Naked Law

Software patents "lost in lawyer land"

Or at least so says the EPO, according to Lucy Sherriff at The Register: "the system is overwhelmed, overly bureaucratic, and hopelessly lost in lawyer land".  Readers might be surprised to hear that actually we lawyers don't live in a different land and, perhaps even more surprisingly, on the whole we tend to approve of increasing clarity in what we do (at least in the UK following the principles of the Woolf reforms).

This is one reason why, in contrast to many of the vocal individuals who opposed the old software patent directive that was shot down in 2005, we've tended not to dismiss outright the concept of reforming the principles around the grant of software patents (see various previous posts on Naked Law for examples).  As Lucy says: "Even though the European Parliament rejected the CII directive, that doesn't mean the status quo is OK. It just means that the CII directive was not the right update."

The concern from practitioners is that there is no uniform approach to patenting software across the EU (let alone in the rest of the world).  It is encouraging that Alison Brimelow, the new head of the EPO, recognises this: "What we need is not more patents, but more good patents".  IPKat has more information about Ms Brimelow here.

More from cross man Macrossan

IPKat flagged a question this week from Neal Macrossan, the inventor behind the high-profile Aerotel v Telco Holdings case on software patenting (in essence, should Macrossan appeal to the House of Lords?).  Note also the interesting exchange between Macrossan and another commenter on IPKat's earlier post here.  I am afraid that I don't propose to answer Macrossan's question today, but thought this was a good opportunity to observe that the High Court again recently considered the Aerotel case in IGT v Comptroller [2007] EWHC 1341 (Pat).

The Court of Appeal in Aerotel laid down a 4-step approach to be followed in determining whether or not such a claimed invention is patentable:

1. Properly construe the claim – in other words, identify the invention claimed
2. Identify the actual contribution – in other words, determine what the claimed invention has really added to human knowledge
3. Ask whether it falls solely within the excluded subject matter – in other words, is this contribution solely in relation to any of the above excluded subject matters
4. Check whether the actual or alleged contribution is actually technical in nature- this follows from previous case law that in order for a software to be patentable, the claimed invention must make a technical contribution over and above the excluded subject matter mentioned above (the Court of Appeal expressed the view that the fourth step may not be necessary because the third step should have covered that, but felt obliged to include it in the light of previous case law).

The IGT case was an appeal against the decision of the UK Intellectual Property Office refusing four patent applications relating to gaming systems.  The judge noted that in the virtual world it is possible to emulate existing games from the “physical world”, in which case it might be possible to argue that the rules of the game are the same as the rules of the real game and that the computer program is excluded as a scheme, rule or method for playing a game.  The judge stated that if the contribution included something else (e.g. new physical combination of hardware), it may be entitled to protection. However, in this case there was no new physical combination of hardware; the novelty was in the software (a computer program, which was not as such patentable); if that novel software produced a contribution which lies only in the excluded field of rule, method or scheme for playing a game, it could not be the subject of a valid patent.

The court held that in applying the Aerotel four stage test, the key question is not whether a contribution is technical, but whether it lies solely in an excluded area. The important question was therefore not whether the subject matter of the claim was patentable and outside the excluded subject matter, but whether the contribution was within the excluded subject matter.  In the IGT case, the court held that the contribution made lay in the excluded field of a scheme, rule or method for playing a game and upheld the refusal of the applications.

My patents? Not on your Liffe ...

Slightly behind the times on this one, but I spotted in last week's Gazette some analysis by Richard Taylor of the LIFFE Administration & Management v Pinkava & Others [2007] EWCA Civ 217 case from March this year.  The case analysed the ownership under s.39 of the Patents Act 1977 of a "system and related inventions which permit the trading on an electronic exchange of various financial instruments not previously so traded" created by Pinkava during his employment by Liffe.  The Court of Appeal dismissed Pinkava's appeal and held that the system he invented was owned by Liffe.

The Court looked at the wording of s.39, which states that an invention created by an employee is owned by the employee's employer if:

"(a) it was made in the course of the normal duties of the employee or in the course of duties falling outside his normal duties but specifically assigned to him and the circumstances in either case were such that an invention might reasonably be expected to result from the carrying out of his duties; or

(b) the invention was made in the course of the duties of the employee and, at the time of making the invention, because of the nature of his duties and the particular responsibilities arising from the nature of his duties he had a special obligation to further the interests of the employer’s undertaking."

Two particularly good comments from Justice Jacob in the judgment.  First, in assessing the first limb on duties:

"I do not think one can be too precise about how the duty is to be ascertained.  The contract and the general nature of the job both call for examination.  It is not possible to be too analytical about this.  In the end one is asking whether the employee is employed to try to innovate and, if he is, what general sort of areas his innovation duties cover."

I am not quite sure what "it is not possible to be too analytical" means (it could be "any analysis, no matter how extensive, is not excessive" - or the opposite, ie "one should not analyse these things too extensively").  Assuming that he meant the latter, I'm not convinced it's the most helpful guidance (a bit like saying "you know, it's a duty if it's a duty ... it just is ...").  I also like this:

"Where I differ from the Chancellor is in thinking that the particular attributes of the individual employee are a relevant circumstance.  I cannot accept that, given all other factors being equal (contract terms, nature of job and so on), there can be a difference as to ownership depending on whether the individual employee is thick or brilliant."

