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Proposal for a Directive on the patentability of computer-implemented inventions - frequently asked questions

European Commission - MEMO/02/32   20/02/2002

Other available languages: FR DE

MEMO/02/32

Brussels, 20th February 2002

Proposal for a Directive on the patentability of computer-implemented inventions - frequently asked questions

(see also IP/02/277)

What are the main features of the proposal?

The central requirement of the proposal is that, in order to be patentable, an invention that is implemented through the execution of software on a computer or similar apparatus has to make a contribution in a technical field that is not obvious to a person of normal skill in that field. This is essentially a legal question of a kind which is answered all the time by patent offices and practitioners.

What is the current situation in the EU concerning patents on computer-implemented inventions?

Inventors currently have two possible routes for obtaining protection for their inventions. Patents may be applied for, processed and granted either at the European Patent Office (EPO) under the centralised system of the European Patent Convention (EPC), or via national patent offices in the Member States purely according to national law. However whichever route is chosen, national law applies in all cases after grant. Thus, granted European Patents become a "bundle" of national patents which have to be validated, maintained and litigated separately in each Member State.

Legally speaking, the patent laws of the Member States are in principle supposed to be consistent with the EPC and uniform among themselves. However, in practice there is no unifying structure with binding effect on national courts and there is therefore the potential for differences to appear over the interpretation of particular aspects of patent law. The EPC is entirely separate from the Community and the EPO is not subject to Community law. The EPC currently includes among its membership all Community Member States plus five other countries (Switzerland, Turkey, Cyprus, Monaco, and Liechtenstein). Several more are expected to join later in 2002.

The patentability of software and related inventions is currently determined principally by Article 52 paragraphs (2)(c) and (3) of the EPC, according to which computer programs "as such" (as well as business methods and certain other entities) are excluded from patentability. However, since the EPC came into force in 1978, more than 30,000 software-related patents have been granted, and a considerable body of case law on the subject has been built up by the appellate bodies of the European Patent Office (EPO) and the Member States' courts. Many of these patents have been granted for devices and processes in technical areas, but the majority now relate to digital data processing, data recognition, representation and information handling. This has fuelled debate on whether the limits of what is patentable are still sufficiently clear and applied properly.

This is moreover an area in which some differences have appeared in practice under national patent laws. This has led to uncertainty over the legal position especially in Member States where less extensive litigation has taken place.

This is therefore an opportune time to propose EU legislation. In its absence, Member States may feel obliged to act outside the Community framework. In addition, if no action is taken at the Community level, the scope of what is patentable may be defined on the basis of individual decisions on particular cases by the European Patent Office's (EPO) judicial bodies, without the opportunity for coherent political reflection based on wide consultation and the overall picture. The proposed Directive therefore sets clear borders to what would be patentable in the EU and what would not.

Does this proposal follow the principles established by the European Patent Convention?

Broadly, yes. The European Patent Convention says that patents should not be granted for computer programs as such. However computers are themselves machines like other technological devices. Over the years, national courts have decided that there is no reason why a patent should not be granted for a machine programmed to carry out some technical function, or a technical process carried out using a computer or similar machine. But in common with all other inventions, it still needs to be new and not obvious. The proposed Directive has followed this approach.

Won't extending patents to cover computer programs reduce competition?

The Directive will not make it possible to patent computer programs "as such". In broad terms, nothing will be made patentable which is not already patentable. The objective is simply to clarify the law and to resolve some inconsistencies in approach in national laws.

So why do we need a Directive?

The present legal situation has essentially been built up by national courts and the EPO. They have had to develop interpretations to cope with a technology whose subsequent development could not have been imagined when the European Patent Convention was first drafted at the beginning of the 1970s. They have done a very good job, but the lack of harmonisation and the existence of different legal traditions has meant that some differences have arisen with the potential for more serious divergences in future if action at the Community level were not taken. Consultations undertaken by the Commission on this issue have indicated very clearly that the lack of legal certainty in this field is widely regarded as very damaging to European interests.

What consultations has the Commission undertaken on this issue?

There has been a series of consultations on this subject beginning with the 1997 Green Paper on the Community Patent. Most recently, a discussion document was published on the Europa website on 19 October 2000 (see http://ec.europa.eu/internal_market/en/indprop/softpaten.htm, which invited comments by 15 December 2000 on the basis of a number of proposed "Key Elements" for a harmonised approach to the patentability of computer-implemented inventions in the European Community. These "Key Elements" broadly reflected the present state of development of European case law under which it is estimated that at least 30,000 patents for computer-implemented inventions have already been issued.

