The patentability of computer implemented inventions : the latest EC Council position

Publié le 22/05/2005 par Paul Van den Bulck

The present contribution aims to outline the latest formal EU Council position dd. 7 March 2005 with regard to the patentability of software. In particular the extent into which the EPO case law and the EU Parliament amendments are reflected in this Council position are highlighted hereafter. A. Possible mechanisms of legal protection of computer…

The present contribution aims to outline the latest formal EU Council position dd. 7 March 2005 with regard to the patentability of software. In particular the extent into which the EPO case law and the EU Parliament amendments are reflected in this Council position are highlighted hereafter.

A. Possible mechanisms of legal protection of computer programs

In the European Community (EC), computer programs are in the first place protected under copyright (as literary works) by Directive 91/250/EC of 14 May 1991 and its subsequent transposition into the national law of the EC Member States.

Copyright protects the ‘original expression’ of a work against direct copying. In the case of computer software, protection is offered to the originally coded program. However, copyright cannot prevent independent creators from recreating the same or similar work. The functionality of a computer program can be implemented in several ways or in different ‘expressions’. Copyright is therefore not capable of offering protection against such another expression of functionality (of a program).

Secondly, one can refer to the legal protection provided for by trade secrets. It is indeed considered to be difficult for independent creators to discover from the “object code” the “source code” of a computer program as long as the latter is kept secret. Off course, the advantage of a trade secret will be lost once the secret is broken. This may in particular present a risk in case of licensing of the computer program.

Remains the protection offered by patent law. Patents can act as a supplementary form of protection of computer programs in Europe (as in the United States and Japan). It is indeed a fact that, independent of the existence of any EC Directive, the European Patent Office (being an intergovernmental organization and not an EC institution) has granted until now several patents for so-called computer-implemented inventions.

Patents offer the exclusive right for their holder to apply the inventive idea underlying the computer-implemented invention. Contrary to copyright, patents can be invoked even against independent inventors of the same idea.

B. Legal framework regarding the patentability of computer implemented inventions

1. The current legal framework

In the context of the patentability of software, several legal instruments are to be taken into account.

1. One can firstly refer to the TRIPs (‘Trade related intellectual Property Rights’) Agreement that has been adopted in the context the World Trade Organization (WTO) on 15 April 1994.

This international convention is binding: any legislative initiative in the field of intellectual property within the EC and its Member States has to comply with the TRIPs “minimum standards”. With regard to the field of patent law, TRIPs provides also for certain minimum standards.

However, with respect to the patentability of computer-implemented inventions, one has to admit that the TRIPs-Agreement is ambiguous. On the one hand, one can argue that it does not provide for any exclusion of patentability for computer programs. On the other side, the Agreement does not stipulate explicitly that computer implemented inventions are patentable.

It is known that this ambiguity does not constitute a coincidence and that it in fact goes back to a compromise, between the United States and the European Community, established at the time of the elaboration of the TRIPs-Agreement…

2. The European Patent Convention (EPC) of 5 October 1973 provides in its Article 52 (1) that computer programs as such are not patentable. A similar exclusion has been introduced in the Belgian Patent Act of 28 March 1984 (Article 3).

On the basis of a literal interpretation of this statutory exclusion, the EPO case law has established a set of rules allowing the patentability of inventions that are not computer programs ‘as such’.

Within this framework, it can be noted that the notion of a ‘computer-implemented invention’ is used in order to make the distinction with a computer program ‘as such’.

In order for an invention to be patentable, the invention has to be novel, it must involve an inventive step (i.e. it has to be non-obvious to a person skilled in the art) and it must have an industrial application. In addition, in particular with regard to software, the invention must be technical in order to qualify for a patent.

Inter alea in the context of the adoption of the EC Software Directive – which is addressed infra – the question into what extent computer software is “technical” for the purpose of the patent law has appeared to be controversial.

Hereafter we explain some of the principles that, according to the EPO case law, aim to allow for the distinction between (unpatentable) inventions involving computer programs “as such” and (patentable) computer-implemented inventions:

1. A computer-implemented invention is patentable when it produces a supplementary technical effect (i.e. a technical effect going beyond the electrical currents in the computer circuitry), or when it gives a solution for a technical problem.

   The technical character of a computer-implemented invention has been derived from the involvement of traditional “hardware” technology. Without such an involvement, it seemed to be difficult to obtain patent protection.

   The criterion of technical character is crucial in the EPO case law. However, one can note that the delimitation between patentable and non-patentable inventions has appeared to be sometimes rather arbitrary in the EPO case law. A number of decisions are indeed not convincing.

   It has indeed been criticized that the EPO is sometimes too flexible in ‘according’ a computer-implemented invention such a technical character. Therefore, the delimitation between patentable and non-patentable inventions is said to be rather arbitrary.

