There are three general types of U.S. patent: utility, design, and plant.

1. Utility Patents. Also called functional patents, utility patents encompass the function or operation of a machine or device. A utility patent issuing from an application filed after June 7, 1995 has a term of enforceability that runs from the date of issuance to 20 years from its earliest effective U.S. filing date, provided that periodic maintenance fees are paid. Certain occurrences during the prosecution of the patent application may give rise to a patent term extension. Utility patents can be obtained in the following categories:

a. Machines or Apparatuses. Includes devices in which components interact, for example automobile transmissions, machine tools, appliances, etc.

b. Processes. Includes methods or procedures used in the manufacture of a device or product, and encompasses computer software used to produce some tangible result.

c. Articles of Manufacture. Includes articles without moving parts, for example soap dishes, water-spray nozzles, and bottles.

d. Compositions of Matter. Includes compounds and mixtures such as plastics, pharmaceutical compounds, and metal alloys. This category also encompasses certain types of life forms, including single-cell and multiple-cell organisms and vertebrate animals. For example, Harvard University was granted a patent on a genetically engineered mouse (see U.S. Patent No. 4,736,866).

e. Business Methods. A term used to describe certain types of processes that relate to doing business. Business method patents have experienced dramatic growth as e-commerce and Internet technologies continue to advance. Since business method patenting recently has been the subject of major legal and commercial developments, a more detailed discussion is warranted.

For many years, inventions regarded as methods of doing business were viewed by the United States Patent and Trademark Office (USPTO) as not patentable. Beginning in the 1980s, however, the USPTO began allowing patents in this area.

The patentability of business methods was confirmed with the issuance of the State Street Bank v. Signature Financial Group decision handed down by the Court of Appeals for the Federal Circuit (CAFC) on January 23, 1998 (149 F.3d 1368 Fed. Cir.).

This decision determined that there was no legitimate basis for withholding patents on methods of doing business. Since that time, a flood of business method patents has been issued, including, for example, the “Name-Your-Own-Price” airline ticket business, made famous by Priceline.com (see U.S. Patent No. 5,797,127), and the Amazon.com patent on “One Click Ordering Process for Internet Purchases” (see U.S. Patent No. 5,960,411).

While it is now settled that methods of doing business are not excluded as patentable subject matter, significant changes in this area are possible in view of a court case entitled In Re Bilski.

The CAFC issued an opinion in Bilski, which specified that a process, such as a business method, must meet the “machine or transformation” test. Under this test a process must be tied to a machine that performs the process or transforms an article to a different state or thing. As such, the CAFC found that a method of hedging risk in the field of commodities trading that was not tied to a machine was unpatentable because the method operated on legal obligations and, therefore, there was no physical transformation. The court did rule that business methods were not per se un-patentable.

Many other considerations differentiate business method patents. Initially, many of these patents were granted, arguably, without sufficient scrutiny, due to the lack of prior art available to examiners at the USPTO. The term “prior art” is used to refer to any public documents or information that describe aspects of the “state of the art” as it existed prior to the invention or effective filing date.

To address this issue, the USPTO has instituted a policy whereby business method patents are examined by two examiners, which in turn significantly increases the application pendency period.

In recent years, allowance rates have been between 10% and 20% for business method patents, which is much lower than the overall rate of about 55%. Nevertheless, the number of applications for business method patents has been strong. From 2006 to 2010, the most recent years for which data is available, the annual number of US patent application filings for business method patents was greater than 9,000.

f. Computer Software. This subject matter was previously deemed to be un-patentable based on Supreme Court holdings that created confusion over whether software was an idea, a formula, or an algorithm. More recent Supreme Court rulings have focused on the patent claims as a whole, versus whether they contain a mathematical formula, in determining whether the overall process or method is patentable. Since then, many computer software applications have been filed, and many have been issued into patents (see Gottschalk v. Benson, 409 US 63 [1972] and Diamond v. Diehr, 450 US 175 [1981]).

While it is still unclear whether claims to computer software are patentable, the Bilski case is equally applicable here. In addition, the CAFC has ruled that claims to a signal with an embedded digital watermark encoded according to a given encoding process do not constitute patentable subject matter.

It should also be noted that various foreign jurisdictions have revisited the question of computer software patentability. Computer software that is separate from an apparatus or machine is considered not to be patentable in most countries outside the United States. In such jurisdictions, protection for computer software is claimed in the form of the apparatus or machine that executes the software.

2. Design Patents. These patents protect any new, original, and ornamental design for an article of manufacture. In contrast to utility patents, which protect the function or operation of a machine or device, design patents protect the appearance of a product. This appearance may be in the form of a shape, color, surface ornamentation, or a combination of these factors.

Design patents protect well-known consumer goods, such as Apple iPods, Nike footwear, and Eclipse mints, to name just a few.

Design patents are becoming increasingly popular. Since 2006, almost 23,000 have been issued annually. The United States leads all countries in design patents, followed by Japan, Taiwan, Germany, and Canada. And the companies most frequently seeking design patent protection include Samsung, Sony, Nike, Procter+Gamble, Goodyear, and Microsoft.

These patents have a term of 14 years from the date of issuance, and unlike the types of patents mentioned above, are not subject to maintenance fees (periodic taxes payable to the USPTO). Generally, design patents are less expensive to obtain than utility patents and issue much sooner. However, the scope of protection is different and often more limited.

There is no requirement that the design be artistic or pleasing to the eye, only that it is primarily ornamental in character. If the overall appearance of the design is dictated by performance, then the design is functional and not entitled to design patent protection. One example is U.S. Design Patent No. D327,636, which disclosed a design for a key blank. In an infringement proceeding, the Court of Appeals for the Federal Circuit (CAFC) held that the shape of the blank key blade was dictated by function, and thus the design was not ornamental. Best Lock Corp. v. Ilco Unican Corp., 40 USPQ2d 1048 (Fed. Cir. 1996). Sometimes, however, articles such as automobile wheels and cell phone housings blend functional and ornamental features, with the design features therefore available for design patent protection.

3. Plant Patents.These patents are available for asexually reproduced plants. A relatively small number are issued each year. And since they define their own highly specialized field of patent law practice, reference should be made to other resources should you desire more information.

4. Judicially Excluded Subject Matter.This includes developments that the courts have defined as outside the scope of the patent types described above. It encompasses:

• Printed matter;

• Naturally occurring substances;

• Ideas, mental processes, or mathematical formulas not involved in any tangible application; and

• Scientific principles or laws of nature (by themselves)

To find out more please access our IP Primer page.