Posts filed under 'Software Patents'
There are many positives from the Court of Appeal judgement which
the FFII feels send a clear message to those who are seeking to
harm innovation and free competition by extending patentability
to computer programs and business methods In particular, the
FFII is reassured by the following points of the judgement of
Lord Justice Jacob, who gave the judgement of the Court):
1) The Court made a point of stating that patent granting authorities
should not be bowing down to pressure from patent applicants
to extend the boundaries of what should and should not be patentable:
“19. it by no means follows that because of pressure from applicants,
the grant of patents for excluded categories should be allowed
or that the excluded categories (particularly business methods
and computer programs) should be construed narrowly. Just as
with arms, merely because people want them is not sufficient
reason for giving them.”
2) The Court noted the problems of the liberal patent policy in
the USA, recognising in paragraph 20 of the judgement that:
(i) ‘despite the fact that [patents for excluded subject matter]
have been granted for some time in the US, it is far from certain
that they have been what Sellars and Yeatman would have called
a “Good Thing.”‘;
(ii) having a patent system does have ‘a price’ and therefore
it does not always follow that more intellectual property rights
is necessarily beneficial;
(iii) “there is, so far as [the court is aware], no really hard
empirical data showing that the liberalisation of what is patentable
in the USA has resulted in a greater rate of innovation or investment
in the excluded categories”;
(iv) as Peter Prescott QC did in 2005 in the CFPH High Court decision[^1],
that ‘[i]nnovation in computer programs … proceeded at an immense
speed for years before anyone thought of granting patents for
them as such’;
(v) that the extension of patentability in the USA has led to ‘a
mass of litigation’ that has created ‘uncertainty’; and
(vi) with a slight sense of English sarcasm, that this might be
acceptable if the purpose of the patent system was the ‘encouragement
of patents and patent litigation as industries in themselves’ — when
we all know that this not meant to be the purpose of the patent system.
3) The Court confirmed that there is a ‘positive intention and
policy’[^2] to exclude the items listed in Article 52(2) of the
EPC.
4) The Court commented that ‘decisions of the EPO Boards of
Appeal are mutually contradictory‘[^3] (emphasis added).
It is very rare for an English court to be as open as the Court of
Appeal has been in highlighting the need for the EPO to consider
clarifying its position by encouraging an internal referral
to what is known as the ‘Enlarged Board of Appeal’. The Court also
notes how the EPO’s internal examination guidelines have changed
over time on the patentability of computer programs and how the
current guidelines are inconsistent[^4]. It is worth noting
that the wording of the EPC has not changed yet the interpretation
of the EPO has over time. The FFII believes that the shifting sands
of the internal examination guidelines, as highlighted by the
Court, is a natural outcome of having bodies such as the EPO
and its own Boards of Appeal making decisions which are not divorced from the administration of the granting of patents; objectivity becomes blurred and it is all too easy for ‘customers’ interests’ to take priority over the interests of European citizens.
5) The Court, discussing the EPO Boards of Appeal approach to
construing the computer program exclusion in Article 52(2)
as narrow as possible and in a way which divorced the set of programming
instructions from the reality that a computer program, to function,
must be on some form of media and/or executed on a computer, concluded
that such approach was the ‘wrong’ approach because it effectively
defeated the purpose behind the exclusion:.
The FFII believes that this reasoning is consistent with the
need to ensure that an international convention is interpreted
to give effect to its purpose. The framers clearly intended to
include computer programs in a set of non-patentable subject
matter. The Court of Appeal has sent out a clear message that the
word game played by the EPO and the Boards of Appeal is an attempt
to defeat such purpose.
6) The Court, to aid consistent decision making and, as a re-statement
of existing English law, stated that there should be a 4 stage
test:
“(1) properly construe the claim
(2) identify the actual contribution;
(3) ask whether it falls solely within the excluded subject matter;
(4) check whether the actual or alleged contribution is actually
technical in nature”[^6].
However, the Court stressed that, “[t]he fourth step — check
whether the contribution is “technical” — may not be necessary
because the third step should have covered that.”[^7].
