Undesirable Software Patents and the US case KSR vs. Teleflex

The US Supreme Court will hear arguments later this fall in the KSR vs. Teleflex case (about § 103 of US Patent Law, the standard for "nonobviousness"). Certiorari was granted in June of this year. The potential exists to raise the bar to deny patenting inventions where there is no motivation in the prior art to combine individual known components. KSR has the potential to be the biggest patent case since at least the A&P case (A. & P. Tea CO. v. Supermarket Corp., 340 U.S. 147 (1950) from more than fifty years ago.

The debate will most likely mirror the one held in Europe last year as a result of the EU Commission's plan to introduce a harmonization directive on software patents. The discussion was soon centered around the idea that the threshold for granting patents should be heightened, so as to prevent the grant of "junk patents" (in Dutch a reference by the FFII was to "10 Ongewenste Patenten" ("10 undesirable patents").

The Memo below (in English, originally in Dutch) was a response to this list of 10 "undesirable patents" submitted to the Netherlands Ministery of Economic Affairs on the Computer Software Directive [1], which meanwhile failed to reach consensus and was therefore withdrawn.

MEMO

From: Severin de Wit
To: Economic Affairs Advisory Committee CII Directive
Date: April 13, 2005

We are of the opinion that it would benefit the substantive discussion on this difficult topic if we were to follow the suggestion by the Dutch Deputy Minister of Economic Affairs – made at the last plenary session of 23 November 2004 – to investigate whether there are European Patents that have been granted but that would (could) no longer be granted under the current wording of the proposed guideline. In this context it is useful to take the list of "undesirable patents" – which is now known within a wide circle – as the starting point here. Our comments on this list are therefore given below.

Introduction

A few remarks first of all:

1. The qualification "undesirable" appears to be too tendentious and raises the question as to from which perspective these patents would be "undesirable".

2. The comments below are not based on an extensive study of the grant history of the state of the art for the patents concerned. They do not constitute legal advice but are a well-founded first impression based on the patents themselves, know­ledge of the specialist fields and the wording of the claims.

3. In each case we comment on three aspects:

· what is the import of the patent,
· would the patent in our opinion still be granted under current European jurisprudence and the European Commission Directive (as now submitted to the European Parliament for second reading) and
· what would be the fate of the patent under the Directive as amended by the European Parliament.

1. EP 0 689 133 (granted 8/8/2001)
· The abstract presented for this patent appears to be too broad. In our opinion this patent relates only to the alternating display of different pieces of information within the same part of a complete screen. For example, the use of pop-up screens does not fall under this patent. It appears to be a basic patent for the use of tabs within part of a screen, so that it is easy to switch rapidly between different pieces of the information within a restricted part of the screen.
· It is not clear to us why this would be an "undesirable" patent (other than that it can be inconvenient for third parties who came up with this idea later). This patented technology is clearly technical and in our opinion would still be patentable under the current jurisprudence of the European Patent Office and the European Commission Directive.
· Since this idea relates to data processing, in our opinion it would not be patentable under the Directive as amended by the European Parliament.

2. EP 0 537 100 (granted 17/3/1999)
· Here again in our opinion the abstract is too broad. In our opinion opening a new screen containing, for example, a larger photograph if the user places a cursor on a small photograph and then, for example, double clicks, does not fall under this patent. The claim is somewhat more specific and the scope of protection is thus more limited. What is concerned is, for example, a blue block in a day within a display of a diary on a screen. The cursor can be placed on the blue block. By clicking (for example) more information about that day, in other words the meetings that have been arranged for that day and cannot all be displayed on the screen, is temporarily obtained. The complete screen of the diary does not disappear, so that it is not necessary to generate a complete screen. In our opinion it is also essential that the additional information shown disappears as soon as the cursor is moved away from, for example, the blue block. In the light of the formulation of the claim, the conventional expansion of specific information on the screen using a cursor does not fall under this because that was already known. The temporary nature appears to be essential.
· It is not clear to us why this would be an undesirable patent. This patented technology is handy and in our opinion would still be patentable under the current jurisprudence of the European Patent Office and the European Commission Directive because a man/machine interface is regarded as technical.
· In our opinion this idea would no longer be patentable under the Directive as amended by the European Parliament because this relates mainly to data processing.

3. EP 0 370 847 (granted 11/8/1993)
· We endorse the abstract in respect of the scope of the claim of this patent.
· In our opinion this is a classic case of a business method patent that currently would no longer be granted by the European Patent Office. The claim goes no further than specifying trade via, for example, the Internet and requires no technical adaptation of said Internet. In our opinion it would also no longer be possible to grant a patent under the European Commission Directive.
· This will also not be patentable under the Directive as amended by the European Parliament.

4. EP 0 715 740 (granted 4/7/2001)
· We endorse the abstract in respect of the scope of this patent. We should even like to describe this patent as "bizarre" because the claim states that when granting a loan account is taken of the "willingness" of the applicant to repay the loan. How does one measure such a psychological criterion?
· In our opinion this is a classic case of a business method patent that currently would no longer be granted by the European Patent Office. The claim goes no further than to specify the grant of a loan via, for example, the Internet and requires no technical modifications of that Internet. In our opinion a patent would also no longer be granted for this under the European Commission Directive.
· This will also not be patentable under the Directive as amended by the European Parliament.

