Software patents are crumbling, thanks to the Supreme Court

The Supreme Court's June ruling on the patentability of software — its first in 33 years — raised as many questions as it answered. One specific software patent went down in flames in the case of Alice v. CLS Bank, but the abstract reasoning of the decision didn't provide much clarity on which other patents might be in danger.

Now a series of decisions from lower courts is starting to bring the ruling's practical consequences into focus. And the results have been ugly for fans of software patents. By my count there have been 11 court rulings on the patentability of software since the Supreme Court's decision — including six that were decided this month.  Every single one of them has led to the patent being invalidated.

This doesn't necessarily mean that all software patents are in danger — these are mostly patents that are particularly vulnerable to challenge under the new Alice precedent. But it does mean that the pendulum of patent law is now clearly swinging in an anti-patent direction. Every time a patent gets invalidated, it strengthens the bargaining position of every defendant facing a lawsuit from a patent troll.

The end of "do it on a computer" patents

In the late 1990s and early 2000s, the Patent Office handed out a growing number of what might be called "do it on a computer" patents. These patents take some activity that people have been doing for centuries — say, holding funds in escrow until a transaction is complete — and claim the concept of performing that task with a computer or over the internet. The patents are typically vague about how to perform the task in question.

THIS IS THE MOST HOSTILE THE COURTS HAVE BEEN TO SOFTWARE PATENTS IN AT LEAST TWO DECADES

The Supreme Court invalidated a patent like that in its decision this year. The patent claimed the concept of using a computer to hold funds in escrow to reduce the risk that one party would fail to deliver on an agreement. The Supreme Court ruled that the use of a computer did not turn this centuries-old concept into a new invention.

That has emboldened defendants in cases involving similar patents. And in recent weeks, the courts have been following the Supreme Court's lead and ruling that these patents are illegal:

·         On July 6, a Delaware trial court rejected a Comcast patent that claimed the concept of a computerized telecommunications system checking with a user before deciding whether to establish a new connection. The court noted that the steps described in the patent could easily be performed by human beings making telephone calls.

·         On July 8, a New York court invalidated a patent on the concept of using a computer to help users plan meals while achieving dieting goals. The court was unimpressed with the patent holder's argument that some of the details in the patent — such as the use of "picture menus" to choose meals — was sufficient to render it a patentable idea.

·         On July 17, the Federal Circuit Appeals Court (which is in charge of all patent cases) rejected a patent on the concept of keeping colors synchronized across devices by building a profile that describes the characteristics of each device. The court held that the creation and use of these profiles were merely mental steps that could be done by a human being and were therefore not eligible for patent protection.

·         On August 26, the Federal Circuit rejected a patent that claimed the concept of running a bingo game on a computer. "Managing the game of bingo consists solely of mental steps which can be carried out by a human using pen and paper," the court ruled. Converting that process into a computer program doesn't lead to a patentable invention.

·         On August 29, a California court struck down a patent on a method of linking a mortgage line of credit to a checking account. The court said that the generic computer functions mentioned in the patent were not enough to merit protection.

·         On September 3, a Texas trial court invalidated a patent on the concept of using a computer to convert reward points from one store to another. The court held that the "invention" claimed by the patent "not fundamentally different from the kinds of commonplace financial transactions that were the subjects of the Supreme Court’s recent decisions."

·         In a second September 3 decision, a Delaware trial court rejected a patent on the concept of an intermediary selectively revealing information about two parties to each other — using a computer. The court noted that it has long been common for corporate headhunters to withhold certain information about an employer from potential employees (and vice versa) until both parties are ready to proceed.

·         On the same day, the same Delaware court invalidated a patent on the concept of using a computerized system to "upsell" customers who buy one product on other products that might interest them. The court pointed out that upselling is as old as commerce itself.

·         In a final decision the same day, the Federal Circuit appeals court struck down a patent that claimed the concept of using surety bonds to guarantee a transaction — using a computer. The court pointed out that surety bonds have been around since ancient times, and performing this well-known transaction with the help of a computer doesn't turn it into a patentable invention.

·         On September 4, a California trial court rejected a patent on the concept of using a computer network to ask people to do tasks and then wait for them to do them. The court pointed out that people have done this with telephones for decades, and that doing the same thing over the internet doesn't count as an invention.

·         On September 11, a Florida court invalidated a patent on the concept of subtracting a small amount of money from each of many payments in order to accumulate a larger sum of money — using a computer. The court noted that this kind of schemes has been widely known for centuries. For example, the plot of Superman III involved a villain using this kind of scheme to steal from co-workers' paychecks.

These rulings might seem like common sense, but it's important to remember that every single one of these patents was examined and approved by the patent office. That's because until recently, this kind of "invention" was considered eligible for patent protection. The patent office has issued hundreds of thousands of software patents over the last two decades, and many of them look like this.

YOU CAN'T TAKE A COMMONPLACE HUMAN ACTIVITY, DO IT WITH A COMPUTER, AND CALL THAT A PATENTABLE INVENTION

But now the courts are sending a pretty clear message: you can't take a commonplace human activity, do it with a computer, and call that a patentable invention.

