By Andre Venturini

The current position in Brazil is that any commercial, financial and accounting principle or scheme cannot receive patent protection under article 10 of the Industrial Property Law (LPI). Eligibility of such subject matter, collectively known as “business methods”, is a controversial topic, which was the subject of recent reform in US legislation.

It seems reasonable that a pure commercial method — that is a method achievable solely by the use of the human mind — should not be considered eligible. However, the topic becomes more complex when considering technological development in the areas of automation, information security and the internet. An advanced encryption method, for example, finds its natural application in increasing security in business transactions.

The Brazilian Patent Office’s (INPI) position on ‘technicality’ — which is mirrorred in the European approach — is not limited to business methods. Under the approach, creations must solve technical problems and yield technical effects to be considered inventions and, thus, patentable. For example, the INPI considers that a method claim defining financial steps should not be accepted (see Rule 158/2016 – Examination Guidelines for Patent Applications Involving Software Implemented Inventions – section 2.3). However, such a method could be considered an invention where it continues to be technical without its commercial characteristics.

It is also clear that strategies of adding “magic” words in the claims, such as “server”, “remote communication” or “processor”, or even rewriting a method as being “implemented by software” will not be effective. This is because the INPI made clear in the Guidelines that it would not be sufficient to re-characterize the method as non-commercial. In this respect, the INPI is closer to the current North American position, since in Europe such illegibility barrier would be overcome. On the other hand, the final rejection result would most likely be the same, since the simple automation of a method by known means would not be considered inventive according to European standards.

Due to the large backlog of patent applications awaiting examination at the INPI, Brazil still lacks a substantive body of decisions that would allow for a better delineation of situations when business related methods should be patentable. However, some examples are helpful. Patent PI 0411286-5, entitled “System for Authenticating Commercial Transactions Made by the Owner of a Card to a Merchant on an Electronic Network; Data Structure to Transport Information and Method for the Authentication of Trade Transaction” was granted by INPI on 20/12/2016.

In the above example, Claim 16 related to a method for authenticating a business transaction between the owner of a credit card and a merchant. Despite referring to a commercial method, the INPI rightly considered this matter patentable because it makes use of specific authentication algorithms and data structure. In other words, it uses technical elements to achieve a technical effect (increasing security in online business transactions).

In another case, the rejection of application PI 9913963-4 was upheld by the INPI following an appeal by the applicant on 02/21/2017. An analysis of the application reveals that it claimed protection from the use of a service platform, where authenticated users could pay for and receive services. The claims of application PI 9913963-4 make use of terms such as “platform”, “authentication” and “network”, but the INPI considered that these were not sufficient to characterize the claimed matter as a non-commercial method.

The two decisions above are in line with the mentioned Guidelines and clearly illustrate the opposing extreme positions defined therein. However, we will need to await further decisions to better understand how the INPI will decide cases where the distance between these extremes is less.

English version by Julian Cornelius