In contrast to the United States, where patent protection for computer software and business method innovations is well recognized by the Patent Office and the courts, the question of whether computer software should be patentable remains a hotly debated subject in Europe. National patent laws governing the patentability of computer software vary on a country by country basis in Europe. In the absence of a consistently-recognized legal standard for software patentability, the European Patent Office, the central patent office for European countries adopting the European Patent Convention, has reportedly granted over 30,000 software patents. The enforceability of these patents, however, is questionable in some European countries. In recognition of the questionable validity of software patents in Europe, the legislative bodies of the European Union - the European Commission, the European Council of Ministers, and the European Parliament - are now seeking to harmonize the national patent laws in Europe.
A (Lengthy) European Debate Over Software Patents
A hotly contested debate over software patent protection in Europe has proceeded on a stop-and-go basis for more than three years. In February 2002, the European Commission kick-started a controversy over software patents by issuing a proposed "Directive on the Patentability of Computer-implemented Inventions" (the "Directive"). The Directive presented a patentability standard that is generally favorable to patent protection for inventions featuring computer software-implemented technologies. Formal adoption of the Directive as legislation representing the European Union's position on the patentability of computer software requires approval by the European Parliament and the European Council.
In September 2003, the European Parliament, comprising elected ministers from each of the member countries of the European Union, declined to accept the pro-software patent position proposed by the European Commission and voted to adopt a substantially amended version of the Directive. The European Parliament's amendments would effectively eliminate an inventor's option for pursuing a European patent for a computer software program or a business operation enabled by computer software. In May 2004, the European Council, which represents the various governments of the European Union, rejected many of the anti-software patent amendments proposed by the European Parliament and issued its own version of the Directive. The European Council's version effectively restored the original proposal made in 2002 by the European Commission for a patent protection model that favors the patentability of computer software. The European Council formally adopted its pro-software patent version of the Directive in March 2005 and submitted the amended Directive to the European Parliament for a second reading as required by the European legislative process.
Under the co-decision rules for European lawmaking, the European Parliament, Commission and Council all have to agree on the text of the Directive before it can come into force. This approval process places the controversial Directive on a collision course for an airing of differing views held by the European Parliament and Council on the scope of software patent protection in Europe. The Parliament is scheduled to consider the Directive version adopted by the Council during a second reading in July 2005. If the Parliament disagrees with the version of the Directive adopted by the Council, it can amend or reject the Directive. If the Parliament and the Council approve the Directive, the member states of the European Union would modify their national laws to implement the patent legislation. Consequently, if Parliament votes this summer to accept the Council's version of the Directive, the countries of the European Union would adopt a consistent position for the pursuit and enforcement of patents for computer-implemented inventions in Europe.
Key Provisions Of The European Directive
Article 4 of the Directive, as adopted in March 2005 by the European Council, provides that a "computer-implemented invention" is patentable if it satisfies the threshold for industrial application and involves an inventive step representing a technical contribution. A key threshold to the patentability of software in Europe is the concept of "technical contribution," what does that term mean? Article 2 of the Directive defines a "technical contribution" as:
[A] contribution to the state of the art in a field of technology which is new and not obvious to a person skilled in the art. The technical contribution shall be assessed by consideration of the difference between the state of the art and the scope of the patent claim considered as a whole, which must comprise technical features, irrespective of whether or not these are accompanied by non-technical features.
Under the Directive, the mere use of a computer, network or a programmable device by a computer-implemented invention does not necessarily result in a technical contribution that would support a determination of patentability.
Article 2a of the Directive, in present form, defines "computer-implemented invention" as "any invention the performance of which involves the use of a computer, computer network, or other programmable apparatus, the invention having one or more features of which are realized wholly or partly by means of a computer program or computer programs." The Directive recognizes that patent claims can define a computer-implemented invention as a product, such as a programmed computer, computer network or apparatus, or as a process completed as a result of software execution. Contrary to the patent model in the United States, however, the Directive excludes business processes from the scope of subject matter that can be patented in Europe.
