UK: Software Patents in Europe

Last Updated: 18 September 2002

Article by Caroline Barton

Software patenting has long been a controversial area of European law. Aiming to harmonise the different approaches taken by Member States, the European Commission has adopted a proposal for a Directive on the patentability of computer-implemented inventions. Caroline Barton of City law firm Field Fisher Waterhouse looks at whether this Directive will achieve its aims.

How should the law protect rights in computer programs?

Although computers have been around in one form or another since Charles Babbage designed his Analytical Engine in the mid-19th century, it was not until the mid-1970s that the first consumer computers and programs were produced. The commercialisation of computers brought with it the need to protect the investment of time, skill and money that had gone into creating these products. At that time, copyright law seemed to be the best way of protecting computer programs, since direct automated copying is the easiest way of appropriating the skill that went into creating the program.

During the 1980s, it became apparent that some aspects of copyright law would need to be amended to ensure adequate protection of computer programs. In the US, the Copyright Act 1976 was amended in 1980 to include a definition of computer programs (although US copyright law does not contain an exclusive list of works which could be protected by copyright, since the US Constitution provides that Congress shall have a general power "to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Investors the exclusive Right to their respective Writings and Discoveries").

In the UK, the Copyright Designs and Patents Act 1988 protected computer programs for the first time, as "literary works". As the creation and licensing of software became an increasingly important part of trade among EU Member States, the Software Directive 1991 sought to harmonise the copyright protection of computer programs throughout the EU. It also gave protection to the preparatory materials for computer programs. Likewise, the World Trade Organisation's TRIPs Agreement 1994, declared that "computer programs, whether in source of object code, shall be protected as literary works under the Berne Convention" (Article 10 (1)).

However, copyright protection only protects against copying - if an identical computer program is produced without the benefit of seeing the original then there is no infringement. Despite the recent recognition in the UK of "non-literal copying" (in cases such as Designers Guild Limited v Russell Williams (Textiles) Limited [2002] FSR 113), copyright law cannot be employed if the original program code has not been accessed by the suspected plagiarist or infringer, or where a "clean lab" procedure has been adhered to.

Patents

Patents differ significantly form copyright, in that they must be applied for and then granted by a Patent Office for a fee. Few inventors can satisfy all of the legal conditions for the granting of a patent, and the application process is invariably a long and costly one.

All inventions must conform to the Patent Act 1977's definition of "novelty". Novelty is an absolute requirement, meaning that the invention must not appear anywhere in the "prior art" (which includes any published work available to the public anywhere in the world at the date of the patent application). To complicate the situation the inventor must also demonstrate that their creation involves an "inventive step" over the prior art. This is an objective test, judged from the standpoint of the hypothetical "person skilled in the art", a person familiar with the prior art in their field and with the general knowledge to be expected of someone skilled in the relevant field, but with no inventive capacity. Once a patent is granted, the holder is afforded a monopoly over the invention. If another individual or research team happens to create something that is ostensibly the same as the original invention, they will have infringed the patent. Whether they had prior knowledge of the patented invention in question is irrelevant.

Can computer programs be patented?

The European Patent Convention was formulated during the 1970s, at a time when copyright was thought to be the appropriate way of protecting computer programs. The Convention therefore provides that computer programs "as such" are not inventions, which in turn means that they cannot be patented.

Previous editions of the EPO's guidelines have provided that:

"a computer program claimed by itself or as a record on a carrier is unpatentable, irrespective of its content. The situation is not normally changed when the computer program is loaded into a known computer".

In a paper given in 1985 by Herr Gunter Gall, then Director of Legal Affairs at the EP, Gall stated that:

"The reasons for the exclusion of programs for computers as such is that … they are not of a technical nature … it can be said that the special provisions excluding programs for computers is only of a declaratory nature … the answer to the question whether computer programs could be patentable in the absence of any explicit exclusion is 'no'".

