Yahoo sues Facebook over patent infringement, and it is primarily related to online advertising, Google purchased a large patent inventory and Apple, Google and Samsung all seem to be in the patent infringement fray. But what is all the fuss about and does it have any meaning for individual inventors? The stakes are enormous if an individual inventor can cash in.  

The reason for the confusion is that the patent rulings appear, at least to me, to have shifted dramatically. I must mention here that I’m not a patent attorney, and don’t understand all the nuances of the changes, but clearly something is afoot and it may give you a chance to profit from the Internet explosion.

First what has changed? When 1863 Samuel Morse tried to patent the concept of sending messages across great distances. His patent was denied – the Supreme Court ruled that he could not patent an idea. Yet today there are patents on on-line advertising and click through ads. Clearly these ideas could not be patented in 1863.

These rules changed in July 1998, when a federal court upheld a patent for a method of calculating the net asset value of mutual funds in State Street Bank & Trust Co. v. Signal Financial Group Inc. 149 F.3d1368 (Fed. Cir. 1998) cert denied 119 S. Ct. 851 (1999). The court ruled that patent laws were intended to protect any method, whether or not it required the aid of a computer, so long as it produced a “useful, concrete, and tangible result.” Thus with one stroke, the court legitimized both software patents and methods of doing business, opening the way for Internet-related patents. In the six months following the ruling, patent filings for software/Internet business methods increased by 40%, and the PTO created a new classification for applications: “Data processing: financial, business practice, management, or cost/price determination.” The above paragraph is taken from http://www.inc.com/articles/2000/11/20945.html. That article has some additional patents to review, including the patent on click through payments.

Take a look at Google’s patent 8138930 for Advertising Based on Environmental Conditions. This sentence  is included in the patent:  For example, a company selling fishing tackle may have a line of large lures and may thus identify terms such as “lunker”, “sturgeon” and “muskie fever” as keywords to associate with their advertisements for such large lures. Another sentence states: An advertisement may be selected for display if there is a “near” match also, for example if a query includes terms that are known synonyms or mistypings / misspellings of the key word for an advertisement. OK,  idea or technology? Can this be patented? Apparently it can as the patent was issued on March 20th 2012.

The key at one time was that the patent concept was tied to a technological device, but today that might not even been needed. Google may have tied their patent to a device to protect the patent from any future rule shifts. From the patent:  The patent application discloses information about an environmental condition of a remote device which is received an apparatus. The apparatus includes one or more processing devices. Particularly the environmental condition is determined based upon a signal output from a sensor of the remote device or a sensor coupled to the remote device. Further, an advertisement is identified based on the environmental condition and the advertisement provided to the remote device.

My take on this patent is that the environmental condition is that a user enters a search term. It goes onto a computer (with several processing devices) is sent to a web site computer (a sensor coupled to the remote device), that then returns one of more advertisements to the user. The patent in broad terms gives a patent for Google to put those little ads on the right side of your screen when you do a patent search.

Rather than complaining about the sorry state of affairs in our patent office, you should instead concentrate on what this means for you. A computer is a technological device, and apparently anything you do with the Internet that starts at a computer, goes into the Internet, and  then is returned to a computer is fair game for the Internet. That’s why Google, Facebook and others are buying up patent rights. They don’t just tie up a product design or innovation, they tie up an entire business concept, something that has never been patentable before.

So next time you get a great idea of new features or services for the Internet, stop and consult with a patent attorney. You just might be able to get a patent that could turn into millions, or billions. To prove my point, all you need to do is go on the web site uspto.gov or do a Google search for Google patents and look up US Patent Number 8138930. You will see how Google has smartly tied up the world of on-line advertising with one patent.

Related posts:

1. Selling on the Internet
2. Doing a Google Patent Search
3. USPTO Making Changes for Provisional Patents
4. USPTO Considering Extending Provisional Patents
5. How Effective are Your Patent Claims