Proposed Directive on Patentability of Computer implemented Inventions

09 October 2003

Peter Ward

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On 24 September 2003, the European Parliament voted on the proposed Directive On Patentability of Computer-implemented Inventions (Ref: 2002/47 (COD)) published a year previously by the European Commission. The Directive, in the form passed by the European Parliament, includes significant amendments over the Commission's original proposals and now moves to the next stage in its passage into law.

Ordinarily, a Directive of this nature proposed by the Commission would follow the path set out by Article 251 of the EC Treaty. A proposed Directive is put before the European Parliament and any resulting amendments are then put to the Council of Ministers, who may either approve all the amendments and adopt the proposed act by qualified majority voting or else subject the Directive to further amendment. The approval of the Council of Ministers is not simply a rubber stamp and such is the controversial nature of some of the Parliament's amendments that the future progress of the present Directive is likely to be just as bumpy as that of the earlier Biotechnology Patents Directive.

Before looking at the Parliament's amendments to the Directive and highlighting how they might be reigned in as the Directive progresses, it is worth remembering why the present Directive came into being in the first place. Article 52 of the European Patent Convention provides that patents may be granted for any inventions, in all fields of technology, save in certain specified fields. The excluded fields included programs for computers, schemes or methods for doing business, the presentation of information, and mathematical methods. Article 52(3) qualifies these exclusions so that an application for a European patent will be refused where it relates to these subject-matter or activities "as such".

The excluded subject matter meant there was a divergence between Europe and the US and Japan over the patentability of software and business methods, and there was concern over whether the European Union might be put at an economic disadvantage because of this. Further, the great majority of the signatories to the EPC are or are about to become members of the EU and distinct differences were appearing between a number of countries and also the European Patent Office on how Article 52 ought to be interpreted. The EPO had moved towards "carrier claims" of the US Beauregard type for software related inventions and, following the Pension Benefit decision of the Technical Board of Appeal in 2001, would no longer refuse to examine a business method patent under Article 52 provided the claim had some technical characteristic (though the test for inventive step would still be determined only on the technical features of the claim). In contrast, the UK Patent Office expressed disquiet at an approach that seemed to determine patentability on the form of a claim rather than its substance and which was also at odds with the approach taken by the UK Courts.

The European Commission had already determined its approach to software patents and patents for business methods following a series of consultation exercises, after which it was decided that no great changes to European practice were required. The result was the proposed Directive published in September 2002. Rather, the Commission set out to resolve the differences between the approaches to interpreting Article 52 that had arisen between Member States and with the EPO. This aim has been reinforced in amendments to the recitals to the Directive passed by the European Parliament, which now include a specific provision that national courts of last instance must seek a referral to the European Court of Justice where there is uncertainty over interpretation of the Directive.

However, the Parliament has gone further than the simple objective of harmonising the present divergence in the laws of Member States by what seems to be the introduction of new law if the amendments are allowed to stand.

The new Article 3a would require Member States to ensure that innovations in the field of data processing are not to be considered as inventions for which patents can be granted. This is potentially broader than the restrictions on patentability of mathematical methods, schemes, rules and methods for performing mental acts, and the presentation of information already provided for in Article 52 of the European Patent Convention.

Further, the proposed Article 6a would introduce a new defence to patent infringement. Where the use of a patented technique was needed for a "significant" purpose, such use would not to be considered to be an infringement of patent. A "significant" purpose has not been given any specific definition other than a reference to "ensuring conversion of the conventions used in two different computer systems or networks so as to allow communication and exchange of data content between them." The potential application is very broad. At its narrowest, the exemption from infringement could apply only to technology that is deemed essential for one computer system to exchange data with another. This would be consistent with the Directive's aim declared in the amended Article 6 that rights conferred by patents for computer-implemented inventions shall not affect acts permitted by Articles 5 and 6 of the Council Directive 91/250/EEC of 14 May 1991 on the legal protection of computer programs - the so-called decompilation and interoperability provisions. However, the proposed Article 6a could conceivably have much wider application. For example, it could embrace technology that converts between electronic and optical signals in a telecommunications network.

