AIPPI Oct06

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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
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fo
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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
FROM THE EDITOR
K
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.
Tjeerd Overdijk, Steinhauser Hoogenraad Advocaten, Amsterdam (page 20)

K
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.
David Cochran, Jones Day, Cleveland (page 48)

K
The differences between US and EPO patentability requirements for business methods and computer-implemented inventions are as great as ever.
Dr Rachel Free, Olswang, London (page 55)

K
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
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
A pan-European strategy is key. An early

victory in one or two respected patents courts
in Europe may lead to a successful overall
European outcome
10 | World Focus: IP & High Technology | Ocotober 2006 www.ipworldonline.com

K
THE BLACKBERRY CASE
whose evidence the judge can rely is
probably the most important practical
part of the recipe to success before the
English Courts.
By way of example, the following are
quotations from Pumfrey Js commentary
on RIM and Inpros expert witnesses
(Professor Handley and Professor
Eisenstein respectively):
Professor Handley
a careful witness...
had been involved in the art at the
relevant time and was deeply involved
in the process for the establishment
of technical standards in the
internet world.
I found him intelligent and helpful.
From time to time he did obviously think
quickly, but
Professor Eisenstein
Professor Eisenstein has a very
distinguished list of qualifications and he
has been president of the IEEE
He is an electrical engineer. He is not a
computer scientist
The words hired gun were not used but
that was plainly the flavour of the
accusation.
The whole of his cross-examination on
this topic should be read. It is very
unsatisfactory. So too was his general
behaviour under cross-examination. This
has nothing to do with his demeanour. It is
a complaint about the way he answered
questions. He was a remarkably obstructive
witness, and repeatedly quibbled.
In this case, given Professor Handleys
understanding of the technology, the judge
was able to place considerable reliance on the
expert evidence put forward by RIMs expert.
The possibility of using the UK streamlined
procedure
English civil procedure rules provide for the
possibility of using a streamlined procedure
(paragraph 10 of the Patents Court Guide)
in an appropriate patent action. The basic
streamlined procedure allows for:
a trial within six months of starting the
action;
trial to last for no longer than one day;
no disclosure (discovery);
no experiments;
limited cross examination at trial,
but variations to these procedural
limitations are possible, for example, limited
disclosure or a two day trial.
RIM chose to invoke the streamlined
procedure in its UK nullity action against
Inpro. Inpro protested and in the early
stages of the action Laddie J (then the
most senior patents judge in the High
Court) handed down a landmark judgment
[2005] EWHC 1292 (Pat) ordering that
the action be streamlined with the trial to
last two days. The judge also ordered an
expedited trial (in other words,
irrespective of the streamlining issue the
case was one where the trial should be
heard as expeditiously as possible (in this
case within approximately six months of
the action being commenced). Later on in
the action, Pumfrey J showed that he was
more sceptical about the use of the
streamlined procedure and held that this
particular case (which by now included an
infringement counterclaim against both
RIM and T-Mobile, together with patent
amendment proceedings) was not
appropriate for streamlining. Nevertheless,
conscious of the commercial significance of
this case (there were, at the time, 375,000
BlackBerry users in the UK alone),
Pumfrey J maintained the order for an
expedited trial.
A hi-tech company (in particular, a
manufacturer) will usually want the issues
surrounding any European patent asserted
against it to be resolved promptly.
Depending on the complexity of the case
and the technology, a streamlined UK action
(assuming it has the buy-in of the judge
who will be the judge at trial) may be very
useful. Even if the appropriateness of the
streamlined procedure is questionable, the
English Courts have shown themselves to be
flexible and ready to consider any
commercial factors in ordering expedited
trials. Further, even without streamlining or
an order for an expedited trial, the English
Patents Court currently appears to be one of
the fastest (if not the fastest) of the national
courts in Europe for full patent
infringement/validity proceedings.
A twist in the tale an application by the
patentee to amend its patent
Inpro chose, as part of the UK action, to
apply to amend its patent. Inpro did not
abandon the existing patent claims but
sought the addition of some 12 new claims
and a number of amendments to the existing
claims. Inpro was seeking to put some clear
blue water between the claims and the prior
art which RIM had pleaded.
This is an example of a company using
English procedure (in particular the ability
to introduce amendment proceedings into
a nullity action before the Patents Court)
to its advantage to try to save its patent
in a form that would still catch the alleged
infringement. However, as with any such
application, Inpro had to follow the
detailed UK procedure for post grant
amendments including:
an application notice giving particulars of
the amendments sought and the grounds
for those amendments;
advertising of the amendment in the
Official Journal (Patents);
an opportunity for the other parties (and
any third party) to oppose the amendments.
The rigour and structure of this procedure
ultimately put RIM and T-Mobile in a better
position in Europe because they were
forewarned of certain auxiliary requests for
amended patent claims in the German
proceedings which otherwise may only have
been revealed during the oral hearing of the
German nullity action.
In the UK, as is commonplace, the trial
judge decided to hear issues as to
allowability and validity of the proposed
amended claims at the trial of the nullity and
infringement action. In his judgment,
Pumfrey J concluded that certain
amendments were not allowed as they added
matter. Those amendments that were
permitted gave rise to claims that were
either anticipated or obvious so that Inpros
patent specification remained in its
unamended form (with fatal consequences to
its validity). Inpro had attempted to rescue
its patent by amendment in the UK, but
RIM and T-Mobile achieved an early victory
on the issue of amendment too! K
A hi-tech company (in particular, a

manufacturer) will usually want the issues
surrounding any European patent asserted against
it to be resolved promptly

K
THE BLACKBERRY CASE
T
he well publicised dispute between
Research in Motion (RIM), T-
Mobile (UK), T-Mobile (Germany)
and Inpro Licensing Sarl (Inpro) relating
to the Blackberry system resulted in parallel
proceedings for infringement and invalidity
in respect of the relevant designations of the
same European Patent in both the UK and
Germany. The procedural issues arising
from these actions highlight the difference
in approach between the English and
German patent litigation systems.
History
Inpro is a company based in Luxembourg.
Like NTP, the company who took on RIM in
the US, Inpro do not manufacture products;
their business is to hold, license and on
occasion litigate patents. Inpro claimed that
its European Patent 0892947 (the Patent)
was infringed by the operation of the
Blackberry system. It commenced
infringement proceedings in Germany at the
beginning of 2005 under the German
designation of the Patent against T-Mobile
(Germany) in respect of its supply of
BlackBerrys. T-Mobile (Germany) was a
customer of RIM and supplied Blackberrys
direct to German users.
The technology
The Patent was for a proxy-server system
for enhancing functionality of computers
accessing servers on the internet. The
specification sets out the problem the Patent
seeks to solve as follows:
What is clearly needed is apparatus
and methods whereby sophisticated
operations like Web browsing and the
like may be accomplished with small,
battery-powered portable computers such
as hand-held computers, while also
accomplishing a life-between-charges of
a week or more, without requiring
especially heavy batteries
To achieve this, the Patent described an
invention in the following terms: a computer
system comprising a field computer with a
display with a specific size and resolution,
connected to a Proxy-Server by a data link.
The Proxy Server accessed the internet
following commands from the field
computer and downloaded data from the
internet. The Proxy-Server transposed the
downloaded data by reducing information
density, transferring the transposed data to
the field computer. The Proxy-Server
transposed web pages to match the specific
Bird & Birds Peter Brownlow argues that the procedural
issues arising out of the Blackberry litigation highlight the
difference in approach between the English and German
patent litigation systems
AUTHOR
Peter Brownlow is a partner in Bird & Birds
international IP team. He has considerable
experience of passing off, trademark, copyright,
design and patent litigation. He recently acted for
T-Mobile in the UK Blackberry litigation
IN SUMMARY
The Blackberry dispute resulted in parallel
proceedings for infringement and invalidity
in respect of the relevant designations of
the same European Patent in both the UK
and Germany. The procedural issues
arising from these actions highlight the
difference in approach between the
English and German patent litigation
systems
In Germany issues of infringement and
validity are determined in separate
proceedings before different courts, which
usually progress at different speeds: the
nullity proceedings were likely to progress
more slowly than the infringement
proceedings
RIMs tactic was to commence invalidity
proceedings in respect of the UKs
designation of the Patent in the English
Patents Court, as the streamlined and
speedy trial procedures of the English
Patents Court would enable it to obtain a
decision on validity before the German
court heard the infringement trial, hoping
that it would influence the German court
Blackberry Part 2:
a UK perspective
on parallel
proceedings
K RIMs tactics analysed K RIMs tactics analysed
an email the wireless computer sends a
message to a much larger and more
powerful computer located elsewhere.
The latter computer then uplifts the
necessary e-mail messages or does the
necessary search on the internet and then
sends the results so obtained back to the
wireless computer in a form which is
most economical and best suited to the
capabilities of the wireless computer.
This means that the major processing is
done by a land based computer and not
by the handheld wireless computer itself.
In doing this, of course, the main
computer has to send to the wireless
computer a data stream designed as
efficiently as possible to convey the
essential information to the wireless
computer in a format which most well
suits the latter computers capabilities.
Tactics
RIM intervened on the side of its customer,
T-Mobile, in the German infringement
proceedings in mid-2005. They also wished
to challenge the validity of the German
Patent. However, in Germany issues of
infringement and validity are determined in
separate proceedings, before different Courts.
These separate proceedings usually progress
at different speeds. This posed a particular
difficulty for RIM and T-Mobile. The
infringement Court was likely to hear the
Trial of the action in January 2006. If there
was a finding of infringement, an injunction
would be granted automatically.
German nullity proceedings however
were likely to progress more slowly. Even if
started in mid-2005 they would be unlikely
to be heard before the end of 2006. The
problem for RIM and T-Mobile was that
however strong their invalidity attack there
was a risk of an injunction before validity
could be assessed. Although the successful
patentee would be required to put up a bond
against the possibility that the patent would
subsequently be held invalid, the effect on
the BlackBerry business if the service had to
cease would clearly have been substantial.
RIMs tactic was to commence invalidity
proceedings in respect of the United
Kingdom designation of the Patent in the
English Patents Court. It issued its claim in
May 2005. The reasoning for this decision
(as explained in the English Courts decision
on the directions hearing) was that the
streamlined and speedy trial procedures of
the English Patents Court would enable it to
obtain a decision on validity before the
German Court heard the infringement Trial.
Although the validity decision would only
be in relation to the UK designation of the
Patent it was hoped that it would still
influence the German Court.
The streamlined procedure in the UK had
been introduced to reduce the procedural
complexity of patent litigation, for instance
by not having documentary disclosure. The
procedure was aimed at the simpler cases in
an attempt to both reduce costs and the time
taken to prepare a case for Trial.
Having commenced a revocation action
RIM applied to the English Court for
directions that the action be heard by way of
streamlined procedure and that a speedy
trial be ordered. It requested a Trial to be
heard on or shortly after 21st November
2005. As English Patent Court Judges
usually reserve judgment, handing it down
some weeks after the Trial, it was
anticipated that a reasoned decision on
validity could be expected prior to the
German infringement Trial in January 2006.
Application for streamlined
procedure in the UK
The English Judge hearing the application
in June 2005 was Mr Justice Laddie. RIM
filed evidence that if the UK Patent was
found invalid by the English Court that
determination would be taken into account
by the German infringement Court in
deciding whether to stay or adjourn the
infringement trial until after the equivalent
invalidity proceedings in Germany.
As might be expected the application was
opposed by Inpro who argued that this
amounted to an unacceptable interference
with the way proceedings are conducted in
another country and were designed to
influence the timing of the German
proceedings. RIM was completely open
about their position and accepted that this
was what they were trying to do. They
claimed however that it was perfectly
legitimate given the immense problems that
would be caused to RIM and its customers if
an injunction was granted in Germany.
Mr Justice Laddie, in one of his last
decisions before his early retirement as an
English Judge, began by assessing how long
the Trial was likely to last. He took the view
that given the technology the trial of the
matter on the issues of validity, infringement
(Inpro put in evidence that they intended to
counterclaim for infringement and join in T-
Mobile as a Part 20 Defendant) and
amendment could be heard in two days. He
made particular reference to the fact that in
Germany the issue of validity will be dealt
with in an oral hearing lasting between one
and five hours (and never more than one
THE BLACKBERRY CASE
K
size and resolution of the field computer
display and in certain embodiments the field
computer transferred information particular
to its characteristics to the Proxy-Server
which used the information in transposing
the web pages.
Characteristically Mr Justice Laddie
explained the technology involved in more
straightforward terms in his Judgment on
the application for directions in the
UK proceedings:
When operating a wireless mobile
computer what is needed is a system
which takes account of the limited
computing power of the computer and
puts that computing power to optimal
use. In essence, what is done in devices
like the BlackBerry is that when a user
wishes to interrogate the web or receive
The problem for RIM

and T-Mobile was that
however strong their
invalidity attack there
was a risk of an
injunction before validity
could be assessed

K
THE BLACKBERRY CASE
day). Consequently, he held the matter
suitable for streamlined procedure and
ordered there be no disclosure in the action
and that the trial should be listed to begin
on 21st November 2005 or as soon
thereafter as could be agreed.
In his Judgment he commented that:
Once a party asks for a streamlined
procedure, I think the Courts should
proceed on the basis that such a
procedure is appropriate, save in cases
where there is a convincing reason to
the contrary.
He also stated that:
It is no part of my function to interfere
with German proceedings. I have to take
account of the existence of German
proceedings as, no doubt, the German
courts take account of the existence of
English proceedings and their outcome. As
I understand ithe [the German Judge]
would take account of what the English
courts do and the timetable imposed by the
English Courts. Just as a matter of
courtesy, I could do the same for German
actions or French or Dutch actions.
Furthermore, we can no longer consider
litigation in England in isolation when at
least one of the parties is engaged in pan-
European business, as RIM is here.
As anticipated, following Mr Justice Laddies
decision, Inpro counterclaimed for
infringement against RIM and brought Part
20 proceedings against T-Mobile (UK) in
July 2005. It also applied to amend the UK
Patent at the same time.
Effect of the German litigation
RIM then began nullity proceedings before the
Munich Court in Germany. As had been
contemplated by Mr Justice Laddie, the
German Courts took notice of the decision
regarding the English Trial date. The Munich
Court scheduled its hearing for 27th January
2006 and although the infringement Court
was due to hear the case on 11th January 2006
it agreed that it would reserve any judgment
until after the decision on the nullity actions
by the Munich Court.
Progress of the proceedings
Between June and November, Inpro applied
to the UK Patents Court on a number of
occasions to adjourn the Trial on the
grounds they did not have sufficient time to
prepare and that the issues were more
complicated than had been originally
presented. The adjournment applications
were dismissed but the Trial estimate was
increased from two to five days with two
days set aside as pre-reading for the Judge.
In addition, it was held that a number of
issues (mainly involving T-Mobile) would be
tried at a later date after the initial Trial.
The English Patents Court Trial began
on 29th November 2005 and, due to Mr
Justice Laddies retirement, was heard by
another specialist patents Judge, Mr Justice
Pumfrey. The Trial lasted seven days.
The timing of the decisions was remarkably
close. The German nullity Court gave its
decision on 27th January following a hearing
lasting no more than a day. As a result the
German infringement Court, having reserved
its decision following a hearing on 11th
January 2006, did not find it necessary to give
a judgment. The UK Court gave its Judgment
on 2nd February 2006, shortly after the
German nullity decision.
In his decision, Mr Justice Pumfrey
criticised the earlier decision that the UK
case was suitable for streamlined procedure,
particularly in light of the commercial
significance of the dispute:
This is one of those cases where the
subject matter is apparently simple. Now
that I have read the documents and
heard the evidence, I am sure that it was
not appropriate for the streamlined
procedure. I cannot say that on the
material available to Laddie J the
decision to use the streamlined procedure
was wrong, but I must disagree with his
proposition that once a party to an
action proposes the use of the
streamlined procedure that procedure
will be used in the absence of a
convincing objection from the other. The
decision to use the streamlined procedure
is an objective one to be arrived at on all
the material. There are no presumptions.
It is not unusual in patent actions for
one or (sometimes) both parties to
consider that their case is both
straightforward and easy to try. They
are often wrong; and in any event, the
dissentient must be allowed a proper
opportunity proportionate to the matters
at stake fairly to put its case, and that
may preclude use of the streamlined
procedure. Speed is highly desirable in
all cases, but not at the expense of
fairness. One relevant factor is the
commercial importance of the patent.
This patent, which is said to be
infringed when any BlackBerry device
downloads a webpage including images
using the BlackBerry service, is
commercially important to the present
form of that service.
Decisions
The German Courts decision on nullity
found all the unamended claims of the
German designation invalid for lack of
inventive step. Inpro sought to defend the
patent by submitting amended claims. These
were also found to lack inventive step. A
number of pieces of prior art were pleaded
but the German Court relied on only one to
reach its decision.
The English Court found all the claims of
the UK designation both unamended and
amended invalid on the basis of anticipation
or obviousness. Almost identical prior art
was pleaded in the UK action but the Court
relied on more than one in reaching its
decision.
Whether the UK designation was invalid
for lack of patentable subject matter was also
considered by the UK Court. It was argued
that the invention was in respect of matter
excluded from patentability by s.1(2) Patents
Act 1977 which has the same effect as
Article 52 European Patent Convention. The
relevant part of Article 52(2) states:
The following in particular shall not be
regarded as inventions within the
meaning of paragraph 1:
(a) discoveries, scientific theories and
mathematical methods
(b) programs for computers;
(c) presentation of information
Mr Justice Pumfrey held:
It is now settled, at least at this level,
that the right approach to the
In his decision, Mr Justice Pumfrey criticised the