For example, recent court rulings could make it easier to challenge Amazon's infamous patent on 1-click shopping, which claims the concept of ordering things over the Internet with a single click. The steps described in the patent — receiving an order from a regular customer, retrieving pre-stored shipping information for the customer, shipping the item to the customer — have been performed by delivery businesses for decades. If Amazon's patent were challenged, courts might be skeptical that performing these steps on a computer constituted a patentable invention.

Software patents in danger

The recent string of decisions invalidating software patents on subject-matter grounds is unprecedented. This chart, based on data from Lex Machina,  shows the number of subject-matter decisions the courts made between 2007 and 2013:

The 14 patents the courts invalidated on subject matter grounds in 2013 was a record for recent years (such decisions were rare in the 1990s and early 2000s). And this chart reflects decisions on all types of patents, not just software patents. With 11 software patents invalidated in just the last three months, the courts are on track to blow away last year's record with software patent cases alone. So this is the most hostile the courts have been to software patents in at least two decades.

The real question is how far the courts will take this logic. Because strictly speaking, all computer programs perform sequences of mathematical operations that could — in principle — be performed by a human being. As the legal scholar Robert Merges has noted, the logic of the Supreme Court's Alice ruling could call almost all software patents into question.

"My immediate reaction was that this would be extremely bad for software patents," patent attorney Gene Quinn wrote last week of the Alice ruling. He interviewed patent scholar Mark Lemley. While Lemley doesn't think all software patents are invalid, he predicts that "a majority of the software patents being litigated right now" will be found invalid based on the Supreme Court's precedents.

There are hundreds of thousands of software patents on the books, so the courts won't be able to invalidate all of them. But if patent holders continue their losing streak of recent months, it will dramatically shift the balance of power between plaintiffs and defendants. Software patent holders will know that if they take a case to trial, there's a high probability that their patent will be destroyed — meaning they not only lose that case but also lose the ability to use the patent against other defendants. That will make plaintiffs — and especially trolls wielding patents of dubious quality — more gun-shy, giving defendants a lot more bargaining power.

Why do so many patent lawsuits involve software?

Research shows that patents on software are particularly prone to litigation. There are several reasons for that:

Software patents can be extremely broad. For example, a famous Amazon.com patent covers the concept of purchasing products online with one click. Another patent owned by a troll called MPHJ has a patent that covers the concept of scanning documents to an email address. This kind of broad patent makes it easy for businesses to infringe by accident.

Most companies aren’t just users of software, they also have IT departments and web developers that produce it. So firms that wouldn’t otherwise have to worry about patent law are at risk of infringing software patents.

Software is extremely complex. Computer programs contain thousands, and sometimes millions, of lines of code. Since patents can be infringed in just a few lines of code, there’s no practical way for companies to figure out which patents their software products might be infringing.

Source: http://www.vox.com/2014/9/12/6138483/software-patents-are-crumbling-thanks-to-the-supreme-court#

Human DNA belongs to no one, it shouldn't be patented

The Australian federal court ruled that isolated human genetic material can be patented. The US supreme court disagrees – and the Americans got it exactly right.

In June 2013, the US supreme court held that mutant BRCA 1 human DNA, isolated from the human body, is not a patentable subject matter under US patent law. Last Friday, an Australian full federal court held that it is patentable subject matter under Australian patent law.

It would have been simple to distinguish the US supreme court’s decision on the basis that patent laws between the two countries differ: different legislatures, different statutes, different jurisdictions. Instead, the Australian full federal court took an unprecedented swipe at the US Supreme Court by suggesting that all nine justices of US supreme court had misunderstood the facts, the science and the law.

How did this happen?

To understand it, we have to go back to June 1988 when representatives of the European, Japanese and US patent offices came to an understanding about what to do with patents over DNA. It was less than two years after Genentech Inc had floated on the American stock market. Recombinant technology, invented by Professors Boyer and Cohen, enabled the production of pure human proteins using human sourced DNA. Patents granted over isolated human genetic material extracted from the human body, much like mining claims over alluvial gold, spurred a DNA gold rush.

Patent offices and patent attorneys and their customers, patent monopolists, wanted to cash in. Patent monopolies provided the perfect means to maximise revenues.

It did not take long before the first patent cases over disputed territory came before the courts. In 1989 in Britain, the court of appeal held that DNA was a discovery of nature and invalidated Genentech’s patent claims to the isolated DNA of human tissue plasminogen activator, a naturally produced human protein.

The European Patent Office, which had already granted patents over isolated DNA, was shocked by the British rebuke. It took immediate action. By 1998 the European parliament passed the European biotechnology directive, ensuring that the European Patent Office’s approach was mandated as law throughout the EU.

In the US, the Patent Office which had implemented the tripartite patent policy was granting thousands of patents over isolated human DNA. The policy had become entrenched around the world. It was wrongly assumed to be consistent with US patent law. In 1980 the US supreme court held that “anything under the sun made by man” was patentable, upholding a patent application to genetically modified bacteria that degraded crude oil.

By 2005 over 20% of the human genome was the subject of US patents.

Then in March 2010, the first shockwave hit the global biotechnology industry. A US district court judge held the patent claims over isolated BRCA genetic mutations invalid. They were not inventions. An appeal to the US federal circuit soothed fragile nerves. Then, a second US federal circuit appeal seemed to settle the issue. However, the US supreme court overruled it.

