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The Patentability of Software and Business Methods in 2025 - Stevens Law Group

The Patentability of Software and Business Methods in 2025

As we move into 2025, the debate over the patentability of software and business methods continues to shape the landscape of innovation and intellectual property law. In an era dominated by artificial intelligence, blockchain, and cloud computing advancements, determining what constitutes patentable subject matter has become increasingly complex. Understanding the current legal framework, recent changes, and best practices for patent applications is essential for software developers and business innovators seeking to protect their creations. In this comprehensive guide, we will explore the patentability of software and business methods, examining the legal criteria, challenges, and strategies for success.

 

What Makes an Invention Patentable?

Before diving into the specifics of software and business methods, it’s crucial to understand the general criteria for patentability. According to patent laws worldwide, an invention must satisfy three key requirements:

  1. Novelty: The invention must be new and not previously disclosed or known to the public.
  2. Inventive Step (Non-Obviousness): The invention must involve an inventive step that is not obvious to a person skilled in the relevant field.
  3. Industrial Applicability (Utility): The invention must be capable of industrial applications, meaning it can be used in some industries.

These criteria apply to all inventions, including software and business methods. However, due to their abstract nature, we often apply additional scrutiny to ensure these inventions meet the legal standards of patentability.

Legal Framework for Patentability

In the United States, the Patent Act (35 U.S.C. Section 101) governs what constitutes patentable subject matter, stating that any new and useful process, machine, manufacture, or composition of matter is eligible for a patent. However, judicial exceptions, such as laws of nature, abstract ideas, and natural phenomena, limit this broad definition.

In the European Union, the European Patent Convention (EPC Article 52) excludes certain subject matter from patentability, including programs for computers and methods for doing business “as such.” However, if a software invention demonstrates a “technical effect,” it may still be eligible for patent protection.

Internationally, the TRIPS Agreement (Trade-Related Aspects of Intellectual Property Rights) sets minimum standards for patent protection, influencing national laws and creating a framework for software and business method patents across jurisdictions.

The Patentability of Software and Business Methods in 2025 - Stevens Law Group

Historical Perspective on Software Patentability

Landmark court cases and shifts in policy mark the history of software patentability. Initially, the view of software as an abstract idea precluded its patentability. This changed with cases like Diamond v. Diehr (1981), where the U.S. Supreme Court ruled that a software-implemented process could be patentable if it involved a physical transformation.

The 2014 case Alice Corp. v. CLS Bank International had a big effect on software patents because it created the Alice-Mayo framework. This is a two-step test to see if a patent claim is based on an abstract idea and, if it is, if it has an “inventive concept” that makes it a patentable application.

Current Trends in Software Patents (2025)

Artificial intelligence (AI), machine learning, and blockchain technology advancements shape the software patent landscape in 2025. Patents involving AI algorithms, data processing methods, and cloud-based solutions are becoming more common. However, these patents must demonstrate a concrete technical application to overcome objections based on abstract ideas.

Emerging trends include increased scrutiny of software patents involving AI-generated content and the need for clear descriptions of the inventive step to meet non-obviousness requirements.

 

Business method patents: challenges and opportunities

A business method patent covers a specific way of conducting business, typically involving e-commerce, financial services, or operations management. Examples include online payment processing systems, customer relationship management (CRM) methods, and investment strategies.

The patentability of business methods is controversial due to their abstract nature and potential overlap with existing software patents. Critics argue that many business methods lack the technical innovation required for patent eligibility, while proponents believe they are essential for protecting novel business processes.

Legal precedents and changes to examination standards

In 1998, the State Street Bank & Trust Co. v. Signature Financial Group case established a precedent that permitted the patenting of business methods that yielded a “useful, concrete, and tangible result.” However, subsequent rulings, such as Bilski v. Kappos (2010), limited the scope of patentable business methods, emphasizing the need for a clear connection to a technical process.

In 2025, the United States Patent and Trademark Office (USPTO) and the European Patent Office (EPO) have refined their guidelines, requiring business method patents to demonstrate a specific technical effect or solve a technical problem, aligning with the stricter standards applied to software patents.

 

Patent Eligibility Standards in Major Jurisdictions

United States

The Alice-Mayo framework remains the primary test for determining the patent eligibility of software and business methods in the U.S. Patent applications must pass a two-step analysis:

  1. Assess whether the claim pertains to a judicially recognized exception, such as an abstract idea.
  2. Assess whether the claim includes additional elements that transform it into a patentable application.

The USPTO recently updated its guidelines, emphasizing the importance of describing the technical problem the invention solves and providing specific, concrete details in the patent claims.

