[A2k] Rob Tiller (Red Hat) reporting on TRIPs and swpats

Erik Josefsson erik.hjalmar.josefsson at gmail.com
Fri Oct 5 03:37:27 PDT 2012

In the article *"What to do about the "patent troll" problem"* at
http://opensource.com/law/12/9/what-do-about-patent-troll-problem there
is a paragraph that looks very very promising:

    /"What about a change in the law to eliminate patents for software?
    The report touches on this possibility, noting that the proposed
    SHIELD Act would treat software as a special category of invention.
    It also notes that the old argument that such an approach might be
    barred by international treaty (the TRIPS agreement) is not
    decisive. Although many consider this approach too radical to be
    viable, it's good to see that the Congressional Research Service is
    not prepared to rule it out."/ 

That's Good! The compatibility of EPC 52.2 with the TRIPs language "all
fields of technology" was an issue frequently revisited in the EPs in

Below some old stuff on the matter from FFII.

    *The TRIPs Treaty and Software Patents*

Best regards.


In a decision of 2000
<http://eupat.ffii.org/papers/bpatg17-suche00/index.de.html>, in which
it rejects a claim to a computer program, the German Federal Patent
Court explicitely refutes the TRIPs fallacy:

The Treaty on Trade Related Aspects of Intellectual Property Rights
(TRIPs) does not entail any different judgment of patentability.
Independently of the question as to in what form - directly or
indirectly - the TRIPs treaty is applicable here, the application of Art
27 TRIPs would not lead to any extension of patentability here. The
wording, according to which patents shall be available for inventions in
all fields of technology, merely confirms the dominating view of german
patent jurisprudence, according to which the concept of technology
(Technik) constitutes the only usable criterion for delimiting
inventions against other kinds of intellectual achievements, and
therefore technicity is a precondition for patentability (the
"Logikverifikation" decision of the Federal Court of Justice (BGH) sees
Art 27 TRIPs as "posterior confirmation" of this jurisprudence). The
exclusion provision of Art 52 (2) and (3) EPC can also not be construed
to be in conflict with Art 27 TRIPs, since it is based on the notion of
lacking technical character of the excluded items.

The Federal Patent Court here refers to the Dispositionsprogramm
<http://eupat.ffii.org/papers/bgh-dispo76/index.en.html> doctrine,
according to which the presence or not of /controllable forces of
nature/ in the solution of the problem is the only usable criterion for
delimiting the realm of patentable inventions. According to this
doctrine, data processing is not a field of technology, as Gert Kolle,
the leading scholar of the time on this question, explains in his
much-cited analysis of the Dispositionsprogramm decision in 1977

Automatic Data Processing (ADP) has today become an indispensable
auxiliary tool in all domains of human society and will remain so in the
future. It is ubiquitous. ... Its instrumental meaning, its auxiliary
and ancillary function distinguish ADP from the ... individual fields of
technology and liken it to such areas as enterprise administration,
whose work results and methods ... are needed by all enterprises and for
which therefore prima facie a need of free availability
(Freihaltungsbedürfnis) is indicated.

This is exactly what the European Parliament has stated in its amended
directive proposal

Recital 7
Under the Convention on the Grant of European Patents signed in Munich
on 5 October 1973 and the patent laws of the Member States, programs for
computers together with discoveries, scientific theories, mathematical
methods, aesthetic creations, schemes, rules and methods for performing
mental acts, playing games or doing business, and presentations of
information are expressly not regarded as inventions and are therefore
excluded from patentability. This exception applies because the said
subject-matter and activities do not belong to a field of technology.

Article 2b.
"technical contribution", also called "invention", means a contribution
to the state of the art in technical field. The technical character of
the contribution is one of the four requirements for patentability.
Additionally, to deserve a patent, the technical contribution has to be
new, non-obvious, and susceptible of industrial application. The use of
natural forces to control physical effects beyond the digital
representation of information belongs to a technical field. The
processing, handling, and presentation of information do not belong to a
technical field, even where technical devices are employed for such

Article 3a.
Member states shall ensure that data processing is not considered to be
a field of technology in the sense of patent law, and that innovations
in the field of data processing are not considered to be inventions in
the sense of patent law.

