11 November 2008

Patents: Software Protection after Symbian and Bilski

Possibly the most important intellectual property decision of this year from the point of view of British business will be the Court of Appeal's decision in Symbian Ltd v Comptroller General of Patents [2008] EWCA Civ 1066 (8 Oct 2008). In that judgment the CA affirmed Mr. Justice  Patten's decision to allow an appeal from the hearing officer, Mrs. Chalmers, who had upheld the examiner's objection that an application for a patent for 
"a method of accessing data in a computing device and, in particular to a method of accessing data held in a dynamic link library in the computing device. The present invention also relates to a computing device controlled by the method"
was excluded from patentability by s.1 (2) of the Patents Act 1977 on the ground that it related to a computer program "as such" (see Symbian Ltd. 30 July 2007). 

Why Symbian is important
The commercial significance of the CA's decision is that it opens the way for patents for at least some software implemented technologies in the UK. The economy of the UK (like that of most of Western Europe and North America) is orientated towards services rather than manufacturing and the services sector in the UK at least are not well served by the intellectual property system.   The reason for that is probably historical.   The intellectual property system was developed in the 19th century when our economy and those of our European neighbours were based on manufacturing.  The temporary monopolies that we now call patents were needed to ensure a return on the investment in research for and development of such new products and manufacturing processes.   Similarly, monopolies of the use of a brand name were needed to assure the source of goods.   It was not until the Trade Marks (Amendment) Act 1984 that it became possible to register trade marks for services (then known as "service marks") in the UK.

Excluded Matter
The European Patent Convention was negotiated in the 1970s when the economic profile of most of the contracting parties was very different from what it is today.   Most European countries (at least on the continent) had healthy manufacturing industries. Computers were very heavy and expensive things that were owned by central and local governments, universities and fairly big companies, telecommunications were a nationalized industry and the financial services industries were much less sophisticated than they are today.   It is therefore not surprising that art 52 of the Convention contained the following exceptions from patentability:
"(a) discoveries, scientific theories and mathematical methods;
(b) aesthetic creations;
(c) schemes, rules and methods for performing mental acts, playing games or doing business, and programs for  computers;
(d) presentations of information."

Though this provision is mitigated by paragraph (3) which provides:

"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."  
After a series of decisions in England and Europe culminating in Macrossan (Aerotel Ltd. v Telco Holdings Ltd and Others [2006] EWCA Civ 1371 (27 Oct 2006) those provisions were interpreted by examiners (in the UK at least) in such a way that it seemed virtually impossible to get or keep a patent for a business method or software implemented invention.

The Position in America
The comparable American legislation contained nothing like art 54 (2).   § 101 of the principal Act (35 USCA 101) provides simply:
"Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title."
In the high water case of State Street Bank & Trust Co. v Signature Financial Group Inc. 149 F 3d 1368 (Fed. Circ. 1998) the Court of Appeals for the Federal Circuit stressed that the question of patentability should focus on whether the essential characteristics of patentability are met. In that case before the Court, claim 1 was directed to a machine programmed with "hub and spoke" software which produced a "useful, concrete, and tangible result." The Court held that to have been sufficient to justify a monopoly (see my article of 20 Sep 2005 "Software Patents Overview" on the IP/IT-Update website).  

Bilksi
The decision in State Street prompted a large number of software and business method patents not all of which were easy to justify.   On 30 Oct 2008 the judges of the Court of Appeals for the Federal Circuit (sitting en banc) upheld the decision of the Board of Patent Appeals and Interferences refusing a patent for a method of hedging risk in the field of commodities trading in Re Bilski.    This case, which contains an interesting concurring judgment and an important dissenting judgment from Circuit Judge Rader, is too long to analyse in this post but the upshot is that there is a two prong test for patentability:
"an applicant may show that a process claim satisfies § 101 either by showing that his claim is tied to a particular machine, or by showing that his claim transforms an article. See Benson, 409 U.S. at 70. Certain considerations are applicable to analysis under either branch. First, as illustrated by Benson and discussed below, the use of a specific machine or transformation of an article must impose meaningful limits on the claim's scope to impart patent-eligibility. See Benson, 409 U.S. at 71-72. Second, the involvement of the machine or transformation in the claimed process must not merely be insignificant extra-solution activity. Seafloor, 437 U.S. at 590."
Applying that test to the invention the majority of the judges held that the method was not a patentable invention within the meaning of § 101.

What does this mean for our Clients?
These two decisions in the same month appear to have shrunk the Atlantic so far as software and business method protection for the services sector is concerned.   To consider the consequences I am organizing a seminar entitled "Software Protection after Symbian and Bilski" at Martins Building on Water Street in Liverpool on 5 February 2009 between 14:00 and 17:00.   I will speak and chair the meeting. Robin Bartle of WP Thompson will also speak and I have invited Intellect, the NCC Group, the UK Intellectual Property Office and Kirwans to contribute speakers. The likely cost is £75 + VAT which is less that half the cost of a similar seminar organized by the CIPA forLondon and Bristol in the next few weeks.   I have SRA and BSB accreditation to award up to 2 1/2 hours CPD points.   Anyone wishing to register an interest should complete our online form.

2 comments:

Donna Barnes said...
This comment has been removed by the author.
Donna Barnes said...

I think it would be great to have a patent for every design, application or software to be publish in the market, at least developers and owners will have the assurance that there will be a data protection system.