Patents Bill 2008: Patentability of Computer Programs

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1 January 2010 P/025/PR004/005 Patents Bill 2008: Patentability of Computer Programs Supplementary Report to Commerce Select Committee Summary The Committee, after considering the Ministry s recommendations in the document Patents Bill 2009: Patentability of Computer Programs, Report to the Commerce Select Committee ( the October report ) in October 2009, has asked for a further briefing on the issue of the patentability of computer programs. The Committee has indicated that it supports some restrictions on the patenting of software, while retaining the patentability of embedded software. The October report considered a number of possible approaches based on overseas practice. The Ministry did not recommend any of these approaches as they were considered to be complex, difficult for the Intellectual Property Office of New Zealand (IPONZ) to implement, and unlikely to achieve the objective sought by the Committee. The Ministry recommended that, if there were to be restrictions on the patentability of computer programs, this should be by way of a blanket restriction on the patentability of computer programs. In response to the Committee s request to reconsider the issue, the Ministry has looked at two possible approaches. On approach is to explicitly provide that inventions involving computer programs are not patentable unless the programs are embedded software ( Option A ). A difficulty with this is that there is no simple definition of embedded software which could be incorporated into the Bill. Possible ways around this might be to specify that a computer program must be considered as embedded software if a person skilled in the art would regard it as such, and/or to provide a list of matters that the Commissioner or the courts must have regard to when deciding whether a particular program is embedded software. Implementing Option A would be difficult, as IPONZ would not be able to make use of caselaw or practice developed elsewhere. IPONZ and the New Zealand courts would have to develop their own practice, from scratch, with decisions from other jurisdictions providing little, if any, guidance. It may take some years, and some court cases, to develop a consistent and coherent practice that provides certainty to all concerned. There would be considerable uncertainty for both IPONZ and patent applicants. Another approach would be to provide for a blanket exclusion for computer programs based on the exclusion for computer programs in the European Patent Convention (EPC) and the UK Patents Act 1977 ( Option B ). Although the EPC and the UK Patents Act provide that programs for computers are excluded from patent protection, in practice, the EPO and UK courts have ruled that some computer programs may be patented, if they possess a technical character. Although there is no specific definition of technical character it is clear that much embedded software, including the type of software developed by such firms as Fisher and Paykel is patentable under this ruling. It is probable that IPONZ and the New Zealand courts would adopt case law and practice from Europe and the United Kingdom as a guide in interpreting such an exclusion.

2 The EPO and UK approach to the patentability of computer programs makes a distinction between patentable and non-patentable computer programs that is rather different from that intended by the Committee. Under this approach, many embedded computer programs are eligible for patent protection. Some non-embedded programs will also be eligible for patent protection. On balance, the Ministry s preference is for Option B as it would be easier to implement, and provides greater certainty for both IPONZ and patent applicants. Possible Approaches to the Patentability of Computer Programs Two possible approaches are set out below. Option A: Allow Patents on Embedded Software, Exclude All Other Software The approach that the Committee wishes to follow is to allow so-called embedded software to be patented, but to exclude all other computer programs from patentability. Achieving this objective will require some sort of definition of embedded software that IPONZ and the New Zealand courts can work with. It may be difficult, however, to provide a workable definition of embedded software. Many definitions can be found in the technical literature. Some examples of such definitions are given below: Embedded software is computer software which plays an integral role in the electronics it is supplied with. Embedded software's principal role is not Information Technology, but rather the interaction with the physical world. It's written for machines that are not, first and foremost, computers. Embedded software is 'built in' to the electronics in cars, telephones, audio equipment, robots, appliances, toys, security systems, pacemakers, televisions and digital watches, for example. This software can become very sophisticated in applications like airplanes, missiles, process control systems, and so on. (from Wikipedia ) Embedded software can be as simple as the microcode instruction set of a microprocessor or as complex as the security software inside a set-top cable modem box. Embedded software performs a specific function not under the control of the primary user and is often used in conjunction with a digital signal processor and mixed-signal devices to form a DSP Solution. (from Software that is part of a larger system and performs some of the requirements of that system; for example, software used in an aircraft or rapid transit system. (from The main characteristic of embedded software is that it is intended to run on so-called embedded systems. Embedded software could be defined as a computer program designed or intended to run on an embedded system. Some definitions of embedded system are: An embedded system is a computer system designed to perform one or a few dedicated functions often with real-time computing constraints. It is embedded as part of a complete device often including hardware and mechanical parts. In contrast, a general-purpose computer, such as a personal computer, is designed to be flexible and to meet a wide range of an end-user's needs. Embedded systems control many of the common devices in use today. (from )

