[DMCA-Activists] Re: [Patents] Washington Times: Internet Patents Divide Industry

[Seth Johnson]

Hartmut Pilch wrote:
> 
> > One very perverse sentence to highlight what's wrong with this article:
> >
> > "Experts say the 1998 "State Street vs. Signature Financial" decision from
> > the U.S. Court of Appeals for the Federal Circuit was an acknowledgment that
> > intellectual property was as much about ideas as about things."
> 
> Right, and this error permeates the article.  But the following
> sentence contains a rare insight, at least for Europeans:
> 
> > The U.S. Patent Office had been granting business-method patents for
> > years and the court simply signaled its approval.
> 
> The same is true of how rules are made here.  And although here it is not
> politically correct to give the approval in an understandable way, the
> proposed EU Directive nonetheless would give it, see
> 
>         Why Amazon One-Click Shopping is Patentable under the EU Directive 
> Proposal
>         http://swpat.ffii.org/papers/eubsa-swpat0202/tech/


Okay.  Just FYI, the following is my "common response" when people use the
phrase "intellectual property."  For US folks, however.  It might be good to
set a date when the equivalent of Bayh-Dole took sway in Europe, or at least
when the influence of America's promulgation of the term started taking root
there.  The main thing I'm trying to accomplish is to emphasize the
relatively short historical influence of the term, and let that segue into a
discussion of what the purpose of exclusive rights really is, as well as how
different circumstances are today, versus how ordinary the correct notion
was before:

"Intellectual property" is not property.  The term was invented in the
mid-60's by the World Intellectual Property Organization, who have sought to
encourage its use ever since.  It was never used without scare quotes around
it until 1980, because before then the purely metaphorical nature of the
phrase was always recognized.  Copyright and patent and trademark are all
very different, and they are absolutely not natural rights.  Use the term
"exclusive rights," or the particular kind of exclusive rights you're
talking about -- copyright, patent or trademark.


We just got heady over information technology, and State Street is one
hugely unfortunate consequence of that.

. . . Okay, I just scanned that page at your URL (text pasted below sans
internal links), and my reaction is generally, I think you have pages upon
pages of useful information and references on the swpat.ffii site.  What
leaps out at me is that after that analysis goes on (and I believe after a
certain point, you get a pretty good idea what the key points are), the next
step is to convert to simple headline pitches for action.  For instance, my
first thought about a pitch for action is to use the headline "Tell the
European Commission: Define Your Terms!"  A second line might be "Stop the
EC From Passing Nonsense Laws to Allow the Patenting of Ideas!"  Then the
text of the blurb would be a simplified version of about two or three key
points that form the basis for the call to action.  Maybe some more
"activist-toned" organization could take up this role.  Maybe you wouldn't
use as many exclamation marks as we would, or you wouldn't put it quite this
brazen a way.  :-)  But the key is make the message one that registers and
resonates with its simplicity and directness.  It's always possible to do
this, if you focus on central contradictions.  You need to distill it down
to something for which you don't need qualifications and caveats, as much as
possible -- leave that for the detailed analysis.  There's an example of a
successful pitch we at New Yorkers for Fair Use used to galvanize the
submission of over 6,000 public comments (4,000 in the final week of the
public comments period) in opposition to the US FCC's proposal to require
the honoring of a "broadcast flag" for content control in digital broadcast
TV devices, at: http://www.nyfairuse.org/action/fcc.flag/fcc.flag.xhtml

All of these great pages at swpat.ffii, even the enormously useful summary
pages such as "Essence of the Proposal," should be the detailed background
for outreach blurbs that are much more simple, highlighting specific
selected contradictions for targeted action, blowing the implications of
those specific contradictions wide open, leaving the detailed and rigorous
analysis for links at the bottom.  Violate the premises of the other side
through mobilization of your constituency, one piece at a time.

