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IP & Hi gh Technol ogy IP & Hi gh Technol ogy
Law and business for copyright specialists
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IP & Hi gh Technol ogy IP & Hi gh Technol ogy
Searchable archive at www.ipworldonline.com
How harmonised are
international IP laws on
computer-implemented
inventions?
Serving patent specialists worldwide October 2006
Electronic
dreams
www.ipworldonline.com October 2006 | World Focus: IP & High Technology | 3
In this special WORLDfocus supplement produced for the 40th AIPPI Congress,
Patent World examines the scope of patent protection available to electronics
inventions in different jurisdictions across the globe. The BlackBerry litigation,
Apples dispute with Creative Technologies and eBay v MercExchange all
demonstrate that digital age patents are increasingly the subject of high-profile
litigation. We take a look at patentability and enforcement issues in
North America, Europe and the Asia Pacific region.
October 2006
Visit our newly re-launched website
www.ipworldonline.com
D
o
n
t
fo
rg
e
t
!
5 | FROM THE EDITOR
7 | IN A NUTSHELL
8 | BLACKBERRY PART 1 THE
IMPLICATIONS FOR HI-TECH
BUSINESSES
12 | BLACKBERRY PART 2 A UK
PERSPECTIVE ON PARALLEL
PROCEEDINGS
17 | GERMANY: ENFORCEMENT OF
PATENTS FOR ELECTRONIC
INVENTIONS
20 | HOLLAND: NO REPORTED CASES
ON REAL SOFTWARE PATENTS
25 | UK: MACROSSAN INCREASED
PATENTABILITY FOR COMPUTER-
IMPLEMENTED INVENTIONS?
28 | SOUTH KOREA: REVISED GUIDELINES
ON COMPUTER-RELATED INVENTIONS
33 | INDIA: HARNESSING FOREIGN
INVESTMENT
37 | INDIA: STATISTICS
AND CASE STUDIES
41 | AUSTRALIA: COPYRIGHT AND
PATENT PROTECTION FOR
COMPUTER SOFTWARE
44 | CANADA: ARE COMPUTER-
IMPLEMENTED INVENTIONS
PATENTABLE?
48 | A TRANSATLANTIC PERSPECTIVE
52 | US/EUROPE: AN ILLUSTRATED
DISCUSSION OF THE PATENTABILITY
REQUIREMENTS FOR COMPUTER-
IMPLEMENTED INVENTIONS
56 | A EUROPEAN PERSPECTIVE
60 | UK: RECENT DECISIONS ON
COMPUTER-IMPLEMENTED
INVENTIONS
66 | USEFUL CONTACTS
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IP and the New Economy
W
elcome to this special AIPPI 2006 Congress edition of
Patent World. Many of you will be looking forward to
the range of meetings and workshops taking place over
the next few days, but we have decided to focus on the issue of
electronic inventions, and the scope of patent protection available to
them in different jurisdictions. This is the hottest area in IP, and a
sector that we report on with increasing regularity in the pages of
our monthly magazine.
Since the 1980s there has been a steady stream of technological advances revolving around
the use of personal computers, high-speed telecommunications and the Internet. In this
globalised new economy, the protection of intellectual property is seen as an important
defence against the manoeuverings of technically savvy competitors, as well as low cost
manufacturers from the emerging eastern markets.
Our reliance on new-fangled gadgets to go about everyday commercial activities, not to
mention widespread media attention on the machinations of big business, have combined to
bring a much wider range of people into contact with the patent system than was the case 20
years ago. For instance, the BlackBerry litigation had potential implications for an estimated
five million users of the remote email device, and recent hostilities between Apple and
Creative revolved around what is thought to be one of the greatest electronics success stories
in history, the iPod. As for eBay v MercExchange, never has the word troll been so prominent
in legal commentary.
This recent plethora of high-profile cases comes as no coincidence, as digital age patents
were always going to filter through to the litigation arena at some stage, particularly once the
vast financial sums at stake became apparent. Nor is this a passing phase or niche area, as
technology is now heavily integrated with the operations of more traditional industries
think the textile firm that uses the Internet to take orders from customers around the world,
or the engineering company that employs computer-controlled tools to design and
manufacture products.
In the absence of a harmonised global patent system, navigating clients through the
particular nuances of international legal frameworks is part and parcel of the modern IP
advisers role. We hope that this supplement assists with that undertaking, and are delighted
to publish contributions from the worlds three key economic areas: North America, Europe
and the Asia Pacific region.
In so far as a general theme emerges, it is that the scope of patentability is at its most broad
in the US, Europe continues to throw up divergences between the approach of the European
Patent Office and national regimes, and that Asian countries are beginning to tighten up their
own procedures in order to preserve the confidence of foreign investors. When it comes to the
question of enforcement, we explore the differences in approach when dealing with industry
standards and the advent of so-called patent trolls, as well as the tactics that have been used
in respect of cross-border litigation.
I would like to thank the many lawyers from Germany, the UK, Holland, South Korea,
Australia, India, Dubai, Canada and the US who all made contributions to this edition, and
those Patent World editorial board members who provided guidance along the way. I hope you
all enjoy reading it.
Rohit Grover
Editor
www.ipworldonline.com October 2006 | World Focus: IP & High Technology | 5
FROM THE EDITOR
K
www.ipworldonline.com October 2006 | World Focus: IP & High Technology | 7
QUOTES
K
The law applied by the UKPO and the EPO includes a list of certain things that are excluded from patent protection. This list of exclusions
includes mathematical methods, methods for performing mental acts, business methods and computer programs. Patent protection is not available
in these excluded fields as such, but that does not mean patent protection is precluded by the mere fact that an invention is implemented using,
for example, a computer program.
