Posts by: Fabian Edlund | (4) posts

Spain’s actions against unitary patent protection dismissed

On May 5, a potential legal obstacle against the Unitary Patent and Unified Patent Court was removed when the Court of Justice of the European Union (CJEU) dismissed two Spanish actions against the regulation of the unitary patent protection. These actions, which were brought before the Court in March 2013, question two aspects of the regulation; 1) that the regulation is not in line with EU law, in particular with respect to the distribution of renewal fees, and 2) that the proposed translation regime is discriminatory (to Spain and others).

Regarding the issue of conformity with EU law, the Court finds that the EU legislature did not delegate any powers which are exclusively its own under EU law. The Court also notes that the Member States must be responsible for all implementing measures, especially as the EU is not a party to the EPC. Regarding the issue of translation regime, the Court admits that the regulation differentiates between languages, but considers this differentiation to be motivated by the purpose to make patent protection more accessible.

Personally, I am not surprised by the decision. The political will to put a “Community Patent” in place is strong, and it appears no legal principles will be allowed to stand in its way. Regarding the translations regime, I think the Court has got it quite right. On the one hand, it is certainly true that the system could be seen as unfair to Spain (just as it is to Sweden, Denmark, and any other country not having English, French or German as one of their official languages). On the other hand, it is just as certain that Europe can never grow economically strong while it is fragmented by language. If Europe is to maintain its position as one of the 4-5 most important markets, Europe must be perceived as one market. The European patent system is of course not the only relevant factor in this context, but it can be an important part of the puzzle.

The winding road of the Unitary Patent and Unified Patent Court now continues. For the system to enter into force, it must be ratified by 13 states, including France, Germany and Great Britain. So far, six states have ratified the agreement (France, Sweden, Denmark, Austria, Belgium and Malta), and at least the Netherlands are on their way.

The level and distribution of renewal fees remains as one of the major hurdles, not only because these issues are difficult to agree upon, but also because they will most likely determine the impact and speed of propagation of the new system. Currently, two different proposals have been presented, referred to as TOP4 and TOP5. Essentially, the proposals set the renewal fee level equal to the sum of the national renewal fees of the four or five most popular countries to validate European patents in. The TOP5 proposal has the extra twist of a 25% discount for SMEs (and some other applicants).

In my personal opinion, the cheaper TOP4 alternative is the better one, in order to make the system as attractive as possible. The idea of an SME discount of course sounds attractive, but I find the discount too small to have any significant effect. With renewal fees according to TOP4, I think the Unitary Patent will be quite attractive, at least from a renewal fee point of view.

Fabian Edlund, European Patent Attorney

Which business methods are patentable in the US?

When the Bilski decision was handed down by the US Supreme Court in 2010, it was taken as a clear indication that business methods would now be more difficult to patent in the US. After all, the Supreme Court came to the conclusion that the subject-matter at stake, a method for hedging risk, was abstract, and therefore not patentable.

However, the Bilski decision did not explicitly make the threshold for patentability higher. In fact, the Supreme Court rejected the “machine-or-transformation”-test** as the only test for patentable subject-matter, and established that also other arguments could succeed in showing that an idea is non-abstract. The Supreme Court also clearly stated that there is no explicit exclusion of “business methods” in the US statute.

So, the question still remains: are business methods patentable in the US, and if so, what does it take to make them so? It is up to the Court of Appeals of the Federal Circuit (CAFC) to answer this question, and three recent decisions may provide some guidance on which factors impact whether a business method is patentable or not.

In Cybersource Corp, the invention related to a method for verifying a credit card transaction, by utilizing a map of credit card numbers from other credit card transactions.

The CAFC considered this method to be abstract. According to the court, none of the steps of the claim actually require the use of any machine. The credit card information could be read from a database by a human, the map may be constructed by a person, and the act of utilizing the map encompasses literally any analysis of gathered data to detect a fraud. The conclusion therefore is that the method is drawn to a mental process, which is “a subcategory of unpatentable abstract ideas”.

