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The Implications of the Unitary Patent System on Software Patenting: a Shortcut to Harmonization of Software Patents?

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The Implications of the Unitary Patent System on Software Patenting: a Shortcut to Harmonization of Software Patents? The implications of the Unitary patent system on software patenting: a shortcut to harmonization of software patents? Master thesis Law & Technology Tilburg University Name: Dorrit Sliepen Supervisor: P. Vantsiouri Second reader: Dr. M.H.M. Schellekens ANR number: 945332 Date: 14 June 2013 Table of contents 1. Introduction ................................................................................................................................. 1 2. The system of software patenting ............................................................................................... 5 2.1. The history behind legal protection of software ...................................................................... 6 2.2. The international framework for patent protection of software ............................................. 9 2.3. The definition of Software ...................................................................................................... 15 2.4. EPO case law ........................................................................................................................... 17 3. The European Patent with Unitary effect.................................................................................. 23 3.1. The new system ...................................................................................................................... 24 3.1. The position of the different EU Member States ................................................................... 26 3.3. Lessons from the United States Court of Appeal for the Federal Circuit ............................... 30 3.3. Comparing the Federal Circuit and the UPC ........................................................................... 34 4. Unitary patent system: implications for software patents ....................................................... 36 4.2 The possible scenario’s regarding the scope of the software patent ..................................... 38 4.3 The implications on software patents regarding the judicial system ..................................... 42 4.4 The knowledge acquired from the Federal Circuit .................................................................. 43 5. Conclusion ................................................................................................................................. 46 Annex I ........................................................................................................................................... 49 Annex II .......................................................................................................................................... 50 Bibliography ................................................................................................................................... 52 ii ‘If we did not have a patent system, it would be irresponsible, on the basis of our present knowledge of its economic consequences, to recommend instituting one. But since we have had a patent system for a long time, it would be irresponsible, on the basis of our present knowledge, to recommend abolishing it.’ - F. Machlup 19581 1 Machlup 1958, p. 80. iii 1. Introduction The idea of having a patent that will provide protection in all of the Member States of the European Union (EU) originates from the late 1940s, when Mr. H. Longchambon wrote his report ‘Creation of a European patents office’.2 Eventually the European Patent Office (EPO) was established in 1977, on the basis of the European Patent Convention (EPC).3 There is a history of harmonization between countries in the field of Intellectual Property in the European Union (EU). Examples are harmonization of the laws of trademarks, design, copyright, neighboring rights, database rights and plant variety rights.4 Nevertheless, the harmonization of patent law has fallen behind.5 The EPC has attempted to bring standards into the practice of granting patents, just like other international conventions and treaties. However a patent that provides protection in all of the EU countries6 has been a long debated topic. Recently there has been a break-through in the EU regarding patenting. Specifically, regulation 1257/2012 on ‘implementing enhanced cooperation in the area of the creation of unitary patent protection’ was introduced.7 This regulation will make it possible to apply for a European patent with Unitary effect (Unitary patent). By adopting this regulation, European patent law has been created because a regulation has direct effect in the Member States. Before the Regulation took effect, the EPC only harmonized national patent law between Member States on a limited basis, for individual national law had to be changed in accordance with the EPC. In this thesis ‘European patent law’ will therefore refer to the harmonization because of the EPC. The focus of this thesis will be on a difficult area in European patent law: patenting software. There have been many debates over if and how software should be protected by law in the Member States of the European Union. Protecting software through patents is possible in Europe but it has some restrictions. Similarly, the introduction of the Unitary patent will also have its implications on software patents. 2 Parliamentary Assembly, Creation of a European Patents Office Report, September 6, 1949, doc. 75. 3 European Patent Office, http://www.epo.org/about-us/organisation.html, last visited June 11 2013. 4 Tritton 2008, p. 7. 5 Tritton 2008, p. 7 6 In this thesis ‘EU countries’ will refer to Member States of the European Union 7 Regulation 1257/2012, Official Journal of the European Union L 361/1. 1 This thesis will explain the current protection of software through software patents and the effects of the Unitary patent on software patents. The research question in this thesis will be: “The implications of the Unitary patent system on software patenting: a shortcut to harmonization of software patents?” After several years of debates on the harmonization of patenting software at a European level, the European parliament rejected the Council’s proposals on patentability of computer-implemented inventions in 2005.8 On the one hand there has been a group against software patents, consisting mostly of individuals, small and medium-sized enterprises and social movement organizations.9 On the other hand, the group in favor of software patents, consists mostly of multinational software firms.10 Such multinational firms believe in the strong protection of software by patents, because, as large companies they have the resources to file for patents and to defend them in court.11 The other group, that is, the group against software patents, is not only worried that small and medium enterprises (SMEs) are left behind because they do not have as much resources as large companies, but also believe that software patents will have a stifling effect on innovation.12 They fear that as the scope of software patenting broadens, it becomes more difficult to invent, since new inventions will infringe with existing patents.13 The dominant firms in the software market want to protect their strong position and by preventing competitors from using their patented software, competitors cannot offer products that are interoperable on the leading software.14 This creates a barrier for companies wanting to enter the market and a disadvantage for existing competitors in the market. The importance of patents and the enforcement of patents to firms have led to firms creating strategies on how to defend and use their patents in such a way that they can benefit the most. This can even lead to escalated litigation, also called a ‘patent war’.15 For example, patent wars in the smartphone industry often involve a software 8 European Parliament document commissioner’s statement, http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+CRE+20050706+ITEM- 007+DOC+XML+V0//EN&query=INTERV&detail=3-100&language=EN, last visited June 11 2013. 9 Leifeld 2012, p. 382. 10 Leifeld 2012, p. 383. 11 Chabchoub 2005, p. 974. 12 Chabchoub 2005, p. 973. 13 Patel 2013, p. 2. 14 European Committee for Interoperable Systems, ‘Interoperability, competition and open standards: The keys to a software strategy for European citizens and consumers’, p.1. 15 Paik 2013, p. 3. 2 related claim.16 This is also illustrated by the on-going patent war between Apple and Samsung.17 The aforementioned objections and supporting arguments can be brought back to a core question of harmonizing software patenting: can software be patented? As of now, there is no European legislation that defines ‘software’. Instead it is commonly understood that software includes both computer programs and its ancillary materials, which could mean documentation, computer files or data.18 In the literature different terms are used for this definition such as computer programs and computer related inventions. To avoid confusion, software will be used in this thesis to indicate ‘computer programs and its ancillary materials, which could mean documentation, computer files or data’. Article 52 of the EPC, which defines what is patentable, could be interpreted in such a way that an invention must be ‘technical’ for it to be patentable. Importantly, though, software is not considered technical under European patent law.19 Yet the EPO and national patent offices do grant patents on software.20 This only goes to show the importance of interpretation of the EPC in this matter. With the introduction of the Unitary patent, one can apply for a patent granted by the EPO which
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