The US Supreme Court held that the isolation of DNA from a human being does not result in something that displays “markedly different characteristics from any found in nature”. It is not the same as a genetically modified bacteria that degrades crude oil. While that bacteria is the product of human ingenuity, the isolated BRCA gene mutations are not.

Since then, the US Supreme Court has been savaged by the patent monopolists. The US Patent Office, which has issued new patent examiner guidelines consistent with the decision, has been vilified.

Patents over human DNA, a material that nobody invented, will, as the US justices’, warn: “impede the flow of information that might permit, indeed, spur, invention.”

The Australian judges, in contrast, argue that: “This case is not about the wisdom of the patent system ... It is not about whether, for policy or moral or social reasons, patents for gene sequences should be excluded from patentability.”

Americans are now free to use DNA to develop new products. Australians are not. Neither are Europeans.

Which is the more desirable policy outcome?

I believe the US supreme court got it exactly right.

The British Statute of Monopolies of 1623, the first statutory expression of English patent law, was a product of economic policy. It sought to provide the ingenious with free and unfettered access to the store of common knowledge and property so as to reward the act of true invention. Human DNA regardless of its form, belongs to no one. No one invented it. And no one should be able to patent it.

http://www.theguardian.com/commentisfree/2014/sep/08/human-dna-belongs-to-no-one-it-shouldnt-be-patented

Nvidia files a patent lawsuit against Samsung and Qualcomm

Nvidia filed patent infringement lawsuits in Delaware against Samsung and Qualcomm concerning graphics processor technologies which Nvidia claims those companies have used in their products without license.

The graphics chip maker also asked the U.S. International Trade Commission (ITC) "to block shipments of Samsung Galaxy mobile phones and tablets containing Qualcomm's Adreno, ARM's Mali, or Imagination's PowerVR graphics architectures."

Nvidia's Tegra mobile processors with GPU functionality compete with Qualcomm's Snapdragon and Samsung's Exynos chips.

Among the products Nvidia wants blocked are Samsung's Galaxy Note Edge,Galaxy Note 4, Galaxy S5, Galaxy Note 3, and Galaxy S4 smartphones, as well as the Galaxy Tab S, Galaxy NotePRO, and Galaxy Tab 2 tablets.

Nvidia said the seven patents it is claiming Qualcomm and Samsung have infringed concern GPU technologies like programmable shading, unified shaders, and multithreaded parallel processing.

The lawsuits are the first patent infringement complaints Nvidia has made in its 21-year history, the company.

"As the world leader in visual computing, Nvidia has invented technologies that are vital to mobile computing. We have the richest portfolio of computer graphics IP in the world, with 7,000 patents granted and pending, produced by the industry's best graphics engineers and backed by more than $9 billion in R&D," Nvidia CEO Jen-Hsun Huang said in a statement.

"Our patented GPU inventions provide significant value to mobile devices. Samsung and Qualcomm have chosen to use these in their products without a license from us. We are asking the courts to determine infringement of Nvidia's GPU patents by all graphics architectures used in Samsung's mobile products and to establish their licensing value."

Samsung told PCMag it had no comment on the matter. A Qualcomm spokesperson said the company was "aware of the complaints and [we] are evaluating them."

At issue for Nvidia are Qualcomm's proprietary Adreno GPU cores used in the Snapdragon processors, which power many of Samsung's mobile devices, as well as ARM's Mali GPUs and Imagination Technologies' PowerVR GPUs, which are used in Samsung's own Exynos mobile chips.

Nvidia claimed that it reached a dead end in negotiations with Samsung on negotiations to license its IP for use in Samsung's devices.

"With Samsung, Nvidia's licensing team negotiated directly with Samsung on a patent portfolio license," Nvidia's David Shannon said. "We had several meetings where we demonstrated how our patents apply to all of their mobile devices and to all the graphics architectures they use. We made no progress. Samsung repeatedly said that this was mostly their suppliers' problem."

http://www.pcmag.com/article2/0,2817,2467372,00.asp

Protecting patents: India worst in world

Despite the current decade being called Indias “decade of innovation”, the country has been ranked at the bottom of the list of 25 countries in terms of its intellectual property (IP) environment. According to the 2014 International Intellectual Property (IP) Index by the US Chamber of Commerce’s Global Intellectual Property Center (GIPC), India’s percentage score has fallen from 25 per cent in 2012 to 23 per cent.

“The continued use of compulsory licences, patent revocations, and weak legislative and enforcement mechanisms raise serious concerns about India’s commitment to promote innovation and protect creators,” the report said.

The index, titled Charting the Course, gives a snapshot of the IP environment of 25 countries.

David Hirschmann, president and Chief Executive Officer of GIPC, said: “Nations – big and small – are wrestling with domestic legislation, judicial proceedings, criminal proceedings, and other processes regarding IP. These are all opportunities to chart a course toward a strong IP environment.”

He said along with these opportunities, some countries are taking backward steps on IP. “India, which again finished last in the second edition of the Index, continues to allow for the deterioration in its IP climate.”

The US is the highest-ranking country, followed by the UK and France. The five BRICS economies — Brazil, Russia, India, China, and South Africa — continue to face serious challenges.