In Dealertrack, the invention related to a “computer aided” method of managing a credit application, wherein credit application data is received and forwarded to funding source terminal devices, from which decision data is returned. According to the invention, the application data is sent to more than one funding source at the same time.

The CAFC found the method to be abstract, despite the “computer aided” limitation in the preamble, and various devices involved in the steps. According to the court, the term “computer aided” is no less abstract than the underlying concept of a clearinghouse.

In Ultramercial, finally, the invention related to a method for providing media contents over the Internet to a user, and in return requiring the user to view or interact with an advertisement. In other words, advertising is used as a sort of currency to access the media contents.

This time, the CAFC came to the conclusion that this method was not abstract. According to the Court, the subject-matter, when viewed as a whole, involved “an extensive computer interface”. The claim was considered NOT to preempt the abstract idea of using advertisements as currency, but instead presents a particular method where several steps require a specific application to the Internet. Needless to say, the conclusion that the subject-matter is statutory says nothing about its merits with respect to novelty, inventive step, and enablement, a fact pointed out not only once but three times by the CAFC.

So, where does this lead us? To begin with it is evident that, much like in Europe, the level of detail in the claims will have a significant impact on patentability. A claim as unspecific and broad as in Cybersource Corp will more likely be perceived as “abstract”. To “disguise” a very broad method with a few hardware features (Dealertrack) will probably not do much good, while a method directed to a more detailed implementation (Ultramercial) may very well pass the test.

From a European perspective, it is also interesting to note that the end result most probably would have been the same by applying the technical character standard of the EPO. Of course, the EPO examiners very rarely attempt to determine whether the subject matter as a whole is excluded. However, in an inventive step analysis the claim in Ultramercial would most likely have been found to have several features with technical character, while the claims in Cybersource Corp would not. In Dealertrack, the features would probably have been considered technical (after all, they include “devices”), but disregarding all non-technical content of these technical aspects it would hardly require any prior art to determine a lack of inventive step.

Perhaps even more interesting is a dissenting opinion by one of the judges in the Dealertrack case. According to this judge, the CAFC should instruct the District Court to assess other requirements on patentability (i.e. novelty, inventive step and enablement) before attempting to determine if the invention is statutory subject-matter. This would lead to an approach much similar to the one chosen by the EPO, where most business method claims are eliminated during an inventive step analysis.

To summarize, the CAFC are working hard to clarify the border between patentable and not patentable, between abstract and non-abstract. While it is yet difficult to see any clear and concise guidelines to help an applicant pass the test, it is certainly clear that not all claims have the same chance. And for the time being, at least, it may well be that the differences in patentability of business methods between the US and Europe are less significant.

Fabian Edlund, European Patent Attorney, Vice President

** The ”machine-or-transformation”-test stipulates that a claimed invention should 1) relate to a particular machine, or 2) represent a transformation of matter. Before Bilski, the CAFC had treated this test as the sole deciding test for determining if subject-matter was patentable.

Software related inventions at the Enlarged Board of Appeals

It is now almost a year since the President of the EPO referred four questions relating to the patentability of software related inventions to the Enlarged Board of Appeal (G03/08). The hope is of course that the EBA finally may put several issues to rest, issues that have been debated in and out of the Technical Boards of Appeal for at least 25 years.

The interest for the referral is extremely large, as indicated by the more than 90 amicus brief filed by various entities ranging from private citizens and academia to multinational corporations and governments. However, the content of the referral is not necessarily easy to understand, even for those “skilled in the art” of software patenting, and for those of you who are still uncertain as to the specifics of the questions, here is a brief comment on what the President wants the EBA to answer. 

Question 1: 
Can a computer program only be excluded as a computer program as such if it is explicitly claimed as a computer program?

I believe this question is simply intended to establish whether the exception to software is decided by the form of the claims.
The background is that some decisions by the TBA state that the software exclusion can be avoided simply by claiming e.g. “a computer implemented method” instead of just a “method”. There is also some controversy regarding whether or not a claim directed to a “computer program product” can be patentable.

