short lines

SOFTWARE PATENTS IN EUROPE - THE SAGA CONTINUES

January 2004

In its plenary vote on 24 September 2003 , the European Parliament approved the proposed Directive on the patentability of computer-implemented inventions (the "Proposal" [1] with amendments which significantly restrict the scope for the patentability of software in Europe . This Short Lines considers the impact of the European Parliament's amendments on the Proposal.

Software Patentability - the Current Position

The present position under European and UK patent laws is that mathematical methods, schemes and rules for mental activity, methods of doing business and programs for computers are not patentable inventions under either the Patents Act 1977 [2] or the European Patent Convention (" EPC ") [3]. Notwithstanding this prohibition, the current practice of the European Patent Office ("EPO") and the UK Patent Office does not prevent the grant of patents in respect of a program provided that the technical effects its produces are more than would "necessarily follow merely from the running of the program on a computer". [4] This approach has, since the mid 1980s, led the EPO to grant thousands of patents in respect of technical effects created through the use of computer software.

The Proposal was designed to do away with the somewhat artificial distinction between a computer program per se and its technical effects and bring EU patent law more clearly in line with the position in the United States which has evolved to recognise that mathematical algorithms and business methods could indeed be patentable subject matter. [5])

The patentability of software, although identified by the Commission as a priority area and supported by major software houses and the European Information and Communications Technology Industry Association, remains a controversial topic. Smaller developers, IT users' industry associations, economists and supporters of the open source movement are particularly concerned that grants of patents in respect of software per se will stifle innovation, unduly restrict the scope of more flexible copyright protections and perhaps give rise to a monopoly over ideas rather than inventions. [6])

The European Parliament's Amendments to the Proposal

The European Parliament's amendments [7]) effectively drive a horse and coach through the Commission's ambition of achieving the patentability of software in Europe . The amendments:

confirm that the Proposal will not amend the EPC , but is designed to prevent divergent interpretations of the EPC . This is a significant re-enforcement of the statement set out in Article 52 of the EPC that computer programmes per se are not patentable. The tightening of the interpretation of the EPC may also restrict the current practices of the EPO and the UK Patent Office in granting patents for the technical effects of computer software;
confirm the crucial role of the four conditions of patentability, namely novelty, non-obviousness, inventiveness and industrial application. The amendments attempt to clarify the Proposal's modified inventiveness requirement - the
" technical contribution " - but are rather circular in their logic in that in order for the inventive step requirement to be satisfied, there must be a technical contribution and a technical contribution must itself involve an inventive step: see Article 4;
confirm that a " computer-implemented invention " must have " technical features that any invention must contribute ". It is not entirely clear whether this is a reference to one of the conditions of patentability - susceptibility of industrial application - or whether it represents a stand-alone aspect in order for there to be a " computer-implemented invention " which would then be subject to the four conditions of patentability, including that of being capable of industrial application;
set out a specific test for determining whether a computer-implemented invention makes a " technical contribution ". The test is expressed cryptically as " whether [the computer-implemented invention] constitutes a new teaching on cause-effect relations in the use of controllable forces of nature and has an industrial application in the strict sense of the expression, in terms of both method and result ";
specifically exclude innovations in the field of " data processing " from patentability. There is no such express exclusion in the EPC , although data processing could arguably fall within the exclusions found in Article 52 of the EPC ;
confirm that a computer-implemented invention will not be regarded as making a technical contribution merely because it involves the use of a computer, network or other programmable apparatus. An invention involving a computer programme which implements business, mathematical or other methods without producing any technical effects beyond the normal physical interactions between a programme and a computer, network or any other programmable apparatus in which it is run, is not patentable: Proposal - Article 5. Moreover, computer-implemented solutions to technical problems are not considered to be patentable inventions merely because they improve efficiency in the use of resources within a data processing system: Proposal - Article 6.

Where To Next For the Commission?

Although not ringing in their clarity, the amendments to the Proposal by the European Parliament are significant in three respects :

firstly, their approach to software patentability is that the principles set out in the EPO are not to be re-opened and that the only difficulty to be resolved is the interpretation and application of the exclusions set out in Article 52(2) of the EPC;
secondly, they represent a clear statement that the fundamental conditions of patentability, and in particular, the requirement of industrial application, are applicable in the normal (rigorous) way to computer-implemented inventions; and
thirdly, they represent a significant set-back for the Commission's ambitions (and, in turn, those of the large software houses) of providing a more open system for the patentability of computer-implemented inventions in Europe . If implemented, the Proposal could restrict the scope of the current practice of the EPO and the UK Patent Office in granting patents in respect of technical effects generated by computer programs.

Since the vote there has been a flurry of activity from the Commission, the EPO and the IT industry in against the amendments. The initial response from the Commission is that the majority of the amendments proposed by the Parliament are unacceptable. [8]) Other reactions have included a joint letter from the Chief Executive Officers of Alcatel, Ericsson, Nokia and Siemens to the Commission and the Council expressing their concerns at the amendments and a speech by the Commissioner for the Internal Market, Frits Bolkestein encouraging business to lobby for the Proposal in its unamended form [9]). The Council of the European Union has delayed its vote on the Proposal, originally due to take place on 27 November and so its response, or Common Position, will not be passed to the European Parliament for a second reading until later this year.

Calum Murray / Anthony Sourgnes

[1] Proposal for a Directive on the Patentability of Computer-Implemented Inventions, 20 February 2002 , COM (2002) 92 Final)

[2] Section 1(2)(c)

[3] Article 52(2)(c)

[4] Patent Office Practice Note, Claims to Programs for Computers ( 19 April 1999 )

[5] State Street Bank v Signature Financial Group Inc., 149 F. 3d 1368

[6] See, for example, http://www.computing.co.uk/News/1143293

[7] http://www2.europarl.eu.int/registre/seance_pleniere/textes_adoptes/definitif/2003/09-24/0402/P5_TA(2003)0402_EN.doc

[8] http://register.consilium.eu.int/pdf/en/03/st11/st11503.en03.pdf

[9] SPEECH/03/446 Frits Bolkestein, European Commissioner for the Internal Market, "Quo Vadis? Striking the balance on industrial property rights" Conference on Industrial Property Rights Ischia, 6th October 2003
http://europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.gettxt=gt&doc= SPEECH/03/446|0|RAPID&lg=EN

Useful URLs:-

The Proposal: http://europa.eu.int/eur-lex/pri/en/lip/latest/doc/2002/com2002_0092en01.doc
European Patent Convention: http://www.european-patent-office.org/legal/epc/
UK Patent Office: http://www.patent.gov.uk/