Patentability of Computer Software and Business Methods Andrs

+ Patentability of Computer Software and Business Methods Andrés Guadamuz SCRIPT Centre for IP and Technology Law University of Edinburgh

+ Software

+ Software n Software is "a set of statements or instructions to be used directly or indirectly in a computer to bring about a certain result". n These instructions are set out in source code, a set of in logical human-readable instructions coded into computer language. n Object code is the result of a compilation of the source code into machine readable instructions.

+ Source code #!/usr/bin/perl # Public domain. Questions to Jamie Mc. Carthy, jamie@mccarthy. vg use LWP: : Simple; use Math: : Big. Int; my $html = get(`http: //www. utm. edu/research/primes/curios/48565. . . 29443. html'); my($prime) = $html =~ m{<blockquote>([^<]+)</blockquote>}; $prime =~ tr{0 -9}{}cd; $prime = Math: : Big. Int->new($prime); my $binary = ''; while ($prime > 0) { $binary = pack(`N', ($prime % 2**32)). $binary; $prime /= 2**32; } $binary =~ s{^+}{}; local *FH; open(FH, `| gunzip -acq') or die `cannot gunzip, $!'; binmode FH; print FH $binary; close FH.

+ Object code

+ Algorithms

+ Know-how and documentation

+ Software and the law

+ International software protection n Art 4 OMPI Copyright Treaty (WCT): Computer programs are protected as literary works within the meaning of Article 2 of the Berne Convention. Such protection applies to computer programs, whatever may be the mode or form of their expression. n Art 10 TRIPS (ADPIC): 1. Computer programs, whether in source or object code, shall be protected as literary works under the Berne Convention (1971).

+ Software protection in Europe n Software Copyright Directive 91/250/EEC requires copyright law to recognise software as a literary work. n UK LAW: 3. -(1) "literary work" means any work, other than a dramatic or musical work, which is written, spoken or sung, and accordingly includes- (a) a table or compilation other than a database, (b) a computer program; and (c) preparatory design material for a computer program; and (d) a database. n Art 52(2)(c) of the European Patent Convention (EPC) states that “programs for computers” “as such” are not inventions, and therefore are not patentable.

+ Copyright works with dual nature n Software: n Source code – literary work n Recipes: n Recipe book – literary work n Architectural plans: n Drawing, artistic work n Knitting patterns n Written instructions and patterns – literary work and artistic work.

+ Copyright vs Patents EXPRESSION IDEA SYMBOLIC FUNCTIONAL LITERAL NON-LITERAL

+ Why patents?

+ Trouble with copyright: USA n The idea-expression dichotomy is very well used in the United States, this had interesting effects for software protection. n “look and feel” cases, Apple v. Microsoft 821 F. Supp 616 (1993). n Whelan Associates Inc v Jaslow Dental Laboratory Inc [1987] FSR 1 gave a test for the idea-expression dichotomy in software. n Computer Associates v Altai 982 F 2 d 693 (1992) – Abstraction, Filtration, Comparison. n Aharonian v Gonzales, N. D. Cal. , No. C 04 -5190, Jan. 3, 2006) tried to get software “not subject to copyright protection”, but failed.

+ Abstraction, Filtration, Comparison test n Stage 1 - Abstraction - You dissect the code and isolate each level of abstraction. n Stage 2 - Filtration - Examine the structured components at each level of abstraction to determine whether their inclusion at that level was ‘idea’ or was dictated by efficiency, required by external factors or was taken from the public domain (and is therefore unprotectable). n Stage 3 - Comparison - What remains following filtration is a core of protected expression. This must be compared for substantial similarity.

+ Trouble with copyright: UK n John Richardson Computers v Flanders [1993] FSR 497. n Saphena v. Allied Collection [1995] FSR 616. n Ibcos Computers Ltd v Barclays Mercantile Highland Finance Ltd [1994] FSR 275. n Cantor Fitzgerald International v Tradition (UK) Ltd [1999] Masons CLR 157. n Navitaire Inc v easy. Jet Airline Co [2004] EWHC 1725 (Ch).

+ Test in Ibcos n According to Jacob J, the Altai test should not be applied in the UK. n What are the work or works in which the plaintiff claims copyright? n Is each work 'original'? n Was there copying from that work? n If there was copying, has a substantial part of that work been reproduced?

+ Protection of functionality in Navitaire n “Copyright protection for computer software is a given, but I do not feel that the courts should be astute to extend that protection into a region where only the functional effects of a program are in issue. There is a respectable case for saying that copyright is not, in general, concerned with functional effects, and there is some advantage in a bright line rule protecting only the claimant's embodiment of the function in software and not some superset of that software. ”

The road towards patentability: USA n The Abstraction-Filtration. Comparison test has been a failure. n Owners begin to pursue other types of protection. n Diamond v Diehr, 450 U. S. 175, 185 (1981) "everything under the sun that is made by man. " n In re Alappat, 33 F. 3 d 1526 (1994), “useful, concrete, and tangible result. “ n State Street Bank v Signature Financial Group (1998) 47 USPQ 2 d 1596.

