20100427 cruickshank software patents - a practical overview, michael o'connor

Michael O’Connor

Partner, Cruickshank Intellectual Property Attorneys

European Patent Attorney

Software Patents – Practical Overview

April 27th 2010

Irish Software Innovation Network

Topics for Discussion:

• Patentability of Software

• Examples of Patented Software Inventions

• Enforcement of Software Patents

• Copyright Vs. Patents

• Why patent software - A Case Study

• Trademarks

“Software is not patentable, right?”

Tell that to Microsoft®……

• April 2009, Uniloc® awarded US$388 million

• May 2009, i4i® awarded US$200 million

• May 2009, Parallel Networks® issue infringement proceedings

• June 2009, Microsoft® appeal US$358 million award to Alcatel Lucent®

More on these later…

Patentability of Software

• Software patentable in United States and Europe

• Common misconception that software not patentable in Europe

• European Patent Office (EPO) granting software patents since

mid-1980s

Where does the misconception that software is not patentable in

Europe come from?

• Historical Issues?

• Text of the European Patent Convention (EPC)?

• European Parliament Vote on CII Directive on 6th July 2005?

• Relatively low grant rates?

Current Examination Practice of the EPO

• Patentability requirements for computer programs are the same in principle as for other inventions

• Patents will be granted where a non-obvious technical solutionto a technical problem can be identified


• Technical problems include (although not limited to):

• Speed of data transmission

• Data security

• Data transmission integrity

• Improved interfaces

• Speed of data processing

• Improvements to memory storage


• Non technical problems include (although not limited to):

• Mere automation of an existing process

• Purely administrative functions

• Implementing a new business process on a computer (without any technical problem)

Examples of patented software inventions

EP1,678,607 – Symbian

• Dynamic Link Library functionality

• Some functions are named, other functions are numbered

• Provided technical advantages

• Refused initially in UK, granted on appeal


EP1,307,807 – Symbian

• User interface functionality

• Most popular option presented

in middle of a list to prevent

unnecessary scrolling

• Next most popular option at one

end of list to enable rapid

selection


EP0,927,945 – Amazon.Com

• “Gift Ordering” Patent

• Users sent a gift recipients email address to the server which in turn contacted the recipient to get a postal address for delivery of the gift

• Granted during examination

• Revoked during opposition

• Wouldn’t be granted now


US 5,960,411 – Amazon.Com

• “One Click” Patent

• Users data including billing details and delivery address was stored in a server system and all they had to do to order a good was click on it once instead of use a shopping cart ordering model

• EP0,902,381 withdrawn during prosecution at European Patent Office

Enforcement of Software Patents – Remember Microsoft?

• April 2009, Uniloc® awarded US$388 million

• May 2009, i4i® awarded US$200 million

• May 2009, Parallel Networks® issue infringement proceedings

• June 2009, Microsoft® appeal US$358 million award to Alcatel

Lucent®

Examples of enforcing software patents

US 5,490, 216 – Uniloc

• Prevents unauthorised use or

copying of programs

• Windows® XP operating system

and Office® infringed

• $388 million in damages

• Triple damages?

• David Vs. Goliath


US 5,787,449 – i4i

• System and method for

manipulation of architecture

and content of a document

• Word 2003® and Word 2007®

use XML in a way that infringed


• Raised to $290 million

• Injunction on Word!

• Received financial support to

bring proceedings


US 5,894,554 – Parallel Networks

• System for managing dynamic

web page requests

• A separate page server is used

to free up a web server

• Parallel Networks now

effectively a patent holding

company

• Parallel Networks have

previously sued Netflix,

Amazon.com, Orbitz and

Priceline.com


US 4,763,356 – Alcatel Lucent

• User interface functionality –form entry system

• Users click on a date rather than typing it in to access it in Outlook® Calendar

• Outlook® infringed


• Increased to $511 million to include interest

• Goliath Vs. Goliath

• Successful (-ish) appeal

Copyright Vs Patenting

Copyright

• does not protect the idea itself but rather only protects the specific expression of the idea

• prevents copying of your code – requires proof that copying actually took place

• does not prevent someone from programming their own code to do the same thing


Patents

• protect the invention not simply the specific implementation of

that invention

• prevent not just copying of the code but any implementation

• do not require you to prove that copying actually took place


• Common misconceptions about software patents:

• They can be easily worked around (just ask Microsoft®)

• Making minor changes to the code will avoid infringement

• Using a different programming language will avoid infringement

• Writing code from scratch will avoid infringement

Why Patent Software – A Case Study

• Company A invents a new application called a “word processor”

• Company A does not file a patent application for their invention

• Company A relies on first mover advantage and copyright

protection

• Company A generates a lucrative market for “word processors”

and competitors begin to enter the market


• Company B develops their own “word processor” application

with new functionality which they call “cut and paste” that allows

them to move blocks of text around in the document

• Company B files a patent application for their “word processor”

with “cut and paste”

• Company B enters the market and soon “cut and paste”

functionality is deemed a must-have for any “word processor”


• What becomes of Company A?

• Company A’s word processor is now obsolete.

• Company A cannot provide a “word processor” with “cut and

paste” functionality required by the market as they would

infringe Company B’s patent.

• Company A loses their market share to Company B unless

Company A can buy or licence Company B’s technology.


• What if Company A had patented their “word processor”?

• Company A could prevent company B from entering into the

market altogether

• Company A could enter into a cross licensing deal with

Company B on favourable terms so that they could use the “cut

and paste” functionality in their “word processor”

Trade Marks

• A Trade Mark is any sign, capable of being represented

graphically, that is capable of distinguishing the goods or

services of one undertaking from those of another

• Trade Marks include for example words, logos, sounds, get up,

smells, shapes and colours

• Perhaps the most valuable asset that any company possesses

Trade Marks/Brands - what are they worth?

$12 Billion

$14 Billion

Trade Marks/Brands - what are they worth?

$32 Billion

$57 Billion

Conclusions

• Software inventions are patentable

• Software patents have been granted for numerous disparate inventions from user interfaces to dynamic link library nomenclature structures to e-commerce applications

• Patent protection offers more robust protection against infringers than copyright protection

• Software patents are enforceable

For further information, visit www.cruickshank.ie or contact

[email protected]

Thank you for your attention

20100427 cruickshank software patents - a practical overview, michael o'connor

Technology