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in July, the European Union's parliament rejected, by
an overwhelming 648 to 14 vote, a bill proposing a common
framework for patenting of software across its 25 member
countries. Given the vote, the EU stays with the status
quo in which software patenting is still possible, though
there are as many software patenting regimes in place
as there are members. This near unanimity in favour
of the status quo was unusual, especially because the
debate on software patenting that preceded the vote
was contentious to say the least.
In fact the long and contentious debate has helped clarify
the case, (mostly) against and (less) for the provision
of patent protection for software. The European debate
began when, backed by big technology companies, the
Commission of the European Communities prepared in 2002
a proposal for a directive of the European parliament
and of the council on the patentability of computer-related
innovations. A ''computer-implemented invention'', which
is a rather convoluted term for software, is defined
as any invention the performance of which involves the
use of a computer, computer network or other programmable
apparatus, and which has one or more prima facie novel
features that are realised wholly or partly by means
of a computer programme. A computer-implemented invention
is patentable on the condition that it is susceptible
of industrial application, is new and non-obvious, and
makes a technical contribution. A ''technical contribution''
in turn is defined, quite ambiguously, as a contribution
to the state of the art in a technical field which is
not obvious to a person skilled in the art. The ambiguity
surrounding the definition of what is patentable is
thus obvious.
The Commission's case was straightforward. Software
makes a significant contribution to GDP and employment
in the Union and that contribution is expected to rise
rapidly over the coming years if members are provided
appropriate opportunities. Patent protection, that offers
an inventor a protected right to exploit the invention
without fear of competitive replication for a specified
period of time, has proved its usefulness as an incentive
to innovators to invest the necessary time and capital
on new innovations. And the growing use of software
patents in the US could put large technology firms in
Europe at a disadvantage. Hence, there was need to harmonise
and thereby strengthen the software protection regime
in Europe.
However, the Commission's immediate ambition was presented
as being more limited. It suggested that the prevailing
regime relating to software protection in the EU was
ambiguous for two of reasons. First, though under Article
52(2) of the European Patent Convention (EPC), programmes
for computers "as such" are not inventions
and are therefore excluded from patentability, a large
number of patents for computer-implemented inventions
had been granted by the European Patent Office (EPO)
and by national patent offices. The EPO alone is reported
to have granted more than 30,000 software patents. Secondly,
even when statutory provisions setting out the conditions
for granting such patents were similar, there were substantial
differences in the implementation of these provisions
as reflected in the case law of the Boards of Appeal
of the European Patent Office and the courts of Member
States.
In order to deal with these ambiguities, the proposed
legislation sought to codify with the help of European
case law the circumstances in which software can be
considered as being more than a computer programme ''as
such''. This was expected to provide information as
to the nature of software innovations that can be patented
and increase the volume of patenting. A second important
objective of the directive was to harmonise the patent
regime across the Union, so as to reduce the ambiguities
resulting from differences in case law.
This effort of the EU to expand the software patenting
regime was a major step forward given the fact that
software patents were till recently not the norm and
given the controversy which still surrounds the provision
of patents for software. In fact, it was only in 1981
that the US Supreme Court ruled that software was patentable,
at least when it functioned or operated to control an
industrial process. However, for long after that, software
was essentially considered to be non-patentable, since
many computer programmes performed a range of more ''intangible''
functions such as word processing, accounting, graphics
generation, and the like. Protection for such software
was available only under the copyright convention.
However, there is a substantial degree of difference
in the extent of protection afforded by copyrights and
patents. Copyright traditionally protects only the "expression"
of an idea, whereas a patent protects the idea itself.
Thus, in the case of software, copyright protection
extends only up to the original software code, which
cannot be replicated or altered. But if an alternative
code can be deployed to achieve the same end result,
copyright is not violated. As a result courts have interpreted
the extent of copyright protection for software by closely
examining the details of a computer programme rather
than the overall characteristics of the end product.
A classic instance of this was when Borland International
included in its accounting software Quattro a set of
Lotus 1-2-3 type menu commands, which allowed customers
to easily switch from the latter to the former. Customers
had the option of using Quattro's own menu commands
or a virtually identical copy of the entire 1-2-3 menu
tree. However, Borland did not copy any of Lotus' underlying
computer code that delivered the functions performed
by the spreadsheet. However, Lotus, as expected, chose
to go to court on grounds of copyright infringement.
After a four-year battle in the courts the Supreme Court
upheld a decision by the a First U.S. Circuit Court
of Appeals denying copyright protection for the menu
commands in the Lotus 1-2-3 electronic spreadsheet program.