This statement is very important because it clearly implies
that the Court believes that, if something is solely within excluded
subject matter (e.g. a computer program, including standard
apparatus used to make the computer program function — as earlier
said by the Court), it should not pass the third test, and therefore,
there is no need to consider the fourth test. This is important
because it is effectively saying that excluded subject matter
‘as such’ does not have a ‘technical’ effect for the purposes
of patent law. This statement sends out a clear message against
the EPO’s very broad brush approach of classing just about anything
as having a ‘technical effect’ which then, using its logic, makes
the subject matter patentable rather than excluded. This is
restated in paragraph 47 of the judgement when the Court comments:
“a contribution which consists solely of excluded matter will
not count as a technical contribution.” (emphasis added)
However, we do feel the Court’s judgement would have been better
if:
1) It had focussed more clearly on the uncertainty surrounding
hybrid inventions involving patentable subject matter and
excluded subject matter under Article 52(2); and
2) It had considered the CFPH statements regarding the supremacy
of the English Courts in respect of the interpretation of the
EPC and acknowledged the constitutional issues with the judicial
function of the EPO and the EPO Boards of Appeal (including the
Enlarged Board of Appeal[^8].
[^1]: IN THE MATTER OF Patent Applications GB 0226884.3 and 0419317.3 by CFPH L.L.C. [2005] EWHC 1589 (Pat)
[^2]: Per Paragraph 21
[^3]: Per Parargaph 25
[^4]: Per Paragraph 115
[^5]: Per paragraph 31, emphasis added. See also the comments at paragraph 113.
[^6]: Per paragraph 40
[^7]: Per paragraph 46, emphasis added
[^8]: See paragraph 56 of the CFPH judgement.
November 20th, 2006
The Court of Appeal’s Judgement in Macrossan and Aerotel is now up at:
http://www.bailii.org/ew/cases/EWCA/Civ/2006/1371.html
The Court of Appeal upheld the rejection of Macrossan but overturned the rejection of Aerotel in the High Court.
Rufus Pollock of FFII-UK said: “We’re obviously delighted that the Court of Appeal upheld the rejection of Macrossan. To have failed to do so would have opened the floodgates for the patenting of business methods as well as overturning much of the recent case-law in the area. The implications of the Aerotel decision are less clear and we are still evaluating the Court’s reasoning. It is certainly a great pity that Aerotel settled with Telco before the hearing so nobody from Telco challenged this representation in court with the result that it was left to the Patent Office to discuss the patent.
One noteworthy aspect of the judgement is the lengthy ‘appendix’ to the decision in which the Court discusses recent EPO jurisprudence. The conclusion to be drawn from the summary is stark: current EPO practice is utterly confused and some recent decisions have reduced the Article 52 exclusion of software programs from patentability to such airy thinness as to render it utterly ineffective.”
For background information see our previous press release:
http://www.ffii.org.uk/archives/32
October 27th, 2006
This Friday the UK Court of Appeal is expected to hand down its judgement in the cases of Macrossan’s Application and Aerotel vs. Telco. These cases are of vital interest to anyone concerned with the ongoing debate over the patentability of software and business methods in the UK and Europe. Both of the cases at issue concern patents in the area of software and business methods and so the appeal presents a historic opportunity for the UK courts to reaffirm the clear exclusion of these areas from the scope of patentability as well as to send an important signal to legislators and patent officials at the European level.
Rufus Pollock, Director of FFII-UK said, “We hope that the Court of Appeal will uphold the decisions of the judges at first-instance who found against the patents in both cases. We also hope that they will take this opportunity to clearly reaffirm the exclusions of software and business methods that exist in the European Patent Convention. This is particularly important for two reasons. First, innovation in the software and business sector both here and across the EU must be protected from the damaging effects that patents would engender if allowed in these areas. Second, given the degree of controversy surrounding these matters in recent years it is crucial that Courts make it clear what the situation is.”