Chris Thornham (SJ Berwin) and Gareth Fennell (Kilburn & Strode), London (page 56)
K
The UK Patent Office and the European Patent Office now have different approaches to determining whether a computer-implemented
invention is patentable even though they operate under essentially the same legislation (section 1(2) of the Patents Act 1977 and
Article 52 of the European Patent Convention (which s1(2) of the Patents Act 1977 enacts) in having two distinct approaches to the
same question there is the risk that the EPO and UKPO may come to different conclusions regarding patentability of the
same invention. Clearly an undesirable feature in a system that is intended to be harmonised.
Simon Cohen & Colin McCall, Taylor Wessing, London (page 25)
K
With the exception of the so-called exclusion of software programs as such from patentability one will be hard pressed to find provisions in
Dutch patent law which specifically relate to electronic inventions. Unfortunately, there are no cases to be reported on real software patents.
Section 101 of the United States Patent Code defines patentable subject matter as a machine, process, manufacture or composition
of matter. The Supreme Court has held that this list was meant to be very broad and covers anything under the sun that was made by
man. Excluded from patentability are things or processes that are not made by man, including laws of nature, natural phenomenon
and abstract ideas. The exclusion of abstract ideas has proven to be the most difficult concept for courts to understand and apply,
particularly in relation to computer-implemented inventions.
The differences between US and EPO patentability requirements for business methods and computer-implemented inventions are as great as ever.
The most controversial area in the electronic art field in Canadian patent practice today is the area of inventions
directed to computer-implemented methods, especially if they can be interpreted as business methods.
Steven Garland, Allan Brett & Kelly Miranda, Smart & Biggar, Ottawa (page 44)
K
Under Australian law, computer software may be protected by copyright and, in some cases, by patent, but computer software
does not always fit the mould of these protection regimes, and conceptual and practical difficulties may arise as a result.
In general, Australia, together with the United States, has tended to take a more liberal approach to the patenting of computer
software than jurisdictions such as the United Kingdom and the European Union.
Michael Pattison, Tom Reid & Jo Hall, Allens Arthur Robinson, Melbourne (page 41)
K
Under Article 2 of the Korean Patent Act, a patentable invention is defined as the advanced creation of a technical idea utilising the laws of
nature. Article 2.2.1 of the revised GEC states that an advance creation of a technical idea utilising the laws of nature is the concrete
implementation of information processing where hardware operates in cooperation with software to process the information. Since concrete
hardware is required, a pure business method, an abstract idea, or mental steps are not statutory subject matter.
Man-Gi Paik and Se-Young Cheon, Kim & Chang, Seoul (page 30)
K
Major changes were made in Indian patent law in 2002. Definition of invention was changed to mean a new product or process involving an
inventive step and capable of industrial application. Barring a few exemptions, any product or process satisfying the requirements of novelty, inventive
step and industrial applicability became patentable. It became easy for software-related inventions to fall within the scope of patentable inventions.
Jose Madan and Dr N Bejoy, Khaitan & Co, Mumbai (page 38)
K
It appears that the position in India is tilted towards the EU approach on the subject, wherein the concept of software
patenting includes that it should be sufficiently technical in nature, or in other words should have technical application to industry,
or should be in combination with hardware.
Rachit Bahl and Rajiv Suri, Rouse & Co International, Dubai (page 35)
In a nutshell:
8 | World Focus: IP & High Technology | October 2006 www.ipworldonline.com
K
THE BLACKBERRY CASE
K Useful tools to use in litigation
W
hilst Research in Motion
litigated against and ultimately
settled with NTP on one side of
the Atlantic, the company and its customer
T-Mobile were actively taking the initiative
in legal proceedings against Inpro on the
other side of the Atlantic (more specifically,
in the UK and Germany, Research in Motion
Limited v Inpro [2006] EWHC 70 (Pat) in
the UK and Cases 2 Ni 30/05 (EU) and 2
Ni 33/05 (EU) in Germany). The factual
background and legal findings are analysed
in A UK perspective on parallel
proceedings (page 12).
This article analyses the key lessons for
hi-tech businesses faced with patent
litigation in Europe and the specific tools
that may be useful as part of the dispute
resolution process when the opponent is a so
called patent troll, or an entity which is
not involved in the relevant business or
technological sector except to the extent
that it owns relevant patents.
Background
Research in Motions (RIM) customer, T-
Mobile, was sued by Inpro for patent
infringement in Germany in January 2005.
RIM sought to move the venue to the UK
with a streamlined and expedited UK
patent nullity action: Laddie J handed
down a landmark streamlining judgment.
German nullity action commenced and
German infringement case defended
(separate actions).
Inpro counterclaimed for infringement and
joined T-Mobile as a Defendant in the UK.
Inpro sought to put off UK trial date and
achieved early (January 2006) hearing
dates in German courts. The parties raced
to achieve the first judgment, RIM in the
UK, Inpro in Germany.
UK trial 29th November 2005 before
Pumfrey J.
UK judgment held patent invalid 2nd
February 2006.
German nullity court concluded patent
invalid on same day.
Appeals pending in the UK and Germany.