Anyway, see, that's the way I think.  :-)

Seth

----

> http://swpat.ffii.org/papers/eubsa-swpat0202/tech/

Why Amazon One Click Shopping is Patentable under the Proposed EU Directive

According to the European Commission (CEC)'s Directive Proposal COM(2002)92
for "Patentability of Computer-Implemented Inventions" and the revised
version approved by the European Parliament's Committee for Legal Affairs
and the Internal Market (JURI), algorithms and business methods such as
Amazon One Click Shopping are without doubt patentable subject matter. This
is because 

- Any "computer-implemented" innovation is considered in principle
considered to be a patentable "invention" 
- The additional "requirement" of "technical contribution in the inventive
step" does not mean what most people think it means. 
- CEC and JURI have built in additional layers of safeguard and redundancy
so that, even if some provisions are amended by the European Parliament,
unlimited patentability remains assured. 
- The directive proposal explicitly aims to codify the practise of the
European Patent Office (EPO). The EPO has already granted thousands of
patents on algorithms and business methods similar to Amazon One Click
Shopping.


1. The CEC/JURI doctrine of "technical contribution" in a nutshell

According to EPO/CEC/JURI doctrine, the "inventive step" between the
"closest prior art" and the "invention" must involve what is called a
"technical contribution" or "solution of a technical problem": an
improvement of computing efficiency, e.g. a reduction in the number of
mouse-clicks. This "technical contribution in the inventive step" exists in
different wordings in the US as well. US patent attorneys therefore
generally write business method patents in a way that allows them to pass
the EPO's requirements, and thousands have already passed. An attorney who
is unable to patent algorithms and business methods under the EPO/CEC/JURI
Directive would not be worth his lawyer's fee. 

As if this was still not enough, CEC/JURI take care to ensure that the
"technical contribution" can consist of "non-technical features" only, and
that it is left to the courts to decide what "technical" may mean. Contrary
amendment proposals from other Parliamentary committees were rejected by
JURI. 

2. Voided Terminology and its Technical Contribution to Legislative
Engineering in the EU

The word "technical" is still in use at the EPO, but it is never defined or
explained. In some decisions it retains its old meaning of "concrete and
physical". In others it seems to mean only "concrete" or even "related to
specialist knowledge". One EPO judge proposed to redefine "technical" as
"practical". 

The EPO deliberately maintains this ambiguous and undefined status of the
term "technical". One EPO official explains why: 

"I'm glad you asked me about that. It's a wonderful word, fuzzy and yet
sounds meaningful. We love it. Until 2001, it had no basis whatsoever in the
EPC, just a passing mention in a couple of rules. .... I agree that we've
never defined 'technical'. It's deliberate and allows us to fine-tune as a
consensus develops on what should be patentable. Yes, I do know the correct
way to do that is by amending the law, but have you any idea how hard it is
to get consensus on amending the EPC?"

Proponents of the software patentability directive at the European
Commission also insist that the word "technical" 

- must be the only criterion for distinguishing patentable from unpatentable 
- must be without definition, because "inventions are by definition
imprevisible" and "technology is not static".

MEP Arlene McCarthy also draws upon the ambiguity of the word "technical"
when she promotes the directive proposal as follows:

"Programmes which underpin non-technical inventions will also not be
patentable, in particular those concerned with non-technical business
methods (such as "reverse auction" arrangements) along with the methods
themselves. Although these are widely patented in the United States, in
Europe it has been shown that there to be no case for such extension of
patents in Europe."

McCarthy excludes only "non-technical business methods" from patentability,
and the European Patent Office (EPO) finds all "computer-implemented
business methods" to be "technical". Let us quote what the EPO and leading
patent practitioners have to say about this: 

- EPO 2000/05/19: Examination of "business method" applications:

"It should be emphasised that ... the computer implementation of a ...
business method, can involve "technical considerations", and therefore be
considered the solution of a technical problem, if implementation features
are claimed."

- Wüsthoff 2001: Strategic Advice to Banks on Business Method Patents in
Europe:

"Of course, the liberal practice in the U.S. requires to file almost any
business method for patent. These business methods are always implemented by
a computer (I have not seen any other example)."
[...] 
"When studying a business method computer software program it turns out that
in most cases that program includes at least one aspect (feature) which
might qualify under the European standards as "technical"."

- K. Beresford, World Patent Information 23 (2001) 253-263: European patents
for software, E-commerce and business model inventions:

Abstract: It is commonly held that software, e-commerce and business models
related inventions are inhenrently unpatentable in Europe. In reviewing the
situation, this article emphasises the large number of inventions in this
field which have in fact been patented through the EPO or through national
patent offices in Europe. [...] He shows that, if proper attention is paid
to both the substance and the form of claims and description, to direct the
reader to the technical problem and its solution, effective protection is in
fact very often available. 

