JA Kemp International
International Protecting software and computer-implemented inventions in Europe
By John Leeming and Martin Jackson, JA Kemp categories of invention from patentability, in particular: A patent is generally considered to be the gold • discoveries, scientific theories and standard of intellectual property, potentially mathematical methods; offering true monopoly protection for a broad • aesthetic creations; inventive concept. Although copyright is also • schemes, rules and methods for performing important for software, its value has been mental acts, playing games or doing reduced by recent European Court of Justice business, and programs for computers; and judgments that copyright does not extend to • presentations of information. ‘look and feel’ or command syntax. However, the apparent prohibition on However, this was only to the extent that patenting computer programs in Europe has often the invention related to these things ‘as such’. discouraged the pursuit of patent protection The term ‘as such’ has over time been for software and computer-implemented used to diminish the prohibition to such an inventions. According to our research, in spite extent that it is now routinely possible to of the increasing penetration of software into all obtain patent protection for many computer parts of technology, the percentage of granted programs. In the test for patentability, it European patents that involve software has is what the computer program does that increased by only about 8% to 9% (see Figure 1). determines whether protection is available. It is clearly possible to obtain patent The meaning of these provisions was protection for many software and computer- first considered in a famous 1986 case called implemented inventions in Europe. Case law Vicom (T 0208/84). The decision noted that at the European Patent Office (EPO) is now the categories listed in the EPC as being settled and, as a result, it is possible to make excluded had in common the fact that they an early realistic judgement of patentability. were all “non-technical”. It was therefore Under the EPO’s now settled practice, concluded that an invention was not excluded it is necessary to consider both whether an invention is excluded from patentability and Figure 1: Granted European patents whether it has an inventive step (ie, sufficient involving software in their implementation as innovation to merit patent protection). The a percentage of all grants inventive step must be technical – business, administrative or abstract features are 12% ignored. A pure business method is therefore 10% not patentable in Europe and a computer- 8% implemented method must have some invention 6% in the technical aspects of the implementation. 4% 2% History 0% The European Patent Convention (EPC),
originally agreed in 1973, excluded certain 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
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from patentability if it made a “technical method, but with no details of the computer contribution”, meaning that it had an effect or other means. For example, a claim might in the real world or related to something specify “a processor for determining the technical – in this case a digital image. price of a contract”. In such a case, the Following this decision, a number of cases step of determining the price of a contract pushed the boundaries of what is patentable. is considered to be non-technical and However, in 2000 the relevant Board of Appeal disregarded. The claim feature is therefore started to develop a new approach to software reduced to “a processor”, which is not new. and computer-implemented inventions which involve a mix of technical and non-technical Recent examples features. Following criticism by the UK Court Some examples of cases in which objections of Appeal, the new approach was endorsed based on non-technical subject matter were by the Enlarged Board of Appeal in Opinion not upheld on appeal include the following: G3/08 in 2011. • SAP/Fulfilment Coordination (T 0964/12) related to a system for tracking fulfilment of EPO’s current approach orders to a company, but went into details The EPO’s current approach to software and of the content and routing of messages in computer-implemented inventions can be the system (as can be seen from Figure 2), summarised as follows: which were considered to be technical. • A pure business or abstract method, • Network Appliance (T 0743/11) related containing no technical features at all, is to allocating space for files in a storage excluded from patentability, even if it is system, which was clearly technical. novel and has an inventive step. • If an invention involves any technical Some recent examples of cases rejected by the feature, however known or trivial, it EPO Boards of Appeal include the following: cannot be excluded. • Deutsche Börse – three cases (T 0907/09, T • When considering the novelty and 2078/08, T 2061/08) relating to valuation inventive step of such a mixed invention of futures contracts based on a basket (ie, an invention containing a mixture of of credit default swaps were rejected as technical and non-technical features), all of lacking any inventive technical features. the non-technical features are disregarded. Even claims specifying details of the algorithm used were rejected, as “the In other words, you need to isolate the algorithm serves an economic or financial technical features and determine whether they purpose without any technical relevance. are new and inventive in order to determine Accordingly, the algorithm does not enter patentability. into the examination for an inventive step”. • Ricoh (T 0972/07) claimed a computer How it works in practice system for managing the exchange between In a patent application, the claims define the different manufacturers of goods that had steps of the method or the features of the been collected for recycling and brought system that are to be protected. Features are to a central exchange facility. Again it was often defined by specifying function and the concluded that the computer system had no features alone determine patentability. inventive features after the administrative A pure business method claim is one that features had been disregarded. sets out only business or administrative steps, • Microsoft/Bayesian Scoring (T 1281/10) without even specifying that they are carried related to Bayesian techniques applied out by a computer or other technical system. to scoring of player skill in online multi- Such claims are relatively rare in the EPO and player computer games. This was held to are routinely rejected. be a game rule, not a technical matter. It is more common for a business method to be claimed in terms of a computer system The definition of ‘technical’ is uncertain or means for carrying out steps of the and the Boards of Appeal have resisted calls
