Computer-Implemented Inventions in the U.S. and Europe: A Comparison Following Alice Corp V. Cls Bank

Following the decision of the Supreme Court of the United States in Alice Corp. v. CLS Bank1, the treatment of computer-implemented inventions in the United States will arguably become more similar to the treatment such inventions already receive in Europe. It will take time to see how the tests set out in the Alice decision are implemented by the lower Courts and the USPTO. However, below, we speculate as to parallels that might emerge between those tests and the current situation in Europe.

Alice Corp. v. CLS Bank

The claims of the patents under consideration in the Alice case related to (1) a method for exchanging financial obligations, (2) a computer system configured to carry out the method for exchanging obligations, and (3) a computer-readable medium containing program code for performing the method of exchanging obligations.

A previous decision of the U.S. Supreme Court, Bilski2, had considered another patent seeking to protect a financial method (a method of hedging against losses). That decision found the financial method to be an “abstract idea”, an implicit exception to the subject matter defined as patentable is Section 101 of the U.S .Patent Act (reproduced in the Annex below), along with “laws of nature” and “natural phenomena”. However, as affirmed in the Alice decision, it was noted that “an invention is not rendered ineligible for patent simply because it involves an abstract concept”.

In another decision (Prometheus3), the U.S. Supreme Court had also already set out a two step framework for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts. The first step is to determine whether the claims at issue are directed to one of the patent-ineligible concepts. If so, the second step is to ask “what else is there in the claims?”.

To answer the question of the second step, the elements of each claim are considered both individually and “as an ordered combination” to determine whether the additional elements “transform the nature of the claim” into a patent-eligible application. The Supreme Court describes this analysis as a search for an “inventive concept” — i.e. an element or combination of elements that is “sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself”.

In the Alice case, the Supreme Court found that the claimed exchange of financial obligations was a well known financial strategy and hence an “abstract idea”. The method, computer system and media claims were found to add nothing of substance to the underlying abstract idea. The method was said to “merely require generic computer implementation”. The computer system and media claims, requiring some hardware, were also said to fail the second step of the test because they represented “wholly generic computer implementation” of the method, which “is not generally the sort of additional feature that provides any practical assurance that the process is more than a drafting effort designed to monopolize the abstract idea itself.”

Computer-Implemented Inventions in Europe

The patentability of computer-implemented inventions in Europe is more fully discussed in a separate briefing4.  However, the current situation is summarised below. 

In Europe, Art 52(2) EPC (reproduced in the Annex below) appears at first sight to exclude computer programs from patentability, but in practice many patents are granted in this area because the inventions covered are deemed not to reside solely in a program for a computer as such. That is, the patentability of a genuinely technical invention, e.g. a method of manufacture, will not be harmed by the use of a computer program to implement some parts of the method.

On the other hand, a non-technical invention, e.g. a business method or rule for a game, will not be rendered patentable merely by specifying that some part of it is implemented by a computer. Inserting a conventional technical feature, such as an otherwise unspecified computer, will satisfy the requirement that the claim must relate to “technical” subject-matter, but it will not satisfy the requirement for there to be an inventive step, unless there is some further technical advantage achieved. To find an inventive step it is necessary to identify both a problem much more specific than “implement the non-technical features in technical means” and a solution to that problem.

This is because, when such “mixed” inventions are examined in the European Patent Office (EPO), all non-technical features are disregarded and the inventive step of the remaining subject matter is examined. Often, all that is left is a general purpose computer and the application will be rejected.  This procedure was developed in a “Trio” of decisions of EPO Technical Board of Appeal 3.5.01 between 2000 and 2004 - Pension Benefits Partnership5, Comvik6 and Hitachi/Auction Method7, and was strongly endorsed in a later Opinion of the Enlarged Board of Appeal in G3/088.

Comparison of Concepts

“Many computer-implemented claims are formally addressed to patent-eligible subject- matter”

The above quote is taken directly from the Alice decision. It highlights an important parallel with the European situation, already mentioned above (and demonstrated, for example in the European decision T 1173/97 (Computer program product/IBM)9): implementing an otherwise patentable process on a computer will not make it unpatentable.

Non-Technical v. Abstract

One of the first questions raised by the European approach to computer-implemented inventions is “what is technical?”. This is because it is of fundamental importance in making the first assessment of whether the exclusions of Article 52(2) EPC, as well as later determining which features can be considered for deciding inventive step.

It seems that the definition of what is “abstract” in the U.S. is analogous to what is “non- technical” in Europe. Abstract ideas are excluded from patentability under the first step of the Prometheus test, but can be ‘rescued’ by the presence of patent-eligible features in the second step of the test. This is similar to the way “non-technical” features in Europe cannot contribute to inventive step, but a non-obvious technical implementation of a non-technical idea can be allowable.

As such, there will be some overlap between what is considered “abstract” in the U.S. and what is considered “non technical” in Europe. However, the boundaries of these concepts will differ, and it seems likely that what is “abstract” will remain narrower than what is “non-technical”.  In that case, it will remain possible to patent some inventions in the U.S.  that cannot be patented in Europe.

In fact, another parallel is that neither the boundary of what is “technical” in Europe, nor the boundary of what is an “abstract idea” in the U.S., has been defined.

The EPO’s Boards of Appeal have consistently avoided engaging in any discussion regarding the boundaries of what is “technical”. The best that has been said is that a technical field is one that is not one of the excluded fields listed in Article 52(2), such as a business method or computer program.  However, because this is a non-exhaustive list, it cannot be taken that everything else is technical. The reasoning of Duns Licensing10 implies that one guide to whether a field is technical would be the skills and qualifications of the practitioners in that art.

