Will UK courts bridge the software patent divide?
OUT-LAW Radio, 03/04/2008
We look at whether or not the UK courts are trying to make UK
patent law more like that in Europe, where software can sometimes
be patented. Plus we find out how large companies can save time and
money implementing the Companies Act
A text transcription follows.
This transcript is for anyone with a hearing impairment or who
for any other reason cannot listen to the MP3 audio file.
The following is the text spoken by OUT-LAW journalist Matthew
Magee.
Hello and welcome to OUT-LAW
Radio, the weekly podcast that keeps you up to date on all the
twists and turns in the world of technology law.
Every week we bring you the latest news and in depth features
that help you to make sense of the ever changing laws that govern
technology today.
My name is Matthew Magee, and this week we look at whether
courts are bringing the UK into line with Europe over software
patents, and we find out how large companies can save time and
money on implementing the companies act.
But first, the news:
Buy one get one free deals are safe
And
Half of UK's children have online profiles.
A senior European Commission official has backed the UK
Government's stance on the use of the word 'free' in marketing in
many cases. The official said that genuine 'buy one get one free'
offers without inflated prices should be allowed.
New Regulations will come into force on 26th May which will
govern how retailers can use the word 'free' in marketing and
advertising. The Regulations implement the European Union's
consumer protecting Unfair Commercial Practices Directive.
There have been disputes over whether or not the Directive asks
countries to pass laws banning the 'buy one get one free' offers,
but the Head of Unit at the Consumer Affairs Directorate of the
European Commission Giuseppe Abbamonte has told OUT-LAW that free
product deals are likely to be permitted as long as the two for one
prices are not inflated.
Half of the UK's internet using children have profiles on social
networking sites despite bans for users under 13 on the major sites
according to research by media regulator Ofcom. The research found
that users are not especially concerned with privacy.
The regulator's research found that 49% of 8 to 17 year olds who
use the internet have a profile on social networking sites such as
MySpace, Facebook or Bebo. This is despite the fact that the major
sites say that users under 13 should not register pages.
The Government is reported to be on the brink of announcing a
code of conduct for social networking sites which would require
them to set privacy settings automatically to stricter levels for
users under 18 who sign up.
That was this week's OUT-LAW news.
Businesses are constantly encouraged these days to do two things:
to think big, and to act creatively. The internet, instant
communications, integrated global markets and the bringing down of
trade barriers should – say governments, advisors, trade bodies –
make it easier for companies to innovate and to act swiftly and
decisively.
But in the technology world there is one historically
troublesome area where this is still much harder than it could
be.
If you write some new software to implement the brilliant idea
you've just had, one with international potential, your first
instinct might be to protect it with a patent.
But this is exactly where you would run into trouble, because
it's still the case that though the UK and the rest of Europe share
a law on whether software can be patented, they still differ
fundamentally on what that law actually means.
Now the Chartered Institute of Patent Attorneys is calling for
the UK and Europe to find agreement.
In very broad terms, the UK is less likely to allow software to
be patented than the European Patent Office. Confusingly, though,
you can get an EPO patent that protects your invention in the UK,
even if it is one that the UK Intellectual Property Office would
have refused you.
The Chairman of the Chartered Institute of Patent Attorneys'
Computer Technology Committee Dr Simon Davies first explains the
confusion that exists despite the fact that the UK and EPO share a
law on patents.
Dr Simon Davies: The law is effectually the
same in the UK and Europe but the interpretation of the same law is
somehow different.
So what, exactly, is the difference? Well it all hinges on a
couple of crucial clauses of the law. One says that one of the
things that you cannot get a patent for is 'a computer program as
such', which is generally taken to mean an invention that consists
solely of a computer program.
The other clause is one which says that you can patent anything
in any field of technology. Though that exact phrase has not been
adopted in UK law, Davies is confident that a court would read it
into the law.
He explains how the EPO and UK IPO have arrived at such
different conclusions from the same starting point.
Dr Simon Davies: The EPO in Europe - they're
more focussed on the positive statement that you can get patents in
any field of technology. Whereas the UK Patent Office is more
concerned with the specific exclusions saying: "Well we don't think
we can give you a patent if your invention is a computer programme
as such". So the EPO, probably over about the past 20
25 years has come up with a fairly consistent line of: with this
sort of invention you can get through and this sort of invention
you can't get through. The UK courts and the UK IPO has been a bit
more wobbly I think in terms of what you can get through and what
you can't get through. And yes it has caused problems. But I think
even if you take out the 'as such' you'd still have this conflict,
if you like, between getting patents in any field of technology in
not being able to allow patents for the computer programmes. Then I
think maybe that conflict is at the root of the uncertainty.
So how does this gulf actually affect patent applications? Well
it is all ultimately up to the courts. If you want a patent you
apply to the UK IPO. If you don't like the answer you get you can
appeal to the courts, arguing that your invention deserves a patent
according to the law.