The consultation produced 1447 responses, the overwhelming majority by e-mail. An analysis of these responses is available at:

http://ec.europa.eu/internal_market/en/indprop/softpatanalyse.htm

Many of the responses supporting a more restrictive approach than at present, with fewer patents being granted, were transmitted through an open forum set up by the "Eurolinux Alliance", a group of companies and other entities supporting the development of open source software such as Linux. Although this group numerically dominated (90%) the response, the major sectoral bodies representing the information and communication technology industries, as well as many of the Member States, all supported the approach put forward by the discussion paper. Some responses argued for eligibility for patents to be widened in line with the practice in the US.

How does the proposal reflect responses to consultation?

The proposal takes account of all responses, which covered a huge spectrum of opinion and interests. The objective is to achieve the right balance between making patents available where appropriate in order to reward and encourage innovation, while avoiding stifling competition and open source development. The Commission received some submissions arguing that patents tend to restrict innovation in fields like software development. We also received submissions from organisations representing many thousands of companies arguing that computer-implemented inventions should remain patentable or even that patentability should be extended. The Commission's proposal reflects the balanced interests of the EU's economy and society as a whole.

Why are patents good for innovation?

From the perspective of the owner of a patent, the limited exclusivity provides an opportunity to generate income. This in turn provides an incentive to invest in research and development. And a successful business will use income from patented inventions to fund further innovation. Patents can also be used as security to obtain loans and as a means of negotiating for licenses on technology owned by others.

It is a condition of obtaining a patent that there should be disclosure of how the invention works. If the disclosure is not sufficient to enable the invention to be reproduced, the patent can be revoked. Patents are therefore an important source of technical information for others to use.

EU industry has built itself up in the very legal environment which we are now seeking to harmonise. Other countries which are successful in the information technology sector (such as the US and Japan) also grant patents for computer-implemented inventions.

Isn't software different to other technologies in that patents can be used to block legitimate independent innovation?

The Commission has seen little evidence that this has been a problem in practice in the present environment. This would be the case only if the scope of protection granted by patents were extended to software as such and, for instance, blocked the use of an algorithmic idea in other technical fields from the one in which a patent is granted. Since the proposed Directive would not extend the scope of what can be patented, nor the scope of the protection granted by a patent, there should be nothing to fear on this front.

Would the proposed Directive restrict the interoperability of computer programs?

No. In fact, Member States' patent laws, while not fully harmonised, do not in general extend to acts performed privately and for non-commercial purposes, or to acts carried out for experimental purposes related to the subject-matter of the invention. Nor is it likely that the making of a back-up copy in the context of the authorised exploitation of a patent covering a programmed computer or the execution of a program could be construed as an infringement. The proposed Directive will not change this situation. Thus, because of the differences between the subject-matter of protection under patent and copyright law, and the nature of the permitted exceptions, the exercise of a patent covering a computer-implemented invention should not interfere with the freedoms granted under copyright law to software developers by the provisions of the existing Directive on the legal protection of computer programs (91/250/EEC).

Indeed, the proposed Directive makes specific reference, inter alia, to the provisions on decompilation and interoperability in the Directive 91/250/EEC, in terms that ensure that the different scope of protection granted by patents would not undermine the possibility to carry out the acts that are permitted under that existing Directive. Directive 91/250/EEC includes specific provisions (Articles 5 and 6) to the effect that copyright in a computer program is not infringed by acts which under certain circumstances would otherwise constitute infringement. These exceptions include acts performed for the purposes of studying the ideas and principles underlying a program and the reproduction or translation of code if necessary for the achievement of the interoperability of an independently-created computer program. It is also specified that the making of a back-up copy by a lawful user cannot be prevented. Such provisions are necessary in the context of copyright law because copyright confers the absolute right to prevent the making of copies of a protected work. All the acts mentioned involve making copies and would therefore infringe in the absence of any exception.

Does the proposal include rules about business methods?

The proposal does not deal directly with the patentability of business methods. This is because the consultations have indicated clearly that there is general satisfaction with the current situation, whereby "pure" business methods (that is, methods which have no technical character) are not currently patentable.

However, in practice some inventions involving business methods could fall within the definition of "computer-implemented inventions". These inventions would be dealt with in accordance with the proposed Directive, and in particular patents would only be granted for inventions that made a "technical contribution".

What is meant by "technical contribution"?

The proposed Directive defines a "technical contribution" as "a contribution to the state of the art in a technical field which is not obvious to a person skilled in the art". If an invention implemented through the execution of software did not make a technical contribution it would be considered to lack an inventive step and thus would not be patentable.

