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Leith, Philip --- "Comment on published papers for : Software Patents in Europe: meeting the challenges of harmonisation and development in Europe" [1999] DigTechLawJl 3; (1999) 1(1) Digital Technology Law Journal 3

Held on Monday 23rd March 1998, London.

Dr Philip Leith
Reader in Law
School of Law
Queen's University of Belfast
p.leith@qub.ac.uk

Conference papers and details are available at:

http://www.ukpats.org.uk/softpat/en/index.html

1 The Call for Protection

[1] It is clear that there are political pressures growing for the extension of patent rights for computer software in Europe. This conference is a clear statement of this, with the UK's Presidency of the EU being seen as an opportunity to move discussion of protection forward. Certainly, many in the patent world are very keen to have software protected for pragmatic reasons: extra business for both the patent offices - many of whom have suffered from the success of the EPO, and patent attorneys - who may fear the removal of translation fees should the CPC ever take off. As well as these reasons, we can see that the EU has been keen to initiate a new information industry and has seen IPRs as being the essential foundation stone for this industry.

[2] Patent protection is by its nature concerned with industrial application, and we can see that software is now at the heart of industry. The analogue methods which where typical up until the late 1980s have been totally replaced by digital control. Machinery of even the most basic kind is now controlled by chip and instruction - a situation which would have been unforeseeable in the early 1970s when the EPC was being formulated, and the denial of protection for software was set in Article 52(2c).

[3] However, the new industrial reality has been realised by the patenting world, and patents are being granted for inventions which are not software alone, particularly in the EPO through developments at Appeal Board level. It is clear that protection would now be allowed for many of the formative ideas in computing: multi-tasking operating systems, for example, which combine hardware and software techniques to radically improve the effectiveness of the computer. Ingo Kober, President of the EPO, in his paper to the conference noted that some 20,000 software related patents had been granted in the organisation's history and that less than 1% of applications in this area had been rejected due to Article 52(c). Some might say that this is a satisfactory situation, and that software has now been properly integrated into patent protection without unnecessarily extending the nature of the patent system itself.

[4] This position, however, is clearly not the one taken by those initiating this conference. What appears to be the aim is a much larger target - that of protection of inventive ideas in software itself. Such an aim is in many ways understandable, given the size of the software marketplace and its importance to western economies. It is clear that many innovative ideas in software are every bit as inventive and novel as those in more traditional industrial areas, and that we have seen the rise of a new software industry anyway. This new industry, many argue, needs proper protection.

[5] However, software is not simply used in industrial settings: it is everywhere, and the patentability of software may give rise to protection well outside the traditional limits of the patent: in business methods and education to name two. The call for software patentability should therefore be read as a call to rewrite and radically extend the industrial limits of patentability.

2 The Argument for Protection

[6] The argument for protection was made by several speakers at the conference: John Mogg of the European Commission, Arno Koerber of Siemens, Axel Casalonga a European Patent Attorney and Marshall Phelps from IBM.

[7] Phelps noted that the software industry is now enormous: some $95 Billion dollars of revenue and that this figure is still growing, with consistent R&D expenditure by firms of all sizes. With this rise in investment, firms desire protection and require this protection to prove the value of their inventive portfolio. Phelp's argument was basically a business one indicating that software was now so central to economic effort that it deserved protection, but also he pointed to the technical dichotomy: an invention in hardware form can also be produced in software form, but only one is protected. This is true, of course, and is one of the major problems in protection: an idea can be taken from a hardware oriented patent and implemented in software, thus evading protection.

[8] IBM, of course, has a history of attacks from anti-trust legislation and Phelps was keen to note that a `level playing field' was required and that software protection would be available to all sizes of firms. The sceptic might assert that `level playing fields' can sometimes be read as meaning levelled playing fields and that the evidence we have is that few smaller companies do assert their rights over their patents as fully as Stac Electronics against Microsoft.

[9] Casalonga's paper argued that whilst the EPO's Boards of Appeal were reasonably favourable to protection for software-related inventions, there was some considerable differences across Europe which needed harmonising. He suggested that even if the computing element was removed from Articles 52(2c) a technical requirement would still remain (which is essentially the position at present with the EPO). Alternatively, a more radical amendment might be made in the TRIPS Agreement. However, it seems unlikely that this would have the desired effect, since the relevant Article (Art 27) would not affect the other grounds for patentability - ie a technical teaching. Casalonga's paper indicates the confusion in the profession: the EPO and EPI has ensured a profession who can work across geographical borders, and yet the profession find that protection is not equivalent across these borders.