In the U.S., in the Alice decision, the Supreme Court explicitly states “we need not labor to delimit the precise contours of the “abstract ideas” category”, instead choosing to find the financial method in question suitably close to the Bilski method so that it was inevitably also “abstract”. The guidance, regarding what might qualify as “abstract”, that can be drawn from Alice and previous decisions includes:

  • The “abstract ideas” category embodies “the longstanding rule that “an idea of itself is not patentable”.
  • “Abstract ideas” are not limited to “pre-existing, fundamental truths” that “exist in principle apart from any human action”.
  • Financial methods are likely to be abstract (Bilski, Alice).
  • An algorithm for converting binary-coded decimal numerals into pure binary form is abstract (Benson11).
  • A mathematical formula for computing “alarm limits” in a catalytic conversion process is abstract (Parker v. Flook12).

What none of these points directly addresses is where the boundary as to what is “abstract” is in the context of a computer program specifically (compared, for example, to a financial method or a mathematical algorithm).

Uninventive Hardware v. Generic Hardware 

In Europe, a decision on inventive step is taken for computer-implemented inventions by considering the inventive nature of the “technical” features. In practice, once features relating to excluded matter are discounted, the remaining technical features can be conventional pieces of computer hardware (e.g. an otherwise unspecified server or processor) with no distinguishing features specific to the invention. In that scenario, those technical features are found to lack an inventive step, being an obvious way to implement the non-technical features.

The Alice decision frequently uses the term “generic” in connection with assessing whether computer hardware features can, in step two of the Prometheus test, rescue an abstract patent-ineligible idea and make it patentable.  The second step is said to be failed if the hardware features are “purely functional and generic”. This is a development of the reasoning in Prometheus, which held that “simply implementing a mathematical principle on a physical machine, namely a computer, [i]s not a patentable application of that principle”.

As such it seems that a decision as to what is “not generic” essentially equates to the step of establishing what is “inventive” in Europe.

Because Alice introduces the “generic” assessment for the first time, it remains to be seen how the lower courts interpret this concept. In the meantime, all that can be said is that the recitation of simple features such as a “data processing system”, a “communications controller” and a “data storage unit” were viewed in Alice as features that “nearly every computer will include” and thus “generic”.

In contrast, some guidance as to what is not “generic” comes from the decision in Diamond v. Diehr13. In that case, employing a “well known” mathematical equation in a process designed to solve a technological problem in conventional industry practice was found to be patentable. Alice explicitly approves that finding, explaining that “the claims were patent eligible because they improved an existing technological process, not because they were implemented on a computer”.

More guidance comes from another comment in Alice. When finding the method claims to amount to “nothing significantly more” than an instruction to apply an abstract idea using a generic computer, the Court noted that the claims “do not, for example, purport to improve the functioning of the computer itself”. The implication is that such an improvement could result in patent-eligible claims. 

This echoes the UK Symbian14 case, in which claims directed to an operating-system level computer program were found allowable because “a computer with this program operates better than a similar prior art computer…  there is more than just a ‘better program’, there is a faster and more reliable computer”. Subsequently, one of the “signposts” for identifying allowable computer-implemented inventions in the UK is “whether the program makes the computer a better computer in the sense of running more efficiently and effectively as a computer”.

Conclusion 

It seems that there are several parallels between the tests of the Alice decision and the tests used in Europe for assessing patentability of computer-implemented inventions. In both jurisdictions it remains possible to patent computer-implemented inventions provided they also make a “technical” (in Europe) or “not abstract” (in the U.S.) contribution.  The precise definition of “technical” and “abstract” remain unspecified, and whether any particular invention makes the necessary contribution will turn on the facts of the case. Therefore it is recommend to discuss any possible computer- implemented inventions with a patent attorney to obtain the appropriate guidance, which may include taking advice from the U.S., on a case-by-case basis. 

4 July 2014

1 Alice Corporation Pty. Ltd. v. CLS Bank International, 573 U.S.         (2014)

2 Bilski v. Kappos, 561 U.S. 593 (2010)

3 Mayo v. Prometheus, 566 U.S.        (2012)

4 J A Kemp Briefing “Computer-Implemented Inventions in Europe”

5 T931/95 of 8 September 2000

6 T641/00 of 26 September 2002

7 T258/03 of 21 April 2004

8 G3/08 of 12 May 2010

9 T1173/97 of 1 July 1998

10 T154/04 of 15 November 2006

11 Gottschalk v. Benson, 409 U.S. 63 (1972)

12 Parker v. Flook, 437 U.S. 584 (1978)

13 Diamond v. Diehr, 450 U.S. 175 (1981)

14 Symbian Ltd v Comptroller General of Patents, [2008] EWCA Civ 1066

Annex

EPC Article 52 (as amended by EPC 2000) 

  1. European patents shall be granted for any inventions, in all fields of technology, provided they are new, involve an inventive step and are susceptible of industrial application.
  2. The following in particular shall not be regarded as inventions within the meaning of paragraph 1:
    1. discoveries, scientific theories and mathematical methods; 
    2. aesthetic creations;
    3. schemes, rules and methods for performing mental acts, playing games or doing business, and programs for computers;
    4. presentations of information.
  3. Paragraph 2 shall exclude the patentability of the subject-matter or activities referred to therein only to the extent to which a European patent application or European patent relates to such subject-matter or activities as such. 

Section 101 of the U.S. Patent Act (35 U. S. C. §101)

Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

References

All cited EPO cases may be found in the EPO's database of decisions at http://www.epo.org/law-practice/case-law-appeals/advanced-search.html

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