Germany: Developing a New Business Method ? – Think about Patents in Europe!

Last Updated: 25 September 2001
Article by Johannes Lang

First published in The European Lawyer / IT supplement, July 2001

In the past, patents were only considered as appropriate protection for the respective development in high technologies and research. Patents were the exclusive domain of patent departments and patent attorneys and, as such, of engineers and scientists in all fields of technology. Patent laws all over the world were interpreted as allowing access to patent protection only for inventions in technical fields comprising a so-called "technical character". This has changed dramatically. Today, patent protection is also accessible for business methods, at least to a certain extent, in most industrial countries.

When, in 1998, the US Court of Appeal for the Federal Circuit laid to rest the so-called business method exception from patentability in its decision State Street Bank & Trust Co. v. Signature Financial Group, Inc. (149 F.3d 1368; Fed. Cir. Jul. 23, 1998), this provoked not only a storm of headlines in major business publications, but also a new patent awareness, in particular in the banking and financial business. Since then, the US Patent and Trademark Office created a new classification for business method patents, hired new specialized examiners and adapted the guidelines for patent examination. Most of the major industrial countries like Japan and the states adhering to the European Patent Convention (EPC), although not going as far as the USPTO, followed at least to some extent the example of the United States. Trilateral discussions with the aim of harmonization of the different practices are taking place between the US Patent and Trademark Office, the Japanese Patent Office and the European Patent Office.

The present situation in Europe

While in the United States patenting of software programs has been allowed in a steady development of case law over the last 30 years and is today a well established practice in Europe, although a similar development of case law could be observed, the general public still seemed to be blocked by the provision in Art. 52 (2) and (3) of the European Patent Convention. It appears to be identical in all European national laws that "schemes, rules and methods for performing mental acts, playing games or doing business, and programs for computers" are excluded from patentability if claimed as such. But in reality, patenting of software-related inventions is a well-established practice also in Europe, in particular for international companies, which has been confirmed by the Boards of Appeal of the European Patent Office as well as by certain national Courts such as the German Federal Supreme Court.

Following the latest decisions of the European Patent Office (EPO) and the German Federal Supreme Court, computer systems adapted for the performance of business methods or activities and corresponding computer programs are treated in the same way as software-related inventions. Thus, they are patentable, provided technical considerations are involved in the implementation of such business methods on a computer system, and they fulfill the other requirements of patentability, which are novelty and inventive activity. Two significant examples of recent case law of the Boards of Appeal of the EPO will be given below.

In one of the first decisions concerning methods for doing business, General purpose management system/SOHEI (T 769/92, OJ EPO 1995, 525), the Board of Appeal of the European Patent Office had to decide whether a computer system and a method for multiple types of independent management, including at least financial and inventory management, would be excluded from patentability as a method for doing business and for not representing any technical contribution to the art. The claimed system allowed data necessary for one type of processing, financial management, and data necessary for another type of processing, inventory management, to be performed independently. Each type of data could be relevant for the other type of processing. The only difference to a conventional general purpose computer was the particular significance of the different files in the memory and the way the input data and stored data was processed.

In the Board’s opinion, SOHEI´s claimed general purpose management system (which in fact was a new user interface or a particular convenient screen display) required technical considerations by the inventor, since two kinds of management systems having different purposes and implying independent activities (management) were combined to a common input device, allowing each of the entered items necessary for use in one of the systems to be used, if required, also in the other. The implementation of the management method as a computer program was not seen as a mere act of programming but as an activity involving technical considerations that had to be addressed before programming, and, thus, before the creation of the software code (which as such would not have been patentable). Therefore the requirements of a technical character of an invention for patentability were set quite low: technical considerations before programming are sufficient.

In a decision of September 8, 2000, Controlling pension benefits system/PBS Partnership (T 0931/95, Decisions of the Boards of Appeal, www.european-patent-office.org), the Board of Appeal held that methods only involving economic concepts and practices of doing business are not inventions within the meaning of Article 52 (1) EPC. A feature of a method, which concerns the use of technical means for a purely non-technical purpose and/or for processing purely non-technical information, does not necessarily confer a technical character to such a method. But a computer system suitably programmed for use in a particular field (even if it is the field of business and economy) has the character of a concrete apparatus in the sense of a physical entity. It is man-made for a utilitarian purpose and is thus an invention within the meaning of the EPC. In this specific case, the method claims were rejected, whereas the apparatus (computer system) claims were allowed. The Board underlined that the difference between SOHEI and PBS Partnership was that in SOHEI, the method claim was directed at a "method for operating a general-purpose computer management system", the steps of the method being closely related to functional features that define the computer system operated by this method. Thus, the purpose of the method was a technical one, namely operating a technical system which ensured the technical character of the method itself. This was not the case in PBS Partnership. There, the wording of the method claim did not relate to functional features of the computer system. But this obstacle can easily be overcome by writing the patent specification and claims appropriately and by providing sufficient support of technical features and considerations. Following these two decisions of the EPO, at least business methods implemented on a computer system or network are patentable.

Why should you think about patent protection for your intellectual property?

Compared to protection by copyright, patents have the advantage that they protect the general concept as claimed, including equivalents, independently of the concrete form of implementation. Not the concrete software code is protected but the general idea lying behind it.

Numerous European patents have already been granted to banks, insurance companies and financial service providers relating to for example, processing insurance claims or managing bank accounts. In view of this rapid development, the financial community, formerly untouched by patent law, now has to develop patent strategies. It has to file patent applications for internet software and for financial or banking software programs; it has to develop patent portfolios and, most important, it must conduct a patent search prior to any major software development in these fields in order to avoid infringing competitors' patents.

© 2001 Johannes Lang.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions