Business method patents are a class of patents which disclose and claim new methods of doing business. Since 1998, an increasing number of patents have been issued to software and Internet companies that have devised novel ways of doing business – for example, new online ordering processes or a unique internet advertising scheme. These patents, which usually combine software with business methodology, are commonly referred to as business method patents or internet patents.
For example, devised a method for expediting online orders, known as the “1-Click”system. The method allows a repeat customer to bypass address and credit card data entry forms, because Amazon can access that information directly from the customer’s account. Amazon was granted a patent on this business method in September 1999 (U.S. Pat No. 5,960,411).


In India, business methods are not patentable as per section-3(k).


In Japan, business methods are well recognized and accepted as patentable subject matter. The legal standard used to assess whether a business method is patentable requires that inventions be “a highly advanced creation of technical ideas by which a law of nature is utilized.”Patents are not issued solely for business methods. The business method must contain a technical aspect that is both tangible and real. However this requirement may be satisfied simply by specifying that the method is implemented using a computer.


There is no general prohibition on the patentability of business methods in Australia. Their patentability is determined by applying the tests used to determine the patentability of any type of invention. In a recent decision, Grant v Commissioner of Patents

[2006] FCAFC 120, [47], the Fullbench of the Federal Court of Australia held that a business method will only bepatentable if it has a physical aspect, being a concrete, tangible, physical, or observable effect or phenomenon. Accordingly, ‘pure’ business methods, being those that do not have a physical aspect, are not patentable in Australia.


But in United States of America patentability of business methods is a controversial topic. In recent case Bilski vs. Kappos , it was hoped it will resolve the nagging issues but the Court concurred that the claimant’s invention was not patentable subject matter, they split on the crucial issue of whether business methods as a category are patentable. The ratio of the judgment was further muddied by a majority opinion that was not entirely decisive. At issue in Bilski vs Kappos was a patent application for a method of hedging risks in commodities trading. Basically, the inventors had devised a way for energy traders to alleviate the adverse effects of commodity price fluctuations by selling consumers energy at fixed rates. The first of the two main claims disclosed the main steps of how to hedge risk according to the scheme. The other main claim put the steps into a simple mathematical formula. The remaining claims applied specifically to the energy market.