Software patents under the European Patent Convention

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Even though the European Patent Convention and its Article 52 excludes the patentability of programs for computers as such and despite the fact that the European Patent Organisation (EPO) subjects patent applications in this field to a much stricter scrutiny <ref name=LaubThesis>Christoph Laub, International Software Patent Filing: The Problem of Statutory Subject Matter in view of Legal Standards at the EPO-USPTO and Economic Implications, Academic Year 2004/2005, Master’s Thesis (Munich Intellectual Property Law Center (MIPLC)), Retrieved March 21, 2006.</ref> when compared to their American counterpart, that does not mean that all inventions including some software are de jure not patentable.

1 Article 52 EPC
2 Patentability under European Patent Office case law
3 Enforceability before national courts
4 Directive on the patentability of computer-implemented inventions
5 Statistics
6 Further reading
7 See also
8 References
9 External links

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Article 52 EPC

The European Patent Convention (EPC), Article 52, paragraph 2, excludes from patentability, in particular

discoveries, scientific theories and mathematical methods;
aesthetic creations;
schemes, rules and methods for performing mental acts, playing games or doing business, and programs for computers;
presentations of information. (emphasis added)

Paragraph 3 then says:

(3) The provisions of paragraph 2 shall exclude patentability of the subject-matter or activities referred to in that provision only to the extent to which a European patent application or European patent relates to such subject-matter or activities as such. (emphasis added)

Many believe that, for decades, this "as such" has been interpreted as meaning "as long as an idea in the program (and anything in paragraph 2) is claimed", but this interpretation has not been followed by the Boards of Appeal of the EPO, and the EPO has granted many patents, which qualify as software patents under certain definitions of the expression, since the '80s. The expression "software patent" is however not used by the European Patent Office and its Boards of Appeal.

According to Peter Prescott QC (sitting as Deputy Judge in CFPH LLC v Comptroller-General of Patents, Designs and Trade Marks, July 21 2005 [1], paragraph 35), "[t]he reason why computer programs, as such, are not allowed to be patented is (...) because at the time the EPC was under consideration it was felt in the computer industry that such patents were not really needed, were too cumbersome (it was felt that searching the prior art would be a big problem), and would do more harm than good.". According to him, the exclusions do not constitute a genus, or logical class (paragraph 21); they were excluded for policy reasons, and more precisely not all for the same policy reason (paragraphs 30 and 31).

His opinion is in sharp contrast with the case law of the Boards of Appeal of the EPO, according to which the list of exclusions of Art. 52(2) EPC is non-exhaustive and forms a logical group of exclusions that are all either abstract or non-technical (Case Law of the Boards of Appeal of the European Patent Office, Fourth Edition, page 1 [2] - pdf, 2.34 MB).

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Patentability under European Patent Office case law

It should be noted when reading this section, that the EPO decisions are "persuasive, not prescriptive" (Peter Prescott QC , July 21, 2005 [1], paragraph 56) and that the Board of Appeals is part of the EPO (Paragraph 60) and so also "persuasive, not prescriptive". Hence it follows that the case law in this section is not binding on the national patent courts, rather it is a guide to them. "So, although we should pay careful attention to EPO decisions, and the decisions of other Convention courts, we are not bound to follow them blindly." (Peter Prescott QC from Paragraph 56).

Like the other parts of the paragraph 2, computer programs are open to patenting to the extent that they provide a technical contribution to the prior art. In the case of computer programs and according to the case law of the Boards of Appeal, a technical contribution typically means a further technical effect that goes beyond the normal physical interaction between the program and the computer.

Though many argue that there is an inconsistency on how the EPO now applies Article 52, the practice of the EPO is fairly consistent regarding the treatment of the different elements of Article 52(2). A mathematical method is not patentable, but an electrical filter designed according this method would not be excluded from patentability by Article 52(2) and (3).