5. EP 0 986 016 (granted 5/12/2001)
· We endorse the abstract of this patent.
· In our opinion this is a classic case of a business method patent that currently would no longer be granted by the European Patent Office. The claim goes no further than to specify trade via, for example, the Internet and requires no technical modifications of that Internet. In our opinion a patent would also no longer be granted for this under the European Commission Directive.
· This will also not be patentable under the Directive as amended by the European Parliament.

6. EP 0 628 919 (granted 19/1/2001)
· We endorse the abstract of this patent.
· In our opinion this is a classic case of a business method patent that currently would no longer be granted by the European Patent Office. The claim goes no further than to specify trade via, for example, the Internet and requires no technical modifications of that Internet. In our opinion a patent would also no longer be granted for this under the European Commission Directive.
· This will also not be patentable under the Directive as amended by the European Parliament.

7. EP 0 933 892 (granted 15/10/2003)
· We largely endorse the abstract of this patent although the claim is somewhat more specific. It relates to the transmission of centrally stored, compressed video/audio to end user equipment that stores the received video/audio locally. Decompression and playback then takes place locally to the end user as and when he or she desires. It is difficult to see why this is an "undesirable" patent. Remember that this patent was applied for in 1991 when companies were only just really adopting fax and the first stand-alone word processors.
· In our opinion this patent would still be patentable under the current jurisprudence of the European Patent Office and the European Commission Directive because this patent provides a technical solution for the efficient dissemination of centrally stored video/audio.
· In our opinion this patent would no longer be granted under the Directive as amended by the European Parliament because this patent relates to the processing and dissemination of data.

8. EP 0 633 694 (granted 13/1/1999)
· The abstract of this patent is technically incorrect. The claim has been read wrongly. The patent relates to the transmission of centrally stored video/audio to end user equipment. In this case a central buffer is used in which a film is temporarily stored. Multiple end users can log in to this using their equipment and play the portion of the film that has been stored in this central buffer. By using the central buffer all end users are able to forward and rewind within the portion of the film that is in the buffer. In our opinion the scope of this patent is fairly limited.
· In our opinion this patent would still be patentable under the current jurisprudence of the European Patent Office and the European Commission Directive because this patent provides a technical solution for the dissemination of centrally stored video/audio where the end user is still able to rewind and forward to some extent.
· In our opinion this concept would no longer be granted under the Directive as amended by the European Parliament because this patent relates to the processing and dissemination of data.

9. EP 0 807 891 (granted 17/5/2000)
· The claim in this patent appears to involve not much more than maintaining on a central server a shopping list indicating which goods have been selected by a purchaser on a website and sending this list back to the purchaser's web browser, the list being continually transmitted back and forth between the server and the user's web browser.
· In our opinion the patent lacks a clear technical invention. We are of the opinion that the claim granted here would probably not be granted under the current jurisprudence of the European Patent Office. It also appears to fall outside the scope of the European Commission Directive.
· The patent would certainly be outside the scope of the Directive as amended by the European Parliament because this patent relates to the processing and dissemination of data.

10. EP 0 927 945 (granted 23/4/2003)
· We subscribe to the abstract of Claim 1.
· In our opinion the patent lacks a clear technical invention. We are of the opinion that the claim granted here would probably not be granted under the current jurisprudence of the European Patent Office. It also appears to fall outside the scope of the European Commission Directive.
· The patent would certainly be outside the scope of the Directive as amended by the European Parliament.

Subsequent remarks

1. Thus we think that of the 10 patents cited the majority (6) would no longer be granted under the current jurisprudence of the European Patent Office and the European Commission Directive. (Some should probably also never have been granted under somewhat earlier jurisprudence. Grant of patents remains man's handiwork after all).

2. Many examples can be found of recent patent applications that are refused by the European Patent Office because according to the European Patent Office they do not relate (are said not to relate) to a technical invention:

· EP 332 770 [Pension Benefits System] which was rejected by the Board of Appeal of the European Patent Office because the Board was of the opinion that the claimed system related only to a pension system implemented on an existing processor;

· EP 828 223 [Hitachi], which was rejected by the Board of Appeal of the European Patent Office because the Board was of the opinion that the claimed system involved nothing more than a new way of auctioning via an existing communication system;

· EP 579 655 [Comvik], which related to a mobile telephone system where mobile phones have 1 SIM card but there are two accounts for this SIM card, for example one for private phone calls and one for business calls. According to the European Patent Office the problem that was solved here was solely of a financial and administrative nature;

· WO-A 02/07033 [Snijders, Fiszbajn], where the European Patent Office refused to carry out a literature search because according to the European Patent Office this application related solely to financial transactions via an existing processor;

· EP 1 429 269, EP 1 445 719, EP 1 469 403 [IP Strategy Incorporated] where the European Patent Office refuses to carry out a literature search because according to the European Patent Office these relate solely to financial transactions via an existing communication system;

· EP 1 293 922 [Berk], where the European Patent Office refuses to carry out a literature search because according to the European Patent Office this application relates solely to insurance transactions via an existing processor.

