Software Patents: the Difference between Excluding Computer Programs as Such and Excluding Computer Programs as Such

By Peter Kerr 23/05/2013 2


By guest blogger Doug Calhoun

The Patents Bill has had a tortuous ride through Parliament – to say the least. Introduced in 2008, it was reviewed by a select committee in 2009 and reported back in March 2010. In September 2012, the bill finally got its second reading that featured a heated debate over the exclusion from patent eligibility of “a computer program as such”.

Since then the committee stage (when the “as such” wording would be voted on) has been delayed.

On 9 May the government tabled Supplementary Order Paper 237.

The main change proposed in SOP 237 was to rewrite the September 2012 exclusion in a new Clause 10A. The new clause features 4 sub-clauses that seek to explain how the exclusion is to be interpreted – but the substantive exclusion is still “a computer program as such.”

So it came as a bit of a surprise to read Clare Curran’s description of the change as David conquering Goliath – a win for the 90%+ of New Zealand innovators that she claims to represent. It is a bit difficult to fathom how the exclusion of a computer program “as such” can be condemned so strongly in September and then be a triumph the following May.

But hey, this is politics. And Clare Curran has borrowed a page from the George W. Bush manual of political spin. She didn’t have a bomber jacket, a “Mission Accomplished” banner or an aircraft carrier. So she had to settle for a declaration of victory – never mind the inconvenient details – on her party’s “Red Alert” blog.

Ms Curran’s victory announcement included this slight revision of history:

“Three years ago, the Commerce Select Committee undertook a much needed review of New Zealand’s patent laws which hadn’t been looked at since 1953. A substantial review which considered and recommended modernisation to an important plank of our intellectual property regime ranging from inventions to medicines, traditional knowledge and indigenous plants and animals to software programs.”

The Patents Act 1953 has been under review for half of its life. In 1983 a government appointed committee (the Industrial Property Advisory Committee) began the process. Since then reviews have done by the Law Commission (1989/90), the Ministry of Commerce (1990-1994), and the Ministry of Economic Development (2000-2008). The Patents Bill, in its original form was introduced by a Labour led government in 2008. What happened before Clare Curran became aware of it was seemingly beyond her event horizon.

The policy development had been conducted in a largely non-partisan way through to September 2012, when computer software became a political football and the rest of the Patents Bill and its purpose became largely ignored. The injection of partisan politics into patent policy at this stage is hardly a recipe for success for New Zealand.

According to its explanatory note, the wording of SOP 237 is intended to be

“more consistent with English precedent.”

But one wonders how closely the authors of the change have looked at English precedent.

In the most recent (3 May 2013) UK appeal decision HTC Europe v Apple the English court of Appeal reversed a lower court decision and held an Apple patent claim to be valid. The invention related to the organisation of touch screen devices. The claim reads:

  • “(i) A method for handling touch events at a multi-touch device, comprising:
  • (ii) displaying one or more views;
  • (iii) executing one or more software elements, each software element being associated with a particular view;
  • (iv) associating a multi-touch flag or an exclusive touch flag with each view, said multi-touch flag indicating whether a particular view is allowed to receive multiple simultaneous touches and said exclusive touch flag indicating whether a particular view allows other views to receive touch events while the particular view is receiving a touch event;
  • (v) receiving one or more touches at the one or more views; and
  • (vi) selectively sending one or more touch events, each touch event describing a received touch, to one or more of the software elements associated with one or more views at which a touch was received based on the values of the multi-touch and exclusive touch flags.”

The lower court decision was that this claimed an (ineligible) computer program as such – the appeal court held it did not. The invention claimed was patent eligible.

Lord Justice Lewison, in paragraphs 140 to 144, had a bit of a moan:

“This appeal requires us, once again, to venture into the minefield of the exclusion from patentability of computer programs ‘as such’”

He then went on to explain that the two simple words “as such” found in the European Patent Convention (which governs both UK domestic law and the law applied in the European Patent Office) still have no clear meaning after 35 years of trying. Instead of arguing about what the legislation means, the arguments now are about what the gloss means. And still no one can agree.

SOP 237 sets out to put into law in New Zealand, a New Zealand “gloss” on the gloss that they have been disagreeing about in the English courts and the European Patent Office since 1978.

Clare Curran paints

“the bloated patent attorney sector”

as one of the villains on the side of Goliath in this saga. (Gratuitous insults seem to be as common to political blogs as a bit of biffo is to rugby pitches.)

What her “triumph” has unwittingly done is to open up a fertile new field for the bloated patent attorney sector to venture into over the next few years. And among the most likely innovations will be in defining software-implemented inventions.

Clare Curran might also want to have a look in her own (Dunedin) back yard. A successful University of Otago spinoff company there is Pacific Edge. That company boasts on its website that it underpins its products with a strong portfolio of patents.

One of its New Zealand patents, NZ 544432, claims a method for determining the prognosis of colorectal cancer in a patient using analysis software.

Under the new clause 10A and under clause 15 of the Patents Bill such claims might no longer be eligible for patents because they might claim a computer program per se or else because they might claim a method of diagnosis, or both.

The most valuable asset that Pacific Edge has is its intellectual property. The Patents Bill casts doubt on the patent eligibility of innovative technologies that Pacific Edge is seeking to commercialise.

Is this really going to promote investment in innovation?