- Iusmentis: EPO Business Method Patents 

A patent attorney informs about the EPO's practise of granting business
method patents, citing numerous examples. 

- EPO T0931/95: Pension Benefit System 

EPO decides in 2000 that the "computer-implemented business method" in
question is statutory subject matter (i.e. an "invention"), but does not
"make a technical contribution in its inventive step". Amidst their efforts
at revising Art 52 EPC in summer 2000, EPO representatives immediately
touted this as the new model caselaw of the EPO. It later became, together
with Appendix 6 of the Trilateral Conference documentation, the basis of the
CEC software patent directive draft. It is however to be doubted whether
this decision provides a clear guidance to anyone except perhaps for
claim-drafting patent attorneys. The judges admit that their basis for
rejecting the patent is undefined: 

"It may very well be that, as put forward by the appellant, the meaning of
the term "technical" or "technical character" is not particularly clear.
However, this also applies to the term "invention". In the Board's view the
fact that the exact meaning of a term may be disputed does in itself not
necessarily constitute a good reason for not using the term as a criterion,
certainly not in the absence of a better term; case law may clarify this
issue."

- Erwin J. Basinski: Business Method Patents in Europe - A Saussurean
Explanation

A US patent attorney explains how claims to business methods must be crafted
if they are to pass at the EPO in the light of the "Pension Benefit System"
decision. Basinski concludes that 

"If you have any intent to file a Business Method type application in
Europe/Japan/etc. and even for purposes of the US you will have to approach
the invention a little differently. The EPO rules should generally be
followed because if you do it their way it should work in the US and Japan."

Basinski explains that, by following the EPO's rules, the applicant will
have to add some redundant specifications to his patent description which do
not make the patent less broad but rather more cryptic: 

"In the background section, one should describe the "technical problem"
addressed by the invention, in terms of how the system/method makes the
computer function "more efficiently" "faster" "in a less costly way" "more
of something" in doing what the invention is doing (such that you have a
"further technical effect" rather than just the interaction of computer and
its instructions). The description of the technical solution then becomes a
cryptic statement of what the invention does and should specify the novelty
and inventive step."

- Kober 2001: Die Rolle des Europäischen Patentamts 

Dr. h.c. Ingo Kober, president of the European Patent Office (EPO), explains
how much the european patent system has already achieved, how important it
has become for the knowledge economy and that, as far as software and
business methods are concerned, the EPO enjoys the full support of the
national governments. Yes, they did not fulfill the EPO's wish to remove the
computer program and business method exclusions in Art 52 EPC at the
Diplomatic Conference of November 2000, but that does not change the fact
that the EPO, as its president explains, the EPO grants patents on computer
programs and computer-implemented business methods, nor does it imply any
criticism of this EPO practise. 

- BPatG Error Search 2002/03/26: system for improved computing efficiency =
program as such

In 2002 the German Federal Patent Court (Error Search decision, 26 March
2002, BPatG 17 W (pat) 69/98) rejects an EPO patent on a non-technical
innovation and points out that the EPO's doctrine of "technical
contribution" makes all business methods patentable and is therefore in
violation of the European Patent Convention: 

"The applicant sees as a decisive indication of technicity of the method
that it is based on a technical problem. Because the proposed method does
not need a dictionary, the memory space for this can be saved. [...] As far
as the technical problem is concerned, this can only be considered as an
indication but not as a proof of technicity of the process. If computer
implementations of non-technical processes were attributed a technical
character merely because they display different specific characteristics,
such as needing less computing time or less storage space, the consequence
of this would be that any computer implementation would have to be deemed to
be of technical character. This is because any distinct process will have
distinct implementation characteristics, that allow it to either save
computing time or save storage space. These properties are, at least in the
present case, not based on a technical achievement but result from the
chosen non-technical method. If the fact that such a problem is solved could
be a sufficient reason for attributing a technical character to a computer
implementation, then every implementation of a non-technical method would
have to be patentable; this however would run against the conclusion of the
Federal Court of Justice that the legal exclusion of computer programs from
patentability does not allow us to adopt an approach which would make any
teaching that is framed in computer-oriented instructions patentable."

