31 August 2014

‘Software Patents’ – Time to End the Uncertainty!

STOPNobody – other than the most deluded fantasists among the anti-software-patents brigade – actually believes that all computer-implemented inventions are, or should be, unpatentable.  To deny patent protection to an invention merely on the basis that it involves the use of a programmed computer leads to absurd outcomes, such as an improved control system for an industrial process being patentable when implemented using gears and pulleys, or using resistors, capacitors and transistors, but not if it is implemented by way of a microprocessor programmed to provide precisely the same functions.

This is a result of the kind of muddled thinking that treats ‘digital’ as a magical incantation rather than what it actually is – another (admittedly powerful) tool in the engineer’s toolkit.

Having said that, it is also apparent that only the most deluded pro-patent fantasist would believe that absolutely anything created on a computer is, or should be, patentable.  In Europe, and many other jurisdictions with similar provisions (including, very soon, New Zealand), patents are expressly prohibited on computer programs ‘as such’.  The recent Alice decision by the US Supreme Court clearly establishes that there are at least some forms of computer-implemented financial processes that are nothing more than ‘abstract ideas’ accompanied by directions to ‘do it on a computer’, and thus unpatentable.

So, we can conclude with some certainty that some computer-implemented inventions are patentable, and some are not.  The problem is that nobody – not the courts, not the national patent offices, not the law-makers – seems to wish to take any responsibility for deciding exactly where to draw the line.  I have no idea where the line is, despite the fact that I read and write about this subject all the time, and practice in this area on behalf of clients every day.  I do not know anyone, inside or outside the profession, in Australia or anywhere else, who knows where the line is – and I would not trust or choose to work with anyone who claims that they do!

Taking Your Chances with Patent-Eligibility

My opinion, in any given case, is probably as good any anybody’s and (I would like to think) better than most.  But if your technology lies within the ‘grey area’, the fact of the matter is that applying for a patent is much like putting your money on black at the roulette table.  Starting a new business, commercialising an innovative technology, or backing an entrepreneur is a calculated gamble at the best of times.  So to add additional uncertainty, over something as fundamental as whether or not the core intellectual property underpinning the investment can be protected, is unacceptable.

The position is no better when considering freedom-to-operate.  If somebody else has filed a potentially-blocking patent application for technology that may or may not be patentable, going ahead with commercialisation, fingers crossed that the application will be rejected, is no better than putting your money on red at the roulette table!

In the worst case, the green ‘zero’ comes up – your application gets rejected, the blocking patent is granted, and you lose despite having bet on both red and black.  As at the casino, the house always wins – the Patent Office collects its fees and carries on business as usual, no matter what becomes of the applicant.

Needless to say, this situation completely undermines the entire purpose of the patent system, which is to foster innovation.  Whether you believe that this purpose is best served, in a particular field, by granting patents (e.g. as an incentive for investment) or by refusing patents (e.g. to enable people to build on the innovation of others), uncertainty is a dampener either way.  Pending applications that may or may not mature into patents serve absolutely nobody’s interests!

I have been prompted to these thoughts by the content of several Australian examination reports I have seen in the past couple of weeks, as well as by a telephone interview with a US patent examiner in which I participated recently.

The Australian Situation

Currently, Australian examination reports show no consistency.  I have some sympathy for IP Australia, which currently finds itself in the difficult position of having to implement the law based on two equally binding, and not entirely consistent, decisions.  However, while this might justify a cautious approach to allowing patents in cases where there may be some doubt, it is absolutely no excuse for inconsistency.  I have seen claims that I would have expected to receive objections sail through, while others with greater technical merit are repeatedly rejected.

It seems that some examiners, once they have raised a subject matter objection, are like a dog with a bone, just refusing to let it go regardless of amendments made, or arguments submitted.  In some cases, the resulting further reports include passages involving ever-increasing levels of bold, italic and underline, as if yelling at the applicant will somehow make the objection more valid.  I have yet to see a report written in ALL CAPS, but it may only be a matter of time!  (Just a note to examiners – and I know many of you read this blog – this is a disrespectful practice, and no matter what you may think of Australian patent attorneys, those reports are going out to applicants around the world, often with very apologetic letters crafted by people such as myself.  Emphasis has its place, but pick just one style and use it judiciously, please.)

I note that the Australian Patent Examiners Manual has not been updated with any new guidance since the Federal Court issued its judgments last year in the Research Affiliates and RPL Central cases.  It is, therefore, hardly surprising that examiners are failing to produce consistent decisions.

The US Situation

As for the current US position, the examiner on my telephone interview was almost apologetic about the fact that she is going to issue a new ‘Alice’ rejection on a case that previously had no subject-matter issues.  It appears that the current practice is to raise the rejections, and wait to see what the applicant comes back with.  Examiners do not appear to have any guidance, at this stage, as to what (if anything) is required to address these new objections.

Conclusion – Time for the Federal Court to Take a Stand

The current situation in Australia and the US is undermining confidence in the patent system, and can only be harmful to innovative businesses working to commercialise computer-based technologies.

In the US, the Supreme Court has spoken, so the responsibility now lies squarely with the lower courts and the USPTO.  Sadly there is little sign, so far, of any clear guidance emerging.

In Australia, we are waiting for a Full Bench of the Federal Court to issue its appeal decision in the Research Affiliates case.  I only hope that the court sees the importance of not only deciding whether or not the Research Affiliates invention is patentable, but also of setting down some clear principles that can be applied to other cases.

The current uncertainty is harmful, and it has to end.


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