BUSINESS MODEL PATENTS


1. Outline of Internet-Related Inventions

(1) Summary of Internet-related inventions

1) Internet : A set of computer networks-a system that can share information accumulated between interconnected computers.

2) Internet-related patent technology : A form of computer-related invention, which operates on the Internet. The technology can be broadly classified into the fields of system construction and Internet-based applications operational within the system construct.

System construction : It includes computer peripherals, networking methods, device, authentication, and security technology.

Internet-based applications : The field includes electronic commerce (business, financial automation, advertisement), electronic currency (electronic currency construct, electronic settlement), information search (database structure, acquisition of database and storage), etc.

3) Types of electronic commerce-related inventions


(¥¡) Business : After forwarding the purchasing requirements of the products of a consumer¡¯s choice to a cyber-shopping mall (CSM), the CSM relays the purchasing requirements to the respective companies. Each respective company presents quotes according to the requirements of the CSM, and the CSM in turn contacts the consumer after selecting the products; thereby satisfying the requirements of the consumer¡¯s choice.

¡Ø CSM : Cyber shopping mall

(¥¢) Business invention : An invention which combines a business idea with a computer system; i.e., a combination of a business, process, and data model.

¡Ø Business method : Economic principle, and the transactional methods for the spot markets (e.g., auction method, advertisement method, inventory control, financial transaction, etc.)

¡Ø Process model : Data processing and operational data flow (operational process)

¡Ø Data model : Data set for operations

(¥£) Financial automation : With respect to asset-debt managements of financial institutions, it is a system for simulating changes in the fund structure a prior volume according to the changes in interest rates.

(¥¤) Advertisement : A system for providing incentives such as cash, mileage, points, etc. to the viewing consumers by internet advertisers


(2) Standards for determining patentability of internet-related patent applications

1) Standards
The patentability of a BM invention is determined by the same procedures as applied to patent applications in general according to the relevant rules and regulations, such as the Patent Law, etc., but it is also determined by the examination standards of the particular industry, "Examination Standards for Computer-Related Inventions." Nevertheless, in view of the peculiar nature of BM patents, the ¡°Examination Standards for EC-related Inventions¡± are used for examination therein. Established in 1994 and recently revised in 1998, the ¡°Examination Standards for EC-related Inventions¡± includes coverage of inventions of mathematical algorithm as patentable subjects if they present a specific application in the industrial area. With respect to software, it may be protected as a patent if it is claimed as a recording medium.

2) Matters for Determination by Examination Step (Summary)


Examination Step
Matters of determination

Written requirement
* Are the following matters described, e.g., the objective, composition, action, and effects of an invention?
* Is it described to the degree that the invention can be worked by a person having ordinary skill in the art to which the invention pertains?
* Isn't the description abstract?
* Are the claims adequately written?

Establishment of invention
* Is it industrially applicable?
* Is it a mere presentation of information?
* Is it a merely about a natural phenomenon?
* Doesn't it just a mathermatical algorithms?

Novelty of invention
* Isn't it identical with any prior arts?
- Comparision of the objective, composition, action, effects, etc. with the prior art (Determination of Identity)
- Determination as to whether it isn't a simple addition to or deletion from ordinary technological concepts is considered?

Inventive step of invention
* In comparison with prior arts, isn't it an art which can be easily invented by a person having ordinary skill in the art to which the invention pertain?
- After determination the difference and congruity of the composition, a determination is made as to the singnificant effects as compared to the prior art
- Determination as to substitution by equivalence or a simple designing

¡Ø Refer to examination guidelines, and Examination Standards for EC-related Inventions for specific standards of determination based on the Patent Law.


2. BM Patents

(1) Definition of BM Patent

A BM patent is a type of Internet-related invention, which implements business methods on the Internet by means of computer and telecommunication technology. It could be said that a BM patent belongs to the area of Internet-based operations.

In other words, a business model is a business idea describing a method of transactions with respect to goods and services. Specifically, it refers to a method of trade, which utilizes transactions on spot markets or the laws of economics.

Under the Patent Law, a business model in itself cannot be called an invention. However, if this type of business idea is presented as a specific technology in combination with computer and telecommunication technology, then it becomes a patentable subject.


