"Hot topics" conference

IP is always a hot topic - so it must be the white hot stuff that's on the programme of Lexis Nexis's conference on 22 October, in London (venue "to be advised": shall I check if the Jarvis Suite is available? Perhaps a bit late). Looking at the Agenda for the day, there's certainly some very hot stuff there, even if "Recent developments in ..." as the title for a session (or three) is a bit of a cop-out. But who knows what might be hot in a month's time?

Regular readers of this blog will recall that I am not impressed by the hyper-inflation that has affected the intellectual property world of late: indeed, it will not have escaped the attention of diligent readers that I am not enamoured of the expression "intellectual property", which tends to obscure the variety of different legal rights that make up this rich and fascinating area of law. I have the good fortune to have entered the profession at a time when one could still be an intellectual property generalist, and for a generalist this review of the hot topics will be invaluable. There are plenty of us generalists still around, and if the IP departments of larger firms have salami-sliced the subject into narrow specialisations there are still plenty of in-house lawyers and small and solo practitioners who will be attracted by an authoritative update on what's hot in the IP world.

Authoritative they certainly are ... For example, Martin Howe QC will be answering the question, "are image rights now protectable in English law?" (at least, that's the title of his session - whether he ventures an answer or not remains to be seen). As leading counsel for Rhianna, he is well placed to judge whether the law of passing off is doing a good job in this area or whether, following the example of Guernsey, we should clutter up the landscape with a new mini-IP right. Later in the day Guy Burkill QC - 'unbelievably clever, extremely funny and technically superb' (per his chambers' website, a description which must make him the favourite of every IP conference organiser wondering what to do with the graveyard slot after lunch) - will talk about the phone wars, in which he has served with some distinction, and that frequently-encountered oxymoron, software patents (actually the programme says "patentability of computer programs", but I claim poetic licence). "IP litigation in the wake of the Jackson reforms" will also be a very interesting topic (I single it out as not being "recent developments in ..." session), presented by Duncan Ribbons, a partner in Redd Solicitors LLP, the only IP boutique I know of to have appeared in the law reports as a claimant

Nowadays, prospective delegates often look first to see how many CPD hours they can score: and at this time of year, this is the first consideration for most solicitors. The answer is six - not bad at all. The price is not at all unreasonable, either, but to make it irresistible the organisers are generously offering members of the IPso Jure LinkedIn group a 20 per cent discount - to book email alicia.sprott@lexisnexis.co.uk and quote code IPL20. Will I see you there? Sadly no, but only because I have to be elsewhere that week - teaching some less hot IP topics to my students in Moscow.

High Court remits software patent matter to Comptroller

Re Halliburton Energy Services Inc [2011] EWHC 2508 (Pat) is an appeal from the Comptroller. HHJ Birss, sitting as a High Court judge, allowed the appeal and remitted the case back for the Patent Office to try again. The Deputy Director, Mr Thorpe, acting for the Comptroller had rejected four applications, on the grounds that they were within the "mental acts" exclusion or were computer programs. The claims were to methods of simulating drill bit performance, without going on to deal with manufacturing the things once they had been simulated.

The law in this area was laid down by the Court of Appeal in Aerotel v Telco / Macrossan's Application [2006] EWCA Civ 1371 (in which Jacob LJ gave the judgment of the court) and Symbian v Comptroller [2008] EWCA Civ 1066 (in which he didn't, though the judgment of the Court which Lord Neuberger gave presumably contained a lot of Jacob). But there remains a great deal of dispute about the rules, with differences between UK Office practice and the EPO, complicated by the change of law in EPC 2000 (implemented in the Patents Act 2004, which came into operation after Aerotel: and there are other cases, including Kapur [2008] EWHC 649 (Pat) before Floyd J, which touch on the subject (and Kapur, which is more relevant than Symbian to the facts of the present case, was not brought to Mr Thorpe's attention.

In the present case, regarding the mental act exclusion, the judge decided that:

... the correct scope of the mental act exclusion is a narrow one. Its purpose is to make sure that patent claims cannot be performed by purely mental means and that is all. The exclusion will not apply if there are appropriate non-mental limitations in the claim.

He also decided that, applying the Aerotel  judgment, the invention was not excluded as a computer program. So the case was decided without having to go into some of the more exotic questions before it: but the judge had a quick go at them anyway. He did not agree that the 2004 Act permitted him to depart from the Court of Appeal judgments. He thought that, correctly applied, the different approaches in the UK and the EPO should not lead to different results (so the outcome would be right, just the route to it would differ, a matter mentioned by Pumphrey J in Cappellini and Bloomberg [2007] EWHC 476 (Pat). And he rejected the "familiar and illegitimate" argument (which he merely "detected" in counsel's submissions) that the EPO approach to patentability should be taken but in combination with the UK's approach to inventive step, which he said would lead to very different results in the two offices.

