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US Supreme Court Confirms the Patentability of Business Methods |
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On 28 June 2010, the US Supreme Court issued its highly anticipated decision in Bilski v Kappos relating to the patentability of business methods. The decision does not significantly change the law, and patentable inventions that relate to computer software or business methods are unlikely to be treated differently following the Supreme Court’s decision, than they were previously under the test proposed in the corresponding Court of Appeal case, Re: Bilski. The Supreme Court’s ruling therefore leaves open the possibility of patentable business methods though does not say in what circumstances this would occur.
Summary
In Bilski’s application, the patent claims defined a process of hedging risk in the field of commodities trading. The claims had been found unpatentable by both the US Patent Office (US PTO) and the Court of Appeal for the Federal Circuit (CAFC) as defining nothing more than an unpatentable business method. In particular, the claims made no reference to hardware and so could have been interpreted as seeking protection for the intellectual activity of traders themselves, as they carried out the claimed method. Inventions defined in this way can be thought of as ‘pure’ business methods, as details of the methods’ implementation in hardware or in technology are absent. In the CAFC decision, Re Bilski, the claims were found to be excluded as they failed the “machine or transformation test” that had newly been developed by the Court.
As expected, the Supreme Court unanimously agreed that the invention defined in Bilski’s application was not patentable subject matter. However, the Court drew on earlier decisions such as Benson, Flook, and Diehr to rule that the invention was inadmissible because it was nothing more than an unpatentable abstract idea, rather than rejecting the application on the ground that the invention was an unpatentable business method.
The Supreme Court also dismissed the notion that the “machine or transformation test” proposed by the Court of Appeal of the Federal Circuit (CAFC) in Re: Bilski was the sole test for patentability for inventions that are defined by process steps. While the test remains a useful tool in assessing patentability, the test itself is not supported by the US patent statute, and the CAFC was encouraged by the Supreme Court to develop a new approach.
Comment
Patent Offices generally take the view that patents should be granted only for inventions that are tangible, either in their physical implementation, or in the effect they have on an end article, and abstract concepts, not going beyond algorithms, rules for playing games or doing business, and more controversially, software, are in many jurisdictions specifically excluded from patentability.
Inventions that relate solely to a way of conducting business, such as in Bilski’s application, are therefore nearly always rejected by Patent Offices when they are expressed in purely intellectual or abstract terms. Differences between Patent Offices in different jurisdictions become more apparent however when an invention that relates to a business method is expressed in hardware. The question of patentability then becomes one of assessing the inventive merit in the hardware, as well as the business method it embodies.
In Bilski v Kappos, the Supreme Court rejected the notion that the CAFC-defined patentability test, formulated on considerations of hardware or a transformation of an end article, was the sole test determining whether a process was patentable, but they did not go further to rule on the underlying concepts of what is patentable and what is not. In this regard, Bilski v Kappos is unlikely to significantly affect patent applicants, but will perhaps cause more consternation for Patent Office examiners and lower court judges who must now still struggle to decide what test is appropriate. The US PTO Director has in the meantime advised Patent Office Examiners to continue to use the "Machine or Transformation" test, discussed in more detail in our earlier Briefing note [here]", as a guideline, but interpret the test on the basis of determining whether the invention is directed to an abstract idea.
Europe
Patent applicants in Europe are used to dealing with the requirement that inventions be expressed in terms of hardware and technology, due to the European Patent Office’s approach to inventive step, which requires a patentable invention to provide a technical solution to an identifiable technical problem. This test, and its development in decisions of the European Technical Board of Appeal such as Hitachi, Ricoh, Comvik and Microsoft was recently endorsed by the Enlarged Board of Appeal in its decision G3/08 discussed [here]. A technical solution must itself be comprised of hardware, and a solution that is purely administrative, organisational, or financial (such as a pure business method) will therefore be rejected. As a result, European applicants who define their invention in terms of a combination of method steps, and interaction with hardware, should not be significantly affected by the ruling.
it is interesting to note that the Canadian Patent Office has also recently echoed the European position by adding to its guidelines for Examiners a direction to assess patent applications in Canada on the basis of a “technical solution - technical problem”, while the Japanese Patent Office similarly requires an invention to be defined in terms of its interaction with hardware. The presence of hardware in patent claims therefore remains an important consideration when assessing patentability of business methods in other jurisdictions around the world.