According to the report, several factors led to the deterioration of the IP environment in India. For instance, in the biopharmaceutical sector, “Indian policy continued to breach international standards of the protection of innovation and patent rights, revoking patents generally accepted around the world and announcing that other patented medicines are being considered for compulsory licences.”

The report also mentions the Supreme Court’s April 2013 ruling on the patentability of the anti-cancer drug, Glivec, that the drug does not meet patentability standards imposed by the Indian Patent Act.

India scored poorly in the areas of patents, copyrights, enforcement, membership and ratification of international treaties (in which it scores zero), among others.

“The continued use of compulsory licences, revocation of patents, and weak legislative and enforcement mechanisms across all IP rights raise serious concerns about India’s commitment to promoting innovation,” the report said.

Most high-income economies — with notable exceptions such as Canada, New Zealand, Chile, and the United Arab Emirates (UAE) — have robust national IP environments in place. The weakest national IP environments are in the lower-middle-income countries such as Vietnam, Indonesia, Thailand, and India.

Some of the developments, which are expected to improve the IP climate globally include the fact that currently 12 countries — the US, Japan, Australia, Peru, Malaysia, Vietnam, New Zealand, Chile, Singapore, Canada, Mexico, and Brunei Darussalam — are negotiating the Trans-Pacific Partnership Agreement, which is expected to set a higher standard in the Pacific region, and help in protecting and enforcing IP.

Moreover, the US is currently negotiating with the European Union on a trade and investment partnership agreement, which is supposed to promote competitiveness, growth, and jobs.

China continues to show strength in the patents arena, earning the highest score of all middle-income countries and even outperform high-income countries such as Chile and the UAE. While progress is being made, China’s overall IP environment continues to see challenges, particularly with regard to trademark and trade secrets as shown by its overall score.

According to a 2013 study by the European Patent Office and the Office of Harmonization for the Internal Market on the impact of IP rights and IP-based industries on the EU economy, IP-intensive industries generated almost 26 per cent of all direct and 35 per cent of indirect jobs.

The report also found that IP-intensive industries produced almost 39 per cent of EU-wide gross domestic product (GDP), worth almost euro 5 trillion.

Source: http://www.business-standard.com/article/current-affairs/india-ranks-at-the-bottom-in-terms-of-intellectual-property-114012900371_1.html

Intellectual Property Rights - Patent

Year after year, many small and medium enterprises lose crores of rupees due to sheer misinformation or lack of awareness about intellectual property rights. In the last five years, on an average, nearly 40,000 patents have been filed every year, more than 80 per cent of them by large organisations.

The scenario is exactly the opposite in China, where more than 80 per cent of patent filings are by small enterprises. Without patent protection, a small business would not be able to compete with larger companies, which could seize upon their idea and produce it more efficiently and on a much larger scale. Yet, most revolutionary innovations have come from small businesses.

Despite the overwhelming case for early patenting, most Indian entrepreneurs shy away from applying for a patent early, for fear that the costs would be steep. They are unable to foresee that not only can it make them richer, but if done right, it could overshadow the perceivable benefits of running the business itself.

Here are some useful points to consider while assessing trademarks /copyrights / patents.

1. When is it the right time to patent your innovation?

It takes a minimum 18 months for a patent to come through. Once you have decided that your product / service is novel and are convinced that it needs to be patented, you should start the paperwork. A strong IP could make entry into the market significantly easier. It gives immediate, legally backed credibility to your product or service.

In the initial years, an IP can protect a company from competition. It is important to identify the focus of the IP for the organisation. Both product as well as process patents can be filed. A music label or a Bollywood movie would focus on copyright, whereas a technology or a pharmaceutical company should focus on patenting their products.

2. Do your homework, get down to basics

You have an idea, pick a brand name, go ahead with purchasing a domain, set up social media platform and the works. But someone out there has been watching your actions and files a trademark infringement. This is every entrepreneur's nightmare, and one of the primary reasons they hesitate to go ahead with IP protection. It is always important to do a full background check first. It is good to document the activities of competing brands. It is also a good idea to get a professional opinion that would help validate your research. It is also important to research international markets where competition is strong.

3. Invest in a non-disclosure agreement

Initially, companies may choose to work with vendors that are not employees or consultants of the company. To ensure that all confidential information stays within the company, make sure your employment agreements, licences, sales contracts and other contracts protect your intellectual property too, right from the word go.

4. Keep track internally and externally

It is advisable to keep an eye on your competitors' IP development, to assess the market for competition. At the very least, owners should establish an appropriate level of proactive monitoring of trademark registration applications. For example, technology companies like Google will track every competitor like Yahoo, Facebook, Amazon and Ebay. Similarly, FMCG companies like HUL will closely monitor the activities of Proctor & Gamble etc.

Also, patent procedures can be different for different countries. It is better not to limit yourself to your own market but also observe the competition outside. Sometimes, it is easier to get a patent registered in a foreign market than in India.

5. Finally, you cannot escape the bill but the cost is worth every penny

Ask the right questions to understand all the less obvious costs included in filing for patents. Administrative costs of printing, courier, etc will be part of your final legal fees, and these small costs can add up. When international filings take place, be sure that there will be additional fees.