Inpros strategy for victory
Inpro (against whom RIM had previously
litigated in the US) is an entity which does
not practise in the internet or telecoms
sector, except to the extent that it owns
licences and litigates patents in that area.
Inpro commenced an infringement action in
Germany, presumably on the basis that here
Inpro considered it had its best chance of
success in Europe.
RIM and T-Mobile recognised that the
claims of the patent in suit were very
broad and ambiguous (in the words of
Pumfrey Jthe patent is a prolix).
As such (and given that the validity
of the German part of the European
patent at issue would not be decided as
part of the German infringement action),
RIM and T-Mobile faced the risk of an
injunction in Germany which would have
shut down the Blackberry web browsing
function there.
For Inpro, slow, protracted litigation
(whilst avoiding any adverse court
decisions) would serve its purposes. In this
case Inpro made a number of attempts to
put off the UK trial. For RIM and its
customers, it was imperative that it
obtained legal and commercial certainty in
Europe as quickly as possible.
The key lessons
A pan-European strategy is key. An early
victory in one or two respected patents
Following the Blackberry case, Nicola Dagg of Allen &
Overy analyses the key lessons for hi-tech businesses faced
with patent litigation in Europe
AUTHORS
Nicola Dagg is a partner in the intellectual
property group of Allen & Overy LLP in London,
and acted for Research in Motion (whilst a partner
at Lovells) in the RIM v Inpro UK case.
IN SUMMARY
While RIM settled with NTP on one side
of the Atlantic, the company and its
customer T-Mobile were taking the
initiative in legal proceedings against Inpro
on the other side of the Atlantic
This article analyses the key lessons for
hi-tech businesses faced with patent
litigation in Europe, and the specific tools
that may be useful as part of the dispute
resolution process when the opponent is
a so called patent troll
Blackberry Part 1:
the implications for
hi-tech businesses
www.ipworldonline.com October 2006 | World Focus: IP & High Technology | 9
THE BLACKBERRY CASE
K
courts in Europe may lead to a successful
overall European outcome.
RIMs European success owed a great deal
to the use of an appropriate and credible
expert witness before a specialist,
technically able English judge.
The English Patents Courts streamlined
and/or expedited trial procedures should
be considered in each case but their use
will need the buy-in of the trial judge.
Special precautions (for example, obtaining
security for legal costs) should be taken
when litigating against a patent troll.
An early victory in one well-respected
national court to give a successful
overall European outcome
European forum shopping issues have been
well rehearsed in previous articles of Patent
World. More recently, the ECJs judgments
in GAT v LuK C-4/03 and Roche C-539/03
mean that the scope for obtaining cross-
border relief in patent proceedings in
Europe is extremely limited.
Nevertheless, when a company is faced
with a patent dispute in one or more
jurisdictions in Europe, a pan-European
strategy is key. In this case, RIM sought
an early victory (namely a decision that the
UK part of the European patent was
invalid) before the well-respected English
Patents Court to lead to a successful
overall European outcome. In this case the
German nullity court concluded the patent
was invalid on the same day as the UK
judgment was first made available to the
parties. To date, no steps have been taken
by Inpro to enforce the remaining national
parts of the European patent. Going
forward, those threatened or faced with
patent litigation (perhaps brought by
patent trolls) may choose a similar
European strategy, namely to take the
initiative and lead the way with nullity
and/or declaration of non-infringement
actions in one or two well-respected and
reliable national patents courts.
European strategies for dealing with
patent trolls
The first aim must be to avoid any dispute
with patent trolls on a global basis. Hi-tech
companies must carefully monitor patent
trolls activities in their technical areas. It
may be useful to liaise with competitors on
their actions in relation to specific trolls or
specific patents.
When potentially problematic patents are
identified full prior art searching should
be carried out so as to equip the company
to make a realistic assessment of the
validity of the patent. Bearing in mind
the importance of expert evidence in
certain jurisdictions in Europe (see
below), the company will be able to take a
firmer view on the validity of the patent
(and on its non-infringement arguments)
if the views of an appropriate expert
witness are sought at an early stage. As
regards validity, the experts views on the
purported inventive concept in the patent
will be key.
The company should check whether it
remains open to it to commence
opposition proceedings in the EPO.
These proceedings have the potential to
give the company a cost effective remedy
(invalidating or limiting the European
patent) across Europe, but the downside
is that obtaining a final decision may take
a number of years.
Other national pre-emptive protective
measures may provide some limited
safeguards. For example, a protective writ
(Schutzschrift) in Germany can stave off
interim (but not permanent) injunctions. It
does not require payment of any court fees
although it should be filed in all potentially
competent courts.
Based on the BlackBerry case (but, of
course, depending on the facts and most
especially the scope and validity of the
specific patent at issue), one attractive
course may be for the company to take the
initiative in Europe and to do its own
forum shopping to establish:
the Court(s) where it is most likely to win;
which of those Court(s) will give the
fastest outcome;
whether a judgment from that Court will
be respected elsewhere;
what national procedural requirements
or tools may be available to focus the
minds of the opponent, for example:
relatively high legal costs in the chosen
jurisdiction;
the risk of having to pay the winners
legal costs;
any requirements to provide security (for
example, by way of a payment into Court)
for any legal costs that might ultimately be
due to the winner.
It may be that, for example, one nullity or
invalidity action before a single, well-
respected national patents court may
suffice. Frequently, a patentee who
has lost (in the sense of having a national
part of his European patent invalidated)
and is faced with having to pay his
opponents legal costs (the usual costs
consequence in the UK) will capitulate
across Europe or at least come to the
table to negotiate a pan-European
settlement relatively promptly.