[10] Koerber argued that `software patents are vital for European industry' and that this position has been understood by European industry and the Commission, because these patents are essential for industry to be amongst the leaders in technology. Koerber argued that whilst software patents must come, there should still be the requirement for a technical characteristic of the invention. This, of course, remains the stumbling block: how to allow software patents but not to open the floodgates to protection of all software. As Koerber stated:

`there is a consensus within European industry that software must at least enable the technical solution of a technical problem. Software which does not fulfil that minimum requirement should not be patentable, because it is not considered to have a technical character. "Technical" is still interpreted in the traditional sense - not including information as a force of nature. Otherwise all software would have technical character.'

[11] But this is just the present position - as taken by the EPO Boards of Appeal - and it is difficult to see how much further down this technical road one could travel without enabling protection for all software. Certainly, many software houses who desire protection would not be happy with Koerber's technical requirement.

[12] Mogg's paper argued for the promotion of innovation and support for the Commission's `Information Society', yet apart from arguing for slight changes in the EPC `to improve it and to make it clear that computer programmes are no longer excluded from patent protection' does not really clarify just where the limits of protection will be set. The indication from the paper is that the Commission is listening to the software industry and see the program itself (rather than the program and technical teaching) as being eventually protectable. But does this mean a complete deletion of Article 52(2c) - which includes `schemes, rules and methods of doing business' - or some partial deletion which will allow software patenting but not `rule patenting'? If so, it would be interesting to see how this could be achieved in any textual revision of the EPC.

3 Can Protection be Properly Given?

[13] Amongst the agnostics for software patent protection (and I include myself) there is some worry about the ability to examine software in the same manner in which other application areas are dealt. Obviously, there are problems which arise from the nature of software (and also from the recent EU denial of reverse engineering of software) and from the lack of prior art and the nature of the prior art which exists, but there are also other problems which arise from the non-physicality of software. For although patent rights are theoretically about ideas, dispute resolution is always about physical implementation of these ideas - this leads to particular problems in computing.

[14] Derek Haseldon of the UK Patent Office argued that examiners `already have experience of dealing with software and its associated technology. It would therefore be quite wrong to say that throwing the doors open to software would find Patent Offices completely unable to deal with it'. Certainly, there is evidence that examiners are not so tightly constrained by technology as one might imagine: it is possible for a technically literate individual to move between disciplines (given sufficient training) and this frequently happens in all patent offices. I do not, myself, believe that any problems will arise because of staff abilities. However, Haseldon concentrates upon the problem of searching, and it does appear to be this which will be the main problem if there is to be any problem at all. His solution is not totally convincing, though, suggesting that even if there is a problem with the size and coverage of the search file, there is always the kind of opposition procedure where evidence will come from outside the patent office. It is true that much esoteric prior art finds it way into the system through this procedure, but it is also true that users of the patent system prefer a good search in the first place. One reason why the EPO has been looked upon so favourably by its users is that they can rely to a great extent upon the findings of the search examiner.

4 The Opposing View

[15] The conference contained the view of only one speaker who might be described as providing opposition to the general tenor: Ron McQuaker from a software house and also a past president of the British Computer Society. McQuaker succinctly put the worries of many who have experience of software production, who are concerned about just what is being protected. What, after all, is to be seen as `inventive', and where will the limits be set for patent protection. Also, there is little experience in the software industry in patent protection (although there is evidence that there is little experience of this in many SMEs in traditional industries, too) and there is a worry that infringement may be an expensive and time consuming business. Evidential issues are problematic in patent granting procedures, and there are further worries that these may become greater with software than in chemistry or engineering, say.

[16] The software industry, McQuaker indicates, is different from other industries, and usually there is a very short time lapse between development and marketing yet patent granting can be a relatively slow process (particularly if there is opposition).

[17] Generally, McQuaker argues that `although there are strong pressures to extend patent protection to computer programs as such, the case is not yet made out well enough to convince large sections of the software industry. It is not enough to argue that other forms of invention enjoy patent protection, so why not software.'

5 Conclusion

[18] Though the conference was aimed at taking software protection forward, it is not clear that it has succeeded in doing this. It certainly indicated that there are forces - primarily business, political and economic - which want this protection to be `moved on'. However, there are still worries which exist for all of those who are agnostic about software patent protection which were not really dealt with in the conference.

[19] Certainly, lawyers should be wary of being pushed into believing that there exists a simple alteration to the EPC which will lead to only `relevant' protection, whatever that may be. It seems more likely that any alteration to the EPC will radically amend the balance of monopoly against competition well beyond what its re-drafters intend. The strength of the patent is that it has balanced monopoly rights against the wider public interest in a way which not all IP rights have been able to do, and we should be careful to ensure that this strength remains by not being rushed into providing or extending unwarranted monopoly protection.

[20] We should look forward to more detail in future conferences of this type.