If you have any questions about how this decision affects your applications in the US, please contact your patent attorney advisor.
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G3/08 Software Related Inventions in Europe |
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The EPO Enlarged Board of Appeal has published its decision in pending case G3/08, confirming that the current approach to computer implemented software inventions set out in the case law of the Technical Boards of Appeal is both consistent and correct.
On 23 October 2008, the president of the European Patent Office (EPO), Alison Brimelow, referred a number of questions to the EPO’s Enlarged Board of Appeal (EBA) concerning the patentability of inventions implemented in computer software.
The referral was intended to clarify the EPO’s approach to such inventions, in view of earlier comments by the UK Court of Appeal arguing that the case law developed by the EPO’s Technical Boards of Appeal (TBA) lacked consistency. In a 55 page decision released on 12 May 2010, however, the EBA refuted the notion that there was inconsistency and dismissed the President’s referral as inadmissible.
In reaching their decision, the EBA highlighted the necessary distinction between the acceptable "development" of case law, in which older cases are gradually superseded and refined, and the more-problematic "divergence" of case law, in which conflicting viewpoints arise within a short time frame of one another and result in a lack of clarity or confusion. In explaining their reasoning, the Board took pains to confirm and elaborate on the current European approach to software related inventions, and in doing so, helpfully provide guidance to national courts troubled by perceived differences in approach. The hope of many practitioners is that this will settle the UK and the European debate on the patentability of computer implemented inventions for the time being at least.
The Hitachi 1, Microsoft 2, Ricoh 3, and Comvik 4, decisions of the Technical Board of Appeal decisions provide the current European framework against which the patentability of computer software related inventions is assessed. These decisions interpret the exclusion from the realm of patentable subject matter of computer programs "as such", as set out in Article 52(2)(c) of the EPC, to mean only those computer related inventions that fail to provide a technical solution addressing a technical problem.
No definition of "technical" has been laid down in the case law. However, computer software, like computer hardware, is considered to be an implementation of technology and to qualify as a part of a potential "technical solution". The issue of whether a computer program is excluded from patentability then depends on what the computer program achieves in practice, and whether the software is directed to solving a problem with technology, or merely a problem that is grounded in commercial or administrative considerations.
The EBA decision G3/08 is important as it confirms that the case law relating to excluded subject matter in Europe is mature and fully developed, and gives legal certainty to applicants of European applications concerning computer software related inventions. The EBA’s response to the President’s referral is also of much interest, in emphasising that the role of the EBA is not to create case law, but to resolve inconsistencies in the case law created by the Boards of Appeal.
It is hoped that the UK Supreme Court will take a case on excluded subject matter allowing it to issue a decision that reflects the findings of the EBA and bring the EPO approach more firmly into UK Law. Even before this occurs, it is hoped that the endorsement of the current European Approach to patentability of computer implemented inventions will allow the UKIPO and UK Courts to take a more 'European' approach to patentability, with the framework set out by the current body of UK law.
1. T0258/03, Hitachi, Auction Method
2. T0424/03, Microsoft, Clipboard Formats
3. T0172/03, RICOH, Order Management
4. T0641/00, COMVIK, Two Identities
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National Authorities disagree on CTMs when there’s use in only one country |
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The Community system was set up under
the principle that if a trade mark was being used somewhere in the Community,
even if only in one member state, this would be sufficient to maintain
Community-wide rights. Recent developments, however, have called this into
question.
If, in national trade mark proceedings, a trade mark holder seeks to oppose a
national right on the basis of a prior Community registration, the issue of use
of the Community mark can be brought into the national proceedings. This has
happened in a case in the Benelux Office and the Benelux authorities have decided
that - against the general guidance given by the Office in Alicante - to
maintain a Community registration as a valid right against non-use allegations,
it is necessary to show use in more than one member state of the Community. It
is to be noted that the Benelux Office did not hold how extensive use must be,
rather it held a mark to be unused where use was demonstrated in only one
member state.
