software patent agreements

Patenting of Computer Programs

Dr. V.K. Unni E-mail: [email protected]

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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

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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 3


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

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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

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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

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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

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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 doesnt 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

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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

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Patenting of Computer Programs 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

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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

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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

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Patenting of Computer Programs 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

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Patenting of Computer Programs State Street Bank & Trust Co. v. Signature Financial Group, 47

U.S.P.Q. 2d 1596 (Fed. Circuit, 1998) In this case Signatures 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

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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

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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

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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."

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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.

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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

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Patenting of Computer Programs 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 shouldnt 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

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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

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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

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Patenting of Computer Programs 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 23

Patenting of Computer Programs 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

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Patenting of Computer Programs 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

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Fujitsus 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

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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

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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.

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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

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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

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Software Patents: Claim Drafting

Dr. V.K. Unni

Asst. Professor-Law NALSAR University of Law, Hyderabad

www.nalsar.ac.in E-mail: [email protected]

31

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.

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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.

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Patenting of Software 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.

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Patenting of Software 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.

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Patenting of Software 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

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Patenting of Software 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.

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Patenting of Software 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

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Patenting of Software 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.

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Patenting of Software 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,

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Patenting of Software 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, 41

Patenting of Software 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."

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Patenting of Software 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 Corporations 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;

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Patenting of Software (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

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Patenting of Software (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.

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Thank You Very Much

Dr. V.K. Unni E-mail: [email protected]

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Patenting of Computer ProgramsThe ABC of ProgrammingPatenting of Computer ProgramsPatenting of Computer ProgramsPatenting of Computer ProgramsPatenting of Computer ProgramsPatenting of Computer ProgramsPatenting of Computer ProgramsPatenting of Computer ProgramsPatenting of Computer ProgramsPatenting of Computer ProgramsPatenting of Computer ProgramsPatenting of Computer ProgramsPatenting of Computer ProgramsPatenting of Computer ProgramsPatenting of Computer ProgramsLatest Case: In re Bilski (Federal Circuit N0. 2007-1130, en banc, decided on 30th October 2008), In re Bilski (Federal Circuit N0. 2007-1130, en banc, decided on 30th October 2008),Patenting of Computer ProgramsPatenting of Computer ProgramsPatenting of Computer ProgramsPatenting of Computer ProgramsPatenting of Computer ProgramsPatenting of Computer ProgramsPatenting of Computer ProgramsPatenting of Computer ProgramsPatenting of Computer ProgramsSymbian Ltd v Comptroller General of PatentsSymbian Ltd v Comptroller General of PatentsPatenting of Computer ProgramsSoftware Patents: Claim Drafting Claim DraftingPatenting of SoftwarePatenting of SoftwarePatenting of SoftwarePatenting of SoftwarePatenting of SoftwarePatenting of SoftwarePatenting of SoftwarePatenting of SoftwarePatenting of SoftwarePatenting of SoftwarePatenting of SoftwarePatenting of SoftwarePatenting of SoftwareThank You Very Much

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