15 April 2010

Software patenting in developed software-producing countries

In the first issue of the newly founded Journal of Computer Science & Comunication of the Kurukshetra University, India, an article on Software Patent and Current Trends of Mr Garima Goswami and K.P. Yadav has been published.

The article tries to briefly sketch the current legal situation in software patenting in those economies, which possess the most developed software industries in the world, including the developed countries US, Europe (the EPC members), United Kingdom, Japan, and Australia, and the developing countries India, South Africa, Israel and Malaysia.

Even though the article is not up to date, it has been reproduced on the Invention Now blog and on in Dr. Tabrez Ahmad's blog in an uncritical and uncomented way - and without disclosing the original source and authors. Below please find the first part of a revision of that article which covers the current situation in the stated developed software-producing countries as far as possible: 

United States: Landmark decisions of the most developed software industry were Diamond v. Diehr, In re Alappat, In re Lowry, State Street Bank, In re Wait, and In re Bilski. In the 1994 en banc decision In re Alappat the CAFC held that a novel algorithm combined with a trivial physical step constitutes a novel physical device, such that a computing device on which a mathematical algorithm is loaded constitutes a "new machine", which is patentable. In re Lowry held that a data structure representing information on a computer's hard drive or memory is similarly to be treated as a patent-eligible physical device. Finally, in State Street Bank the CAFC ruled that a numerical calculation that produces a "useful, concrete and tangible result", such as a price, is patent-eligible.

Generally, according to the US approach on statutory subject-matter as expressed in State Street Bank, "an abstract idea by itself never satisfies the requirements of eligible subject matter under 35 U.S.C. Section 101 [, whereas] an abstract idea when practically applied to produce a useful, concrete and tangible result satisfies Section 101. In the following of that ruling, the UPSTO also opened patent protection to so called business methods as long as they are useful, e.g. a single click scheme to order goods in an online transaction, an online system of accounting, an online frequent buyer program, programs letting customers set their own price for hotel booking etc.

Now the CAFC superseded the State Street Bank ruling in its recent decision In re Bilski and reiterated the machine-or-transformation test as the applicable test for statutory subject-matter (see also here and here). 

Europe (EPC): According to Article 52 EPC especially mathematical methods, methods for doing business, and programs for computers as such are not regarded as inventions and are thus excluded from patententability. The same holds for many other member states of the European Patent Organisation (EPOrg). However, since the EPC is not a treaty of the European Union but of the independent EPOrg, there has not been a consistent practice among EU member states, which is why the EU Directive on Patentability of Computer-implemented Inventions was suggested by the European Commision in 2002 to harmonise national patent laws and practices concerning this aspect and finally rejected on 6 July 2005 by the European Parliament.

Formerly, the patentability of a software-implemented inventions depended on wheter or not the related teaching provides a technical contribution to the prior art, i.e. a further technical effect going beyond the normal physical interaction between the program and the computer. This "contribution approach", as e.g. referred to in T 52/85, has been considered a disguised inventive step assesment, since the claimed subject-matter had to contribute to the state of the art in a way not excluded from patentability as required by Article 52 EPC.

Then decisions such as T 258/03 and T 154/04 brought a shift in case law in that they made clear that the contribution approach was no longer applicable, since "the structure of the EPC [...] suggests that it should be possible to determine whether subject-matter is excluded under Article 52(2) EPC without any knowledge of the state of the art" (see also my earlier post here). As a consequence thereof, it now suffices that a physical entity or activity involves technical means to be considered as an invention within the meaning of Article 52(1) EPC. In the 2004 decision T 258/03 “Auction Method/Hitachi” the Boards of Appeal found that the plain executability of a computer program by a computer already renders the program sufficiently technical. That is, a software-related invention which at least involves the execution of a program on a processor is presently considered patentable subject-matter according to Article 52 EPC.

The subsequent examination of inventive step may also involve considerations as to technical character of the claimed subject-matter, since the comparatively broad interpretation of the term "invention" in the patentable subject-matter test requires an adjustment of the inventive step requirement in that non-technical features of a claim beeing patentable in principle cannot be taken into account for the assessment of inventive step, unless such features interact with the technical subject-matter to solve a technical problem. Likewise, the "state of the art" that is considered by the person skilled in the art under the framework of the problem-and-solution approach only comprises such technological fields that are not excluded from Article 52 EPC.

United Kingdom: Much like with the EPC, "programs for computers" are not patentable under UK patent law to the extent that a patent application relates to a computer program "as such". However,  according to current UK case law, an invention will only be regarded as statutory subject-matter if it provides a technical contribution to the prior art, as long as it is not excluded from patent protection, such as computer-implemented business processes. While this reminds one of the old EPO contribution approach before T 258/03, the UK Court of Appeal analysed in Aerotel and Macrossan that using the reasoning of most of the present EPO case law (e.g. T 258/03) would result in the same final conclusion as the UKPO contribution approach.

In reaction to the Astron Clinica decision of the UK High Court the UKIPO issued a Practice Note in Feb. 2008 according to which it will depart from the relatively strict ruling of Aerotel v Telco and Macrossan and return to their previous practice of permitting claims to computer programs if claims to a method performed by running a suitably programmed computer or to a computer programmed to carry out the method were themselves allowable, such that the UKPO now generally considers the substance of the invention over the particular way it was claimed.

Compared to the EPO, the UKIPO traditionally has taken a very different approach to patentability of software-related inventions, since while the EPO general consideres an application relating to a computer-implemented method "an invention", the UKIPO usually rejects applications if the claimed subject-matter only contributes in that the invention is a computer program. Later, after the patentability of the subject-matter has been determined, the EPO only consider technical features when assessing inventive step, while the UKIPO considers any feature - technical or not - as being capable of contributing to an inventive step. 

Japan: The standards for granting software patents were revised in 1993. The Japanese approach to patentability of software-related inventions appears to be more liberal that the European approach, since it is sufficient in Japan to claim how exactly software elements interact or cooperate with hardware elements to achieve a result in order to meet the Japanese requirements of defining "a creation of technical ideas utilizing a law of nature", which in the context of software-related inventions means that a "utilization of nature law in information processing performed by software" has to be accompanied by "using hardware resources", which should be possible in most cases which do not exclusively relate to pure mathematical operations.

The crucial examination step will then be to check whether or not the claimed cooperation between software and hardware elements is novel and inventive. Software-related inventions may be considered obvious if they involve the application of an operation known in other fields, the addition of a commonly known means or replacement by an equivalent, the implementation in software of functions which were previously performed by hardware, or the systematisation of known human transactions.

For further reading please refer to my earlier post here or to the “Examination Guidelines for Inventions in Special Fields: Computer Software-Related Inventions” of the Japanese Patent Office (JPO).

Australia: In Australia, pure or abstract methods of doing business are not considered patentable, but if the method is implemented using a computer, it avoids the exclusion for business methods. Generally, a  patentable subject-matter is a useful man-made process or product, as distinct from an abstract idea or a purely artistic work. Australia was one of the first countries to broaden the patentability of computer software. Guidelines issued by the Australinan Patents Office, which were confirmed by the Federal Court in 1994, specified that a patent could be granted for software if it had a “commercially useful effect”. Examples of “commercially useful effects” include an improved image or a more effective way of performing a calculation, compression or storage routine.  For further reading, please consult the chapter on software and business method inventions in Australia in the very useful "Patent Law Handbook" of AIPLA or this article on software patents in Australia. 

In the second post on the underlying article I will try to briefly address the patentability of software-implemented inventions in the mentioned developing countries and, along the structure of the original article, provide a qualitative conclusion.