In developing its pan-European strategy,
the company may decide to commence an
action for a declaration of non-
infringement (as an alternative to but more
often alongside) a nullity action. Further,
in the UK, if the company has suffered
unlawful threats (section 70 Patents
Act 1977) by the patentee, it may decide to
take the initiative by commencing
proceedings to restrain those threats and
seek damages, albeit that such an action is
likely to grow into patent infringement
and/or validity proceedings.
(Some of) the secrets to success in
the UK
An appropriate and credible expert witness
Patent litigation in the UK is generally
before specialist patents judges who are
technically able. The level of technical
analysis in Pumfrey Js 45-page judgment in
the RIM v Inpro case illustrates this point.
A party involved in patent
infringement/validity proceedings in the
UK is likely to rely on expert evidence. The
experts role is to assist the Court
objectively. He must not be an advocate for
his sides case. The expert should have a full
understanding of the technology and it is
very useful if he was involved in the relevant
technical art as at the priority date of the
patent. Having the benefit of expert
evidence from an appropriate and credible
expert whom the judge finds helpful and on
As patents are
available in respect of
both products and
processes, the definition
for a patent is in
conformity with the
international standards
as laid down in TRIPS
K
INDIA
34 | World Focus: IP & High Technology | October 2006 www.ipworldonline.com
www.ipworldonline.com October 2006 | World Focus: IP & High Technology | 35
INDIA
K
On the other hand, the proposed changes
by means of an ordinance caused a national
uproar as it was considered heavily loaded in
favour of multi national companies and
therefore was not in the interests of
domestic industry.
In view of this uproar, the Ordinance was
revised and subsequently passed in the shape
of the Patents (Amendment) Act 2005. In the
modified Act, the Government dropped
proposed changes in relation to software
patents and reverted to original position of
non-patentability of computer programs per se.
The Government, it appears, was trying
to take a middle path between an extremely
liberal approach and at the same time avoid a
very rigid stance on software patentability
by promulgating the Ordinance.
Non-patentability of computer programs
per se under Indian law seems to indicate
that although they are not patentable under
ordinary circumstances, they may be so if
the invention is more than a mere
computer program.
Although the said expression (per se) has
not been defined or clarified anywhere in the
Act, it may be construed to import reference
to a technical advancement that is not
obvious to a person skilled in the field, in
line with the definition of patent,
invention and inventive step under the
Patents Act 1970.
With the lapse of the Ordinance and the
exclusion of computer programs per se
from patentable inventions, it appears that
the position in India is tilted towards the
EU approach on the subject, wherein the
concept of software patenting includes that
it should be sufficiently technical in nature,
or in other words should have technical
application to industry, or should be in
combination with hardware.
MP3 technology and India
MPEG-1 Audio Layer 3, popularly known
as MP3, is a good example of a computer
software with global impact. MP3
technology is widely used for compressing
audio files without compromising on the
sound quality. Patents in this respect are
owned by Thomson Consumer Electronics
and the Fraunhofer Institute, national laws
permitting.
MP3 is also widely used in India. Being
software-based, the patentability of MP3
technology depends much on whether it
falls within the ambit of a computer
program per se. As the Indian position is
unclear on the subject, it seems that
Thomson has not even applied for patent
protection in India.
Copyright protection
This is not to say that computer programs
are not sufficiently protected under Indian
laws. Computer programs have always been
accorded protection under the Copyright
Act 1957 as a literary work.
Indias Copyright Law, as per the Indian
Copyright Act 1957 as amended by the
Copyright (Amendment) Act 1999, fully
reflects the Berne Convention on copyright to
which India is a signatory. In other words,
computer programs per se have been
included and classified as being literary
works which are afforded separate and
exclusive copyright protection. In any case,
anyone who writes a computer program
automatically owns the copyright in it as well.
Copyright v patent
Ss. 2(ffc), 2(o) read with s. 14 of the
Copyright Act 1957 afford protection to a
computer program as a literary work and
bestows exclusive right to:
a. reproduce the computer program;
b. store it (even in electronic form);
c. issue copies of the computer program;
d. make any translation or adaptation
thereof; or
e. sell the computer program or give it on
commercial rental.
The term of copyright protection for a
literary work (including a computer
program) also extends to a period of 60
years after death of the author.
Hence, although copyright laws provide
comprehensive protection for a period of
60 years, one wonders at the choice of patent
protection for computer programs for a
shorter period of 20 years.
Not that patents afford greater
international protection, as the International
Copyright Order, to which India is a
signatory, ensures effective protection
globally. It is also well-known that the
procedure involved in obtaining patents is a
lot more expensive and complicated.
Why patents for computer programs?
There could be several reasons for choosing
patents (in respect of computer programs) over
an existing and effective copyright protection.
One of the cardinal principles of copyright
protection is that it does not protect the idea
itself but only the expression of an idea.
Hence, if a computer program produces a
particular result, it would not be encroached
upon if a rival program produced an identical
result but with a different source code.
By extending patent protection to
computer programs, the patentee would
obtain monopoly over the final product
itself. As a result, even if the source code of a
rival program is completely different, it may
perhaps still amount to patent infringement,
given that the final product is the same.
In effect therefore, patent protection for
computer programs is likely to afford
greater rights over the underlying idea
itself, completely regardless of the manner
of expression.