As they say, no pain, no gain. Investing time, effort and money in patenting your innovation could save you a lot of pain in the long run. And the benefits go beyond protecting your intellectual property.

http:/www.moneycontrol.com/smementor/mentorade/legalinvestingintellectual-property-is-worth-every-penny-977889.html

Software Patenting - Intellectual Property

The concept of “intellectual property” in India over the last few years has taken on some epic proportions for a number of reasons. One of the primary reasons, attributable to the growing awareness among the urban Indian population, is of the significance and, more importantly, the commercial benefits in protecting its intellectual property rights both within and outside India. And under traditional principles of intellectual property protection, patent law is to encourage scientific research, new technology and industrial progress. The fundamental principle of patent law is that the patent is granted only for an invention i.e. new and useful the said invention must have novelty and utility. The grant of patent thus becomes of industrial property and also called an intellectual property. And the computer software is a relatively new recipient of patent protection.

The term “Patent’’ has its origin from the term “Letter Patent’’. This expression ‘Letter Patent’ meant open letter and were instruments under the Great Seal of King of England addressed by the Crown to all the subjects at large in which the Crown conferred certain rights and privileges on one or more individuals in the kingdom. It was in the later part of the 19th century new inventions in the field of art, process, method or manner of manufacture, machinery and other substances produced by manufacturers were on increased and the inventors became very much interested that the inventions done by them should not be infringed by any one else by copying them or by adopting the methods used by them. To save the interests of inventors, the then British rulers enacted the Indian Patents and Design Act, 1911.

With respect to patentability of software -related inventions, it is currently one of the most heated areas of debate. Software has become patentable in recent years in most jurisdictions (although with restrictions in certain countries, notably those signatories of the European Patent Convention or EPC) and the number of software patents has risen rapidly.

Meaning Of Software Patenting

The term “software” does not have a precise definition and even the software industries fails to give an specific definition. But it is basically used to describe all of the different types of computer programs. Computer programs are basically divided into “application programs” and “operating system programs”. Application programs are designed to do specific tasks to be executed through the computer and the operating system programs are used to manage the internal functions of the computer to facilitate use of application program.

Though the term ‘Software patent’ does not have a universally accepted definition. One definition suggested by the Foundation for a Free Information Infrastructure is that a software patent is a "patent on any performance of a computer realized by means of a computer program".

According to Richard Stallman, the co-developer of the GNU-Linux operating system and proponent of Free Software says, “Software patents are patents which cover software ideas, ideas which you would use in developing software.

That is Software patents refer to patents that could be granted on products or processes (including methods) which include or may include software as a significant or at least necessary part of their implementation, i.e. the form in which they are put in practice (or used) to produce the effect they intend to provide.

Early example of a software patent

On 21st Sep 1962, a British patent application entitled "A Computer Arranged for the Automatic Solution of Linear Programming Problems" was filed. The invention was concerned with efficient memory management for the simplex algorithm, and may be implemented by purely software means. The patent was granted on August 17, 1966 and seems to be one of the first software patents.

Conceptual Difference Between Copyright And Patent

Software has traditionally been protected under copyright law since code fits quite easily into the description of a literary work. Thus, Software is protected as works of literature under the Berne Convention, and any software written is automatically covered by copyright. This allows the creator to prevent another entity from copying the program and there is generally no need to register code in order for it to be copyrighted. While Software Patenting has recently emerged (if only in the US, Japan and Europe) where, Patents give their owners the right to prevent others from using a claimed invention, even if it was independently developed and there was no copying involved.

Further, it should be noted that patents cover the underlying methodologies embodied in a given piece of software. On the other copyright prevents the direct copying of software, but do not prevent other authors from writing their own embodiments of the underlying methodologies.

The issues involved in conferring patent rights to software are, however, a lot more complex than taking out copyrights on them. Specifically, there are two challenges that one encounters when dealing with software patents. The first is about the instrument of patent itself and whether the manner of protection it confers is suited to the software industry. The second is the nature of software, and whether it should be subject to patenting.

However, issues involved in conferring patent rights to software are a lot more complex than taking out copyrights on them. Specifically, there are two challenges that one encounters when dealing with software patents. The first is about the instrument of patent itself and whether the manner of protection it confers is suited to the software industry. The second is the nature of software and whether it should be subject to patenting.

a) Different Subject Matters

Copyright protection extends to all original literary works (among them, computer programs), dramatic, musical and artistic works, including films. Under copyright, protection is given only to the particular expression of an idea that was adopted and not the idea itself. (For instance, a program to add numbers written in two different computer languages would count as two different expressions of one idea) Effectively, independent rendering of a copyrighted work by a third party would not infringe the copyright.

Generally patents are conferred on any 'new' and 'useful' art, process, method or manner of manufacture, machines, appliances or other articles or substances produced by manufacture. Worldwide, the attitude towards patentability of software has been skeptical

b) Who may claim the right to a patent /copyright?