    TRIPs Article 10: Computer Programs and Compilations of Data

 1. Computer programs, whether in source or object code, shall be
    protected as literary works under the Berne Convention (1971).
 2. Compilations of data or other material, whether in machine readable
    or other form, which by reason of the selection or arrangement of
    their contents constitute intellectual creations shall be protected
    as such. Such protection, which shall not extend to the data or
    material itself, shall be without prejudice to any copyright
    subsisting in the data or material itself.

    TRIPs Article 27(1): Patentable Subject Matter

Subject to the provisions of paragraphs 2 and 3, patents shall be
available for any inventions, whether products or processes, in all
fields of technology, provided that they are new, involve an inventive
step and are capable of industrial application.^[1]

Subject to paragraph 4 of Article 65, paragraph 8 of Article 70 and
paragraph 3 of this Article, patents shall be available and patent
rights enjoyable without discrimination as to the place of invention,
the field of technology and whether products are imported or locally

It should be noted that the text explicitely encourages differing
interpretations of some of the abstract terms used therein, such as
"non-obviousness" and "industrial application".

While the paragraph forbids "discrimination" in the interest of free and
equal trading conditions, it does not mandate a specific invention
concept. It could however be construed to favor an invention concept
which is favorable to free trade and economic development and in which
the terms "technology", "industry" etc are not empty words.

Even within the realm of patentable "technology", Art 27(1) can hardly
be interpreted as a rigid framework that outlaws all fine-tuning. If it
was to be interpreted in this rigid way, as some patent lawyers propose,
U.S. law would fall afoul of TRIPs in at least four areas:
pharmaceuticals [35 USC 155,156, term extensions; 35 USC 271(e),
experimental use]; biotechnology processes [35 USC 103(b), providing
special non-obviousness standard]; medical and surgical procedures [35
USC 287(c), limiting remedies], and methods of doing business [35 USC
273(a)(3), providing prior user rights].

    Article 30: Exceptions to Rights Conferred

Members may provide limited exceptions to the exclusive rights conferred
by a patent, provided that such exceptions do not unreasonably conflict
with a normal exploitation of the patent and do not unreasonably
prejudice the legitimate interests of the patent owner, taking account
of the legitimate interests of third parties.

This clause is cited by patent owner lobbies whenever anyone tries to
restrict the rights of patent owners, no matter whether in "reasonable"
or "unreasonable" ways.

see Interoperability and the Software Patents Directive: What Degree of
Exemption is Needed

    Article 33 mandates that all patents must have a minimum duration of
    20 years.

This is important to know, because it renders frequently recurring
proposals pointless, such as that of Amazon's CEO Jeff Bezos, who
advocates reducing the lifetime of software patents to 3-5 years.

    Art 7-8: A Treaty for Free Trade and its Interpretation

The TRIPs treaty has no time limitation. It is valid as long as the
World Trade Organisation (WTO) as a whole can not agree to change it.
The organisation of WTO is far removed from democratic participation,
and many WTO members are dictatorial states. If any country wants to opt
out of TRIPs, it will have to leave WTO, thereby risking a collapse of
its exporting industries. The treaty was negotiated in backrooms between
ministerial officials, and for most of the world's languages
translations do not even exist. All these considerations make it
imperative to interpret the TRIPs treaty with greatest care and to make
extensive use of the flexibility which it allows, so as to achieve a
fair balance of rights and obligations under the overall objective of
Free Trade which the treaty serves.

The treaty drafters were aware of these problems. In the General
Provisions, they included articles such as the following:

Article 7


The protection and enforcement of intellectual property rights should
contribute to the promotion of technological innovation and to the
transfer and dissemination of technology, to the mutual advantage of
producers and users of technological knowledge and in a manner conducive
to social and economic welfare, and to a balance of rights and obligations.