Furthermore, the defence of fair-use
exceptions may not be available in respect of
computer programs that are patent
protected, which otherwise are available in
respect of copyrighted works.
However, some individuals and companies
obtain patents without the intention of
working them, with the purpose of obtaining
damages or to license them at whimsical rates
infamously known as patent trolls. The
Blackberry case in US (NTP v. RIM) is a case
in hand exemplifying the dangers of
patenting computer programs, when the
patentee does not work the invention itself.
Looking ahead
Over the years India has become an
attractive destination for foreign technology
driven enterprises, and thus it becomes
imperative for the Indian Government to
provide laws and a legal framework which
protects the interests of such global players.
India has taken bold steps by amending its
patent laws and introducing new legislation
which seeks to attain these objectives. It has
noticeably broadened its patent regime in
accordance with its international obligations
and has introduced eagerly awaited changes.
However, there are certain issues such as
the patenting of software programs, which are
still hotly debated. Particularly in the Indian
context, softwares are not exclusive to big
corporations anymore. Computer programs
are now used in all kinds of businesses,
irrespective of their size, and are also
popularly used by individuals. Such ubiquitous
use has inseparably linked computer softwares
with business development and individual
needs, and certainly calls for more clarity in
the near future.
Effectively, the Indian position seems to be
tilted towards not allowing patents for
computer software, although on paper,
softwares that are not computer programs per
se are patentable. At the same time, the
question as to the patentability of softwares is
yet to be tested before the Patents Office or
even the Indian courts. With the upsurge in the
number of patent applications (by IT
companies) filed in the past few years, the issues
are bound to come up in the near future. K
www.ipworldonline.com October 2006 | World Focus: IP & High Technology | 37
INDIA
K
IN SUMMARY
Examination guidelines issued by the US and
European Patent Offices largely rely upon
recent decisions made by the courts in the
respective countries. With only a few patent
related case laws emerging out of Indian
courts, the examination guidelines followed
by the Indian Patent Office also largely
depend on some of these decisions
There was a feeling that to promote the
flourishing Indian software industry more
flexibility and a broader definition should be
provided in Indian law so as to encompass
software-related inventions along with other
inventions which were not patentable in the
Indian context earlier, within the scope of
patentability. Hence, major changes have
been made to Indian patent law since 2002
Although there exist some limitations as
regards the patentability of software-related
inventions in India, there is a wider scope for
software-related inventions at present
compared to earlier, and that is very much
reflected in the increase in filings in respect of
software-related inventions being witnessed
AUTHORS
Jose Madan (below left) is an IP professional with
over three decades of experience in IP practice.
Patents are his speciality. He works with Khaitan
& Co in Mumbai as the head of its IP practice. He
is a member of AIPPI and APAA.
Dr N Bejoy (below right) is an IP professional in
the IP department of Khaitan & Co. He holds a
PhD from the Indian Institute of Technology,
Mumbai. Before joining Khaitan & Co, he worked
as an examiner of patents and designs at the
Indian Patent Office.
S
oftware plays a major role in almost
all electronic devices and
electronically-controlled devices.
Views on patentability of software or
computer-implemented inventions in the
fields of mobile telephony, production or
conversion of audio / video formats, audio
visual data storage methods and media vary
from country to country. Software
programs per se are excluded from the
scope of patentable inventions in the Indian
context, as is the case with most of the
countries in the world. Generally software
programs are subject matter for copyright
protection. Software-related inventions are
unique in their abstraction unlike other
products or process-related inventions. This
makes it difficult to present them in a
language that clearly defines their scope.
With the myriad of possible combinations
of software and hardware components, it has
been an uphill task for lawmakers worldwide
to evolve concrete guidelines regarding the
patentability of such inventions. Attempts
made in the past to change the law in order
to avoid exclusion of the so called
deserving inventions in software from the
landscape of patentable inventions have
either resulted in very broad interpretations
or attracted resentment from the public.
Varying degrees of flexibility in the laws
relating to patentability of software-related
inventions do exist in different jurisdictions.
The examination guidelines issued by the
US and European Patent Offices largely rely
upon certain significant decisions made by
the courts in the respective countries in
recent times. With only a few patent-related
case laws emerging out of the Indian courts,
the examination guidelines followed by the
Indian Patent Office also largely depends
upon some of these decisions.
Legal provisions
Under the legal provisions that existed
earlier in India, invention was defined as
any new and useful art, process, method or
manner of manufacture; machine, apparatus
or other article; or substance produced by
manufacture. In order that an invention was
patentable under these provisions the art,
process, method or manner of doing
something were to be one of manufacture.
It was difficult and practically impossible to
bring a software-related method within the
ambit of manufacture. It was also difficult to
bring software-related inventions in general
within the scope of machine, apparatus or
other article. The other article had to satisfy
the requirement of manufacture. Therefore,
the legal provisions that existed earlier did
not leave much scope for patentability of
software-related inventions.
