Holding a patent would provide a competitive advantage by building walls that can be difficult for competitors to scale. Alternatively, if the firm chooses to out-license its technology, it benefits by charging royalties for the use of the patented technology. Either way, owning the rights to the patent contributes to the firm's bottom line. An arsenal of patents in one's portfolio can serve as a deterrent to companies considering an infringement suit if they think the defendant's portfolio might allow them to launch a countersuit. On the negative side, filing an application for a patent and maintaining it can be a significant expense that can offset any anticipated commercial and protective benefits.
Time is also an important issue to consider.
Patent approval can take many years. In some cases the system to be protected may be obsolete by the time the patent is approved, although the risk of obsolescence can be reduced through the use of careful and broad language in the patent claims. As an alternative to patenting, the owner of the business system may choose to protect its IP with a copyright instead. This is a less effective means of protection than a patent, but is much faster. Another downside to patenting a business method is that the patent application process reveals to the public what was up until then a trade secret.