New EU rules for patenting software inventions
May 2002
Hugh Brett discusses the European Commission's proposals
for patent protection of computer-implemented inventions, based on the draft directive published On 20 February 2002.
The European Commission draft Directive
The present position and reform
The new position
The future
The European Commission draft Directive
The European Commission is at it again. Not content with issuing
Directives on the copyright protection of computer software, rental rights,
databases, and the term of copyright, the European Commission has now produced
a draft Directive on the patentability of computer software — or to use its
terminology 'computer¿implemented inventions'.
The draft Directive has been formally tabled, and has all the hallmarks
of being accepted by the Council. When introduced it will add another new IP
right to the EU collection of IPRs.
The Commission says it has undertaken the initiative because of
the importance of the software industry to the EU economy, which was valued
at 39 billion Euros in1998, and is increasing rapidly. Concern is also expressed
by the Commission that "given the maturity that today's software industry has
achieved, many improvements of software are increasingly difficult and expensive
to achieve while, at the same time they can be easily copied."
Patents play, in the Commission's view an important part in encouraging
innovation, but it views the approach of national courts of member states, towards
the patenting of computer software within the EU, as ambiguous and lacking legal
certainty.
The primary objective therefore of draft Directive is to harmonise
the various legal approaches the Commission has identified within Member States
to the patenting of software in the EU.
The present position and reform
The present position governing the patenting of software is governed
by Article 52 of the European Patent Convention. Article 52 excludes computer
program 'as such' from being patentable, and business methods.
But no definitive interpretation has been placed on the meaning
of these words within the Community - some member States have not clearly recognised
patents for inventions involving software, while others such as Germany have
taken a more direct and liberal approach, and have admitted software inventions
as being patentable, provided a 'technical contribution' can be identified.
The draft Directive points to a distinction between computer programs
'as such' and those that make a 'technical contribution'.
In making this distinction the Commission says it was mindful that
in the USA no line is drawn by the US courts, and that everything new under
the sun is patentable provided there is a "useful, concrete and tangible result."
But the Commission was not willing to make its reforms as wide as
the US approach, because it would lead to the patenting of business methods,
and in its opinion whether business patents are good thing for business has
yet to be established. Is it possible they could stifle commerce within the
EU?
Further, the Commission was anxious not to extend its patent proposals
into the field of copyright, which protects computer programs as 'literary works'.
The Commission states that it wants to preserve and ensure the continuation
of the copyright provisions whereby software developers are free to reverse
engineer another's program without infringing copyright.
The draft Directive specifically states that is not intended to
interfere with those permitted acts under copyright fair use provisions covering
decompilation and interoperability. The Commission accepts that the copyright
exceptions will not apply to patented software, but it points out that 'reverse
engineering' will continue to be possible within the patent exceptions, when
using a patented invention for academic research and personal use.
The new position
The draft Directive introduces two key concepts a 'computer-implemented
invention' and the need for a 'technical contribution'. These definitions are
important in establishing whether software is patentable.
'Technical contribution' follows very much the EPO approach, and
is a pre-condition for patentable software - without a 'technical contribution'
the software will not patentable.
Some examples of software inventions which include a 'technical
contribution' are:
- A novel process for increasing the speed of a computer
- A novel communication system between computers to be used before programming
started
Such patentable software must be contrasted with software, whose
application is for use solely on data. Here there will be no technical contribution,
and so will not be patentable. Unpatentable software would include, for example,
software to implement a business technique (e.g. tracking shares) or a plain
business method.
The second condition — a computer-implemented invention - makes
it plain that to be patentable the software must involve the use of a computer,
computer network, or other programmable apparatus. Software, in short, cannot
be patented on its own — it must be patented in conjunction with a computer.
The future
Whether these reforms on the patentablity of software are driven
solely by the Commission continuing imperatives to 'harmonise', or are made
in the genuine interests of business is certainly debateable. The draft has
not received universal support. A discussion document placed on the Internet
by the Commission led to some 1447 responses.
The Open Source lobby was very active in criticising the draft Directive,
and numerically they outnumbered the pro-protectionist interests — being mainly
large companies. The Commission nevertheless concluded that on the balance of
economic weight (taking into account) total jobs and investment of the corporate
lobby, represented the majority view.
Curiously, the Commission appears hardly to heed the Report it commissioned
— Patent Protection of Computer Programmes (Contract No INNO-99-04|) prepared
by Sheffield and Sussex University which concluded — perhaps not surprisingly
- that SMEs were not generally in favour of extending patent protection.
The SME sample in the Report says that SMEs were generally ignorant
of patent practices and that they recognised that economically stronger party
held all the 'trumps' when it came to patent infringement. SMEs were generally
of the opinion that copyright and technical systems of protection were adequate
systems to protect their software from being expropriated, and that "the patent
system is at best an irrelevancy for most small firms."
In March of this year the French government wrote to the Commission
expressing concern about the proposals in the draft Directive. The letter questions
the economic benefits, and criticised the terms used as being too loose and
unclear. The draft Directive provides that its effect must be reviewed after
three years — this period is in the French Government's opinion, far too long.
Whether the French Government will pursue its concerns is doubtful
— most observers feel the show is on the road, and the IP world can expect an
additional IP right.
Hugh Brett is editor of the European Intellectual Property
Review, and of Counsel with the international law firm of White and Case. He
is a Professorial Fellow at Queen Mary and Westfield College, London University.
