1 Situation

According to Margot Fröhlinger from the European Commission, the Commission believes that France is hoping to reach an agreement for a unified European Patent Jurisdiction under its forthcoming presidency.

2 Timeline

• 2008-07-01 French Presidency of EU
• 2008-07-03 ProTon Europe hot-topic workshop on IP valorisation – EU Workshop in Brussels for promotion of universitarian patenting and patent exploitation
• 2008-07-07..18 IP Summer Academy in Alicante
• 2008-07-10 Software patents and the European Democracy Deficit – Panel discussion of parliamentarians and associations in Munich

3 Chronology

Brief News

• 2008-07-27 Digimaj: EPO says the term “software” is ambiguous and prefers to use tautology for more clarity
• 2008-07-11 WTO Dispute DS375: litigation on tariff treatment of certain IT products – This is a WTO dispute resolution action initiated by the U.S. by a document dated 2008-06-02 in regard to alleged E.C. tariffs on “set-top boxes with a communication function, flat panel displays, ‘input or output units,’ and facsimile machines.” No date has yet been scheduled for the consultation; information provided by U.S. cites a number of E.C. documents. Japan, China, Taiwan, Singapore, and The Philippines have also filed documents. The U.S. document relies upon and cites the Singapore Ministerial Declaration on Trade in Information Technology Products, a follow-on trade agreement to GATT 94.
• 2008-07-07 EECMA amendments to telecomm directive under discussion/vote in the IMCO and ITRE committees of the European Parliament, partially dealing with patent matters
• 2008-07-07 IP Watch: Intellectual Property Regime Stifles Science and Innovation, Nobel Laureates Say – economist Joseph Stiglitz and physiologist John Sulston say today’s patent system “stifles science and innovation”:

  Patent monopolies are believed to drive innovation but they actually impede the pace of science and innovation, Stiglitz said. The current “patent thicket,” in which anyone who writes a successful software programme is sued for alleged patent infringement, highlights the current IP system’s failure to encourage innovation, he said.

• 2008-07-05 Nurton & ManagingIP: Opt-In Model proposed for European Patent Court – details about current state of EU-EPLA negotiations
• 2008-07-04 Digimaj: Spanish MEP paints the EPO as the legislator – during a visit of members of the Legal Affairs Commission (JURI) of the European Parliament (EP) in the European Patent Office (EPO), MEPs criticise the EPO on software patents and ask questions, inter alia about the Alicante model. Medina points out: “Although you are a technical body, you are taking political decisions”; it appeared on the EPO Gazette
• 2008-07-03 Financial Mirror: House debates Lisbon Treaty – narrow vote in Cypriot Parliament on the Lisbon treaty expected today, with governing party being against
• 2008-07-02 Bill Cohn @ Prague Post: The European Union’s failings offer Czechs an opportunity – how the CZ presidency of 2009-01 could end the Lisbon agony and champion real democratisation
• 2008-07-02 Meller @ Sciencebusiness: Innovation may slip down Sarkozy’s Agenda – “Forget reaching agreement on a Community Patent, which would require unanimity from all member states, warn many Brussels pundits. … Yet sources close to the French EU Presidency argue that it isn’t that bad for innovation-related policy initiatives that had already gathered momentum under Slovenia’s tutelage during the first half of this year.”

US Courts require “physical transformation of an article”

phm 2008-07-22 in Munich

It has recently been observed, that “in a series of cases including In re Nuijten, In re Comiskey and In re Bilski, the Patent and Trademark Office has argued in favor of imposing new restrictions on the scope of patentable subject matter set forth by Congress in § 101 of the Patent Act. In the most recent of these three—the currently pending en banc Bilski appeal—the Office takes the position that process inventions generally are unpatentable unless they “result in a physical transformation of an article” or are “tied to a particular machine.” Perhaps, the agency has conceded, some “new, unforeseen technology” might warrant an “exception” to this formalistic test, but in the agency’s view, no such technology has yet emerged so there is no reason currently to use a more inclusive standard.”.

This may sound like a refusal to see “IT” as a “fundamentally new technology” and a return to what in Europe is known as the technical invention concept, where the invention must involve the use of forces of nature.

However, as has been pointed out, the requirement of “physical transformation of matter” alone hardly excludes anything from patentability. The requirement must be applied to the relevant object. It can’t be enough to require that the object of a patent claim “as a whole” (i.e. the activity that the “inventor” wants to forbid) must comprise a “physical transformation of matter”. Rather, the contributed knowledge would have consist in a physical transformation. The “inventor” would be granted his monopoly not in reward for forbidding something but rather for contributing something, namely new knowledge in a field of applied natural science, i.e. a teaching about hiterto unforeseeable effects of using forces of nature, which the inventor could have gained only by experimentation with forces of nature.