earlier decision that the UK case was suitable for
streamlined procedure

THE BLACKBERRY CASE
K
exclusions can be stated as follows. Taking the claims correctly
construed, what does the claimed invention contribute to the art
outside excluded subject matter ? The test is a case by case test,
and little or no benefit is to be gained by drawing analogies
with other cases decided on different facts in relation to
different inventions. RIM says that the point does not require
elaboration. It contends that all that is claimed, as a matter
of substance, is a collection of programs for computers. I
think this is wrong. What the claims give is a technical
effect; computers running faster and transmitting information
more efficiently, albeit ultimately for the purpose of displaying
part of that information.
I am anxious that these exclusions are not given too wide a scope.
All modern industry depends upon programmed computers, and
one must be astute not to defeat patents on the ground that the
subject matter is excluded under Article 52 unless invention
lies in excluded subject matter as such. The test proposed by RIM
in this case (is a computer program accused of infringement)
proves too much. An offer of computer program may be an offer
of a process for use in the United Kingdom (section60(1)(b) or it
may be means relating to an essential element of the
invention within section 60(2) even when the invention
cannot be accused of residing in excluded subject matter; it
depends on the facts. Perhaps one can say that the invention does
not lie in excluded subject matter, even though it may be expressed
in a computer program.
The English Court also found that there would have been
infringement had the Patent been valid.
Both the English and German decisions are being appealed.
Comparison of procedures
The Patents Court in the UK took almost seven months to reach a
trial on the issues of infringement, validity and amendment.
Approximately the same time was taken to reach trial on the validity
issues in the German nullity actions. The German infringement
proceedings took nearly a year to reach trial.
While the length of time to Trial may be comparable in the two
jurisdictions, the length of the trials themselves was not. The
German actions were each heard in approximately one day while the
English Patents Court took seven days despite it being a streamlined
procedure case.
Why did the Trial in the UK last so long in comparison to the
German proceedings particularly when it was supposed to be a
streamlined procedure ? One reason is that there was cross-
examination of experts which lasted nearly two and a half days.
There was no witness or expert cross-examination in the German
proceedings. Another is that, as is apparent from the Judgment,
there was half a days argument on the ancillary issue of security for
costs. Finally, the UK trial dealt with both the issues of
infringement and validity, which of course were dealt with in
separate hearings in Germany.
It is likely that the UK decision will reduce the chances of
subsequent patent infringement cases in this sector being ordered to
be heard under the streamlined procedure. Given that it is now usual
for a UK patent infringement and invalidity claim to reach trial
within 9 months to a year, this is unlikely to have any great effect on
the time taken to reach trial. K
Bird & Bird acted for T-Mobile (UK) in the UK proceedings
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IN SUMMARY
Patents based on electronic inventions
continue to fuel the increasing patent
litigation activity in the German courts,
particularly the District courts in
Dsseldorf and Mannheim
Despite the wide variety of cases and
technologies covered, there are some
recurring issues that arise in respect of
patent litigation based on electronic
inventions
This article discusses German rules on,
amongst others, the collection of
evidence, industry standards, contributory
infringement and injunctions
AUTHOR
Martin Khler is a German attorney-at-law and
partner of the IP law firm Reimann Osterrieth
Khler Haft in Dsseldorf. He acts in IP litigation
and licensing, with a particular focus on patent
litigation in the areas of electronics,
telecommunication, medical devices and
pharmaceutical products.
Martin Khler, Reimann Osterrieth
Khler Haft, analyses recent
German case law on patent
litigation in the field of
electronic inventions
K Recurring issues discussed
P
atents based on electronic inventions
continue to fuel increasing patent
litigation activity in the German
courts, particularly the District Courts in
Dsseldorf and Mannheim. Semi-conductors,
digital media, telecommunication and software-
related patents account for a substantial
portion of the cases litigated. Despite the
variety of cases and technologies covered, some
recurring issues typically arise within a patent
litigation based on electronic inventions.
Collection of evidence
The more complex the technology, the more
difficult it may be to establish that all
features of a patent claim are fulfilled.
Under German civil procedure rules, the
patentee has to establish that every feature
of the claim is used by the infringer. As long
as the patentee has not established to a
certain extent the necessary facts, the
defendant in principle is not obliged to
present counter-arguments.
Obtaining evidence on the facts establishing
infringement is key to successful patent
litigation and may be a serious hurdle to take
when preparing a case based on an electronic
invention. Although there is no discovery
available under the procedural rules,
instruments available to the patentee to obtain
information about the use of a patent have
been improved by recent case law. To start
with, the EU Directive 2004/48/EC on
enforcement of intellectual property rights
now sets a minimum standard imposing an
obligation for Member States to ensure that,
even before the commencement of proceedings
on the merits of the case, the competent
authorities may, on application of a party
which has presented reasonably available
evidence to support his claims that his IPR has
been infringed or is about to be infringed,
order prompt and effective provisional
measures to preserve relevant evidence in
respect of the alleged infringement, subject to
the protection of confidential information.
1
Before the coming into force of this
directive, German Courts accepted pre-trial
inspection orders. The leading case is the Fax
Card decision of the Federal Court of Justice.
2
In this case, the owner of a copyright
protected software requested access to the
source code of a software used by a competitor
in order to establish infringement. The Court
took the opportunity to modify and
significantly lower the standards required in
order to obtain a pre-trial inspection. Still, a
certain likelihood for infringement must be
established, in order to prevent abusive
actions without any serious grounds. The new
standards developed by the Fax Card decision
have been applied by the District Court
Dsseldorf to patent infringement cases and
are now reflected in draft legislation
implementing the enforcement directive. The
pre-trial inspection order as practised by the
District Court Dsseldorf allows access to
and inspection of presumed patent infringing
products or processes by technical experts in
order to prepare a court expert opinion, which
sets the basis for a subsequent infringement
action. If granted, the inspection order is
decided by way of a preliminary injunction in
order to allow the patentee access without any
prior warning of the presumed infringer.
In addition to evidence gathered by way of
inspection orders, it is common practice to use
information available from parallel litigation
abroad in order to establish the necessary
facts for a case in Germany. For instance, the
results of a saisie-contrefaon conducted in
France or of a US discovery as far as not
covered by a protective order might be
introduced in patent proceedings in Germany,
if it can be assumed that the relevant products
are identical. This is certainly the case if the
attacked products have to comply with the
same industry standard.
Germany: enforcement
of patents for
Germany: enforcement
of patents for
Standards
One feature of patents based on electronic
inventions is that the claims cover an industry
standard, which has important implications
for both parties.
On one hand, compatibility with a
standard might allow a straightforward
infringement argument if the relevant
portion of the standard is covered by the
patent. Instead of establishing that each
single feature of the claim is fulfilled, it
may be sufficient to establish that the
infringing product works according to a
standard and that the patent is necessarily
used when working according to that
standard. The typical discussion following
enforcement of a patent allegedly covering
a standard is the question whether and to
what extent the patent in question is
essential
3
with respect to the standard. The
fact that the patent is listed as standard
essential is not sufficient as there is
generally no binding assessment by the
standard setting institution whether a
specific patent is essential or not. Rather,
participants in standard setting have an
obligation to indicate to the standard
setting institution such patents which are
presumed as being essential for the
standard.
4
Consequently, the unilateral
declaration of a patent as essential by the
patentee is open to be debated in substance
when it comes to litigation.
However, as can be taken from two decisions
rendered by the District Court Dsseldorf, a
decision of 28th February 2002
5
relating to the
ECMA standard and a decision of 15th
January 2004 relating to the GSM standard
6
,
the courts accept to a certain extent to shift
the burden of proof for non-infringement to
the defendant if the patentee can base his
attack on a patent listed as standard essential.
In order to counter an infringement allegation
based on a standard essential patent, the
defendant must develop a substantial technical
argumentation showing that the attacked
product does not make use of the patent
despite using the standard. Thus, an argument
based on a standard can confer a significant
procedural advantage to the patentee.
The possibility to simplify infringement
arguments by reference to a standard is not
only used in normal proceedings but also in
border seizure requests. Particularly, in the
field of digital media patents, the
instruments provided by European
Regulation 1383/2003 as well as the parallel
German provisions
7
are systematically
applied to put pressure on presumed
infringers. The fact that a product complies
with a standard makes identification of
imported products by customs easier and
thus allows the patentee to launch broad
border seizure requests based on standard
essential patents.
Finally, the simplified approach to
infringement when dealing with standard
related patents is of particular importance in
preliminary injunctions, where under certain
conditions a decision might be obtained
within several hours or days in ex parte
proceedings, therefore requiring a clear
infringement (and validity) situation.
8
The use of standard essential patents
frequently gives rise to antitrust issues, and
the enforcement of these patents might
collide with European and parallel national
rules on the misuse of a dominant position.
According to Art. 82 EC any abuse by
one or more undertakings of a dominant
position within the common market or in a
substantial part of it shall be prohibited as
incompatible with the common market
insofar as it may affect trade between
Member States. According to a decision of
the Federal Court of Justice of 13th July
2004, Bung Barrel
9
, the enforcement of a
patent might constitute discriminatory
behaviour and thus be an abuse of a
dominant position. Although the case
concerned a patent covering a de facto
standard for the chemical industry, the
arguments developed by the Court are not
limited to this industry sector and could
apply to the electronics industry as well.
According to the Court, the freedom of
competition was in question if the patent
also covered a standard allowing the
patentee to control the access to a
downstream market. Therefore, the fact of
denying a licence under a standard essential
patent to a competitor where a licence is
granted to other competitors, was
considered an abuse of a dominant position.
If successful, the antitrust defence as
admitted since the Bung Barrel decision will
have the effect that the Court may dismiss a
request for an injunction as the patentee is
under an obligation to grant a licence to the
alleged infringer. In addition, damages for use of
the patent in the past would be limited to a
reasonable royalty (FRAND), as opposed to the
restitution of the profit actually made by the
infringer which in many cases can be far more
lucrative.
10
The crucial question with respect to
damages is how to define a FRAND royalty.
According to a decision by the Appeal Court
Dsseldorf of 2nd June 2005, Lifter, relating to
the calculation of damages based on the profit
obtained by the infringer, one aspect in
assessing the reasonable value of the patent is
the question of whether the infringing product
is covered by further patents. Electronic devices
such as chipsets, mobile phones or DVD players
usually are covered not only by one single
patent but by a multitude of patents which
consequently may reduce the damages available
for the patentee enforcing one specific patent.
To be successful with an antitrust defence,
the presumed infringer, however, would have
to do more than just raise a defence
argument: he has to make an offer to the
patentee to take a licence under fair and
reasonable conditions. Only once the
patentee has refused such an offer will the
antitrust defence lead to dismiss the request
for injunction and limit the damage claim.
11
Contributory infringement
The core idea of electronic inventions is often
related to a process used by the end user of
products such as a computer, a mobile handset
or a CD/DVD player. In order to enforce the
patent against the seller of these products or
the supplier of components the patentee will
have to turn to contributory infringement
under Sec. 10 German Patent Act.
Contributory infringement is given as soon
as a means is supplied which relates to an
essential element of the claimed invention,
provided that it is obvious in the
circumstances that the means is suited and
intended to put the invention into effect. Such
obviousness might result from a
recommendation by the supplier to use the
means in a patent infringing way
12
, e.g. by
reference to a standard covered by the patent.
According to the Federal Court of Justice in
Impeller Counter of 4th May 2004
13
, means
suitable for contributory infringement might
be any means which by interacting with any
feature of the claim contributes to the use of
the invention. By definition, any feature of the
claim has to be considered as an essential
element of the invention. Hence, as long as the
K
GERMANY
One feature of patents based on electronic

inventions is that the claims cover an industry
standard, which has important implications for
both parties

GERMANY
K
means supplied is related to a feature of the
claim, there is no way to escape contributory
infringement, even if the feature belongs to
the generic part of the claim which recites the
prior art. As is pointed out by the Court in
Impeller Counter, contributory infringement
would have to be denied only for such means
which, although involved when the invention
is used, make no contribution at all to the use
of the claimed technical teaching. As an
example, the Court refers to energy supplied
to a patent protected device.
As a consequence of this broad concept of
contributory infringement, not only
suppliers of core elements for electronic
devices, such as chipsets, are exposed to the
risk of contributory infringement, but also
any supplier of hardware or software
components related to at least one feature of
a claimed invention. A typical example for
contributory infringement can be given by
the already mentioned GSM standard
decision of the District Court Dsseldorf
14
,
relating to a process for channel selection
between a base station and a mobile station.
Although the claimed process consisted in
sending specific references by the base
station, the Court considered that the
handset was a necessary counterpart for
communication with the base station and
therefore the handset had to be considered
as a means related to an essential element of
the claimed process.
S. 10 German Patent Act on contributory
infringement therefore can be a very efficient
tool for a patentee in order to enforce patents
not only against the end user but also against
any member of the supplier and user chain
reaching from the manufacturer of single
components to the seller of end user products
or the provider of services involving such
products. As is repeatedly pointed out by the
Federal Court of Justice, the provision on
contributory infringement aims to protect the
patentee against the mere risk of infringement
and thus does not rest on the precondition
that an infringement actually occurs.
15
Limits of protection
The enforcement of patents in a chain of
suppliers regularly raises the question of
exhaustion of patent rights. In an
environment such as the electronics
industry with a tightly braided network of
licences and cross licences between
companies present at different stages of the
manufacturing and marketing process,
exhaustion is often used as a defence
argument. However, German courts tend to
apply the doctrine of exhaustion in a patent
owner friendly, i.e. restricted way, so that
this defence argument rarely succeeds.
The starting point of the doctrine of
exhaustion is that once an invention is brought
into commerce in the EU by the patentee or
with his consent by a third person (e.g. by a
licensee), the patentee is not entitled to use the
patent against further sales. The highly
debated question in many cases is whether the
invention as such actually has been brought
into commerce. According to established case
law as expressed in the Impeller Counter
decision, the supply of parts of a patent
protected device by the patentee is not
sufficient for an exhaustion, as long as the
device has not been put on the market
completely, i.e. with all features of the claim. In
case the electronic invention is protected by a
process claim, the patentee, according to the
leading decision of the Federal Court of
Justice, Fullplast Process, of 24th September
1979
16
would even be entitled to sell a device
suitable to use the claimed process without
having to face exhaustion of the patent. The
only remaining barrier preventing a patentee
from enforcing a patent against the use of an
electronic process by devices which at some
point had been supplied by the patentee
himself would be the existence of an explicit or
an implied licence granted to the purchaser of
the device and to the subsequent user of such
device. However, the fact that such a licence
has been granted has to be established by the
defendant in a patent infringement action.
This might be quite difficult if the defendant is
not a party to the purchase agreement with
the patentee and in the absence of any
document discovery has no possibility to
obtain information about the content of the
purchase agreement. In addition, even if such a
licence should have been granted and prevents
the patentee from obtaining an injunction
against the use of the protected process, the
patentee might still be entitled to request a
supplementary remuneration for the use of the
process depending on the scope of the licence
granted to the purchaser.
Injunctions remain a standard
remedy
The practice outlined above can be one
explanation to the increasing number of patent
litigation actions filed in the German Courts
over recent years and the substantial portion
of electronic patents litigated.
17
Some of these
actions are brought by companies which may
or may not be awarded the title of a patent
troll. Unlike the US, there is no discussion in
Germany about whether and under what
conditions patentees should be denied the
right to ask for an injunction against
unauthorised use of their patents. The right to
ask for an injunction is explicitly mentioned in
s. 139 German Patent Act and only depends on
the question of whether the patent is used or
not by an unauthorised person. There is no
need to establish any specific interest of the
patentee in enforcing the patent. In addition,
first instance decisions finding infringement
and issuing an injunction against the infringer
are provisionally enforceable independent of a
pending appeal.
18
This provisional
enforceability can theoretically be lifted in case
the defendant establishes the risk of
exceptional and irreparable damages. However,
the threshold to be overcome by the defendant
is extremely high so that this exception does
not play a relevant role in practice. K
Notes
1 Art. 7 Measures for preserving evidence, OJ L
157 of 30 April 2004.
2 GRUR 2002, 1046.
3 ETSI (European Telecommunications
Standards Institute) Rules of procedure, annex
6 ETSI IPR policy, n 15.6.
4 Ibid, policy, n 4, available at www.etsi.org.
5 Court file n 4a O 35/00, unpublished.
6 Court file n 4b O 49/03, unpublished.
7 Sec. 142a German Patent Act.
8 A further prerequisite for a preliminary
injunction would be a certain degree of
urgency; cf. for a discussion of the
requirement of a clear infringement situation
for a requested preliminary injunction based
on a DVD patent: Appeal Court Karlsruhe,
GRUR-RR 2002, 278.
9 GRUR 2004, 966-969; cf. the decisions of the
European Court of Justice based on the
essential facilities doctrine: ECJ Slg. 1995, I-
743 Radio Telefis Eirann (RTE) / Magill TV Guide
Ltd. ECJ Slg.1998, I-7817, Oskar Bronner /
Mediaprint; ECJ WRP 2004, 717-722, NDC
Health ./. IMS Health.
10 Khnen, FS Tilmann 513-525 (523).
11 Khnen, FS Tilmann 513-525 (524).
12 Federal Court of Justice 13 June 2006 n X ZR
153/03 (unpublished).
13 GRUR 2004, 758-763.
14 15 January 2004, court file n 4b O 49/03,
unpublished.
15 Impeller Counter.
16 GRUR 1980, 38, 39.
17 As German Courts have no publicly
accessible case register, there are no
statistics available which would allow an
assessment of the exact percentage of cases
dealing with electronic patents.
18 In order to enforce a first instance
decision which is not yet final due to a
pending appeal, the plaintiff has to post a
bond corresponding to the estimated value
of the case.
K
HOLLAND
A
n article on electronic inventions in
the Netherlands necessarily has its
focus on litigation. Why? Not
because the Dutch have a litigious mindset
they do not. The reason is simple: 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. Therefore,
this article aims to provide a general
overview of how Dutch courts apply rules of
general patent law to electronic inventions.
Validity issues
Like all patent laws in the world, the Dutch
Patent Act (DPA) requires that an
invention is novel and inventive.
From decided cases it seems that novelty
is not often a problem in regard to electronic
inventions, but discussions on the level of
inventiveness occur on a regular basis.
The requirement of inventive step means
that the claimed invention is unobvious on
the basis of the state of the art
1
. The
predominant line is that a solution is
deemed obvious if the person skilled in the
art will come to the same solution of a
problem without noteworthy effort. What
can be regarded as inventive largely
depends on the field of technology and the
nature of the invention.
For a long time the required degree of
inventive step presented a low threshold.
The inventiveness test was already deemed
satisfied in the event that:
the invention fulfils an apparent need in
the market place;
a certain progress was made in relation to
the state of the art;
the invention has a special technical or
practical effect, for example in case the
invention overcomes a long existing
prejudice;
measures which are already known are
being combined to something new, or are
being applied in another field of
technology.
Recently, a few interesting decisions have
been rendered which demonstrate how
inventive step is being judged in respect of
electronic inventions.
In 2001 the Dutch computer manufacturer
Tulip Computers filed a complaint against
Dell Computer Corp. alleging infringement of
a patent for a motherboard
2
. The patent covers
the placement of expansion cards that enables
PC makers to create desktop computers that
are smaller, have a more efficient cooling
system and can communicate more effectively
with connected devices. The patent centres on
placing the riser card in a connector on the
side of the motherboard rather than in a
connector in the centre of the motherboard.
Dell argued the Tulip patent was invalid
due to lack of inventive step. The court
acknowledged that the test is not whether
the man skilled in the art could have thought
of the patented solution, but whether he
would have done so. The simplicity of a
particular solution may generally be an
indication for inventive activity, but the
solution should not be so simple that it
AUTHOR
Tjeerd Overdijk obtained his degree in Law at
the State University of Leiden in 1984. He has
been practising as an advocate since 1984. In 1995
he joined Steinhauser Hoogenraad Advocaten. He
is an all-rounder in the field of intellectual
property, with a special interest for cases at the
cutting edge of IP and IT, such as enforcement of
software rights, copyright law and the internet,
database law, domain name disputes, software
patents and business method patents.
IN SUMMARY
Apart from the so-called exclusion of
software programs as such from
patentability, it is hard to find provisions in
Dutch patent law that specifically relate to
electronic inventions, and there are no
reported cases on real software patents
This article provides a general overview of
how Dutch courts apply rules of general
patent law to electronic inventions
With regards to practical points of guidance,
there is a more stringent view on inventive
step, the Netherlands is a relatively cheap
place to litigate and in spite of recent ECJ
decisions cross-border practice has not
been completely wiped out
K Practical guidance K Practical guidance
Holland: no reported
cases on real
software patents
Holland: no reported
cases on real
software patents
Tjeerd Overdijk of Steinhauser
Hoogenraad Advocaten explains
how Dutch courts apply rules
of general patent law to
Tjeerd Overdijk of Steinhauser
Hoogenraad Advocaten explains
how Dutch courts apply rules
of general patent law to
HOLLAND
K
should be deemed to be within reach of
those skilled in the art.
The court found in favour of Dell
regarding lack of inventive step. It agreed
that placing the riser card at the side of the
motherboard involved no more than
relocating an object that stands in the way.
Tulip had asserted that this measure was not
obvious because there was also a drawback,
namely that it restricted access to the riser
card from the side of the housing. The court,
however, ruled that if a solution has also a
drawback, this does not mean that the man
skilled in the art would not think of the
solution. This would be true even more if
the advantage obtained is more important
than the disadvantage.
A second measure (expansion cards point
in the direction of the centre of the pc
housing) was considered to lack
inventiveness because the court found this a
logical sequel of the first measure.
A third solution (i.e. fitting the connectors
for ISA-cards at the upper side of the riser
card and the connectors for PCI-cards at the
bottom) was considered obvious for
decreasing the distance between the PCI-
card and the motherboard. As the PCI-
standard had only been introduced recently,
it was inconceivable that there would have
been an established standard which could
only be overcome by inventive activity
3
.
In a case involving a patent for a
multimedia display the District Court
4
followed the opinion of the Dutch Patent
Office, which had ruled that the claimed
invention was no more than just another
application of a solution that was known in
the art and that another aspect of the claimed
invention would be a solution that would
urge itself upon the man skilled in the art
who was confronted with the problem
described in the patent. The courts are
generally inclined to follow a negative advice
of the Patent Office, certainly in case the
patentee fails to present any new arguments.
Another case involved a remote control for
a T.V.-camera.
5
The claimed invention
provided a system whereby two cameras
(master and slave or actuator) are
connected to each other by means of electric
cables making it possible to remotely operate
the camera on the slave head. Known in the
art were two other systems (Merlin Camera
and Scene Sync system), which each
disclosed elements of the claimed invention.
The court held that it was obvious for the man
skilled in the art, when confronted with the
objective problem of inflexibility of the Merlin
Camera, to combine both these known
systems. Such combination would result in
replacing the mechanical operation by
electronic remote control of the actuator head,
which involved no inventive activity.
A dispute between Royal Philips
Electronics and EMI Compact Disc, part of
EMI record company
6
, involved a collection
of patents forming part of the DVD-
standard. In this case the court dismissed
EMIs argument that this patent would lack
inventive step. The court held that the
measures described in US 5,170,253 related
to a completely different field of technology
and there was no reason for the man skilled
in the art to consult this patent for the
purpose of solving the problem at hand.
Recently, the Dutch Supreme Court handed
down a decision on the relation between the
requirement of inventive step and the
requirement of Article 83 EPC that the
patent application must disclose the invention
in a manner sufficiently clear for it to be
carried out by a person skilled in the art.
This case
7
involved a dispute on a patent for
a vehicle guidance system owned by Navcom
N.V. Philips had brought nullity proceedings
and the Dutch part of the patent at issue (EP
011880) had been declared null and void in
two instances, because the patent did not
describe the invention in such a manner that it
could be carried out by a person skilled in the
art. The Court of Appeal had considered that
the requirement of Article 83 EPC was
nothing more than an elaboration of the
requirement that the invention must be
capable of industrial application
8
.
The Supreme Court ruled in favour of
Navcom. It held that the Patent Act that was
in force before 1987 did not include a
reference to Article 138 EPC. Therefore,
such a patent could not be nullified on
account of the fact that the invention had
not been disclosed in such a way that it
could be carried out.
In its cross-appeal Philips had argued that
an invention that cannot be carried out
basically lacks inventive step. The Supreme
Court disagreed. It clarified that the
requirement of inventive step has its own
independent meaning. On the one hand an
invention can lack sufficient inventive step
and at the same time be described in such a
way that it can be carried out. On the other
hand, it is possible that an invention fulfills
the requirement of inventive step, whereas
at the same time its description is so unclear
that it cannot be carried out by a person
skilled in the art.
Even though the number of decided cases
is too small for firm conclusions, it can be
said that the required degree of
inventiveness seems to have become slightly
higher over the past five years. The
threshold definitely seems to be higher than
that applied in the EPO.
Infringement and enforcement
With regard to infringement and enforcement
issues there are some examples of the general
principles applied in the field of electronics.
The Dutch courts have adopted an
approach to infringement issues which is
consistent with Article 69 EPC and the
Protocol for its interpretation.
The District Court in The Hague has
developed the following test in
determining the scope of protection of a
patent / literal infringement:
Upon examining whether there is (literal)
infringement it is put a priori that when
interpreting the claims of a patent
specification, also in the light of the
description and drawings, one should
consider what is essential for the invention
at issue according to the average person
skilled in the art who studies the patent,
to put it differently: what is the inventive
thought underlying the words of such
claims in order to avoid an interpretation
exclusively founded on the literal meaning
of the wording and therefore maybe too
restricted (unnecessarily broad) for a
reasonable protection of the patentee. When
interpreting the claims of the patent
specification the court will, however, also
have to judge whether the result of his
examination sufficiently respects legal
certainty for third parties. The latter view
may justify a restrictive interpretation
closer to the wording of the claims in the
sense that lack of clarity for the average
skilled person who wishes to define the
limits of the protection offered by the
patent, will in principle be to the
disadvantage of the patentee.
The required degree of inventiveness

