Legal Definitions - business-method patent

A business-method patent is a type of patent that protects a new and non-obvious method, system, or process for conducting business. Unlike patents for physical inventions like machines or chemical compounds, a business-method patent focuses on innovative ways of performing commercial activities, managing data, or delivering services. To be granted, the method must be novel (new), non-obvious (not an obvious improvement over existing methods), and useful.

Here are some examples to illustrate how a business-method patent might apply:

• Example 1: Personalized Subscription Service Algorithm
  Imagine a company that develops a unique algorithm for a subscription box service. This algorithm analyzes a customer's past purchases, browsing history, social media activity, and even local weather patterns to curate highly personalized product selections each month, optimizing inventory and delivery schedules. The company could seek a business-method patent for this specific, proprietary process of data analysis, product curation, and logistical optimization, as it represents a novel way of operating a subscription service.
• Example 2: Non-Traditional Credit Assessment System
  Consider a financial technology (fintech) startup that creates a new system for assessing creditworthiness for micro-loans. Instead of relying solely on traditional credit scores, their system uses a unique combination of alternative data points, such as utility payment history, mobile phone usage patterns, and educational background, processed through a proprietary algorithm. This innovative method of evaluating risk and distributing small loans to individuals typically underserved by conventional banks could be protected by a business-method patent.
• Example 3: Dynamic Pricing Model for E-commerce
  An online retailer develops a sophisticated, real-time dynamic pricing model for its products. This system automatically adjusts prices based on a complex interplay of factors including competitor pricing, current website traffic, inventory levels, time of day, and even predictive analytics of future demand. The specific, novel method by which this system collects, processes, and acts upon these diverse data points to set optimal prices, rather than the software itself, could be the subject of a business-method patent.