The Idea of Software Patent Protections

By Dr. Aunya Singsangob

3. European Union (EU)

a) European Patent Convention (EPC)

The EPC was signed on October 5, 1973, and became effective on October 7, 1977. The EPC, established by the Council of Europe, was opened to European countries both inside and outside the European Economic Community (EEC). The EPC takes a first but significant step in unifying patent law within the European Community. The EPC establishes a single procedure for granting patents for subsequent registration in the national member states and establishes certain standard rules governing those patents.

Regarding the computer-software patent, Article 52 of the EPC excludes from patentable subject matter computer programs "as such." (14) Thus, it has been understood that the exclusions to patentability in Article 52 referred to activities that did not aim at any direct technical result but were rather of an abstract and purely intellectual nature.(15) The original Guidelines of the European Patent Office (EPO) clearly state that "[i]f the contribution to the known art resides solely in a computer program then the subject matter is not patentable in whatever manner it may be presented in the claims." However, in 1985, the EPO Guidelines were revised, stating that "although computer programs per se are unpatentable and this situation is not 'normally changed when a program is loaded into a known computer', if 'the subject matter as claimed makes a technical contribution to the known art, patentability should not be denied merely on the ground that a computer program is involved in its implementation." The EPO has proposed to remove limitations on patentability in Article 52 of the EPC. (16) Many free software organizations oppose the EPO proposal for the computer-software patent. (17)

4. The United States

a. Patent Act (Title 35 U.S.C.)

A patent may be granted to inventors of new, useful, and nonobvious inventions.(18) The primary objective of the patent system is to encourage innovation and commercialization of technological advances. The patent system offers an incentive to inventors to publicly disclose their invention in exchange for the right to exclude others from making, using, or offering for sale the same invention throughout the United States for a limited time. The patent also allows inventors to prevent the importation of such the inventions into the United States during the patent's term. (19) The term of patent protection is 20 years from the date on which the patent application is filed in the U.S. Patent & Trademark Office (USPTO). A noncommercial federal entity, the USPTO, is one of fourteen bureaus in the Department of Commerce. (20)

(I) Patentable Subject-Matter Requirements

The USPTO grants a patent when an inventor can prove that an invention fits one of the general categories of patentable subject matter provided by U.S. Patent Act. Section 101 of the Patent Act indicates that any person who discovers or invents any new and useful (1) process, (2) machine, (3) manufacture, or (4) composition of matter, or any new and useful improvement these things, may obtain a patent on his discovery or invention. Any of these categories is considered as a "useful art."

The term "process" means a "process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material.(21) " A "machine" can be a device, mechanism, or apparatus. Although a method of doing business, by itself, cannot be patented, (22) an effective business procedure implemented by a computer has been upheld as patentable as a useful art (a process implemented by an apparatus).(23) In response to widespread criticism of the large number of business-process patents issued in recent years, on March 29, 2000, the USPTO issued an action plan as part of their Business Method Patent Initiative. This is designed to reduce invalid and ridiculous patents being issued. The USPTO initiative entails industry outreach and improving the quality of the patent-examination process. (24)

The U.S. Supreme Court has ruled that there are three categories of subject matter for which no one may obtain patent protection: (i) laws of nature, (ii) natural phenomena, and (iii) abstract ideas. (25) Besides demonstrating that the invention is within the subject matters covered by 101, the patentee must demonstrate that the subject matter meets the requirements of (i) novelty, (ii) utility, (iii) nonobviousness, and (iv) the application includes an adequate description of the invention. (26)

The first requirement of patentability is that the subject matter must be "new," (27) although absolute newness is not required. An invention is considered new unless it was used by others in the United States or patented or described in the United States or foreign country before the applicant created it, or was used or sale more than a year prior to the date of application for a U.S. patent. (28) The second requirement is that the subject matter must be "useful." (29) To be useful, an invention must attain the result claimed by the inventor in his patent disclosure. The invention must work and accomplish the purposes set forth in the specification.(30) The third requirement of patentability is that the subject matters be "non-obvious." (31) An invention is obvious if the differences between the subject matter to be patented and the prior art are such that the alteration as a whole would have been obvious, at the time the invention was made, to a person having ordinary skill in the pertinent art. Finally, in order to obtain a patent, an inventor must file an application with the USPTO. (32) The application must include a section called the "specification," which must contain a detailed description of the invention along with written claims. (33)

(II) Is Computer Software Patentable Subject Matter?

Although patents have been used to protect computer-hardware systems and are increasingly used to protected computer-software innovations, it is questionable whether computer software is patentable subject matter. James P. Chandler noted that since there has been no uniform definition of what constituted "computer software," most people have assumed that computer software is analogous to an algorithm, which is considered unpatentable subject matter. (34) Chandler noted that the typical inventor of a patentable invention proceeded from conception of the invention to articulation of the invention into some tangible form. By contrast, the invention of a computer program is different from historical inventions as it is intangible at conception and remains intangible even after reduction to practice. (35) The problem is that computer software is developed by using principles of mathematics and logic. This has lead some to argue that all computer programs are mere algorithms, and since all algorithms are mathematical, computer programs must be unpatentable as principles of nature. (36)

In Gottschalk v. Benson, (37) computer software was held to be unpatentable as a mental process, a pure idea, or inherently a mathematical formula. It has been thought to be intangible for patent purposes-that there was nothing physical about its signals. The output of computer programs has also been considered to be in the form of pure numbers. However, viewing computer software as a physical, electrical process operating in a physical matrix of digital circuitry opens the way to be considered as patentable subject matter. (38)

Part 3

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(14) European Patents Convention art. 52. "(1) European patents shall be granted for any inventions which are susceptible of industrial application, which are new and which involve an inventive step. (2) The following in particular shall not be regarded as inventions within the meaning of paragraph 1: (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. (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).

(15) Donald M. Cameron and Smith Lyons, Software-Related Patents: European Patent Convention, at http://web.idirect.com/
~dcameron/epc.htm (last visited Apr. 14, 2002).

(16) Id.

(17) Many documents relevant to the opposition to software patent in Europe are available at http://swpat. ffii.org.

(18) 35 U.S.C. 101 & 103.

(19) Id. 154 (a)(1).

(20) Id. 154 (a)(2).

(21) Id. 100 (b).

(22) Hotel Sec. Checking Co. v. Lorraine Co., 160 F. 467 (2d Cir. 1908).

(23) Paine, Webber, Jackson & Curtis v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 564 F. Supp. 1358 (D. Del. 1983).

(24) Sheila M. Ryan and John M. Bagby, An Idea Whose Time Has Come: Patenting Software and Business Methods, BUS. L. TODAY, Jan.-Feb. 2001 at 37.

(25) Diamond v. Diehr, 450 U.S. 175, 185 (1981).

(26) 35 U.S.C. 112 para. 2.

(27) Id. 102.

(28) Id. 102(a), (b).

(29) Id. 101.

(30) JOHN C. LAUTSCH, AMERICAN STANDARD HANDBOOK OF SOFTWARE BUSINESS LAW 64 (1985).

(31) 35 U.S.C. 103.

(32) Id. 111(a)(1).

(33) Id. 112 para. 2.

(34) James P. Chandler, Patent Protection of Computer Programs, 1 MINN. INTELL. PROP. REV. 33 (2000).

(35) Id. at 34.

(36) Id. at 35.

(37) 409 U.S. 63 (1972).

(38) LAUTSCH, supra note 30, at 59.