seems to have become slightly higher over
the past five years

K
HOLLAND
This approach has been upheld by the
Supreme Court in several landmark decisions
9
.
A recent example in the area of
electronics is a case in which the court had
to decide the question of infringement in
regard to electrical connectors for printed
circuit boards
10
.
On the basis of the description of the
invention the Court concluded that the
essence of the invention was to offer a
modular concept that should make possible
an easily manufactured right angle connector.
This objective forms the background for the
interpretation of the claims.
The defendant argued that it did not infringe
the patent because the housing of its connector
did not include the passageways referred to in
the relevant patent claim and that the contact
portions were not supported in pin receiving
passageways. The court honoured this defence
and decided there was no literal infringement.
It added that a lack of clarity of the wording of
the claims comes for the risk of the patentee
and that third parties may use such unclarity to
their advantage. Moreover, the court took into
account that the claim had been drafted in the
form of a so-called portrait-claim, which
describes the claimed invention in a great level
of detail. As a result, the man skilled in the art
will not expect that there is room for a broad
interpretation of the claim. Therefore, there
was also no room to apply the doctrine of
equivalence.
In regard to equivalence recent decisions of
the Hague District Court indicate a decrease
of the importance of the doctrine of
equivalence. The Court believes that the
protection granted to a patent under the
above-quoted infringement test is already
broader than a strict literal protection. As a
result there is less room for additional
protection under the doctrine of equivalence.
In a decision on the use of technology for
the manufacture of DCs and CD-Rs, Royal
Philips and the Italian CD manufacturer
Optical Media Storage (Optimes), the latter
had denied that it had made use of the
technology
11
. Optimes had argued that the
only relevant patents related to the production
of the glassmaster, which it had not done.
However, one of the patents included a claim
14 directed at a record carrier of the
inscribable type having a preformed track.
This preformed track includes the driver
information which is being added to the
glassmaster and is also present on the CD- R.
The court held that the CD-R must be
deemed to fall within the scope of claim 14 of
the patent because the CD-R is ultimately a
copy of the glassmaster.
In the Philips v. EMI DVDcase
12
it was not
in dispute that the DVD Video discs produced
by EMI complied with the DVD-standard.
EMI, however, had argued that the DVD-
standard did not embody the technology
claimed in one of the DVD-patents (EP
0698270) and that the DVD-standard covers a
process of scrambling and descrambling,
which was not included in the 270 patent. In
the opinion of the court it was irrelevant that
the DVD-standard had some other elements
which were not disclosed in the patent.
Damages
Damages officially start to accrue from the
moment the infringer is aware that he is
infringing a patent. Such awareness is accepted
if the patentee can show that the infringer
knew or on reasonable grounds should have
understood (Art. 45 TRIPs) that he infringed
the patent. Normally, a registered cease and
desist letter should be sufficient to accomplish
that an infringer becomes liable for damages.
In the event that damages are hard to prove
they are mostly calculated by estimating a
reasonable royalty. The amount granted by the
court is intended to form a fair compensation
of the damages, which may include damages to
compensate for price reductions.
Instead of compensation for damages, the
patentee can ask for surrender of profits.
The infringer can be ordered to submit all
the necessary information with regard to
profits made.
Procedural aspects
In autumn 2006, in the frame of the
implementation of EC Enforcement Directive
2004/84, several novelties will be added to
Dutch laws to permit effective infringement
action. Among these are the descriptive seizure,
which makes it possible for a bailiff to enter the
factory and describe what the infringing goods
look like or how they are designed.
A new statutory provision
13
will enable
the right holder to request an ex parte
Court order to stop the marketing of an
infringing product (cf. the German
Einstweilige Verfgung).
Furthermore, the Enforcement Directive
will bring the Dutch IP arena dramatic
changes as regard cost awards. Until now,
Article 237 of the DCCP provides a fixed cost
award, which is usually only a fraction of the
actual costs. This will be changed. Both parties
can ask the Court to order the losing party to
compensate the winning party for the full legal
costs (upon detailed calculation). This does not
always mean all costs, but reasonable and
proportionate court costs and other costs
incurred by the party who has won the case,
unless fairness dictates otherwise.
Cross-border injunctions
Since the early 1990s Dutch courts have
been developing ways to grant an efficient
protection to the patentee by giving
injunctions in multiple jurisdictions.
Recently, the European Court of Justice has
rendered two important decisions on the cross-
border injunction
14
. In GAT v. LuK, the ECJ
has clarified that the rule of exclusive
jurisdiction in Article 16(4) of the Brussels
Convention concerns all proceedings relating
to the registration or validity of a patent,
irrespective of whether the issue is raised by
way of an action or a plea in objection. In Roche
v. Primus the ECJ ruled that Article 6(1) of the
Convention cannot form the basis of
jurisdiction of a court in one Member-State in
European patent infringement proceedings
involving a number of companies domiciled in
various other states in respect of acts
committed in one or more of those states. This
is also true in cases where companies belonging
to the same group may have acted in the same
manner in accordance with a common policy.
Several commentaries have been published
which suggest that the GAT v LuK and
Roche v Primus decisions do not put an end
to the Dutch cross-border practice. For
example, in respect of defendants domiciled
in the Netherlands jurisdiction of the Dutch
courts can be based on Article 2 of Brussels
Regulation 44/2001, which does not exclude
cross-border injunctions, even if a validity
defence or nullity claim is raised. This may
be particularly relevant for the electronics
sector, where products are very often
marketed throughout the EU by one
legal entity.
Furthermore, cross-border actions against
a Dutch defendant and non-EU co-
defendants will remain possible, because the
non-EU defendants cannot invoke Article 6
In autumn 2006 several novelties will be

added to Dutch laws to permit effective
infringement action

HOLLAND
K
of the Brussels Regulation to challenge the
jurisdiction of the Dutch courts.
It has also been suggested that even in cases
with EU based defendants the Dutch courts
can still grant a cross-border preliminary
injunction based on a prima facie assessment of
the infringement arguments and of the chances
of success of any foreign nullity actions, as
preliminary injunctions are not subject to
Article 22 of the Brussels Regulation. Support
for this view can be found in a recent decision
of the Dutch Supreme Court
15
.
To summarise: the situation is not as bad
as it seems. The cross-border injunction may
be regarded as substantially curtailed, but
certainly not yet finished.
Practical guidance
While a fair number of decided cases on
electronic inventions can be reported from
the Netherlands, all reported disputes have
been decided by application of general
principles of patent law, which also apply
in other fields of technology.
Unfortunately, no decided cases on
software patents can be reported from
the Netherlands.
As regards practical points of guidance
the following may be noteworthy.
The Dutch courts and certainly the Dutch
Patent Office seem to have adopted a more
stringent view on inventive step. The
Netherlands may therefore be an interesting
venue for nullity actions.
The Netherlands have always been a
relatively cheap venue to litigate. This will
not change, but as a consequence of the
Enforcement Directive there will be much
better possibilities to recover legal costs
incurred with infringement actions. The
other side of the medal is obvious: litigating
in the Netherlands is definitely going to turn
out more costly for losing parties.
As regards the cross-border injunction:
recent decisions by the ECJ in the cases
GAT v LuK and Roche v Primus
have substantially curtailed the cross-
border practice, but certainly not wiped
it out. There will be many
infringement situations where multiple
jurisdictions are involved in which the
Dutch approach still offers interesting
options for the patentee. K
Notes
1 Article 6 DPA 1995
2 President of District Court The Hague, 6
September 2001, publ. BIE 2003, 79
3 Apparently, the obviousness of the solution
developed by Tulip was not so obvious, as
some time later the parties reached an out-of-
court settlement under which Dell paid Tulip a
compensation of $49.5 million.
4 District Court The Hague 8 December 2004,
publ. BIE 2005, nr 84.
5 District Court The Hague, 29 October 2003,
6 District Court The Hague, 26 June 2002, publ.
BIE 2003, nr 47.
7 Netherlands Supreme Court 9 September
2005 (Navcom N.V. v. Philips International N.V.),
8 Article 57 EPC.
9 Supreme Court 13 January 1995, NJ 1995, 391
m.nt. DWFV (inz. Ciba Geigy/Ot Optics);
recenter o.a. HR 12 maart 2004, C00/201, JOL
2004, 134 (PTC/Dieseko) en HR 12 november
2004, Nr C03/161 en 162 (Impro/Liko).
10 District Court The Hague 19 July 2006 (The
Whitaker Corp v. FCI).
11 District Court The Hague 15 January 2003
(Royal Philips Electronics N.V. v. Optical Media
Storage SpA), publ. BIE 2003, nr 40.
12 See footnote 6
13 Article 1019e DCCP.
14 European Court of Justice 13 July 2006, C-
4/03 (GAT v. LuK); European Court of Justice
13 July 2006, C-539/03 (Roche v. Primus).
15 19 March 2004 (Philips v. Postech & Princo),
publ. IER 2004/50.
Distinctiveness
One of the largest Intellectual Property
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France and Spain. Prosecution, litigation and
counseling in all elds of IP:
Inventive Step
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at-law, Patent Attorneys and technical
advisors covering all industrial elds:
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www.bardehle.com
THE MACROSSAN CASE
K
UK: Macrossan
increased
patentability for
computer-
implemented
inventions?
IN SUMMARY
The increased frequency of cases regarding
patent applications for computer-
implemented inventions is partly due to the
inherent difficulty in deciding whether such
inventions fall into categories for which
patents are not available
The UKPO and EPO now have different
approaches to determining whether a
computer-implemented invention is
patentable, even though they essentially
operate under the same legislation.
Macrossan provides the Court of Appeal
with an opportunity to realign the UK
approach to determining whether a
computer-implemented invention is
patentable with that of the EPO, and also
an opportunity to determine the scope of
the exclusions from patentability
AUTHORS
Simon Cohen (bottom left) is a partner in the
intellectual property department of Taylor
Wessing, specialising in patent litigation and
licensing in the pharmaceutical and other sectors,
as well as doing pharmaceutical regulatory work.
He lectures and writes regularly on patent issues,
and holds a BSc in Biochemistry and Genetics and
a Diploma in Intellectual Property Law.
Colin McCall (bottom right) is an associate in the
intellectual property department of Taylor
Wessing, specialising in patent litigation and
licensing in various technology sectors. He holds a
BSc in Cell Biology and a Diploma in Intellectual
Property Law.
Taylor Wessings Simon Cohen and
Colin McCall argue that the Court of
Appeal needs to address the areas
of confusion that riddle the UKs
approach to the patentability of
computer-implemented inventions
K Judgement awaited
T
he past few years has seen a
significant increase in the number of
hearings at the UK Patent Office
(UKPO) regarding patent applications for
inventions that are in some way dependant
on computer programming (Computer
Implemented Inventions). The increased
frequency of such cases is in part
attributable due to the advances in
telecommunications and internet
technologies. But it is also due to the
inherent difficulty in deciding whether a
Computer Implemented Invention falls into
the categories of invention for which patents
are not available. As shown by the line of
European Patent Office (EPO) and UK
case law from Vicom T208/84 to the present
Court of Appeal case of Macrossan (heard on
3/4 August 2006 by Jacob LJ, Neuberger LJ
and Chadwick LJ), this question is
particularly difficult in relation to Computer
Implemented Inventions. Indeed the UKPO
and the EPO 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).
Article 52 contains several exclusions, and
often more than one of these applies to the
same invention. This is especially so in the
case of Computer Implemented Inventions,
and here lies another difficulty in deciding
whether they are patentable. The reasons for
excluding an invention from patentability
are policy in nature. But these policy reasons
are not the same in respect of each of the
exclusions. In his judgment, as deputy judge
in CFPH LLCs Application [2005] EWHC
1589 Pat, Peter Prescott QC suggests that
the scope of each exclusion needs to be
determined in the light of the policy reason
behind its existence a suggestion that
seems logical, and one that was echoed by
Jacob LJ, prior to hearing Macrossan, when
he said that the issue of exclusions is of
public interest, sufficiently uncertain and
thus worthy of consideration by the Court of
Appeal. But, as shown by the abortive EU
directive on computer-implemented
inventions, consensus on policy issues,
especially in relation to patentability where
computer programs are involved, can be
very difficult to achieve.
Macrossan provides the Court of Appeal
not only with an opportunity to realign the
UK approach to determining whether a
Computer Implemented Invention is
patentable with that of the EPO, but it also
provides it with the opportunity to
determine the scope of the exclusions from
patentability. In particular, it should
determine the scope of the mental act and
business method exclusions (it may seek to
clarify some of the other exclusions as well).
If it takes these opportunities, it should go
some way to providing a consistent
approach to determining what is and what is
not patentable in both the UK and the EPO.
Current approach to assessing
computer-implemented patent
applications
As mentioned already, the UKPO and the
EPO, even though they are working under
what is essentially the same legislation,
approach the question as to whether a
Computer Implemented Invention is
patentable differently. It would clearly be
desirable if the UK approach and that of the
EPO could be realigned.
The UKPO approaches the question by
applying the principle stated in the EPO
decision in Vicom that decisive is what
technical contribution the invention as
defined in the claim when considered as a
whole makes to the known art. If there is
no technical contribution, or if the technical
contribution is excluded, the application
must fail. This raises the tricky question of
what is a technical contribution? The term
is not defined in any legislation. Peter
Prescott in CFPH went to some length to
stress his dislike for the test in cases where
an invention is on the borderline between
what is patentable and what is not.
Essentially, the UKPO asks: what is the
technical contribution? If there is none
outside of the exclusions it rejects the
application. As Peter Prescott put it, it holds
that it is not an invention. If there is some
technical contribution outside of the
exclusions, it then goes on to determine
questions of novelty and inventiveness i.e. it
is an invention, but it may still be old,
or obvious.
The EPO approach has moved on from
that currently applied by the UKPO and it
is based on the principle set out in the
recent EPO judgment in Hitachi T258/03.
It asks: does it have any technical
features? If there are no technical
features at all it rejects the application, for
not being an invention. But it considers it
is an invention if there is any technical
feature at all. In Hitachi, the EPO
suggested that even paper or ink could be a
technical feature. It then goes on to
consider novelty and inventiveness, and in
deciding if the invention is new or
inventive, it ignores anything that is not a
technical feature.
Peter Prescott summarised the difference
in approach in CFPH:
The EPO
filters out
excluded subject-
matter at the stage
of considering
obviousness at the
last stage while the
UK Patent Office does so
at the first stage (when
considering excluded
subject-matter). Or to put it a little
more precisely, what the UK Patent
Office does is to consider the exclusion
under the description novelty, but the
EPO does so under the description
inventive step.
But does this make a difference to the
outcome of whether an application is
deemed to be patentable? In CFPH, one of
the first UK cases since the Hitachi
decision, Peter Prescott found that if both
tests are applied correctly then the
outcome of both tests should be the same.
However, he thought that both systems
could do with a bit of a tweak to one that
was more harmonised and less susceptible
to human fallibility. Essentially, he
suggested the following approach:
(a) Determine what the new and non-
obvious advance in the art is said to be;
(b) Determine whether the advance in the
art is a new and non-obvious advance in
technology;
(c) If it is not obvious whether the advance
is a technological advance, the examiner
should then look to the exclusions to
patentability in Article 52 EPC and
decide whether the advance falls solely
into one or more of the exclusions,
bearing in mind the reasons for those
exclusions when determining
their scope.
Peter Prescott uses reasoning from the
House of Lords in Biogen Inc v Medeva plc
[1997] RPC 1, 42 to criticise the current
UK approach of determining whether
something is an invention without first
considering whether it is new and non-
obvious. He also criticises the EPO
approach of simply ignoring the non-
technical elements of an invention in
determining whether it is new and non-
obvious. Such an approach is incompatible
with the Court of Appeal decision in Dyson
Appliances Ltd v Hoover Ltd [2001] EWCA
Civ 1440 (where the business context was
determinative on the question of
obviousness). It is also contrary to the
established patent law principle that,
although a discovery is not patentable, an
artefact or process that is devised once the
discovery is made may be even if it is
obvious in the light of the discovery.
The risk with both current
approaches is that, even when applied
correctly, an invention that is new
and non-obvious may be deemed
unpatentable for falling within wide
interpretations of the exclusions, even if
the grant of a patent for the invention
would not be contrary to the public
interest. Such inventions should be
patentable. Also, 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.
Interestingly, counsel for the
Comptroller General of Patents in
Macrossan set out a very similar proposal
to Peter Prescotts outlined above for the
Court of Appeal to consider as a test for
UKPO examiners to follow in the future.
Accordingly, it seems most likely that the
Court of Appeal will change the way the
UKPO examines Computer Implemented
Inventions in the future.
Scope of other exclusions
Obviously it would be desirable for the
EPO and the UKPO to apply the same test
K
THE MACROSSAN CASE
It would clearly be desirable if the

UK approach and that of the EPO could
be realigned

THE MACROSSAN CASE
K
when deciding what is and what is not
patentable. However, as hinted at above,
there are further complications when more
than one of the exclusions potentially
applies to the invention. Clearly if the only
advance in the art above and beyond the
computer program is itself matter that is
excluded for other reasons, the invention is
not patentable.
In the context of Computer
Implemented Inventions the most
frequently cited exclusions (in addition to
the computer program exclusion) are the
mental act and business method exclusions.
Indeed, at the heart of the Macrossan
appeal is the question of what the correct
scope of the mental act and business
method exclusions is. It is clear there is
much confusion as to how to apply these.
Indeed, Mann J (who heard the case at first
instance) and Mr Birss (counsel for the
Comptroller) do not agree on which
exclusion the application falls foul of,
although they do agree that the application
should fail. It is useful to examine the
differences of opinion in relation to this
case to highlight the need for the Court of
Appeals guidance.
Macrossan
The facts
Mr Macrossans patent application
describes a website which produces the
legal documents a user requires in order
to incorporate a company. A user visits
Mr Macrossans website using his home or
office PC. The user answers prompts put to
him by the website. The website then uses
the information provided by the users
responses to generate the necessary
corporate documents in electronic form
which the user can then print. The
examiner rejected the application on the
grounds that it was excluded from
patentability by virtue of it falling within
the mental act, business method and
computer program exclusions to
patentability. Mr Macrossan appealed to
the Patents Court where Mann J heard the
case. Mann J held that since automation
was added to the task of form filling there
was some technical contribution, and in
this there is no disagreement from Mr
Birss. The disagreement comes in deciding
whether the form filling is a mental act or
a business method, raising the possibility
that it may be neither.
Mental act?
Mann J followed the first instance decision
of Aldous J in Wang Laboratories Incs
Application [1991] RPC 463 in holding
that what was described by
Mr Macrossans application was
merely a method of performing a
mental act. He stated that without a
computer, a skilled individual would do the
same thing in much the same way.
Consequently, what was described was
clearly a mental act, and therefore
excluded from patentability.
However, in his skeleton argument to the
current appeal, Mr Birss suggests that
the approach taken to date at the Patents
Court level is incorrect, and that the
policy behind the mental act exclusion is
aimed at
excluding
inventions that
require actual
mental activity in
their performance.
He states that
inventions that involve
acts that are carried
out by computers but
which could be performed
mentally should not be immediately
excluded from patentability (since at
some level all acts carried out by a
computer program are capable of being
performed mentally). Mr Birss concludes
that Mr Macrossans application
should not fail on the basis of the mental
act exclusion. An argument we feel
is compelling.
Business method?
Mann J held that Mr Macrossans
application did not describe a business
method, but instead it described a tool that
could be used in providing business
services. Mann J suggested that the policy
behind excluding business methods was
aimed at something more abstract, such as
the market making technique of Merrill
Lynchs Application [1989] RPC 561 or
the way of conducting an auction in
Hitachi, but not at tools used in a business
(i.e. the business as a whole is
excluded from patentability, but a
tool for doing business is not). Peter
Prescott presented a similar argument
in CFPH.
Mr Birss on the other hand understands
the exclusion to effectively bar all activities
that have an economic or business
character from contributing to patentability.
He draws on translations of the French
and German texts of Article 52 EPC in
support of this. However, this argument
runs counter to much of what Peter
Prescott was at pains to point out in
CFPH when he used Dyson as an example
of a case where the business context
of an invention can, and should, contribute
to patentability.
Prospects of success?
Regardless of how the Court of Appeal
decides to deal with applying the
computer program exclusion (which is
probably more of a procedural issue, given
that CFPH showed that the outcome of
both EPO and UKPO approaches is
essentially the same), of more pressing
concern would appear to be how it deals
with the scope of the other exclusions.
Given the confusion and uncertainty
surrounding the Article 52 EPC
exclusions and the policy reasons behind
them generally the time is right for the
Court of Appeal to step in on this issue.
Indeed, in the light of the current
uncertainty in relation to the mental act
and business method exclusions, it is clear
that Mr Macrossan has a prospect of
success. However, what is required for
Mr Macrossan to succeed is a decision
from the Court of Appeal that significantly
alters the UK approach to patentability of
Computer Implemented Inventions. Even
if Mr Macrossans appeal is rejected, we
very much hope that the Court of Appeal
addresses the areas of confusion and
uncertainty that riddle the UK approach
to this question in a robust and thorough
manner. The Court of Appeals judgment
is eagerly awaited. K
In the light of the current uncertainty in relation

to the mental act and business method exclusions,
it is clear that Mr Macrossan has a
prospect of success

