A Patent for Software?

Patents promote innovation and protect ideas, so why is there so much opposition to software-related patents? Dr Stefan Schohe, patent attorney at Boehmert & Boehmert, outlines the debate.

The dispute over patents on software-related inventions is multi-faceted. On one hand, there is a legal debate about the proper interpretation of the law. On the other, there is a debate about patent protection as a matter of public policy that goes far beyond the mere software issue and rather questions the patent system in itself.

The legal situation in Europe is not as ambiguous as the public discussion may suggest. In all member states of the European Patent Convention (EPC), patent protection is excluded, if related to a computer programme as such. Furthermore, patents are granted for technical inventions only. This does, however, not generally exclude patents on inventions involving software. For example, software-controlled devices, such as ABS brakes, are generally held patentable. The problem is drawing the line to excluded and/or non-technical subject matter. After all, computers are doubtlessly technical devices and a computer operating according to a programme is something different from the programme as such.

An emerging practice
Different courts and patent offices took different approaches to resolve this problem. The European Patent Office (EPO) considers the statutory requirements of the EPC fulfilled, if the claim comprises features related to hardware, but requires a technical solution to a technical problem when examining inventive step. German courts hold that the prominent features of a claim have to comprise non-excluded subject matter, but also apply the test of a technical solution to a technical problem in this context. The English high court recently ruled in a matter of patent applications of CFPH LLC that advances in art have to come under the description of an invention in the sense of the law.

Despite these different approaches, a common criterion is emerging. Loosely speaking, not everything implemented in a computer is patentable, but the implementation has to be non-obvious from a technical standpoint.

Patents are business tools. The question is how to make the best use of them, in terms of both public policy and business policy

Outside Europe, Japanese practice requires hardware elements in statutory claims and denies recognition of an inventive step in cases of ordinary creative activity or if the distinction from the prior art is just a different data content. In contrast, the practice in the USA continues to use the criterion of a ‘useful, concrete and tangible result’ established by the CAFC in 1998. This may especially be a result in the field of business and finance, eg a calculated share price. The notion that the subject matter of a patent has to be in the technological arts was rejected by the Board of Patent Appeals and Interferences in a recent precedential opinion (Ex parte Lundgren).

Whereas the criteria applied in Europe meet a kind of common denominator internationally, critics, spearheaded by the open source movement, insist that all patents on software-related inventions should be banned. The main arguments are that patents only benefit large businesses, that trivial patents are granted and that the free exchange and use of information serves the progress of technology better than patents. While these arguments have some merit, they only relate to a part of the picture.

Patents provide protection
Patents can protect inventions created by small companies from being copied by the majors and allow technology transfer from small businesses to large businesses to take place. A number of recent, high-profile patent law suits against big companies have been filed by small companies, such as Eolas or Teles. Companies making a business of suing large companies, also known as patent trolls, have meanwhile become a matter of public concern in the USA.

Patents protect investments by prohibiting competitors from copying the functionality of a software in a fraction of the time and at a fraction of the costs. When large investments are at stake, the exchange of information on new technologies is frequently only made possible by patents, as they provide a safeguard against misuse of information. In these realms, the alternative to patents is not open source, but secrecy.

Trivial patents exist, but the patent offices are continuously improving their prior art searches. besides, oppositions are available in Europe to those who feel a patent should not have been granted. Patents are valuable business tools. the question is how to make the best use of them, in both public and business policy.

This article first appeared in IP Review, issue 13