And, as we recently explain in the two rules of patentability, this would only be rule number 2 in a proper legal framework for excluding software patents. Rule number 1 would be the formalistic exclusion of certain claim objects.

Very little has so far happened in the US to this extent, but the fact that the old doctrine of “physical transformation” is still alive and stirring discussions can of course in itself be seen as an encouraging signal.

The issue aroused a discussion on the eupat mailing list where I responded as follows:

I favour an approach that does not distinguish “business method patents” (and even “software patents”) as a separate category, because that leads to difficult distinctions …

“software patents” are an easily discernible category. You can exclude them by looking at the claim form. Program claims refer to software as such. Some other claim forms are more indirect, but you can find out their real object by asking whether they are in substance equivalent to program claims, i.e. whether rewording them as program claims would require a new novelty examination or not.

This was expressed in the EPO Guidelines of 1978 and it is expressed in rule 1 of the “2 rules”.

The problem with the “physicality” requirement is that it leads to utterly complicated rules –

It leads to the simple rule of Art 52 EPC, or, for those who still don’t get it, the slighlty more complicated “2 rules” of the page referred to above. “Physicality” is in rule 2, it is only an auxiliary rule.

– as has become apparent, again, on both sides of the Atlantic (US FWA-test, EU/DE Kerntheorie/Gesamtbetrachtung, etc.). Simplicity and elegance are essential for justice and legal security. Policy makers must be able to relate to “real life” business and society needs rather than to spaghetti-like legal formalisms.

When you have lots people with vested interests who “don’t get it” (Begriffsstutzigkeit), any set of simple rules will become immensely bloated and complicated. Take “inventive step”, “opinion vs factual statement”, “violence”, “dignity”, whatever. Which of these could not fill large volumes of debates, especially when people want to deconstruct them?

So the above argument will basically lead to the deconstruction of *any* legal rule, depending merely on whether there are sufficient vested interests in deconstructing it.

G8 vows to work for the patent industry

phm 2008-07-10 in Munich

The G8 summit (meeting of heads of state of the 8+5 leading industrial nations) conducted at Toyako in Japan this year, decided to push for more patenting and more stringent rights enforcement, also in view of new forms of “new techniques” employed by rights violators:

Protection of Intellectual Property Rights (IPR)

17. Effective promotion and protection of IPR are critical to the development of creative products, technologies and economies. We will advance existing anti-counterfeiting and piracy initiatives through, inter alia, promoting information exchange systems amongst our authorities, as well as developing non-binding Standards to be Employed by Customs for Uniform Rights Enforcement (SECURE) at the World Customs Organization. We encourage the acceleration of negotiations to establish a new international legal framework, the Anti-Counterfeiting Trade Agreement (ACTA), and seek to complete the negotiation by the end of this year. We will promote practical cooperation between our countries to develop tools to combat new techniques in counterfeiting and piracy and spread best practices. We reaffirm our commitment on government use of software in full compliance with the relevant international agreements and call on other countries to follow our commitment.

18. Firmly believing that an efficient and well-functioning IP system benefits countries at all stages of development, we:

1. (a) reaffirm the importance of global patent harmonization and expanding international patent collaboration, including accelerated discussions on the Substantive Patent Law Treaty; and
2. (b) welcome the progress achieved in the G8 technical assistance pilot plans as well as the launch of additional pilot plans and joint outreach programs for public awareness in these countries.

It seems that G8, in conjunction with ACTA, is becoming another forum where inter-governmental IPR lobbies try to push through what they haven’t been able to achieve at fora such as EU and WIPO, including such items as the long-simmering Substantive Patent Law Treaty that has been failing at WIPO because some goverenments, notably that of Brazil, expressed doubts about the wisdom of hardcoding obligatory limits on patent quality into international law at this stage.

Pugatch paper on lessons from software patent directive battle

phm 2008-07-16 in Munich

I just stumbled over a paper from 2006-01-27 by Dr. Meir Perez Pugatch of University of Haifa which tries to draw lessons from the struggle over the failure of the patent movement to get its rules codified by the legislator in 1997-2005 through the EU software patent directive.