Article 8


 1. Members may, in formulating or amending their laws and regulations,
    adopt measures necessary to protect public health and nutrition, and
    to promote the public interest in sectors of vital importance to
    their socio-economic and technological development, provided that
    such measures are consistent with the provisions of this Agreement.
 2. Appropriate measures, provided that they are consistent with the
    provisions of this Agreement, may be needed to prevent the abuse of
    intellectual property rights by right holders or the resort to
    practices which unreasonably restrain trade or adversely affect the
    international transfer of technology.

Software patents are well known to be a disaster in terms of innovation,
competition and balance of rights. Patents on business methods moreover
systematically serve to restrain trade, and these restrictions appear
unreasonable to most people in the field.

TRIPs provides meta-rules for patent law, designed to promote free trade
and reduce the leverage of governments in favoring domestic industries
over foreign ones. It says something about how laws should be
structured, e.g. "no discrimination in favor of specific local
industries", "no arbitrary limitation on enforcability". It thereby
encourages limitations that are based on /systematic/ considerations,
e.g. weighing patentee rights against other rights of equal weight, such
as copyright property (Art 10 TRIPs), freedom of publication (Art 10
European Convention of Human Rights ECHR) or the right of access to
communication standards.

It is very important for any patent law project to concretise the
abstract rules of the TRIPs treaty. Any law project that fails to do so
can not be claimed to serve the purpose of clarification.

While economic policies should be justified in terms of the abstract
concepts laid down in TRIPs, they can not be derived from TRIPs alone.

It is poor draftsmanship to copy&paste abstract doctrines from TRIPs
into European laws, which are supposed to provide guidance at a more
concrete level. Art 52(1) EPC was revised
<http://eupat.ffii.org/analysis/epc52/index.en.html> in this ill-advised
way by the Diplomatic Conference of 2000, and the European Parliament's
rapporteur on the software patent directive project
<http://eupat.ffii.org/papers/europarl0309/index.en.html>, Arlene
McCarthy MEP <http://eupat.ffii.org/players/amccarthy/index.en.html>,
proposed <http://eupat.ffii.org/players/amccarthy/index.en.html> to
directly write Art 30 TRIPs into Art 6a of the Directive. Such actions
do not only make make the proposed laws unclear. They also deprive
European of maneuvering freedom in future renegotiations of TRIPs, which
may well be needed in order to keep the TRIPs framework workable at all.

TRIPs was negotiated by delegations that represented the dominant
interests of another era. Software was largely considered unpatentable,
and opensource development and distribution was almost unknown. TRIPs
should be interpreted in a way that does not benefit some production
technologies, business models, and industries at the expense of others.
The important thing is to enhance productivity in all industries.

Many limits of the TRIPs system, at least in its more rigid
interpretations, have become so apparent, that even the Americans, who
were the chief promoters of the TRIPs treaty, are tailoring it to their
advantage and thereby arguably violating some of its provisions.

There is now a lot less worry that the US might make a complaint about
any aspects of the patent system in the EU, because the EU would hit
straight back with complaints about US preference in the US patent system.

Any judgments coming out of such a row would be likely to open a
sufficient number of politically difficult issues on both sides of the
Atlantic that nobody wants to go there.

    TRIPs violations by EPO and EU directive proposals

The European Patent office started allowing program claims
<http://eupat.ffii.org/papers/eubsa-swpat0202/prog/index.en.html> in
1998. In the justifying decisions T 1173/97
<http://eupat.ffii.org/papers/epo-t971173/index.en.html> and T 935/97
<http://eupat.ffii.org/papers/epo-t970935/index.en.html> it is stated:
Programs for computers could be considered as patentable inventions if
they have a technical character.

Computer programs, as described in program claims granted by the EPO
since 1998, are information structures, consisting of symbolic entities
only. Any "technical character" which they might have can be found only
on the meaning side of the symbolic entities. Likewise one could speak
of the "technical character" of a set of chemical formulas, of a
collection of construction drawings or even of a science-fiction novel,
and empower every patent owner to monopolise the distribution of any
information which describes his "invention".