A Review Of The U.S. Patent Model For Software And Business Processes
The proposed patent legislation represented by the Directive has stirred a heated discussion among European Union member countries over the merits of adopting a U.S. patent model offering a broad scope of patent protection for computer software, computer technologies and business methods. The debate in Europe is similar to one that took place in the United States during the mid- to late-1990's. Prior to that time, an inventor in the United States was unlikely to be successful in pursuing a patent for a computer software program or a method for doing business. As a result of a series of court decisions, however, the U.S. Patent & Trademark Office adopted examination guidelines for determining the patentability of computer software and formally recognized the patentability of business methods.
Critics responded to an expansion of patent protection in the United States for computer software and business methods by arguing that these patents would create a substantial barrier to innovation of the then relatively new commercial environment of the Internet. Pointing to Priceline.com's "reverse auction" patent and Amazon.com's now famous "one-click" on-line ordering patent, critics asserted that the Patent Office was issuing patents of questionable validity. For example, critics argued that the Patent Office failed to consider prior computer and mainframe software technologies and well known business processes during the patent application examination process. In response to this criticism, the U.S. Patent & Trademark Office revamped its examination process by applying a heightened level of scrutiny to patent applications claiming business process innovations. In addition, the Patent Office increased the number of Examiners handling patent applications for business methods and expanded the scope of prior art search activities conducted by Examiners during the examination of these applications. Today, if an Examiner concludes that a business method patent application is patentable over the prior art, the Patent Office typically initiates a second-level review of this "allowed" application to insure compliance with U.S. patent laws.
What Do The Critics And Proponents Say About A European Software Patent Model?
Reminiscent of criticism of software and business method patents in the United States, critics of software patents in Europe allege that the proposed European legislation would improperly extend patent protection to computer software programs and present a threat to continued development of open source software innovations in Europe. For example, the United Kingdom's Independence Party (UKIP) recently issued a statement asserting: "Software patents stifle innovation, unfairly favor big business, and curtail the rights and freedoms of individual computer programmers. Software patents can be used as a tool to restrict freedom of ideas and freedom of expression."
In response to this criticism of software patent protection in Europe, proponents assert that the proposed European legislation would provide a clear definition for the scope of patentable subject matter. Supporters argue that businesses in Europe need a well-defined patentability standard that can be consistently applied by both the European Patent Office and the European Union member states. European Internal Market Commissioner, Charlie McGreevy, has stated: "The current rules in the European Patent Convention are out of date and leave a very wide decision-making power in the hands of examiners." Rejection of the Directive by the European legislative bodies would likely result in European countries and the European Patent Office continuing to handle software patenting in the current ad hoc basis."
The uncertainty of the software patent protection model in Europe is influencing decisions by government entities and businesses to widely adopt the use of open source software programs. Government officials in Munich, Germany elected to delay plans in 2004 to migrate the city's computers from Microsoft's WINDOWS operating system to the LINUX operating system. The officials cited a concern that software patent disputes could arise if the government adopted an open source software system in the face of European legislative attempts to allow patents for computer software inventions. This concern is raised on both sides of the Atlantic. In recognition of a cloud hanging over commercial use of open source software, IBM has pledged that it would not assert its vast U.S. patent portfolio against the LINUX operating system unless the company was forced to defend itself from a patent attack.
In summary, while the critics of software patent protection in Europe focus on the restrictive power of a patent grant, they ignore the other half of the social bargain of the patent system. Through the patent process, a business discloses its innovations, including computer software inventions, to the public. Other companies can come along and build on these disclosed innovations. In this way, patents for software are no different than patents for traditional mechanical or electronic innovations. A company may own the patent for a mouse trap and monopolize its sale. However, by disclosing how to make and use the mouse trap, others can come along and build a better mouse trap. After all, there is more than one way to catch a mouse. And, in this case, there is more than one way to create a computer-implemented invention in Europe.
W. Scott Petty, a Partner in King & Spalding's Atlanta office, focuses on patent protection and enforcement issues in the fields of computer software, telecommunications and financial services. He can be reached at (404) 572-2888.