The European Parliament has voted against a Directive to harmonize computer implemented inventions in Europe. Independent of this, the UK Patent Office has issued new guidelines for patenting of computer implemented inventions. These guidelines do not help to harmonize the law in Europe. Meanwhile, when considering whether subject matter is of a patentable nature, the German Supreme Court follows the line of the European Patent Office, not just for patents but for utility models too. Austria has explicitly legislated for utility model protection for computer programs. Can these factors assist in reaching the correct interpretation of the “computer program” exclusion in the European Patent Convention?
The European Patent Office and the German Supreme Court place emphasis on assessing the inventiveness of the technical contribution. A lesser degree of inventive step is necessary for utility model protection. A strategy is outlined in which valid utility model protection is available for computer implemented inventions as a fall-back where patent protection is not.
Background - The Failed Directive
Over a period of 5 years, the European Commission worked with the European Council to bring draft legislation to the European Parliament which would cause the various states of Europe to amend their laws on the patenting of software along a common template. This template was the Directive on Patentability of Computer-Implemented Inventions (the “CII Directive”).
On 6 July the European Parliament voted overwhelmingly against the CII Directive. The vote was 648-to-14 against the legislation. Incidentally, it is believed this is the only draft legislation that has been turned down by the Parliament at a second reading. Such an overwhelming vote is quite unprecedented. Does this mean that the European Parliament is against patenting software? Not entirely. There were strong voices for and against the proposed legislation, and compromise may have been possible, but amendments were proposed at the last moment by the “No Software Patents” lobby, so those in favour decided also to vote against the legislation rather than have it watered-down or damaged by last-minute amendment. The Council has no plans to revive the process or start it again.
What does it mean to have no Directive? It means quite simply that there is no change to the legislation. The status quo as decided by the courts will continue. For the pro-patent lobby, this seemed quite satisfactory. The courts in the UK and Germany appeared to be converging already on the European Patent Office test for “technical effect”. They even permitted claims to a program medium having a computer program stored on it, provided that the computer program brought about some technical effect when executed.
New UK Patents Court decision and Patent Office Notice
Almost as soon as the Directive was voted down, a new decision came out of
the UK courts, casting new doubt on the apparent convergence.
In CFPH LLC’s Applications1 , the Court attempted to ascertain the purpose behind the computer program exclusion in the European Patent Convention, and came up with a list of possible reasons for the exclusion that differ from other exclusions such as discoveries, mental acts or mathematical methods. The deputy judge said that at the time the EPC was under consideration it was felt in the computer industry that such patents
The deputy judge pointed out that the software industry in America developed at an astonishing pace when no patent protection was available and with only copyright law available to protect computer programs against copying.
In the wake of this decision, the UK Patent Office has published new guidelines on patentability of computer programs (called a “Practice Note”)2 . In these guidelines it is said that it is the Office’s view that the change in approach does not change the boundary of what is patentable. Yet at R.G.C. Jenkins & Co (“Jenkins”), we have observed a spate of new decisions from the UK Patent Office, which indicate a significant hardening of attitude.
In particular, the Patent Office decisions that rely on the new CFPH case go beyond the new Practice Note. They purport to look more deeply into the CFPH case. The Hearing Officer concludes that it is the intention of the present legislation not to “foreclose” (i.e. grant exclusivity over) computer programs [and nothing else] nor computers when running under the instructions of a computer program. The Patent Office now asks the question “what, if anything, apart from a computer program or a computer running under the instructions of a computer program, would be foreclosed by the claims?” If the answer is nothing, no patent will be granted3. This alone is enough for the UK Patent Office to now conclude that any advance in the art that is said to be new and not obvious, is not “new-and-not-obvious” under the description “an invention” in the sense of the European Patent Convention4 .
In other words, it is not enough that there is an inventive technical contribution. The previous Practice Note5 took the view that this was the start and end of the analysis. The UK Patent Office now believes there is an over-riding question as to what is to be foreclosed by the patent claims.
It may be that this new case law and this hardening of attitude has been precipitated by the vocal debate over the failed Directive and the vote in the European Parliament. It may be that the UK Patent Court and the UK Patent Office have come to the view that the pendulum has swung too far in favour of patents for software inventions. But was it indeed the intention of the legislature (i.e. the drafters of the European Patent Convention) not to “foreclose” computer programs and computers when running under the instructions of a computer program in all circumstances?
