Computer-implemented inventions litigation in Europe

1. Dr Matthieu DHENNE Avocat à la Cour Paris France md@dhenne-avocat.com Computer-implemented inventions litigation in Europe

2. What is a CII? • “The expression “computer-implemented inventions” (CII) covers claims which involve computers, computer networks or other programmable apparatus whereby prima facie one or more of the features of the claimed invention are realized by means of a program or programs.” (EPO Guidelines) • But programs for computers are “as such” explicitly excluded from patentability.

3. Legal provisions: statutory law Articles 52 EPC and L611-10 CPI (1) European patents shall be granted for any inventions, in all fields of technology…. (2) The following in particular shall not be regarded as inventions: (a) mathematical methods (b) aesthetic creations (c) mental acts games business programs for computers (d) presentations of information (3) [These are excluded from patentability] only to the extent to which [the claim] relates to such subject-matter or activities as such.

4. Someparticularities of the litigation 1/2 • First: litigationwas rare, mostlybecausevaliditywas incertain. • Second: PI couldbecomplicatedwhentelecommunications (for instance) are involved. • Third: infringementisdifficult to assess and need an access to a server whichisoftenabroad. • Fourth: in France asking for an independant expert is rare and hereitis the contrary, especiallysinceweneed to get an accessinside computers. • Fifth and not least: thisfieldisgenerally not understood.

5. Someparticularities of the litigation 2/2 • By now the most important question is: ismy patent valid or not? • Honestly: itdepends on how itisredacted. The acuracy of the specificationisvery important here: the more accurate the specification the more crediblewewillbe. • Wecan’tusedany patents to go to Court. Even in Germany, the risk: a stay for the BPatG.

6. Validity: Technical character Test • The technical character standard, deducted from a reading a contrario of article 52, is used to assess if a claim relates to an invention or to an item excluded per se: the “technical character test”. • The technical character has not been defined clearly. • But the case law developped some methods to assess it.

7. Approach of the incorporation 1/2 • The integration of a thing which is not technical to a new technical set gives birth to a new patentable device. • In the computer industry via the concept of virtual machine, which is the illusion of a new machine: it is the use of a known machine according to a new program.

8. Approach of the incorporation 2/2 • This concept has especially been employed by the Board of Appeal of the Netherlands Patent Office (Octrooiraad). • The British practice prior to entry into force of the Munich Convention reveals a similar position (PAT, 23 October 1969, Gevers' application). • During 1980’s, the Bundespatentgericht has developed a body of case law favorable to this approach. But the Federal Patent Court (Bundesgerichtshof) put an end to this and reaffirm the core theory (Kerntheorie).

9. Approach of the essential element 1/3 • According to the theory of the essential element, subject matter can be considered as technical if its essential element belongs to the field of technology. • This is known by the German term “Kerntheorie” (core theory). • The approach comprises three steps: decomposition of the invention; delimitation of the essential element; characterization (is the essential element technical or not?).

10. Approach of the essential element 2/3 • This approach has been retained by the German Courts for a long time. • The Bundesgerichtshof has admitted the technicality of a page buffer in holding that it was essentially technical because the software improved the internal functioning of the computer (e. g. BpatG, 14 June 1999, 20 W(pat) 8/99, Absatzsteuerung Automatische). • In England, the judges have employed a similar method: the “localization of novelty”. The Statute of Monopolies provided that only a new “manner of manufacture” could constitute an invention. Some decisions have thus rejected the appropriation of inventions whose novelty was not localized in a manufacture (PAT, 26 July 1968, the Neva's application).

11. Approach of the essential element 3/3 • In France, it is clear from the Schlumberger  caselaw that the device implemented by a program may be technical if the program only plays an accessory role. • But the device is not technical if the software plays an essential role. • Paris Court of Appeal, June 15, 1981 « Schlumberger » • Paris Court of Appeal, February 26, 2016 « SESAME » • Paris Court of Appeal, December 16, 2016 « Exalead »

12. The technical contribution approach 1/5 • The EPO has introduced the concept of technical contribution in guideline published in 1985: • “[I]f the claimed subject matter makes a technical contribution to the state of the art, the patentability should not be put in issue for the simple reason that a computer program is involved in its implementation.” • Why? To be able to understand the contribution of inventions that contain both technical and non-technical features. • This approach was adopted in T-208/84 (Vicom ) and T-26/86 (Koch & Sterzel).

13. The technical contribution approach 2/5 • The Bundesgerichtshof finally adopted the concept of technical contribution in the Tauchcomputer  decision rendered in 1992 (BGH, Tauchcomputer, 1992). •  An application had been filed on a device recording diving data, then indicating the decompression time, with a display of the optimum decompression for each dive. • The contribution lay in the co-operation of the technical features (the diving device) and non-technical features (the method and the computer program) to achieve the technical result (the display of information relating to the decompression).