After India signed the WTO Agreements,
a series of amendments were introduced in
Indian laws relating to patents during the
transitional period so as to bring the legal
provisions in line with the stipulations in the
TRIPs Agreements. There was a general
feeling in India that in order to promote the
flourishing Indian software industry, more
flexibility and a broader definition should be
India:
statistics and
case studies
India:
statistics and
case studies
K Increase in filings for
software-related inventions
Jose Madan and Dr N Bejoy of Khaitan &
Co analyse key statistics and case studies
relating to the patentability of software-
related inventions in India
K Increase in filings for
software-related inventions
Jose Madan and Dr N Bejoy of Khaitan &
Co analyse key statistics and case studies
relating to the patentability of software-
related inventions in India
provided in Indian law so as to encompass
software-related inventions along with other
inventions which were not patentable in the
Indian context earlier, within the scope of
patentability. There was also a feeling that a
broader software patent regime would
benefit the Indian software industry which is
one of Indias major strengths.
Major changes were made in Indian patent
law in 2002. Definition of invention was
changed to mean a new product or process
involving an inventive step and capable of
industrial application. Barring a few
exemptions, any product or process satisfying
the requirements of novelty, inventive step
and industrial applicability became patentable.
It became easy for software-related inventions
to fall within the scope of patentable
inventions. As expected, with these changes in
the law, there has been a substantial increase
in the number of applications in respect of
software-related inventions filed in India.
Statistics
A discussion based on statistics in respect of
software-related inventions will make the
point clear. Graph 1 is a statistical
representation of patents granted in India
for the period July 2005 July 2006.
It is seen from this graph that software-
related inventions take fourth place in the
number of patents granted, mechanical,
chemistry and electrical/electronic-related
inventions being the first, second and third
respectively.
Graph 2 gives in a nutshell the number of
patents granted in India in respect of
various types of software-related inventions
during the period July 2005 July 2006.
Graph 3 gives the various types of claims
granted in India during the period July
2005-July 2006, in respect of software-
related inventions.
Graph 2 shows that the major patent
grants in software in India are in the fields
of telecommunications, computer networks,
encoding and decoding, mobile telephony,
computer systems etc. The findings in
Graphs 2 and 3 also establish that almost all
types of software-related inventions are
patentable in India if they are presented in
the form of methods, systems, apparatus,
devices or combinations thereof.
Graph 4 presents leading patent holders
in respect of software-related patents in
India during the period July 2005- July
2006. It is quite clear from the figure that
major multinationals in the electronics
industry are interested in protecting their
software-related inventions in India.
Case studies
In order to give more insight into what
kinds of software-related claims are
acceptable and unacceptable to the Indian
Patent Office, a few typical case studies are
made below :
Goldenchart Co was granted patent No.
198592 in respect of an asset management
advice system. The system comprises a
database storing purchase and sale signals
relating to assets to be traded, and a data
processing means for producing a suitable
investment scenario when users property
information is input from a user terminal via
a prescribed communication means,
referring to the purchase and sale signals to
send management advice data based on the
investment scenario to the user terminal and
performing an asset transaction in
accordance with a response to the
management advice data from the user
terminal. Although the invention is basically
a business method, presentation of it as an
asset management advice system was
acceptable to the Patent Office.
Siemens was granted patent No. 195440
in respect of a method for testing system
components of an object-oriented program.
The system components include classes
and/or modules of the object-oriented
program and the method comprises the
steps of: replacing one of a called method
and function by a substitute function so as to
resolve dependencies of the respective
method and function; representing the
substitute function by an automatic status
unit, wherein the automatic status unit is
encapsulated in a separate class and
interactively allows an input of commands;
and generating, automatically, the substitute
function wherein the substitute function
includes the same call parameters and an
identical return value as the replaced one
of a called method and function. A method
for testing system components of an
object-oriented program would not have
K
INDIA
38 | World Focus: IP & High Technology | October 2006 www.ipworldonline.com
Graph 1: Fieldwise distribution of
patents granted in India
F
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v
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n
Number of Patents
Graph 4: Major patent holders in respect of software related inventions
S
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Graph 2: Area-wise distribution of
software-related inventions
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w
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v
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t
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Number of Patents
Graph 3: Various types of claims
allowed in respect of software
related inventions
T
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Number of Patents
www.ipworldonline.com October 2006 | World Focus: IP & High Technology | 39
INDIA
K
been patentable in India under the
earlier provisions.
Philips Electronics was granted patent
No. 194663 in respect of an interactive
entertainment apparatus operable to
output sequences of image frames. The
apparatus comprises a user-influenced path
through a branch structured narrative, a
source of image frame data for all branch
structure paths of the narrative; branch
storage means for data defining the
narrative branch structure; user operable
input means; branch selection means
coupled to the branch store and operable to
determine when the narrative reaches a
branch point and to select one of two or
more image frame sequences from the
image frame data source in dependence on
the user input; an output for the selected
image frame sequences; and narrative
memory means operable to capture and
subsequently recall one or more
predetermined information items from the
narrative in response to user input, with
the or each predetermined information
item having a respective information value
associated with it; wherein the branch
selection means is further operable to
detect the or each user-directed recall of an
information item, and for at least one
branch point of the narrative, the branch
selection is made in dependence on the
information values of said recalled
information item or items. Although
computer programs per se are not
patentable in India, the above claim was
allowed as it is directed to an interactive
entertainment apparatus.
