Monday, March 1, 2010

Bargains, Bargains, Where Are My Bargains?

Business Methods Monday

In last Monday's post I talked about how the USPTO significantly increased the resolution and complexity of the Discounts and Advertising portions of Class 705. Discount or incentive art are encompassed within subclasses 705/14.1 (Discount or Incentive) through 705/14/39 (Online Discount or Incentive). Advertisements are covered in subclasses 705.14.4 (Advertisement) through 705/14/73.

How much detail has been added? The discount portion of the schedule no includes 30 subclasses. All of that inventive art had previously been classified within a single class - 705/14.

Today we'll explore the broad outline of the Discount and Incentive subclass array.

To help you understand the new complexity in this Business Method Area you might want to open the Class 705 Schedule Page in another window and scroll down to subclass 14.1 as we walk through how discount and incentive patents are classified. You can also CLICK HERE.

Most of the new granularity in this area of the Class 705 schedule is indented one level further than that of the discount or incentive subclass (705/14.1) that introduces it. To be classified in this array, the claimed art must include a "price reduction of, or premium credit resulting from, the purchase of a good or service, or a commercial offer to incite, stimulate, or provoke an increase in business, through a commercial transaction" It is important to note that the mere mention of discount or incentive in name only, a nominal recitation in USPTO parlance, like just mentioning a "coupon" or "rebate" in the claims, is insufficient to classify are in this subclass.

The upper portion of the discount section of the Business Methods Schedule incorporates aspects such as specific activities required to receive an incentive (705/14.11 - trade or exchange of a good or service, 705/14.12 - playing a video game, 705/14.16 - referral reward, and 705/14.19 - giving input on a product or service, to name a few); analysis (705/14.13 - determining discount or incentive effectiveness); and finance or budgets (705/14.17 - financial account, 705/14.21 - based on funds or budget.)

Inventions dealing with re-usable coupons (705/14.22), incentives provided or redeemed during online transactions (705/14.23), incentives based on inventory (14.24), on user history (705.14.25), or on avoiding fraud (705/14.26) are found in the central portion of the schedule.

The most complex area of the Discount or Incentive art is related to frequent usage incentive systems (705/14.27). These systems include frequent flyer miles programs, point reward systems, and other incentives that require an individual to meet predetermined criteria for showing loyalty to a product, merchant, or service. The array of subclasses indented below frequent usage systems incorporate:
  • Frequent usage incentive value reconciliation between diverse systems
  • On-line clearinghouse
  • Multi-merchant loyalty card system
  • Awarding of a frequent usage incentive independent of monetary value of a good or service purchased, or distance traveled
  • Frequent usage reward other than merchandise, case, or travel
  • Method of redeemng a frequent usage reward
The bottom of the schedule includes subclasses addressing rebates after a completed purchase (705/14.34; timing of the incentive award or usage (705/14/35); requiring user registration or identification (705/14.36; at a kiosk (705/14.37) or point of sale (705/14.38;) or online discounts or incentives (705/14.39).

As of February 24, 2010, as I am writing this post, USPTO has placed 1,639 patents with an original classification within the discount or incentive area of Class 705. The majority of these patents (75%) are contained within eight of the 30 total subclasses into which USPTO has placed 99 or more patents. The subclasses are:
  • 705/14.1 -- Discount or incentive (e.g. coupon, rebate, offer, upsale, etc.)
  • 705/14.14 -- Chance discount or incentive
  • 705/14.26 -- Avoiding fraud
  • 705/14/27 -- Frequent usage incentive system (e.g. frequent flyer miles program, point system, etc.)
  • 705/14.35 -- Including timing (i.e limited awarding or usage time constraint)
  • 705/14.36 -- Incentive or reward received by requiring registration or ID from user
  • 705/14.38 -- At Point of Sale (POS)
  • 705/14.39 -- Online discount or incentive
Online discount or incentive (705/14.39) the last subclass in this list, contains 266 patents by far the largest number of any subclasses in the discount or incentive array. If inventors claim art that they believe falls within one of these eight subclasses, they will need to be diligent in searching for prior art to insure that they are applying for a unique invention.

Let us know your thoughts on these business methods patents by sending a comment.

Until next Monday - Mike

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