The First Circuit Court had assessed Lotus' menu tree
to be a "method of operation" that was expressly
excluded from copyright protection since the relevant
clause states: "[I]n no case does copyright protection
for an original work of authorship extend to any idea,
procedure, process, system, method of operation, concept,
principle or discovery, regardless of the form in which
it is described, explained, illustrated or embodied
in such work." What is more the court declared:
"The computer program is a means for causing something
to happen; it has a mechanical utility, an instrumental
role, in accomplishing the world's work. Granting protection,
in other words, can have some of the consequences of
patent protection in limiting other people's ability
to perform a task in the most efficient manner. ...
It is no accident that patent protection has preconditions
that copyright protection does not -- notably, the requirements
of novelty and non-obviousness -- and that patents are
granted for a shorter period than copyrights."
In sum, if software had to be protected in the manner
in which Lotus and others felt it should be, then a
patent rather than copyright was the appropriate route.
Since a patent can protect an idea or concept, the patent
claim can be written to cover the so-called novel combination
of elements or steps making up the patented system or
process. This would make it difficult or impossible
to write another computer programme that would offer
a similar system or process without infringing the patent.
It was in the context of such judgements that a virtual
movement to ensure patent protection for software began
in the US. The result has been a flood of patent applications
for software, resulting in the grant of what has been
identified as "clearly invalid patents" for
inventions that are either not new or where there is
no significant inventive step. That tendency has not
slowed. According to Randall Stross, a Silicon Valley
analyst who recently wrote on the subject in the New
York Times, around a year back Bill Gates announced
Microsoft's decision to raise the number patent applications
it submitted annually to 3,000 from 2,000. This amounts
to identifying close to 60 novel and non-obvious patentable
ideas every week. Not surprisingly, the subjects of
Microsoft's applications were indeed flimsy and included
titles like "System and Method for Creating a Note
Related to a Phone Call" and "Adding and Removing
White Space From a Document."
Stross is convinced that the 3,955 patents that Microsoft
has already been issued should be struck down and the
3,368 patent applications it has pending should be summarily
rejected. His view is shared by software major Oracle,
which had in an officially declared policy opposed the
patenting of software as it was inappropriate for industries
in which innovations occur rapidly, can be made without
a substantial capital investment, and tends to be creative
combinations of previously-known techniques. In its
view, patent protection was devised for engineering
and mechanical technologies that are characterized by
large "building block" inventions that can
revolutionize a given mechanical process. On the other
hand, ''software, especially a complex program, seldom
includes substantial leaps in technology, but rather
consists of adept combinations of many ideas.''
There are also a number of practical problems in implementing
a software patent regime. As Oracle put it, ''software
patent examinations are hindered by the limited capability
of searching prior art, by the turnover rate among examiners
in the Patent and Trademark Office, and by the confusion
surrounding novelty and innovation in the software arena.
The problem is exacerbated by varying international
patent laws, which both raise the cost and confuse the
issue of patent protection.''
What is more, filings of patent applications tend to
be expensive, especially because of the large sums to
be paid out in the form of lawyers fees. Further, patents
for incremental innovation which is typical of the software
industry entail the economic costs of identifying the
patent holders and negotiating the necessary licences.
Small firms therefore would be unwilling to apply for
patents, even though many new software ideas emanate
in small firms. Hence, patents for computer-implemented
inventions might strengthen the market positions of
the big players and result in the monopolization of
an industry that technologically tends to be more competitive
in structure. The net result would be a setback for
innovation.
Based on these and other similar arguments, the advocates
of open source software joined the debate on the EU
software directive. The controversies that ensued generated
the fear among the big software companies that they
would lose even the protection they currently receive
through the EPC and national patent legislation. So
while small firms and the open source software movement
wanted the EU bill rejected and used as an occasion
to question the appropriateness of software patenting,
the big firms wanted the bill dropped to prevent its
use as the basis for a reversal of the existing level
of software protection. In the event the bill was rejected
in a vote which Josep Borrell, president of the EU parliament
described as the most decisive majority vote in the
history of the chamber. This near unanimity in rejection
was surprising given the contentious nature of the debate
that preceded it. There was no commonality of purpose,
but differences on the direction software patenting
should take ensured convergence around a negative verdict.
Meanwhile, the software patenting regime in the EU continues
as before despite the arguments advanced to show that
the practice, like the EU directive, must go.
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