3. This list can be infinitely expanded. There are thus apparently no grounds for major concern with regard to the consequences of the Directive as submitted by the European Commission for second reading.

4. It is striking that virtually all patents in the list of "undesirable patents" which in our opinion would no longer be granted under the current jurisprudence were granted in the period up to 2001. There is only 1 from the period thereafter (no. 10). This corresponds to the practical experience of patent attorneys that the European Patent Office has for the past few years become increasingly more stringent in maintaining its own rules and is granting hardly any more or no genuine business method patents. Remember that it takes some time before jurisprudence of the Board of Appeal of the EPO – for example in the Pension Benefits case – works its way through to the officials responsible for grant at the EPO. The Pension Benefits judgment[1] dates from September 2000 and it is therefore not surprising to see that the EPO has become much more critical since about the end of 2001 and is therefore rejecting much more, which is the reason why the list of "undesirable patents" contains mainly patents that were granted before 2001 (with the exception of two patents: no. 7 and no. 10).

5. We cannot see why the patents from the list of "undesirable patents" where we are of the opinion that they could still be granted under the current jurisprudence of the European Patent Office and under the European Commission Directive would have to be treated differently to, for example, a patent application for a plastic paperclip. We have appended an example of a European Patent (EP-B1 274 085) granted for such a paperclip. These patents have cost time, money, energy and inventive work on the part of scientists and technicians (specifically IT engineers), just as the plastic paperclip has cost time, money, energy and inventive work on the part of the inventor thereof.

6. If the Directive were to be amended in the manner as proposed by the European Parliament, not only the patents from the list of "undesirable patents" would be in the danger zone, but also many other patents from many SMEs but also from large innovative companies and institutions in the Netherlands. A number of examples of such patents from – largely small to medium-sized – Dutch companies and institutions which would be in the danger zone if a Directive according to what is proposed by the EP were to be adopted and the technology of which would then thus be able to be freely copied by anyone (as a result of which, in our opinion, protection of the knowledge-intensive industry in the Netherlands would be in great danger) are given below.

· EP 657 098, applicant NV Nederlandsche Apparatenfabriek NEDAP, subject: "Information system and method for automatically obtaining data about animals in dairy farming" [relates to the collection and processing of data in a dairy farm];

· EP 562 696, applicant Delft Geophysical BV, et al., subject: "A method of making a synthetic seismogram" [making seismograms based on simulations of earth layers];

· EP 1 367 779, applicant University of Twente, subject: "Robust congestion control mechanism for communication networks" [controlling congestion in a telecommunications network];

· WO 00/44937, applicant Keygene NV, subject: "Method and arrangement for determining one or more restriction enzymes for analysing a nucleic acid sequence" [analysis of DNA sequences];

· WO 2004/076977, applicant TomTom BV, subject: "Navigation device and method for exchanging data between resident applications" [navigation in cars, for example];

· EP 1 259 084, applicant Libertel Netwerk BV, subject: "Network system for connecting end-users and service providers" [relates to various layers in a network to enable end-users and service providers to be connected to one another];

· EP 377 480, applicant Teleatlas International BV, subject: "Procedure for setting up and keeping up-to-date data files for road traffic" [relates to keeping data files that are used for, for example, car navigation systems up to date];

· EP 1 429 512, applicant KPN, subject: "Telecommunication system and method for transmitting video data between Internet and a mobile terminal" [transmitting video data between Internet and mobile telephones];

· WO 03/091389, applicant TNO, subject: "Microbiological information system" [relates to the classification of microorganisms];

· EP 1 515 528, applicant TNO, subject: "Method and means for interconnecting users of a telephone network using speech recognition" [use of speech recognition for establishing connections in telecommunications networks];

· EP 1 196 252, applicant PTT Post Holdings BV, subject "Installation and method for updating an address database with recorded address records" [updating an address database on the basis of addresses read on items of post].

7. We would therefore also be of the opinion that SMEs ought to be specifically in favor of the adoption of a (good, read:) latest Commission text for the Directive. The best illustration of this stance is the abovementioned company TomTom BV (with registered offices in Amsterdam). Founded in the early 90s as a small (!) software company, TomTom conquered the GPS market after it developed software with which it became possible to use GPS software in handheld PDAs. This solution became enormously popular because of its user friendliness and its competitive price (far less expensive than the GPS that is supplied as standard in cars). The company has grown enormously and is now an active patent applicant, simply because otherwise any large – American or Japanese – company can copy and market this product without the burden of high development costs and R&D. If no protection were to be available in Europe, companies such as TomTom BV – without doubt an exceptionally good example of successful Dutch entrepreneurship – would think twice before starting or maintaining their innovative company in Europe.

[1] Case T0931/95