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[FYI] Study "The Economic Impact of Patentability of Computer Programs"


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Study "The Economic Impact of Patentability of Computer Programs"

Report to the European Commission by Robert Hart (Independent 
Consultant), Peter Holmes (School of European Studies, University of 
Sussex) and John Reid (IP Institute) on behalf of Intellectual 
Property Institute, London  

Summary of and conclusions from the Study  


We return to the more general aims of the study.  

I To provide information on a number of key elements to enable the 
Commission to assess whether the envisaged Directive should be 
confined to harmonising the relevant laws of the Member States on the 
basis of the status quo as defined by the jurisprudence, or whether 
it should extend the scope of application of the Directive.  

II In respect of the latter option: to provide guidance on the 
possible consequences of more wide ranging harmonisation.  

III To make a first assessment of the main consequences for 
innovation and competition, in particular for SMEs, of extending 
patent protection beyond current levels.  

IV Finally, to address whether patent protection in Europe should be 
available for computer programs with applications outside the areas 
which are currently considered to be "technical" by the jurisprudence 
of the European Patent Office and Member States' courts and if so, to 
what extent. A particular issue is how such an approach could be 
explained as being in line with basic patent law principles.  

On I: we consider that this report has, despite the constraints of 
time and budget, provided a great deal of useful indeed probably 
sufficient information on the key elements.  

On II and III: There may be other ways of formulating the options for 
possible more wide ranging harmonisation beyond current levels but we 
suggest the following three:  

Option 1: we could stay with the status quo, subject to removal of 
the exclusion of "computer programs" "as such". This would, we 
consider, have no consequence except the important one that SMEs and 
independent software developers will be less likely to consider 
computer program related inventions unpatentable.  

Option 2: European law could ensure that the mere use of a computer 
program/computer to implement an invention brings an invention within 
technology, as appears to be the case in the USA. This would be a 
substantial change from basic principles of Eiropean patent law. It 
would be highly controversial. But it would bring European law into 
alignment with U.S. law on patentability of business methods.  

Option 3: European law could be altered to have no requirement that 
patents be limited to technology. If it were accepted that business 
methods should be patentable simpliciter then this is the logical 
consequence. But any attempt to make such a change would cause great 
controversy. This would interfere in achievement of option 1 and in 
achievement of adequate understanding by SMEs and independent 
software developers of the opportunities and risks from the 
patentability of computer program related inventions under option 1 
or under the status quo.  

Very relevant to options 2 and 3, as to any extension of patents, is 
the caution amongst economists specialising in IP rights. As shown in 
our economic study of the literature (Section III of our report), 
most economists have doubts whether economic efficiency, i.e. 
increased overall welfare, is achieved by having or making computer 
program related inventions patentable. This caution is supported by 
the continuing, indeed growing, concern in the USA on the issues 
surrounding patents on computer program related inventions. The 
debate in the States is not finished.  

On IV: This is mainly covered by our input on II and III except for 
the last sentence of IV: A particular issue is how such an approach 
could be explained as being in line with basic patent law principles. 

We consider this in relation to options 2 and 3 above.  

Option 2 would allow a patent to be granted on a novel and unobvious 
invention which had no other connection with technology than that the 
invention is implemented on a computer. This can be argued to meet 
e.g. the United Nations definition of technology: "a combination of 
equipment and knowledge" and so to be in line with basic patent law 
principles. However it can also be argued that nothing technological 
is achieved by the combination of the computer (equipment) and the 
knowledge, which would for the purposes of the argument not be 
technological. It should be noted that option 2 could similarly be 
argued to meet the (minimum) requirement of TRIPs Art 27 "that 
patents shall be available for any inventions, whether products or 
processes, in all fields of technology, provided that they are new, 
involve an inventive step and are capable of industrial application. 
...... without discrimination as to ..... the field of technology ".  

Option 3 stretches the principles perhaps to breaking point in that 
no connection with technology would be required. Most experts would 
say that this goes beyond the basic principles of patent law. There 
is however the reply, which Judge Rich may have articulated in State 
Street Bank, that if a non-technological invention is new and 
unobvious and is useful in commerce or industry then society should 
encourage the making of such inventions and their use as basis for 
innovation by granting patents on them. We can only warn that the 
debate will continue.  

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