ISMT 520 Lecture #6:
Protecting Technical and
Business Process Innovations
Dr. Theodore H. K. Clark
Associate Professor and Academic Director of
MSc Programs in IS Management and E-Commerce Management
Department of Information & Systems Management
Hong Kong University of Science & Technology
and Visiting Associate Professor of Operations & Information Management
(Information Economics and Strategy Group) 1998 - 2001
The Wharton School of the University of Pennsylvania
Innovation Protection via Patents



Copyright laws protect expression, and innovation in
software (now) and works related to “creativity”
Trademark Laws protect Brands and Identity
Trade Secrets can be used to protect innovations


But, you MUST keep the secret a secret
Patents protect PRODUCT AND PROCESS innovations




BOTH products (function) and processes are protected
HOWEVER you can NOT keep the innovation a secret
BECAUSE patents are published for everyone to see
AND expression (design) is NOT PROTECTED, only function
HKUST Business School
Patent Law Protections

Protects FUNCTION, not expression



Lengthy application and approval process




Amazon patented its one-click function, as
copyright would not have protected this function
Replicating code for one-click function easy to do
Significant legal costs may be required
Patents may be required in multiple jurisdictions
Patent limited to exact terms of application
Be careful to limit patent claims narrowly
HKUST Business School
An Idea Can Not Be Patented




… “while a scientific truth, or the
mathematical expression of it, is not a
patentable invention, a novel and useful
structure created with the aid of knowledge
of scientific truth may be.” (Mackay)
“an idea of itself is not patentable”
A principle … ; an original cause; a motive;
these cannot be patented” (Le Roy)
A new discovery of fact is not patentable.
4
HKUST Business School
Processes May Be Patented



“That a process may be patentable,
irrespective of the particular form of the
instrumentalities used, can not be disputed
…, it may not be at all material what
instrument or machinery is used” (Cochrane)
Benson case resulted in rejection by US
Supreme Court of patents for algorithms
Limitations on process patents in Morse

Claim was too sweeping; discouraged innovation
5
HKUST Business School
Requirements to Obtain a Patent

Novelty – restricts patents if innovation has
been previously anticipated, or if publicly
disclosed and patent not applied for in time



Utility – requires that innovation be a “useful
art” and more than just novelty or curiosity


Twelve months prior to time of application in USA
Race to patent by “simultaneous” inventors
Inventor must identify a specific and real utility
Non-obviousness – the most difficult criteria
6
HKUST Business School
What is Non-Obviousness?


Most be non-obvious to someone skilled in
related fields to satisfy this test
Once used to deny almost all patent
applications, but restricted in application now


Does not require a brilliant act of new genius
All elements can be obvious if new utility and
insights are more than “sum of the parts”
7
HKUST Business School
Obviousness Not Case Law Based



This is a fact of analysis of the business
process or engineering applications involved
Obviousness viewed from perspective of
industry expert, but from layman review
New industry or product with lots of demand
can provide evidence of non-obviousness


If it was so obvious, why was it not done already?
Has to represent advance over prior “art”
8
HKUST Business School
Statutory Test of Nonobviousness




(1) survey of scope and content of prior art
(2) examination of differences between
invention and prior art
(3) determination of the level of ordinary skill
in the art that might measure obviousness
In light of this three stage process, the court
or the patent office can then determine if the
proposed innovation exhibits nonobviousness.
9
HKUST Business School
Survey of Prior Art

Duty of candor – the inventors and applying
attorney must disclose known prior art





Must provide survey of prior art
Must be relevant or pertinent or analogous
Prior art definition must not be too narrow
Definition is functional, not commercial
Second stage of process is patent office
review of prior art

Undisclosed discoveries not viewed positively
10
HKUST Business School
Group Project: Due SOON!!!



Group project deadline coming up very soon!
Individual assignment helped prepare you for
group project, as questions overlap some
Bonus incentive: Turn in DRAFT of Group
project before December 10, and free review



No possible way it could hurt your grade
Definitely might help your grade
You may ask any question any time via email

However, I am traveling Dec 19-21 and not online
11
HKUST Business School
FINAL EXAM: to “B” or not to “B”

Final Exam will be take home exam, and will
be similar to the individual assignment





However, will not be focused on copyright law
Will be case assignment from same textbook
Different question, different area of law
Opportunity for learning and skills demonstration
Must DECIDE whether to accept “B” for free
on the Final or to take the exam by next class

Everyone has option to decide not to take the final
exam, even if you missed “too many” classes.
12
HKUST Business School