Generally, the author of a literary, artistic, musical or dramatic work automatically becomes the owner of its copyright. The patent, on the other hand is granted to the first to apply for it, regardless of who the first to invent it was. Patents cost a lot of money. They cost even more paying the lawyers to write the application than they cost to actually apply. It takes typically some years for the application to get considered, even though patent offices do an extremely sloppy job of considering.

c) Rights conferred

Copyright law gives the owner the exclusive right to reproduce the material, issue copies, perform, adapt and translate the work. However, these rights are tempered by the rights of fair use which are available to the public. Under "fair use", certain uses of copyright material would not be infringing, such as use for academic purposes, news reporting etc. Further, independent recreation of a copyrighted work would not constitute infringement. Thus if the same piece of code were independently developed by two different companies, neither would have a claim against the other.

A patent confers on the owner an absolute monopoly which is the right to prevent others from making, using, offering for sale without his/her consent. In general, patent protection is a far stronger method of protection than copyright because the protection extends to the level of the idea embodied by a software and injuncts ancillary uses of an invention as well. It would weaken copyright in software that is the base of all European software development, because independent creations protected by copyright would be attackable by patents. Many patent applications cover very small and specific algorithms or techniques that are used in a wide variety of programs. Frequently the "inventions" mentioned in a patent application have been independently formulated and are already in use by other programmers when the application is filed.

d) Duration of protection

The TRIPS agreement mandates a period of at least 20 years for a product patent and 15 years in the case of a process patent. For Copyright, the agreement prescribes a minimum period of the lifetime of the author plus seventy years.

Jurisdictions Of Software Patenting

Substantive law regarding the patentability of software and computer-implemented inventions, and case law interpreting the legal provisions, are different under different jurisdictions.

Software patents under multilateral treaties:

• Software patents under TRIPs Agreement

• Software patents under the European Patent Convention

• Computer programs and the Patent Cooperation Treaty

Software patenting under TRIPs Agreement

The WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs), particularly Article 27, are subject to debate on the international legal framework for the patentability of software, and on whether software and computer-implemented inventions should be considered as a field of technology.

According to Art. 27 of TRIPS Agreement, patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application. (...) patents shall be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced."

However, there have been no dispute settlement procedures regarding software patents. Its relevance for patentability in the computer-implemented business methods, and software information technology remains uncertain, since the TRIPs agreement is subject to interpretation.

Software patents under the European Patent Convention

Within European Union member states, the EPO and other national patent offices have issued many patents for inventions involving software since the European Patent Convention (EPC) came into force in the late 1970s. Article 52 EPC excludes "programs for computers" from patentability (Art. 52(2)) to the extent that a patent application relates to a computer program "as such" (Art. 52(3)). This has been interpreted to mean that any invention which makes a non-obvious "technical contribution" or solves a "technical problem" in a non-obvious way is patentable even if a computer program is used in the invention. Computer-implemented inventions which only solve a business problem using a computer, rather than a technical problem, are considered unpatentable as lacking an inventive step. Nevertheless, the fact that an invention is useful in business does not mean it is not patentable if it also solves a technical problem.

Computer programs and the Patent Cooperation Treaty

The Patent Cooperation Treaty (PCT) is an international patent law treaty, which provides a unified procedure for filing patent applications to protect inventions. A patent application filed under the PCT is called an international application or PCT application. Under the PCT, the international search and the preliminary examination are conducted by International Searching Authorities (ISA) and International Preliminary Examining Authority (IPEA).

Current Trend

However, before we start hailing the advent of a new era and equating the patenting of software in India it would be well worth our while to take a pause and examine the realities of software patenting. We could do this by looking at examples of countries in which software patenting has already become the order of the day, such as in the US and Japan

United States

The United States Patent and Trademark Office (USPTO) has traditionally not considered software to be patentable because by statute patents can only be granted to "processes, machines, articles of manufacture, and compositions of matter". i.e. In particular, patents cannot be granted to "scientific truths" or "mathematical expressions" of them. The USPTO maintained the position that software was in effect a mathematical algorithm, and therefore not patentable, into the 1980s. This position of the USPTO was challenged with a landmark 1981 Supreme Court case, Diamond v. Diehr. The case involved a device that used computer software to ensure the correct timing when heating, or curing, rubber. Although the software was the integral part of the device, it also had other functions that related to real world manipulation. The court then ruled that as a device to mold rubber, it was a patentable object. The court essentially ruled that while algorithms themselves could not be patented, devices that utilized them could.

But in 1982 the U.S. Congress created a new court i.e the Federal Circuit to hear patent cases. This court allowed patentability of software, to be treated uniformly throughout theUS. Due to a few landmark cases in this court, by the early 1990s the patentability of software was well established. Moreover, Several successful litigations show that software patents are now enforceable in the US. That is the reason, Patenting software has become widespread in the US. As of 2004, approximately 145,000 patents had issued in the 22 classes of patents covering computer implemented inventions.

Japan

Software is directly patentable in Japan. In various litigations in Japan, software patents have been successfully enforced. In 2005, for example, Matsushita won a court order barring Justsystem from infringing Matsuhita's Japanese patent 2,803,236 covering word processing software.

Indian Position

With respect to computer software, in Patents (Amendment) Act, 2002, the scope of non-patentable subject matter in the Act was amended to include the following: "a mathematical method or a business method or a computer programme per se or algorithms".