A national phase application of WO
03/052623 made by Glassgow Jinan in
respect of a system for drafting a patent
application and assessing technological
information was not found acceptable. The
system comprises at least one input device
connected to at least one computer and at
least one output device, wherein at least
one user is capable of inputting
information via the at least one input
device to the at least one computer and
viewing information on the at least one
output device, and wherein the at least one
computer is capable of storing, modifying,
outputting, and retrieving information in
communication with the at least one input
device and at least one output device; and
software installed and capable of running
on the at least one computer for
automatically generating a diagrammatic
representation of an invention, wherein the
diagrammatic representation includes a
hierarchical component categorisation of
the technical components of the invention
based upon the user inputted information
and outputting a viewable diagram of that
categorisation and for automatically
generating a document for filing as a
patent application, including specification
and claims, based upon the user inputted
information and additional text-based
detailed information that is organised
consistent with the diagram; wherein the
hierarchical component categorisation
includes at least one key component and at
least one subcomponent related thereto.
The main reason for the refusal was that
the system was essentially a computer
program per se.
A national phase application of WO
0201407 made by Lieterman in respect of
a method for automatic searching and
synchronous content display of a
predefined set of documents in list form in
a displaying device was also found
unacceptable. The method comprises
encapsulated text extracts of various
length taken from the documents or
synonyms of said text extracts in a natural
language form, said text extracts or their
synonyms stored as data objects in a
persistent data store, creating detailing
relations that define couples of the said
objects wherein one object more precisely
states a meaning of the other object,
mapping said detailing relations by
attributes of the objects containing
references to longer encapsulated text
The extension of
the term of copyright
as a result of the
US-Australia free
trade agreement
was not without
controversy
businesses which
do not carefully
consider existing
software patents
prior to going to
market risk
allegations of
infringement
The differences
between US and EPO
patentability
requirements for
business methods and
computer-implemented
inventions are as
great as ever
T
he public can readily identify
electrical/electronic inventions in
consumer devices such as mobile
telephones, digital cameras and personal
music players. Behind such devices lie
associated systems and processes for storing,
transmitting, reading and processing digital
data. Indeed, more generally, computer
systems and software support almost all
aspects of everyday life. This article reviews
the differing approaches of the UK Patent
Office (UKPO) and the European Patent
Office (EPO) when assessing patentability of
inventions in these electrical/electronic fields.
We also look at some of the English court
cases (in appeals from UKPO decisions, and
when validity has been litigated between
parties). UK law regarding patentability in
the electrical/electronic field is changing. It is
not a revolution, but evolution, case-by-case.
This article also highlights English litigation
regarding standards and requests by litigants
for a declaration that a given patent is not
essential for practising a standard.
What protection is available?
The law applied by the UKPO and the EPO
1
includes a list of certain things that are
excluded from patent protection. This list of
exclusions includes mathematical methods,
methods for performing mental acts,
business methods and computer programs.
Patent protection is not available in these
excluded fields as such, but that does not
mean patent protection is precluded by the
mere fact that an invention is implemented
using, for example, a computer program
2
.
Although the UK law is framed to have the
same effect as the European provision
3
, the
two patent offices have developed their own
approaches to the question of whether an
application relates to one or more of the
exclusions. This exclusion question is most
often encountered when a patent application
is concerned with a software or computer-
implemented invention.
(a) The EPO
As a general rule, a
patent will be granted by the EPO if the
invention is a non-obvious technical solution
to a technical problem. In the landmark Vicom
4
case in 1986, the EPO reasoned that decisive
is what technical contribution the invention as
defined in the claim when considered as a whole
makes to the known art. In this case an
invention defined in terms of a mathematical
method was not allowed, but a re-phrasing of
the invention in terms of a method of digitally
processing images using the mathematical
method was allowable. Built on this
foundation and following two later
significant EPO decisions of PBS Partnership
5
in 2000 and Comvik
6
in 2002 the EPO has
developed a methodology which incorporates
the exclusion question into the assessment of
non-obviousness. This methodology has been
followed in one form or another in various
EPO decisions
7
and prohibits non-technical
features of the invention from contributing to
inventive step.
In PBS Partnership, regarding a new
pension benefit scheme, it was found that
the regime of patentable subject matter is only
entered with the programming of a computer
system for carrying out the invention. The
inventive step thus has to be carried out from the
point of view of a software developer or
application programmer having the
knowledge of the concept and structure of the
improved pension benefits system and the
underlying schemes of information processing.
With no invention at the software developer
level, the programmed computer system was
found to lack an inventive step.
Comvik related to the concept of allocating
two user-selectable identities to the subscriber
identity module of a mobile telephone system
so that costs could be conveniently distributed
between business and personal use. It was
found that selectively distributing the costs for
service or private calls does not make a
contribution to the technical character of the
K
UK/EUROPE
K Regimes compared
Chris Thornham and Gareth Fennell look at the
different approaches of the UKPO and EPO when
assessing the patentability of electronic inventions
AUTHORS
Chris Thornham(below left) is solicitor
specialising in patent litigation at SJ Berwin LLP
in London. He is a member of the Editorial
Board of Patent World and acts for a variety of
clients, commonly in co-ordinated multi-national
disputes. Before training as a lawyer Chris gained
a Natural Sciences Degree (Physics) from
Cambridge University.
Gareth Fennell (below right) is a UK chartered
patent attorney and European patent attorney
practising at Kilburn & Strode in London. He has a
Natural Sciences degree from Oxford University,
an MSc in computer science from the University
of London, and worked as a software engineer
before joining the patent profession.
