Software patentability: European Answer.

Abstract: This paper attempts to analyse the legal protection of software in Europe and reviews the current legislative developments in the European Union (EU), particularly with regard to the European Council (EC) draft directive for patentability of software-implemented inventions. It analyses the current EU legislation and considers how the proposed Directive improves such legislation and also points to the problematic areas of the proposed draft. With the approach of trying to cover both copyright and patent protection, the paper emphasises the main issues concerning each type of protection, starting with the most significant historical development in the field. While describing the major points of concern, some cases were referred to as well as decisions of Technical Board of Appeal of European Patent Office. The main sources cited are web-based. Considering that the USA practise in this field is the most developed, some references were to its practice. However, this attempt was only made to show the differences in the legislation between the two regions. Due to lack of space, it was not possible to go into greater detail in the analysis of the comparisons of the two regions. For this reason, a discussion regarding the advantages and disadvantages patent protection of software as such was avoided. Although, many disputes have arisen about the need for patent protection for computer programs, a deep discussion regarding this issue was also not taken up, as it would take up much space. Preference was made instead to concentrate on a discussion of the substantive legal issues. This was also for the belief that this part of the work could be better accomplished than undertaking an analysis of an economic or politic nature. The second chapter considers legislation on copyright protection of software. It attempts to give a detailed analysis of how computer programs are protected under the terms of the European Council Directive on the legal protection of computer programs (91/250) (Computer Program Directive). The special point of interest was a distinction made between functional and non-functional elements of a program and how copyright law protects them. Other important issues discussed concern actions that are permitted in connection of use of the software without the authorisation of the right holder. These relate, in particular, to a decompilation of computer program&semic the conditions such actions are deemed as legal and the problems related to such actions. The third chapter deals with patent protection of software in Europe, particularly under the European Patent Convention (EPC, 1973). Since in the text of the EPC software are excluded from patentable subject matters, but only if ''referred to only to the extent to which a European patent application relates to such subject matter or activities as such'' there is a problem in treating software as patentable subject matter as such and thus there is already a number of European patents issued on software and business method. Furthermore, case practice has developed confirming that patents granted to software shall constitute an invention with a technical character. According to the case law, a technical character may, for example, be present due to the fact that: a technical effect is achieved by the claimed subject-matter&semic technical considerations are required to carry out the claimed subject-matter&semic a technical problem is solved by the claimed subject matter&semic or the claimed subject-matter is explicitly or at least implicitly defined by concrete, technical means. Taking into account the existence of the different approaches regarding the protection of one product, and the controversial issues concerning every type of protection, coupled with the current shift in the software industry regarding the protection of computer programs under patent law and simultaneous discussion of the value of patent protection for software as such, the Draft directive on patentability on computer-implemented inventions has raised many discussions. Therefore, an attempt was made to analyze the Directive and compare its development in the present legal field. First, attention was paid to solving the problem of the requirement of 'technical character' of new software to be patented. In this regard, the requirement of its definition in Article 2(b) that the technical contribution should be ''non-obvious'' is confusing. Article 4 states that an ''inventive step'' (equivalent to non-obviousness) must involve a ''technical contribution'' and to then state in Article 2 (b) that this technical contribution must itself be non-obvious makes the combination of the two articles a circular statement. Article 2 (b) might be read, as requiring that the technical difference between the invention and the prior art should itself be non-obvious. That would impose a further limitation on what is patentable over and above the practice of the EPO. Secondly, the interrelation between the Computer Program Directive and the draft Directive was considered as to how the draft could allow actions to be taken without the right holder's authorization, and if that would have a possible harmful extension. A provision is proposed to leave acts permitted under that earlier Directive unaffected (proposed Article 6). The proposal does not clearly set out to extend the ''fair use'' exceptions for patent infringement to those provided by that earlier Directive (e.g. reverse compiling to achieve interoperability), but it might be interpreted that an act that is not a copyright infringing act should also not be a patent infringing act. Such an interpretation would indeed extend the bounds of fair use. The analysis carried out led to the following conclusions: The directive does not define the concept of 'technology' and 'technological contribution'&semic therefore this is left up to the courts. If however the courts have to decide what 'technology' means on a case-to-case basis, the proposed directive fails to meet one of its prime objectives, namely, to reduce confusion on reaching an agreement regarding the technical contribution concept essential for any patent grant. Moreover, the proposed 'technical contribution' requirement is apparently intended to prevent 'business method' patents. If business method patents were to be categorically excluded, probably it would be more appropriate to prohibit such patents as a category by an explicit legal provision, rather than indirectly by means of a 'technical contribution' requirement. This European Directive may improve the unity of law, as it is claimed to be one of the purposes of the Directive, as Member states' courts are required to interpret the law in conformity with the Directive, eventually under the supervision of the European Court of Justice. However, the Directive would have no direct legal effect on the European Patent Office. In any case, European Patents, once granted, become subject to national laws, so any patents granted after the Directive took effect and which were inconsistent with its provisions would need to be amended to bring them into conformity (or be revoked). Thus, the directive would not harmonise the grant of European patents by the European Patent Office. Therefore, at best, the proposed directive would reach this objective only in due course as case law is created.