K
SOUTH KOREA
S
tarting around 1999, the number of
business method, e-commerce and
software patent applications and
patent registrations rose dramatically in
Korea. Unsurprisingly, the increase
coincided with the boom in the internet-
related industries of the late 1990s and
revitalisation of e-commerce industries in
early 2000. According to the Korean
Intellectual Property Office (KIPO), since
2000, an average of about 5,000 patent
applications for electronic inventions are
filed annually.
One of the particular challenges facing
these kinds of inventions is the statutory
subject matter requirement. Very little case
law exists in Korea on whether these kinds
of inventions constitute patentable subject
matter. Most guidance must be found in the
relevant patent office internal guidelines: the
Guidelines for Examination of Computer-
Related Inventions (GEC) and the
Guidelines for Examination of Electronic
Commerce-Related Inventions (GEEC).
These guidelines are not necessarily
exclusive and a particular invention may
reasonably fall under both guidelines.
Further, the interpretation and application
of the GEC and GEEC are generally at the
examiners discretion.
Since the inception of these guidelines,
KIPO has continued to revise the GEC,
with the most recent version published in
2005. The revised GEC provides more
specific standards for determining if
software inventions constitute patentable
subject matter. This article takes a brief
look at the language of the revised GEC in
this regard.
AUTHORS
Man-Gi Paik (below left ) is a senior partner at Kim
& Chang. He received his B.E. in Electronics
Engineering at Seoul National University, his M.E. in
Electronics and Electrical Engineering at the Korea
Advanced Institute of Science & Technology and his
MBA at the Wharton School of the University of
Pennsylvania. He has extensive experience in
prosecution, litigation and enforcement involving
electronics technology and software issues. Before
joining Kim & Chang, he served as the Director
General at the Korean Intellectual Property Office
(KIPO) and at the Ministry of Commerce, Industry
& Energy (MOCIE).
Se-young Cheon (below right) is a Korean
patent attorney at Kim & Chang. She received her
B.A. degree in Electronics and Electrical
Engineering at the Korea Advanced Institute of
Science & Technology, and has experience in
prosecution and litigation related to electrical
engineering, including communications systems,
computers, and internet-related technology.
IN SUMMARY
Coinciding with the boom in internet-
related industries of the late 1990s and
revitalisation of e-commerce industries in
early 2000, the number of business
method, e-commerce and software
patent applications rose dramatically
One of the challenges facing these kinds of
inventions is the statutory subject matter
requirement. Little case law exists in Korea
on whether these kinds of inventions
constitute patentable subject matter, and
most guidance must be found in the relevant
patent office internal guidelines
The revised Guidelines for Examination of
Computer-Related Inventions provides
more specific standards for determining if
software inventions constitute patentable
subject matter
KStatutory
subject matter
requirement
examined
Man-Gi Paik and Se-Young Cheon
of Kim & Chang analyse
Koreas revised Guidelines
for Examination of
Computer-Related
Inventions
South Korea:
revised guidelines on
computer-related
inventions
South Korea:
revised guidelines on
computer-related
inventions
K
SOUTH KOREA
Statutory subject matter
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.
In addition, a method of operation and a
computer-readable medium storing software
that involves hardware and software
cooperation are also considered patentable.
For method inventions, the revised GEC
gives examples of patentable inventions:
performing specific procedures to control
hardware (e.g., hard disk, server) or
performing specific information processing
based on physical or technical features (e.g.,
engine speed, rolling temperature).
Revised GEC Examples
Previously, the GEC had generally defined
statutory subject matter as requiring
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Box 1: Revised GEC examples (page 51)
Statutory Subject Matter Not Statutory Subject Matter
Claim A
A service method for awarding points
based on a purchase amount from an
internet shopping mall, the method
comprising the steps of:
notifying a point amount to be donated and
a name of a point recipient into a server
through an internet;
obtaining an e-mail address of the point
recipient through the server based on the
recipients name stored in a means for
storing a customer list;
adding the points to be received to points
already received by the recipient stored in
the means for storing the customer list by
the server; and
notifying the points to the recipient by
e-mail through the server.
Claim B
A service method for awarding points
based on a purchase amount from an
internet shopping mall, the method
comprising the steps of:
notifying a point amount to be donated and
a name of a point recipient via an internet;
obtaining an e-mail address of the point
recipient based on the recipients
name stored in a means for storing a
customer list;
adding the points to be received to points
already received by the recipient stored in
the means for storing the customer list; and
notifying the points to the recipient via
the internet.
SOUTH KOREA
K
concrete means for achieving a specific
purpose. Although this was typically
interpreted to mean some type of
hardware, the revised GEC actually makes
this explicit. In fact, for method claims, the
revised GEC requires recitation of the
specific components for performing each
step (see Box 1)
According to the revised GEC, although
Claim B uses the internet, storing means
and e-mail, it is not statutory subject
matter. Claim B does not indicate what
specific components perform the claimed
steps. Consequently, Claim B could cover
human operations which is prohibited
subject matter. On the other hand,
Claim A is statutory subject matter since
it clearly recites that each step is
performed by a server.
Most significantly, the revised GEC now
explicitly requires cooperation between
the concrete means (hardware) and
software. That is, merely reciting concrete
means alone is not sufficient to meet
statutory subject matter requirements.
Further, this cooperation must exist in
even a method or storage medium claim
(see Box 2).
According to the revised GEC, although
Claim B comprises concrete means (an
inputting means, a calculating means, and a
printing means), these hardware are not
operating in cooperation with the software.
Thus, Claim B is not a statutory subject
matter. However, in Claim A, the calculating
means obtains the value of:
(m + n)
2
and (m n)
2
based on the square table. Thus, the revised
GEC states that, in Claim A, the calculating
means (hardware) operates in cooperation
with the formula (software).
In explaining the above requirement,
the revised GEC cites In re Park In-Ho,
Patent Court Decision No. 2000 Heo
5438 (September 21, 2001), aff d
Supreme Court Decision No. 2001 Hu
3149 (May 16, 2003). In re Park In-Ho
involved an application for a method
of recycling waste. The examiner
rejected the application under Article 29(1)
of the Korean Patent Act, which is the
citation used for violation of the subject
matter requirement. The applicant
appealed to the Intellectual Property
Tribunal (IPT).
On appeal, the IPT affirmed the
examiners final rejection. The IPT noted
that the fourth step was ordering a person
who incorrectly recycles waste to correct the
mistake. This, the IPT held, is not an
advanced creation of a technical idea
utilising the laws of nature. Rather, the IPT
held this step was nothing more than a
recycling guideline. The applicant appealed
to the Patent Court.
On further appeal, the Patent Court
affirmed the rejection, stating that a
business-related invention generally refers
to an invention directed to a new business
system or business method implemented
using information technology. To qualify
as such a business-related invention, the
information processing by software should
be implemented concretely in hardware.
However, the present invention comprises
off-line steps and the system in which the
software and the hardware were closely
linked to each other is not realised. Thus,
the claimed invention does not fall within a
business-related invention. The applicant
appealed to the Supreme Court, which
subsequently affirmed the Patent
Court decision.
Regulating informal practice
The revised GEC did not change patent
practice regarding statutory subject
matter so much as it merely regulated
what was informally already the practice.
Although this is not likely to significantly
impact the filing of business method,
e-commerce and software applications,
the revised GEC will eliminate some of
the examiner discretion on statutory
subject matter during examination.
Consequently, we may see a drop in the
number of questionable patents in the
software area. K
Box 2 Revised GEC Examples (page 31)
Statutory Subject Matter Not Statutory Subject Matter
Claim A
A calculating apparatus, the apparatus
comprising:
an inputting means for inputting natural
number n and m (1<n<m<256);
a calculating means comprising a square
table storing the value k
2
in the Kth
(0<k<511), an adder and a subtracter, and
a shift operator; and
a printing means for printing S as the
calculation result of the calculating means,
said calculating means calculating the
square value and obtaining
s =
based on the square table, while not using a
multiplier and a divider.
Claim B
A calculating apparatus, the apparatus
comprising:
an inputting means for inputting natural
number n and m (1<n<m<256);
a calculating means; and
a printing means for printing S as the
calculation result of the calculating means,
said S being defined as
s =
(m + n)
2
(m - n)
2
4
(m + n)
2
(m - n)
2
4
The revised GEC now explicitly requires cooperation between the

concrete means (hardware) and software

INDIA
K
IN SUMMARY
The onslaught of global technology players
showing an interest in the Indian economy is
encouraging, but to ensure the continued
influx of FDI there is a need to secure their
interests and protect their investments
As technology-driven enterprises invest a
lot to develop new technologies, Indias
IP regime tops their list of concerns. As a
confidence building measure, the Indian
Government has recently introduced
new legislation
This article examines Indian patent laws
relating to electronic inventions, and whether
they are in line with international regimes
AUTHORS
Rachit Bahl (bottom left) is an IP consultant with
Rouse & Co. International where he advises brand
owners on contentious and non-contentious IP
matters. He closely works with clients and advises
them over civil and criminal court proceedings in
respect of trademark and copyright infringement
including passing off actions. He also handles
opposition proceedings and advises over TM
clearance projects. He is a qualified lawyer and
graduated from Delhi with a university Rank.
Rajiv Suri (bottom right) is working as a consultant
with Rouse & Co. International. He has been
working in the IP field for more than 11 years. He is
an experienced professional in all aspects of
intellectual property including prosecution of
applications, oppositions, cancellation actions,
strategising and recommending practical solutions
to clients to effectively deal with conflicting
situations including anti-counterfeiting, copyright
violations, advising on issues relating to commercial
IP and drafting of commercial IP documentation
including assignments and licensing arrangements.
Rachit Bahl and Rajiv Suri of Rouse & Co
International examine whether Indian
patent laws relating to electronic
inventions are in line with
international regimes
T
he new millennium has been witness
to Indias ever increasing economic
might and technological prowess.
From notorious inclusion in the Priority
List in Special 301 to predictions of India as
the NEXT BIG THING by none other than
Bill Gates and renowned economists like
Clyde Prestowitz (President, Economic
Strategy Institute), all describe Indias growth
and potential in a more than subtle manner.
The sudden upsurge in bilateral ties with
the US, proposed inclusion within the elite
G-8 group of industrialised nations and
soaring stock markets combine to indicate a
paradigm shift from an essentially agrarian
economy to a technologically advanced nation.
Foreign Direct Investment (FDI)
Reliably supported by a strong middle class
of about 300 million, India has turned into
an attractive destination for global players.
Simply for the growth potential that India
has to offer, it is comprehensible that MNCs
are beelining to venture into the countrys
market and explore its grand pool of
pristine resources.
The onslaught of global technology
players showing an interest in the Indian
economy is definitely an encouraging
prospect in the above context. However, to
ensure the continued influx of FDI there is
an incumbent need to effectively secure the
interests and protect the investments of
these potential investors.
Technology companies and patents
As a confidence building measure, the Indian
Government has recently introduced some
new and effective legislation such as the
Information Technology Act 2000, the
Semiconductor Integrated Circuits Layout-
Design Act 2000, and the Protection of
Plant Varieties and Farmers Rights Act
2000 with encouraging results.
Considering technology-driven enterprises
invest a lot to develop new techniques and
research and development, Indias intellectual
property regime understandably tops their
list of concerns, as it is critical to make their
bottom lines look healthy.
Thus, employing a stringent IPR regime
is of foremost importance to India as it not
only would bring violators to justice but
would also ensure fair commercial benefits
to individuals and technology-driven
companies, irrespective of their origin.
Clearly, an efficient IPR administration is
inextricably entwined with Indias continued
economic growth.
In the context of these enterprises with
technology at their core, the patent regime
in India comes under scrutiny, which is
perhaps the most significant form of
intellectual property relevant to such
technology-driven companies.
Against the above background, this article
examines patent laws relating to electronic
inventions, and whether they are in line with
international regimes.
India:
harnessing
foreign investment
KNew IP legislation introduced
India:
harnessing
foreign investment
KNew IP legislation introduced
Indian patent law
Patent law is currently governed by the
Patents Act 1970. This Act has been
amended from time to time to bring it in line
with the changing demands of society and
international norms.
Revolutionary changes were introduced in
Indias patent law by means of the Patents
(Amendment) Act 2005 to bring the
countrys law in conformity with its
international obligations under the TRIPS
agreement. Some important features of the
amended patents law are:
a fully-fledged product patent regime, be it
for foods, drugs, medicines or substances
prepared or produced by way of a chemical
process, were introduced in India for the
first time;
patent terms were increased uniformly to
20 years;
the advent of pre-grant and post-grant
oppositions in addition to separate
proceedings for revocation of a patent; and
broader grounds for compulsory licensing
in the larger public interest.
TRIPS compliance
In line with Article 27 of TRIPS, Indian law
accords patent protection to an invention
provided it:
a. is new and does not form part of state of
the art;
b. involves an inventive step i.e. a technical
advancement which is not obvious to a
person skilled in the art; and
c. is capable of industrial application.
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.
Electronic inventions
There is no special legislation in India
governing electronic inventions. As per the
scheme of patents law in India inventions
are generally defined and protection is
uniformly accorded to all patentable
inventions irrespective of their nature
(including electronic inventions).
Of all electronic inventions, perhaps
software or computer programs and patents
thereof have been extensively debated the
world over. The position in India has been
equally as turbulent and marred with
ambiguity and uncertainty.
Software programs and
patentability
On the international level, patent
protection in respect of computer
programs and software has always been a
controversial subject.
In comparison to most countries, the US
laws seem to accord the most liberal
protection to computer software/programs
under patents. American corporations like
Microsoft, IBM and Thomson have taken
the protection that their local laws afford
and have gone on to patent virtually
everything that they come up with.
Generally speaking, software-related
inventions have been patentable in the US
since 1998, as long as they produce a useful,
concrete and tangible result in addition to
the usual criteria of novelty, non-
obviousness and industrial application.
To an extent their line of argument
is comprehensible. Article 27 of the
TRIPS contemplates patent protection for
every type of invention in all fields of
technology, provided it conforms to certain
minimum standards.
There is no doubt that computer
programs generally involve a lot of
ingenuity, and hence may qualify for
patent protection.
On the other hand, proponents against
software patents (most noticeably the
European Union) argue that liberal software
patents are completely unwarranted.
Frequently, patents are granted for trivial
inventions that do not merit any recognition.
In other words, patents are granted for
inventions that are either not new or where
an inventive step is prima facie lacking.
The US patent for one-click-buy on
Amazon has come in for severe criticism,
and exemplifies patentability of even
business methods (that are generally
software based).
Those against a liberal software patents
regime also argue that additional patents are
sought in respect of upgraded versions of
software that has already been patented. If
patents are granted for every upgraded
version, it may lead to ever-greening of
patents, given that technological advances
are rapid in the software industry.
As a result, the EU allows limited
patentability of software provided it makes a
technical effect.
The Indian position
As a developing nation, Indias extended
deadline to comply with its international
obligations under TRIPS expired on 1st
January 2005. In order to meet its deadline
the Indian Government promulgated an
ordinance viz. Patents (Amendment)
Ordinance 2004. By means of this
Ordinance, the Government introduced
significant changes, one of which related to
software patents.
Hitherto, in its description of non-
patentable inventions, s. 3(k) of the Patents
Act, 1970 specifically included: a
mathematical or business method or
computer program per se or algorithms.
However, by means of the aforementioned
Ordinance and citing international
obligations under TRIPS, the Government
sought to replace the sub-section on non-
patentable inventions to read as follows:
3(k) a computer program per se other
than its technical application to
industry or a combination
with hardware;
3(ka) a mathematical method or business
method or algorithms.
From this proposed change, it is evident that
the Government sought to keep mere
softwares out of patent protection. At the
same time however, computer programs
with technical application to the industry or
embedded in hardware were expressly
brought out of the purview of non-
patentable inventions and were included
within the scope of patentable protection.
The proposed amendment seemed to
indicate that if a software was used in
conjunction with a hardware, it would not
fall within the ambit of a computer program
per se and would thus qualify to be a
patentable invention.
However, as softwares are only used in
combination with hardware, it appeared that
all software would have qualified for patent
protection subject to them fulfilling the
criterion of novelty, non-obviousness and
capability of industrial application.
Therefore, the Ordinance sought to
drastically enhance the scope of
patentability of computer programs.
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
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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
INDIA
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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
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
Graph 1: Fieldwise distribution of
patents granted in India
F
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d

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f

p
r
e
v
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n
t
i
o
n
Number of Patents
Graph 4: Major patent holders in respect of software related inventions
S
ie
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g
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Graph 2: Area-wise distribution of
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w
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e

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n
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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
y
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e

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s
Number of Patents
INDIA
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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
Major multinationals in the electronics industry are interested in protecting

their software-related inventions in India
Table 1: Jurisdictions compared

US EPO Japan China India
Invention should be
within the technological
arts providing a useful,
concrete and tangible
result
Invention should satisfy
an inventive technical
contribution to the prior
art. It should not be a
scheme, rule, method
for performing mental
acts, playing games or
doing business and
computer programs as
such
Invention should be
utilising a law of nature
to produce a creation of
technical ideas
Invention should provide
a technical solution ie it
should use technical
means to solve a
technical problem and to
achieve a technical effect
Invention should involve
a technical advance as
compared to the existing
knowledge or should
have economic
significance or both so as
to make it not obvious
to a person skilled in the
art. It should not be
mathematical or business
method, algorithms,
computer programs per
se, presentation of
information or mere
scheme or rule
K
INDIA
extracts that are more precise and shorter
encapsulated text extracts that are less
precise, creating chains of text extracts
from the mapped detailing relations which
start with words extracted from said
documents and end with headlines,
assigning each of the text extracts of said
chains to a class enabling queries of the
persistent data store by a computer
displaying a text extract assigned to a
longer class after selection of a text
extract assigned to a shorter class, and
gradually displaying an increasing part of
the document and representing content of
said document with more and more detail.
This method was found to be essentially
relating to a database search program and
hence a software program per se.
Summary
It emerges from the above discussions
in the Indian context that the
parameters for patentability that the
Patent Office look for in respect
of software-related inventions are
not basically different from those
applied in respect of non-software-
related inventions.
Essentially an invention should be
a new process or product having technical
character or nature and it should
solve a technical problem that existed.
It goes without saying that improved
processes or products are also within the
realm of patentability. Industrial
applicability is easy to establish. The
Indian approach to software related
inventions is more towards the European
point of view. Broadly speaking application
software and embedded software
presented in a format acceptable to the
Patent Office seem to generally fall within
the ambit of patentable inventions in
India. 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 as compared to the
earlier situation, and that is very much
reflected in the increase in filings in
respect of software-related inventions
being witnessed.
The Indian economy and industry
have become vibrant and dynamic after
the floodgates of globalisation were
opened up. Software, pharmaceutical etc
are some of the industrial sectors at
the forefront in India. The legal provisions
in India do have a wider and broader
outlook in respect of software-related
inventions and there is enough scope
for software-related inventions to have a
greater share in the patent landscape in
India. It is for the concerned industries
and profession to take advantage of
this situation. K
REIMANN
OSTERRIETH
KHLER
HAFT Patents
Trademarks
Copyright and Designs
Trade Secrets
Unfair Competition
Licensing
Litigation, ADR
RECHTSANWLTE
Dsseldorfer Strae 189
40545 Dsseldorf
Tel. +49 (0)211 550 220
Fax +49 (0)211 550 22 550
contact@rokh-ip.com
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JUVE Law Firm
of the Year 2005/2006
for Patent Law
We do IP.
the parameters for patentability that the

Patent Office look for in respect of software-
related inventions are not basically different
from those applied in respect of non-software-
related inventions

AUSTRALIA
K
IN SUMMARY
Under the Berne Convention Australia is
required to ensure that an authors
enjoyment of copyright protection is not
subject to any formalities requirements.
Copyright therefore applies automatically
to computer programs on their creation
Since the NRDC decision, it has been
accepted that the categories of potentially
patentable subject matter are not closed. The
approach in this case was reflected in the
Patents Act 1990, which left the courts
discretion to decide the boundaries of
patentability in light of technological advances
This article offers an overview of recent
developments in the treatment of
computer software under copyright and
patent law, touches on some of the
conceptual inconsistencies in the
protection regimes, and considers the
practical effects of those inconsistencies
AUTHORS
Michael Pattison (bottom left) is a partner, Tom
Reid (bottom middle) a lawyer, and Jo Hall
(bottom right) an articled clerk at Allens Arthur
Robinson, Australia. Michael has specialised in
information technology law, both nationally and
internationally, since 1991. He has particular
experience in internet law, systems integration and
outsourcing agreements, telecommunications
procurements, electronic commerce issues, and
litigation to enforce rights in information technology
products. Tom conducts patent, trademark and
other intellectual property-related litigation and also
specialises in information technology agreements,
and is a former winner of the AIPPI Australia Group
National Essay Prize. Jo commenced articles in
2006, having previously been a researcher in AARs
intellectual property department, and has been
involved in patent litigation for international
companies in the pharmaceutical and chemical
industries and IP matters generally.
I
ntellectual property rights in computer
software are becoming more widely
recognised as valuable business assets,
not merely by specialist software
developers, but also by businesses which
may develop software in the course of
providing other services, such as systems
integrators and providers of IT and back
office services. 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.
The purpose of this article is to offer
a brief overview of recent developments
in the treatment of computer software
under Australian copyright and patent
law. It also touches on some of the
conceptual inconsistencies in the available
protection regimes, and considers the
practical effects of those inconsistencies for
the owners of intellectual property rights
in software.
Copyright protection
In Australia, computer programs are
protected as literary works under the
Copyright Act 1968 (Cth) (Copyright
Act).
1
Under the Berne Convention for the
Protection of Literary and Artistic Works
(Berne Convention), to which Australia is a
signatory, Australia is required to ensure
that an authors enjoyment of copyright
protection is not subject to any formalities
requirements.
2
Accordingly, copyright
applies automatically to computer
programs on their creation, and there is no
system of formal registration as there is,
for example, for patented inventions,
trademarks and designs.
Under the Copyright Act, creators of
computer programs enjoy the same rights as
authors of other literary works, such as the
right to prevent unauthorised reproduction.
There are certain general exceptions that
apply to the rights of authors of literary
works, including computer programs, such as
the fair dealing exceptions for the purposes of
research or study, criticism or review, or
Australia:
copyright and
patent protection for
computer software
Australia:
copyright and
patent protection for
computer software
Michael Pattison, Tom Reid and Jo Hall of
Allens Arthur Robinson discuss some of
the shortcomings of IP protection for
computer software in Australia
K Time for a dedicated regime?
Michael Pattison, Tom Reid and Jo Hall of
Allens Arthur Robinson discuss some of
the shortcomings of IP protection for
computer software in Australia
K Time for a dedicated regime?
reporting the news.
3
In addition, there are
certain exceptions that apply specifically to
computer programs, including to
reproductions made incidentally or
automatically for the purpose of running the
program, as backups, or for the purpose of
enabling a new computer program to be made
interoperable with an existing one.
4
As a result
of the free trade agreement made between the
United States and Australia in February 2004,
which came into effect on 1st January 2005,
the length of copyright protection in Australia
was extended in some circumstances. The US
Free Trade Agreement Implementation Act
2004 (Cth) extended the term of copyright in
literary works, including computer programs,
to be the life of the author plus 70 years
(previously, it was life plus 50 years).
The extension of the term of copyright as
a result of the US-Australia free trade
agreement was not without controversy. A
long term may be appropriate where the
subject matter is a classic novel, which could
be expected to be read for many years after
the authors death. In the case of software,
however, the fast pace of technological
development leads to the inevitable result
that a computer program will be protected
by copyright for many years after it ceases
to have any practical utility.
From 21st December 2000, the concept of
moral rights (sometimes referred to as
personal or non-economic rights) was
expressly incorporated into Australias
copyright regime by the passage of the
Copyright Amendment (Moral Rights) Act
2000 (Cth). The genesis of this amendment
was a paper issued by the then Minister for
Justice and Minister for Communications and
the Arts in 1994, titled Discussion Paper:
Proposed Moral Rights Legislation for
Copyright Creators (Discussion Paper).
The Discussion Paper was in turn prompted
by consideration of Article 6bis of the Berne
Convention, which requires the parties to
the Berne Convention to ensure that
independently of the authors economic
rights, and even after the transfer of the
said rights, the author shall have the
right to claim authorship of the work
and to object to any distortion,
mutilation or other modification of, or
other derogatory action in relation to, the
said work, which would be prejudicial to his
honour or reputation.
Notably, although the Discussion Paper
recommended against introducing moral
rights in relation to computer software, that
recommendation was not reflected in the
amendments made to the Copyright Act in
2000. Accordingly, pursuant to those
amendments, the Copyright Act now
provides for authors of literary, dramatic,
musical or artistic works, including creators
of computer programs, to have rights to
attribution, to prevent false attribution, and
to prevent derogatory treatment.
5
Moral rights may only be conferred on
individuals
6
and, in general, last for as long
as copyright subsists in the work.
7
Unlike an
authors economic rights, his or her moral
rights are inalienable (ie they may not be
transferred).
8
However, the Copyright Act
specifically allows for an author to agree to
give consent for a third party to do anything
which, but for that consent, would be an
infringement of the authors moral rights.
9
Employees may give standing consents to
their employers in relation to works created
in the course of their employment.
10
Employers who employ programmers to
create computer programs, and large
businesses which engage service providers to
create or modify software, will generally be
aware of moral rights issues (or be made
aware by their legal advisers). For example,
large-scale IT services outsourcing
agreements commonly include a requirement
that the service provider obtain consents from
its employees for the customer to do anything
in relation to software created by the service
providers employees which would, but for
those consents, be an infringement of those
employees moral rights.
However, there are obvious difficulties with
such workaround solutions. For example, if
the service provider (through inadvertence or
otherwise) fails to obtain a consent from an
employee, the customer is exposed to a risk
that the employee could subsequently assert
that his or her moral rights have been
infringed. The customer may well have a
claim against the service provider for breach
of contract as a result, but the ordinary
remedy for such a breach will be damages,
which may be inappropriate or insufficient
where the assertion of moral rights
infringement is inhibiting the customer from
using the software which it has paid the
service provider to develop, thereby causing
consequential loss to the customer.
Patent protection
Since the High Courts decision in National
Research and Development Corporation v
Commissioner of Patents
11
(NRDC), it has been
accepted under Australian law that the
categories of potentially patentable subject
matter are not closed. In the NRDC case, the
High Court set out a broad and flexible test,
whereby patentability is assessed as to
whether the invention results in the
production of an artificial state of affairs that
has its value in a field of economic endeavour.
In handing down its decision, the High
Court was mindful of the fact that
technological change is a process that
appears to be occurring at an increasingly
rapid rate. The High Courts approach in the
NRDC case was reflected in the passing of
the Patents Act 1990 (Cth), which left to the
courts the discretion to decide the
boundaries of patentability in light of
technological advances.
In the early 1990s, the Federal Court of
Australia affirmed the patentability of
computer software in cases such as
International Business Machines Corporation v
Smith, Commissioner of Patents
12
(IBM) and
CCOM Pty Ltd v Jeijing Pty Ltd
13
(CCOM).
The IBM case concerned a patent claimed
over a method and apparatus for producing
an image of a curve, and whether or not that
constituted a manner of manufacture.
14
In
overturning the examiners decision to
refuse the patent, the court held that the
examiner should look at the invention as a
whole and not at each claim individually, and
that the NRDC principles should be applied
to the whole invention. The court also stated
that the fact that the claims contain a
theoretical element should not exclude the
invention from patentability.
In the CCOMcase, which concerned
computer software for the storage and
retrieval of Chinese characters in order to
perform word processing,
15
the court
emphasised the importance of considering the
invention as a whole. The court again upheld
the NRDC principles, stating that for
K
AUSTRALIA
The extension of
the term of copyright
as a result of the
US-Australia free
trade agreement
was not without
controversy
computer software to be patentable, it must

