CASRIP Newsletter - Autumn 1999, Volume 6, Issue 2
The Present Status Of Software Protection In Europe and Germany
by Stefan Schohe*
Patent protection for software-related inventions is a topic that continues to excite and occupy the patent community. This is true although the discussion thereon started more than thirty years ago and has presumably outlived some of its initial participants. In nearly all countries, the courts and patent offices have become restrictive at some point, in granting patent protection, if a computer program was the essential element of an invention. For example, starting from the seventies, German courts used to apply the so-called core doctrine denying patent protection if the core or essence of the invention was a computer program. This attitude, however, has softened over the years. As computers changed from mysterious machines to easy-to-click consumer products and consequently lost some of their former myths and mysteries, the case law became more liberal. Today it is the established case law of both the European Patent Office and the German authorities, that software related inventions are patentable, if the software is used to control a machine other than a computer (post-process activity); if the software is used to process data delivered from a measuring device (pre-process activity); or if the software implies a new way of operating a computer. The protection of application software, however, continues to be a problem.
Recent developments in the United States of America in this field, especially the In re Lowry, In re Beauregard, and State Street Bank cases, did not go unnoticed in Europe and were discussed thoroughly by the patent community. While appreciating the need for protection of software related inventions, the European Patent Office, and the authorities in the member states of the European Patent Convention (EPC) were reluctant to follow suit due to differences between US law, on the one hand, and the EPC and the laws of its member states, on the other. In order to understand these difficulties, a brief outline of the legal provisions of the EPC and its member states, and their interpretation by the deciding authorities, may be helpful. The provisions of the EPC, as far as is relevant in this context, are identical to those of the national provisions of the member states of the EPC.
Neither the EPC nor the national provisions of its member states provide a definition of statutory subject matter. The EPC states:
"European patents shall be granted for any inventions which are susceptible of industrial application, which are new, and which involve an inventive step" (Art. 52(1) EPC).
The opinions in the case law generally agree that, with respect to the meaning of the word "invention" used in EPC Art. 52(1) and related national provisions, patents are only available for inventions having a technical character. The German Federal Supreme Court (Bundesgerichtshof) defined an invention as an instruction to employ natural forces in a predetermined manner to arrive at a foreseeable result as a consequence thereof 1. Although this definition has not been explicitly adopted by other jurisdictions, it nevertheless provides a guideline to assess the question of technical character.
Article 52(2) of the EPC further contains a non-exhaustive list of subject matter that are not considered to be inventions in the sense of EPC Art. 52(1) including: mathematical methods, discoveries, scientific theories, aesthetic creations, plans, rules and methods for performing mental acts, playing games or doing business, and the presentation of information and computer programs. This list is given with the proviso that the subject matter listed is excluded from patentability only if claimed "as such" (Art. 52(3) EPC). Applying these provisions to software-related inventions, the case law of the German courts and of the European Patent Office followed different lines of reasoning, although with essentially the same results.
The German courts essentially considered the question of whether the claimed subject matter was technical, rather than dealing with the list of excluded subject matter. This list was regarded as exemplifying subject matter not having a technical character. In a leading decision of the Federal Supreme Court2, a program itself was considered to be a rule for calculation or data processing not having technical character which could therefore not be claimed as an invention. Furthermore, the Court held that the true character of an invention does not depend on the wording that is used and that non-patentable subject matter should not be allowed under a disguise of technical wording. The use of a computer in carrying out the invention was held not to be relevant, as long as the computer itself was not changed, but simply used and operated in the manner it was generally provided for.