An interesting case, from which the judge concludes that

... as a matter of law computer implemented inventions are just as patentable in the UK as in the EPO.

Really? That sounds as if it might spoil the fun! 

Stallman on unitary patent

As I just observed on my Dictionary of IP Law blawg, Richard Stallman talks a lot of sense, though perhaps the message gets confused because a lot of rather hysterical people follow him. But each day I am less convinced of the benign effect of any part of what we know as the intellectual property system, and I certainly don't believe that software patents should be encouraged, so I lean some way towards his position. And the reason I was posting to the other blawg this morning was because of an absolutely spot-on comment about the utility of the portmanteau expression "intellectual property" appended to a recent piece in the Guardian about the dangers of patent inflation if and when we get CRAP, or the Unitary Patent as it is officially known. I think the unitary patent litigation system also plays an important role in this.

He makes the very good point that granting software patents will be the preserve of the EPO (with national offices also banging out national patents, which will probably become pretty unimportant especially for the sort of undertaking that goes in for gigantic software patent portfolios with which to beat up competitors, whether as first strike or retaliation). National courts will lose the ability to strike them down, but will the unified litigation system be rigorous enough to keep them in check?

A software patent that produces a genuine novel technical effect that itself is a patentable invention doesn't seem to me to be objectionable. What we are talking about here is a machine doing something new, and software controlling it. A patent for such an invention isn't actually a software patent at all, because the software itself is not the subject of the protection. Not an easy line to draw, as we know, but at least we have an idea of the territory in which the border lies.

Mr Stallman makes the interesting point - which, forgive my ignorance, I have not seen expressed so clearly anywhere else - that the EPO searches for such a technical effect in the invention itself, not in the inventive step that makes the invention patentable. The software operating a computer does not have to result in a new machine, just an existing machine doing something new, and there is a world of interesting difference between the two. But I'm not here to explore that, just to draw your attention to an interesting piece on the subject - which I will go away and think about.

No escape from software patents

An impassioned plea for software to be made patentable, included in this report from ZDnet of a conference organised by the Westminster Legal Forum (never heard of it before). It's John Mitchell, the chairman of the SME Innovation Alliance, who's been heard on this subject before and whose position I find it hard to understand. Patents, a fortiori software patents, are playthings for big business: they enable them (should they wish to do so - and I don't mean to imply that they always do) to bully small businesses. Worse still, they lead to the worst excesses of trollery and it's small businesses that suffer from that rather than the large ones - though they are certainly not immune.

Mr Mitchell compares software to materials, like wood and paper, from which inventions may be made. That in itself does not justify allowing patents for it: no more than it justifies patents for wood or paper. What patents can rightly be granted for are the inventions that are made using the software. And that's exactly what the UK and European patent systems strive to do, without crossing the line and granting patents for pure software (which as one comment on the ZDnet story points out is nothing but mathematics). The trouble is that it's a difficult boundary to map, and the UK Patent Office and the EPO have drawn it in slightly different places. A problem, but not the problem that people seem to be arguing about. Both systems seem to me to look for a technical effect that lies outside the fields excluded from patentability by the relevant legislation, although they express this search in different ways. And, excluding a few die-hard anti-patent lobbyists (but a growing number: software and business methods patents bring the whole patent system into disrepute), that seems to be the attitude of most people, outside the USA at least. Including Marty Goetz, another commenter on the ZDnet story, and probably Mr Mitchell too. And certainly Prof Hargreaves, whose recommendations on this point seem spot on.

Lodsys: Has a non-practising entity finally bitten off too much to chew?

Earlier this month Lodsys, LLC approached a number of developers of applications for Apple products, inviting them to fork out for licences to use four US business methods patents (details here, on Lodsys’s own website). Apple has taken up the cudgels on apps developers’ behalf, responding to Lodsys with a stern letter. If Lodsys thought they could get away with going after small companies and (perhaps) individuals, they should have received a clear message that they were mistaken. If as they assert they are merely going after those who benefit most directly from using the patented “technology”, drawing a very strained analogy with the fact that it’s the owner of an hotel who is responsible for the service provided to guests, not the owner of the land on which the hotel is built, nor the supplier of the nails that hold the hotel together. I may have become a bit confused – read it for yourself here.

Apple’s contention is that the developers are all operating within the terms of a licence taken by Apple. Much, no doubt, will turn on the terms of the licence – and it won’t be entirely clear-cut, because knowing who’s doing what with patents like this is never easy. The argument put forward by Apple (which you can read in their letter to Lodsys, which is reproduced on The Guardian’s technology blog here and no doubt can be found in many other locations on the Internet) can be summarised, I think, as any act that needs to be licensed is being done by Apple, not the developers.