achieve an artificially created end result of
utility in the field of economic endeavour.
16
The Australian Patent Offices manual of
practice and procedure refers to the principles
outlined in CCOM
17
as a guide to determining
the patentability of computer software.
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. However,
a patent may not always be the most
appropriate method of protecting software. As
with patents for any invention, the process of
obtaining a patent for a software-related
invention is time-consuming and expensive,
and not certain to be successful. In particular,
it is not uncommon for months or years to
elapse between the making of an application
and the grant of a patent; by the time a patent
is obtained and able to be enforced, the bulk of
the useful life of the software concerned may
be over, and the ability to enforce the patent
(for example by obtaining injunctions to
prevent infringements) may be of limited
practical benefit to the patentee.
In addition, difficulties may be encountered in
determining whether a software-related
invention meets the requisite standards of
novelty and inventive step. The problem that
arises is that, in order to determine whether the
invention would have been obvious to a skilled
addressee, who under Australian law is
presumed to be equipped with the common
general knowledge of those working in the
relevant field, some assessment of the prior art
is required. However, unlike other fields such as
medicine or chemistry, software-related
inventions are not commonly reported in
journals or other industry publications; rather,
source code is commonly kept secret by
developers, or released only to customers
subject to strict confidentiality requirements. As
a result, relevant prior art may not be able to be
identified until some time after a patent is
granted and the relevant invention is on the
market, exposing the patentee to the risk of a
successful revocation action. Where there is
uncertainty, it may be prudent for a software
developer to elect not to seek patent protection,
and instead to rely on its ability to keep the
details of its software a trade secret. Conversely,
businesses which do not carefully consider
existing software patents prior to going to
market risk allegations of infringement.
Comment
Generally speaking, the protection available for
computer software under Australian copyright
and patent law is sufficient to enable an owner
of such software to take action to prevent
simple infringements, such as straightforward
piracy. However, the limits of these rights have
been tested in decisions such as Stevens v Sony
18
(in relation to the legality of mod chips,
devices designed to circumvent copy protection
measures incorporated into Sonys Playstation
console) and Universal Music Australia v
Sharman License Holdings
19
(relating to the
liability of Sharman for the use of its peer-to-
peer software to infringe copyright).
In such circumstances, it may be asked
whether computer software should continue
to be forced into the mould of copyright and
patent protection, or whether, given the
increasing economic value of software, a
dedicated protection regime (similar to the
niche protection regimes available in
Australia in relation to plant breeds and
circuit layouts) would be justified. Before
any such regime could be implemented,
some basic questions of policy would
need to be answered, such as:
whether protection should be available
automatically upon the creation of
software (as is currently the case in
Australia under the Copyright Act),
or whether a formal system of
registration would be more
appropriate;
the length of time in which the
creator of computer software would
be permitted monopoly rights;
whether moral or personal rights
in software should be available; and
the scope of any ancillary rights, for
example a right to prevent the use of
copy protection circumvention
devices, such as the mod chip in the
Stevens v Sony case.
Shortcomings
The approach of Australian law to the
establishment and protection of rights in
computer software has been evolutionary
rather than revolutionary, charting the gradual
recognition of software as a valuable economic
asset. As a result, software has been protected
by copyright law (and to a lesser extent patent
law) not so much as a result of any considered
planning or strategy, but because there has not
been any more appropriate regime.
The protection available for computer
software in Australia under copyright and
patent law is broadly the same as in other
Western nations, and incorporates the
various conceptual difficulties and practical
pitfalls outlined above. Without considerable
further debate, it is unlikely that any
specialised regime for the protection of
computer software will emerge in Australia
in the short term. In the meantime,
businesses seeking to protect their
investment in the development of a computer
program under Australian law need to be
aware of the existing shortcomings of the
available protection regimes, and consider
relying on practical protection measures, such
as confidentiality agreements, in addition to
any legal remedies. K
Notes
1 Copyright Act, s 10 (definition of literary work).
2 Berne Convention for the Protection of
Literary and Artistic Works, article 5(2).
3 Copyright Act, ss 40-42.
4 Copyright Act, ss 47B-47D.
5 Copyright Act, Part IX. The US Free Trade
Agreement Implementation Act 2004 recently
amended the Copyright Act to extend moral
rights to performers.
6 Copyright Act, s 190.
7 Copyright Act, s 195AM.
8 Copyright Act, s s195AN(3). If an author dies
or his or her affairs are otherwise
administered by a legal representative, the
legal representative may exercise and enforce
the authors moral rights on the authors
behalf: s 195AN(1)-(2).
9 Copyright Act, s 195AWA.
10 Copyright Act, s 195AWA(4).
11 (1959) 102 CLR 252 at 275-7.
12 (1991) 105 ALR 388.
13 (1994) 122 ALR 417.
14 (1991) 105 ALR 388 at 389.
15 (1994) 122 ALR 417 at 419.
16 (1994) 122 ALR 417 at 450.
17 http://www.austlii.edu.au/au/other/
ipaus/apo/manual/Vol2/Part208/Part208-
8.2.html, at 8.2.7.2-8.2.7.3.
18 (2005) 221 ALR 448.
19 (2005) 220 ALR 1.
businesses which
do not carefully
consider existing
software patents
prior to going to
market risk
allegations of
infringement

AUSTRALIA
K
T
he 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.
There have been very few court cases
dealing with patentability of software or
business methods in Canada. Patent Office
practice is closely guided by the Manual of
Patent Office Practice (MOPOP). While
many of the practices in MOPOP find a
basis in the limited case law available, many
of them do not, but rather stem from
attempts by the Patent Office to deal with
issues not yet faced by the courts.
In February 2005, the Canadian Patent
Office issued two updated Chapters
MOPOP one entitled Utility and
Subject Matter (Chapter 12) and the other
entitled Computer Implemented
Inventions (Chapter 16). These revisions
were long awaited and there was a high
degree of consultation with Canadian
patent practitioners during their
preparation. Yet, they have been received
with mixed reviews. New Chapter 12 deals
with how to determine if an invention is
useful and if it is directed to statutory
subject matter. Chapter 16 deals with
computer-related inventions and provides
more guidance on the topic of statutory
Steven Garland, Allan Brett and Kelly Miranda of Smart &
Biggar summarise the position of software and business
method patents in Canada
AUTHORS
Steven Garland (below left) is a partner in Smart
& Biggars Ottawa office. His practice focuses
primarily on intellectual property litigation of all
types including issues relating to patent, trade-mark,
copyright, industrial designs, trade secrets and
competition law. He has acted on many patent
litigation matters that have involved a wide variety
of subjects, including chemical, biochemical,
biotechnological, telephony, mechanical and
industrial subject matters. He has appeared as
counsel in intellectual property cases.
R. Allan Brett (below middle) is a partner in
Smart & Biggars Ottawa office where his practice
involves complete patent portfolio development
and management for clients in various technology
sectors including telephony, internet,
communications systems and components,
wireless systems, photonics, control systems,
digital rights management, software, computers
and computing industries.
Kelly Miranda (below right) is an associate in the
Ottawa office of Smart & Biggar. Her practice focuses
primarily on patent matters in the areas of electrical
and electronic engineering and computer science.
IN SUMMARY
There have been few cases dealing with
patentability of software or business
methods in Canada. Patent Office practice
is guided by the Manual of Patent Office
Practice (MOPOP)
While many of the practices in MOPOP
find a basis in the limited case law
available, many do not, but rather stem
from attempts by the Patent Office to deal
with issues not yet faced by the courts
Though the patentability of a computer-
implemented method is a problematic
question, if the method implemented is
inventive, it should be possible for carefully
crafted claims to meet the tests set out in
MOPOP for patentable subject matter
K
CANADA
K Minimal case law in the area
Canada: are
computer
implemented
inventions
patentable?
Canada: are
computer-
implemented
inventions
patentable?
CANADA
K
subject matter as it relates to those
inventions in particular.
We will first provide a summary of
software and business method patents in
Canada. Then we will explain how
computer-implemented method claims are
being treated to determine if they are
directed to patentable subject matter.
Software
It should be noted at the outset that
pursuant to the Canadian Patent Act, the
definition of invention is any new and
useful art, process, machine, manufacture or
composition of matter, or any new and
useful improvement in any art, process,
machine, manufacture or composition of
matter. This is in essence identical to the
definition of invention found in the United
States patent legislation.
Moreover, Section 40 of the Act states that:
Whenever the Commissioner is satisfied that
an applicant is not by law entitled to be
granted a patent, he shall refuse the
application and, by registered letter addressed
to the applicant or his registered agent, notify
the applicant of the refusal and of the ground
or reason therefor. Finally, the only specific
statutory provision against patentable subject
matter is Section 27(8), which states: No
patent shall be granted for any mere scientific
principle or abstract theorem.
Current Canadian Patent Office practice
as set out in Chapters 12 and 16 of MOPOP
can be summarised as follows:
a) Software per se is not patentable subject
matter;
b) The following subject matter may be
patentable subject matter, assuming the
tests for obviousness and novelty
discussed below are satisfied:
i) claims to computer readable media;
ii) claims to data structures stored on a
medium (assuming they impose a
physical organisation on the data
according to attributes of the data);
iii) claims to a propagated signal carrying
a programme; and
iv) claims to computer-implemented
methods.
Thus, in practice, software claims written as
computer readable medium claims may be
patentable in Canada if they meet the test for
statutory subject matter detailed below.
The state of Patent Office practice with
respect to software has developed over the
years from a combination of Patent Office
Notices, Patent Appeal Board Decisions and
a single court decision.
In 1972, Office Notice No. 119A
included statements that computer
programmes were not patentable, nor was
a known or general purpose computer
programmed in a particular way to
produce a particular result.
The Patent Appeal Board departed from
Office Notice No. 119A in Re Application
Number 961,392 (hereinafter, Waldbaum)
1
,
and held that a conventional general purpose
computer programmed to produce a new
and non-obvious result is indeed patentable.
The Board remarked that neither computer
programs nor instructions or lists of
instructions for operating a computer are
patentable, but stated that the claims at issue
did not define a computer programme per
se.
2
The Board quoted with approval from a
U.S. decision, as follows:
[I]f a machine is programmed in a
certain new and unobvious way, it is
physically different from the machine
without that programme; its memory
elements are differently arranged. The
fact that these physical changes are
invisible to the eye should not tempt us
to conclude that the machine has not
been changed.
3
Following Waldbaum, a revised Office
Notice was published which stated: The
subject matter must not be a computer
programme per se, an algorithm, or a set of
instructions to operate a computer as this
is essentially mathematical information
developed from an algorithm.
4
The Schlumberger case
In 1978 the Federal Court of Appeal issued
its decision in Schlumberger Ltd. v.
Commissioner of Patents (1981), 56 C.P.R.
(2d) 204 (F.C.A.)
5
, (hereinafter
Schlumberger). In Schlumberger, the claims
at issue related to a machine operated
method of processing down-hole well
logging data, and involved, inter alia,
combining measurements and input
parameters to compute output parameters.
This is Canadas only court case on
software patents.
In Schlumberger, Mr. Justice Pratte
dismissed the applicants appeal, stating:
there is nothing new in using
computers to make calculations of the
kind that are prescribed by the
specifications. It is precisely in order to
make those kinds of calculations that
computers were invented. What is new
here is the discovery of the various
calculations to be made and of the
mathematical formulae to be used in
making those calculations. If those
calculations were not to be effected by
computers but by men, the subject-
matter of the application would
clearly be mathematical formulae and a
series of purely mental operations; as
such, in my view, it would not be
patentable. A mathematical formula
must be assimilated to a mere
scientific principle or abstract theorem
for which subsection 28(3) [now
section 27(8)] of the Act prescribes
that no patent shall issue I am of
opinion that the fact that a computer is
or should be used to implement
discovery does not change the nature of
that discovery. What the appellant
claims as an invention here is merely
the discovery that by making certain
calculations according to certain
formulae, useful information could be
extracted from certain measurements.
This is not, in my view, an invention
within the meaning of section 2.
6
Subsequent to Schlumberger, there have
been a number of Patent Appeal Board
decisions on this topic. In Re Application for
Patent of Seiscom Delta Inc.,
7
the application
disclosed a method of producing a display
on a two-dimensional surface of seismic
data indicative of a three-dimensional
subsurface formation. The Board
concluded:
The assessment to be made then is
whether the application relates to
converting measurements or to a
patentable combination of elements. In
our view it is the display of the co-
Software claims written as computer readable

medium claims may be patentable in Canada if
they meet the test for statutory subject matter

K
CANADA
ordinates in isometric form together
with the computer processing steps that
make up applicants invention, and the
invention in our opinion is not merely
performing calculations. We are satisfied
that the step of displaying an isometric
view of a formation brings the
invention into an art area in which
patents may be granted under s. 2,
providing there is conformity with all
other parts of the Act.
8
In Mobil Oil
9
, the application disclosed a
method of filtering multiple reflections from
seismograms. The Board stated: We see
that mathematical calculations may be part
of the applicants system We observe
however, that the steps of the method work
on the seismograms whereby the multiple
reflections are suppressed. It is our opinion
these steps bring another dimension to the
kind of invention that the applicant has
presented. We regard the invention as
pertaining to a useful system of filtering
multiple reflections from seismograms, and
as such we believe that more than
calculations are involved. We are satisfied
the nature of the applicants invention
removes it from any of the categories
identified in s. 28(3) [now s. 27(8)], and
hence from being solely algorithmic.
10
In 1998, the Patent Appeal Board
considered a series of Motorola
applications.
11
In Re Motorola Inc. Patent
Application No. 2,085,228 hereinafter
Motorola, the Board remarked that: It is
widely accepted that it is not possible to
obtain a patent containing claims to an
algorithm per se. Similarly, a method which
does nothing more than set out the step
needed to solve the algorithm is not
patentable.
12
However, the Board held that
the claims recited more than merely a
mathematical algorithm per se: the
Applicant has invented a device which is
specifically adapted to carry out the method
of solving the algorithm which the
Applicant has developed. This device, while
it does contain many means-plus-function
statements, also includes at least one specific
piece of computer hardware which is real
physical element. As a result, the Board
believes that the claims of this application go
beyond being directed to a mere scientific
principle or abstract theorem. The Applicant
is not seeking to exclude others from using
the algorithm itself but is seeking to exclude
others from using the specific device which
is claimed.
13
From the above, it would appear that
including some form of computer hardware
in a software related claim is sufficient to
prevent the claim from being rejected under
section 27(8) as being directed to an abstract
theorem. However, as mentioned earlier,
these claims must still meet the test for
statutory subject matter that will be
discussed below.
Business methods
Previously, MOPOP said that business
methods were, per se, not patentable. New
Chapter 12 states that there is no statutory
bar against business methods per se. There is
no case law that supports or refutes this
position. Until there is a case specifically
dealing with the patentability of business
methods per se, there will be some question
as to the validity of business methods.
The Patent Offices original bar on
business method patents stemmed from
Lawson v. Commissioner of Patents,
hereinafter Lawson
14
, where the Court
stated that methods that required
professional skill were not patentable. The
Lawson application disclosed a method of
subdividing real estate lots into a
champagne glass shaped configuration.
In view of the new Chapters of MOPOP,
examiners are no longer rejecting claims
because they are directed to a business
method. However, subject matter
objections are still common because
examiners believe that the claims do not
meet the test outlined below or if they are
not implemented by a computer or some
sort of hardware, that they require
professional skill.
Statutory subject matter for
computer-implemented methods
MOPOP enunciates tests for examiners to
use when analysing whether or not
computer implemented method claims are
directed to patentable subject matter.
Specifically: the method must be: a) an act
or series of acts performed by some physical
agent upon some physical object and
producing in such object some change of
either character or condition; and b) it must
produce an essentially economic result in
relation to trade, industry or commerce.
15
The Patent Office has acknowledged that
executing a computer programme
reconfigures a computer in a particular
way that is equivalent to differently wired
circuits.
16
Therefore, a computer-
implemented method meeting the other
requirements for patentability should meet
the physical requirement mentioned in
the previous paragraph. However, be aware
that if the method is deemed to be
uninventive, simply automating it will not
make it patentable.
17
With respect to the essentially economic
result criteria, the Patent Office has
interpreted the case law as follows:
to be considered statutory subject
matter, a method must be at least one of
the following: i) a method for producing,
making constructing, or building a
vendible product; ii) a method of using
or operating an inventive thing, or a
known thing for an inventive new use;
or iii) a method of diagnosing a
physical disease or physical medical
condition in a human being.
18
It is arguable that the case law has been
too narrowly interpreted in crafting these
criteria. Furthermore, the second criterion
introduces the concept of inventiveness
into the test for statutory subject matter.
Therefore, subject matter objections are
usually combined with obviousness
objections. Fortunately, if the obviousness
objection can be overcome, applicants can
usually fit their computer-implemented
method claims into the second criteria in
order to meet the essentially economic
result requirement.
The test for obviousness in Canada was
stated by the Federal Court of Appeal in
Beloit Canada Ltd. v. Valmet Oy (1986), 8
C.P.R. (3d) 289 (F.C.A.) at 294 as follows:
The classical touchstone for
obviousness is the technician skilled in
the art but having no scintilla of
inventiveness or imagination; a
paragon of deduction and dexterity,
Until there is a case specifically dealing with

the patentability of business methods per se,
there will be some question as to the validity of
business methods