14. The technical contribution approach 3/5 • The decision rendered in the Merrill Lynch  case was the first British example (CA, 1989). • An application had been filed for a system of stock exchange transactions able to analyse the orders of purchases and sales of customers, according to a given criterion • The satisfaction of this criterion resulted in the automated operation of the transaction. The Court of Appeal rejected this application by referring to Case T-208/84, judging that the claimed invention contained no technical progress. • But, in this case, the Court of Appeal confused the technical contribution with the requirement of a technical progress.

15. The technical contribution approach 4/5 • Merrill Lynch has led the British Judges to retain a strict conception of the technical contribution : Gales’ case (CA, 1990). • The contribution of the invention was a method of calculation of square roots that eliminated the divisions and limited the multiplication of specified binary functions. • The Court of Appeal rejected this application by distinguishing between the mathematical procedures and the ROM memory and judging that the integration of the first into the second does not demonstrate their technicity. • Similarly, it has been found, in the Aerotel case, that the method of making telephone calls from any phone with a special code was patentable, because the application did rely on a new technical device intended to implement the method.

16. The technical contribution approach 5/5 • One example of the use of the technical contribution in the French case law (TGI Paris, 7 June 2013, Starsight v Numéricable, RG n° 10/08326). • The patent concerned a process and a device to access information regarding television programs. • The question raised on the validity of the title was the following: was the claimed invention a presentation of information? • The Judges indicate that "at this stage of the review of the validity, there is no place to search the novelty or inventive step of the invention […] on the other hand, the appreciation of its patentability involves determining the technical contribution that the patent claims ". • The judges reiterate firmly, via an obiter dictum, that a computer program does not constitute a patentable technical feature.

17. The further technical effectapproach 1/4 • The TBA 3.5.1 has for the first time admitted a product claim on a computer program in the decision T 1173/97 rendered in 1998 (IBM I). • Each feature listed may be the subject matter of an invention, provided that said invention produces a technical effect. • But this technical effect cannot consist of the electrical current produced by inserting the program into the machine. In this case, the technical character depends on the production of a further technical effect.

18. The furthertechnicaleffectapproach 2/4 • The criterion of the further technical effect has been used several times by the national Courts. In France, the concept was used by Paris Court of Appeal in a decision rendered on 20 September 2005. • The claimed invention related to a method for preparing an application for the registration of a trade mark. • The application was refused by the Director General of the INPI on the grounds that it related to an intellectual method that originated from the field of economic activity. • The Court upheld the judgment, as the method consisted of the implementation of a non-technical method by known technical means. The invention did not produce any further technical effect.

19. The furthertechnicaleffectapproach 3/4 • Paris High Court referred to the concept of a further technical effect in the decision FREE rendered on 18 June 2015. • The claimed invention related to a switching of multimedia sessions from a mobile terminal to local network equipment. • It was considered that a program-product constituted a computer program as such, which was excluded from patentability, and that the achievement of the other two claims did not produce a further technical effect, which was also a barrier to their patentability. • Paris Hight Court, November 16, 2016, Xaga v. Ewalia

20. The furthertechnicaleffectapproach 4/4 • The Bundesgerichtshof has used a concept equivalent to that of the further technical effect: the particularity. • This criterion has been used in SucheFehlerhafterZeichenketten/Tippfehler (2002). • The claimed invention related to a system for the identification and correction of typing errors in a text recorded by digital means. •  The application contained a product claim on the computer program makingthis correction. The Court of Appealconfirmed the rejection on the grounds that the solution lay in a computer program as such. This decisionwas set aside by the Supreme Court. It wasjudgedthat the question waswhether the claimed invention included a particularitycomparedwith the currentfunctioning of a computer.

21. The any hardware approach 1/4 • The use of conventional technical means, such as the computer implementation of a method, is sufficient to justify the technical character (EPO, T 258/3, Hitachi,2004). • Claiming known technical means into the claim is sufficient to ensure the technical character of the invention.

22. The any hardware approach 2/4 • In France, only two decisions refer to a test relating to the any hardware approach: Infomil v. Atos. • The invention claimed related to a method and apparatus for the selective distribution of discount coupons • It was considered that the intellectual method performed by the device did not prevent the invention from being patentable in relation to said device. It was the lack of inventive step that led to the revocation of the patent.

23. The any hardware approach 3/4 • In England, the Court of Appeal rejected the any hardware approach in Aerotel case (CA, 2006). • According to Judge Jacob, the approach developed by the EPO in the case T 258/03 was not "intellectually honest". • The Court of Appeal has, however, brought the English position closer to that of the EPO in Symbian case: the claimed invention engendered a technical effect consisting in the modification of the internal functioning of the computer that produced the implementation of the program. • In AT&T Knowledge Ventures case (2009), Judge Lewison clarified what were the four signposts of the technical effect: • if the process has a technical effect outside of the computer; • if the technical effect is at the level of the architecture of the computer, in other words if the technical effect is produced without taking account of the data or applications; • if there is an increase in the speed or the reliability of the computer; • if the technical problem is overcome and not bypassed.

