1. Patent protection of business method

1) Overview

The information advancement of the human society, progressing at an unprecedented speed and power, brings impact into every aspect of economy and society intensively, resulting in significant changes of operation mechanism and management mode of the economic and business affairs worldwide.  The Internet-based business methods provide better opportunities for manufacturers, sellers and consumers to serve their respective needs, by escaping from the traditional dimensions and shortening the links of manufacturing, circulation, distribution and consumption.  While business method inventions are on the rise, the consequential patent applications received by many patent offices are increasing continuously on the annual basis.  The business method applications received and published by the China State Intellectual Property Office (SIPO), according to the preliminary statistics, amounts to about 7,000, with the yearly number at 577 for 1998, 1,176 for 2000 and around 1,800 in 2002.  The relevant fields cover finance, management, insurance and banking, etc.

2) Patent protection of business method in the United States

The examination standard for the patent application of business method differs from country to country and changes in a constant manner.  The general trend, however, may be recognized as the inclusion of business method into patent protection scope.   We have attached sufficient attention to this matter. 

The gesture of the United States towards the patentable subjects concerning business method is relatively relaxing.  In its decision on State Street Bank1, the Court of Appeals for the Federal Circuits (CAFC) ruled if an invention created specified and useful information such as investment ratio, loss and profits and asset by executing mathematical method, it is deemed having produced useful, concrete, and tangible result.  Therefore, the utility requirement is satisfied.  The decision defied the former "exclusion principle of business method" by its ruling on the patentability of business method.  In its ruling on the later AT & T2, the CAFC affirmed the principle of "practical utility".  The two rulings indicated the focus of patent examination had shifted from technical character to practical utility and opened a door for different types of business method invention.

3) Patent protection of business method in Europe

We take note of some changes in the examination standard of patent applications concerning business method in recent years in Europe.  The decision by Boards of Appeal of the European Patent Office on Pension Benefit Systems Partnership 3, indicated the Boards' attitude towards patent protection of business method.  The ruling says, "...the question to be answered in the present case is, whether the method according to claim 1 represents a method of doing business as such.  If the method is technical or, in other words, has a technical character, it still may be a method for doing business, but not a method for doing business as such "  In this connection, business method with technical character may obtain patent protection relying on that decision.  Based on this ruling, business method with technical character may be patentable. 

The view of the Boards was consistent with the one made in the prior IBM (T1173/97).   In the ruling, the Board clarified that technical computer program belongs to patentable subject matters and further ensured that the technical character of computer program shall be determined by the technical effects it creates, technical achievements shall be considered when evaluating inventive step and not applied to determine the standard whether the subject matter is patentable. 

4) Patent protection of business method in China

While there is no separate examination standard for applications of the business method type in China, the standard for applications of computer programs applies to the type.  Based on Article 25 (1) of the Chinese Patent Law, "no patent right shall be granted to rules and methods for mental activities".  When deciding whether patent right shall be granted to an invention concerning computer program, it is required to determine whether the matter asking for protection falls into "rules and methods for mental activities", in other words, whether it is one of the patentable subject matters.  As specified in the Chinese Patent Examination Guidelines, a computer program itself falls into the scope of "rules and methods for mental activities" and therefore is not patentable.  If the subject matter "adopts technical means, resolves a technical problem and creates a technical effect", it belongs to the patentable subject matters under the Chinese Patent Law.

The examination criteria for business method applications may be concluded as:

(1) When the subject matter of the application only involves business method as such (pure business method) and consequently there is no technical character, the subject matter belongs to rules and methods for mental activities.  Therefore no patent shall be granted.

(2) When the subject matter involves the business methods executed through the adoption of technologies such as network or computer, it is required to determine whether the subject matter "adopts technical means, resolves a technical problem and creates a technical effect".

2. Patent protection of biotechnology

In 1990s, biotechnology developed rapidly.  The conclusion of the sequencing of human genome and the birth of Dolly the cloned sheep in the late 1990s marked that the development of biotechnology entered a new phase, in which the traditional molecule biology with DNA recombination technology as its core, split into many subjects such as bioinformatics, recombinant protein and genome.  The developments of these subjects presented opportunities, challenges and risks to many technological and economical aspects. 