CANADA
K
wholly devoid of intuition; a triumph
of the left hemisphere over the right.
The question to be asked is whether
this mythical creature (the man in the
Clapham omnibus of patent law)
would, in light of the state of art and
of common general knowledge as at
the claimed date of invention, have
come directly and without difficulty to
the solution taught by the patent. It is a
very difficult test to satisfy.
This test is reproduced in Chapter 15 of
MOPOP
19
and should be used by applicants
in responding to obviousness objections.
The Patent Office has been receptive to
this approach.
Since the new Chapters of MOPOP
issued, there have been only two Patent
Appeal Board decisions published that dealt
with patentable subject matter.
20
In both
cases, the applicants were successful.
Unfortunately, neither case provides a
detailed analysis of what is patentable
subject matter.
Problematic question
In summary, the patentability of a given
computer-implemented method in Canada is
a problematic question at this time.
However, if the method implemented is
inventive, i.e. not obvious, it should be
possible for carefully crafted claims to meet
the tests set out in MOPOP for patentable
subject matter.
The Patent Office is once again
reviewing Chapter 12 of MOPOP but the
results of that review will not be known
for some time. In the meantime, it is hoped
that some applicants will push their
applications through the appeal process so
that some further guidance may be
received from the Courts.
Therefore, for the time being, applicants
may either try to fit their claims into the
criteria set out in MOPOP, wait to see if
there will be any judicial guidance, or appeal
their applications. K
Notes
1 Re Application Number 961,392 (1971), 5
C.P.R. (2d) 162 (P.A.B.).
2 Ibid, at 165.
3 Ibid. at 168, quoting from In re Bernhart and
Fetter of U.S. Court of Customs and Patent
Appeals.
4 Notice to the Patent Profession (1973), 12
C.P.R. (3d) 84.
5 Leave to appeal to S.C.C. refused.
6 Schlumberger, at 205-6.
7 Re application for Patent of Seiscom Delta Inc.
(Now Patent No. 1,196,082) (1985), 7 C.P.R.
(3d) 506 (P.A.B.).
8 Ibid at 508.
9 Re Application for Patent of Mobil Oil Corp
(Now Patent No. 1,254,297) (1988), 24 C.P.R.
(3d) 571 (P.A.B.).
10 Ibid. at 575-576.
11 Re Motorola Inc. Patent Application
No. 2,085, 228 (1998), 86 C.P.R. (3d) 71
(P.A.B.); Commissioners Decision No. 1229
(Cdn. Pat. Appln. No. 2,085,116);
Commissioners Decision No. 1230
(Cdn.Pat. Appln. No. 2,084,989); and
Commissioners Decision No. 2,047,731
(Cdn. Pat. Appln. No. 2,047,731), all
released November 3, 1998.
12 Motorola, supra note 13 at 75.
13 Ibid. at 75-76.
14 Lawson v. Commissioner of Patents (1970), 62
C.P.R. 101 (Ex. Ct.) at 109.
15 MOPOP 16.03.02, see also Lawson at 109.
16 MOPOP 16.03.03.
17 Ibid. at 109.
18 MOPOP 12.02.01a.
19 MOPOP 15.01.02.
20 Commissioners Decision 1265 (Canadian
Application 2307153) February 2, 2006 and
Commisioners Decision 1266 (Canadian
Application 2275720) February 2, 2006.
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indpendant claims
Family Accession Nbr 20052430007852
Patent Number JP2005227445 A 20050825 [JP2005227445]
STG : Doc. Laid open to publ. Inspec.
AP : 2004JP-0034732 20040212
WO2005078685 A1 20050825 [WO200578685]
STG : Publ. Of int. Appl. With int Search rep
AP : 2005WO-JP00971 20050126
US2006077287 A1 20060413 [US20060077287]
STG : Utility Patent Application published on or after January 2, 2001
AP : 2005US-0545237 20050812
FD : PCT/JP05/00971 20050126 [2005WO-JP00971]
Title Security label and security label supply sheet
Patent Assignee DAINIPPON PRINTING CO LTD
KOSHU WATARU
SASAKI KAZUHIRO
SEALEX CORP
TAKAHASHI YOICHI
Orig. Patent Assignee DAINIPPON PRINTING CO., LTD.;1-1, Ichigaya-Kaga-Cho 1-Chome, Shinjuku-ku
[JP]
Inventor(s) KOSHU WATARU; TAKAHASHI YOICHI; USUI MICHIRO; SASAKI KAZUHIRO
Priority Details 2004JP-0034732 20040212
2005WO-JP00971 20050126
IPC G03B-011/00
G03B-011/04
G09F-003/02
G09F-003/03
H04N-005/225
IPC Advanced All H04N-005/225 [2006-01 A F I B H US]
IPC Core All H04N-005/225 [2006 C L I B H US]
ECLA G09F-003/02D2
US CLASS ORIGINAL (0) : 348376000
FI-Terms G03B-011/04; G09F3/03
F-Terms (File forming terms) 2H083 AA10
Citations (WO200578685)
Cited in the search report
JP2003345255(A)(Cat.Y);JP2005099354(A)(Cat.X,E);JP1105962(U)5Cat.A);
JP10116031(A)(Cat.A);JP2002318405(A) (Cat.A);JP2000035761(A)(Cat.A)
Citations (JP2005227445)
[19] Citation as reason for refusal of an application
JP (A) 2003345255 [JP2003345255]
Abstract (US20060077287)
A security label 1 according to the present invention can be removably applied on an image photographing
device such as a mobile phone 2 incorporating therein a digital camera to cover a lens part 3 thereof. Upon
removal, the security label 1 is bent and makes a trace emerge which shows that the security label 1 has been
removed. By applying the security label 1 to the mobile phone 2 to cover the lens part 3 thereof, improper photo-
graphy can be prevented. In case where the security label 1 is removed to take a photograph, the trace remains
on the security label 1 even if the security label 1 is applied again on the mobile phone 2 to cover the
lens part 3 thereof. Thus, the fact that a photograph is improperly taken can be easily understood.
Abstract (JP2005227445)
PROBLEM TO BE SOLVED: To provide a security sticker for preventing dishonest photographing by covering a
lens part of an imaging device such as a mobile phone with a camera.
SOLUTION: The security sticker 1 is composed of a sticker which can be stuck in an exfoliable form so that the
lens part 3 of the imaging device such as the mobile phone with camera 2 is covered and which has a property
Object of Invention (US20060077287)
[0002] The present invention relates to the field of security.
More particularly, it pertains to a security label to be used for an image photographing device such as a mobile
incorporating therein a digital camera, a digital camera and so on. An object of the present invention is to pro-
vide a security label and a security label supply sheet.
Advantages / Prev
Drawbacks
(US20060077287)
In addition, such electronic sounds have no use when a sound-emitting device such as a speacker is destroyed,
or software is altered to mute the sounds. In the case where a mobile phone is under custody, there are disad-
vantages that an owner cannot communicate through the phone in an emergency, and there is also the fear that
personal data stored in the mobile phone are improperly accessed by another person.
Independant Claims (US20060077287)
1. A security label removably applied to an instrument, comprising:
a label body; and an adhesive layer disposed on an rear surface of the label body; wherein the label body inclu-
des a transparent filmon a front surface of the label body a patterned release layer disposed on a rear surface of
the transparent film, and a print layer disposed on a rear surface of the release layer, and when the security label
is released from the instrument, the security label is bent to bring the release layer away from the transparent
film so that the release layer can be visually observed from the front surface.
10. A security label supply sheet comprising:a release paper; and a plurality of label bodies disposed on the
release paper through an adhesive layer; wherein each of the label bodies includes a transparent film on front
surface of the label body, a patterned release layer disposed on a rear surface of the transparent film, and a print
Questel.Orbit
Patent Family
Publication stage
description
Application and filing
details
Bibliographic
references
Title, Assignee, Inventor
Priority Details
Classifications
IPC and IPC 8
ECLA, US, Japanese
Cited References
By family member
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are searched
Key Content
Object of Invention,
Advantages and Previous
Patent Drawbacks,
Independent Claims
K
US/EUROPE
United States
S
oftware and business method patents
remain controversial in the United
States, even though the case law
endorsing these types of patents is well
established. The scope of eligibility for
patent protection continues to expand,
however, as patent applicants push the
boundary of what is acceptable subject
matter for patenting. Recently the USPTO
revised its guidelines for determining
subject matter eligibility (the Guidelines)
to eliminate the requirement that the claims
be within the technological arts.
1
This
revision opens the door of patentability to
the so-called pure business method patent.
Patentable subject matter
Section 101 of the US 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.
2
Excluded from patentability are things
or processes that are not made by man,
including laws of nature, natural phenomenon
and abstract ideas.
3
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. In Diamond v. Diehr,
the Supreme Court held that a statutory
process for curing synthetic rubber remained
statutory even though the claims recited a
series of mathematical steps executed by a
programmed computer. In doing so, the Court
distinguished its two earlier computer-related
cases, Benson
4
and Flook
5
, on the basis that the
claims in those cases did not recite a practical
application of the mathematical steps. The
claims in Benson were directed to a method of
converting numbers from one form to
another, and had no practical application other
than in connection with the programming of a
general purpose digital computer. In Flook,
although the claims were set in the context of
a catalytic conversion process, they were not
restricted to the chemical processes at work,
the monitoring of process variables, or the
means of setting off an alarm system. The
claims in Benson and Flook were further
distinguished in Diehr on the basis that they
did not include the transformation and
reduction of an article to a different state or
thing, which the Court said was the clue to
patentability for process claims that do not
include particular machines. Thus, after Diehr,
it was questionable whether a computer-
implemented claim that merely processed data
within a programmed computer and did not
include any physical transformation outside of
the computer was patentable subject matter.
More than a decade later, and following
numerous attempts to define the proper test for
patentable subject matter, the en banc Court of
Appeals for the Federal Circuit held in In re
Allapat that Benson, Flook and Diehr merely
stood for the proposition that certain types of
mathematical subject matter, taken alone,
represent nothing more than abstract ideas
until reduced to some type of practical
application.
6
The Allapat Court determined that
the claimed waveform rasterizer was patentable
subject matter because the claims were directed
to a combination of elements that formed a
specific machine to produce a useful, concrete and
tangible result, and thus constituted a practical
David B. Cochran and Wolfgang Reichl of Jones Day discuss
the current treatment of software and business method
patents in the United States and Europe
AUTHORS
David B. Cochran (bottom left) is an electrical
engineer and patent attorney in Jones Days
intellectual property practice and is based in
Cleveland. His experience includes international
patent prosecution, patent opinions, prelitigation
counseling, patent reexamination, due diligence of
intellectual property assets and patent litigation
Dr. Wolfgang Reichl (bottom right) is a German
and European patent attorney in the intellectual
property group of Jones Day in Munich, Germany.
He practises patent prosecution in the areas of
telecommunications, computer science, software-
based inventions, and opposition procedures. He
is actively involved in drafting and prosecuting
patent applications, opposition, and appeal work
before the German Patent and Trademark Office
and the European Patent Office.
IN SUMMARY
In the US, the scope of eligibility for patent
protection of software and business
method patents continues to expand, as
applicants push the boundary of what is
acceptable subject matter for patenting
The scope of patentable subject matter in
the US is much broader than in Europe,
and includes all forms of computer-
implemented (or software) inventions, and
business method inventions, whether
technically implemented or not
In Europe, it seems that the struggle for
computer-implemented inventions with the
exclusion provisions of the European Patent
Convention is over, and that in some
respects the law is approaching that of the
US, although clearly it is not as broad as the
US perspective because of the continuing
requirement for a technical effect
K Software and
business method
patents
A transatlantic
perspective
A transatlantic
perspective
US/EUROPE
K
application of the mathematical functions. The
Federal Circuit went further, and stated that
programming a general purpose computer
with software creates a new machine, and that
consequently a computer operating pursuant to
software may represent patentable subject
matter. Although not explicitly held, this case is
viewed as opening the door to software
inventions that are claimed solely within the
context of programming a general purpose
computer without expressly reciting any
physical transformation outside of the computer.
In 1998, the Federal Circuit decided the
State Street Bank case, which is noteworthy
because it eliminated the business method
exception to 35 U.S.C. s101.
7
Perhaps more
importantly, the State Street Court also
decided the issue of whether a claim that
recited a series of computer-implemented
data processing functions constituted
patentable subject matter when there was no
physical transformation of any article or thing
outside of the computer. The claims in State
Street recited a series of computations that
resulted in a number representing the value
of a mutual fund, claimed as a final share
price. Relying on its earlier decision in
Allapat, the Court held that the calculation of
the final share price constituted a practical
application of the mathematical calculations
because it produced a useful, concrete and
tangible result. The Court did not elaborate
on its holding that the final share price was
concrete or tangible, but merely concluded
that it was. Unfortunately, the Federal Circuit
has provided little (if any) guidance since
State Street in applying the useful, concrete
and tangible result test.
USPTO Guidelines
The USPTO Guidelines on patentable
subject matter were recently revised, in part,
to account for a decision of the Board of
Patent Appeals and Interferences (the
Board) related to a pure business method
claim that recited no technical step or
function Ex Parte Lundgren.
8
Lundgren
invented a method of compensating managers
in different companies in a way that would
supposedly prevent the managers from
colluding to fix prices. The examiner rejected
Lundgrens claims on the basis that they were
not within the technological arts, which the
previous Guidelines had equated with a
practical application. At one stage in the
prosecution, the examiner made a parallel
rejection that the claims did not produce a
useful, concrete and tangible result, but he
subsequently withdrew that rejection. On
appeal, the Board reviewed the s101 case law
and concluded that there was no
technological arts requirement and
therefore reversed the examiner. The interim
Guidelines subsequently removed this
requirement as well.
According to the Guidelines, if a claim
appears to fall within one of the recognised
judicial exceptions to patentable subject
matter, i.e., laws of nature, natural
phenomenon or abstract ideas, then the
examiner is to determine whether the
claim recites a practical application. Two
tests are provided for finding a practical
application: (1) the physical transformation
test; and (2) the useful, concrete and
tangible result test. Determining whether
a claim satisfies the first test is easier to
deduce, as the claim will recite some
physical step or function outside of the
programmed computer. The useful,
concrete and tangible result test, however,
is more difficult to analyse, primarily
because the Federal Circuit did not provide
any specific reasoning as to why a final
share price calculated by a computer is
concrete and tangible. The Guidelines state
that useful means specific, substantial
and credible, citing the USPTOs official
interpretation of the utility requirement
of 35 U.S.C. s101. The term concrete
means repeatable, or predictable,
according to the Guidelines, and the term
tangible means not abstract. This latter
definition is clearly not helpful because it
essentially takes the examiner back to the
beginning of the analysis.
The Guidelines also provide a listing of
patentable and non-patentable subject
matter specifically related to computer-
implemented inventions. A machine directed
by a computer program, a memory storing
functional descriptive material (i.e., not
artistic or literary material but material that
alters the function of a computer), and a
computer-implemented method are all
statutory subject matter. Non-patentable
subject matter includes a mere compilation
of data, a memory storing non-functional
descriptive material, a non-applied
mathematical algorithm, and an electronic
data signal, even when encoded with
functional descriptive material.
9
Clearly the scope of patentable subject
matter in the United States is very broad,
much more so than in Europe, and includes all
forms of computer-implemented (or software)
inventions, and business method inventions,
whether technically implemented or not.
Moreover, unless the Supreme Court decides
to revisit the issue after 25 years of silence,
10
the USPTO will continue to issue these types
of patents in ever greater numbers.
Europe
The discussion about software and business
method patents in Europe is centred around
the exclusion provisions in the European
Patent Convention (EPC). Art. 52(2) and (3)
EPC contains a non-exhaustive list of
subject-matters which are not regarded as
inventions within the meaning of the EPC.
These are either abstract (discoveries;
scientific theories; mathematical methods;
presentations of information) and/or non-
technical (aesthetic creations; schemes, rules
and methods for performing mental acts,
playing games or doing business; and
programs for computers). These exclusion
provisions are understood as generally
implying a requirement of technical character
for any invention which has to be fulfilled in
order to be patentable. The Board of Appeal
of the European Patent Office found in
Improved Pension Benefits System
11
that having
technical character is an implicit
requirement of the EPC to be met by an
invention in order to be an invention within
the meaning of Art. 52(1) EPC.
Computer-implemented inventions have
never been categorically excluded from
patentability by the Board of Appeal despite
the wording of Art. 52(2) EPC. Also the
Guidelines for Examination at the EPO state
that the basic patentability considerations for
computer-implemented inventions are in
principle the same as for other subject-matter.
Further, While programs for computers are
included among the items listed in Art. 52(2) EPC,
if the claimed subject-matter has a technical
character it is not excluded from patentability by
the provisions of Art. 52(2) and (3) EPC.
It is well-established in European case law
that a device or apparatus, being a physical
entity or concrete product, necessarily has
technical character. Further, a technical
invention cannot lose its technical character
because it is used for a non-technical purpose,
like, for instance, financial management. Thus,
an apparatus suitable for performing or
supporting economic activity is an invention
within the meaning of Art. 52(1) EPC and will
not be refused for lack of technical character.
Methods carried out on computers
The situation for patent applications
relating to methods carried out on
computers is more complex. Methods in
general are a valid claim category
according to European patent practice.
However, a method claim may relate to
explicitly excluded subject-matter, such as
business methods, and it may be
formulated in an abstract way without
referring to any physical object or
K
US/EUROPE
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US/EUROPE
K
resulting to a physical transformation. The
practice of the EPO has developed
significantly over the last years and seems
now to have reached a mature position.
The Board of Appeal recently held in
Auction Method
12
that a method involving
technical means is an invention within the
meaning of the EPC. The term invention
in Art. 52(1) EPC was broadly interpreted
and the Board mentioned that this
interpretation includes activities which are
so familiar that their technical character
tends to be overlooked, such as the act of
writing using pen and paper. The Board
continued: What matters with regard to
patentability is the presence of technical
character which may be implied by the physical
features of an entity or the nature of an
activity, or may be conferred to a non-technical
activity by the use of technical means.
Following this finding, all method claims
that recite technical means will have
technical character, regardless of the
purpose or use of these means. Method
claims that only indirectly imply the use of
technical means, e.g., when a computer is
essential due to the complexity of the
proposed solution but not included in the
claim, can still be rejected as mental act or
method of doing business as such. Another
decision
13
held that technical character may
be provided through the technical
implementation of a method, resulting in
the method providing a tangible, technical
effect, such as the provision of a physical
entity as the resulting product, or a non-
abstract activity, such as through the use of
technical means.
The decision Computer-related Invention
14
dealt with the consequences of the explicit
exclusion of computer programs and held
that a claim directed to a technical process
which process is carried out under the
control of a program cannot be regarded as
relating to a computer program as such.
Computer Program Product
15
added to the
question of technical character of computer
programs: This question should be decided by
whether the invention has a technical effect .
Since every computer program has a
technical effect when it executes, in that it
controls electrical currents in the computer
components, the Board considered that this
technical effect was not enough and that
there should be a further technical effect which
goes beyond the normal physical interaction
between program (software) and computer
(hardware). This further technical effect
must be established by technical effects
produced by the method executing on the
computer. In other words, a computer
program is not excluded from patentability
if the corresponding method of operating
the computer system has a technical
character. In consequence to the finding of
Auction Method, an executing computer
program will always have technical
character since it necessarily makes use of a
technical means the computing device it
executes on.
However, this does not mean that all
methods reciting technical means and all
computer programs, e.g. relating to business
methods, would be patentable under the
EPC. Art. 56 requires the invention to be
based on an inventive step, i.e., non-obvious
for the person skilled in the art.
According to the problem-solution
approach applied by the EPO for assessing
inventive step, the distinguishing features
of the invention over the closest prior art
are determined and the technical problem
that is solved by these features is
identified. While it is established case law
that the objective technical problem must
be so formulated as not to contain pointers
to the claimed solution, the Board in Two
Identities
16
came to the conclusion that this
principle only applies to those aspects of
the subject-matter claimed which
contribute to the technical character of the
invention and, hence, are part of the
technical solution. Non-technical features
are deemed a framework of the technical
problem which are given to the skilled
person for solving the technical problem.
Where a feature cannot be considered as
contributing to the solution of any
technical problem by providing a technical
effect it has no significance for the purpose
of assessing inventive step.
The decision Order Management
17
concluded that a direct implementation of a
business method may result in the technical
part of the invention being essentially
limited to instructing the computer to apply
given conditions and perform any necessary
calculations. In this case, the business
method implementation will lack an
inventive step. If a software implementation
distinguishes only in terms of business-
related processes and data structures, these
technical features follow directly from the
requirements specification and do not go
beyond the concept of a mere automation of
constraints imposed by the business-related
aspects. Such automation using conventional
hardware and programming methods must
be considered obvious to the skilled person.
In Europe, it seems that the struggle for
computer-implemented inventions with the
exclusion provisions is over, and that in
some respects the law is approaching US
law, although clearly it is not as broad as
the US perspective because of the
continuing requirement for a technical
effect. Apparatus claims, method claims
reciting technical means and computer
program claims have the necessary
technicality for being considered an
invention. However, having an inventive
step requires a contribution to the art of
technology and only features providing a
technical effect can contribute to inventive
step. Patent applications relating to direct
software implementations of per se non-
technical subject-matter, such as business
methods, will therefore have difficulties
showing the necessary technical effects
achieved with their claimed features for
overcoming the inventive step requirement.
On the other hand, implementations based
on technical considerations and computer-
implemented inventions relating to
technical processes will be allowable if their
technical features are non-obvious. K
Notes
1 Interim Guidelines for Examination of Patent
Applications for Patent Subject Matter Eligibility,
1300 Off. Gaz. Pat. Office 142 (Nov. 22, 2005).
2 Diamond v. Chakrabarty, 447 U.S. 303, 308-
309 (1980).
3 Diamond v. Diehr, 450 U.S. 175, 185 (1981).
4 Gottschalk v. Benson, 409 U.S. 63 (1972).
5 Parker v. Flook, 437 U.S. 584 (1978).
6 33 F.3d 1526 (1994).
7 State Street Bank & Trust Co. v. Signature Financial
Group Inc., 149 F.3d 1368 (Fed. Cir. 1998).
8 Appeal No. 2003-2088 (Precedential BPAI
opinion, September 2005).
9 The question of whether electronic data
signals are patentable subject matter is
currently on appeal in the case In re Nuijten.
Previously, the Guidelines had indicated that
such claims could be patentable if the
electronic data signal was encoded with
functional descriptive material, such as
computer program instructions.
10 The USPTO expected the Supreme Court to
issue a decision in Laboratory Corp. of America
Holdings v. Metabolite Laboratories, Inc., S. Ct.
No. 04-607, this year, which could have
impacted how method claims are judged under
s101, but the Supreme Court decided not to
hear the case after granting certiori.
11 T0931/95, 08.09.2000
12 Auction Method/Hitachi, T 0258/03, 21.04.2004
13 T 0914/02, 12.07.2005
14 T 0208/84, 15.07.1986
15 T 01173/97, 1.07.1998
16 T 0641/00, 26.09.2002
17 T 0172/03, 27.11.2003
K
US/EUROPE
K Differences between the US
and EPO
W
e discuss the
similarities and
differences between US
and EPO patentability
requirements with
reference to
examples from the
field of computer-
implemented
inventions.
Example 1
Our first example relates to
an automatic auction carried
out on a computer system. In
this case a US patent issued in 2000 whilst
the European Application in the
same family was refused on appeal
in 2004. One independent claim
from the US patent and one
from the European
Application as refused on appeal are
paraphrased in Tables 1(a) and (b).
This example is taken from the well
known Technical Board of Appeal decision
T258/03 Auction Method/Hitachi of the
European Patent Office (EPO). Whilst
Technical Board of Appeal decisions are not
binding, this particular case has been
influential. During on-line auctions, bids can
be delayed in transmission and so become
out of synchronisation. Hitachi described
solving this problem by requiring bidders to
send a desired price and a maximum price to
the auction server. The auction then
proceeds automatically with no further need
for information to be transmitted to the
auction server. The server sets a price and
lowers it until it reaches the highest desired
price. In the event of a tie, the server raises
the price until only the bidder having the
highest maximum price is left.
The approach used by the EPO Technical
Board of Appeal in the Hitachi case is
summarised in Table 1(c).
Olswangs Dr Rachel Free explains that obtaining
patents for computer-implemented inventions is easier
in the US than under the EPO
AUTHOR
Dr Rachel Free is a
European Patent Attorney and a Chartered Patent
Agent at Olswang. Her practice focuses on patent
drafting and prosecution for computer-related
inventions. She has particular experience in image
processing, internet-related
technologies, communications
and artificial intelligence.
IN SUMMARY
This article discusses the similarities and
differences between US and EPO
patentability requirements, using
examples from the field of computer-
implemented inventions
The differences between US and EPO
patentability requirements for business
methods and computer-implemented
inventions are as great as ever. Pure
business methods can be patentable in the
US, and this is not the case in Europe
US/Europe: an illustrated
discussion of the
patentability requirements
for computer-implemented
inventions
Table 1(a)
US 6,044,363 Automatic Auction
Method. Issued 2000
An auction method, comprising the
following steps:
receiving ordering information from
remote bidders, the ordering
information including a desired price,
number of product purchases and a
highest possible price for each remote
bidder; and
conducting an automated auction
procedure whereby the desired prices
included in said ordering information
are compared to determine an initial
highest product price;
wherein, if two or more bidders have
competing desired prices, a successful
bidder is determined on the basis of the
largest highest possible price included in
said ordering information; but if no
bidders have competing desired prices,
a successful bidder is determined on the
basis of the largest desired price
included in said ordering information.
US/EUROPE
K
The first question, Does the claim
involve technical features? was answered,
Yes. If the claim includes any technical
means at all, and those include even
pen and paper, the first question is
passed successfully. In this case, technical
features like a server computer and
client computers were present in the
apparatus claim and it was held that,
for this purpose, there is no difference
between an apparatus claim and a method
claim. However, the claim fell at the second
part of the test. There were no non-
obvious technical features. The applicant
argued that technical effect was present
because delays in propagation of
information between the bidders and
server were overcome. However, because
this solution concerned the rules
of the auction it was not considered to
be a technical solution. Modifications
to a business scheme to circumvent a
technical problem rather than solving it by
technical means were held not to
contribute to inventive step. Thus any
ingeniousness required to develop the
auction rules did not contribute to
inventive step. In the US, a similar and
arguably broader claim issued. This
highlights the difference in approach
between the two jurisdictions of the US
and EPO.
In the US a computer-implemented
invention will generally be patentable
subject matter as long as it does not
fall within a judicially created exception
such as abstract ideas, laws of nature
and natural phenomena. A key
test for assessing this is Does the
invention produce a useful, concrete and
tangible result?. This is illustrated in
Table 1(d).
Example 2
Our second example relates to a method of
compensating a manager. This is the recent
decision of the US Patent Offices Board of
Patent Appeals and Interferences in Ex
parte Lundgren, Appeal No. 2003-2088,
BPAI 2005. The invention concerned a
method for calculating a managers
compensation based on a comparison
between the managers company and
similar companies. Claim 1 is paraphrased
in Table 2, which the US Patent Office
originally rejected as being non-statutory
subject matter. As you can see the method
is a pure business method that can be
carried out with pen and paper. On appeal
the claims were held to be patentable
subject matter (in a 3 to 2 decision)
although no ruling on novelty or inventive
step was made.
No European application corresponding
to the US Lundgren application exists.
However, it is fair to say that this
type of pure business method would be
unpatentable under the European
Patent Convention. In this particular case,
claim 1 does not specify use of any
computer equipment and so such a claim
would likely fall at the first part of the
Hitachi test mentioned above. Even so,
the second part of the test would also
likely fail as it is difficult to find any
claim features that contribute to
technical character.
Table 1(b)
EP 0828223 Automatic Auction
Method
Claim 1 of main auxiliary request on
Appeal. Application refused.
An automatic auction method at a server
computer
transmitting information on a product
to be auctioned to client computers
receiving and storing a desired price and
a maximum price in a competitive state
from the clients
setting an auction price
determining any client who proposes a
desired price equal to or greater than the
auction price; if there is no such client,
lower the auction price and repeat
exclude client bidders who's maximum
price is lower than the current auction
price and repeat this in a Dutch
auction process until only one client
bidder remains.
Table 1(c)
EPO Hitachi approach
Table 2
US 7,065,495 Lundgren 20 June 2006
A method of compensating a manager
for the purpose of reducing the degree to
which prices exceed marginal costs in an
industry, reducing incentives for industry
collusion between the primary firm and a
set of comparison firms in said industry,
the method comprising the steps of:
choosing an absolute performance
standard ;
measuring an absolute performance;
measuring an absolute performance of
each firm;
determining a performance
comparison;
comparing said measurement of
absolute performance;
determining a relative performance
measure;
determining the managerial
compensation ; and
transferring compensation to said
manager, said transferred compensation
having a value related to said managerial
compensation amount.
Does the claim involve
technical features?
Considering only those features that
contribute to technical character,
Does the invention provide a
non-obvious solution to a
technical problem?
Table 1(d)
US Approach
Does the invention produce a useful, concrete and tangible result?
Useful?
Is there utility that is
specific, substantial
and credible
Tangible?
Process must give a real
world result, e.g. some
change in the physical
world that humans
perceive
Concrete?
Process results need
to be repeatable
K
US/EUROPE
Tadahiko Itoh
President
ITOH International Patent Ofce
32nd Floor,
Yebisu Garden Place Tower,
20-3, Ebisu 4-Chome,
Shibuya-ku,
Tokyo 150-6032
JAPAN
Tel: +81 3 5424 2511
Fax: +81 3 5424 2527
Email: itohpat@itohpat.co.jp
Website: www.itohpat.co.jp
LEX ORBIS is one of Indias premier Intellectual Property
Practice Groups. Through our well-credentialed IP
professionals, LEX ORBIS is equipped to offer its clientele a
combination of techno-legal expertise that is unparalleled in
India covering all areas of Intellectual Property Rights com-
prising Patents, Trade Marks, Copyrights, Trade Secrets,
Designs, Geographical Indications, Plant Variety Protection,
Domain Names and Layout of Integrated Circuits. The
Firm has proven credentials in IPR enforcement, including
trial and appellate level litigations in patents. LEX ORBIS
has been successful in uniquely combining legal talents with
technical expertise, thus differentiating it from Indias
traditional style of IP practice.
Contact Details:
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709/710, Tolstoy House
15-17, Tolstoy Marg
New Delhi - 110 001
TEL: 91 11 2371 6565
FAX: 91 11 2371 6556
EMAIL: mail@lexorbis.com
URL: www.lexorbis.com
US/EUROPE
K
Example 3
Our third example is concerned with data
transfer with expanded clipboard formats in a
computer system. US patents issued in 1998
and 1999 whilst a European patent application
and its five divisionals were accepted on
appeal in Feb 2006. One independent claim
from one of the US patents and one from the
parent European application are paraphrased
in Tables 3(a) and (b).
This example is taken from a recent
Technical Board of Appeal decision
T0424/03 of the EPO. The Board followed
Hitachi T258/03 (discussed above) and
concluded that a computer system including
a memory (clipboard) is a technical means so
that the claimed method had technical
character. The second part of the Hitachi test
involves asking whether the technical
features alone provide a non-obvious solution
to a technical problem. This was the case
because all the method steps contributed to
the technical character of the invention. The
closest prior art had only two clipboard
formats and claim 1 was inventive over this.
Comparing this example with the Hitachi
example, in Hitachi the method steps were
computer-implemented non-technical
business method steps. In contrast, in this
clipboard case, the method steps were
technical because they enhanced the
internal operation of a computer system
with a view to facilitating the exchange of
data among various application programs.
In conclusion, the differences between US
and EPO patentability requirements for
business methods and computer-
implemented inventions are as great as ever.
The ex parte Lundgren case illustrates that
pure business methods can be patentable in
the US whereas the Hitachi case shows this
not to be the case in Europe. In Europe it is
not enough to include use of computers in a
method claim. As demonstrated in the
Hitachi case there must also be technical
features which contribute to inventive step.
That is, in the US the claim as a whole is
examined once to assess whether it
comprises patentable subject matter. In
contrast, the requirement of patentable
subject matter is effectively considered twice
by the EPO; first to assess whether any of
the claim features are technical and second,
to test whether a thinned down claim
comprising only technical features provides
a non-obvious solution to a technical
problem. For patentability under the EPC,
technical method steps that provide a non-
obvious solution to a technical problem are
needed (see the clipboard format example in
Table 1(c)).
Having said that, the ex parte Lundgren
case was a 3 to 2 decision with strong
dissents by two of the Board of Appeal
members. The situation in the US and
Europe may well change in future and we
recognise that anomalies are always possible,
as illustrated by our fourth example below.
Example 4
This granted European patent is directed
to a method of approving a monetary loan
application and its claim 1 is paraphrased
in Table 4.
In this case a programmed computer and a
communications link are used and arguably
give technical features under the first part of
the Hitachi test. However, it is difficult to see
how the method steps comprise anything
more than implementing a previously manual
process and how any technical features that
solve a technical problem in a non-obvious
way are involved. Unfortunately, citing
precedents such as this is rarely influential
during examination at the EPO. In the US
however, such a claim could theoretically be
granted provided it were new and not obvious
over corresponding manual processes. Indeed
there are currently three granted US patents
in the same patent family.
Despite this fourth example, it is
concluded that obtaining patents for
computer-implemented inventions is
generally easier in the US than under the
EPC and this situation is likely to remain at
least for the foreseeable future. K
Table 4
EP 0715740 B1 granted 2001
A method for processing a monetary loan
application from an applicant without
human intervention using a programmed
computer and a communications link, said
method comprising the steps of:
exchanging information regarding said
loan application between said applicant
on one end of said communications link
and said computer on an opposing end
of said communications link;
obtaining a credit report regarding said
applicant from a credit bureau based on
said information, and characterised by
the further steps of:
determining by computer analysis of
factors deemed important in the
applicant's ability and willingness to
repay the loan whether to approve said
application based in part on said
information and on said report;
confirming approval of said loan to said
applicant via said communications link.
Table 3(a)
US 5,765,156 Data Transfer with
Expanded Clipboard Formats.
Issued 1998
In a computer system having a clipboard for
performing data transfers that support
multiple transfers of data clipboard formats,
a method comprising the steps of:
establishing a file contents clipboard
format that is specially designated for
holding data that is to be encapsulated
into a file;
providing data that is not a file for data
transfer;
putting the data on the clipboard,
including converting the data into a file
contents clipboard format; and
pasting the data to a destination,
wherein said pasting causes the
computer system to create a file that
holds the data.
Table 3(b)
EP 0717354 approval for grant issued
June 2006
A method in a computer system having a
clipboard
providing a text clipboard format, a file
contents clipboard format and a file
group descriptor format
selecting data that is not a file for data
transfer
converting the selected data into file
contents clipboard format and storing
this as a data object on the file contents
clipboard
using the file group descriptor clipboard
format to hold a file descriptor
complete the data transfer by pasting a
handle to the data object to a data sink,
using the file descriptor to create a file
at the data sink and encapsulating the
data object into the file.
The differences
between US and EPO
patentability
requirements for
business methods and
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
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
If there is only innovation at a non-technical level

