Software Patents (EU, US, and Japan)

Software Patents
(Photo Credits: Leonard Low)

A patent is a powerful tool that grants monopoly over an invention you make. The scope of its protection differs from copyright. In the context of software, copyright will only protect literal copying of the code, but it will not protect against the recreation of the same program using original code – even if the new application has program or even identical functions to your program. A patent on the other hand grants protection for the application of the ideas of the program regardless of how that application happened, so even if your program was written using a new completely different code, if that program carries out a process or creates a product similar to what you have your patent application, then you would have the right to stop them from using that program or you can claim damages for their infringing use.

The problem with computer programs (and business methods as well) is that they are generally considered as subject matter which is unprotectable by patents. Each jurisdiction has a different reason behind this ban of software patents and also provides a way to go patent your software “around” the allowed subject matter.

In Europe, patents are granted by the European Patent Office which governs its patent grant procedure through the European Patent Convention 2000.  According to Article 52(2) of the EPC computer “programs for comoputers” are not to be regarded as inventions as such. The keyword here is “as such”. The EPC has been interpreted by the EPO in a way that excludes only computer programs when they are claimed to be “the invention” itself as that would be a claim to an excluded subject matter “as such”.

EPO decisions were inconsistent and unclear as to their legal grounds for granting this protection and it suggests that a computer program will not be excluded if the program includes a ‘technical character’, but there is not definition as to what ‘technical character’ means. In mid 80s decision of Viacom (T-208/84), the EPO held that the invention in question made a “technical contribution to the known art” and was therefore patentable. This decision was followed by that of IBM (T-22/85) in which the patent application was refused on the ground that it the invention lacked a “technical character” as it did not “provide a technical contribution to the art”.

The principle shifted for a “contribution” of this vague “technical contribution” element to the need for the presence of this “technical character” element in the invention itself. In the decision of Hitachi (T/258/03) it was stated that “What matters having regard to the concept of invention within the meaning of Art.52(1) EPC is the presence of technical character which may be implied by the physical features of an entity or the nature of an activity, or may be conferred to a non-technical activity by the use of technical means”. No definition was given as to what “technical effect” meant, and instead the EPO admitted in PBS Partnership (T-931/95) that “the meaning of the term “technical” or
technical character” is not particularly clear.”

Although the EPO has granted many patents for computer programs, the grounds for doing so do not seem to be clear at all at the term “technical character” was never defined. However, the key to getting a European patent from the EPO for a computer program would be not to claim the invention as a computer program and instead attempt to claim it as invention for doing something using a computer program. Claims in the patent application must also be carefully drafted to make sure that they do not fall under any other exceptions under 52(2) for abstract ideas or business methods.

In the US, the Patent Law (Title 35 USC) does not include a statutory bar on computer programs or business methods, however, this exception was developed through case law as it was established that “laws of nature, physical phenomena and abstract ideas” are not patentable subject matter (Case:�Diamond v. Diehr (1981)). The application for many computer program patents failed on the grounds that there were mere abstract ideas as all they were constituted of mathematical formulas.

This position changed in the year 1998 where the court held in the case of State Street Bank v. Signature Financial Group (1998) that a business method will not not be considered an abstract idea if it produced “a useful, concrete and tangible result”. The same principle was then applied to many computer applications as, for example, the production of computer data that resembles a real life solution (e.g. stockmarket prices) produces a useful, concret, and tangible result. One of the most famous business method patents granted in the US is Amazon’s 1-click patent.

However, in the very recent case of Re Bilski (2008) the court rejected the principle of the mere need of “a useful, concrete and tangible result” of State Street as the ultimate saviour of business method patents stating that it was “inadequate”. The court held in this case the right to test to use was a “machine or transform” test which requires the business method to be attached to a specific machine for it to qualify as an invention OR for the business method to transform a particular article into a different state or thing.

Re Bilski is a very recent case and the exact impact of it on the scope of computer programs is still unknown, but it has surely reduced its scope significantly as no longer the fact that the program produces ‘a useful, concret and tangible result’ is sufficient for it to qualify as an invention, but it must be attached to a specific machine or must be a transformative process.

In Japan, the law requires an invention to be “a creation of technical ideas utilizing a law of nature”. This has meant for Japan that pure software patents will not qualify as they do not are not ‘technical’ in nature (even Software as a subject matter is explicity considered as patentable subject matter), however, the JPO Guidlines states that this requirement can be satisfied by simply “realising the program using hardware resources” – and that apparently provides the technical element needed for escaping the requirement. (Check JPG Guidelines for Computer Software Related Inventions – Warning PDF).

Software patents will not automatically succeed if they prove that they are not included in any of the exceptions found in various patent laws, each of these jurisdictions require a patent to be novel, non-obvious, and be capable of industrial application (or useful in the US).

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