One possible way to approach the present version of the Directive is to say that unless its restrictions are clear and unambiguous, they must be applied strictly in the context of a computer-implemented invention. The latest version of Article 2 states:

"For the purposes of this Directive the following definitions shall apply:

(a) "computer-implemented invention" means any invention within the meaning of the European Patent Convention the performance of which involves the use of a computer, computer network or other programmable apparatus and having in its implementations one or more non-technical features which are realised wholly or partly by a computer program or computer programs, besides the technical features that any invention must possess;

(b) "technical contribution", also called "invention", means a contribution to the state of the art in a technical field. The technical character of the contribution is one of the four requirements for patentability. Additionally, to deserve a patent, the technical contribution has to be new, non-obvious, and susceptible of industrial application. The use of natural forces to control physical effects beyond the digital representation of information belongs to a technical field. The processing, handling and presentation of information do not belong to a technical field, even where technical devices are employed for such purposes.

(ba) "technical field" means an industrial application domain requiring the use of controllable forces of nature to achieve predictable results. "Technical" means "belonging to a technical field".

(bb) "industry" within the meaning of patent law means the automated production of material goods.

When one looks at the suggested new definition of "industry" offered in Article 2(bb) together with the proposed revisions to Article 5 which specify that a computer-implemented invention may be claimed only as a product (that is, a programmed device), or as a technical production process (a manufacturing process controlled by computer), one might argue that the provisions of the Directive should only relate to a claim that is in the form proposed by the new Article 5.

If this approach in interpretation was adopted, it would mean that claims for components that make up a computer system would be excluded from the definition of a computer-implemented invention, even though some components may themselves involve programmable logic and software in the form of microcode. It would hardly be a stimulus to European industry if the designs of microprocessors or disk drives to perform data processing more efficiently could not be protected, which is arguably the case if the proposed Article 3a is given a wide interpretation. Such an approach would also avoid falling foul of the proposals in Article 4b, which require Member States to ensure that computer-implemented solutions to technical problems are not considered to be patentable inventions merely because they improve efficiency in the use of resources within the data processing system.

Having attempted to introduce certainty into existing law, the Parliament's amendments are likely to introduce new grounds for confusion because of uncertainty over their scope and purpose. Indeed, the Parliament's amendments seem to bear the hallmarks of effective lobbying from a variety of sources all put together without much understanding of their long term implications or effect. By way of example, Article 8 suggests a provision for a study into whether it is appropriate to introduce a "grace period" regarding disclosures of any form of invention before an application is filed. This is more a reform than a "harmonising" measure as Europe already has a common approach to publication.

Because the Parliament's amendments seem to have far outstretched the original purpose behind the Directive, it is more than likely that substantial changes will be introduced by the Council of Ministers, particularly when fresh lobbying starts after the implications of the amendments are understood.

The likely way forward for the act is as follows. Article 251 stipulates that if the Council is not able to accept the Parliament's amendments in their entirety, it should adopt a common position and communicate that position with supporting reasons to the European Parliament. It is then open to the Parliament to accept that common position from the Council in which case the Directive can proceed, or else it can reject the Council's position in which case the proposed act shall be deemed not to have been adopted and fail altogether. It is also open to the Parliament propose further amendments for the Council and the Commission to consider.

If the further amendments from the European Parliament are accepted in their entirety, the Directive can again progress into law. If the Council does not accept all the new amendments, it is necessary to convene a meeting of the Conciliation Committee composed of MEPs and members of the Council. Both the Council and the Parliament must approve any proposed revisions or the act will be deemed not to be adopted.

Thus, the future progress of the measure is hard to predict. Will the Parliament, having had its say, quietly accept the further amendments that it seems almost inevitable that Council and the Commission will require if the measure is to become law? Or will the whole legislative process collapse in acrimony, as happened with the first version of the Biotechnology Patent Directive? Or will the Commission seek quietly to bury things? It certainly has a good excuse in the elections for Parliament next year, as the measure will then automatically fall if it has not become law by then, and the Commission can reintroduce it in the new Parliament. About the only certainty is that having got to this stage the Commission will not abandon the measure for ever, especially as the underlying problem which it seeks to address will not go away, and can only be expected to get worse over time.

Pending formal publication of an official copy of the proposed Directive as amended, we have produced our own copy prepared from the Texts Adopted at the sitting of the European Parliament on 24 September 2003.

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