Economic Analysis of E-business Method Patent

Even though E-business method patents are widely accepted by most countries in the world, there exist many theoretical problems unsolved, such as why should we protect the business method in the present patent system. To answer this question, one should explain the economic influence and take the consistency of patent system into consideration at the same time since business method has been excluded as patent subject for centuries. This article first defines business method as an institution arrangement to reduce transaction cost. By applying a new classical analyzing framework, it analyzes the influence path of business method and technology separately in one model. Further, it discuss the interrelation between the two, At the end, it emphasizes the importance of applying business method to software and hardware. In this way, it explains the different effect mechanism of business method and technology, and tells the reason why business method should be protected by patent system but should be treated in different way from traditional technology.