2. In order to involve an inventive step, a computer-implemented invention must make a technical contribution. A patent cannot be granted for a computer-implemented invention not making any technical contribution.

3. A computer program product can be patented, either on a carrier such as a CD-ROM, or by itself (e.g. if the program is distributed over the Internet). The practical importance of the possibility of such computer program product patents is that the unauthorized sale of such a program amounts to direct patent infringement.

2. The proposal for an EC Directive

2.a. – History

On 20 February 2002, the European Commission launched a proposal for a directive on the patentability of computer-implemented inventions. The objectives of the proposed directive are to resolve the current legal uncertainty in the area of software patents, and to approximate existing national patent law in the EC Member States. The proposed Directive will oblige the Member States to amend and apply national patent law in compliance with its provisions.

The procedure to adopt this proposal is the so-called ‘co-decision procedure’: the EC Commission makes the proposal, whereas the EC Council (in which the Commission is represented) and Parliament decide on the content and adoption of the Directive. Within the EC Council, a qualified majority is required for the adoption of a common position on this proposal.

The Council adopted its first common position on 14 November 2002. On 24 September 2003, the EC Parliament passed a variety of amendments on the text. The Commission, on its turn, accepted some of these amendments, but rejected several more for different (legal and other) reasons.

The Commission presented its position on these amendments to the Council, whereby the latter announced, on 18 May 2004, a new political agreement on the directive.

This new agreement only includes some of the amendments of the Parliament, and even fewer in the legal body of the text. The political agreement on 18 May 2004 was not yet a formal adoption of that proposal by the EU Council (there was no formal vote on this date).

On 2 February 2005, the Legal Affairs Committee of the European Parliament asked the Commission for a renewed referral of the Directive. However, the Commission was not obliged to comply with the Parliament’s request and the Council Presidency was still allowed to schedule the vote on the Directive on a next Council meeting. Despite the Parliaments request, the Council took advantage of this possibility and formally adopted, on 7 March 2005, its political agreement of 18 May.

The proposal has now returned to the EU Parliament for a second reading (the latter hereby not disposing of the same institutional competences with regard to the adoption of any amendments as it did during the first reading).

Remark : The interaction between the European Commission and the Member States of the EC Council:

For a proposal for an amendment by a Member State being included in a common position of the Council, a qualified majority is required.

However, for each amendment of the Parliament being rejected by the Commission, there has to be unanimity within the Council in order for this amendment to be included in the latter’s common position. Therefore, from a legal point of view, the veto of the Commission on a specific Parliament amendment is difficult to be overturned by the Council.

Considering the qualified majority requirement, it may nevertheless occur that a Member State finds itself in a (key) position to decide whether a political agreement will be adopted or not (mostly a larger country). It may be, on the same time, that this Member State wishes to see an amendment of the Parliament, which has been formally rejected by the Commission, to be included in this political agreement.

From a tactical point of view, in some cases, this Member State will therefore be able to overturn the veto of the Commission and require, as a pre-condition for its acceptance on the agreement as a whole, the inclusion of this (rejected) amendment in the political agreement.

This institutional balance has been relevant in the past with regard to the adoption of the former Council political agreements, and may be even more important in the future considering the EU enlargement up to 25 Member States.

2.b.- The current Council position

Firstly, one has to note that all the EU Member States have implemented the EPC into their national laws. All these Member States form therefore part of the (intergovernmental) European Patent Organisation.

Merely from a legal point of view, the European Directive on itself is not capable of changing neither the EPC nor the EPO case law regarding software patentability.

However, once adopted in the national law of the EU Member States, the Directive will provide for the legal basis on which the validity of a European software patent can be revoked. The EU Member States’ courts will indeed be bound to interpret European patents in accordance with the Directive.

One way or another, once the Directive would be adopted, the EPO will therefore have to take into account the case law of the Member States vis-à-vis its own patent granting policy. Such would not be unimaginable pertaining to the problems with the interpretation, by the EPO, of the presence of a technical character of a computer-implemented invention. As said before, this interpretation has not always been justified in every case.

Hereafter we highlight briefly some of the other elements regarding to which the EPO may have to reconsider its policy or not, hereby taken into account the current Council position.

In particular we point out some points of similarity (or divergence) between the 18 May political agreement, as formally adopted by the Council on 7 March 2005, and the EPO case law:

1. The Council defines what would constitute a “computer-implemented invention”:

   ‘Any invention the performance of which involves the use of a computer, computer network or other programmable apparatus, the invention having one or more features which are realised wholly or partly means of a computer program computer program.’

   The EPC, nor the EPO case law, provide for such a binding definition.

2. In order for a software related invention to be patentable, a technical contribution remains required.

   According to the Council, a technical contribution means a contribution to the state of the art in a field of technology, which is new and not obvious to a person skilled in the art.

   This requirement aims to exclude computer programs ‘as such’ and business methods ‘as such’ from patentability, what should be in line with the EPO case law.