This approach seems to be based on an assumption that a computer program is essentially an abstract tool, and was mirrored by the approach of the US courts in the Freeman-Walter-Abele line of cases, in which the test was (a) does the claim consist of a mathematical algorithm? and (b) is that algorithm applied to a physical process to produce a physical result?, meaning that a computer program which does not produce a physical result was not patentable. However, the EPO Boards of Appeal began to take the approach, during the 1980s, that a computer program which (when installed and run on a computer) produces a "further technical effect" is patentable. This principle is incorporated into the EPO's current Guidelines, which state that:

"while 'programs for computers' are included among the items listed in Art 52(2) [EPC], if the claimed subject matter has a technical character, it is not excluded from patentability.

But the EPO Boards of Appeal have yet to define clearly what "technical character" or "technical effect" consist of. The Report to the European Commission on the Economic Impact of Patentability of Computer Programs, written by Robert Hart, Peter Holmes and John Reid on behalf of the Intellectual Property Institute (see http://europa.eu.int/comm/internal_market/en/indprop/comp/study.pdf) stated that:

"the requirement of 'technical effect' does not arise from the European Patent Convention … and technical effect has been the subject of considerable discussion in the Technical Board of Appeal in the EPO and in the UK Patent Office and the Patents and Appeal Courts".

Indeed, the word "technical" is in itself the subject of contention and has been queried in several UK cases. In Fujitsu Limited's Application [1997] RPC 608, Lord Justice Aldous said:

"I, like Nicholls LJ [in his judgment in Gale's Application [1991] RPC 305], have difficulty in identifying clearly the boundary line between what is and what is not a technical contribution".

And, as Mr Justice Aldous, in Wang Laboratories Inc's Application [1991] RPC 463, he said:

"As is apparent from other decisions of the Board [of the EPO], the European Patent Office pays particular attention to whether an invention has made a technical contribution and it seems that the word 'technical' has become a word of art … This creates difficulties in that the word 'technical' is open to a number of meaning, depending on its context. Further, it does not appear in section 1 of the 1977 [Patents] Act nor in Article 52 of the [European Patent] Convention."

The difficulty for the English courts is that they are used to construing the words of a statute strictly, and some judges have been unwilling to embrace the approach, taken in other European countries, of looking beyond the legislation to try to identify the aims of the legislator. However, the Patents Act 1977 specifically provides (in s.91 (1)(c)) that EPC Member States must "take judicial notice" of decisions of the EPO Boards of Appeal in order to harmonise patent law throughout the Convention states. The unfortunate consequence is that UK judges are left to apply these principles without any clear guidelines as to their meaning.

The EU's proposed Directive

Hoping to remedy the differences between the case law of the EPO Boards of Appeal and that of the courts of Member States, the European Commission conducted a review of the patentability of computer programs.

The removal of computer programs from the list of non-patentable inventions was one option. Clearly the usual pre-requisites of novelty, inventive step and industrial applicability would have to be met, so that relatively few programs would be patentable. At the other end of the spectrum was resistance from the growing open source movement, which opposes the enforcement of intellectual property rights (including copyright) in software, and argued vehemently against computer program patentability.

The Commission decided that given the variation in opinion and the dramatic ramifications any changes in the law could have for the business community, sudden change should be avoided. The Commission believed that its aim should be to harmonise the existing position, ironing out differences between the approaches of courts in different Member States which could impact negatively on the free movement of goods and services in the internal market.

A proposal for a Directive on the patentability of computer-implemented inventions has been drafted (see http://europa.eu.int/eur-lex/en/com/pdf/2002/en_502PC0092.pdf) and is currently going through the European Union's legislative process.

Despite the continued exclusion of computer programs " as such" from patentability, programs contained in programmed computers or networks, or "other programmed apparatus", and processes carried out by such apparatus through the execution of software, will be patentable. This applies only if they make a "technical contribution" to a particular technical field. The usual requirements for the granting of a patent must also be met. However, the phrase "technical contribution" is not defined in the proposed Directive.

Three years will be given to EU Member States to implement the proposed directive into national law should it be accepted by the European Parliament and the Council of the EU. The proposed Directive is intended to clarify which inventions will be eligible for patent protection, thereby encouraging investment in the development of new and inventive programs by computer programmers and the organisations which employ them or fund their work. But whether this Directive will have a significant effect on research and development, helping to shore up the technology sector in Europe, remains to be seen.

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

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