not just for large companies. Patents are not only for high technology.
Some of the most successful E-Commerce companies have used patents for
business methods and “low-tech”inventions.
Patents can help your E-Commerce business in a number of ways.
are probably more benefits to patents, but this list is a start. These benefits
are not only for E-Commerce companies, but are especially important in
E-Commerce. This is because E-Commerce is closely linked to subjects that
have recently, in countries where patent protection is available for these
fields of technology, been the subject of vigorous patent activity:
business methods and
in E-Commerce are important because of the amount of licensing, contracting out,
outsourcing, and strategic relationships involved in E-Commerce.
will want to consider whether to implement an Employee Invention Incentive
Program in your company. Such programs are common, in particular in countries
that do not provide for legislation on remuneration for employee inventions, in
larger companies and usually involve a bonus in stock and/or cash given to an
employee or team of employees who produce inventions.
The awards are usually
given in stages, with a small award given at the time an invention disclosure is
filed by the employee with the person in the company who is responsible for this
task, another given at the time the patent application is filed, and another one
given when the patent issues, with the largest incentive given last. Public
announcements and award ceremonies are good ways to boost morale and encourage
are usually first filed in your own country’s patent office, but also in most
other countries, anyone can file a patent in the respective national patent
office or use, where the conditions therefore are fulfilled, the International
Bureau of WIPO for patents filed under the Patent Cooperation Treaty (the
“PCT”). Using the PCT gives you options to file patent applications in a number
of countries. There are also regional patent offices, for example, the European
Patent Office (EPO), the Patent Office of the Gulf Cooperation Council (GCC),
the African Regional Industrial Property Organization (ARIPO) and the
Organisation Africaine de la Propriété Intellectuelle (OAPI). See: “Protecting
Your Intellectual Property Abroad”.
are engaging in E-Commerce as your primary business, or as an important part of
your business, you will need to decide whether patent protection for your
employees’ inventions is a useful tool for your company, and if so, where you
should file the application.
business method patents, see:
regional and international patent filings, see:
Patent Cooperation Treaty (PCT)
European Patent Office (EPO)
Japanese Patent Office (JPO)
African Regional Industrial Property Organization (ARIPO)
patent licensing and other types of licensing, see:
Ways in Which Patents can Help
Your E-Commerce Business
motivate employees who enjoy challenges and who may benefit from remuneration
or other benefits from the company.
help record and develop new ideas.
can increase the valuation of your company in the context of investment,
financing, merger and acquisition transactions.
can support an increase in the price of your products by giving your company
products exclusive features unavailable to competitors.
can increase sales of your products by giving your company products exclusive
features unavailable to competitors.
can be a source of royalties in licensing transactions, thus adding revenues
to your company bottom line. Such royalties can be in a lump sum, in
installments, based on units of product sold, or based on a percentage of
revenues from sales of product.
can permit your company, if it grants licenses to the patent, to expand its
markets and/or create a platform, whereby licensees develop and differentiate
products based on the patent.
can be used in connection with participation in standards bodies or consortia,
where different companies join forces to create interoperability or promote a
can be used defensively in case your company is accused of violating the
patent of another company; you can protect your company from litigation and/or
trade your patent against the accusing company’s asserted patent.
can help your company develop strategic alliances with other companies who
wish to take a license to your company patents and thereby increase their own
Business Method and Computer
there are an increasing number of software and business methods which are
protected by patents in the
In Japan, computer programs and business methods are patentable provided
that they are considered to be technical instead of merely abstract ideas (see
web site of the
Patent Office. Under the European Patent Convention and the patent laws of a
number of countries members of the European Patent Organisation, computer
programs and business methods as such are still expressly excluded from
patent protection. In practice, however, the approach has changed in recent
years as the result of long-lasting intensive and controversial discussions and
many decisions. The vast majority of applications are today considered not to
claim abstract programs or business methods but to describe technical means
like, for example, computer networks, for carrying out these programs or
methods. In order to be inventive, the programs or methods have to overcome a
technical problem in a non-obvious way; in other words, it is not the commercial
ingenuity which makes them patentable (see
EPO web site and the report of the
80th EPO Administrative Council, 2000. In a number of other countries,
computer programs and business methods are not yet patentable.
examples of business methods are: patents on using a single click to order goods
in an on-line transaction, on an on-line system of accounting, and on-line
rewards incentive system. Much has been written about business methods patents.
In most countries, patents are available for a wide range of inventions.
In E-Commerce business, it is prudent to get legal advice about whether any new
business methods developed by your company may be patentable.