European Union

Generally, the EU excludes software and business methods from patentability unless they demonstrate a “technical effect.” The European Patent Office (EPO) focuses on whether the invention involves a technical contribution beyond a mere business or administrative method. This approach requires that the patent claims clearly define the technical features of the invention.

International Perspective

The World Intellectual Property Organization (WIPO) and the TRIPS Agreement set international standards for software and business method patents, emphasizing the importance of harmonization across jurisdictions. However, national laws still vary, and applicants must tailor their strategies to meet the specific requirements of each region.

The Patentability of Software and Business Methods in 2025 - Stevens Law Group
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The role of AI in software and business method patent applications

AI-Assisted Inventions and Inventory Issues

The inventive process is increasingly using AI, which raises questions about inventorship and patent eligibility. According to recent USPTO guidelines, the inventor must be a natural person, even if AI played a significant role in creating the invention. The challenge lies in demonstrating the human contribution to the inventive step when AI tools are involved.

Patent Strategies for AI Innovations

To successfully patent AI-driven software, applicants should focus on the technical aspects of the invention, such as the specific algorithms used, their unique configuration, and the problem they solve. Providing a detailed explanation of the AI’s role in the process can help overcome objections related to abstract ideas.

 

Overcoming Common Rejections: Best Practices for Patent Applications

Navigating Section 101 Rejections in the U.S.

Rejections based on 35 U.S.C. 101 are common for software and business method patents, often due to the abstract nature of the claims. To address this, applicants should:

  • Clearly state the technical issue that the invention resolves.
  • Highlight specific technical features that demonstrate novelty and inventiveness.
  • Use detailed and concrete language in the patent claims.

Crafting Strong Patent Claims

Strong patent claims are essential for avoiding rejections and ensuring broad protection. Focus on defining the technical features of the invention and providing specific details about how the software or method operates.

Utilizing Prior Art Effectively

Conducting a thorough prior art search can help identify existing patents and differentiate the invention. This process is crucial for demonstrating novelty and avoiding rejections based on prior disclosures.

 

The Future of Software and Business Method Patents

Emerging Technologies and Their Patent Implications

As technologies like quantum computing, blockchain, and the Internet of Things (IoT) continue to develop, they present new challenges and opportunities for patenting. Applicants must keep pace with legal updates and adapt their strategies to address the unique aspects of these innovations.

Predicted changes in patent law and policy

With ongoing debates over the scope of patentable subject matter, we can expect further legal reforms aimed at clarifying the standards for software and business method patents. Staying informed about these changes will be critical for innovators seeking to protect their intellectual property.

The Patentability of Software and Business Methods in 2025 - Stevens Law Group
Illustration of technology vector

Conclusion

The patentability of software and business methods remains a complex and evolving area of law. In 2025, the key to success lies in understanding the specific requirements of each jurisdiction, crafting strong patent claims, and demonstrating the technical innovation behind the invention. By staying informed and proactive, innovators can navigate the challenges and secure valuable patent protection for their software and business methods.

If you’re developing software or innovative business methods and need expert legal guidance to navigate the complexities of patent protection, Stevens Law Group is here to help. We specialize in securing patents for software, AI-driven inventions, and unique business methods, ensuring the protection of your intellectual property throughout the process.

Why Choose Stevens Law Group?

  • I have a deep expertise in software and tech patents.
  • I have a proven track record in overcoming complex patent rejections.
  • A personalized, strategic approach is tailored to your unique innovations.

Ready to safeguard your invention? Don’t leave your valuable software unprotected. Contact Stevens Law Group today for a consultation and let our skilled patent attorneys help you secure the IP rights you deserve.

Let us turn your ideas into protected assets. Reach out today!

You can also watch this video on intellectual property management tailored specifically for in-house counsel. This guide offers essential strategies and insights for managing and protecting your company’s intellectual property and innovations.

 

FAQs

  1. Is it possible to patent software globally, or are there regional restrictions?
    • Software patentability varies by region. In the U.S., it must pass the Alice-Mayo test, while in the EU, “technical effect” is required.
  2. What is the main difference between software patents and business method patents?
    • Software patents focus on specific technological solutions, while business method patents cover processes for conducting business activities.
  3. How can I improve my software patent application’s chances of approval?
    • Define the technical problem clearly, emphasize its unique features, and steer clear of abstract language in your claims.
  4. What role does AI play in the patenting process for software inventions?
    • Despite the frequent use of AI in the inventive process, it is still important to recognize the human inventor and emphasize their contribution to the invention.
  5. Are business methods still patentable after recent legal changes?
    • Yes, they must demonstrate a specific technical effect or solve a technical problem to be eligible.

 

References

Business Methods

Artificial Intelligence (AI) guidance updates

Patentability Patentability of Computer Computer
Software Software and Business Business Methods


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