** End of Press Release **
Contact Information
Rufus Pollock
Director, FFII-UK
+44 (0)7795 176 976
rufus.pollock@ffii.org.uk
Notes for Editors
- Software and Business Method patents in Europe
- The patents in question
- Aerotel
- Macrossan
- About the Foundation for a Free Information Infrastructure
1. Software and Business Method patents in Europe
Computer programs and “rules, schemes, and methods for doing business” are specifically excluded from patentability under Article 52 of the European Patent Convention (1973), “to the extent that [an application] relates to such subject-matter or activities as such”. See http://www.european-patent-office.org/legal/epc/e/ar52.html
The rule is “fudged” (Sir Robin Jacob, Stephen Stewart Memorial Lecture, 1996), to allow hardware when programmed to be patentable in some circumstances - if the application can be shown to represent a contribution to an area of technology beyond that areas specifically excluded.
The United States goes much much further, allowing patentability for anything which produces a “concrete, useful and tangible result”. This rules in the patenting of new programming techniques, computer implementations of business methods, and even it seems this week, new accounting strategies for tax minimisation (see http://www.iht.com/articles/2006/10/19/business/norris20.php)
The European Patent Office goes a little further than UK courts, generally allowing patents on new computer methods if there is an identifiable “technical” improvement. In contrast to the UK, such improvements need not be related to technological areas beyond those excluded by Art 52. Thus a general patent application for a faster method for calculating square-roots (Gale’s Application), which was ruled out in the UK, would probably be allowed by the EPO; whilst a new way of the highlighting the active player in a football video game, allowed in a recent EPO decision, would probably not be allowed by the UK. The UK approach can be seen to give software developers a “safe harbour” of subject matter, where they can make improvements without having to worry about possible patent risk.
In 2002 the European Commission launched a Directive to confirm the EPO approach across the whole of the EU. The Directive was strongly supported by many of the world’s largest software and industrial companies, and much of the patent legal establishment. But the Directive was strongly opposed by a majority of individual developers and smaller software companies who felt that patents would be a much greater threat than any benefit, and that large companies would hold all the trumps if it came to court cases. Some of the campaign and testimony sites from this time can still be found on the internet, such as:
The proposal was ultimately rejected overwhelmingly by the European Parliament in July 2005 (by 648 votes to 14)
Following the rejection of the European Directive, there has been a spate of cases about software and business method patentabilty in the UK High Court, mostly challenging UK Patent Office decisions to reject applications. The High Court has consistently confirmed the UK approach, and upheld the Patent Office in every instance.
However, High Court decisions do not establish binding precedents on other High Court cases while decisions by the Court of Appeal do bind lower courts. This week’s decision will be the first time the Court of Appeal will have ruled on the questions of software and business method patentability since 1997, and are expected to give a definitive statement of the UK law in this area - either supporting the run of existing UK court decisions; or decisively striking out in a new direction.
2. The patents in question.
In both cases, the patents in question relate to new software operating on conventional, known hardware; where the novelty rests entirely in the business or administrative logic being implemented.
Aerotel’s Patent
Aerotel’s patent is GB 217 1877, based on the state of technology in January 1985: http://v3.espacenet.com/textclam?DB=EPODOC&IDX=GB2171877&F=0&QPN=GB2171877
It claims the making of telephone calls using prepayments. The essential idea is to have a telephone exchange which keeps a record of clients’ credit. Clients can then dial into the exchange, and have their calls completed for as long as they have credit to pay for them.
It is accepted that the method would have been readily implemented using an electronic control exchange of a kind that had been available in Britain from the 1970s. Only the novel business logic programmed into the exchange is new.
Aerotel has sued Telco for patent infringement. However, in the High Court, Judge Lewison granted Telco’s application for summary dismissal, and revoked the patent, finding that it did indeed describe no more than a method of business. ([2006] EWHC 997 (Pat))
Macrossan’s Application
Macrossan’s application is EP1346304 / GB 2388937 / application GB314464.9: http://v3.espacenet.com/textclam?DB=EPODOC&IDX=GB2388937&F=8&QPN=GB2388937
It has been described by one software contractor as an absolutely conventional “fill-in-the-blanks website that picks the right docs based on guided answers, then fills them in appropriately and disgorges them wherever required”. The only new idea was to apply this to the documents needed to incorporate a company.
