When looking at software patents in Europe one of the fundamental questions is whether a method claim reciting some software functionality is patent-eligible subject-matter. The good news is that – assuming the claims have been properly drafted – software easily overcomes the patent-eligibility hurdle.
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However, this is not a carte blanche for obtaining a software patent for any software, as this decision illustrates:
Decision T 0258/03 (Auction method/HITACHI) of April 21, 2004 is one of the landmark decisions underlying the current legal framework for assessing the patentability of software-related inventions. The essence of the decision is that subject-matter which uses technical means (e.g., a computer) is generally patent-eligible, i.e., it is an “invention” within the meaning of the European Patent Convention (EPC).
However, as the present decision also illustrates, this does not mean that any patent claim directed to a business method with the additional instruction to “do it on a computer” will be granted a software patent. On the contrary, such claims will be rejected for lacking an inventive step, since features making no technical contribution cannot support the presence of inventive step.
A method involving technical means is an invention within the meaning of Article 52(1) EPC (as distinguished from decision T 931/95-Controlling pension benefits system/PBS PARTNERSHIP) (see points 4.1 to 4.4 of the reasons).
From the reasons
2. The invention according to claim 1 is an “automatic auction method executed in a server computer”. In claim 3 a “computerised auction apparatus” comprising a server computer is defined, and in claim 4 a computer program for carrying out an auction. The features of the claims are closely related and in substance based on the same method steps.
The method can be described as follows. The auction starts with preliminary steps of data exchange between the client computers and the server computer in order to collect bids from the participants. Each bid comprises two prices, a “desired price” and a “maximum price in competitive state”. After this initial phase the auction is automatic and does not require that the bidders follow the auction on-line. An auction price is set and successively lowered (which is typical for so-called Dutch auctions) until it reaches the level of the highest bid or bids as determined by the “desired price”. In case of several identical bids the price is increased until only the bidder having offered the highest “maximum price” is left. He is declared successful. Claim 1 does not specify the exact price paid, nor the rules and conditions for determining the amounts of the product to be allotted.
With respect to apparatus claims, the Board held the following:
3.1 According to Article 52(1) EPC, European patents shall be granted for any inventions which are susceptible of industrial application, which are new and which involve an inventive step. The second paragraph of Article 52 contains a list of subject-matter which is not to be regarded as inventions within the meaning of paragraph 1. There are thus four requirements which claimed subject-matter must fulfil: it should be an “invention”, and this invention must be new, inventive, and industrially applicable. In accordance with the established case law of the boards of appeal, the term “invention” is to be construed as “subject-matter having technical character”. The verification that claimed subject- matter is an invention within the meaning of Article 52(1) EPC is in principle a prerequisite for the examination with respect to novelty, inventive step and industrial application since these latter requirements are defined only for inventions (cf Articles 54(1), 56, and 57 EPC). The structure of the EPC therefore suggests that it should be possible to determine whether subject-matter is excluded under Article 52(2) EPC without any knowledge of the state of the art (including common general knowledge).
3.4 Furthermore, in accordance with Article 52(3) EPC, the subject-matter mentioned in paragraph 2 of the same article is only excluded from patentability as such. It has long been recognised that, due to this stipulation, a mix of technical and non-technical features may be patentable: […]
3.5 Therefore, taking into account both that a mix of technical and non-technical features may be regarded as an invention within the meaning of Article 52(1) EPC and that prior art should not be considered when deciding whether claimed subject-matter is such an invention, a compelling reason for not refusing under Article 52(2) EPC subject-matter consisting of technical and non-technical features is simply that the technical features may in themselves turn out to fulfil all requirements of Article 52(1) EPC.
3.7 For these reasons the Board holds that, contrary to the examining division’s assessment, the apparatus of claim 3 is an invention within the meaning of Article 52(1) EPC since it comprises clearly technical features such as a “server computer”, “client computers” and a “network”.
3.8 This conclusion is in conformity with decision T 931/95, where it is stated in headnote III that:
“An apparatus constituting a physical entity or concrete product, suitable for performing or supporting an economic activity is an invention within the meaning of Article 52(1) EPC.”
With respect to method claims, the Board held the following:
4.1 The reasoning above (point 3.5) is independent of the category of the claim. Thus, in the present case, also the method of claim 1 is not excluded from patentability under Article 52(2) EPC.
4.7 It is therefore concluded that, in general, a method involving technical means is an invention within the meaning of Article 52(1) EPC.
Read the whole decision here.
The bottom line
Under the European Patent Convention (EPC), anything having technical character is an invention (patent-eligible subject-matter). Since software always executes on a computer, it always involves technical means and therefore automatically overcomes the patent-eligibility hurdle. However, this does not mean that the EPO grants software patents on any type of software, since the further hurdle of inventive step can only be based on the technical contribution provided by the software.