Examining points in telecommunications for invention patent applications relating to biling systems

By Lin Shen, Yang Weiming,[Patent]

The Patent Office of China has received in recent years a large number of applications for invention patent relating to telecommunications billing system due to the rapid development of the Internet and mobile communication technology. As “billing systems” are closely related to commercial activities, i.e. business methods, they have been precluded from statutorily patentable subject matters. Therefore, it is necessary that a patent examiner in the area of telecommunications remains business method aware when examining applications involving billing systems according to China’s Patent Law; on the other hand, it is also worthwhile for those engaged in this area of telecommunications to acquire more precise knowledge before filing relevant applications.

Yet, examiners have to make many subjective determinations during examination because on the one hand business methods have not been defined clearly by the Patent Law; on the other hand, erroneous examination conclusions have been reached for invention patent applications in certain areas of telecommunications involving billing systems because examiners frequently make wooden decisions and are excessively sensitive about billing system applications, for the reasons that relevant knowledge is scarce for decisional authorities to judge business method patent eligibility, resulting in individual cases of prejudicial determinations as to every “billing method.” Moreover, lack of proper knowledge on the part of an applicant might lead to tremendous loss when his application is determined to be a business method. This not only affects the quality of communication patent examination, but also hinders the development of communication technologies related to billing system.

In light of the above, this article will try, from the perspective of the decisional authorities and the characteristics of the patent applications related to billing systems in the telecommunications area, to provide some key points for the examination, in the hope of offering some insights for the telecommunications examiners and inventors.

I. Patent eligibility of business method

To determine whether a patent application for invention is a business method, it is necessary to first understand what is a business method in patent sense and the Patent Office treatment.

A business method refers to the ways to conduct all kinds of commercial activities and operations, in a broad sense, an interpretation of social and economic rules and methods, including securities, insurance, leasing, auction, advertising, services, operational management, administration, transaction arrangements etc.

By this definition, business method encompasses very wide field. Although the above illustrative examples do not specifically cite billing systems, their expansive interpretation necessarily includes billing systems given the close relationship with business.

However, not all business methods included in business categories are ineligible for patent.

In patent world, the eligibility of business methods has long been debated, from the 1908 US case of Hotel Security Checking Co. v. Lorraine Co., which established the “business method exception,” to the 1998 State Street Bank & Trust Co. v. Signature Financial Group, which opened the door for business method eligibility, and then to the qualified limitations on business method in the case of InreBilski of 2006. It can be seen from these cases that US, a leading country in patent industry, has been indecisive and wavering on the patent eligibility examination of business method.

The treatment of patent eligibility of a business method has gone through two stages in China, the first being based on the “inventive contribution,” and second, being based on the 2006 and 2010 examining guidelines provisions of “the rules and methods for mental activities,” as well as Article 2 of the Patent Law (as amended in 2009) on the patentable subject matters. The current is the second.

Then, how to determine whether a patent application for invention in China is a business method at present?

Firstly, determination is made as to whether the application is the simple subject of a business method, and if yes, it is not a patentable subject matter within the meaning of Article 25.1 (2) of the Patent Law.

Secondly, if not, the examiner should proceed to determine whether the subject matter of the invention is an application of business method by employing conventional computation or network technologies, in the following three specific steps:

(1) Determining by the technical background of the written description and/or common sense that the subject matter of the invention is not a technical solution, and therefore not a patentable subject matter by simply reciting Article 2.2 of the Patent Law;

(2) Determining by the prior art search based on the technical background of the written description that the technical problem has been solved, and the subject matter, for example, a business operational mode, is a non-technical solution, and therefore, is not a patentable subject matter under Article 2.2 of the Patent Law; and

(3) Determining prior art references from the search result that may affect novelty and/or inventiveness by reciting novelty and/or inventiveness issues. In comparison with the inventive contribution theory in the first stage, the second stage focuses on the overall determination. However, due to the influence of the “inventive contribution” theory and insufficient understanding of the examining procedures, some examiners, under such influence, may still make subjective determinations when examining business methods. As a result, the same invention application may end up in different directions by different examiners, which is not conductive for the implementation of a consistency examination standard for business method applied for patent.

II. The characteristics of patent application for invention related to communications billing system

There have been few patent applications that are pure business methods, which can be attributed to the characteristics of communications technology. Telecommunications, by definition, is to communicate information, covering in its broadest sense, anything from yelling at a space to an exchange of letters. However, modern telecommunications, in patent sense often refer to equipmentor method-based communications between people anywhere. Thus, rarely has pure business method been applied for patent in communications field, and most, if any, being related in one way or another to business method. Billing systems are precisely examples of business method related invention in the field of telecommunications.

The subject matters of telecommunications billing system generally include technical and non-technical features, the intended solution of the problems, in sum, being accounting of fees and serving the purpose of billing practices. It can be seen from these foregoing features that the examiner may, influenced by the theory of inventive contribution, easily be inclined to draw a wrong conclusion that those patentable subject matters are non-patentable business methods in the examination of telecommunications billing systems.