1) Patent protection of genes

There are two distinct points of views on the patent protection of human genes.  Most scientists are not in favor of the protection while many social scientists and legal experts, in particular, patent attorneys from the developed world are on the opposite side.

According to the Chinese Patent Examination Guidelines, to find in nature a gene or its DNA fragment existing in its natural state is mere discovery, which is not patentable based on Article 25.1(1) of the Patent Law.  However, if a gene or a DNA fragment is, for the first time, isolated or extracted from its natural state, of which the base sequence remains unknown in the prior art and can be definitely characterized, also, it has a value of industrial application, then the gene or the DNA fragment per se and the process to obtain it are patentable subject matters for protection..

2) Patent protection of transgenic animal and plant

In view of the livability of animals and plants, breeding of the traditional biology could not maintain its repeatability.  In this connection, except a few ones such as the United States and Japan, most countries including the European Community do not grant patent rights to animal and plants.  However, with the advancement of biotechnology, especially the rapid development of DNA recombination technology, various types of transgenic animals and plants may be created upon need.  Whether to protect them with patent becomes a new issue.

Currently, it is stipulated in the Chinese Patent Law that no patent right shall be granted for "animal and plant varieties".  Though transgenic animal and plant are those obtained by biological method such as DNA recombination technology of the genetic engineering, it falls into the scope of "animal and plant varieties" specified in of Article 25.1(4) of the Patent Law.  Thus, no patent right may be granted for them.  The protection of transgenic animal and plant could only be reached indirectly via the effects of the process patents.

3) Patent protection involving morality issues

In recent years, with the rapid development of biotechnology, morality issues and their criteria in connection with patent law are put on the agenda.  For example, most of the people do not accept the technology for cloning human beings while many seems to accept the cloning of human embryos or organs for medical benefits.  There are still people who are concerned with the difficulty of distinguishing cloning for treatment or breeding purposes, proposed rule-making as the primary step. 

As specified in the Chinese Patent Examination Guidelines,for an invention relating to biotechnology, if its commercial development is contrary to social morality or detrimental to public interest, such invention shall be regarded as an subject matter provided in Article 5 of the Patent Law for which no patent right may be granted.  Following inventions shall be regarded as the inventions hereinabove:

(1) Processes for cloning human beings and human beings being cloned;

(2) Processes for modifying the germ line genetic identity of human beings;

(3) Uses of human embryos for industrial or commercial purposes;

Processes for modifying the genetic identity of animals which are likely to cause them suffering without any substantial medical benefit to human or animal, and also animals resulting from such processes.

4) Sufficient Disclosure of Inventions Relating to DNA Fragment, Gene, Peptide and Protein

As a general principle for chemical invention, the inventions relating to a DNA fragment, a gene, a peptide and a protein shall be sufficiently disclosed.

Where the specific technical solution of an invention relating to a DNA fragment, a gene, a peptide and a protein has been presented, but no experimental evidence is provided and the said technical solution can be established only when it has been proved by the result of the experiment, such a technical solution shall be deemed as unable to be carried out.

For the inventions relating to a DNA fragment, a gene, a peptide and a protein, if the technical solution of the invention is for the purpose of a diagnosis or treatment of diseases, the qualitative or quantitative data of the laboratory test (including animal test), or clinical test, shall be provided sufficiently to enable the person skilled in the art to prove that the technical solution of the invention may achieve the expected purpose or effect. The disclosure of the effective amount, method of use or preparation etc. shall be disclosed sufficiently to enable the person skilled in the art to carry out the invention. Otherwise, the said technical solution shall be deemed as unable to be carried out.

For the invention relating to a gene or a DNA fragment, only when the gene or the DNA fragment per se or the peptide and the protein expressed thereby has satisfied the requirements of disclosure hereinabove, can the technical solution of the invention be deemed as able to be carried out.

2003-12-25

2003-12-25