Macrossan’s patent application was rejected by the UK Patent Office. In the High Court, Macrossan appealed against this rejection, but the appeal was dismissed by Judge Mann, finding that although not specifically a business method, it was a method of performing a mental act by a computer. ([2006] EWHC 705 (Ch))
Macrossan has also applied for a European Patent, which could still be granted for countries in Europe outside the UK. The European application has not yet been decided by the EPO.
Summary
It seems likely, on current caselaw, that both patents would probably today be rejected by the EPO as not containing anything novel beyond new administrative or business logic, with solely administrative and business consequences. But the approach taken by the Court of Appeal will be seen as an important commentary on EPO practice, and may significantly affect future developments.
At stake is not only what the Court of Appeal decides, but how it decides it. Even if both patents are dismissed, software developers will be looking particularly closely at whether the Court reaffirms the UK’s traditional more restrictive and more literal reading of Article 52, or whether its argumentation follows the more permissive reading of the EPO.
About the Foundation for a Free Information Infrastructure
The Foundation for a Free Information Infrastructure (FFII) is a not-for-profit association registered in twenty European countries, dedicated to the development of information goods for the public benefit, based on copyright, free competition, open standards. More than 850 members, 3,500 companies and 100,000 supporters have entrusted the FFII to act as their voice in public policy questions concerning exclusion rights (intellectual property) in data processing. FFII-UK is the UK branch of the FFII.
October 26th, 2006
Harmut Pilch has a full summary of the EPLA situation but here are the key excerpts:
Background
The draft European Patent Litigation agreement of 2004 has accumulated strong momentum thanks to support from the European Patent Office (EPO), the patent departments of large companies (= “industry”), the patent officials of the national ministries (= “the member states”) and by the European Commission’s Directorate General of the Internal Market under Commissioner Charlie McCreevy. EPO president Alain Pompidou says the text of the agreement is ready for rubberstamping by the national parliaments. Some national parliaments, such as Germany’s lower chamber (Bundesrat), have already done so. Input from the European Parliament is required only to a very limited extent.
Yet the spearheads of the patent establishment in the European Parliament, MEP Klaus-Heiner Lehne (EPP, DE) and Sharon Bowles of (ALDE, UK), both legal professionals involved in the patent litigation business, have tried hard to push their groups, which together form a majority, into supporting a motion which gives uncritical backing to the EPLA and to the plans of Commissioner Charlie McCreevy.
The socialist, green, left and and eurosceptic parties have filed motions which strongly criticise the EPLA, thereby triggering nervous reactions from Lehne, including a press release in which he calls his adversaries “diehard anti-innovation MEPs”. During the Strasburg session week of late September, the Lehne-Bowles proposal was cut down from 17 to 3 articles which again came under pressure from within their group. Helpful amendment proposals received support among many MEPs in these groups.
Immediate Situation
However, an unexpected turn came on the 3rd of October, when the socialist group, in view of the possibility that Lehne might still achieve a majority for a bad resolution, gave up its strong position and entered a compromise that prevents the worst. According to this compromise resolution, the parliament basically supports the EPLA and asks for the EU to “join the EPC”, but calls for “significant improvements” to the current EPLA text. Meanwhile, efforts are going on to improve this position by tabling amendments, which would turn the current weak green light into a weak red light.
As things stand now, on thursday, October 12, the European Parliament will vote on three different proposals for a resolution on this subject (at a mini-plenary in Brussels), of which the EPP-ALDE-PSE proposal is set to win with a high margin. The deadline for filing new motions is over. However, amendments to existing motions can be filed until Monday, October 9 (the week of the vote) by either party groups or trans-partisan groups of at least 37 MEPs, and some very helpful amendments indeed have chances of being filed next monday and of receiving majority support next thursday.
What you can do
For the last few weeks, the FFII has maintained a continuous relatively strong presence in the European Parliament. There were always at least 2, sometimes more, activists working in the Parliament to support EPLA-critical efforts. You can contact the team by writing to europarl-help [at] ffii [dot] org.
If you can afford to spend a few hours of your time, please find out at http://www.europarl.europa.eu who your MEP is and send her a polite and concise mail where you inquire about the current situation and ask whether she would be willing to meet you or someone from the FFII team to explore the possibility of supporting the current trans-partisan amendment effort. There is a sample fax about the EPLA motion which you can use if you wish.