---

>From this it becomes clear that the "technical contribution" means trivial
improvement of computing efficiency, as found in any "computer-implemented
business method". This "contribution" is not "made" but constructed by the
patent attorney. A patent attorney who can not construct a "technical
problem" from a business method would hardly be worth his fees. And any
solution to a "technical problem" will necessarily entail some kind of
improvement in computing efficiency. 

Once software becomes patentable, the word "technical" can no longer mean
"concrete and physical" but at best "concrete". However, since all
non-trivial advances in software are of abstract nature, "concrete" in this
context implies "trivial". Which of course does not mean that a business
method must be trivial in order to qualify for patentability at the EPO.
E.g. Karmarkar's solution to the problem of the travelling salesman was not
trivial. However its ingenuity lies in the field of mathematics, and in
order to qualify for an EPO patent, ingenuity in mathematics is said to be
irrelevant, whereas novelty (compared to known mathematical methods) and the
presence of a technical contribution (i.a. a trivial improvement in
efficiency of solving a constructed computing problem) are necessary
conditions. 


3. The Privileged Status of the Amazon 1Click Patent in Brussels

CEC/BSA 2002-02-20: Frequently Asked Questions 

- The European Commission (CEC) has never cited any example patents in order
to explain what should be patentable and what not, the only exception being
"Amazon One Click Shopping". Yet, although CEC may make the casual reader
believe that Amazon One Click Shopping would not be patentable in Europe,
the more attentive reader clearly recognises from this statement that in
fact it is: 

Q: Would the Amazon "one-click" shopping cart ordering model be patentable
under the Commission proposal? 
A: The European Patent Office has yet to come to a decision on the related
European application, so it would not be appropriate to comment on whether
there is any patentable subject-matter in the application as a whole.
However, a patent with the breadth of claims which has been granted in the
United States would be highly unlikely to be considered to make a "technical
contribution" in the EU under the terms of the proposed Directive. 

In other words: the Amazon 1Click method is in principle patentable by
EPO/CEC standards but, depending on what prior art is found, the claims
might be narrower than in the USA. It should be noted that in the USA also
the claims did not encompass a whole "ordering model" but rather a way of
reducing the amount of needed mouse-clicks in a given situation, i.e. what
EPO/CEC/JURI call a "technical contribution". In private, law drafters at
the European Commission were quite upset about the general public's
misunderstanding of Amazon One Click Shopping. They agreed with Eurolinux
representatives that the claims granted in the US were not about a business
model but about a way of improving computing efficiency. Therefore it was
difficult for the authors of the CEC FAQ to clearly declare Amazon One Click
Shopping unpatentable, as would have been politically expedient at the time. 

- Arlene McCarthy MEP 2003/07: reply to Richard Jones 

Arlene McCarthy explicitely refuses to explain her position in terms of
example patents, but, when it comes to "Amazon One Click Shopping", is quick
to deviate from this rule:

"While it is not possible to comment on whether any patent application would
be excluded from the directive, the directive, as amended, would not permit
the patentability of Amazon's 'one-click' method."

Unfortunately McCarthy does not support this assertion with any reasoning as
to what in her proposal, particularly in her amendments, might make Amazon
1Click unpatentable. Arlene McCarthy has less difficulty than the patent
experts of the European Commission in reconciling political expediency with
the expert's conscience. This may in part be due to the fact that, as she
says herself, she is "not an expert". 

see also Arlene McCarthy MEP 2003/07: reply to Phil Hunt, McCarthy
2003/05/03: Software Patent Directive Proposal FAQ and PHM to AMccarthy
03/06/10: Questions based on 2 Example Patent Claims 

- One-Click Shopping: litigation turns out unexpected real owner 

Amazon has meanwhile lost its patent lawsuit in the US because prior art
documents showed that the method was not new (but in fact already patented
by Thomson Multimedia, to whom Amazon now has to pay license fees).
Therefore Amazon withdrew its application from the EPO, where it had already
entered into the second stage of examinaton, i.e. had been found to be
patentable in principle. This allows some people in Brussels to pretend that
the EPO has higher standards of examination than the USPTO. It does not. It
is merely slower.