Several more recent decisions of the Federal Supreme Court have also considered this issue. In a 1991 decision, the Court determined that a method for inputting and processing Chinese characters in a computer essentially relied on establishing an order among Chinese characters, which was considered to be a mental act. The technical features of the claim were considered to be of minor importance to the success of the teaching. Accordingly, the subject matter of the claimed matter was considered not to provide any technical instruction3. On the other hand, the Court has held that a program related method is technical if it relates to the operative capabilities of a data processing unit as such and thus to direct cooperation of its constituents4. In a subsequent decision on this issue, the Court held that where a claim defines a close relation between a numeric rule technical means, such as a display, a memory, a converter, a depth gauge, etc., it should not be considered as directed to subject matter which is excluded from patentability per se.5
The reasoning of the Boards of Appeal of the European Patent Office took a more formal approach, starting from the list of excluded subject matter contained in EPC Art. 52(2). They considered the question of whether the claimed subject matter was a computer program, a presentation of information or a mathematical method as such. Like the German Courts, the Boards held that the mere fact that the program in question is embodied within a computer, or run on a computer does not make it patentable. For example, they held that, with respect to a text processing method, a computer program is not considered as part of a technical operating procedure if the claimed teaching merely modifies the data and produces no effect beyond information processing6. Similarly, in another decision related to text processing, the Board held that the contribution to the art resided in a system of rules for abstracting, storing and retrieving documents, although a system was claimed wherein these rules were applied. The Board concluded that the true nature of the invention remained the same, whether or not technical terminology was used to express it7.
On the other hand, in a further decision, the Board held that a claim directed to the use of a program for solving a technical problem, in that instance the automatic optical display of conditions prevailing in a device or a system, was not to be considered as being directed to a computer program as such8. In another decision, the Board determined that a claimed data transformation method related essentially to (printer) control items and not to the meaning of data representing words of the text, said control items characterizing the internal working of the text processing system9.
A general rule, in regard to the practices of both the German authorities and the European Patent Office, may be summarized as follows: The mere fact that a computer program is run on a computer is not sufficient to establish the patentability of the claimed subject matter. It is also necessary, in order to receive patent protection, that there is a further technical effect, or, as the European Patent Office put it, a technical contribution to the known art10.
Without pretending to give an exhaustive overview of the relevant case law, the decisions of other member states of the EPC supported this practice:
1. In the United Kingdom, the Court of Appeal held11 that the commands of a computer program are not patentable and that conceiving a new sequence of commands that will be executed on a computer does not form an invention. In that case the Court specifically referred to a program stored on a ROM. Quoting previous case law12, the Court held that the storage medium is just the medium physically embodying the (non-technical) commands. Therefore, the physical modification of the storage medium is not relevant in the context of patent law, as it just represents the use of the storage medium for the intended purpose. In that context it was irrelevant that a hardware component (i.e. a ROM) was claimed. In an earlier decision13, the Court similarly held that it is not permissible to patent excluded subject matter in the disguise of another subject matter (e.g. a computer program claimed as a computer). As a point of interest, the Merrill Lynch decision rejected a claim on a data processing system for trading securities.
2. In France the Cour de Paris held, in a rather early decision14, that the exclusion of computer programs, then already present in the French law, also covered a computer or a method basically characterized by said program.
3. The Dutch Patent Office took a slightly different approach in a decision dating from 198515. The Patent Office confirmed the general rule that products characterized by their information content are not patentable. However, it made a distinction between programs as such stored on a data carrier, which are not directly addressable by a computer, and programs stored in the working memory of a computer which are directly accessible by a computer. Based on the analogy between hardware and software it held that loading a new program into the computer creates a new apparatus technically different from previous computers.
The approach taken by the European Patent Office, as outlined above, has led to reasonable results in many instances. However, it was destined to run into difficulties when dealing with program product claims related to a storage medium with a computer program stored thereon. Obviously, such a storage medium does not provide any further direct technical effect beyond providing data to be read by a computer. It was also argued, that program product claims related to a program as such and were explicitly excluded from patentability by law16. On the other hand, in the wake of the In re Lowry, and In re Beauregard cases, there was strong pressure, especially from US applicants, to allow claims similar to those granted in the United States.
In two recent decisions17, the European Patent Office has tried to reconcile program product claims with its interpretation of the EPC.
In these decisions, the Board of Appeal started from the restriction in the EPC that computer programs are excluded from patentability only "as such". This was interpreted to mean that not all computer programs are excluded from patentability, but only "computer programs as such". From its general understanding that an invention must have technical character, the Board concluded that those programs not excluded from patentability must be distinguished as having technical character. This technical character, however, was considered not to stem from the modification of the hardware created by loading and running the program, as this is common to all computer programs, including those excluded from patentability under EPC Art. 52(2). Accordingly, the Board further concluded that the distinction must lie in a further technical effect brought about when the program is run on a computer. Said further technical effect must then be assessed according to the standards established by the previous case law. To put it more simply, the Board held that if a method of operating a computer is patentable under the standards set up previously, so is the related program.