The remarks are rather cursory and Mr. Pugatch does not seem to know very much about the content of the various proposals and the related struggles. His paper is about the “political economy” of struggles related to “IP policy” in general, and there again he may, like many other commentators, be engaging in over-generalisations, based on assumptions about the economics of “IPR” which are not grounded in the grammar of the legal provisions under discussion. The paper tries to take an equidistant approach between the “pro-IP and anti-IP lobbies” and comments the results of the failure of the directive in July 2005, which both presented as their successes:

A pareto optimum economic result? Hardly! More like a Machiavellian sense of humour of how to do nothing and still reap all the praises and greetings from one’s “subjects”.

Here the author is perhaps making the “observation from a realistic (and slightly cynical) perspective” which he announces in the title of his paper. But how can one claim that the two “lobbies” did “nothing”? Both fought to the brink of exhaustion, and at the end felt that the result was probably the best that they could get in the given situation, with a volatile and half-knowledgable parliamentary majority of about 55% willing to seriously limit patentability, in stand-off against a Council of ministerial patent officials, who, in spite of some superficial signs of defection at the political level, continued to be monolithically united in their unwillingness to even discuss any question of substance whatsoever. This was a typical situation of stalemate where continuation of the struggle entailed more risks than hopes for both sides.

Could it be that the “slightly cynical” viewpoint of the author leads to a loss of feeling for political realities?

According to some unfounded rumors, Mr. Pugatch was seen participating in a project called the “Stockholm Network”, a patent movement think tank that is equipped by “pro-IP lobbies” with a lot of money for noble causes, such as scholarships for young patent experts.

EPO judges step up pro-software-patent rhetoric

phm 2008-07-01 in Munich

In a remarkable twist of logic, the Technical Board of Appeal (TBA) of the European Patent Office insist that granting software patents is mandatory under Art 52 EPC, and that contrary arguments of the British High Court are completely devoid of all merit and therefore needn’t be referred to the supreme instance of the EPO, the Enlarged Board of Appeal. The TBA states:

The examination whether there is an invention within the meaning of Article 52(1) to (3) EPC 1973 should be strictly separated from and not mixed up with the other three patentability requirements referred to in Article 52(1) EPC 1973.

This is their new rhetoric for saying that what is technical needn’t be new and what is new needn’t be technical.

They equate “invention” with “claim object” and then pretend that this way of seeing things is particularly logical and in line with the EPC whereas the more straightforward understanding of and “invention” being the contribution, the invented thing, is claimed to be a result of “mixing things up”.

Really nice rhetoric.

As Justine Pila observed in Dispute over the Meaning of “Invention” in Article 52(2) EPC, they used this trick since 1999 when they reversed the true meaning of the contribution approach. It was applied to the draft EU Software Patent Directive: “The result was a text that used the language of the contribution theory of article 52(2) to achieve the result of the whole contents theory, and thereby give the principles of post-1999 EPO case law the imprimatur of European Union (“EU”) legislation.” (page 5, last sentence in the 2nd paragraph).

The “whole contents approach” requires only that a subject matter, when considered as a whole, use technical means to solve a technical problem or produce a technical effect. It is particularly clear in the Council version of the Article 2b when compared to the previous Europarl version as well as the final version proposed by rapporteur Michel Rocard and supported by a cross-partisan majority (which then led to the withdrawal of the directive by the pro-EPO camp):

This amendment is similar in spirit to the thinking of the UK High Court and it completely destroys the EPO’s trick, thereby turning around the original meaning of the Commission-EPO-BSA directive project. The EPO’s doctrines now have received an official stamp of disapproval from the European Parliament, and they are continuing to inflict damage on Europe’s economy and on the reputation of the patent system. Referring the case to the Enlarged Board of Appeal could have been a way out for the EPO. Unfortunately the Technical Boards of Appeal now seems to be clinging to their discredited doctrines more stubbornly than ever.

See also How the EPO can stop software patents now.

4 Resources

• EPO: Patents for Software – a document full of nonsense, e.g. “The term software, on the other hand, is ambiguous. It is generally understood as the implementation of an algorithm in source or object code, but without distinguishing between technical and non-technical processes.”
• Kappos et al: Technical Contribution Requirement for Patentable Subject Matter: Supreme Court Precedent and Policy – IBM proposes an EPO-style soft limitations on software patentability
• Joseph Straus 2001: The Present State of the Patent System in the European Union As Compared with the Situation in the Unites States of America and Japan – this paper, prepared in connection with Commission efforts related to the GreenPaper of 1997, proposes creation of a EU Patent and establishment of the EPO as a EU institution, subject to a Community Patent Law copied&pasted from the EPC
• Ars Technica review of Bessen & Meurer with nice figure