Although the question seems to be rather clear, the expression “explicitly claimed” leaves it open for interpretation and in the end we cannot be certain about what the EBA will actually answer. For example, some observers believe that “explicitly claimed” means claimed as software code. They further believe that the answer is yes, and that only code can be seen as software as such, and thus be excluded. This opinion has some support in the preparations for the EPC, drafted in times when software still took the form of listings in “written form” tediously transformed into punched cards to be “read” by a computer. Under such circumstances, it seemed reasonable to exclude these listings from patentability, as they were already protected by copyright.

Question 2:
A) Can  a claim in the area of computer programs avoid exclusion under Art. 52(2)(C) and (3) merely by explicitly mentioning the use of a computer or a computer-readable data storage medium?

B) If question 2 (A) is answered in the negative, is a further technical effect necessary to avoid exclusion, said effect going beyond those effects inherent in the use of a computer or data storage medium to respectively execute or store a computer program?

This question addresses a significant difference between two lines of jurisprudence. According to both lines, a claim should have “technical character” to avoid the exclusion in Art. 52 EPC, but the way to establish “technical character” is very different.

According to the older line of decisions, technical character was established if the claimed subject matter presented some “technical effect”. As all software interacts with hardware in a very basic technical sense, i.e. by influencing currents and voltages in a processor, it was also emphasized that in the case of software related invention, there had to be some “further” technical effect. Such an effect could be found in the perceived effect of the software, e.g. facilitating user interaction, improving memory access speed, increasing storage capacity, etc. According to this practice, a simple inclusion of commonplace technical features in the claim would not necessarily provide technical character.

According to the more recent line of decisions, technical character is established by any technical feature in the claim, even the act of “writing on a piece of paper”. As a consequence, the simple inclusion of “by a processor” or “in a memory unit” in a method claim will avoid the exclusion to software. Question 2 of the referral simply asks which of these approaches is correct.

Question 3:
A) Must a claimed feature cause a technical effect on a physical entity in the real world in order to contribute to the technical character of the claim?

B) If question 3 (A) is answered in the positive, is it sufficient that the physical entity be an unspecified computer?

C) If queston 3 (A) is answered in the negative, can features contribute to the technical character of the claim if the only effects to which they contribute are independent of any particular hardware that may be used? 

I see this question as an attempt to address some of the controversies surrounding patents being granted on software applications that may be executed on any general purpose computer. Such patents include patents to interface solutions, patents to image coding techniques, patents to internet interaction and trade, etc. Such patents have in common that infringement may be committed by simply providing your personal computer with new software, distributed on a carrier or electronically. For many people such patents (regardless of whether they are claimed as methods or computer products) come across as protecting “software as such”. The alleged divergence of TBA decisions confirms this impression, as it puts decisions related to general computer applications against decisions related to software associated with particular hardware, such as a car radio system.

Unfortunately, question Q3 approaches this issue in a very complex way. First, question a) introduces a number of new expressions, such as “physical entity” and “real world”, and also makes you wonder if it is the technical effect or the physical entity that should be in the real world. Then, it is clear from question b) that the President is not even convinced that something as tangible as a computer is a “physical entity”, making the interpretation of this expression even more difficult. Question c) is even more confusing, as it seems to just repeat question a). At least it seems unlikely that someone that answers question a) in the negative then should require a specific hardware. I think questions Q3 must be seen as an attempt to ask the following: “can technical character arise from effects resulting from running a software on an unspecified computer?”

Question 4: 
A) Does the activity of programming a computer necessarily involve technical considerations?

B) If question 4 (A) is answered in the positive, do all features resulting from programming thus contribute to the technical character of a claim? 

C) If question 4 (A) is answered in the negative, can features resulting from programming contribute to the technical character of a claim only when they contribute to a further technical effect when the program is executed?