However, the recent amendment changes (Ordinance, 2004), which amends the Patents Act, 1970, has been promulgated after receiving assent from the President of India and has came into effect from 1st Jan., 2005. Apart from change in pharmaceuticals and agro chemicals, one of the seminal amendments this Ordinance seeks to bring is to permit the patenting of embedded software.

Hence, the amendment means that while a mathematical or a business method or an algorithm cannot be patented, a computer programme which has a technical application in any industry or which can be incorporated in hardware can be patented. Since any commercial software has some industry application and all applications can be construed as technical applications, obviously it opens all software patenting.
In any case, any company seeking to file a patent application for software under the Ordinance should ensure that its invention firstly, follows the three basic tests:

• Inventive Steps

• Novelty

• Usefulness

Therefore, it is important that the software sought to be protected is not merely a new version or an improvement over an existing code.

Further, in accordance with the specific requirements of the Ordinance with regard to patentability of software, the software should necessarily have a technical application to the industry or be intrinsic to or “embedded” in hardware. This is to prevent against any future litigation or claims of infringements being raised, which is a distinct probability even after a patent has been granted.

Conclusion

India for its part seems to have adopted the more conservative approach of the European patenting norms for software. But the Ordinance definitely has its use and relevance in today’s India, particularly for our growing domestic semi- conductor industry. This, along with judicial tempering might definitely ensure a judicious use of patent protection while allowing the industry to grow through innovations and inventions, thereby, mitigating the risks of trivial patents chocking the life out of real innovations and inventions. This is the reason a patent should always be treated as a “double edged sword”, to be wielded with caution and sensitivity. Now whether, in reality this will be implemented on a rigid basis or will become broad in scope through application (as in the U.S.), and, more importantly, whether the Ordinance would, in fact, result in increased innovation and inventions in the software industry, remains to be seen.

Source : ,http://www.legalserviceindia.com/article/l140-Software-Patenting.htm

Is India Geared Up For Business Method Patent

Introduction

Today technology is changing expeditiously. New technical inventions are taking place in huge number. These new inventions open new field of subject-matter for protection under Intellectual Property Law. Intellectual Property law gives an umbrella protection to new inventors. Patent provide protection for those line of process, products which are novel and are capable of proving that it involves an inventive step. USPTO grants maximum patents in a year. The paper written here advocates the invalidity of Business Method patent in Indian scenario. Business method today is capable of IP protection in countries like USA, Australia, Japan and New Zealand. India is against granting of protection to Business Method.

Definition: Business Method Patent

Business Patents are those patents which are given to business methods or business systems or like. A business method may be defined as "a method of operating any aspect of an economic enterprise". Business method patents are part of a larger family of patents known as utility patents, which protect inventions, chemical formulas, processes, and other discoveries. A business method is classified as a process, because it is not a physical object like a mechanical invention or chemical composition.

Background To Business Method Patents

Business Method Patents were not considered as a subject matter for protection under Patent Law. Earlier Business Method was considered as an abstract idea and was thus not falling under the purview of Patents. But by a decision by a Federal Court even Business Method have been granted patent protection. Section 101 of US Patent Act defines Inventions which are capable of Patent protection

A combine reading of Sections 101, 102, 103 and 112 will lead to following construction:
• Any process, machine or composition of matter may be patented if;
• It is new (Novelty Section 102), Non-obvious (Section 103) and is capable of adequate description and invention (Section 112).

Protection Under TRIPS

TRIPS also provide subject matter for patent protection. Article 27 paragraph 1 of the agreement on Trade-Related Aspects of Intellectual Rights (TRIPS) provides that "patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application..."

Further, Article 27 paragraph 2 of the TRIPS agreement permits Members to "exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect order public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law."

Cases In Which Business Method Was Upheld

Concept of Business method patent is now a decade old. State Street case is an important decision in this regard. Further developments have taken place after this judgment.

Business Method was considered as an exception to Patent protection until 1998. The first case of this kind was filed in the year 1908. In Hotel Security case the question was whether business methods can be said to be patentable. Here the case rejected the argument of it being capable of protection and created a per se exception to business methods. It was until year 1998 that this position was accepted.

1. State Street Bank v. Signature Financial Group, Inc.

In the present case the District Court had rejected application for Business Method Patent on the said process of “hub and space”. But Later the Federal Circuit confirmed that there is no rule which prohibits the patentability of "business methods." The Court stated “The judicially-created business method exception to patentability is . . . an unwarranted encumbrance to the definition of statutory subject matter in section 101 that should be discarded as error-prone, redundant, and obsolete. It merits retirement from the glossary of section 101. Patentability does not turn on whether the claimed method does "business" instead of something else, but on whether the method, viewed as a whole, meets the requirements of patentability as set forth in Sections 102, 103, and 112 of the Patent Act.

Federal Court further clarified that it was never intended that business methods should be kept out of the subject matter. Rather in earlier few cases claim was rejected due to incapability of those methods to be taken as inventions. Thus, State Street confirmed that business methods can be patented if they meet the statutory requirements of utility, novelty and non-obviousness.