3 Embedded system A system containing a processor where the processor is not generally reprogrammable by the end user. For example, a cell phone containing a DSP processor is an embedded system. (from ) embedded system A computer system that is a component of a larger machine or system. Embedded systems can respond to events in real time. Hosts of embedded systems include watches, household appliances, cars, and cellular telephones. (from wvs.doc/wvs/glossary.html Although these definitions are useful, they are not really precise enough for incorporation into legislation. There is no simple definition which exactly captures the idea of embedded software or embedded systems. Any attempt to provide a simple definition may make it relatively easy for patent attorneys and applicants to use creative drafting to avoid the definition. Devising a simple definition is likely to be difficult, if not impossible. Technical advances may mean that any definition fixed in legislation becomes obsolete fairly quickly. For example, one of the definitions given above suggests that an embedded system is not readily re-programmable by the end user. But it is becoming common for many systems containing embedded software to be able to connect to the Internet so that updated software can be downloaded. This process can often be initiated by the end user. Does the ability to update the software mean that the program or system is not embedded? Alternatively, the Bill could provide no definition of embedded software. One problem with this is that IPONZ or the courts might adopt a definition that is either more liberal or more restrictive than the Committee intends. This risk could be reduced if the Bill also provided a list of matters that the Commissioner or court must have regard to when deciding whether a particular computer program is embedded software or not, so as to provide guidance on what is actually intended. Another way of reducing the risk might be to specify that a computer program must be considered as embedded software if a person skilled in the art would regard it as such. The concept of the person skilled in the art is well established in patent law. It is used, for example in determining inventive step cl 7 of the Bill refers to the person skilled in the art. The reference to a person skilled in the art could be used instead of, or in addition to, the list of matters that the Commissioner or court must have regard to described in the preceding paragraph. No other country has attempted to make the distinction between embedded and nonembedded computer programs in patent legislation. Implementing such a distinction in New Zealand is problematic, as IPONZ would not be able to make use of caselaw or practice developed elsewhere. IPONZ and the New Zealand courts would have to develop their own practice, from scratch, with decisions from other jurisdictions providing little, if any, guidance. It may take some years, and a number of court cases, to develop a consistent and coherent practice that provides certainty to all concerned. There would be considerable uncertainty for both IPONZ and patent applicants. In light of these factors, Option A is not the Ministry s preferred option.

4 Option B: Exclusion of Computer Programs from Patent Protection As described above, the Committee s preferred approach of making a distinction between embedded and non-embedded software is likely to be difficult to implement. Is there an alternative approach that might go some way towards meeting the Committee s objectives that will be easier to implement? One possibility is to provide that computer programs in general are excluded from patent protection, the wording of the exclusion being similar to, or the same as, the exclusion for computer programs contained in the EPC and the UK Patents Act. IPONZ has indicated that if such an exclusion was provided, it would use EPO and UK caselaw and practice to interpret the exclusion. The New Zealand courts have tended to look to UK caselaw when interpreting New Zealand patent legislation, particularly where the New Zealand legislative provisions are similar to, or the same as corresponding UK provisions. If New Zealand were to adopt the exclusion for computer programs contained in the UK Patents Act 1977, it is almost certain that the courts would follow UK caselaw in interpreting it. So, how do the EPO and the UK courts interpret the exclusion for computer programs? Despite what appears to be a blanket exclusion, the EPO and UK courts have ruled that some types of computer program can be patented. In general, if an invention involving a computer program possesses a technical character it will be patentable. EPO and UK caselaw does not provide a specific definition of technical character. However, it is clear that computer programs that are used to control some device external to the computer are likely to be patentable provided the other requirements for grant of a patent are met. On this basis, most inventions involving embedded computer software, such as those developed by firms like Fisher and Paykel, would be eligible for patent protection. It is also clear from EPO and UK caselaw and practice that inventions involving computer programs that are not capable of causing a technical effect which goes beyond the normal technical effects that are always present when a program runs on a computer would probably not be patentable. This means that many non-embedded computer programs would probably not be patentable. The EPO and UK approach to the patentability of computer program makes a distinction between patentable and non-patentable computer programs that is rather different from that intended by the Committee. Under this approach, many embedded computer programs would be eligible for patent protection. Some non-embedded programs would also be eligible for patent protection. There are some disadvantages with this approach. It introduces the notion of technical character, which was created by the EPO, and is not defined in legislation. The EPO and the UK courts have, at times, differed in the way the exclusion for computer programs is applied, leading to some inconsistency in caselaw and practice. Nevertheless, the Ministry considers that an approach based on the EPO and UK exclusion would be easier to implement than an approach based on attempting to distinguish between embedded and non-embedded software. It is likely to provide much greater certainty for IPONZ, patent applicants and the courts.

5 While adopting the EPO/UK exclusion does not achieve exactly what the Committee intends, it does go a long way towards it. It will probably be considered too liberal by those opposed to software patents, and too restrictive by those who support them. Nevertheless, if the Committee considers that restrictions on the patenting of software are warranted, the Ministry s preferred approach is that the Committee adopts the exclusion for computer programs contained in the EPC and the UK Patents Act 1977, that is, Option B. Ministry Of Economic Development