(2) Examination standards for EC-related inventions

In August of 2000, the Korean Industrial Property office published ¡°Examination Standards for EC-related Inventions.¡± It relates to inventions of business method, to be carried out on computers. These inventions are used in the areas of electronic commerce, finance, business management, education, entertainment, etc. on the Internet, which are implemented by means of computer and telecommunication technology. Based on the Examination Standards for EC-related Inventions, the requirements of BM patents are explained below:


(3) Written requirements for specification

1) Patent claims
The types of claims for EC-related inventions could be classified into a process invention, a product invention, or a recording-medium invention. An invention can be claimed as a process invention if it specifies a series of processes or manipulation procedures, connected in a time series, which implements a business method on computers. It can also be claimed as a product invention. It should be stated in terms of a device or system with specification of the relationships between the construct elements, which are described therein as a means of carrying out the operations corresponding to the process or manipulation for executing a business method on a computer. Moreover, if an EC-related invention is produced as a software product, it can be claimed as an invention of a recording medium, which stores programs or database structures.

2) Detailed description of invention
The detailed description of the invention should be made in such a manner that the objective, construction and effects thereof are clearly described to the degree that it allows working by a person having ordinary skill in the art to which the invention pertains. Consequently, in cases of BM patents, the implementation technology thereof should be specifically and clearly described to allow execution of a business method on computers. Accordingly, in the detailed description of the invention, the problems to be resolved by the invention, and the means for solution should be rendered clear. In particular, the business method as presented should clearly show how it is implemented by means of computer and telecommunication technology. If not, it would warrant a refusal based on Article 42(3) of the Patent Law.


(4) Requirements of BM patents

1) Establishment of invention
With respect to a BM application, the standards for determining the establishment of the invention are the same as those for other general patent applications. First, a BM in itself could not be deemed an invention. In order for a BM to qualify as a creation of technical ideas utilizing the law of nature under Article 2 of the Patent Law, it has to be for an implementation of said business method which can be executed on a computer. Consequently, in the claims, the invention should be stated in a manner that describes how a business method is implemented by computer and telecommunication technology with computers and the like as the subjects. Even if the detailed description of the invention contains explanations of the implementation technology thereof, if the claims merely describe a business method without mentioning the computer and telecommunication technology involved therein, the application would warrant a refusal by failure to establish an invention. A BM patent is generally based on computer technology. It usually comprises steps containing mathematical calculations. If an application does not limit the applicable areas within the industry, it is deemed to be a mere mathematical algorithm, which would warrant a refusal. For example, there was an application which merely described the calculation process for asset management in its claims without any limitation as to how the results of said calculations are used as a specific means for achieving the specific objectives in the industry. The application was deemed to be a mere mathematical algorithm and hence it was rejected.

2) Novelty
Determination of novelty depends upon whether there are actual differences between the invention as described in the claims and the techniques of prior arts and those described in the literature given as reference. A BM is a combination of particulars of a business method and computer technology. Even if the particulars of the business method are the same, if there are differences in the particulars of the construct of implementation technology, then the novelty therein is recognized. However, if the difference is one in mere expression with the same construct, or if the invention described in the claims is expressed only as a generic concept of higher level and the technology in the reference as a specific concept of lower level, the I invention would be deemed wanting novelty. For example, there was an application, which involved a means of displaying transaction information to customers. The invention was described in the claims as a display device and the technology in the reference, given as a flat display. In that case, according to the rules as mentioned above, the novelty of the invention was not recognized.

3) Inventive steps
The examination standards as published by the Korean Intellectual Property Office are as follows: In the case of a BM which is a type of combination of particulars of a business method and computer technology, if the business method is already being carried out in the conventional market, and if the technology which implements said business method on computers is a general automation technology, it could be said that the inventive step is lacking in such a case. On the other hand, if the technology which implements a conventional business method on computers rises to the level at which it is more than general automation technology in view of the technical level at the time of the filing of the application, then its inventive step cannot be negated. Of course, if a new business method is implemented by a new implementation technology, then the inventive step obviously exists in such a case.


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