2 Responses to “Software Patents: the Difference between Excluding Computer Programs as Such and Excluding Computer Programs as Such”

  • I believe the US has also rejected the use of pure software as not eligible matter in Mayo Clinic v Prometheus. A closer look at your example of PacificEdge shows that their business is biomarke.rs As the site says “The test uses unique molecular signatures to identify the presence of bladder cancer tumours. Cxbladder is supplied to the clinician as a complete kit for the collection and shipment of a patient’s urine sample and the test is carried out in a qualified Central Service Laboratory.”

    Hence their patent would still be valid as the analysis is probably tethered to a hardware related test kit (and as such covered by patent act … the biomarkers in isolation would be a discovery but kit is method/apparatus) and not a pure abstraction of the statistical methodology.

    Putting up a strawman argument against Clare is a little unfair as the political attention did force the intermeddling bureacracy to negotiate in good faith to amend the defective legislation.

  • drllau

    Thank you for your continuing interest in my posts.

    |” I believe the US has also rejected the use of pure software as not eligible matter in Mayo Clinic v Prometheus.”|

    The Mayo v Prometheus US Supreme Court decision was about whether measuring the drug metabolite levels in a patient to enable the optimisation of drug dosage was an application of a law of nature – or the law of nature itself. See my post:

    https://sciblogs.co.nz/stick/2012/03/23/optimising-autoimmune-treatment-patent-invalid-a-%e2%80%98law-of-nature%e2%80%99-is-not-a-law-passed-by-congress/

    I think the case you are referring to is Bilski where the US Supreme Court held that the “machine or transformation” test (that had been the standard applied by the Court of Appeal of the Federal Circuit) was not the only test as to whether an invention was patent eligible or was an excluded “mere abstract idea”. Since then the CAFC has struggled to establish any certainty in its approach. This has culminated in its CLS Bank v Alice decision where there was a tie vote of all 10 judges (meaning the lower court decision was not overturned):

    http://www.cafc.uscourts.gov/images/stories/opinions-orders/11-1301.Opinion.5-8-2013.1.PDF

    The reason for the en banc (all judge) hearing was to try to establish a coherent approach to the patent eligibility of “business methods” and “software Patents”. The frustration in the outcome was best expressed by Judge Pauline Newman who said:

    “The court, now rehearing this case en banc, hoped to ameliorate this uncertainty by providing objective standards for section 101 patent-eligibility. Instead we have propounded at least three incompatible standards, devoid of consensus, serving simply to add to the unreliability and cost of the system of patents as an incentive for innovation. With today’s judicial deadlock, the only assurance is that any successful innovation is likely to be challenged in opportunistic litigation, whose result will depend on the random selection of the panel. “

    This echoes the remarks of Justice Lewison in the Apple case referred to in my post.

    Attempts to reinterpret patent eligibility for software implemented inventions through legislation or judicial intervention has resulted largely in greater uncertainty and unpredictability. That is not a result to be welcomed by either proponents or opponents of software patents – litigants will continue to bear the costs of the uncertainty.

    |”… their patent would still be valid as the analysis is probably tethered to a hardware related test kit …”|

    The validity of a patent is determined by an analysis of its claims – not what the website of the patent owner might say about its other products.

    Claim 1 of NZ 544432 reads:

    “A method for determining the prognosis of colorectal cancer (CRC) in a patient, the prognosis being the likelihood of recurrence of the CRC, comprising the steps of:

    i. determining the expression level of a prognostic signature comprising ME2 and FAS in CRC tumour sample from a patient, and
    ii. establishing a prognosis by comparing the expression level of the prognostic signature to those known recurrent and non-recurrent tumour samples.

    Claim 2 says that the prognosis is established by applying a predictive method. Claim 5 lists the types of predictive methods – all of them being algorithms using a computer for the analysis.

    To establish if such claims are patent eligible under the new provisions, there would need to be a first analysis under clause 10A to determine if the “actual contribution” of the invention claimed “lies solely in it being a computer program”. If the claims get over that hurdle then there would need to be a second analysis under clause 13 to determine if the invention claimed was a patent eligible “manner of manufacture” or an excluded “method of diagnosis practised on human beings”.

    In Australia neither exclusion is present. When a business whose reliance on its IP assets is similar to that of Pacific Edge is making a choice between Australia and New Zealand, why would it choose New Zealand – whose IP policy is to make it as difficult as possible to get patents and as easy as possible to invalidate them?

    [See my opinion piece in NZ Science Review Vol 69 (2), page 47: http://www.scientists.org.nz/files/journal/2012-69/NZSR_69-2.pdf%5D

    I am not out to engage in a game of political football. I agree with the statement on page 5 of the IP Australia Australian Intellectual Property Report 2013:

    “In today’s global economy, a well-functioning intellectual property (IP) system can foster innovation and encourage the flow of ideas and technology domestically and across borders. Countries that are global innovation leaders now invest more in ideas than they do in machines and factories. The rights that protect these ideas are significant business assets as well as a key component of Australia’s innovation system. The fundamental role of an IP system is to provide an incentive to invest in innovation. This is achieved by granting temporary exclusive commercial control to the inventor in exchange for public disclosure of information about their invention. A well-functioning IP system gives innovators and investors confidence that their innovations will be protected from imitation while permitting public disclosure of those new ideas.”

    A system where judges cannot agree on the patent eligibility of some of the most innovative technologies is not a “well-functioning “one.