Thursday, September 8, 2011

Should Startup Seek Business Method Patent?

Dear Rich: I'd like some pointers on which book(s) or blogs I could read that address patenting business methods. Also I'd like to hear your take on this, is it something a startup should invest in before commencing any development of the idea (in form of software). The Dear Rich Staff previously posted an article about business method patents that may help and we recently had a blog entry on the subject. David Pressman's Patent It Yourself also discusses BMPs in some detail.
Should you talk to a lawyer? We think that if you're a startup, you owe it to your investors to have a patent attorney review your business method to determine two things: (1) whether it's commercial (especially whether it is likely to be commercial in 2-3 years which is how long it will take to get the patent), and (2) whether it's patentable. We can't help you with whether it's commercial but as for whether it's patentable there are a few things to consider:

  • Filing Deadlines. There are time limits for filing -- currently, you can't file if you published or sold the method more than a year before filing; 
  • Time and money. It takes time and money to get a patent.  Assuming the USPTO grants your patent (and the failure rate is about 50%), it takes 2-3 years during which time you can't stop others. And it can be expensive!
  • Endangered species. Business method patents are running into more and more challenges and may be much harder to obtain if the America Invents Act is passed this month (as expected). 
All that said, many startups were built on software and business method patents, so we urge you to get professional advice.