The EPO would say “No”, it was only the intention not to foreclose computer programs as such and there was no over-riding intention not to foreclose computers when running under the instructions of a computer program (please excuse the double-negative), provided they are new, inventive and have a novel technical effect.
Under the present analysis of the European Patent Office, any computer system or medium that stores a computer program or signal that carries data is patentable under Article 52, but only the novel technical aspects are considered when it comes to inventive step under Article 56. If there is a lack of technical contribution, the application will be rejected for lack of inventive step. Below we shall see how this is relevant for fall-back protection strategies.
Can the UK deputy Patents judge validly say that in 1971 the computer industry felt that patents for computer programs were not wanted? The basis given for his conclusion is second-hand, being based on a reference in a book by a Professor in Intellectual Property Law, rather than some industry survey6. Indeed we cannot even today claim to know what “the industry” wants or does not want. The European Information & Communications Technology Industry Association (EICTA) says its members want adequate patent protection for computer implemented inventions. It was at the forefront of lobbying in favour the Directive7. And what “industry” are we to consider? EICTA represented many large European hardware companies whose computer code becomes embodied in equipment. The Open Source community is a different industry altogether.
What the Courts of Europe Say
In the UK we have four levels at which the question can be considered. We start with the Patent Office, from which an applicant can appeal to the Patents Court. It is at these levels to which the above discussion relates. Above the Patents Court we have the Court of Appeal and ultimately the House of Lords. We have not had a decision on this subject above the level of the Patents Court since 19978 , and so far we have never had a decision at the level of the House of Lords.
But if we look at Germany, the highest Court in Germany has looked at this subject on several occasions. In 2004, for example, in a case relating to a method of performing a transaction between a vendor and a buyer in an internet payment system, the German Supreme Court considered electronic banking to be a technical means and considered the transmission of sensitive transaction data to be a technical problem9. The rule the Court formulated was:
In the same year, the German Supreme Court considered utility model protection for a signal sequence and computer programs and methods in general. The Supreme Court held that a signal sequence is indeed a physical entity capable of utility model protection, and that the question of whether an invention is a computer program as such is the same for utility model protection as for patent protection10 .
Austria has gone a step further in its utility model law and has actually legislated for protection for computer programs. This is found in Section 1(2) of the Austrian Utility Model Act of 1994. This provides that the program logic upon which programs for data processing equipment are based may be protected. The protection is for only 10 years, but is otherwise practically the same as that of a patent. The Austrian government, at least, does not appear to believe that protection of this nature is not wanted or is too cumbersome.
Utility Model Protection in Europe
Very much like the provisions for utility models under Chinese Patent law 11 , various states in Europe provide for utility model protection for 10 years for innovations that have a lesser degree of inventiveness than the “inventive step” requirement of the European Patent Convention.
Utility model protection is available in the following European countries:
Luxembourg, Sweden and the United Kingdom do not have provisions for utility models.
The European Commission also prepared a draft Directive on utility models12, which the Parliament actually approved in 1999, but it this been blocked by the Council of Ministers and has been finally withdrawn.
In Germany, about 20,000 utility model applications are filed each year, mainly by German applicants. It is a form of protection that appears not to be well known among US and other foreign applicants. Details of the protection can be found at the Jenkins website13.
A Strategy for Computer Program Protection in Europe
The European Patent Office is quite liberal in granting patents for computer implemented inventions. In borderline cases of technicality, it is always advisable to proceed in that office than before the individual national offices. (On the other hand, national patent offices, such as the UK Patent Office, remain an attractive alternative for quick and inexpensive protection in cases that are clearly technical but where it is known at the outset that the inventive step over the prior art is very slim.)
Furthermore, it is possible for a German (and indeed Austrian) utility model to be “split off” or “branched off” from a national or European patent application. This is a useful consideration when choosing a patent filing strategy for computer implemented inventions in Europe. If the invention stalls before the European Patent Office on the grounds that it does not have the necessary inventive technical contribution, the present practice of the EPO is to object under Article 56 (lack of inventive step), whereas in the past there would have been an objection under Article 52 (not patentable subject matter). But utility model protection does not require the same level of inventive activity. It requires a lower level of “inventive step”14 . So the invention that is not patentable before the EPO may be validly protected by splitting off and filing a utility model application.
This is a procedure we have used at Jenkins and is a procedure we recommend to clients with confidence that valid protection can be obtained in those rare cases where it proves unobtainable in the European Patent Office.