then one should expect the EPO to refuse
the patent application

K
UK/EUROPE
(c) Patent filing practice
The Court of Appeal decisions in Aerotel and
Macrossan should hopefully provide guidance
for patentees and their advisors on the
approach the English courts (and
consequently the UKPO) will take when
considering exclusion from patentability. To
the extent that there remain differences
between the UK and the EPO, practitioners
may still continue to pick and choose their
application route. In some cases
practitioners may pursue applications in
parallel at the EPO and in the UK (de-
designating UK from the European
application if the GB patent is granted first,
or withdrawing the GB application if the
European patent is granted and is not
opposed). The UKPO processes patent
applications within four and half years and
there are no post-grant opposition
proceedings in the UKPO (unlike the EPO).
These two factors may be of value to an
applicant in a rapidly changing market.
Standards patent litigation in the UK
Aside from cases regarding patentability and
the statutory exclusions, the English court
has seen other cases recently regarding
mobile telephone standards. There is also a
case currently in litigation in the UK
regarding the M-PEG standards used for
MP3 players. Both offer interesting insights.
Industry standards have been established in
a number of fields to ensure interoperability.
In theory they may also encourage innovation
and reduced barriers to entry for competition.
Numerous multinational telecommunications
companies have large patent portfolios.
Members of the Electronic
Telecommunications Standards Institute
(ETSI) an industry association are
required to disclose their patented technology.
Where those patents are said to be essential
the patentee is expected to license them to all
others on terms that are fair, reasonable and
non-discriminatory (FRAND). The patentee
declares which of its patents are essential.
Companies have filed as many patents as they
can that relate to industry standards. The
more essential patents they hold, the
stronger their negotiating position when
cross-licensing with others. ETSI does not
have a procedure for resolving which patents
are essential, nor does it police whether
licence terms offered are FRAND (leaving
that to commercial negotiation). The only
sanctions ETSI has are to threaten to exclude
a party from participation in standard setting,
or to steer a standard in a direction away from
that partys patent portfolio
15
.
Nokia v InterDigital non-essential
telecommunications patents
In recent disputes between Nokia and
InterDigital the English court has been willing
to accept jurisdiction to determine patent
essentiality under the ETSI standards.
InterDigital holds numerous patents regarding
2G and 3G handset technology. Nokia and
InterDigital could not
agree licensing terms
and sums payable.
Nokia brought an
action in the English
court against InterDigital
16
seeking revocation of three InterDigital
patents and a declaration that they were not
essential to the 2G standard. The English court
accepted not just the revocation case (which any
party may bring against a patent in force in the
UK) but also the non-essentiality case (in the
courts inherent jurisdiction). The matter went
to trial on invalidity and non-essentiality.
However, the case was overtaken by parallel
ICC arbitration, where a final determination
was made and Nokia was ordered to pay $252m
to InterDigital in royalties for handset sales in
2002-2006. Nokia and InterDigital then settled
globally. Nokia were in court against
InterDigital in March 2006, this time regarding
3G technology
17
. Nokia did not seek revocation,
but did seek a declaration of non-essentiality of
some 30 patents. The court accepted inherent
jurisdiction to grant such negative declaratory
relief, setting out a three-stage test:
(1) The question is decided as a matter
of discretion
The Court was unwilling to accept
arguments that this would open the
floodgates of litigation against
InterDigital.
(2) Negative declarations are only suitable
where they will serve a useful purpose
The court was satisfied that as an
independent experienced patent tribunal
its reasoned opinion could have significant
persuasive authority in licensing
negotiations even though the UK is only a
small part of the global market. The court
noted that if patents were non-essential
and related only to a specific method of
working a standard then they could be
designed around and it was therefore likely
there would be no need for subsequent
patent infringement proceedings.
(3) The issues must be sufficiently
clearly defined
Pumfrey J had previously heard the 2G
trial and was satisfied that ETSI
standards and the patent claims in
dispute were sufficiently clearly defined.
Young telecommunications companies, who
will be net payers in cross-licensing
negotiations because they do not have large
patent portfolios of their own, may consider
such declaratory relief proceedings in the
UK if they believe competitors patents are
non-essential and not in fact used by them.
The English court has placed itself at the
centre of developing patent law in the global
telecommunications field.
Phillips v. SanDisk M-PEG (MP3)
patent litigation
By 1992, the Moving Pictures Expert
Group (MPEG) had developed compressed
digital audio and video standards, and had
concluded a first standard called MPEG-1
for use in CDs. There were three formats
for audio data (labelled layers 1, 2 and 3).
Layer 3 was a more efficient format and
was widely adopted as a way to store
music on relatively small hard disk drives
and to transfer music files over the
internet. By the mid/late 1990s, MPEG-1
layer 3 became known simply as MP3.
Fraunhoffer and Philips, amongst others,
developed the standards and filed patents.
Fraunhoffer now use licensing and royalty
collection agents to mange their patent
portfolio
18
. Phillips use licensing and
royalty collecting agents, Audio MPEG
19
in the US and Societa Italiana Per Lo
Sviluppo DellEllettronica (Sisvel)
20
in Europe.
SanDisk make memory products,
including MP3 players, with prices
ranging from as low as $49.99 up to over
$250. Though SanDisk has taken a licence
to the Fraunhoffer patent portfolio (and
their royalty collecting agents publish that
they collect in the region of $1 per unit
royalty) SanDisk has not taken a licence
from Sisvel. In February 2006 SanDisk
To the extent that there remain differences

between the UK and the EPO, practitioners
may still continue to pick and choose
their application route

