Business Method And Computer Implemented Inventions

The EPO standards for patenting computer software are a mess. Although more than 20,000 software patents have been issued by the EPO, it is still unclear what the EPO's standard is for software patentability. Moreover, it is unclear whether political pressures will force the EPO to severely narrow its issuance of software-related patents.

Article 52(1) of the European Patent Convention provides that a European patent shall be granted for any inventions that are susceptible of industrial application, that are new and which involve an inventive step, and (in accordance with Rules 27 and 29 EPC) are of a "technical character". Technical character means that the invention must relate to a technical field, must be concerned with a technical problem and must have technical features in terms of which the matter for which protection is sought can be defined in the patent claim.

Article 52(2) of the European Patent Convention expressly prohibits patents for methods of doing business, mathematical methods, presentations of information and programs for computers. However, Article 52(3) EPC limits the restriction only to the extent to which a European patent application relates to such subject-matter or activities "as such". Thus, software patents claims must recite a "technical effect" or have a "technical character" .

What does it mean to have a "technical effect" or "technical character? That's not clear. In the 1995 pension benefits system case, the Board of Appeal held that apparatus claims have per se technical character, but that even so: (a) an invention cannot be patentable where the "real contribution" over the prior art is non-technical; and (b) method claims describing only business methods are not patentable even if technical features are mentioned in the claims. In 1997 the Board of Appeal held that a computer program is considered to have a technical character if it causes, when run on a computer, a technical effect which may be known in the art but which goes beyond the "normal" physical interactions between program and computer. Such effect may, for example, be found in the control of an industrial process or in the internal functioning of the computer itself. All of this, of course, leaves one's head spinning.

In 2002 the European Union Council of (national competitiveness) attempted to clarify the meaning of Article 52 by releasing a draft proposal that would make software patentable if and only if it had "technical effect". In September 2003 the European Parliament amended the draft to distinguish between specific kinds of physical processes (patentable), and abstract information-processing processes (unpatentable), and prohibited patents prevent interoperability between computer systems. In May 2004, the European Union Council resolved to submit a compromise version, which overturned most of the Parliament's amendments, and permitted patenting of computer-implemented inventions as long as they have a "technical character", whatever that is. The Council formally approved the resolution in March 2005, and apparently the Parliament can only overturn it by an absolute majority of members. Most recently however, May 19, 2005, the European Parliament has been calling for changes to the software patent directive that would effectively preclude software patenting per se. A parliamentary plenary session is expected to vote on the changes in July.

In the meantime there has been some discussion of whether the Treaty on Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement could force EPO to accept broad software patents. TRIPS Agreement is a constituting document of the World Trade Organization (WTO). The answer is probably not. Although TRIPS Art. 27(1) requires that:

"(...) patents shall be available for any inventions, whether products or processes, in all fields of technology, provided they are new, involve an inventive step and are capable of industrial application".

the EPO will likely be able to circumvent that requirement by defining algorithms as falling outside the scope of "inventions" or defining them as being non-technical and thus not in a "field of technology".

In any event it is unclear how effectively EPO software patents could be enforced. Although there are cases in which a national court of an EPO member country found a software patent to be valid , there appear to be no reported cases before such courts where infringement of a software patent was proven and damages were awarded.