Monday, February 22, 2010

Business Method Monday - Advertising for E-Commerce

The PTO recently published modifications to the financial, business practice or management (former class 705/1) and discounts and advertising (former 705/14) portions of the class 705 schedule. PTO defined many new subclasses, and increasingly granular additional subclasses indented under them (also known as subclass arrays), to capture the wealth of new inventive concepts in these areas. Other significant changes to the class 705 schedule are underway and anticipated to be published in coming months.

Patent number 7,158,942 for an “Internet advertisement system” illustrates some of the changes to former subclass 705/14, which had covered both discounts and advertising. That has now been greatly expanded, renumbered and split into 705/14.1 (Discount or incentive (e.g., coupon, rebate, offer, upsale, etc.)) and its subclasses, and 705/14.4

Claim 2 of the “Internet advertisement system” states that “... at least one partner web site is at least one of a net-game provider, a chat room provider, and an e-commerce provider” – the 'e-commerce provider' clause puts this claim in 705/14.51, and PTO examiners designated this as the original (OR) classification for this patent. Subclass 705/14.51 pertains to advertising During E-commerce (i.e., online transaction). Because this subclass is indented under subclass 705/14.49 (Targeted advertisement), it is a form of targeted advertising. The 705/14.51 definition also specifies that “[t]he term “electronic transaction” covers a transaction wherein the user uses any kind of network having at one end a terminal to execute the transaction consisting of buying or selling goods or services.” Discounts or incentives provided during an electronic transaction could direct an invention claim to subclass 705/14.23 (During E-commerce (i.e., online transaction)), which is higher in the class schedule and could, therefore, be the mandatory classification depending on the claim language.

This patent is interesting in that illustrates several other new subclasses relevant to advertising for e-commerce sites. These classifications are either mandatory (required by the inventive material disclosed in each claim) or discretionary (provide useful additional information for search purposes and can be drawn from the claimed disclosure or other disclosed information such as the abstract, summary of the invention, or drawings) and can be referred to as cross-reference classifications. The cross-references applied by the USPTO to this patent include 705/14.61 and 705/14.73. Targeted advertising Based upon schedule (705/14.61) is captured in claim 4, stating that the invention “provide[s] a plurality of sets of advertisement banners to said at least one partner web site so as to be carried on the web page and switched on the web page as a set at predetermined time periods.” This meets the subclass definition for a “specific time or day that a promotion is going to be available or exposed to the public.”

The second cross-reference mentioned above is for an Online advertisement (705/14.73). The claim 1 phrase “advertisement banner providing means for providing said at least one partner web site with at least one advertisement banner among the plurality of advertisement banners stored in said first database” is covered by the definition for this subclass. The phrase 'banner advertisements' is key here – when encountered it should direct one to consider a 705/14.73 classification. Because of the broad nature of the definition for this subclass, where “a promotion is presented on the World Wide Web”, we might expect that this will be a very common mandatory or cross-reference classification for applications and patents dealing with e-commerce site ads.

The significant changes to the class 705 schedule and definitions make it imperative that inventors and applicants have a good understanding of the new level of detail being applied to classifying business methods patents and patent applications. This includes not only the schedule and definitions, but also the prior art in these new subclasses which USPTO uses, in part, to support or reject proposed new inventions. In previous posts Sean Henderson and I discussed risks associated with misclassification and inadequate prior art searches. Another lesson is . . . do your homework when USPC schedule changes are released.

Until next time . . .

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