3. The Council is of the opinion that a computer-implemented invention belongs to a field of technology (and should therefore be patentable). It nevertheless reflects this opinion in the recitals of the Directive (since 14 November 2002), and not in its legal body (which is contrary to the original Commission proposal).

   By putting this provision in the recitals, the Member States will have the possibility, when and after transposing the Directive into their national law, to consider that a computer-implemented invention does not belong to a field of technology (and is therefore not patentable).

   Such an approach corresponds to the EPO case law in the sense that the latter has not always been accepted (automatically) the presence of a technical character in a computer-implemented invention.

   Within this framework, it is remarkable that the Council does not indicate what computer-implemented invention is technical and which one is not. This approach corresponds to the EPO case law that neither clarifies (sufficiently) from which moment an invention is considered to be technical.

4. According to the Council, ‘Member States shall ensure that a computer-implemented invention may be claimed as a product, that is as a programmed computer, a programmed computer network or other programmed apparatus, or as a process carried out by such a computer, computer network or apparatus through the execution of software.’

   This position is again in line with the EPO case law.

   The Council proceeds that ‘a claim to a computer program, either on its own or on a carrier, shall not be allowed unless that program would, when loaded and executed in a computer, programmed computer network or other programmable apparatus, put into force a product or process claimed in the same patent application.

   Apparently, the Council is not in favor of every possible form of claim on a computer program: only those claims putting into force an element of the invention ‘outside’ the computer program seem to be allowed.

5. The Council reiterates the EPO case law principle that a computer-implemented invention is patentable when it produces a supplementary technical effect (i.e. a technical effect going beyond the electrical currents in the computer circuitry).

One can conclude that the Council envisages a kind of codification of an essential part of the current EPO case law. This implies not only that this case law will be implemented in the national law of the EU Member States, but that its inherent lack of legal certainty will be codified as well.

It is well known that the Council has rejected a lot of amendments voted by the Parliament. Hereafter we outline some of these amendments:

1. The Council did not agree with the Parliament on the issue that whether it has to be acknowledged formally, within the patent law, that the technical character of the invention constitutes a supplementary condition of patentability.

2. The Council rejected the Parliaments amendment stating that data processing is not considered as a field of technology within the meaning of patent law, and that innovations in the field of data processing are not considered inventions within the meaning of patent law.

3. There is the fear that a patent holder could make it impossible for third parties to develop software that is compatible with patented software.

   In order to prevent the patent holder acting as such, the Parliaments suggested for measures such as a statutory exception permitting interoperability.

   The Council, however, preferred the “competition law solution” (abuse of market dominance) by merely mentioning the application of this field of law in the recitals.

   One can question the merits of such a ‘solution’. Competition law indeed applies to the exercise of exclusive patent rights regardless of its specific mentioning in a legal instrument as a Directive. Therefore, the Council did not provide for a (new) measure preventing aforesaid possible abuse of market dominance by a patent holder. One can further underline that competition law implies a set of rules concerning the delivery of evidence and sanctions, which one is different (and more difficult to apply) than it would be the case for a statutory exemption on interoperability.

C. The issue of trivial patents

It is well known that the Open Source Software movement fears that the proposed directive will enable patents on all software and business method patents. It supporters seem therefore to be in favor of a total abolishment of the Directive.

This fear appears to be justified in a vast number of cases. One could nevertheless argue that the question whether software patents should be allowed is less relevant than the question what software patents should be permitted. The latter question refers to the issue of the so-called trivial patents (i.e. patents of a bad quality, failing to involve sufficient inventivity).

The Council devotes some attention to the problem of “trivial” patents by providing in the legal body of the Directive that ‘a computer-implemented invention shall not be regarded as making a technical contribution merely because it involves the use of a computer, network or other programmable apparatus. Accordingly, inventions involving computer programs, whether expressed as source code, as object code or in any other form, which implement business, mathematical or other methods and do not produce any technical effects beyond the normal physical interactions between a program and the computer, network or other programmable apparatus in which it is run shall not be patentable’.

The question of what patents should be admitted is therefore not ignored by the Council.

One can further refer to the intervention made by some delegations, during the 18 May Council meeting, stating that it is necessary for the EU Member States to propose the EPO (and to decide subsequently), within the Administrative Council of the EPO, that the latter reconsiders its inventive step–policy.

Such a measure should not only be able to avoid the risk of trivial patents, which we believe to constitute one of the main problems with software patentability. It also presents the advantage of efficiency: the adoption by the EPO Administrative Council of such a decision, can be done regardless of the existence of the Directive and without the involvement of the EC Commission and Parliament.

One can nevertheless wander whether the latter institutions would welcome such an approach. After all, they may not like to leave the competence in the field of software patents merely to the EPO and the Member States of the European Patent Organization …