III. The key for the examination of patent applications for invention related to communication billing system

How to avoid the influence of inventive contribution theory and effectively implement the examination procedure of business method in the second stage to determine whether a telecommunications billing system constitutes a business method?

The most important thing is to treat the claim as a whole and place the claim in the application as a whole. The examiner should not separate charging method from the claim involving billing, otherwise it may lead to a wrong conclusion. The following is a case to illustrate the significance of the overall examination.


Claim 1: A billing method for multimedia broadcast service being a multimedia broadcasting system including a billing center, multimedia broadcasting terminal, and billing terminal, comprising the steps of:

(1) producing a first billing pulse according to said multimedia billing rate, to be transmitted through a multimedia broadcast network channel;

(2) receiving multimedia signals by said multimedia broadcasting terminal and sending said billing pulse to said billing terminal;

(3) counting said multimedia billing pulse when an end user starts to use said multimedia services corresponding to said pulse, and terminating counting when an end user stops said multimedia service corresponding to said billing pulse.

At the first impression that claim 1 is related to billing method, the examiner thinks that there may be a business method involved and then separate such method from the claim. After that, the examiner makes a patent retrieval to determine whether the technical features of such method are common sense, and finds that there has been a prior art in billing method that media gateway controller (equivalent to billing center in the claim) generates billing pulses of different frequencies and transmits such pulses to media gateway (equivalent to multimedia broadcasting terminal in the claim), which then transmits such pulse to user terminal. The examiner thinks that there is also a prior art in the field for pulses counting, and there is no technical improvement in the structure of billing apparatus even if the billing pulses can be generated according to rate in the billing process. Based on the foregoing analysis, the examiner concludes that the technical problem intended to be resolved in the claim is the way to determine the frequencies of billing pulses according to rate, and therefore, constitutes no technical issue; the method adopted in the claim is used to count the frequencies of billing pulses according to the rate and billing amount represented by each billing pulse which is all specified by human being; that such operation is based on man’s subjective will and bound by no natural laws, and therefore, constitutes no technical solution; that it aims at providing the users with a kind of billing rule instead of technical effects; and thereby, that the claim dose not satisfy the requirement of Article 2.2 of China’s Patent Law.

It can be seen from the above statement that the examiner has a preoccupation that “billing is related to business method,” and then divides the technical solution into three parts: the first is to transmit billing pulses among billing center, multimedia broadcasting terminal and billing terminal; the second is to count such pulses; and the third is to determine the frequencies of billing pulses according to rate. After such analysis, the examiner concludes that all the technical features involved in the first and second part are common sense in the field, and the third part falls outside technical categories, therefore the technical solution included in the claim is, a business method and constitutes no object for a patent.

However, is this really the case?

According to the description, the application intends to state a billing charging method for multimedia broadcast which is featured by realtime billing without interactive channel configuration. To that end, the invention applied for patent adopts a technical solution included in the claim to transmit the billing pulses corresponding to the rate of specific service from billing center and multimedia broadcasting terminal to billing terminal, which counts the pulses when the users enjoys specific service, and therefore, real-time billing can be achieved without interactive channel configuration.

The examiner is right in that there is a prior art for the transmission of billing pulses among billing center, multimedia broadcasting terminal and billing terminal, but wrong in his or her failure to examine the technical solution as a whole. Therefore, the examiner fails to realize that all prior arts need interactive channel configuration to transmit billing pulses for realtime billing, whereas the broadcast service without interactive channel can not be real-timely charged because broadcast network can not monitor the consumption due to the lack of interaction between consumer’s action and such network, and therefore prepaid system was inevitably introduced. In conclusion, the examiner fails to realize that the technical solution as a whole can resolve the technical problem which can not be resolved by any prior art because of his or her separate examination of the application.

It can be seen from the above case that, when judging whether the technical solution in a claim is a business method or not, the examiner should: (a) discard the prejudice that “charging is related to business method” and, (b) not divide the claim into separate parts and determine, according to such division, whether the technical solution for the problem is a technical issue or not, adopts technical method or not, and results in technical effect or not. Where there is a solution in the claim to be examined for its being a business method or not, the examiner should not only take the claim as a whole, but also put the claim into the application and examine them as a whole, in order to make a conclusion whether such problem intended to be resolved is a technical issue or not.

IV. Summary

In retrospection to the origin of business method and making an analysis of the characteristics of telecommunications billing systems, the essay puts forward that, in such examination, the examiner should not divide the claim into several parts. Instead, he or she should put the claim into the application as a whole, and examine them as a whole too. The examiner should focus on the point whether the business method adopts technical means and results in corresponding technical effect.

The author hopes that this essay may help scientific and technical personnel, agencies and examiners related to billing technologies in communication to have a better understanding of the relation between billing and business method for a good application and examination as well.

(Translated by Yuan Renhui)

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