IN SUMMARY
Computer systems and software support
almost all aspects of everyday life. This
article reviews the differing approaches of
the UK and European Patent Offices when
assessing the patentability of inventions in
these electrical/electronic fields
UK law regarding patentability in the field
is changing, and some of the English court
cases are also discussed
The article also highlights English
litigation regarding standards and
requests by litigants for a declaration
that a given patent is not essential for
practising a standard
A European
perspective
56 | World Focus: IP & High Technology | October 2006 www.ipworldonline.com
invention. Although the application indicated
that an object of the invention was to
eliminate inconveniences caused by
distributing costs for service and private
calls, it was decided that this was not
considered to be a technical problem and
that to arrive at the technical problem this
object needs to be reformulated as being to
implement the GSM system in such a way as
to allow user-selectable discrimination between
calls for different purposes .In fact the
technical professional would, in a realistic
situation, receive knowledge of the cost
distribution concept as part of the task
information given to him. The claimed
invention was found to lack an inventive step.
The EPO has not formally defined the
term technical and is unlikely to do so.
EPO cases give guidance that certain areas
are non-technical (e.g. economic concepts
and practices, and business, actuarial and
accountancy systems) but, in the absence of
a positive definition, there is scope for
arguing a particular feature has sufficient
technical character. The current approach
applied by the EPO requires the
identification of a non-obvious solution to a
technical problem, where the problem is set
for a technical professional and may
contain novel non-technical features of the
claimed invention. This means that in cases
where a technical implementation on a
computer system of an innovative non-
technical scheme is routine, the EPO will
find the application to lack an inventive step.
In other words, if there is only innovation at
a non-technical level then one should expect
the EPO to refuse the patent application.
(b) UK law and developments regarding
patentability
Formerly, the UKPO applied a technical
contribution test which had its roots in Vicom
and a 1997 Court of Appeal case, Fujitsu
8
. The
UK approach, unlike the European approach,
tried to keep the exclusion question separated
from the assessment of inventive step. If an
invention made a technical contribution, it
was patentable, otherwise it was not. There
were no other court cases and the UKPO gave
little guidance on what constituted a technical
contribution. The view was that in some
instances borderline cases might be granted
by the UKPO where refusal might be
expected at the EPO.
On 29th July 2005 following Court
judgments in CFPH
9
and Halliburton
10
the
UKPO issued a practice notice
11
on the
exclusion question. The notice indicated that
the UKPO examiners would apply a new
approach, based on CFPH, to determining
whether or not a patent application is
directed to an exclusion. This approach is a
two-step one, which is summarised in the
notice as follows:
1. Identify what is the advance in the art
that is said to be new and not obvious;
2. Determine whether it is both new and not
obvious under the description of an
invention
12
in the sense of Article 52
EPC which section 1(2) of the Act reflects.
As a test, this can be likened to the Vicom
approach if the advance is an improved
mathematical method (or other exclusion)
then the application is not allowable, but if it
is an improved method of digitally
processing images (something not on the list
of exclusions) then the application is
allowable. There is, however, a danger that
the test can be misapplied (even by patent
office examiners) by not looking for an
advance achieved by the invention as a whole,
but looking at the portion of the invention
that is said to be new and non-obvious and if
this portion
relates to an
exclusion (e.g. in
the way that a
mathematical formula
could be said to) then
refusing the application.
Following the introduction of the new
approach, anecdotal evidence is that
applicants have experienced a toughened
stance from the UKPO. Several appeals
from UKPO refusals have been heard by
the court since July 2005
13
. The judges have
not always referred to the UKPO test, and
some have preferred to apply the exclusion
question in terms of the more established
technical contribution approach
14
. It was
nearly a decade ago when the exclusion
question was considered by the Court of
Appeal in Fujitsu. However, the Court of
Appeal heard two appeals on 2nd August
2006: Aerotel Ltd v Telco Holdings Ltd
(appeal from a finding of the trial court on
summary judgment that the patent was
invalid) and Macrossans application (appeal
of the refusal of the UKPO and court to
allow the patent application). The Court of
Appeals decisions are awaited.
In the Aerotel case, the granted patent GB
2178177 B1 related to a telephone system,
whereby a customer could make long-
distance calls by dialing a centre
(presumably on local rates) that would check
the customers credit (after the customer had
given a personal identification number) and
would then connect the customer long-
distance if he/she had credit. The stated
advantage was said to be that a customer
could make long-distance calls from hotels
without incurring hotel charges or could use
a call-box without the need for a great deal
of change. Telco Holdings Ltd and others
denied infringement and brought an
application for summary judgment (heard
3rd May 2006) that the patent was invalid
and should be revoked. It was accepted that
no new equipment was used for the system,
but Aerotel said a patentable invention
nevertheless lay in the new system. The
court found the patent invalid and granted
summary judgment (which required a
finding of no real prospect of success at trial
for Aerotel on the issue of
patentability/validity). The judge concluded
the system was no more than a new way of
paying for telephone calls and was an
unpatentable business method. The
willingness of the Court of Appeal to hear
the appeal, despite a summary judgment
finding, suggests the Court of Appeal may
not have agreed fully with the legal
principles the judge applied.
The Macrossan case relates to the refusal
by the UKPO of an application for an
automated method for acquiring the
documents necessary to incorporate a
company. The computer-implemented
system interrogates the user and gathers the
information necessary to complete the
forms. The UKPO said it related to excluded
subject-matter, namely a mental act, a
method of doing business, or a computer
program as such. The court gave its decision
on 3rd April 2006. Like the UKPO it said
the subject-matter of the application was not
patentable. The court said the alleged
invention was no more than a method of
performing a mental act (systematic
interrogation to gather data) on a computer
and made no technical contribution.
UK/EUROPE
K