2. It is believed that the invitee had no awareness or could not have been aware of any danger that may have led to an injury.

3. The property owner has not indicated or corrected the hazard so that any danger may be avoided.

In addition to slip-and-fall accident and animal bites, some of the more common types of premises liability cases stem from inadequate security, roadway and sidewalk defects, such as potholes, cracks or heaved sections, falling objects, unmarked excavations or holes, and poor lighting.

In the second part of this article, we will discuss some of the ways a property owner can limit the risk of premises liability litigation.