+ State Street, business methods and software patents n State Street decision (1998), “The business method exception has never been invoked by this court, or the CCPA, to deem an invention unpatentable”. n The invention in State Street Bank was only possible because of computerisation – it wouldn’t work without a program. n Many ‘software patents’ are actually ‘business method patents’ where the business method is stated in program terms. They also describe methods (algorithms). n Amazon. com’s “one click” patent application is an example.

+ Software patents (USA, 19852005)

+ Typical software patent claim n “A method to be performed by a computer for operating a matching service, comprising: generating, from empirical data, a number of factors corresponding to a like number of functions of one or more variables relevant to relationship satisfaction; approximating the satisfaction that a user of the matching service has in the relationships that the user forms with others; identifying, with the computer, candidates for a relationship with the user by determining an association between the approximated satisfaction and one or more of the factors; and approximating the satisfaction that the user will have in a relationship with a particular candidate. ” U. S. Patent 6735568

+ Charts

+ But… software copyright is useful

+ Software patentability around the world n Art. 27. 1 TRIPS Agreement: “patents shall be available for any inventions, whether products or processes, in all fields of technology”. n All major (in terms of volume) patent offices accept software patentability in one shape or another (US, Europe, Australia, Japan). n Reluctance to apply indiscriminate patentability in various regions.

+ Patentability in Europe n Strict reading of the law leads one to believe that software “as such” is not patentable. n European Patent Office (EPO) Board of Appeals interpreted “as such” very broadly in several cases. n 20, 000 software patents approved by the EPO, 6, 000 applications per year in UK. n There is software patentability in Europe.

+ Technical effect n Case law has decreed that only software that has a “technical effect” can be patented. n The term is not in the legislation, and therefore there is no clear definition of technical effect. n Lack of consistency in its application. n Merrill Lynch [1989] RPC 561: "There must. . . be some technical advance on the prior art in the form of a new result. “

+ Some caselaw

Halliburton v Smith International n Two patents involved, one drill bit and software to design drill bits. n In this ruling, there seems to be a clear technical effect, the software can only be used for specific purpose. n The patent was struck down because it had inadequate disclosure (upheld after appeal). n Could this be the strategy to attack software patents in the future?

The little man test (CFPH LLC Application) “The question to ask should be: is it (the artefact or process) new and nonobvious merely because there is a computer program? Or would it still be new and non-obvious in principle even if the same decisions and commands could somehow be taken and issued by a little man at a control panel, operating under the same rules? For if the answer to the latter question is 'Yes' it becomes apparent that the computer program is merely a tool, and the invention is not about computer programming at all. ”

+ Aerotel v Telco n “[. . . ] despite the fact that such patents 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. " The patent system is there to provide a research and investment incentive but it has a price. That price (what economists call "transaction costs") is paid in a host of ways: the costs of patenting, the impediment to competition, the compliance cost of ensuring non-infringement, the cost of uncertainty, litigation costs and so on. There is, so far as we know, 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. Innovation in computer programs, for instance, proceeded at an immense speed for years before anyone thought of granting patents for them as such. There is evidence, in the shape of the mass of US litigation about the excluded categories, that they have produced much uncertainty. If the encouragement of patenting and of patent litigation as industries in themselves were a purpose of the patent system, then the case for construing the categories narrowly (and indeed for removing them) is made out. But not otherwise. ”

+ Astron Clinica & Others v The Comptroller General of Patents n ". . . I do not detect anything in the reasoning of the Court of Appeal which suggests that all computer programs are necessarily excluded. I have identified the key aspects of the decision which relate to computer related inventions and they undoubtedly criticise the reasoning of the EPO Board of Appeal in each of the "trio" of cases. But the criticism is directed at the "any hardware will do" approach and the return to form over substance with the drawing of a distinction between a program as a set of instructions and a program on a carrier. "

+ Symbian Ltd v Comptroller General Of Patents n "So is this invention no more than the running of the program? Having regard to the earlier authorities the answer has to be that it depends on what the program does and not merely how it does it. The mere fact that it involves the use of a computer program does not exclude it. [. . . ] It is simply inaccurate to label all programs within the computer as software and on that basis to regard them as of equal importance in relation to its functionality. [. . . ] I think that the Hearing Officer took too narrow a view of the technical effect of the invention and was wrong to exclude it from patentability on the basis that it amounted to no more than a computer program. The appeal will therefore be allowed. "

+ Enlarged EPO Board of appeals n Programs n “… for computers, G 0003/08, 12 May 2010. it seems to this Board, although it may be said that all computer programming involves technical considerations since it is concerned with defining a method which can be carried out by a machine, that in itself is not enough to demonstrate that the program which results from the programming has technical character; the programmer must have had technical considerations beyond "merely" finding a computer algorithm to carry out some procedure. ” para 13. 5.

+ Bilski v Kappos (SCOTUS) n This will set the stage for software and business patents for the next few years. n Patent application for a method of hedging risks in commodities trading in energy markets (U. S. Pat Application 08/833, 892). n Rejected by examiner, appealed, lost. n Appealed to Court of Appeals of the Federal Circuit (CAFC), rejected again. n Supreme Court. It will define what processes are patentable, and most soft pats are processes.

+ Problems with software patents

Sui generis? n Why not go the “sui generis” way? n Software seems to have problems with both copyright and patents. n New right that has shorter lifetime, and recognises both the literal and functional aspects of software.

+ Concluding…

+ Questions? a. guadamuz@ed. ac. uk