2004-09-29 Stefan Wagner: Business Method Patents in Europe and their Strategic Use -- Evidence from Franking Device Manufacturers
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A study conducted at the Department of Business Administration of Munich University on the "legal framework set by patent laws with respect to the patentability of business methods, contrasting the situation in Europe and the situation in the US." Finds the standards for granting business method patents to be very similar. Identifies 1901 European business method patents, finds that they spur litigation (opposition rate 44%) and are being used strategically, at least regarding postage devices.
Sources
the author -- de uni-muenchen bwl user swagner
Confusing Law and Caselaw
The abstract of the study says that business methods have always been patentable in Europe and that other impressions are due to the lack of precision in the current law.
This is not true, as we can easily see from the earlier interpretations of this law in the Examination Guidelines and in the caselaw of the Board of Appeals and national courts.
See
However, the author explicitely bases his view of the law on Keith Beresford's "Patenting Software under the European Patent Convention", which, by equating law with caselaw and treating the latter as authoritative for the understanding of the former, is deliberately uncritical of the patent judiciary.
Wagner writes:
- Since business methods are excluded from patentability only "as such", a clear definition of what is meant by a business method "as such" is needed for this purpose. Complicating the situation, there is no legal definition of what the "as such"-formulation actually means, leaving it open to interpretation. Hellfeld (1989) gives a comprehensive overview of different interpretations of the "as such"-restriction formed in numerous court decisions and the judicial literature. Because of the unclear meaning of the EPC's "as such"-formulation, the Board of Appeal finally ruled that this criterion can not be decisive for the distinction between patentable and not-patentable business methods. This view has been developed in a row of decisions concerning applications seeking patent protection for business methods and computer programs throughout the 90's.
Indeed the EPO began to render Art 52 EPC meaningless by a series of decisions in the 1990s. This however does not mean that these decisions are based on adequate interpretations of the law. When there is a consensus in the patent world, written laws tend to mean very little, and the wording "as such" then may just serve as a pretext for a group of judges to circumvent the law.
See * http://swpat.ffii.org/analysis/epc52/ on how this happened at the EPO in the 1990s and how the law was correctly interpreted, also with regard to business methods, before that.
Wagner goes on to summarise EPO caselaw and the current political situation:
- The criterion developed by the Board of Appeal in several cases for the distinction between patentable and non-patentable business methods is the technical character of the underlying invention/ method.8 However, determining what lends an application of a business method patent the necessary technical character and takes it beyond the exclusion from patentability is extremely difficult. Again, there is no formal definition of this criterion. The relevant decisions of the Board of Appeal on the technical character of business method related patent applications during the 90's (listed in Hart et al. (2000) or also Tang et al. (2001)) can be summarized as follows: An invention has a technical character if there are technical considerations involved. These technical considerations may lie either in the underlying problem solved by the claimed invention, the means of solving the underlying problem, or in the technical effects achieved in the solution of the problem. Anders (2001) give a thorough treatment of what exactly determines the technical character of business related inventions from a legal perspective considering recent developments at the European level. His arguments can be summarized by stating that almost any computer-implemented invention is sufficiently technical making the criteria of novelty and inventive step decisive for a patent grant in Europe (Anders, 2001, p. 558). Given this de facto patentability of business methods under certain (not well defined) circumstances, the European Patent Office currently advocates a change of the EPC that facilitates the patenting of computer programs and business methods to clarify the current complex situation (European Patent Office, 2000). However, at the diplomatic conference hosted by the EPO in November 2000 in Munich, European legislators declined to adopt these proposals. Nevertheless, Kober (2001) the President of the EPO at that time stated that the EPO will nevertheless continue to grant patents on business methods based on the current jurisdiction. Meanwhile, the discussion reached policy makers at the European Community level who are currently discussing a new EU directive on the patentability of computer-related inventions with direct impact on the regulatory framework of the EPC: After a first vote by the European Parliament to maintain and reinforce the exclusion of software and business methods from patentability in September 2003, the Council of the Ministers of the European Community published a working paper opposing the Parliament's position. The working paper proposes to cancel almost all patentability limits for computer-implemented inventions agreed on by the parliament earlier (Council of the European Community, 2004). While it is currently unclear which of the two opposing positions will prevail at the EU level, it is obvious that under the applicable law patents on business methods are granted by the EPO as long as the underlying invention satisfies the criterion of being sufficiently technical as well as the other criteria of patentability.
This description is largely correct, except for its refusal to allow for the possibility that the current caselaw has crossed the borderline of what is a permissible interpretation of the written law.
... To be Cont'd.