2. Amazon.com Inc. v. Barnsandnoble.com

In this case one-click patent to Amazon.com was criticized by few writers on the ground of it being “unplanned mutation”. Here an injunction was granted to Barnes & Noble for not using the said feature. This case clearly reflects drawbacks that can arise in case a business patent is protected in countries which are still developing their technologies. Later part of my paper deals with disadvantage that granting a business method patent can have.

Amendments Brought After State Street Case

Now that the situation is clear with respect to business method patents in US laws, it can be said that business method are capable of granting patent protection. But in order that no ambiguity remains the USPTO publicly announced that in terms of granting protection sufficient prior art search should be undertaken.

Class 705

A new classification (Class 705) was introduced for the filing of business method patents under the more generic utility patent applications: "Data processing: financial, business practice, management or cost/price determination.” Specifically, Class 705 includes sub-categories for industries such as health care, insurance, electronic shopping, inventory management, accounting, and finance.

Amendment In Title 35

Section 100 Title 35, United States Code, was amended to provide for improvements in the quality of patents on certain inventions. Thus, ‘Business Method Patent Improvement Act of 2000’’was passed. The term business method patent has been defined under the Act. What is surprising is the fact that under the definition any “technique used in Athletics” can also be qualified as a Business Method Patent.

Interim Guidelines

For providing better uniformity in the system Interim Guidelines were published for Examination of Patent Applications for Patent Subject Matter Eligibility on October 26, 2005

Lacunas Prevalent In Method Adopted At USPTO

It has been observed that the method of granting patent in USPTO is without a substantial base. Patents at USPTO are granted not on a quality basis, rather on quantity basis. The following are serious lacunas which should be given a serious thought:-

1. In USPTO examiners are not properly trained to search prior art. Prior art search is scattered and hence proper care is required while doing a prior art search. But since the examiners are not provided with enough resources quality somewhere lacks while granting a Patent

2. Further it has been observed that in USPTO examiners get bonuses on allowing a patent rather than rejecting it. Hence the result can be seen more the acceptance by examiners, more the bonus. The process should change and bonus should be given only while rejecting a patent.

3. Once a patent is granted USPTO doesn’t conduct a review or quality control.

4. Mostly claims use ambiguous language which leads to more confusion in mind of patent examiner. Thus affecting the quality of specific invention.

Disadvantage Of Granting A Business Method Patent

1. Once a patent is granted for an invention it is capable of securing the rights of patentee for a period of 20 years. Thus it can be well understood that if patent is granted for a business method then it would obstruct new technological research for the next 20 years to come.

2. Granting a patent on business method would create a monopolistic situation which would hinder growth. It would mean an unhealthy competition.

Advantage Of Granting A Business Method Patent:

1. Copyright protection is insufficient to protect Business method. All Research and Development that is done requires that something more that Copyright protection should be given in order to reward Business ideas.

2.  Start-ups should be encouraged. New companies would benefit with a concept of such kind. Initially patent protection to such starting groups would definitely benefit them in order to have a strong stand in front of powerful companies. Business method patents create the artificial scarcity needed to preserve market power and restore the incentive to innovate.

Solution For A Business Method Protection

1.The paper here accepts granting of business patents but not at the cost of technological or economical growth. Thus in order to benefit both inventor and other co-inventors in line it would be better to grant patent protection only for a limited period of 3 years for Business method Patents. Thus law should help in sustaining a collaborative effort.

2. Change in the Patent System at USPTO is also required. The one sentence rule should    be eliminated so as to faciltitate clearer language. Thus, it would help patent examiners and also leave less scope for manuplation by patent lawyers. Also person applying should disclose his computer code to the patent examiner.

3. Salary of Patent examiners should be increased. Also USPTO should give bonuses on rejecting a patent application rather than on accepting it as earlier mentioned in paper.

Should Patent Be Granted On Business Method In India

India is a developing economy. We are still unable to cope up with many threats like poverty, unemployment and population. In global market India is considered as a growing economy. Our youths are taking India to greater heights. All this reflect that we require a technological and economical boom. It needs to be mentioned that countries which have granted business method patents are developed countries. Conformance with TRIPS is particularly slow in developing countries, notably Argentina, Brazil, India and Egypt. Further I believe that granting a business method patent in India would impede technological growth in our country. Hence I am of opinion that business method patent should not be granted in India.

Conclusion
With boom in intellect ideas in corporate world it is required that these should be protected and respected. But fortification of these ideas by means of patent might not be profitable at this stage in developing countries. Grant of business method patent in US saw mixed reactions from experts of law. Moot problem was the modus operandi for granting of business method patent at USPTO. US have also drafted an Act called Business Method Patent Improvement Act of 2000 with respect to protection of business methods ironically athletic techniques are also within the purview of Business methods.

Patent over a particular invention protects it for a period of twenty years. Thus a patentee acquires an exclusive right over it (subject to Patent Act) and thus has right to prevent infringement of it during the said period. Thus in case of protection to business method the patentee would be in a position to stop the claimant of patent for a period of 20 years. Thus it would imply that business related methods/ideas would be retarded for such a long period. It can be thus concluded that Business method may be granted but it should be granted for a lesser duration of time and preference should be given to new companies. Thus Indian Patent system may move a step ahead for grant of Business method patent in future but not at present. It would be beneficial that there is no amendment in Section 2(k) of Indian Patent Act, 1970 for the next five years.

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