This decision has caused widespread
concern and a number of national Offices within the Community have issued or
are expected to issue statements indicating whether they will or will not
follow the Benelux judgement. Some countries have already said they agree but
others have said they don’t. The Community Office has stated publicly that it
stands by its original position, that is, use in one only member state is
sufficient to maintain a Community right.
The Benelux decision is under appeal but it is likely that an appeal will take
a matter of two to three years at least to resolve, particularly if there is,
as there may be, a further appeal to the European Court of Justice at the
higher level. If the European Court decides to follow the stated position of
OHIM, then the national authorities will have no option but to follow the
ruling of the European Court. In the meantime, however, the situation is
unclear.
A Community registration can only be
invalidated through the Community Office but a Community mark can,
nevertheless, be treated as though invalidated in the course of a
dispute under national law by the relevant national authorities if they so
choose. Community registrations are not themselves endangered in any way by
present situation but an owner’s ability to enforce such registrations in some
Community member states or to base oppositions brought under national laws on
Community rights is affected.
Until the situation is resolved by
the European Court, we would suggest that trade mark owners should review the
geographical extent of their use of important marks in the Community. If use is
ongoing in several member states then it would appear safe to assume that the
rights given by a Community registration will be respected by the authorities
in all member states of the Community. Therefore it is safe to allow national
trade mark registrations which are still in effect to lapse in favour of
Community registrations. If, however, use is restricted to one or maybe two
member states, it may be worthwhile considering augmenting Community
registrations with national registrations in those member of states of greatest
commercial importance in order to be able to take quick and effective action
against third parties in these states.
If you have any queries regarding
this practice note or require any other information about us please contact
your usual Reddie & Grose partner or Briget Harrison, Marketing Manager:-
Email:
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Volcanic Eruption in Iceland |
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Disruption to air traffic and courier services in Europe
Tuesday 20 April 2010: All flights in Europe have been suspended in the United Kingdom and in around twenty other European countries since late last week due to concerns about dust from the ongoing volcanic eruption in Iceland interfering with aircraft engines. It is anticipated that this situation may continue through this week since forecasts suggest that weather patterns will not clear the dust for some days at the earliest.
Courier Services: Some courier services are suspended completely and operators are simply stockpiling items until flights recommence. Others are using road and rail connections within Europe to replace normal air freight arrangements. This means that deliveries are, at best, taking much longer than is usually the case.
Where items have already been sent to us, we would suggest that you check with your courier service to establish whether delivery has been possible.
For new items, we would recommend using facsimile or email transmission, wherever possible, rather than courier services until further notice.
Intellectual Property Offices in Europe: As at 10.00 am today, none of the Intellectual Property Offices in Europe with which we deal routinely (UK IPO, EPO, OHIM and WIPO) has yet made any announcement suggesting that deadlines will be extended due to the difficulties mentioned above. We can expect the various Offices’ facsimile and electronic filing arrangements to be overloaded as users fax and email materials which would otherwise have been sent by courier.
In the circumstances, we ask that you let us have instructions and materials required to meet deadlines coming up in any of the Intellectual Property Offices mentioned above as soon as you are able to do so - so as to give us as much time as possible to transmit new applications and responses to objections to the Offices in question.
If you have any queries regarding this press release or require any other information about us please contact your usual Reddie & Grose partner or Briget Harrison, Marketing Manager:-
Email:
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New partner: Dr Michael Roberts |
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Reddie
& Grose, patent and trade mark attorneys, are pleased to announce that Dr
Michael Roberts will become a partner with effect from 1 April 2010. He will
remain based in the firm’s Cambridge office.
Paul
Brereton, senior partner at Reddie & Grose said:
"We
are delighted that Michael is to become a partner at Reddie & Grose. Michael
handles a significant part of the firm's biotechnology, life science and plant
variety practice for both domestic and overseas clients. His promotion is in
recognition of his technical capability and client-facing skills. We have no
doubt he will continue to make an excellent contribution to Reddie & Grose,
which will allow us to continue to deliver an excellent service to our varied
client base”.
Michael
can be reached at
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.
If
you have any queries regarding this press release or require any other
information about us please contact your usual Reddie & Grose partner or
Briget Harrison, Marketing Manager: -
Email:
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