At that point, the Board still had to overcome a further obstacle. According to the Board's reasoning, a storage medium alone does not bring about any further technical effect, considering that the physical modification thereof for storing the program was held not to be relevant according to the Board's reasoning. The Board, however, generalized the previous criterion and held it sufficient that the storage medium, with the program stored thereon, has the potential to create such a further technical effect which is accomplished by loading the program from the storage medium into the computer and running it on the same. This "indirect" technical effect was held to be equivalent to the direct technical effect previously required.
Thus, the Board arrived at the conclusion that program product claims are generally allowable, if the program is "technical" in the sense outlined above. The Board added that, although this was not part of the question to be decided, they saw no reason not to allow claims directed to programs themselves, provided these programs have technical character. The Board emphasized that their decision related only to the question of whether a program product claim may be allowable under some circumstances. It explicitly left open the question of the proper wording of the claim. In so far the case was remitted to the first instance for further examination. The Board indicated, however, that it will be necessary to specify all features in the claim that ensure the patentability of the method intended to be carried out when the program is run on the computer. It further indicated that it would be appropriate to specify, in the claim, that the program is related to a patentable apparatus or a method that is run on or loaded into a computer.
In summary, these decisions do not change the standards applied by the European Patent Office to the technical character of software related subject matter. They rather open the possibility of new claim categories. In a nutshell, the European Patent Office will allow a program product claim and possibly a program claim, if said method or apparatus claim is or would be allowable according to the previous standards (in addition to or instead of a conventional method or apparatus claim). It should be noted, however, that the Board rejected the notion that a computer employing or carrying out a program establishes patentability. Thus, there is a clear distinction from the decision by the U.S. Court of Appeals for the Federal Circuit (CAFC) in State Street Bank. On the other hand, it should also be noted that these decisions go beyond the U.S. practice in that they allow claims on programs in general, without relation to a storage medium or an apparatus.
These decisions may have a severe impact on the further development of not only the protection of software-related inventions, but also of patent law in general. This impact will probably be not so much due to allowing program product claims, but rather to the reasoning in the decisions, which breaks with some traditions in patent law.
The additional admission of program product claims will presumably have less impact on the scope of protection than may be expected from a US perspective. This is because of the provisions on contributory infringement in European countries. As far as Germany is concerned, German law prohibits supplying or offering to supply means relating to an element essential for putting the invention into effect, when the supplying or offering party knows, or if it is obvious under the circumstances, that these means are suitable and intended for putting the invention into effect. The claim format suggested in the two above-mentioned decisions of the European Patent Office more or less mirrors these requirements. The wording suggested by the Board implies that a program, stored on a storage medium, basically embodies a method to be carried out on a computer and is suitable and designed for carrying out said method. In an infringement suit this will be a point that a plaintiff must prove. Such proof will be necessary irrespective of whether the claim is for a contributory infringement of a method or apparatus claim or a direct infringement of a program product claim.
In many instances, especially if the method claim is defined by the results the program produces, it will be fairly obvious that a program stored on a storage medium is suitable and intended to carry out a patented method. This may be even more the case, since, other than in the United States, the scope of protection of means plus function claims is not limited to the specific embodiments described in the specification and equivalents thereof18. Accordingly, claims for European countries may be drafted in a functional manner, which both facilitates enforcement and provides a broad scope of protection. Program product claims may facilitate the enforcement of a software-related patent, if the effects of the underlying program do not readily show up during the process of execution. This is especially helpful in cases where it might be argued that it is not obvious that a relevant program or program part is stored on the storage medium.
Two other aspects of these decisions are, however, more delicate. If taken up by subsequent case law, these ideas may lead to new concepts in patent law, (namely the protection of programs as such, and the abandonment of the requirement of a direct technical effect).
