Differences in Patent Eligibility Around the World

Two things must always be true when you’re applying for a patent, wherever you are in the world — (1) Your invention must be novel and (2) it must be useful. However, different nations have different definitions of these two requirements based on their cultures, legal systems and business environments. This is especially true for innovations related to software, medical methods and business methods. 
 

To patent or not to patent

Though the three fields are quite different, they have issues in common, and countries tend to address them using similar criteria. First among the considerations of patentability is the desire to avoid patents that will inhibit further innovation. In the U.S., for example, care is taken to make sure the subject of a patent application is something specific and not an abstract idea. In other countries, it may mean that certain types of patents aren’t awarded at all. Likewise, patenting authorities everywhere are averse to patents that keep others from doing their jobs. This is critical in the medical industry. In Europe, for example, the European Patent Office (EPO) is wary of awarding medical methods patents that could inhibit the actions of doctors as they treat their patients. Similarly, business method patents must be specific enough that they don’t inadvertently put common procedures and systems out of bounds for other companies.

And then there’s the relationship between copyrights and patents. Software, for example, can usually be copyrighted, and patent authorities who may deny a patent understand that in many cases copyright protection is sufficient. Copyrights are also inexpensive, granted automatically once an application is released, and last longer (70 years vs. a patent’s 20 years). What a copyright doesn’t protect — which is the reason why applicants consider the expense and difficulty of applying for a patent to be worthwhile — are the underlying technologies within the software. For example, Adobe Photoshop is copyrighted as a software application, and its name is trademarked, but it is also the subject of numerous patents for the inventions it contains.

A closer look at some of the world’s key economic players reveals a variety of approaches to awarding patents.

Patent eligibility in the U.S.

Software Patents: In the U.S., the basic philosophy is that a software invention is patentable if it meets two requirements:

• It’s unique — i.e. it’s something new.
• It’s tied to a machine — i.e. the type of hardware platform on which the software runs is specified so that a patent isn’t granted for the description of an abstract process, but rather for something that requires a specific type of physical hardware. (This is a bit more open-ended than the machine requirements in other countries, as we’ll see.)

There are three types of software, however, that are not patentable:

• An algorithm cannot be patented.
• A scientific law cannot be patented.
• An abstract idea cannot be patented.

The third type of non-patentable software relates to the U.S. Supreme Court’s decision of June 19, 2014 in the case of Alice Corp. v CLS Bank. This case set a precedent for the USPTO to reject  computerized versions of abstract ideas. As a result, the number of software patents denied by the USPTO under Section 101 has more than doubled due to judgements finding inventions to be nothing “significantly more” than abstract ideas. For example, last year, the Alice standard was used to invalidate a patent application for a patient health information management system claiming to provide a solution to cost inefficiencies in electronic health record systems. The U.S. Court of Appeals for the Federal Circuit issued a decision saying that the patent application was “directed to the abstract idea of billing and also to a fundamental economic practice of calculating a patient’s bill.”

IP lawyers are having a difficult time trying to figure out exactly what qualifies as “significantly more” than an abstract idea and the USPTO is expected to release new examination rules to clarify the matter. One judge has even stated that Alice ends software patents in the U.S., period.

Medical Method Patents: A medical method is patentable in the U.S. if it meets three requirements:

• Specificity — It’s specific enough that its limitations can be clearly identified.
• Practical Application — It’s a method of treatment for a particular condition using a particular drug.
• Central Transformative Effect — It fundamentally changes the nature of its intended target.

Business Methods Patents: Business method patents have been allowed in the U.S. since 1988, though, here again, the Alice decision has cast doubt on their feasibility going forward. Alice aside, a business method can be patented if it produces a “useful, concrete, and tangible result” and has actual real-world value. It can’t be just a concept or an operation intended for further study.

Patent eligibility in Europe

Software Patents – Software, on its own, is not patentable through the EPO. It can only be protected as a “computer-implemented invention,” which is defined as a software program that performs some novel and useful function within a hardware device that is itself being patented.

Medical Method Patents – The EPO will approve an application for a medical method patent if it’s new and inventive, and if it isn’t a form of surgery, therapy or diagnostics. Refusing patents for surgical, therapeutic and diagnostic methods is intended to free doctors from having to worry about unintentionally violating someone’s patent during the treatment of a patient, as noted earlier. 

Business Methods Patents – The EPO allows a business method to be patented only if it contains “technical” features, meaning it is a non-obvious, new and inventive method for operating a specific hardware device or group of devices.

Patent eligibility in Asia

Software Patents – Countries like Japan, India and South Korea typically apply the same exception as the EU – i.e. software cannot be patented unless it is an element within a hardware invention. Historically, China has viewed software patents the same way, though recently released patent examination guidelines suggest the country is becoming more receptive to the idea of patenting software as a separate entity. The guidelines released earlier this year by China’s State Intellectual Property Office (SIPO) now allow for the patenting of a (storage) medium plus a computer program process. This also implies to some experts that the two elements — storage devices and software — may be separately patentable as well.

Medical Method Patents – Japan operates under much the same philosophy as the EPO, allowing medical patents as long as they don’t get in the way of practicing physicians’ work. China has allowed pharmaceutical patents since 1992. Interestingly, for medical methods, China’s examiners don’t look for a patent claim to meet a set of allowable standards — instead, they keep a list of all the specific medical methods that are excluded from patenting. South Korea doesn’t allow patents for medical methods, nor does India — which excludes from eligibility “any process for the medicinal, surgical, curative, prophylactic, diagnostic, therapeutic or other treatment of human beings or any process for a similar animal treatment render them free from diseases.” 

Business Methods Patents – In Japan and now China, a business method that’s performed using hardware can be patented. In South Korea, novel inventions that improve the technical features of an automated system can qualify for protection. You can’t patent a business method at all in India.

The Future of Patents Around the World

Innovations in software, medical methods and business methods are important to the health of any nation’s economy, and it’s universally understood that continued investment in these areas requires fair compensation for the innovators. It’s equally understood, however, that awarding patents for such innovations requires careful consideration and many countries are still in the process of deciding how to handle these applications. After all, even the seemingly settled U.S. patent system is now vulnerable to profound realignments, as demonstrated by the Alice upheaval last year.