Chatting last week to an apps developer, at fellow-Stackridge fan Mike Southon's excellent if noisy Beermat Monday networking event, I came to appreciate the concern this is causing in the industry. Is it something app developers here need to worry about? Yes and no – mostly yes. The market for apps is clearly global, so while there are no UK patents (or European Patents GB or elsewhere) to worry about infringing, a developer from Silicon Roundabout could still find itself getting sued in where else but the Eastern District of Texas.

I don’t know what it proves about The Guardian – perhaps that it’s too liberal for its own good, perhaps that it’s fallible – but a few postings up from the one about Lodsys is a plea for US-style patent protection for software and business methods. I read it with mounting incredulity, as did many others whose comments are appended to it – does anyone believe this? Evidently at least one patent attorney does, confirming people’s worst preconceptions about lawyers. Well, to my mind granting a patent if the software gives rise to a novel technical effect is the right approach – although it’s only a start, and that broad statement of principle still risks allowing what are nothing more than straight software or business methods patents.

Bilski

I'm going to have to record a new Lawcast shortly - and it will have to include something about Bilski. Fortunately not much, because it's not our Supreme Court - it's SCOTUS, not SCOTUK. And I don't have to post much here, given that Dennis Crouch has already said a lot about it and the IPKat has also had his or her say. I'm pleased to note that it seems to indicate that we reached the high-water mark of business methods patents in State Street, while not actually binning that earlier case. It seems to tell us more about what it doesn't do than what it does do.

The patent covered a technique for hedging for commodities traders in the energy market - a classic business method patent. The examiner rejected it because it was not implemented on specific apparatus (as processes generally need to be), it merely manipulated an abstract idea,, and it solved a purely mathematical problem. The Board of Patent Appeals and Interferences agreed and affirmed. The Court of Appeals for the Federal Circuit also affirmed, rejecting its own test for whether a claimed invention was a patentable process (whether it produced a "useful, concrete, and tangible result", as in State Street). Instead, it applied the "machine-or-transformation" test - a process can be patented if it is tield to a particular machine or apparatus, or it transforms the particular article into a differnt state or thing. On that basis the CAFC held the application was not patent-eligibible. In doing so it threw down a gauntlet to the Supreme Court: the machine-or-transformation test was crafted from precedents from that court.

The Supremes declined the challenge, and threw the gauntlet back. They affirmed the CAFC judgment but did not endorse an exclusive machine-or-transformation test. There was no need to look further than the bar on patenting abstract ideas. The fact that the Bilski patent involved abstract ideas was reason enough to refuse it, and automatically this meant that the machine-or-transformation test could not be the exclusive one for patentability of processes. Nor was there any need to define further what constitutes a patentable process. Justice Kennedy gave the opinion of the court, and concluded:

Today, the Court once again declines to impose limitations on the Patent Act that are inconsistent with the Act’s text. The patent application here can be rejected under our precedents on the unpatentability of abstract ideas. The Court, therefore, need not define further what constitutes a patentable “process,” beyond pointing to the definition of that term provided in §100(b) and looking to the guideposts in Benson, Flook, and Diehr. And nothing in today’s opinion should be read as endorsing interpretations of §101 that the Court of Appeals for the Federal Circuit has used in the past. See, e.g., State Street, 149 F. 3d, at 1373; AT&T Corp., 172 F. 3d, at 1357. It may be that the Court of Appeals thought it needed to make the machine-or-transformation test exclusive precisely because its case law had not adequately identified less extreme means of restricting business method patents, including (but not limited to) application of our opinions in Benson, Flook, and Diehr. In disapproving an exclusive machine-or-transformation test, we by no means foreclose the Federal Circuit’s development of other limiting criteria that further the purposes of the Patent Act and are not inconsistent with its text. The judgment of the Court of Appeals is affirmed.

I sense that it's a bit of a disappointment - commentators were looking forward to much more robust statement about exotic patents, such as software and business methods ones. Instead, it sounds as if the court has said look at what the Patent Act says and work it out from there. The "machine-or-transformation" test is a tool to help, but not a rule to be applied in all cases. Nevertheless, Dennis Crouch detects something more in the judgment:

Although not rejected by the majority opinion, it is clear that the broad “useful, concrete, and tangible result” test is dead. That test is conclusively rejected by what I term the Anti-State-Street Majority — a majority created by the combining the two concurring opinions in Bilski and their five-justice majority.

Well, it would be a shame if software and business methods patents suddenly became cut and dried so there was nothing left to argue about!