dr. v.k. unni associate professor iim, calcutta e-mail .... v.k. unni associate professor iim,...

UNNI NALSAR

Patenting of Computer Programs

Dr. V.K. Unni

Associate Professor

IIM, Calcutta

E-mail: [email protected]

The ABC of Programming

A computer program is a set of instructions to the computer. Most programs accept and process user-supplied data

The fundamental processes utilized by a program are called algorithms

Algorithms are mechanical computational procedures and are at the heart of the program

These algorithms must be developed by the human creativity of the programmer, and the program therefore cannot contain any algorithms not already considered by humans.

Although a computer cannot think or develop algorithms, it can execute them faster and more accurately than any human possibly could


Here the most important case-laws or rather the jurisprudence has emanated from the U.S.A

The principal source of patent law in U.S is the Patents Act or specifically S. 101 which defines the scope of patentable subject matter, S.101 deals with products, processes etc

Thus in the light of S. 101, the only aspects of computer programs that are eligible for patent protection are the algorithms on which they are based, algorithms can be considered as processes

Under the law of copyright source code/object code which merely implements these algorithms are considered as literary works


As a result, patent disputes involving computer programs revolve around the question whether the algorithms underlying the program are eligible for a patent

What is an Algorithm?

An algorithm is a plan/method which tells us how to organize a calculation to solve a specific set of problem

The detailed organization /structure of the procedures that a machine may take to implement an algorithm results in a program

When we tell a computer what to do, you also have to choose how it is going to do, so to be very simple, an algorithm is the basic technique used to get the job done


Thus algorithms are mostly in the form of a mathematical

formula

Interestingly mathematical formula is excluded from

patentability in most of the jurisdictions

Thus the moot question is whether algorithms constitute a

patentable process or they are merely mathematical formulae

which are exempted from patentability

The courts addressed this issue for the 1st time in the case of

Gottschalk v. Benson, 409 U.S. 63 (1972)

The issue was whether an algorithm for converting decimal

numbers into binary numbers constituted patentable subject

matter


Most of the digital readings found in calculators, micro wave ovens use decimal numbers internally, but for a computer to read these devices these decimal numbers should be converted into binary numbers

Here the court held that the algorithm involved here has no substantial practical application except in connection with a digital computer

Court held that the claimed invention was not a process within the meaning of the Patents Act

The court viewed the properties / characteristics of numbers and numbering systems as a mathematical formula/phenomena of nature which is not patentable


In Parker v. Flook, 37 U.S. 584 (1978) The case involved the use of a new algorithm for

calculating alarm limits in a petroleum refining process

The patent application described a method of updating alarm limits which consists of 3 steps

1st step that measures the present value of a variable like temperature

2nd step that uses a mathematical equation/ algorithm to calculate an updated alarm limit value

Final step that adjusts the actual alarm limit to the updated value


The U.S Supreme Court held that the only novel feature of the

application was a mathematical formula/algorithm

Here Flook only teaches a formula and a possible suggestion

that it can be used in a catalytic conversion process

It doesn’t teach how to apply it to such process, for e.g. the

human operator is not taught on how to measure the variables,

how to select the margin of safety etc

Experts are of the opinion that had Flook revealed how to

measure the variables, how to select the appropriate values of

safety margin and drafted the claim as a step that controls the

petrochemical process, then it might have been patentable


Diamond v. Diehr, 450 U.S. 175 (1981)

The patent involved a process for treating / curing rubber

Diehr invented a new process for curing synthetic rubber which was based upon a mathematical algorithm

To get the finest quality of synthetic rubber the curing time should not be too long or too short

Thus temperature inside the mould cavity played a crucial role in any curing process

In the present invention Diehr used temperature sensors to monitor the heat inside the moulding chamber


This information on temperature was fed to a computer, which

in turn used a program based on an algorithm to calculate the

curing time

The computer then signals precisely when to open the chamber

to get the finest synthetic rubber

In this case the US Supreme Court developed a 2 point test

Firstly it has to be determined whether the mathematical

algorithm is either directly or indirectly recited by the claim, if

the answer is yes

Then it has to be determined whether the claim is a mere

recitation of the mathematical formula, if it is, then no patent

can be granted

UNNI NALSAR


In the present case the court found that the claim had infact

applied the mathematical formula in a device / process which

provided a solution that directly affects the physical elements

Here the end product is not a mere number, it is an applied

solution that directly resulted in the manufacturing of high

quality synthetic rubber

Thus patent was granted


Arrhythmia Research Technology, Inc v. Corazonix Corp.