According to the jurisprudence of the Boards of Appeal of the EPO, a technical effect provided by a computer program can be, for example, a reduced memory access time, a better control of a robotic arm or an improved reception and/or decoding of a radio signal. It does not have to be external to the computer on which the program is run; reduced hard disk access time or an enhanced user interface could also be a technical effect.

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Patentable subject-matter test

Rather recently, a shift occurs in the case law. The "contribution approach", used to assess what was regarded as an invention within the meaning of Art. 52(1) and (2), was dropped. According to the "contribution approach" (see for instance T 52/85), the claimed subject-matter did not concern an invention within the meaning of Article 52(1) EPC when no contribution was made in a field not excluded from patentability. The "contribution approach" was a disguised inventive step assessment. Recent decisions, such as T 258/03 [3], have made it clear that the contribution approach was no longer applicable. Indeed

"The structure of the EPC (...) suggests that it should be possible to determine whether subject-matter is excluded under Article 52(2) EPC without any knowledge of the state of the art (including common general knowledge)" (T 258/03, Reasons 3.1).

It now suffices that a physical entity or activity involves technical means to be considered as an invention within the meaning of Article 52(1) EPC.

But the patentable subject matter test of Article 52(2) and (3) is only the first step towards patentability. Computer programs can also be refused and are often refused on the ground of lack of inventive step, which can be relatively easier to assess in certain cases. As a Board of appeal put it in T 258/03 (Reasons 4.6) in relation to the fact that the "contribution approach" was no longer applicable,

"[we are] aware that [our] comparatively broad interpretation of the term "invention" in Article 52(1) EPC will include activities which are so familiar that their technical character tends to be overlooked, such as the act of writing using pen and paper. Needless to say, however, this does not imply that all methods involving the use of technical means are patentable. They still have to be new, represent a non-obvious technical solution to a technical problem, and be susceptible of industrial application."

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Inventive step test

The broad interpretation of the term "invention" in the patentable subject-matter test, as used by the Boards of Appeal, has come with an adjustment of the case law relating to the inventive step requirement. It has now become clear that any non-technical feature, i.e. a feature from a field excluded from patentability under Art. 52(2), cannot be taken into account for the assessment of inventive step. Likewise, the "state of the art" (used as the starting point from the inventive step assessment) should be construed as meaning the "state of technology" (T 172/03 [4]), and the person skilled in the art is the person skilled in the relevant field of technology (T 641/00 [5]). Fields excluded under Art. 52(2) are not considered part of the technology for the assessment of inventive step.

Thus an expert in marketing or insurance policies for instance cannot be chosen as the fictional person skilled in the art, while a computer hardware or memory management expert may be chosen as the reference fictional person. This means that the mere implementation of a business method on a computer or computer network rarely involves an inventive step, while improving a computer-assisted industrial process or providing a more efficient memory management within a computer may involve an inventive step.

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Relevant decisions

In chronological order (with date of decisions).

T 208/84, VICOM [6] - July 15, 1986
T 26/86, Koch and Sterzel, X-Ray apparatus [7] - May 21, 1987
T 38/86, IBM, Text processing [8] - February 14, 1989
T 52/85, IBM [9] - March 16, 1989
T 158/88, Siemens [10] - December 12 1989
T 769/92, Sohei [11] - May 31, 1994
T 1173/97, IBM [12] (on the "further technical effect") - July 1, 1998
T 931/95, Pension Benefit System [13] - September 8, 2000
T 641/00, Comvik, Two identities [14] - September 26 2002
T 258/03, Hitachi, Auction Method [15] - April 21 2004
T 914/02, Nuclear core loading arrangement [16] - July 12 2005

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Enforceability before national courts

The case law of the EPO Boards of Appeal is not binding on the member states. The case law is not even binding on the first instance departments of the EPO, if not in the same, identical case with the same evidence and legal facts at hand. Different national courts and different Examining Divisions of the EPO acting on different cases may take a different view of patentability, especially under Art. 52(2) EPC. A European patent on a computer-implemented invention, like each and every European patent no matter what it relates to, may therefore be issued by the European Patent Office, but subsequently it may potentially be not upheld in a patent infringement lawsuit or a revocation proceeding before a national court. Likewise, during an opposition procedure before the EPO, reviewing the case at the request of a third party (opponent), the patent may be revoked.