24. The any hardware approach 4/4 • In Germany, the Bundesgerichtshof has adopted an approach like the approach of the EPO in a decision rendered in 2006 (BGH, 7 March 2006, VorausbezahltenTelefonanrufen) : • The claimed invention was identical to the one claimed in the Aerotel case. It was a system that allowed telephone calls with any type of device thanks to a special prepaid code. • The Court found that the presence of known technical means guaranteed the technical character of the invention.

25. EXAMPLES OF FRENCH CASES1/2

26. Programming: the French case Paris first instance court, November 18, 2016,  Xaga Network SAS et al. v. Ewalia et al. Invention • system allowing users to easily customize generic applications without any coding, such that users need not be skilled programmers • customizable and adaptable development of preconfigured applications by a simple activation-deactivation of modules

27. Programming: the French case Making programming easier: not technical Paris first instance court, November 18, 2016,  Xaga Network SAS et al. v. Ewalia et al. Invention • system allowing users to easily customize generic applications without any coding, such that users need not be skilled programmers • customizable and adaptable development of preconfigured applications by a simple activation-deactivation of modules

28. The French case: decision Sesame Mere automation of a business and intellectual method: ineligible • sets and subsets of data of a business nature • No specific data structure or hardware from the technical point of view • Intervention of the user to reduce the traffic (choice of an optimal freighter) breaks the technical chain  broken technical chain fallacy

29. Xaga: claim 1 of corresponding EP application also refused by EPO A system for managing applications (APP), characterized in that it comprises: – a web server (SRVW) including: – objects comprising one or more predefined and pre-assembled components (Cp), said objects forming: – a generic model of Organization (MGO) composed of logical organizational entities (ST) forming sets of identified physical persons, said logical organizational entities (ST) being possibly configured to be linked together; – a generic management model (MGG) composed of logical operational entities (EO), an operational entity comprising at least one task which can be implemented by at least one person, said logical operational entities being possibly configured to be linked together; – a generic pilot model (MGP) consisting of data analysis tools (OA) so as to monitor, owing to a set of indicators, actionsperformed on at least one operational entity (EO); – a generic model (MGS) of screens and kinematics (SCR) for a user interface (Ul), said kinematics corresponding to a sequence of screens; – a set of tables and files (G_TAB) characterizing the possibilities of activation and personalization of the objects and characterizing the processes, flows and rules associated with the objects; – identification tools (ID_T) of the possible activations of objects linked to an initial activation of an object; – management tools (MG_T) allowing the construction of logical networks comprising data spaces, and preassembled links that can be activated and customized, each data space being composed of all the objects, – a connector object (ML) searching for tables and files corresponding to the activation and personalization of components of the object and object data to be displayed in the areas of the corresponding screen; – a data server (SRVD) including a predefined single physical database (DB1) comprising the data corresponding to said objects.

30. EXAMPLES OF FRENCHCASES2/2

31. Business methods: the French case Paris court of appeal, February 26, 2016, Sesame Active System v. Director of French patent office (INPI) Invention • haulage platform application • specific architecture of registers and specific software • processes data concrete and specific to vehicle loading (loads, vehicle capacity, etc) • Advantages • optimizes vehicle loading • global traffic reduction

32. Business methods: the French case Mere automation of a business and intellectual method: effects not credibly reached (similar argument as broken technical chain fallacy in T 1670/07 - Shopping with mobile device/NOKIA) Paris court of appeal, February 26, 2016, Sesame Active System v. Director of French patent office (INPI) Invention • haulage platform application • specific architecture of registers and specific software • processes data concrete and specific to vehicle loading (loads, vehicle capacity, etc) • Advantages • optimizes vehicle loading • global traffic reduction

33. The French case: decision Xaga No technical problem: ineligible • The programming activity field does not constitute a patentable technical activity • it is not made explicit how the proposed management system effectively helps the user

34. Sesame: claim eventually refused System for goods transportation/haulage by road vehicles, including a central processing station, shippers capture stations, carriers capture stations and means of communication between the central processing station and on the one hand the charterers capture stations and on the other hand the carriers capture stations to allow the carriers to access the charterers' offers, characterized in that the central processing station includes: at least three registers corresponding respectively to data relative to the nature of the load, to time and to space, each of these registers being divided into a sub-register dedicated to the shippers and for receiving data relating respectively to the required load capacity, to a target time for loading and delivery and to a loading and unloading place, and a sub-register dedicated to carriers and for receiving respectively data to the available cargo capacity, a provisional schedule time for moving, a departure and a destination city; a CPU that drives these three registers, that compares the capabilities of a vehicle in terms of spatial and temporal capabilities and load and size, with space and time constraints, as well as load and congestion, defined by a freight offer associated with a charterer capture station, that follows the progress of each vehicle associated with the carrier entry station, that compares the progress of each vehicle in time and space with time, and that targets space defined from a charterer capture station.

35. The French case: provisions for refusal • Art. L. 612-12 CPI Substantive ground to refuse an application only if the application: • relates to subject-matter which can manifestly not be considered as an invention (ineligibility), or • has not been amended, after an invitation to do so, although the lack of novelty manifestly results from the search report. Inventive step is only a ground of nullity The lack of novelty must be manifest • The ineligibility should probably also be manifest for a refusal by INPI