European software patentability: Cheating your way to the finish line

European software patentability: Cheating your way to the finish line

We’re taking you on a journey through the history of software patents in Europe, through the lens of pop culture. By zooming out and looking at the big picture of what the EPO has taught us over the years, we’ll be building up a clear vision on what you need to do to improve the success of your software patents at the EPO. At each step along the way through history, we’re stopping to see a case where the EPO redefined the law in a way that is still applied today.
In Part I to Part IV of our journey, we’ve seen the EPO set out the foundational principles of how software patents are dealt with in Europe. Next, we’re starting to push the boundaries.

Instalment V: Cheating your way to the finish line

2004 was a pivotal year for seemingly phenomenal, but ultimately shamed, cyclist Lance Armstrong. It was the year he “won” his 6th consecutive Tour de France, an achievement like no-other seen before. However, the publication of the book “L.A. Confidentiel: Les secrets de Lance Armstrong” by Pierre Ballester and David Walsh, which first exposed evidence of cheating by Armstrong, was also published the same year. This book marked the beginning of the end for Armstrong, but it was not until 2012, 8 years later, that pressure mounted and Armstrong was finally stripped of his medals. Rules are rules and Armstrong was a cheat.
In a very similar manner, in the very same year, the EPO set-out the Hitachi online auctioning case. That case taught us there and then that changing the rules also doesn’t work for software patents.
The invention related to a so-called “Dutch” auction process. As we know, in a “standard” auction, bidders place consecutively higher bids until there is only one bidder remaining with a highest bid. Bidding is then closed and the highest bidder wins.
In very simple terms, a “Dutch” auction is one where each bidder puts in their maximum bid, then the seller determines if there is a bidder with a maximum bid that meets their expectations. If there is then the highest bidder wins. If there isn’t, the seller can drop their expectation until a highest bidder is identified. In the claim of the patent the process was quite complicated, but at the highest level, this was the invention being claimed.
On the face of it, the claimed invention looked to be excluded as “a method of doing business”. However, as we know according to Vicom, excluded inventions can be patentable if they are “technical”. The patentee had therefore tried to identify that the claimed invention improved the speed of operation by reducing transmission delays within the distributed auction process being run, when compared to the prior art. However, the EPO came down hard to clearly define their position on these improvements over the prior art:
"Changing the auction rules to obviate the need for timestamp information amounts to circumventing the technical problem of transmission delays rather than solving it with technical means".
So, what we learnt from this is that even if a technical advantage is achieved, if it is achieved as a secondary effect of changing a business process then it is not patentable. In a way, what mattered here was the underlying purpose of the inventor. The inventor just wanted a different business process and there were arguably technical advantages that resulted from it. In the words of the EPO, there was not a technical solution to a technical problem. The problem encountered was a business one and the solution was also a business process solution. The fact that there were some technical advantages resulting from it didn’t matter – patents are there to protect technical innovations and this wasn’t one.
Ultimately, the EPO likes to stick firmly to the founding principles of the patent system dating back to the Greeks and Venetians, which is still found in the EPC today in the words “European patents shall be granted for any invention, in all fields of technology. The EPO firmly believes that this auction method is not a technological innovation, but instead a business one.
When dealing with technology that could be considered a business method, a mental act, or something else arguably non-technical it is therefore important at the drafting stage to frame the invention in terms of the technical problem it overcomes, rather than simply referring to some associated technical advantages. Framing the problem as a business one is likely to put the EPO’s nose out of joint straight away. But remember Lance, if you are trying to cheat the system by hiding the true nature of what has been created or the problem at hand, the EPO will likely get to the bottom of it in the end. And knowing the EPO, it might even take 8 years for them to conclude that too.
If you’re interested, you can read the decision here: Auction method/Hitachi T0258/03.

If you have questions about patenting software or related inventions in Europe, please contact Nick Shipp or your usual Kilburn & Strode advisor.

Preview of Instalment VI: Cutting through the noise

Our story now takes us to 2006, the year Silicon Valley darlings Facebook, Twitter and YouTube were born (do you remember life before them?), but we’re not here to talk about them. Instead, we want to take you back to think PINK in 2006. Continue reading►

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