Oxford report warns firms to patent business methods as US filings double

A new report published jointly by Oxford University academics and London lawyers warns entrepreneurs that they risk losing their competitive advantage by failing to patent their business models.

More significantly for independent contractors, the report highlights that methods of doing business are patentable in the US, and as a result American companies are "aggressively filing for business method protection in Europe".

According to the report:

"The most renowned patent on a method of business is the disputed Amazon.com patent for the 1-Click SM Internet ordering method. Since business methods have become patentable, filings for patents in the US have doubled in one year.

The law in relation to business method patents in the United Kingdom and European Patent Offices has not changed. A way of doing business "as such" cannot be protected; however, some protection for business methods may be obtained by claiming a new, inventive, technical method of implementing a business method. This is particularly relevant in the eCommerce arena where there have been and continue to be technical innovations."

Independent contractors need to be aware of these issues for a number of reasons:

- Be sure of IPR issues when negotiating contracts

- Be aware that by not re-inventing the wheel and using popular methods may mean you are breaching patent laws

- Use the laws to your own advantage and make sure you get protection for your own ideas and methods

American companies are using patents / legal protection as a way to sustain any first mover advantage that they have obtained through technical developments. A patent effectively provides a monopoly in the market. However many people both here and in the US were outraged when Amazon was granted a patent for a system that many said had been in the public domain for a number of years.

The report goes on to suggest that even if British businesses are more wary of patenting their business methods, the number of applications and patents granted for computer implemented business methods is likely to grow in the near future. And by implication if the Americans get there first, this is a threat to our competitive standing.

The big question is, will contractors be able to afford the expensive legal fees from their 5% allowance?

Link to the full report

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Mark Roderick