22 US PQ 2d. 1033 (Fed. Circuit,1992)

Patent concerned here pertains to the analysis of e.c.g. signals to determine certain characteristics of heart function

This claim was for the method of analysing the presence or absence of particular signal emanating from a patients heart

For this e.c.g signals were first transformed into digital signals and processed using a computer programme which was based on an algorithm to find out whether the patient is at a high risk for a dangerous heart condition (ventricular tachycardia)

The resultant output is not an abstract number, but is a signal related to the patient's heart, thus the patent was held valid


Re Alappat, 31USPQ 2d. 1545 (Fed. Circuit,1994)

Invention pertained to a device which was meant for creating a smooth wave form display in a digital oscilloscope

Oscilloscope is a device which can display graphs, it draws the graph of an electric signal and looks like a small TV set

It is used by everyone from electricians to medical professionals

Neurologists/ cardiologists use it to measure brain/heart waves

In certain patients where the heart beat is slow the signal changes much faster and then the picture of the wave becomes difficult to see

Alappat invented device to solve this problem which used a program that was based on an algorithm , finally the patent was granted


State Street Bank & Trust Co. v. Signature Financial Group, 47 U.S.P.Q. 2d 1596 (Fed. Circuit, 1998)

In this case Signature’s patent called “Data Processing System for hub and spoke financial services configuration” pertained to a data processing system which used a computer program

The said computer program was used for monitoring, calculating and recording the information involved in a financial arrangement called “hub and spoke” configuration

In this case the claimed invention involved a program that is closely tied to a business model

A clear distinction has to be made between the business method and software that signature invented to do business


Under this business model, mutual funds (spokes) would pool

their assets into an investment portfolio (hub) organised as a

partnership

This model provided the administrator of the mutual funds

with 2 advantages, firstly the economies of scale in

administering the investments, secondly the tax advantages of

a partnership

The data processing system processed the data regarding the

assets in the portfolio of each of the funds, daily incremental

expenses, income, allocation of share in percentage that each

fund holds in the portfolio etc


The court held that transformation of data

representing discreet dollar amounts by a

machine into a final share price,

constitutes a practical application of a

mathematical algorithm because it

produces a useful, concrete and tangible

result

Thus the patent was held to be valid

Latest Case: In re Bilski (Federal Circuit N0. 2007-

1130, en banc, decided on 30th October 2008),

The Federal Circuit has affirmed the PTO's Board of Patent Appeals finding that Bilski's claimed invention which dealt with a method of hedging risks in commodities trading, does not satisfy the patentable subject matter requirements of 35 U.S.C. § 101.

In doing so, the nine-member majority opinion spelled out the "machine-or-transformation" test as the sole test of subject matter eligibility for a claimed process

In State Street, the Federal Circuit used the "useful, concrete, and tangible result" of a process as a touchstone for patentability.

In Bilski, the en banc panel found the State Street formulation "insufficient to determine whether a claim is patent-eligible under § 101."

In re Bilski (Federal Circuit N0. 2007-1130, en

banc, decided on 30th October 2008),

The Federal Circuit reiterated the viewpoint of the

Supreme Court that enunciated a definitive test to

determine whether a process claim is tailored

narrowly enough to encompass only a particular

application of a fundamental principle rather than

to pre-empt the principle itself.

A claimed process is surely patent-eligible under §

101 if: (1) it is tied to a particular machine or

apparatus, or (2) it transforms a particular article

into a different state or thing.