Presumably Jacob felt at liberty to make this comment because the employee in this instance leaned more towards the "brilliant" than the "thick".  As Richard Taylor points out, employees are theoretically entitled to compensation under s.40 but this is unlikely to have been of enormous comfort to Pinkava - as Taylor says, "there have been no reported cases of a successful claim under this head".

I've also found IPKat's analysis here and here.

Floodgates tightly shut on software patents

It may be the end of a long road for Australian businessman Neal Macrossan and his software patent application, or is it?  After failing in his attempt to be heard by the House of Lords regarding the Court of Appeal's decision not to grant him a patent for his software, Macrossan is considering making a second application to the House for his case to be heard.  Macrossan can make a second petition but it looks likely that the House will reject his application again.

In March 2005, Macrossan applied to the UK Intellectual Property Office (named at that time the UK Patent Office) to protect his invention comprising a piece of software, by way of patent.  Macrossan's invention is an online system which compiles the documents needed to incorporate a company.  His patent application was rejected because under the European Patent Convention, computer programs are generally not patentable in the UK (unless the inventive concept clearly involves some new and inventive physical component or result).

The case has been closely scrutinised and followed by commentators, eager to see if it would result in a change in UK law relating to software patents.  As it stands, the Court of Appeal's ruling means we are unlikely to see any such changes in the near future.  Despite a request by the Court of Appeal, even the European Patent Office has declined to comment on the position of software patents, because "there is an insufficient legal basis for a referral". The UK Intellectual Property Office is going to fully apply the law set out in the Macrossan case as the "definitive statement of how the law on patentable subject matter is now to be applied in the United Kingdom" (see new practice notice).

Vonage 'delighted' at only paying Verizon $58 million for patent infringement

At least according to their own press release they are. A US District Court in Virginia recently ruled that Vonage had infringed three United States registered patents owned by Verizon. The award against Vonage also includes a share of future royalty revenues (reportedly 5.5%), and apparently could form the basis for a subsequent injunction application against Vonage.

Vonage is reportedly the biggest supplier of Voice-Over Internet Protocol services (VoIP), providing phone services over the internet. According to third party sources, some 2.2 million users are signed up with Vonage.

There is some good news for Vonage though. They weren't found to be infringing all seven of the patents that Verizon had originally claimed. In addition, Verizon's initial claim was for $197 million. On this basis perhaps their 'delight' at the result is understandable.

Wicks lights IP audit touchpaper

Intellect reported this week that Science and Innovation Minister Malcolm Wicks had announced a new initiative that will see 40 small businesses given IP audits to identify what IP they use and how best to maximise value from their IP.  This follows the recommendation in the Gowers review (see previous posts) that the Patent Office should "improve SME business IP support", and the Patent Office's Innovation Strategy, in which is states that it aims to:

"use the Office’s knowledge, resources and expertise in the most efficient and effective manner to support innovation and to avoid duplication of effort by working with government and private sector partners to present a simple interface for business".

It will be interesting to see which businesses are chosen for this pilot scheme and whether they do change their IP strategies following the review.

Gowers goes into bat

The Government has been carrying out a review of intellectual property legislation in the UK to see if any improvements need to be made to update the system for the 21st century. Andrew Gowers was appointed to lead the review, and his findings were published earlier this month. The full report is available here.

There are a number of key recommendations, but the first to catch our eye was recommendation 53 - that the UK Patent Office should be renamed...wait for it...the UK Intellectual Property Office.

Software patent - a bogus claim

One particular IT related patent application is getting a lot of attention from IP lawyers on the US Patent and Trademark Office web site - take a look at claim number nine.

Konami Shoot and Score

Computer game fans might be interested to find out that Konami has been granted a European Patent for a new element of software which allows for the better control and graphical representation of players in a football video game.

The initial patent application for this innovation was refused by the European Patent Office. Konami then appealed to the Technical Board of Appeal, which decided that, though some of the elements of the application would not be allowed, the invention as a whole was patentable.

This successful application provides an illustration of the fact that inventions relating to software can be patentable, despite the general exclusion on the patentability of computer programs as such, set out in Article 52 of the European Patent Convention. Software developers may want to consider whether they could protect their intellectual property using patents.

Model railway software points to open source licensing weakness

An argument over intellectual property rights in software that manages train sets has been reported on vnunet as exposing an "Achilles heel" in open source software.

US based proprietary software vendor KAM Industries has alleged that the JMRI (Java Model Railway Interface) available on SourceForge distributed via an open source licensing model infringes patent rights owned by KAM.  KAM have reportedly invoiced Robert Jacobson, who runs the JMRI project $203,000 based upon $29 per download.  Jacobson has not rolled over and has fought back with a lawsuit claiming that the patent is invalid and that KAM has been involved in various illegal acts.

This dispute highlights one of the risks faced by those developing and using open source software.  Although there are many benefits in open source software, it is not immune from claims that someone else owns intellectual property in the software.  There is of course the perception that since the software is normally distributed free of charge and as open source is generally believed to be for the common good, owners of prior intellectual property rights will not be overly concerned by open source competition.  Indeed, the likes of Nokia, IBM and Sun Microsystems have declared to varying degrees that they will not use their patents against open source software.  Also, there is ongoing discussion about how the GPL open source licence model can be improved to deal with possible patent infringment prior to the launch of GPL version 3.  However, where prior rights, such as patents and copyright exist, there will be ongoing risks of infringment, both for the developer/distributor of the software and the end-user.  Simply going down the open source model will not remove this risk altogether.