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Netflix sued Blockbuster last year, saying its larger rival had stolen its system for placing movie selections in a queue and its business method for charging subscribers a monthly fee to select and rent DVDs from its Web site.
Under the new law, someone who can prove they used an electronic business method for a year before a patent application was filed cannot be sued, even if they did not make public their practices.
Specifically, the Purple Leaf patent # 7,603,311 B1 covers a business method for conducting electronic transactions and claims to provide a more effective and efficient way to make a payment over the Internet.
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It looks like we are stuck with business method patents for now.
In the Bilski case, federal judges in lower courts denied a patent to inventors Bernard Bilski and Rand Warsaw for a "business method" they had developed for hedging bets in the commodities market.
Mr. Hastings's attempt to address the issue falls into the category of business method patents -- ideas for ways of conducting businesses, like one-click ordering online, rather than tangible inventions.
In March, a federal judge in San Francisco wrote that the appeals court's decision signaled that "the closing bell may be ringing for business method patents, and their patentees may find they have become bagholders".
These findings do generally not hold true for "business method" patents, which do not appear to confer a survival advantage.
"According to the U.S. Patent Office, applications for business method patents are up 700% this year," says David Kline, a business consultant and the author of Rembrandts in the Attic.
This is the very first case to be tried under the new rules for business method patents, which are part of the America Invents Act.
Although apparently there have only been just over two dozen requests made for business method patent reviews since the rules came into effect, that could set a profile and precedent for more.
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