Bilski v Kappos

Bilski Vs. Kappos (2010)

US Supreme Court affirmed that Bilski’s risk-management

method was not the type of innovation that may be patented.

However, it rejected the machine-or-transformation test as a sole

test of patentability

The Court's opinion in this case is seen as moderating the

machine-or-transformation test requirement instated by the

Federal Circuit

Alice Corp. v. CLS Bank International ( US Supreme Court

June 2014)

Alice held the patent for a computer-implemented, electronic

escrow service for facilitating financial transactions

Alice Corp. v. CLS Bank International,

2014

A consortium of banks led by CLS Bank challenged this

patent

Supreme Court held that the patents are invalid because

the claims were drawn to an abstract idea, and

implementing those claims on a computer was not enough

to transform that idea to a patentable invention

Supreme Court "reaffirmed that merely adding “a generic

computer to perform generic computer functions” does not

make an otherwise abstract idea patentable

Court opined that an abstract idea along with a computer

doing what a computer normally does is not something the

patent system was designed to protect.


Patentability in Europe

Vicom /Computer related invention

This case pertains to an application before the European Patent Office (EPO), for an invention relating to digital image processing

The said imaging process was based on an algorithm

Here the images of physical/ simulated objects were generated and reproduced with the help of a computer program

Thus the imaging process is related to a method of obtaining/reproducing an image of a physical / simulated object which has a lot of industrial application especially in CAD/ CAM operations


Here the EPO held that a claim that is directed towards a

technical process ,which is carried out under the control of a

program is patentable

Thus the subject matter of the invention is the technical effect

produced by the operation of the computer program, the that

technical effect should be patentable as long it satisfies the

other conditions for a patent

The patent granted in relation to the technical effect is not the

patent for the program as such and it shouldn’t make any

difference whether or not novelty resides in the program itself

This seems to be a logical approach, otherwise any new and

inventive technical effected by a mechanical method will be

patentable and one implemented by a computer is not


IBM / Document abstracting and retrieving,

(1990) EPOR 98

Here the patent application was for a method of

automatically abstracting storing and retrieving

documents in a computer

Here the EPO held that ,if the only conceivable use of a

program is running it in a computer, then there can be no

patent

It is often said that the intellectual effects like storing,

abstracting are not patentable while the industrial effects

are patentable as demonstrated in the Vicom case

UNNI NALSAR 24


IBM Application (1999) RPC 861

IBM applied for a patent for a data processing system

Here a program was used to display information in windows, in such a way that when any information displayed in one window is obscured by a second window then one window will move to a new unobscured position

Apart from this , IBM applied for the computer program product itself

The patent was granted by the EPO but the claims pertaining to the computer program product were rejected, IBM appealed


The Board of Appeal held that computer program product may

have a potential technical effect which the program possesses

Thus it would be illogical to grant a patent for the method of

using the program and the apparatus (computer) adapted for

using the program, while not giving protection to the computer

program product which consists of all the features needed for

the functioning of the method and apparatus

This would men that as long as a computer program is

technical, the medium on which it is recorded is immaterial, it

can be a floppy, chip , CD or a flash drive

This might mean that a program may be patentable as such,

provided it produced a desired technical effect when run on a

computer


Position in U.K.

In U.K. the earlier approach followed was to find out whether

the machine without taking the computer program into account

adds anything to the state of art

If the only novel/inventive step resides in the computer

program then the machine or data processing system as a

whole is not patentable

In Re Merrill Lynch Application (1988) RPC 1

The invention related to an improved data processing system

for implementing an automatic trading market for securities

The system received and stored the best current bids, produced

reports of trade particulars for customers ,monitored stock,

inventory and profit etc


The application was rejected by the examiner, because there

was no practical or technical effect, (it was also hit by the

business method exception)