This question tries to cope with a very common argument from applicants, namely that the activity of programming is a technical activity, and that therefore the software resulting from such programming must be technical also.
This question is based on an alleged inconsistency in TBA decisions, where the President believes that one decision suggests that all programming involves technical considerations. Personally, I do not believe that is what the cited decision says, and so the question is probably not based on an actual divergence in case law. However, I am sure many examiners would like a clarification on this point, in order to cope with clever arguments from applicants.

Part a) of the question very clearly asks if the act of programming necessarily involves technical considerations. Technical considerations have by the TBA been considered to be an indicator of technical character, and a yes to question a) would thus seem to indicate that any software would avoid the exclusion.

However, for this to be true, the technical character of the programming activity must be transferred to a feature resulting from this programming. This is what is asked in part b). If the activity of programming is not found to be relevant, the issue of technical character again returns to the issue of question 2. And indeed, part c) of question 4 seems to correspond to s question 2b.

After carefully considering the four questions I believe that they address some of the much debated issues surrounding patentability of software related inventions. However, in some cases the questions cloud the issues by using new terminology or by being overly complex. Therefore, it is not easy to guess how the EBA will interpret the questions, and what guidance they will provide, if indeed they find the referral to be admissible. An attempt to analyze the possible effects on applicants depending on how the questions are answered will be the topic of a future blog on this site.

Fabian Edlund, European Patent Attorney

UK Court grants software patent

In its ruling on October 8, 2008, the British Court of Appeal confirmed the decision of the High Court that the invention claimed in GB application 0325145.1 by Symbian Ltd is patentable under UK law.

The claimed invention relates to a new and improved way to access DLL (dynamic link library) files in an operating system, potentially making a computer function faster. The court decided that such a solution could not be considered a computer program “as such”, and was thus not excluded by Article 1(2) of the British patent law (corresponding to Article 52(2) EPC). It also noted that a corresponding patent has been granted by the EPO.

In its decision the Court made a significant effort to deal with the tendency of recent decisions by UK Courts to diverge from the practice of the EPO. The Court stated its view that, at least as a matter of broad principle, the British Appeal Court precedence (Merrill Lynch, 1989, Gale, 1991, and Macrossan, 2007) should be reconcilable with the recent Technical Board of Appeal decisions (T154/04 and T1543/06).

To be more specific, the Court noted that the test stipulated by UK courts for determining whether claimed subject matter is excluded from patentability, is whether the “contribution” (i.e. novel features) relates to excluded matter as such. It further argued that this test corresponds to the test applied by the TBA, for example in T154/04, to determine whether or not a contribution is technical.

However, the Court explicitly disagreed with the approach followed in some EPO decisions (e.g. T1188/04 and T1351/04). The Court motivated its decision not to follow these precedents, by arguing that such an approach indicates that “the computer program exclusion may have lost all meaning”. Further, these decisions are not in line with earlier EPO jurisprudence, at least not until they have been confirmed by the Enlarged Board of Appeals.

The Court finally noted that, as long as the principles of Pension Benefit (T931/95) and Hitachi (T258/03) are applied by the EPO, there will be a discrepancy between the practice of the UKIPO and the EPO, and called for a “two-way dialogue between the national tribunals and the EPO”. As long as the discrepancy remains, the Court believes that efforts need to be made to minimise the effect on practical outcome as far as possible. In the present case, the Court has done just that, and decided that the claimed invention is patentable in the UK, just as it was found patentable by the EPO.

While the outcome of this case, at least for the time being, seems to harmonize UK standards for patentability with those of the EPO, it should be noted that the “discrepancy” may be greater than the Court admits. According to present EPO jurisprudence (including T154/04 and T1543/06 mentioned above) Article 52(2) is only used to determine what features may contribute to inventive step. Or, to put it differently, the EPO will not reject any claim under Article 52(2), as long as it contains the slightest of technical details. The UK Court of Appeal, on the other hand, is prepared to reject an admittedly technical invention as excluded subject matter, if its “contribution” lies within Article 52(2).

Fabian Edlund, European Patent Attorney

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