Addressing Misconceptions: Can You Patent Software?

A patent protects a new idea where that new idea is not considered to be an obvious modification to an existing idea. However, some subject-matter is excluded from patentability. The explicit exclusion of certain subject-matter in the law has led to misconceptions about what can and what can’t be patented and nowhere is this more true than in the case of software-related inventions.

The UK Patents Act (section 1(2)) and the European Patent Convention (article 52(2)) exclude:

• discoveries, scientific theories, or mathematical methods;

• literary, dramatic, musical, or artistic works or any other aesthetic creations;

• presentations of information;

• schemes, rules and methods for performing mental acts, playing games, or doing business, or programs for computers.

Naturally this has led people to believe that software cannot be protected by a patent in the UK or Europe, however this is not a full picture of the law. Inventions involving this subject-matter are identified as excluded from patentability only to the extent that they relate to such subject-matter or activities “as such".

The phrase “as such” restricts the excluded subject-matter to abstract ideas that lack technical character. When considering whether the invention has technical character, the invention is assessed as a whole. As soon as there is at least one technical feature, the whole invention has technical character. Therefore just because an invention involves excluded-subject matter does not mean it is unpatentable.

The question of patentability then becomes whether or not the technical feature is new and not an obvious modification of what is already known, in other words: does the technical effect of the invention represent a technological advance?

Many applications for patents to computer programs are rejected because they do not satisfy the requirements of having a new and inventive technical effect. Merely running a piece of software on a computer that produces no technical effect other than to make the hardware perform existing technical functions in a known way will not be patentable because the technical effect present is not new. Where an invention is to a computer program that, when run, produces a further technical effect that goes beyond what is already known or the standard operations of a computer, this is patentable in practice. For example, software that merely enables word processing is not patentable but software that enables word processing that crashes less often might be because it produces a technical effect that enables the computer to work better as a matter of practical reality.

Symbian: A granted software patent

Although it may be clear that a technical effect is produced when a computer program has an external effect such as operating a mechanical arm based upon sensor inputs, it can be less clear when the effect is inside a computer. The following case study is an excellent example of a computer program producing a patentable technical effect occurring within a computer.

Symbian was a company that made operating systems for mobile phones and other handheld devices.

The Symbian patent in question relates to a method of accessing data in dynamic link libraries (DLLs). The method uses a normal computer with no additional hardware involved. DLLs were already widely known at the time when the Symbian application was filed and were known as a means of storing functions common to a number of different applications, so that they were only required to be stored once thus helping to save memory. In DLLs each function is given a numbered address and when adding new functions to DLLs, the first “free” number address is allocated.

Problems arise when more than one function is added to the DLLs independently of each other. For example, a product developed by a first party may provide an underlying platform. Once released, a second party may then add additional functionality to the platform (such as compatibility with an additional piece of hardware). These additional functions are added to the first “free” number address. However if, in the future, the first party updates the platform (for example an upgrade of the operating system), the updated functionality of the underlying platform will have additional functions written to number addresses that the second party updates have already been allocated to. This can cause incompatibility in the operation of these new functions.

The Symbian patent provides a solution to this problem by splitting the DLLs into separate parts. A first part is effectively “fixed” and contains functions that are directly linked to the underlying platform. Separate extension parts contain additional functions added by a second party. These additional functions are not directly linked to the underlying platform and can be accessed via a computer program that holds the addresses of the additional functions added by the second party. The effect of the computer program is to enable the location of the functions in the extension parts of the DLLs to change without altering the location in the computer program via which they can be selected or called. Therefore both the first party and the second party can independently add functions to the DLLs without the issue of incompatibility arising.

The Symbian patent avoids difficulties and potential unreliability and therefore malfunctioning of the known system of using DLLs to use less memory in a computer. Therefore the invention enables devices to work more reliably and has the knock on effect of making a computer work better as a matter of practical reality.

This is clearly a technical effect and therefore this computer program was patentable even though the technical effect was in the computer.

Why should you pursue a software patent?

Some people think they won’t be able to afford to enforce a patent and therefore don’t think they are worth having.

However, in many cases people are simply unaware of your patent rights and can easily be dissuaded from infringing your patent simply by notifying them of your patent. This is in general much simpler than resolving copyright issues.

Moreover, having a patent does not mean you have to assert it. There are other, possibly more significant, benefits than having grounds on which to sue.

1) Licensing or being bought out by larger company

Successful software start-ups tend to be bought out by a larger company, or grow to be a larger company themselves. In some cases other companies may seek to obtain a licence to use your software.

In order to exploit the commercial value of your software you need to first convince potential users/purchasers that your software is special and second convince them to use your software rather than develop their own version.

A patent is only granted after rigorous examination to determine that the invention satisfies inventiveness criteria sufficient to grant a 20 year monopoly on making, using, selling, etc. your invention. In a sense then, a patent is official recognition that there is something special about your software.

There are two major factors why someone will decide not to develop their own version of your software:

1. if you already have a large and rapidly growing user base, and

2. if you have a patent or well prepared patent application on critical parts of your software.

Having a patent for your software will therefore be hugely beneficial for exploiting the commercial value of your software.

2) Patent Box

Patent Box is a government scheme to encourage R&D in the UK. It enables companies to apply a lower rate (10% as opposed to the current 20%) of Corporation Tax to worldwide profits earned from any products that incorporate patents.

These profits include for example:

• income from the sale of products incorporating the patent;

• licence fees or royalties from the patent (income generated from exclusive- licenses will be qualifying income for both the licensor and the licensee);

• sale of the patent;

• damages from infringement of the patent; and

• “IP-derived income”, where patented products or processes are used in the manufacture or delivery of non-patented products or services (to the extent of a notional royalty which values the specific patented product or process as a proportion of the value of the non-patented product or service).

Patent Box can therefore be a very lucrative scheme for those with granted patents.

The current Patent Box scheme is closing to new entrants in June 2016. Although no official guidance has been issued by the Government, it appears that it will be replaced by another Patent Box scheme in which the major difference is that benefits will be limited to the proportion of relevant UK R&D undertaken as a proportion of global R&D.

3) A note on copyright

Copyright protection of software can only prevent someone from copying the code that you used, not the functionality of the code. Copyright does not prevent a competitor from reading your code to figure out what you did and then independently writing their own code to accomplish the same thing. In view of this, copyright is not usually sufficient protection for software.

Get a professional to draft the application

Lots of software innovations will use distributed processing or more specialised cloud processing. Because different entities are performing different functions it can make it difficult to draft a patent that will be infringed by just one entity rather than lots of distributed entities. Having a patent which covers the actions of a single entity can be much easier to licence and enforce.

Experienced patent attorneys draft many applications like these in a way that can be directly infringed and ensure that the technical effects are included and worded appropriately.

It is therefore very advisable that you use a professional patent attorney to draft the application rather than attempt to do it yourself.

If you have any questions concerning software patents, please get in touch with your usual contact at Swindell & Pearson Ltd or Robert Lambton at [email protected]. Robert is based at our Derby office and is training to become a qualified UK and European Patent Attorney