It would not be possible for a legal text such as a Directive to attempt to spell out in fine detail what is meant by "technical", because the very nature of the patent system is to protect what is novel, and therefore not previously known. In practice the courts will determine in individual cases what is or is not encompassed within the definition. However, earlier court decisions have indicated that a technical contribution may arise if there has been some improvement in the way that processes are carried out or resources used in a computer (for example an increase in the efficiency of a physical process), or if the exercise of technical skills beyond "mere" programming has been necessary to arrive at the invention.

What are the main differences between the approach of the proposed Directive and the situations in the US and Japan?

The main difference lies in the requirement for "technical contribution". Japanese law does not have this as such, but there is in Japan a doctrine which has traditionally been interpreted in a similar way: the invention has to be a "highly advanced creation of technical ideas by which a law of nature is utilised".

In the US on the other hand, a patentable invention must simply be within the technological arts. No specific technological contribution is needed. The mere fact that an invention uses a computer or software makes it become part of the technological arts if it also provides a "useful, concrete and tangible result". Among other things, this has meant that in practice in the US, restrictions on patenting of business methods (apart from the requirements of novelty and inventive step) are negligible.

Practice in both the U.S. and Japan is to allow patent claims to software that implements patentable inventions.

The need to maintain and improve standards of patent examination for computer-implemented inventions is one of the most important challenges facing patent offices world-wide. The EPO, which is widely recognised as a world leader in patent search and examination, is, together with its colleagues in the US and Japanese patent offices, studying this question as one of its highest priorities.

Why would claims to computer programs on their own not be permitted under the proposed Directive?

In recent decisions, patents have under certain conditions been allowed which contain claims for computer programs on their own, for example on a disk or even as a signal transmitted over the internet. In the course of consultations, fears were expressed that if enforced, patents including such claims may be used to prevent "reverse engineering" and other activities considered legitimate in respect of computer programs already protected under copyright law. Moreover, such claims could be said to be contrary to the EPC, which does not allow patents for computer programs "as such". In response to these concerns, the Commission has decided not to follow the direction taken by case law in this important respect. Accordingly, the proposal would not allow claims of this type to be considered valid.

What is the difference between a patent and copyright? Can an invention be protected by both?

Patent and copyright protection are complementary. In very general terms, patents protect new technical ideas and principles, while copyright protects the form of expression used. For example, a new sort of paper might be protected by a patent, while the printed content of a newspaper would be protected by copyright. In computer terms, the actual code (whether machine-readable or in a form which is intelligible to human readers) would be subject to copyright protection, while underlying technological ideas may be eligible for patent protection.

Patent law gives the holder of a patent for a computer-implemented invention the right to prevent third parties from using software incorporating any new technology he has invented (as defined by the patent claims).

On the other hand, a computer program will be accorded copyright protection where the form of expression is original in the sense of being the author's own intellectual creation. Third parties would not be able to produce substantially the same content material as the original author has produced, even if they used different technical principles to do so.

Accordingly, the same program may be protected by both patent and by copyright law. That protection may be cumulative only in the sense that an act involving exploitation of a particular program may infringe both the copyright in the code and a patent whose claims cover the underlying ideas and principles of the invention using the program.

What about the BT "hyper-text" patent case - can this patent really be valid when hyperlinks are common-place?

This is a very old patent. It has expired everywhere else in the world, but is still in force in the US by virtue of the old US patent law which counted the patent term from the date of grant (10 October 1989) rather than from the date of application. This happens from time to time and is nothing to do with being in the field of computer programs. It of course remains to be seen whether the US courts will find in favour of the patentees.

A related patent was granted in the UK and remained in force until it expired in 1997. Patents were also granted in many other countries including Japan and the main European countries. The test for whether a patent is allowable is whether it was inventive at the time of application. Although hyperlinks are commonplace today, it is clear that several different patent offices all took the view that the patent described a valid invention at the time of the application.

Would the Amazon "one-click" shopping cart ordering model be patentable under the Commission proposal?

The European Patent Office has yet to come to a decision on the related European application, so it would not be appropriate to comment on whether there is any patentable subject-matter in the application as a whole. However, a patent with the breadth of claims which has been granted in the United States would be highly unlikely to be considered to make a "technical contribution" in the EU under the terms of the proposed Directive.

When would the proposal become law?

Once the proposal has been adopted by the EU's Council of Ministers and the European Parliament under the so-called co-decision procedure, the Directive would have to be implemented in national law by the Member States.

Will there be further consultations?

There have already been extensive consultations since 1997 and no more are planned now that the proposal, reflecting the results of these consultations, has been presented. However, there is plenty of opportunity for further input and comment on the proposal during the process of its adoption by the EU's Council of Ministers and the European Parliament.


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