Recent developments have led to a considerable rethink on this and related issues. In 1998 the US Court of Appeal passed a landmark judgement in the case of State Street Bank and Trust Co v. Signature Financial Group Inc and it removed the `business methods’ exception to patentable subject-matter.

The Court held that claims for business process patents should be treated like any other claims. They should also be granted where the process at issue is novel, non-obvious and produces a useful, concrete and tangible result. This paved the way for patent grants in this field by the US Patent and Trademark Office (USPTO).

However, these grants have been criticised due to the ease with which the recipient companies can unfairly exploit the market through a small, undeserving invention.

If present trends are any indicator, the cyber world is most certainly going that way! A few months ago, Amazon.com was granted a patent (US Patent No. 5,960,411,207, Method and system for placing a purchase order via a communications network) for what it termed the `one-click model’. Amazon’s patent sparked a call for boycott of Amazon.com, and led to a raging debate.

However, problems relating to patenting of business methods, arise not from the patent regime itself, but from flaws in our continuing interpretation of patentability.

While conceptually, the patent framework is consistent in its approach to determining patentability, in reality, subjective inputs often tend to replace objective parameters when deciding whether the conditions for patentability, are satisfied.

Understanding software patentability provides us with a clearer picture on business methods patentability.Generally, when an application for patent concerns software, the relevant subject matter is the implementation of the algorithm or source code in a computer.

Pure algorithms, software or source code (the representation of an algorithm) cannot be patented per se by reason of their being laws of nature. The implementation of the software in a device, so as to produce a tangible, novel result, could however be patentable.

If the software were, but a component of a system that delivered a tangible, novel result, the system would be patentable.

In India, if software were patentable, there would be a good chance that business methods too might be deserving of similar protection. It is generally believed, that the Indian legal intellectual property framework provides only for copyright protection, the source code being a literary work that is copyrighted. Software, is per se, unpatentable in India.

A straight reading of our patent statute (Indian Patent Act, 1970) reveals no express bar or exception to patenting a business model or software— though a clause touches upon the unpatentability of a scientific principle. The approach to defining patentable subject matter, too, is similar to the statutory definition in the US and revolves around the meaning of `manufacture’.

The subject matter should relate to manufacturing; an art, process, method or manner of manufacture; the machine by which it is manufactured or the end-product of the act of manufacture.

The Act, however, provides no elaboration on the meaning and scope of the word. Indian judicial interpretation too provides no clue to whether tangible and novel results produced by a software system might satisfy the requirement of manufacture.

In the US too, there was a belief that both business models and mathematical algorithms were per se unpatentable. However, as Makin states, a closer inspection of precedent in both of these areas reveal that business methods and mathematical algorithms were deemed unpatentable, not per se, but after judicial analysis of the abstractness of the claims.

The determination of abstractness was motivated more by factors relating to the `reluctance to grant a monopoly over too great an area of the public domain’ rather than primary requirements of patentability.

There is a distinction between patenting business models and patenting computer software. The primary distinction of consequence is the inability, rather, the greater degree of difficulty in determining whether a business model satisfies the novelty requirement of patentability.

Novelty, in a global context, is in any case, difficult to determine. A patent examiner, while granting a patent for a particular jurisdiction, must necessarily have to satisfy herself, as to the prior art relating to that invention, globally.

Secondly, the problem with business method patents is that they bring with them an increasing difficulty in distinguishing between an invention and an innovation.

A different stream of thought might lay the blame for this mess on our intellectual property protection system itself. Some non-proprietary inventions or innovations can even be credited with being the basis on which today’s entrepreneurs have built their business models.

The TCP/ IP, the ubiquitous PC, the domain naming system have all been non-proprietary in nature. In a sense, this gave entrepreneurs the freedom to innovate, using these technologies as a basis.

It can be argued that it is the smaller innovations that really needed protection in today’s digital age. A smaller and more efficient company that constantly innovates can still be stifled by its bigger competitors, that need no more than to imitate these features or processes.

One needs to then decide where the balance lies - between leveraging intellectual property in such a manner, on the one hand, and striving to offer the best deal to customers and shareholders alike through more efficient business methods, on the other.