Last updated on March 2006

Patent protection for computer programs is a relatively new issue in US law. Developers previously relied on confidential information and contract law to protect their interests.

In the USA, the situation as to possible patent protection for certain methods - including business methods or algorithms - is different from Europe since US patent law does not include any restriction on certain subject matter, whereas the European Patent Convention contains an exception for computer programs (as well as schemes, rules and methods for performing mental acts doing business, among others) as such. The scope of patentable subject matter is not restricted in the USA. Indeed, patentability requires, in general, showing that the subject matter is useful. This allows for the incorporation of computer software into the US patent system. However, the scope of protection granted and the requirements which have to be met are still subject to discussion.

Under U.S. patent law, patents may be granted for any new and useful process, product, manufacture or composition of matter. This broad scope of patentable subject matter has enabled the US to widen the ambit of general patent law so as to include certain types of useful methods, which in turn include computer programs.

Previously inventions for which patent protection was denied included claimed algorithms and methods of doing business.

Although both classes of subject matter can be treated differently, both computer programs and business methods are similar in that they]can be implemented by use of a computer. Both systems are also essentially methods for solving problems, and are therefore treated together here.

For patentability in Europe, the law requires that there is an invention, and that it is new, inventive and Industrially applicable. The requirement of an invention is apparently derived from the "method of manufacture" requirement of the Statute of Monopolies. In Europe this requirement is generally interpreted to mean that an invention must have a technical character or, in other words, must make a technical contribution to the art. Thus if a patent application merely relates to a discovery, scientific theory or mathematical method or rules and methods for performing mental acts or doing business, or to computer programs as such, a patent will not issue.

In the USA, by way of contrast, an invention must fall into one of five "statutory classes" of things to be patentable: these are: processes, machines, manufactures (that is, objects made by humans or machines), compositions of matter, and new uses of any of the above.

As in the case of Europe, in the USA inventions have to be new in the sense that they must not form part of the state of the art any where in the world. Thus the European Patent Convention (Art. 54,1 and 2) provides that


The US Patent Law (35 U.S.C. § 102) provides for national novelty:


The second requirement of patentability is that a technological innovation must involve an inventive step, in the sense of an act of creation which is not obvious to a person skilled in the relevant art. In other words, there is no difference in meaning between obviousness and lack of an inventive step.

An inventive step may involve the solution to a long-standing problem or the satisfaction of a long-felt need. Simplicity of invention is said to be no objection to patentability Invention may lie in the conception, even where the method of carrying it out is obvious. Alternatively, the invention might lie in conceiving new methods for carrying an existing idea into practice. Or it might lie in a combination of the two. It is said that it is not inventive to apply a well-known mechanism or technique for an analogous purpose, but it will be inventive if a new use involves the utilisation of a hitherto unknown property of a known substance or mechanism.

The relevant knowledge against which obviousness is tested is that of the hypothetically skilled craftsman in the state of knowledge in the particular art existing at the priority date of the patent. Often a difficult question is the extent of diligence of the craftsman in seeking out knowledge. Some courts refer to the knowledge of a diligent researcher, while others focus upon the knowledge of a non-inventive, skilled worker.

The final requirement for patentability both in Europe and the USA is that an invention must be useful, in the sense f industrially applicable. This requirement is necessary to prevent the patent system from applying to scientific information for which a practical application has not yet been ascertained.

In the USA, the possibility to patent computer programmes and business methods arises from judicial interpretation that s.101 of the Patents Act includes "anything under the sun that is made by man" 1 .

However, this excludes laws of nature, physical phenomena, and abstract ideas. These are deemed discoveries and as such manifestations of nature which belong to the public domain.

The exclusion of such subject matter is, therefore, subject to the so-called mental steps doctrine. Although a computer program contains a method for solving problems and thus presents nothing more than a series of instructions to a machine, the scope of the mental steps doctrine has now already been by-passed.

Hence, courts began to consider the patentability of computer programs and ruled that an invention relating to firmware or to a computer controlled process for manufacturing rubber were patentable. The court distinguished between the mathematical formula and its application in controlling a process. The test was to look at the invention as a whole and not just at the novel features. Thus, a computer controlled process is patentable, although the process as such may reflect prior art, provided that the non-obviousness requirement is fulfilled.

However, the case law then started to move into a more generous direction which culminated in the question whether algorithms are patentable as such. The test was defined as follows. First, whether a mathematical algorithm is directly or indirectly recited in the claim. If yes, whether the claimed invention as a whole is more than the algorithm itself. This raises the question of whether the claim is directed solely to a mathematical algorithm, or whether it is applied to an industrial application or limited by physical elements. The lack of a mathematical formula in the specification does not of guarantee patentability Hence, the US Patent Office granted patents relating to the mathematical analysis of electrocardiographic signals, to the conversion of seismic signals, to a navigation system, to computerized systems for: for calculating the width of certain fractures; and for processing and supervising a portfolio of bank accounts.

On the other hand, a method for graphics interpolation was held not to be patentable since when the algorithm was taken out of consideration, the residue was merely a display of the results. The court held that "such post-solution activity does not convert claimed subject matter into" something embraced b. s.101.

A further wave of case law then emerged during the 1990s. the case of In re Donaldsongave the opportunity to refine the necessary test. Hence, it was asserted that if what was being claimed was effectively a machine, this would fulfill the patentability requirements if the method claimed had some physical embodiment. As to the general issue of algorithms included, it was decided that the "mathematical algorithm" exception to patentability is to be interpreted very narrowly since Congress had intended that "anything under the sun that is made by man" should be patentable. Limitation to patentability were thus restricted to claims directed to laws of nature, natural phenomena and abstract ideas only. This means that mathematical algorithms are patentable subject matter unless they represent a mere abstract idea or a disembodied mathematical concept, i.e. if they are applied in a certain fashion. If the concept was embedded in a machine which enables it to produce a useful and tangible result, the algorithm is thus patentable. This is so even if the claimed concept consists of a series of mathematical calculations.

Additionally, it was found irrelevant that a computer program claimed represents a general purpose claim. It was sufficient that the function of that program was to produce a special purpose in relation to a particular machine. In addition, it was also held that, for the purpose of being tangible, the embodiment of a computer program in a physical carrier was sufficient. (See p. 4)

Effectively, this opens a pathway to the patentability of all other concepts underlying certain methods, including all forms of computer programs, and was met with fierce criticism.

The patentability of software-related inventions is not, however, confined to the algorithm/business method area.

It is much easier to gain patent protection for computer software in the United States than it appears to be the case in the European Union. In the USA, the more fundamental approach to patenting - the general "everything under the sun" - enables courts to widely grant protection without any restriction even to the technical character of the subject matter at hand. The gravest consequence lies in a possible overprotection and thus monopolisation of informational items since the claim may well encompass not only the series of information embedded but also the concept which it carries out.

1. The US Supreme Court uttered these now-famous words in Diamond v. Chakrabarty (1980)

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