Infringement of a European patent is determined according to the law of the member states of the EPC. The national law, however, only defines the scope of protection awarded by a method claim and by an apparatus claim, but not the scope of protection of a program claim. Thus, when deciding on infringement of a claim on a program, the courts must choose between awarding no scope of protection at all to a program claim or providing a scope of protection covering all and every distribution or materialization of such a program (e.g.. in executable form, in source code form, in the form of an electrical signal transmitted over a network19, provided on a piece of paper or communicated in an oral presentation). Thus, it is likely that the courts, especially German courts, will tend to the latter choice, as long as there is no explicit restriction on the scope of protection either in the law or in the patent. (It is certainly not a sensible result to award no scope of protection to a claim granted by a patent office.) Thus, for the first time, providing protection for a program in general might restrict exchange of information relating to an invention. Whereas in any other field of technology, the exchange of information is free if there is no materialization of the invention.
The potential to create a technical effect (i.e. the technical character only shows, if additional measures or method steps are employed which do not form part of the claim) may be a sensible criterion to use in the context of storage media, which have only one sensible use. This criterion may, however, in principle, allow claiming only parts of a patentable apparatus or method which would not be allowable under the present practice requiring that the claim shall contain all features necessary to arrive at the desired result. Thus, following the reasoning of these decisions, preparatory steps for accomplishing a patented method or device may receive protection. Legally, this criterion may create a problem, especially in Germany, in that the German case law, as outlined above, requires the technical effect to be a direct consequence of the features set out in the claim. Thus, the future development of patent practice for software related inventions might not be as straightforward as it may appear at first glance in view of the above-mentioned recent decisions by the European Patent Office.
Regarding the future practice of the European Patent Office, it remains to be seen what types of claim formats the European Patent Office will allow. Although this seems to be a straightforward task for program product claims, a more specific wording of the claim for program claims (e.g. a wording relating the program to a method or a physical entity) might be requested by the European Patent Office under the requirement of clarity (EPC Art. 84) in view of the uncertainty about the scope of protection of a claim for a program in general.
As to the national authorities, the question is whether they will adopt the result and/or reasoning of these decisions for their own national practice and for decisions on the validity of European patents. It should noted that the national authorities are competent to revoke European patents and are not bound by decisions of the European Patent Office to grant or to maintain a European patent in this respect. Generally, the national authorities avoid overruling the European Patent Office in an invalidation procedure with regard to the same questions. They might, however, do so if the deciding authority feels different about the issue.
The British Patent Office has already announced that it will allow claims both on program product claims and on programs themselves. There has been no similar communication by the German Patent and Trademark Office. In view of the fundamental issues raised by the above-mentioned decisions, it is not unlikely that the German courts will differ from the European Patent Office in their reasoning and/or in their results. As the Federal Supreme Court of Germany has not issued a software-related decision for a couple of years, it is presently not clear what attitude it will take. According to a paper published by Justice Melullis of the Federal Supreme Court, the Supreme Court may tend to interpret EPC Art. 52(2) in a similar sense as the Boards of Appeal, namely that there are patentable and non-patentable computer programs. However, the Supreme Court may draw the line differently by considering as non-patentable, those programs which only relate to general concepts unrelated to the operation of a computer.
On a political level, there are presently efforts to amend both the EPC and the law of the member states of the European Union (EU) to improve the patent protection of software related inventions. In the Green Book on the Community Patent and the System of Patent Protection in Europe issued in 1997, the European Commission addressed the issue of software protection in general and the issue of program product claims in particular. In a communication issued as a follow-up, in February 1999, the Commission announced a directive to the member states of the European Union for harmonizing the provisions on the protection of software. A draft for this directive may be expected in early 2000.
There are also efforts, which the European Union encourages, to abandon the list of Art. 52(2) EPC, at least as far as computer programs are concerned. On June 24 and 25, 1999 a governmental conference of the European Patent Organisation took place in Paris. In the final communication, the European Patent Organisation was requested to prepare and convene a conference for revising the EPC according to Art. 172 EPC, especially with regard to EPC Art. 52(2), which currently states that programs for computers are not patentable inventions. According to the present schedule, this conference is to take place during the year 2000. Agreement on a revised version of the EPC shall be reached before January 1, 2001 and the revised version shall enter into force before July 2002.
