Monday, March 8, 2010

Finding Bargains - Business Methods Monday

Last week I wrote about the changes to the Discounts or Incentive portion of the USPTO Class 705 schedule. Today we'll review major changes to the Advertisement section (705/14.4 -- 705/14.73) of the schedule.

As with discounts, the USPTO greatly expanded the detail concerning advertising inventions. They expanded from one subclass (705/14) to 34. You might want to refer to the Class 705 Schedule Page in another window and locate subclass 705/14.4 as we examine the recent changes to advertisement patents.

To be classified as an advertisement, the claimed art must include the act "of promoting or calling to the attention of the public any goods or services to induce the public to buy or use the goods or services." As of today, March 3, 2010 as I write this post, the USPTO has placed 1,680 patents with an original or cross-reference classification within the 705/14.4 array, including all its subclasses. 164 patents (10%) are located within the advertisement subclass (705/14.4).

The advertising art section of the business methods schedule is composed of several major sub-arrays. Indented immediately below Advertising is a section dealing with analysis, introduced by subclass 705/14.41, determination of advertisement effectiveness. The key to being classified in this array is that "an analysis is conducted in order to ascertain the degree to which the intended or expected result of a promotion is achieved." Note that an analysis must be conducted by the claimed art. If the claimed art allows classification here, then additional detail may require classification in one of the four further indented subclasses:
  • Comparative campaigns (705/14.42) in which two or more promotions are evaluated to determine which one attains the highest degree of intended or expected results
  • Optimization (705/14.43) where there is an analysis of a constraint of a promotion resulting in a reworking of that promotion to improve its current or future effectiveness
  • Survey (705/14.44) which is a collection of public opinion about a promotion in order to determine its effectiveness
  • Traffic (705/14.45) in which the commercial activity generated by a promotion is analyzed. 89 patents (5%) are found in this array.

Immediately below the analysis section are three subclasses which address calculation of past, present, or future revenue (705/14.46), avoiding fraud (705/14.47), and advertising based on a budget or funds (705/14.48). 58 patents are currently assigned to these subclasses.

This brings us to the largest, most complex portion of the advertising schedule. Targeted advertisements (705/14.49 -- 14.67) cover 19 subclasses, and 678 patents (40%). Inventive art must include "a promotion . . . directed at or to an individual or individuals based on predetermined criteria" to be classified here. Several of the key subclasses in this area include:
  • Based on an event or environment (e.g., weather, festival, etc.) (705/14.5)
  • During e-commerce (705/14.51)
  • Based on user history (705/14.53), and its indented child subclass, user search (705/14.54)
  • Based upon a schedule (705/14.61)
  • Wireless device (705/14.64)
  • At Point of Sale (705/14.65)
  • Based on user profile or attribute (705/14.66), and its indented child subclass, personalized advertisement (705/14.67).

The next section of the advertising schedule deals with fees for advertising (705/14.69); inventions classified here must include "compensation or billing for the promotion of a good or a service." Two subclasses are indented under fees: split fees (705/14.7) and auctions (705/14.71). 171 patents (10%) are found here.

Finally, at the bottom of the advertising array, we find a subclass for creating advertisements (705/14.72), and one for online advertisements (705/14.73). This last subclass contains 462 patents, 28% of all the patents found in advertising.

In today's business climate, strong competition for customers might be expected to drive more innovation in advertising, particularly in light of converging technologies such as cell phones that receive text messages, serve as web browsers, and contain GPS transceivers that allow highly targeted, location-specific advertising using "geofencing" concepts -- using a defined geographic area of a map. The increased complexity of the advertising art, as revealed in USPTO's class 705/14.4 schedule array, provides more opportunity for inventors to submit unique patent applications. The U.S. Supreme Court's upcoming decision in the Bilski v. Kappos case could drastically change the patent landscape for advertising, along with all other business methods patents.

Let us know your thoughts.

Until next Monday -- Mike


  1. Why is it that advertising (705/14.4 – 705/14.73) with 1680 applications is divided into a multiplicity of classes/subclasses, but other fields with far more applications, like insurance (705/004) with over 3000 applications, is still a single class?

    Is it possible to automate the generation of new subclasses, or is this still a manual process?

  2. Mike and Sean reply:

    The USPTO has not recently undertaken a reclassification project for 705/4. PTO undertakes reclassification projects for various reasons including too many documents in a subclass, or to synthesize the US Patent Classification System with those of foreign patent office such as Europe or Japan.

    As far as the multiplicity of new subclasses in the advertising array (or any schedule which undergoes reclassification, for that matter), the number of new subclasses is largely dictated by the subject matter in the patents and PGPubs selected for analysis in the project. Regarding the number of documents assigned to a subclass when developing new subclasses in a reclass project, for many years a rule of thumb average has been 30, however, there appear to be no hard and fast guidelines, and different Technology Centers/GAUs within PTO seem to have different preferences for the upper limit of a proposed new subclass before it should be broken out into 2 or more additional subclasses. 

    As far as automation of the generation of new classes...It might be theoretically possible to automate new subclass generation, and a very interesting project would be a comparative one in which reclassification is undertaken both manually and with an automated system. Given the somewhat subjective nature of reclassification, and the application of guidelines for it, very different results between thetwo portions of such a comparative study would be expected. Bottom line, it remains a very manual and labor intensive process.