Tech firms challenge software patent barrier in High Court

Four small technology companies will challenge recent guidance from the UK Intellectual Property Office (UK-IPO) in the High Court next week. It

states that few claims to computer programs for carrying out patentable methods are eligible for patenting.

The challenge is to decisions based on policy formed after the long-running cases of Aerotel and Macrossan which changed the way the UK-IPO and courts were told to implement patent law.

The four companies have invented technology that is partly software-related. They say that an ability to control the distribution of that software is critical to their success as companies. They claim that copyright protection for the software code itself is not enough.

Before November 2006 patent applications relating to computer programs for carrying out patentable methods, sometimes called "program on a carrier" claims, were allowed. But after the landmark Aerotel and Macrossan cases, the UK-IPO changed its policy.

"[The UK-IPO] indicated that they appear to be excluded from patentability as a consequence of the test set out in Aerotel," said a July judgment from the UK-IPO. "As a result, since 2 November 2006 it has been the usual practice of examiners to disallow such claims."

The guidance from the UK-IPO states:

"…can claims to a computer program (or a program on a carrier) be allowable when other claims in a different form, claims covering the use of that particular program, would be allowed? In the past, the Office has allowed such claims on the basis that substance should prevail over form. Whilst the [Aerotel] judgment maintains the emphasis on substance over form, it also characterises the first step as deciding what the monopoly is, and if the monopoly does not go beyond the program, the contribution is also unlikely to go beyond 'a program for a computer'. Accordingly, whilst examiners will continue to assess each case on its merits, it seems likely that few claims to programs in themselves (or programs on a carrier) will pass the third test [i.e. whether the claim falls solely within the excluded subject matter."

In the UK-IPO hearing, the companies argued that the new policy means that they cannot use patent law to stop someone from producing and selling programs in the UK for use abroad, because that would not qualify under the 'contributory infringement' provision of the Patents Act.

The UK-IPO's hearing officer acknowledged that software, stored on discs or delivered as downloads, was the companies' primary commercial product and it was therefore of great importance to them to have claims to the software per se.

"I appreciate the point that is being made here," he wrote, "but it is the case, as I have said, that I am unable to take it into account in this decision."

The four firms say that decision exposes them to risk.

"The UK-IPO’s decision to exclude protection for disks and downloads means that British industry can no longer rely on British patents to give them the protection they need to successfully market and compete in the field of computer-implemented inventions," said a statement on behalf of the four firms. "The UK-IPO’s surprise new practice, announced in November 2006, is at odds with settled patent law and practice throughout Europe."

The four companies are skin imaging company Astron Clinica; semiconductor designer Cyan Holdings; print software company Software Imaging; and mobile browser designer SurfKitchen.

In their original UK-IPO case hearing, the companies argued that it was deemed essential by the courts that UK patent law not deviate from the practice of the European Patent Office. The hearing officer accepted that, but said that a higher court had already departed from that practice, and the UK-IPO must follow.

"I observe that in the area of inventions excluded from patentability, the question of EPO practice was exhaustively considered by the Court of Appeal in Aerotel," said the UK-IPO ruling. "They found recent developments in Board of Appeal decisions inconsistent with one another, and as a result felt it necessary to take an independent view pending any clarification of the matter by the Enlarged Board of Appeal. I am consequently obliged to follow the reasoning and guidance in the Aerotel judgment."

The companies argue that the difference between UK practice and that in Europe is putting them and all UK businesses at a damaging disadvantage.

"That is probably fair," said Kim Walker, head of intellectual property at Pinsent Masons, the law firm behind OUT-LAW.COM. "The solution would really be for somebody like the European Commission to say that protection for software which is constantly evolving and developing and is only really valuable for a couple of years, doesn't need 20 years of protection."

"It would be good if someone had the guts to develop a new form of protection for software which would give short, sharp and narrow protection," he said. "I don't know if it would be feasible, the international complications would be enormous, but if you are going to protect software otherwise than through copyright, it ought to be something with a lighter touch."

The UK-IPO ruled against the companies, saying that it must follow the lead of the UK courts. "Although there is no direct guidance in Aerotel as to how program claims should be treated, the requirement to consider the scope of the monopoly in step one of the test, coupled with the direct comparison between the contribution and the excluded fields, suggests that such claims should be excluded," it said.