From the monthly archives:

March 2011

Computer Software Patents in the US

by admin on 2 March 2011

“To patent or not to patent” was the question that the US Supreme Court faced back last year when reviewing the so-called Bilski case. The Court has started to hear a number of patent cases in the past few years. Some, such as the Bilski case, are probably taken to see if the Court can find some sense in the diametrical positions held by advocates and opponents of software and business method patents.

Back in November when the Bilski decision was issued – and which has been extensively commented here and here – the Supreme Court clearly said as long as the patent fulfils one of the categories set out in Section 101 of the 1952 Patent Act (i.e. process, machine, manufacture or composition of matter), then the patent  was fundamentally acceptable. It was only if the patent application related to a “law of nature”, a physical phenomenon, or an “abstract idea” would a patent be refused.

The Court in Bilski refused to define a “bright line” test for an unpatentable abstract idea. Instead the Supreme Court said that the lower courts should develop “other limiting criteria”.

So it was with some interest that lower court – in this case the Court of Appeals for the Federal Circuit – took on a case relating to patents on the processing of digital images (more accurately digital image halftoning). In RCT v Microsoft, the lower Arizonan Court had held that some of the claims in the patents were invalid as being too abstract. The CAFC said that was incorrect. The CAFC refused to define abstract but said that  “this disqualifying characteristic should exhibit itslf so manifestly as to override the broad statutory categories of eleigble subject matter. In other words the patent had to be so obviously “abstract” that it should never be granted. A somewhat rudimentary, but probably practical, test.

What was more interesting was the CAFC’s observation that the claimed methods in these patents (held by RCT) incorporated algorithms and forumulas. These algorithms and formulas, even though admittedly a signficiant part of the claimed combination, did not bring this invention even close to abstractness. Since, as the CAFC noted, the Supreme Court had already made it abundantly clear that inventions incorporating and relying upon even a well known mathematical equation do not lose eligibility because serveral steps of the rpcoess use that mathermatical equation.

This is clearly good news for many innovators seeking patent protection. Once again the US has emphasised: you cannot get patent protection for an abstract idea. But once you use the abstract idea (algorithm) for a practical purpose, then patent protection opens up.




The ultimate weapon for a patent strategy is the injunction. Patents are negative rights which means that at the end of the day a patent holder can stop another company from selling, using, offering for sale or important an infringing product. As IP strategists, we’re usually trying to work hard on assisting companies to obtain a commercial advantage through establishing a strong patent and other intellectual property portfolio and using this portfolio in negotiations with partners, suppliers and competitors to strengthen a company’s competitive advatange. It’s rare that we’ll look at actually blocking a competitor from selling a product – mostly deals are done and a market for a particular product is actually strengthened by having several competitors respecting each other’s intellectual property. From time to time, however, there are times when it may be necessary to seek an injuntion to stop another company from trespassing into protected territory – and that is where the injunction comes into play. Unfortunately, the time taken to get an injunction can be extraordinarily long. Two or three years is not uncommon in many countries – and even in the quicker countries such as the UK or Germany an injunction is rarely granted within a year (and can then be appealed). Emergency injunctions may be possible – but these can be difficult to get except under special circumstances.

So it’s intriguing to read today’s story on the BBC website about LG stopping the import of Sony Playstation 3 consoles into the whole of the European Union (at least for the next ten days). A fascinating example of two large electronics companies exploiting the EU Border Seizure Directive to stop the import of an infringing product. The Directive is usually used to stop counterfeit clothing or software. It’s rare that patents are involved.

Even more fascinating – and useful when considering the single market of the European Union, is that the court in the Netherlands has decided to effectively stop all imports into the European Union, since Rottendam and Amsterdam are the main ports of entry. Of course, it is possible that Sony may try and find a new point of entry into the EU – but they risk other seizure orders in other countries.

The UK Guardian reports that up to 100,000 consoles a week are imported into Europe. At a retail price of between EUR 200 and 500 that’s going to be an impressive amount of lost sales and will not doubt be concentrating minds wonderfully on a dispute that has been going on for some time and is related to patents on the BluRay standard.

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