UK/EUROPE
K
brought revocation proceedings
21
in the UK against Phillips and
other joint owners regarding six MP3 patents
22
. A month later, in
March 2006, SanDisk brought an action
23
seeking a declaration
that their products need not infringe three of the MP3 patents
24
and seeking a declaration that they are not essential for
SanDisks MP3 players. The parallels with the Nokia/InterDigital
non-essential patent litigation are clear. SanDisk has also sought
a similar declaration of non-essential patents. The case has
been listed to be heard in March 2007 with a trial running
13-15 court days.
Other electrical/electronic cases
There are other telecommunications patent cases in the UK that
have been commenced involving Qualcomm/Nokia and
Samsung/Sony Ericsson. There are also other electrical/electronic
cases that have been started in the courts. The English courts offer
the practical and procedural advantages of experienced specialist
patent judges; disclosure of documents; party-appointed experts;
and cross-examination of witnesses and experts at trial. These
factors, combined with thorough examination of the issues at trial
result in reasoned detailed judgments from the specialist judges.
Further, the English court is one of the fastest jurisdictions in
Europe. Cases can be brought to trial in less than a year from
commencement. An example is the RIM BlackBerry litigation.
When InPro sued RIMs customer, T-Mobile in Germany, RIM
brought revocation proceedings in the UK to try to get a court
decision before the German trial. RIM succeeded in obtaining a
finding of invalidity in the UK. Where companies are faced with
patent-owners that are not exploiting their patents other than by
litigation and licensing, the UK can be a good location to bring
proceedings for revocation and/or a declaration of non-
infringement on an expedited timetable to trial. So-called patent
trolls who choose to sue in other countries in Europe may find
their patents challenged in the UK courts in fast-moving litigation.
Though the English courts are more expensive than elsewhere in
Continental Europe, the winner on an issue at trial will normally
recover his reasonably incurred costs (typically 65-80% of the
actual cost incurred). That may help deter speculative cases being
brought against parties in the UK. K
Notes
1 Section 1(2) of the Patents Act 1977 (as amended) and Article 52(2)of the
European Patent Convention, respectively
2 See, e.g. T0208/84 Vicom, paragraph 16
3 The Patents Act 1977, Section 130(7)
4 T0208/84 Vicom
5 T0931/95 Pension Benefit Systems Partnership
6 T0641/00 Comvik
7 e.g. T0258/03 Hitachi; T0244/00 Matsushita; T0634/01 Fuji; T0049/04
Walker; T0411/03 Microsoft
8 Fujitsus Application [1997] RPC
9 CFPH LLCs Application [2006] EWHC 1589 Pat [2006] RPC 5.
10 Halliburton Energy Services Inc v Smith International (North Sea) Limited &
others [2005] EWHC 1623 Pat [2006] RPC 2.
11 http://www.patent.gov.uk/patent/notices/practice/examforpat.htm
12 This refers to the list of exclusions.
13 See, for example, Macrossan v Comptroller-General [2006] EWHC 705
(Ch), (2006) 29(5) IPD 29043; Crawfords application [2006] RPC 11; and
Citibanks application [2006] EWHC 1676 (heard 9 June 2006).
14 Citibank, [2006] EWHC 1676 (Ch), paragraphs 10 and 11.
15 ETSIs failure to take a more active role in regulating essential patents
and potential licensing abuse has lead to European Commission scrutiny.
16 Nokia Corp v InterDigital Technology Corp [2004] EWHC 2920 appealed in
April 2005 at [2005] EWCA Civ 614.
17 Nokia Corp v InterDigital Technology Corp [2006] EWHC 802 (Pat).
18 see www.mp3licensing.com
19 see www.audiompeg.com
20 see www.sisvel.com
21 Action HC 06 C00615
22 EP 0 402 973; EP 0 599 824; EP 0 599 825; EP 0 660 540; EP 0 708 533;
and EP 0 751 520
23 Action HC 06 C00835
24 EP 0 403 973; EP 0 660 540; and EP 0 599 824
25 Some of these cases are about to grant following recent hearings at the
UKPO or EPO
Examples of patents granted
25
by the European and UK
Patent Offices
EP 1 028 377, Data transfer with expanded clipboard formats
(T0411/03).
EP 0 917 698, Enhancing text presentation from machine readable
natural language text (T0049/04).
EP 1 319 211, Click based trading with intuitive grid display of
market depth (opposition proceedings pending).
GB 2 391 980, Enhanced JAVA machine instructions (BL
O/057/06).
GB 2 391 348, Compilation of application code in a data
processing apparatus (BL O/066/06).
K
UK/EUROPE
K Changing attitude of English courts
I
n the last decade, a combination of
binding precedent in the UK and a
dearth of software decisions from the
English Courts has meant that the rate of
development of English law in this
important area has lagged behind that of the
Technical Boards of Appeal of the EPO.
Since mid 2005, the English High Court
and Patent Office Hearing Officers have
handed down a significant number of
decisions relating to the patentability of
software-related inventions, and excluded
subject matter in general.
Competing with the ratio of English Court
decisions, but having only persuasive effect
1
, is
the plethora of case law from the EPO. The
Enlarged Board of Appeal has not opined on
software issues and this, in combination with
the fact that decisions from one Board of
Appeal do not bind another, has enabled EPO
case law in this field to evolve. Many English
decisions stress the importance of heeding
current EPO jurisprudence and litigators are
seeing an increased willingness of the English
Courts to fully consider case law from the
EPO. If anything, one might expect this to
bring the decisions of the English Courts and
Patent Office Hearing Officers closer to EPO
practice. However, there is room for
differences and these do occur.
Guidance
Until recently, the Manual of Patent Practice
used by UK Patent Examiners referred
principally to Vicom
2
, Merrill Lynch
3
and
Fujitsu
4
. These cases in particular have been
used for a number of years to provide
guidance when determining whether a
computer-implemented invention provides
the required contribution to the art in a non-
excluded field.
In Vicom, a method of processing digital
images had been rejected by the Examiner
as a mathematical method. The relevant
board of appeal said:
.an invention which would be
patentable in accordance with
conventional patentability criteria should
not be excluded from protection by the
mere fact that for its implementation
modern technical means in the form of a
computer program are used. Decisive is
what technical contribution the
invention as defined in the claim when
considered as a whole makes to the known
art. (emphasis added)
The conclusion was that a claim to a
technical process in which a mathematical
method is used is not a claim to the
mathematical method as such and is therefore
allowable in principle.
In Merrill Lynch the English Court of Appeal
held it was not permissible to patent an item
excluded by section 1(2) under the guise of an
article which contains that item. In considering
what was the result of the technical
contribution in Merrill Lynch Lord Justice Fox
arrived at a mere trading system (i.e. a method
of doing business) and accordingly the
technical result itself fell under an exclusion.
The Court held there was no invention of a
type suitable for patent protection.
In Fujitsu the Court of Appeal established
that a computer programmed to display and
manipulate images of crystalline structures in
pictorial form did not provide the type of
technical contribution to the art envisaged in
Vicom, not least because the resulting display
of images would in the past have been
produced as a complex plastic model and
therefore the only advance was that the
computer program version portrayed results
more quickly. In this context, speed was not
enough. Precisely what distinguished the
inadequate technical contribution of Fujitsus
Application from the acceptable technical
contribution in Vicom is not easily determined.
The CFPH case
More recently, the CFPH
5
decision from the
English High Court attempted to modify the
Recent decisions in the field of computer-implemented
inventions reflect a changing attitude in granting practices.
McDermott Will & Emerys Justin Hill explores
AUTHOR
Justin Hill is a European Patent Attorney and
head of intellectual property procurement at
McDermott Will & Emerys London Office. His
practice focuses on a broad range of IP matters
covering the procurement, exploitation and
enforcement of IP rights and in particular patents
and designs.
IN SUMMARY
Over the last decade the rate of
development of English law on the
patentability of software-related inventions
has lagged behind that of the Technical
Boards of Appeal of the EPO
Since 2005 the English High Court and
Patent Office Hearing Officers have
handed down a significant number of
decisions in the area, and excluded subject
matter in general. Competing with this
ratio is the plethora of EPO case law. The
Enlarged Board of Appeal has not opined
on software issues and this, in combination
with the fact that decisions from one Board
of Appeal do not bind another, has enabled
EPO case law in the field to evolve
Despite machinations to the contrary the
UK Patent Office and EPO are heading in
different directions, with the EPO
tending to look upon software inventions
more realistically
UK: recent decisions on
inventions
UK/EUROPE
K
test used by the UK Patent Office. This
decision has since gained some notoriety.
Mr Peter Prescott QC (sitting as Deputy
Judge in the High Court) provided a
comprehensive survey of decisions relating to
the computer program exclusion, from both
the English Courts and the EPO, before
offering several new tests and principles as the
fruits of his analysis. He also gave motivation
for the patent office to issue a practice notice,
(see below). Finally, he called upon Patent
Office Hearing Officers to uphold the law by
rejecting non-deserving software applications.
Giving particular weight to Laddies
comments in Fujitsu at first instance
6
,
Mr Prescott concluded that the various
categories of subject matter excluded under
Section 1(2) are excluded for various
different public policy reasons. This
unorthodox approach served Mr Prescotts
purposes far better than the words of
Section 1(2) of the 1977 Patents Act because
it allowed him to conclude any claim which
foreclosed a computer program to the public
cannot be granted. Interestingly, it seems
this approach has not been taken up
(overtly) by the Courts since.
Clearly aware of the public interest,
Mr Prescott went on to compare the
somewhat different technical contribution
test historically favoured by the UK courts
with the EPO approach set out for example
in Pension Benefits
7
and confirmed in Hitachi
8
.
The EPO approach involves establishing
whether the invention is excluded by
reference to Article 52 without any knowledge
of the prior art (technical character would
mean the invention is not excluded) and
considering whether the invention is new,
and if so, non-obvious by taking account of
only those features regarded as technical. It is
worth noting that the EPOs approach has
been modified somewhat since Vicom, which
focused only on the exclusion under Article
52(2), EPC and not inventive contribution
under Article 56 EPC.
In conclusion, Mr Prescott felt that the
EPO was correct to abandon the novelty-
based technical contribution test and
instead indicated it was more appropriate to
consider if the advancement was also
inventive, in line with the current EPO
practice. This much is explicit in his
discussion and indeed reflected in his
preferred test:
So the first step in the exercise should
be to identify what is the advance in the
art that is said to be new and non-
obvious (and susceptible of industrial
application). The second step is to
determine whether it is both new and
not obvious (and susceptible of
industrial application) under the
description of an invention (in the sense
of Art 52 [EPC]).
He made clear that the second question does
not necessarily involve consideration of
prior art; for example a Judge might take
Judicial Notice on such matters or a patent
office examiner might rely on his own
expertise to reject an application. Mr
Prescott also formulated a shortcut
question: Is this a new and non-obvious
advance in technology?. Few would argue
with this test.
Finally, he put forth a little man test,
which he felt might be complementary in such
determinations, and which involved asking
whether the allegedly new and non-obvious
contribution survived if the same decisions
and commands could somehow be taken and
issued by a little man at a control panel,
operating under the same rules. This test was
presumably intended to take account of the
fact that computerisation of tasks formerly
performed manually is a natural progression.
However, so far it has not gained wide
acceptance among other judges or hearing
officers, probably because all programs are, in
effect, a series of steps for execution by a
computer and hence practically all programs
could be regarded as falling foul of such a test
in one way or another.
In response to CFPH, the Patent Office
issued new guidance for examiners. Among
other things, the guidance set out: CFPHs
two-stage test (including the observation that
searches for prior art will not always be
necessary before rejecting an application on
the second step); a soft versus hard exclusion
theory which distinguished between certain
categories of excluded matter and sought to
treat them differently; the shortcut question;
and the little man test. According to the
new guidance, the CFPHtwo-stage test was
the highlight and was expected to bring
practice closer to the EPO. But what would
Examiners do with their new armoury?
In September 2005, the UK Patent Office
heard appeals to rejections by the Examiner
on two applications in the name of Oracle
9
.
The first involved a method of converting text
between documents in different mark up
languages, including the phrase operating a
processor to carry out the following steps.
The second of these cases was to a computer
implemented data storage system for storing
different versions of data objects, and defined
in terms of tables with certain properties. In
both cases, the Hearing Officer used CFPHs
public policy reasoning to observe the claim
foreclosed a computer program [to the
public] and so was directed to excluded
subject matter. In the second case, this was
despite acknowledging that the claim was
directed to a new and inventive data
structure. According to these decisions novel
and inventive advances in the computing arts
that result in improved efficiency of the
computer on which they operate are excluded;
whereas it is obvious that hardware with
equivalent function would not be excluded. It
seems illogical given the desire to avoid
exalting form over substance. The danger is
this approach does not discriminate between
circumstances in which (i) there is real
innovation in the function or structure of the
program and (ii) those circumstances in which
the claims are directed to programs as such. In
any event, other Hearing Officers have
followed
10
with some applying this reasoning
to other exclusions.
It is interesting to consider what other
High Court Judges thought of CFPHin
decisions since. In general, they appear to
have stayed clear of the public reasoning and
also the little man test. However, in
Halliburton
11
, Justice Pumfrey appears to use
an approach broadly corresponding to the
CFPHtwo stage test. In Crawfords
Application
12
, relating to a display system for
the outside of buses, Justice Kitchen said:
For my part I do not detect any
difference in substance between this
approach [CFPH two stage test] and
the conclusion expressed by Justice
Pumfrey in Halliburton. Nor do I
believe it to be inconsistent with the
Court of Appeal decision in Fujitsu.
Pumfrey considered such matters in
Shoppalotto
13
and more recently in Research in
Motion v INPRO (RIM)
14
. In RIM, the
makers of the BlackBerry handset had
brought a revocation action against a patent
belonging to the defendant, and the
defendant subsequently counter-claimed for
infringement by RIM. In his decision,
Pumfrey said:
It is now settled, at least at this level,
that the right approach to the
exclusions can be stated as follows.
Taking the claims correctly construed,
what does the claimed invention
contribute to the art outside excluded
matter? The test is a case-by-case test,
and little or no benefit is to be gained
by drawing analogies with other cases
decided on different facts in relation to
different inventions. RIM says that the
point does not require elaboration. It
contends that all that is claimed as a
K
UK/EUROPE
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Advocates, Solicitors, Notaries, Patent & Trademark Attorneys
Meher Chambers, 4th & 5th Floors, R K Marg, Ballard Estate,
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Mumbai Delhi Bangalore Calcutta
matter of substance, is a collection of
programs for computers. I think this is
wrong. What the claims give is a
technical effect: computers running
faster and transmitting information
more efficiently, albeit it ultimately for
the purpose of displaying part of that
information. (emphasis added)
and he went on to add:
I am anxious that these exclusions are
not given too wider scope. All modern
industry depends upon programmed
computers, and one must be astute not to
defeat patents on the ground that the
subject matter is excluded under Art 52
[EPC] unless the invention lies in
excluded subject matter as such.
These are indeed words of wisdom. Pumfrey
had no difficulty in distinguishing between (i)
when an innovation implemented by means of
a computer program is responsible for an
improvement in performance of the system in
which it operates, and (ii) when a computer
program is merely speeding up an operation
which was previously performed another way.
The latter is obviously nothing more than
natural progression. Consequently, Pumfrey
upheld the claim to a collection of computer
programs based on the fact that he saw a real
technical contribution, despite the fact that
this was ultimately for the purpose of
displaying information on a handset. In doing
so he rejected the what is claimed as a matter
of substance approach.
Following RIM
It was hoped that RIMhad provided the
clarification the Patent Office needed and the
initial indications were that it may have settled
some of the confusion flowing from the Patent
Offices practice note on CFPH. For example,
in Sun Microsystems
15
an innovation relating to
Java Bytecode instructions was deemed not
excluded because the improved instruction set
to which the claim related had made a
technical effect, making it something more
than a computer program as such.
However, the vast majority of Hearings
16
since RIMconcerning issues of whether the
claimed subject matter is excluded have
resulted in claims being rejected for falling
under the relevant exclusion. Most of these
decisions cite CFPH and RIMas primary
authorities and may well be reasonable on
the facts. Clearly though some seem
confused. Intuwave in particular seems
difficult to reconcile.
The invention concerned a small,
restricted set of primitive code elements
which were small enough to be stored on the
ROM of a mobile telephone. The claim was
to A mobile telephone programmed.The
Hearing Officer decided the substance of
the invention was a new way of writing a
program and accordingly it was excluded as
a computer program as such. In reality the
invention in Intuwave is conceptually similar
to the reduced instruction set deemed
allowable in Sun Microsystems. Why were
these decisions decided differently? Careful
analysis shows that in Sun Microsystems the
Hearing Officer (the same Hearing Officer!)
was urged to consider the CFPH two stage
test in the context of other comments of Mr
Prescott in that decision relating to as such.
The Hearing Officer in Sun Microsystems
was thus forced to decide whether the subject
matter was (i) a method making a technical
contribution which just happened to be
implemented on a computer or (ii) merely a
computer program as such. The Hearing
Officer observed that no-one would have
questioned the eligibility of the subject
matter had it been implemented in hardware
and, this, in combination with the fact that
there was technical effect (faster execution
and simpler structure) meant that it was not
a computer program as such. Would such
reasoning have worked in Intuwave or some
of the other appeals which were dismissed?
Justice Mann is another High Court Judge
asked to consider issues surrounding the
exclusions since CFPH. He did so in
Macrossan
17
and in Citibank
18
. In Marcrossan the
claim related to an automated method of
acquiring the documents required to
incorporate a company. In consideration of
whether or not the claim related to an
excluded computer program Mann stated that
the form of claim and in particular whether it
recited a final step ending up with the
production of something physical (documents)
was irrelevant under Fujitsu. What was
important was the substance of the invention
and that looked to Mann to be a computer
program. He then turned to apply the CFPH
two-stage test and cited interesting guidance
from Pumfrey in Shopalotto:
The real question is whether there is a
relevant technical effect, or, more crudely,
whether there is enough technical effect: is
there a technical effect over and above that
to be expected from the mere loading of a
program into a computer? From this sort
of consideration there has developed an
approach I consider to be well established
on the authorities, which is to take the
claimed programmed computer, and ask
what it contributes to the art over and
above the fact that is covers a programmed
computer. If there is a contribution
outside the list of excluded matter, then
the invention is patentable, but if the only
contribution to the art lies in excluded
subject matter, it is not patentable.
Despite this, and the fact that the claim
recited technical means throughout, Mann
concluded that the claim in Macrossan
corresponded to a computer program as such
and therefore was excluded. In practice,
Mann decided to consider what he saw as
the substance and in doing so inherently
overlooked fact that the as such exclusions
were intended to be construed narrowly.
It is interesting to compare Pumfreys
requirement for a technical effect over and
above that to be expected from the mere
loading of a program into a computer with
the EPOs further technical effect
19
,
namely a technical effect beyond the
normal interaction of a computer and the
program that runs on it. If they are in
practice equivalent then one would expect
the Hearing Officers to recognise
situations when the technical result
manifests itself in an improvement in the
system in which the program operates. As
explained, however, this was not the case
in Macrossan (which also fell on the
mental act exclusion) and if anything it
appears to be the exception rather than the
rule under present UK Patent Office
practice.
Current EPO practice
The current EPO practice is exemplified in a
number of related decisions from the EPO,
the Microsoft cases
20
. In these decisions, a
UK/EUROPE
K
The vast majority of
Hearings since RIM
concerning issues of
whether the claimed
subject matter is
excluded have
resulted in claims
being rejected for
falling under the
relevant exclusion
K
UK/EUROPE
DEQI
Intellectual Property Law Corporation
China Patent & Trademark Attorneys
Tel: 86-10-82339088
Fax: 86-10-82331881
Email: mail@deqi-iplc.com
Web: www.deqi-iplc.com
Head Office: 7/F, Xueyuan International Tower,
No. 1 Zhichun Road, Haidian District,
Beijing 100083, P. R. China
UK/EUROPE
K
European patent application relating to methods in computer systems
having clipboard functions, and five of its divisionals, proceeded to
the Appeal Board stage after having been refused the Examining
Division. Clearly, the substance of the methods was provided in
software but nevertheless all six applications were remitted with
orders to proceed to grant.
In each of the Microsoft cases the Board took the same approach.
First it considered whether the claimed method was an invention
within the meaning of Art 52(1) EPC. In doing this it regarded each
claim to be a method implemented in a computer system. Citing
Hitachi the Board declared a method using technical means is an
invention within the meaning of Art. 52(1), EPC and that a computer
system including a memory (clipboard) is a technical means and
hence the claimed method has technical character in accordance with
established case law. Moreover the Board emphasised that:
a method implemented in a computer system represents a
sequence of steps actually performed and achieving an effect, and
not a sequence of computer-executable instructions (i.e. a computer
program) which just have the potential of achieving such an effect
when loaded into, and run on, a computer. Thus the Board holds
that the claim category of a computer implemented method is
distinguished from that of a computer program [as such].
On the subject of whether the method steps contributed technical
character to the invention the Board said:
These steps solve a technical problem by technical means in that
functional data structures (clipboard formats) are used
independently of any cognitive content (see T 1194/97
Data structure product / Philips: OJ EPO 2000 525) in order
to enhance the internal operation of a computer system with a
view to facilitating the exchange of data among various
application programs.
Having concluded the matter was not excluded, the Board considered
novelty and inventive step; the latter consideration was based on the
usual problem and solution approach. The problem was said to relate
to how to facilitate data exchange across different formats, in
particular when transferring non-file data. The solution was the
clipboard method claimed and since this was not disclosed or
suggested in the prior art, the case(s) should be remitted for grant.
There may well be a lesson in claim formats here but perhaps more
significantly it seems the EPO accepts that, where excluded subject
matter is concerned, technical character may be provided through
technical implementation of the method, resulting in the method
providing a real technical effect through (i) the provision of a physical
entity as the resulting product, and/or (ii) a non-abstract activity
using some technical means. In the same circumstances, the current
UK approach would afford no weight to the mention of a physical
entity or technical means and instead asks: what is the substance of
the inventions contribution to the art? In practically all instances the
answer to this question is a computer program, and the claim is
automatically rejected for falling under the relevant exclusion. This
automatic rejection occurs irrespective of whether the claim makes a
technical contribution, for example by virtue of a new structure or
function imparting efficiencies to the computer on which it runs.
In summary, despite machinations to the contrary the UK Patent
Office and EPO are heading in different directions, with the EPO
tending to look upon software inventions more realistically.
Interestingly, Lord Justice Jacob has given Macrossan permission to
appeal the refusal based on the computer program and mental act
exclusions, and the English Court of Appeal heard relevant
arguments on an expedited basis in early August 2006, for the first
time since Fujitsu in 1997. Perhaps the Court will consider it more
appropriate to reject Macrossans claim under lack of inventive step.
But if it does not, then the challenge for it is to leave open the
possibility of protecting technical contributions in the art of
computer systems and the like, which happen to be implemented
using software. Watch this space. K
Notes
1 Merrill Dow Pharmaceuticals v H N Norton & Co [1996] RPC 77, 82 HL
2 Vicom / T208/84
3 Merrill Lynchs Application [1989] RPC 561 CA
4 Fujitsus Application [1197] RPC 608 CA
5 CFPHs Application EWHC 1589 Pat, CH 2005 APP 0009
6 Fujitsus Appln [1996] RPC 507, 530
7 931/95 - Pension Benefits System
8 T 258/03 Auction Method (Hitachi)
9 Oracle Corporation 0/254/05 and 0/255/05
10 Eg Overture Services O/331/05 and Raytheon O/047/06.
11 Halliburton Energy Services v Smith [2005] EWHC 1623 (Pat)
12 Crawfords Appln [2005] EWHC 2417 (Pat)
13 Shoppalottos Appln [2005] EWCH 2416 (Pat)
14 Research in Motion v INPRO Licensing SARL [2006] EWCH 70 (Pat)
15 Sun Microsystems Inc GB2391980 O/057/06
16 Eg Muchiu Chang O/085/06, Intuwave O/102/06 and eSPEED O/115/06.
17 Macrossans Appln [2006] EWHC 705 (Ch)
18 Citibanks Appln [2006] EWHC 1676 (Ch)
19 IBM decisions.
20 Microsoft decisions T 424/03, T 411/03, T 425/03, T 467/03, T 468/03
and T0468/03.
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The copyright in the Magazine published by Informa UK Ltd and attached to this email

Tjeerd Overdijk, Steinhauser Hoogenraad Advocaten, Amsterdam (page 20)

David Cochran, Jones Day, Cleveland (page 48)

Dr Rachel Free, Olswang, London (page 55)

A pan-European strategy is key. An early

10 | World Focus: IP & High Technology | Ocotober 2006 www.ipworldonline.com

A hi-tech company (in particular, a

12 | World Focus: IP & High Technology | October 2006 www.ipworldonline.com

The problem for RIM

14 | World Focus: IP & High Technology | October 2006 www.ipworldonline.com

In his decision, Mr Justice Pumfrey criticised the

www.ipworldonline.com October 2006 | World Focus: IP & High Technology | 15

One feature of patents based on electronic

www.ipworldonline.com October 2006 | World Focus: IP & High Technology | 19

The required degree of inventiveness

22 | World Focus: IP & High Technology | October 2006 www.ipworldonline.com

In autumn 2006 several novelties will be

www.ipworldonline.com October 2006 | World Focus: IP & High Technology | 23

It would clearly be desirable if the

www.ipworldonline.com October 2006 | World Focus: IP & High Technology | 27

In the light of the current uncertainty in relation

28 | World Focus: IP & High Technology | October 2006 www.ipworldonline.com

The revised GEC now explicitly requires cooperation between the

www.ipworldonline.com October 2006 | World Focus: IP & High Technology | 33

Major multinationals in the electronics industry are interested in protecting

Table 1: Jurisdictions compared

the parameters for patentability that the

www.ipworldonline.com October 2006 | World Focus: IP & High Technology | 41

computer software to be patentable, it must

www.ipworldonline.com October 2006 | World Focus: IP & High Technology | 43

Software claims written as computer readable

46 | World Focus: IP & High Technology | October 2006 www.ipworldonline.com

Until there is a case specifically dealing with

www.ipworldonline.com October 2006 | World Focus: IP & High Technology | 47

If there is only innovation at a non-technical level

www.ipworldonline.com October 2006 | World Focus: IP & High Technology | 57

To the extent that there remain differences

www.ipworldonline.com October 2006 | World Focus: IP & High Technology | 59

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