In addition courts in U.K. looked upon the operations

performed by a computer program as some sort of a mental act

Raytheon Co. Application (1993) RPC 427

The invention was for an automated process for identifying

ships from a silhouette which was then matched against a

database of known ships

This application was rejected on the basis that it was a method

of performing a mental act


Fujitsu’s Application (1997) RPC 608

A computer related invention which enabled chemical

researchers to produce digital models of hybrid chemicals

were not patentable

Although the invention saved considerable time/ effort for

researcher, it was held that there was no technical effect

Thus in U.K. an ordinary computer program used in a general

purpose computer is not patentable

In 1999 the UK Patent Office has changed its practice to come

into line with that of EPO on computer program inventions


Aerotel Ltd v Telco Holdings Ltd & others and Macrossan's Patent Application [2007] RPC 7 , the UK Courts have laid down a 4 point test,

1. properly construing the claim;

2. Identifying the actual contribution;

3. asking whether it falls solely within the excluded subject matter; and

checking whether the actual or alleged contribution is actually technical in nature.

The decision of the Court of Appeals in Symbian Ltd v Comptroller General of Patents [2008] EWCA Civ 1066; [2008] WLR (D) 310 has liberalized the UK regime dealing with software patents

Symbian Ltd v Comptroller General of Patents

The patent application concerned a method of accessing data in a dynamic link library in a computing device

The Court of Appeals held that it was not excluded from registration under s 1(2)(c) of the Patents Act 1977 on the ground that it related to a computer program “as such”, since it involved a technical contribution to the prior art which would enable computers and related devices to work faster and more reliably.

The patent dealt with “Mapping dynamic link libraries in a computing device”.

Dynamic link libraries (DLLs) were used as a means of storing functions common to a number of different applications, so that they were only required to be stored once.

Symbian Ltd v Comptroller General of Patents

The program concerned a method of overcoming certain problems associated with the prior art in accessing DLLs and would enable a range of devices, including computers, cameras and mobile phones, to work faster and more reliably

Court of Appeals noted that the effect of the alleged invention was not merely within the computer programmed with the relevant instructions.

The beneficial consequences of those instructions would feed into the cameras and other devices and products which included computer systems.

In other words the Court of Appeal stated that a method of accessing data in a dynamic link library in a computing device was not excluded by reason of being a computer program from registration as a patent as it involved a technical contribution which would enable computers to work faster and more reliably

UNNI NALSAR


In India as per the Sec 3 of the Patents Act (2002

Amendment), computer program per se is not

patentable

This would mean that a computer implemented

invention which adds a new and inventive technical

effect which can be applied industrially may be

patentable

As of now no case laws have are available in India

Software Patents: Claim Drafting

Dr. V.K. Unni

Asst. Professor-Law

NALSAR University of Law, Hyderabad

www.nalsar.ac.in


Claim Drafting

Before drafting claims for an invention, the most important task for the author is to understand what the invention is and how it works

Claim drafters should not be in such a hurry to draft claims that they skip the step of understanding the technology and the invention

A patent attorney should also be aware of the prior art, enabling him or her to distinguish the invention from the prior art

In fact, the author must really understand the state of the prior art to ascertain what the invention is, and what it is not.

Patenting of Software

Understanding the invention also includes understanding what the presently preferred embodiments are, and what the best mode is

Several important questions should be asked of the inventor: How will the invention be packaged?

Will it be packaged and/or distributed with other pieces of software and/or hardware? Are the customers of this product consumers or other manufacturers?

For example, if an invention is targeted at consumers, to be distributed on CD-ROMs, a few claims directed toward the CD-ROM, the functional data stored thereon, and the interrelationships between the data should be included.


On the other hand, if the software to be patented is only to be distributed with a specific piece of hardware e.g., the software that runs on a processor in a VCR, then such a data structure claim to a storage medium may be unnecessary

In drafting claims for software, try to connect the invention to the real world

Make it clear to the Examiner, judge, and jury the invention's real-world application.

If the claims read like a mathematical formula, they probably do not have enough material supporting a practical application of the invention.


The detailed description of a patent must provide support for the claims. Therefore, at least some of the broad claims should be written before the detailed description is drafted

A useful tool to use while drafting claims is to draw claim diagrams to aid in understanding the invention.