The decisions the courts make then affect how the UK IPO makes
its mind up, so it changes its rules as court decisions emerge.
Currently, the main ruling governing how the UK IPO thinks is a
court of appeal decision in a case involving Neal Macrossan, who
was denied a patent on the grounds of his invention being simply
software. The judge in the Macrossan ruling created a four step
test that courts were to follow in deciding whether or not an
invention is deserving of a patent.
Davies said that what is creating a gap between UK and EPO
practice is not the test itself, but how it is applied.
Dr Simon Davies: I think most people feel that
you could apply that four step test and end up with the same
results that the EPO would end up by and large. And also when you
read the UK IPO's website it also says that in the large majority
of cases you'll end with the same results as the EPO. However one
of the things that the Committee that I serve on, the conclusion we
have is that actually that's not an accurate reflection of our
experience, if you like, in terms of the cases that we submit to
the patent offices; that we tend to get a more favourable treatment
from the EPO than we do from the UK IPO for inventions relating to
mobile phones, PDAs, that sort of thing.
The judge in a case last month involving software company
Symbian seems to have agreed, rejecting the UK-IPO's application of
those four steps. The UK-IPO has said that the court did not apply
the test at all, and says it will appeal.
Davies sees the Symbian ruling as evidence that the courts want
to make decisions more closely in line with the EPO, and he says
that the appeal court could be the forum for that to become wider
policy.
Dr Simon Davies: The Symbian case is
interesting because the UK IPO has said it will appeal and so we
will get a high level court to look at it and if the court says
that yes, you know, the Symbian case should be allowed - it's been
allowed by the EPO, we want the UK approach to be in line with the
EPO - then that is probably going to - you know - may settle the
matter. That yes, that the UK approach will become closely aligned
with the EPO approach. You know you will be able to get patents in
shall we say computing technology. I think, you know, if the courts
wanted to they could certainly [unclear] them across and test from
the decision and [unclear] them but just apply it in a slightly
different way from how the UK IPO has been applying it and they
could, you know, end up with something that was fairly similar to
the EPO approach.
There is a bigger complication here, though, because if you're a
UK business you can just go straight to the EPO and get a patent
from it, asking that it applies to the UK.
So you can get a patent for software which would likely be
denied in the UK, bypassing the UK IPO altogether, but it will be
at the mercy of the courts. If someone challenges you on it, it'll
be up to a judge to look at the law, look at your EPO awarded
patent and decide whether it is valid.
Davies said that this uncertainty has a material effect on
businesses.
Dr Simon Davies: Well I think unquestionably
it's going to be more difficult to enforce your patent because
you're not a 100% sure that the courts are going to support it. So
if you wanted to licence it or to litigate it people are going to
be more reluctant to pay you money for the patent or to, you know,
respect it by not implementing the invention. Because they're going
to be saying: well we don't think your patent's - you know - we
don't think the courts will uphold it any way. So depending on - I
mean that may or may not be the right view but any uncertainty in
the strength of the patent in effect has - reduces its value.
So the dispute over what should be patentable is having a real
effect on the value of inventions in the marketplace. Davies hopes
that the Symbian appeal will move the UK closer to the EPO's view,
and that it will finally bring some longed for clarity to a
stubbornly problematic issue.
In 2006 a sprawling monster of a law was passed. The Companies
Act governs how businesses are run and is so massive that it is
only coming into effect in bits and pieces, with many parts not
becoming active until 2009.
A couple of changes will come into effect in October of this
year, though, which will demand large, public companies make
changes to their articles of association, which are like a
constitution governing how a company is run.
Company law specialist Claudia Gizejewski explained what those
changes are.
Claudia Gizejewski: The main important change
coming into effect from 1 October 2008 is that a director will now
have a statutory duty to avoid any situation where he has a
conflict of interest and for a public company the directors can
only authorise the conflict if they're permitted to do so by their
articles of association. So public companies will have to amend
their articles before 1 October 2008 to include a provision to
enable directors to authorise conflicts.
Changing the articles of association needs an extraordinary
general meeting, a costly and time consuming business for a large
firm. But Gizejewski has a tip: we're heading into annual general
meeting season, and she advises making the changes now to avoid a
September panic.
Claudia Gizejewski: For a large company,
certainly for a public company, it's sort of a major exercise to
call a meeting, send out notices of a meeting, print them all up
and send them to shareholders. So what we're recommending is that
if companies are holding AGMs now or any time up to October 2008,
they adopt new articles with effect from 1 October 2008 that
contain these new conflict of interest provisions.
So large, public companies about to hold their AGMs could still
save themselves considerable time and money later in the year with
a little addition to the agenda now.
That's all we have time for this week, thanks for listening.
Why not get in touch with OUT-LAW radio? Do you know of a
technology law story? We'd love to hear from you on radio@OUT-LAW.com.
Make sure you tune in next week; but for now, goodbye.
OUT-LAW radio was produced and presented by Matthew Magee for
international law firm Pinsent Masons.