In the context of software-related inventions, it is frequently argued that the exclusion of computer programs in EPC Art. 52(2) must be abandoned because Art. 27 of the TRIPS agreement requires that patent protection shall be available for inventions in all fields of technology. Leaving aside that the term "invention" is open to interpretation, this argument disregards the fact that most decisions in this field rendered so far were based, or alternatively could have been based20, on the finding of whether an invention has a technical character (i.e. whether the invention is in a field of technology at all). In any case, the question of technical character will continue to be relevant, even if the list of excluded subject matter is abandoned.
The following conclusions may be drawn for patent prosecution. It is quite certain that patent practice in the software field will become more liberal in Europe. It is presently not clear where the limits will be. Thus, newly filed applications should comprise everything the present decisions of the European Patent Office promise, e.g. program claims, program product claims, and, of course, the traditional method and apparatus claims. However, the applications should also contain claims covering the safe harbours according to the previous standards, as fallback positions, in case the future practice will draw the limits more narrowly than what is indicated in the two latest decisions by the European Patent Office. Considering the differences in the scope of protection according to U.S. practice and European practice, it may not always be the best solution or even necessary to go for the claims granted in the United States. For example, means plus function claims, which may be of limited use in the United States, may still form a powerful tool for easy and thorough enforcement of a software related patent in Europe. For existing patents and applications that cannot benefit from the recent developments discussed above, prosecution of contributory infringement according to the national law of a member state of the EPC might be an option.
Presently it does not appear likely that business methods executed on a computer will be patented in Europe unless the criteria mentioned above are met. However, applicants should not be discouraged from trying to prosecute related claims and from bringing them up to the Courts and Boards of Appeal. Especially, the latest decisions by the European Patent Office show that subject matter considered as strictly non-patentable a couple of years ago may become allowable in the course of time. Thus, especially in view of the forthcoming revisions of the law, it is not impossible that, in a couple of years, there will be an equivalent to State Street Bank in Europe.
* Dr. Schohe is a German and European Patent Attorney at Boehmert & Boehmert in Munich.
1. Federal Supreme Court of Germany - Rote Taube (Red Dove), BGHZ 52, 74 [IIC 1970, 136]; this was in fact the leading decision opening the possibility of patenting inventions in the field of biology.
2. cf. Federal Supreme Court - Dispositionsprogramm (Disposition Program), BGHZ 67, 22 [IIC 1997, 558]
3. Federal Supreme Court - Chinesische Schriftzeichen (Chinese Characters), BGHZ, 115, 23 [IIC 1993, 124]
4. Federal Supreme Court - Seitenpuffer (Page Buffer), BGHZ 115, 11 [IIC 1992, 824], Headnote 1.
5. Federal Supreme Court - Tauchcomputer (Diving Computer), BGHZ 117, 144 [IIC, 993, 645], No. II 5. b) of the reasons, similar Federal Patent Court, 23rd Senate, BPatGE 33,87
6. T 158/88 - 3.4.1. Character form/SIEMENS, OJ 1991, 566, Headnote 2.
7. T 22/85 - 3.5.1 Document abstracting and retrieving/IBM, OJ 1990, 12
8. T 115/85 - 3.5.1 Computer related invention/IBM, OJ 1990, 30, Headnote 1. and 2.
9. T 110/90 - 3.5.1 Editable document form/IBM, OJ 1994, 557, No. 4 of the reasons.
10. Guidelines for Examination in the European Patent Office, C IV 2.
11. Court of Appeal (1991) R.P.C. 305 - Gale
12. Court of Appeal (1989) R.P.C. 147 - Genentech
13. Court of Appeal (1989) R.P.C. 561 - Merrill Lynch
14. Cour de Paris, PIBD 1973 III 197
15. Octrooiraad, Afdeling van Beroep (Patent Office Board of Appeal), BIE 1985, 435
16. Guidelines for Examination at the European Patent Office C IV 2, 1997 version
17. T 935/97 and T 1137/97, unpublished
18. The Federal Supreme Court recently issued a decision (X ZR 85/96) indicating that the scope of protection of the claim may be limited in view of the specification, e.g. to the extent to which the invention could be carried out. It is still too early to say whether this will have an impact on means-plus-function claims.
19. In the decision T 163/85 by the European Patent Office, OJ 1990, 379, it was held that a television signal, although transient, forms patentable subject matter.
20. See, for example, the Gale decision of the Court of Appeal in the United Kingdom, cited above