Claim diagrams usually consist of several circles or boxes connected by lines

The circles represent the claimed elements, and the lines interconnecting them represent the claimed relationships between the elements.

Claim diagrams are simple to make from an existing claim.


Each element or sub-element is drawn as a circle or box and

labeled

Each relationship between elements or sub-elements is drawn

as a line between the related elements and labeled with a name

indicating the type of relationship

Claim diagrams are beneficial because the reader can "see"

what is being claimed

When claims are completed, the author also has a rough draft

of the sketches needed for the patent application


Method Claims

Method claims are defined in terms of operations performed

Because method claims are intended to define the steps performed and not the hardware, they need not be tied as closely to the disclosed structure as the apparatus claims should be.

Where the hardware is not unique, method claims should dominate, for e.g., if a computer program runs on any IBM PC compatible computer running Microsoft Windows XP, the method claims should dominate the claim set because novelty is in the computer program alone.


Thus, a method claim is more capable of cleanly claiming and

protecting a computer program without unnecessarily limiting

its application to a particular piece

Apparatus Claims

On the other hand, an apparatus claim is usually tied much

closer to a piece of hardware

If method claims have already been drafted for the invention,

drafting corresponding apparatus claims is relatively simple

and can be done by simply prefacing each step with "means

for


Data Structure Apparatus Claims

A data structure claim is a modification of an apparatus claim

directed toward some aspect of the data embodied on a

computer-readable medium (e.g., a CD- ROM, hard drive,

memory, and the like).

These types of claims are are often narrower than a method or

apparatus claim for the same invention.

Unless a data structure claim is written carefully, or is really a

method or apparatus claim in disguise, designing around the

claim to avoid infringement is easy.


Diamond v Diehr Claims

A method of operating a rubber-molding press for precision molded compounds with the aid of a digital computer, comprising:

providing said computer with a data base for said press including at least,

natural logarithm conversion data (ln),

the activation energy constant (C) unique to each batch of said compound being molded, and

a constant (x) dependent upon the geometry of the particular mold of the press,


initiating an interval timer in said computer upon the closure

of the press for monitoring the elapsed time of said closure

constantly determining the temperature (Z) of the mold at a

location closely adjacent to the mold cavity in the press during

molding,

constantly providing the computer with the temperature (Z),

repetitively calculating in the computer, at frequent intervals

during each cure, the Arrhenius equation for reaction time

during the cure, which is ln v = CZ+x, where v is the total

required cure time,


repetitively comparing in the computer at said frequent intervals during the cure each said calculation of the total required cure time calculated with the Arrhenius equation and said elapsed time, and

Opening the press automatically when a said comparison indicates equivalence.

Although the process employed a well-known mathematical equation, the claims did not "pre-empt the use of that equation."

"Rather, they seek only to foreclose from others the use of that equation in conjunction with all of the other steps in their claimed process."


The Court enumerated the real-world, physical steps involved in the claims as including "installing rubber in a press, closing the mold, constantly determining the temperature of the mold, constantly recalculating the appropriate cure time through the use of the formula and a digital computer, and automatically opening the press at the proper time

Claims of the Signature Financial Corporation’s patent

A data processing system for managing a financial services configuration of a portfolio established as a partnership, each partner being one of a plurality of funds, comprising:

(a) computer processor means for processing data;

(b) storage means for storing data on a storage medium;


(c) first means for initializing the storage medium

(d) second means for processing data regarding assets in the portfolio and each of the funds from a previous day and data regarding increases or decreases in each of the funds, assets and for allocating the percentage share that each fund holds in the portfolio;

(e) third means for processing data regarding daily incremental income, expenses, and net realized gain or loss for the portfolio and for allocating such data among each fund;

(f) fourth means for processing data regarding daily net unrealized gain or loss for the portfolio and for allocating such data among each fund; and


(g) fifth means for processing data regarding aggregate year-

end income, expenses, and capital gain or loss for the portfolio

and each of the funds.

Thank You Very Much

Dr. V.K. Unni

Asst. Professor-Law

NALSAR University of Law, Hyderabad

www.nalsar.ac.in


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