So far there does not appear to have been any case before a national court in Europe where infringement of a software patent has been proved and damages have been awarded. This is in stark contrast to the United States.

However, there have been a few court cases where the validity or not of a patent involving software has been the question, where in some European countries, such as France, Germany and Great Britain a national court has ruled that a particular patent is either valid or that is was not.

In Germany in the case Logikverifikation (13 December 1999), the German Federal Court (German: Bundesgerichtshof or BGH) ruled on a case involving a European patent claiming a computer-implemented invention, namely a "method for hierarchical logic verification of highly-integrated circuits". Going against the run of previous case law, it overruled the German Federal Patent Court (German: Bundespatentgericht or BPatG), and came to the conclusion that the claimed subject-matter did properly meet the 'technical' requirement, was not excluded from patentability and therefore the patent should be allowed. BPatG objections were also overruled in the decisions Sprachanalyseeinrichtung (German BGH, 11 May 2000) and Suche fehlerhafter Zeichenketten (German BGH, 17 October 2001) [17]; but it should be remembered that in the civil law tradition of mainland Europe legal precedent, as well as the legal precedent before the European Patent Organisation, does not necessarily acquire the same formally binding character that it assumes in the common law traditions typical of most English-speaking countries. In fact, more recently the same court has repeatedly upheld the rejection of monopoly claims to computers and programs operating theron, as in Erfassung und Übertragung von Betriebsdaten eines ersten medizintechnischen Geräts an eine zentrale Datenbank [18] as well as in Verfahren zum Betrieb eines Kommunikationssystems [19]. Other recent examples of rejections of programs as unpatentable, this time under British jurisdiction and expressly rejecting the recent decisions of the Boards of Appeal of the EPO, include CFPH L.L.C.[20] and SHOPALOTTO.COM LIMITED[21] which return to the traditional contribution approach.

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Directive on the patentability of computer-implemented inventions

Main article: EU Directive on the Patentability of Computer-Implemented Inventions.

Proposed in 2002, one motivation at least for the controversial draft EU Directive on the Patentability of Computer-Implemented Inventions was to have been to establish common practice for the national courts; and, in cases of doubt as to its interpretation, to have created a requirement for national courts of last instance to seek a ruling from the European Court of Justice. Even though Switzerland for instance is a member of the European Patent Organisation but not a member of the European Union, the EPO also signalled that it would have been likely to adjust its practice, if necessary, to conform with whatever text had finally emerged from the EU legislative procedure,

However, the directive became highly controversial, drawing increasing legislative notoriety to this area of European law. Proponents of the Directive claimed its purpose was to clarify the meaning of Article 52, by consolidating existing EPO practice. Opponents claimed the Directive would dismantle perceived more stringent restrictions against software patenting employed or employable by national courts, and lead to an increased assertion of patents on software Union-wide across the EU. After a history of procedural wrangling, and sustained lobbying and publicity efforts from both sides, the Directive, which had largely been supported by the European Commission and most member-state governments in contrast with their the national parliaments, was overwhelmingly rejected by the European Parliament on 6 July 2005, terminating the legislative procedure.

This failure to reform the exclusion of software followed the failed attempt to delete programs for computers from Art. 52(2)(c) of the convention in 2000 at the diplomatic conference in Munich. At the time the reform was explicitly derogated in order to await the outcome of the consultation process for this EU Directive.

Final interpretation of the law in this area thus continues to be the responsibility of national courts, following national case-law (except when a European patent application is refused or when a European patent is revoked in opposition proceedings before the EPO, in which case the EPO has the final say regarding the interpretation of the EPC). A decisive supra-national authority for European patent law cases could be created under either proposals for the Community patent or the European Patent Litigation Agreement. As of early 2006 these are the subject of a public consultation by the EU Commission, preparatory to new expected legislative activity.

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