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Figure 2: SAP/fulfilment coordination
500 Determination of physical Logical receiver Transformation from sender technical addressing determination based on format and values into information (address, business level routing rules receiver format and values transport protocol,...) 503 555
Sending Integration server Receiving component component 505 system system 557
Receiving Sending Message 520 Message 520 Message 520 Message application 520 application Header: R Header: Header: Header: Physical A V Logical -receiver R -sender -receiver Mapping -receiver address address routing Outbound -... -... framework -... resolution -... Inbound framework proxy framework proxy Body Body Body Body 510 outbound outbound inbound inbound 515 document 530 document 545 document 559 document
525 535 Get routing rules Get transformation Get receiver address
Routing model Mapping Service 542 directory 547 directory directory
540 Integration directory 548
for its meaning to be clarified. They take the rejecting many cases that the EPO would likely view that they recognise technical subject have allowed. matter when they see it. Rest of the world National patent offices in Europe Patents are inherently territorial and The patent statutes of the member states of definitions of what can be protected are the European Patent Office are harmonised with harmonised only to a limited extent. An the European Patent Convention. Therefore, international business must bear in mind the the different patent offices ought to take position in all significant markets and those the same approach as the EPO. Although the of its competitors. Most countries restrict or German Patent Office has sometimes been said prohibit patents for business methods and to be stricter than the EPO, the main dissident other forms of abstract invention, but the is the UK Intellectual Property Office (UKIPO). criteria applied vary from country to country. The UKIPO’s general approach, following A detailed analysis of the position in other UK case law, is to identify what further countries is beyond the scope of this chapter. contribution the invention makes over the It is worth briefly mentioning the situation prior art (relevant inventions previously in the United States. The State Street Bank case disclosed), and then decide whether that of 1998 was widely seen as throwing open the contribution is technical. This could be seen doors of patentability to any method. A flood of as simply a reordering of the EPO approach business method patents followed, with some (which is to identify technical features, then ludicrous examples. The doors were closed determine whether they are inventive), and UK substantially by the Bilski case, decided by the courts have said that it ought to give the same US Supreme Court in 2010, and the Court of result. However, the UKIPO takes a narrow Appeals for the Federal Circuit’s judgment in view of what is a technical contribution, CLS Bank v Alice. However, there remains a lack
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of clarity over the exact test for patentability. derivatives or avoiding tax; Currently, the rate of grant for business method • payment schemes using mobile phones; patents in the United States is less than 10%, • inventions whose novelty is in the meaning compared with about 50% overall. of data being stored or processed; • logistic schemes; Identifying patentable software inventions • analysis of business or financial information; Many innovative companies have effective • transaction or trading systems; and procedures for identifying innovations that are • game rules. potentially patentable and evaluating whether it is worthwhile applying for patent protection. Some areas that might go either way are: However, the prejudice that ‘software is • data indexing and searching; not patentable’ often hinders reporting of • presentation of information; and software-related inventions. • game displays. One approach to countering that prejudice is to ask engineers and developers to Patent application process concentrate more on what is done than on A common approach to obtaining patent how it is done. In principle, a good idea should protection in a number of countries is to make not be deprived of patent protection merely a first filing in the applicant or inventor’s because it is implemented in software. home country to establish an early priority Even many inventions that relate to the date. Then, within one year, an international operation of the computer itself, rather than patent application is filed, effectively as a to some external process, are prime candidates marker that protection in other countries is for patent protection. These include anything required. Separate applications are sometimes that makes the computer a better computer also made in countries that are not part of the (eg, by virtue of operating faster, more reliably international system, notably Taiwan. Within or with fewer resources, or by virtue of being approximately two and a half years (30 months), easier to use or program). In the recent UK the international patent application must be Court of Appeal judgment in HTC v Apple, converted into separate applications in the Apple’s invention relating to handling multi- countries or regions of interest (a process called touch user inputs was held to be patentable ‘entering the national and regional phases’). because a device using the invention “is, in a There is no particular reason to diverge real practical sense, an improved device. This from this approach for software and computer- is not because it now runs different application implemented inventions. Sometimes the programs but because it is, as a device, easier international phase can be dispensed with if for programmers to use”. protection in only one or two countries (eg, In general, anything in the following areas the United States) is desired. should be regarded as potentially patentable: If protection in Europe is desired, it is • data communications and networking; important to emphasise the technical aspects of • data encoding, encryption and compression; the invention at the drafting stage. An objection • data storage and retrieval; that an invention is not sufficiently technical • design, simulation and optimisation of can be hard to refute, so it is best to prevent it real-world products and processes; from arising in the first place. We often find that • image, including video, and audio signal applications drafted with US standards in mind, processing; especially pre-Bilski, promote the business • error detection and correction in or financial aspects of an invention over the processing and communications; and technical aspects. This invites objections in • user interface techniques, such as gesture Europe that could have been avoided with a recognition. different emphasis in the application. It is sometimes said that the rapid pace of On the other hand, areas where there are development in many software fields means frequent rejections include: that patents, which can take four or five years • financial schemes, especially for valuing to be granted, are not useful. However, new
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Figure 3: Outline of patent application process
File first domestic application File international (PCT) application Enter national and regional phases
0 months 12 months 30/31 months ‘priority date’ products often build upon old ones, rather In such case the UK disclosure procedure (a than replacing them. By the time that a controlled process of discovery) can often patent is granted, it might be that the idea it provide the necessary evidence while keeping embodied is no longer cutting edge, but it may costs down. still be in use. It is possible to have a patent granted swiftly for a good software invention Conclusion if you are proactive. The time may be right for companies to Additionally, with the spread of so-called reappraise their approach to protecting ‘Patent Box’-type legislation through Europe software and computer-implemented (eg, which allows companies in the United inventions. Many such inventions can be Kingdom to pay a lower rate of corporation tax protected by patents and then successfully on profits generated through sale of patented enforced in Europe. It is now easier to predict products), there are more reasons for applying accurately the likelihood of success in applying for patent protection than the traditional for a patent so that applicants can be surer at reason of seeking to exclude competitors from the outset that their investment in a patent the marketplace. application will be worthwhile. Additionally, tax incentives such as the Patent Box-type Enforcement legislation in place in various countries extend In Europe, patents are enforced at national the benefits of patent protection beyond those level. This may change if the European patent of a monopoly. They can be seen more readily with unitary effect and the Unified Patent and clearly on the bottom line. Court are introduced. Most patent litigation in Europe occurs in specialist courts in the United Kingdom and Germany. The relevant courts in both countries have much experience in software and computer-implemented inventions and often enforce such patents. Two concerns over enforcement of patents for software are occasionally raised. One is that a competitor could make use of the invention without actually infringing the patent if some or all of the invention was carried out on servers located outside the jurisdiction. This risk can be mitigated by careful drafting. Also, the UK Court of Appeal has held (Menashe v William Hill) that there is still infringement of a UK patent if a server outside the United Kingdom is used by a person located within the United Kingdom. The second concern is that for certain inventions, it may not be possible to detect infringement because either source code is not available or the invention is used internally.
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JA Kemp 14 South Square, Gray’s Inn London WC1R 5JJ, United Kingdom Tel +44 20 3077 8600 Fax +44 20 7242 8932 Web www.jakemp.com
John Leeming Martin Jackson Partner Partner [email protected] [email protected]
A London-based partner of J A London-based partner of J A A Kemp, John Leeming has Kemp, Martin Jackson focuses over 24 years’ professional his practice on the electrical, experience and currently software, manufacturing heads the company’s designs and engineering fields. He group. He prosecutes patent is responsible in the firm for applications in the optical, UK Patent Box matters and electronic and software fields, developments in UK patent with particular expertise law. Dr Jackson is highly in semiconductor device experienced in contentious manufacturing equipment proceedings before the and processes. Mr Leeming European Patent Office. is experienced in litigation His client base ranges from and enforcement matters, multinationals to start-ups, often achieving resolution of with major clients concentrated disputes without recourse to in Japan, the United Kingdom litigation. He has specialist and Europe. expertise in recovering lapsed Clients consider that patents and applications, Dr Jackson is “efficient, with clients ranging from courteously critical when multinationals to start-ups. needed and has an excellent Clients appreciate Mr technical grasp”. Leeming’s pragmatic and cost-conscious approach to prosecution, as well as his ability to capture the essence of an invention effectively in drafting applications.
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