Business methods and processes

Business method patents protect specific ways of doing business online. They extend patent protection — traditionally limited to machines, products, compositions, and processes — to methods of conducting commercial transactions, particularly on the Internet. Amazon's one-click purchasing and Priceline's Name Your Own Price are classic examples.

The pivotal case was the 1998 State Street Bank decision, in which the U.S. Court of Appeals for the Federal Circuit held that business methods are patentable, overturning the longstanding 'business method exception' that had excluded them. After State Street, the USPTO began granting thousands of business method patents.

Amazon's patent on one-click purchasing is the iconic example: it caused Barnes & Noble to invent a simplified two-click method of purchasing to avoid infringement. This illustrates both how business method patents work and how they can be used to stifle competitors — or to encourage alternative implementations.

Business method patents remain controversial. Critics argue they grant broad monopolies on basic commercial ideas that should be available to all, that they are often granted for 'obvious' methods, and that they can stifle innovation in e-commerce. The 2014 Supreme Court decision in Alice Corp. v. CLS Bank tightened the standard, making it harder to patent abstract business methods implemented on a computer.