If you’re from the UK and are going to contact (have contacted) your MEP please notify uk-help mailing list so that we make sure we don’t badger the same overworked MEP twice.
Main Talking Points
- The EPLA would raise the costs of most patent lawsuits over the status quo, which disadvantages SMEs. For a small to medium-scale litigation, the overall costs will amount to EUR 97,000 to EUR 415,000 according to EPO estimates (and the EPO is pro-EPLA, so the actual numbers may well be much higher). Some SMEs who hold patents would not be able to afford to enforce them, and SMEs who are threatened with patent litigation wouldn’t be able to defend themselves. The current system of country-by-country litigation may not seem perfect, but it’s much more affordable to SMEs than the present proposal for the EPLA.
1a. The EPLA makes patent lawsuits prohibitively expensive for those who publish software on the internet. An Irish programmer could be sued in Cyprus, because the alleged infringement takes place everywhere where the Internet is, including Cyprus, and EPLA says that the lawsuit can be brought to a court at the location of infringment.
It’s a question of judicial independence: Lehne-Bowles propose to create a new court system that would be under the control of the same people who also govern the European Patent Office (ministry officials in charge of patent policy), while the alternative motion emphasizes the need to put the EPO under independent judicial control.
If judicial independence is compromised as proposed, software patents will become legally enforceable in Europe on a large scale. The way the EPO decides is known because of the EPO’s Boards of Appeals’ decisions; if you take more or less the same material and a very similar construction plan and build a machine, what comes out at the bottom of the machine is more or less the same. And the way the ministry officials in charge of the EPO (who would also be in charge of the EPLA court) like to define patent policy is known because they worked out the EU Council’s proposed software patent directive, which the EP then rejected. The EPLA is all about replicating the EPO structures.
The EPLA would strengthen the EPO system at the expense of the EU. The EU would probably become involved in some fashion, but it would be better for the EU to wait until the time is ripe for a true Community patent.
It’s about democracy itself. The EPO system is undemocratic and operates without parliamentary control. That’s why it should not be strengthened (or replicated) in its present form. Also, the draft EPLA would give ministry officials legislative authority on the rules of procedure, but in every country in the civilized world, the procedural code for the courts is defined by lawmakers (i.e., parliaments).
By supporting the Lehne-Bowles motion, the EP would support commissioner McCreevy’s new patent initiative almost unconditionally (and undeliberately), while the alternative motion voices constructive criticism and positions the Parliament for future debates on the right course of action.
Some major companies have even expressed various reservations concerning the proposed EPLA. Nokia, which holds more than 10,000 patents of its own, has said that the EPLA is too much in favor of certain patent holders and jeopardizes innovation.
October 5th, 2006
The Gowers review of Intellectual Property has announced details of its call for evidence:
“At the Enterprise Conference on 2 December 2005, the Chancellor of the Exchequer announced that, as part of the Pre-Budget Report 2005 package, he was asking Andrew Gowers to lead an Independent Review to examine the UK’s intellectual property framework. Mr. Gowers will be assisted by a small secretariat of civil service officials. The review will report to the Chancellor, the Secretary of State for Trade and Industry and the Secretary of State for Culture, Media and Sport in Autumn 2006. The Gowers Review of Intellectual Property launched its consultation phase with a formal call for evidence on 23 February 2006.”
“The call for evidence consists of a letter from Andrew Gowers, accompanying an issues paper, which provides details of the scope of the Review and sets out a number of general and specific issues on which we would particularly like to gather evidence. It also invites respondents to highlight other issues for consideration by the Review.”
Click here for more information.
February 27th, 2006
FFII and NoSoftwarePatents.com have won this years “Outstanding Contribution to Software Development” award at CNET’s premier technology industry event held at the Hilton Park Lane in London!
Here’s what they said:
“FFII and NoSoftwarePatents.com joined forces last year to campaign against the European software patent directive, which many feared would open the doors to an increasingly litigious marketplace in which small businesses would struggle to survive. In July this year, the European Parliament unexpectedly rejected the directive, a victory which can be attributed to the tireless work of this alliance.”
More details here
September 28th, 2005