How to Patent a Business Model

Rich Goldstein

Founder & Principal Patent Attorney
Hand with a blue marker circling the word "Business Model" on a whiteboard

Unlocking the potential of a business model is exciting; protecting it, however, can be challenging. I have worked with countless clients who have faced the maze of patenting alone, helping them overcome each hurdle.

Join me to find out how to patent a business model. I will guide you through the process, breaking down the steps needed and ensuring all innovative ideas remain exclusively with the inventor.

How to Patent a Business Model 

Patenting a business model is more complex than one first thinks. To begin, I need to tackle the question, “Can you patent a business model?” Currently, it is not possible to patent a business model, though you can patent a business process. You can also patent the invention needed to ensure the business model operates properly. 

Two people with markers writing down their business plan on a whiteboard

While a business model alone can not be patented, there are steps you can take to protect it. To be eligible for patenting, the business, and/or invention to run the business, needs to meet certain requirements:

  • It must be novel
  • The business must be useful
  • It can not be obvious
  • Details of the business must be fully disclosed for all to understand its processes

The Patent Process

Before filing a patent application, it is highly recommended that you consult with a patent attorney. They can talk you through patent eligibility and patent law to help you understand the patent process better

From here, you and a patent law specialist can create a patent application before assigning it to the USPTO for examination. The steps required to protect your business model are:

  1. Drafting and filing a patent application to the USPTO
  2. Having the patent application examined by a USPTO examiner
  3. If your application is rejected, you will need to respond with evidence and solid reasoning to overturn the decision

The Patentability Test

To protect your business model, you will need to pass a patentability test. This test essentially assesses whether an invention is:

  • Novel
  • Non-obvious
  • Useful

Altogether, there are three main tests:

  1. The Machine or Transformation Test
  2. The Non-Obvious Test
  3. The Novelty Test

The Machine or Transformation Test Explained 

Business models must be novel, useful, and non-obvious. They can not be considered an invention unless they are somehow incorporated with computer technology or telecommunications. If the business model is not deemed an invention, it will not be regarded as a patented technology. 

Hand with a blue marker circling the word "Business Model" on a whiteboard

The machine or transformation test is used to determine the patent eligibility of an invention and focuses on whether the invention involves a specific machine or transforms a physical object into a new state. It has historically been a significant factor in assessing overall patentability.

The Supreme Court has clarified that a machine must transform a physical object into a new state for it to be considered patentable, and simply transforming a machine into something resembling a computer is not sufficient. Simply put – to ensure patentability, a business model must be capable of transforming its product into a new form.

The Non-Obvious Test Explained

If a product’s success is primarily due to the patented features, it could indicate that those features were not obvious and contributed to the product’s uniqueness and innovation.

To be patented, a product requires a well-documented and well-written non-obvious examination. The examiner will look at whether the invention blends prior art that is available and novel. Before being examined, an inventor needs to define their invention’s identity, not just how novel it may be. 

If an expert’s opinion suggests that the invention was difficult and had technical challenges, it can show that the invention is not obvious. Although deciding if something is obvious is a legal decision, it’s ultimately based on facts. The facts include information about previous inventions, and what’s considered ordinary knowledge.

The Novelty Test Explained 

The novelty test is a fundamental aspect of patent law. It assesses whether an invention (which could be a business method, product, or any other type of innovation) is eligible for a patent based on its novelty, meaning that the invention is new and has not been publicly disclosed or described before. 

In simpler terms, for an invention to be eligible for a patent, it must be something that hasn’t been done or publicly known (no prior art) before the filing of the patent application. It must also not be known in the country the patent is being filed.

Business Model Patents – Are They Important or Not?

The most common type of patent to cover business models or methods are utility patents. In 2022 alone, 325,445 utility patents were granted by the USPTO out of 382,559 patents. 

Rather than protecting a physical object, these patents protect a process. The fact that they can block competitors, such as other companies, using a particular process means a patent is very important. Moreover, a utility patent can be licensed to other companies for usage, in exchange for a fee.

Man looking at his laptop with a wooden gavel and block in front of him

An example of a patented business method is the reverse auction method by Priceline. Visitors to the site are able to choose a price when purchasing certain items, such as airline tickets. From here, sellers can start a bidding war to win the buyer’s business.

Are All Business Methods Patentable? 

To be eligible for a patent, a business method must extend beyond being a mere idea. As opposed to a business model, which outlines how a company creates, delivers, and captures value, a business method refers to a specific process or technique a business follows to achieve a goal.

Not all business methods are automatically patentable. As discussed above, they must meet specific criteria to be eligible for a patent.

Additional Questions 

Can You Copyright a Business Model?

A business model can not be copyrighted or trademarked. To be copyrighted or trademarked, something needs a name, slogan, or logo as a way to brand the business or product. Business models can not be used to brand either, so are not eligible for copyright or trademarking. 

How Much Does a Business Method Patent Cost?

The cost of a business method patent can range on average from around $3,000 to $15,000 (these costs can vary). However, the patent application can be extremely complex and take some time. If a patent application is successful, additional patent fees are required every three and a half, seven and a half, and 11 and a half years from the date the patent was approved.

How Do You Trademark a Business Model?

Trademarking a business model is currently not possible. That being said, it may be possible to trademark a business name or logo, as long as it is used to brand the business. Slogans, such as Burger King’s “Have it Your Way” are trademarked. 

However, because business models are more related to the operational and strategic aspects of a business, rather than specific identifiers that trademarks protect, they are not eligible for trademarking.

Conclusion 

Patenting a business model alone is not currently possible; however, business methods are patentable. Nevertheless, the United States patent process can be complex and challenging due to the abstract nature of businesses. 

While specific innovative methods within a business model might be eligible for patent protection, meeting the criteria of novelty, non-obviousness, and utility is essential. Consultation with a patent attorney is crucial to navigate this intricate process effectively.

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