However the EPO does not go as far as this. Instead it creates a special
class of "inventions" which can be claimed in the form of information
structures. These structures, since 2000 called "computer-implemented
<http://eupat.ffii.org/papers/eubsa-swpat0202/kinv/index.en.html>" by
the EPO, can be appropriated both by copyright and by patents.

Computer programs are thus "protected as literary works" (i.e. subjected
to copyright), as stipulated by Art 10 TRIPs, and, in addition,
patentable as technical inventions.

This alone is arguably a violation of TRIPs. Normally one intellectual
achievement should not fall under two different regimes at the same
time, and Art 10 states that computer programs fall under copyright. If
they are "protected both as literary works and as inventions" then they
are in effect no longer "protected as literary works", since it is a
characteristic of copyrighted works that the ideas embodied therein
remain free. If both copyright and patents apply to software, property
that was acquired one regime is exposed to devaluation by the other.

The EPO and the European Commission have still gone further in violating

Starting from the creation of a special class of "computer-implemented
inventions" which can be claimed in a special, usually impermissible way
(namely in the form of an information structure describing the
"invention"), they have endeavored to create a body of sui generis
software patent law.

In 2000, both the EPO and the European Commission quickly adopted the
doctrines of a new decision by the EPO's Technical Board of Appeal,
called Controlling Pension Benefits System
<http://eupat.ffii.org/papers/epo-t950931/index.en.html>. This decision
establishes special rules for examining the technical character of
"computer-implemented inventions", such as assessing the "claim as a
whole" rather than the achievement behind this claim, thereby making any
computer program pass the requirement of technical invention, and,
instead of this voided requirement, establishing a new requirement of
"technical contribution in the inventive step", which has no basis in
Art 27 TRIPs.

The Working Party of the Council of the European Union went even one
step further in its secret papers of November 2002 and January 2004
<http://eupat.ffii.org/log/04/cons0129/index.en.html>. They leave it to
the patent applicant to decide which of the two regimes he wants to see
applied to his achievement: the standard doctrines of patent law or the
sui generis doctrines for "computer-implemented inventions".

By contrast, the European Parliament has proposed to clarify TRIPs by
stating <http://eupat.ffii.org/papers/europarl0309/index.en.html>, inter
alia, that data processing (informatics) is not just another discipline
applied natural science ("field of technology") but rather a layer of
abstraction, applicable to all fields of natural as well as social
science. These clarifications beautifully integrate Art 10, Art 27 and
the EPC. The Parliament's proposals are ignored and unreasonably
<http://eupat.ffii.org/papers/europarl0309/cec0311/index.en.html> by the
community of patent administrators and corporate patent lawyers, which
is, as of spring 2004, continuing to monopolise the decisionmaking at
the European Patent Office (EPO), the European Council (Consilium) and
the European Commission (CEC).

In summary it can be said that the European patent establishment is

 1. refusing to clarify and concretise the meaning of the TRIPs treaty;
 2. wrongly equating the TRIPs treaty with "US practise", using threats
    of alleged TRIPs-incompatibility for purposes of fostering Fear,
    Uncertainty and Distrust (FUD);
 3. trying to impose a sui generis software patent regime on Europe
    which is incompatible with the TRIPs treaty.

    Annotated Links

*->OMC: ADPIC <http://www.wto.org/english/docs_e/legal_e/27-trips_01_e.htm>*
    Text of the TRIPs treaty on the WTO website
*->Christian Beauprez: Art 10 TRIPs and "Computer-Implemented
Inventions" <http://aful.org/wws/arc/patents/2004-03/msg00065.html>*
    UK software law expert argues that according to TRIPs Art 10
    computer programs must be be "protected as literary works", and this
    means that the ideas embodied therein are free, as in literary works.
*->Daniele Schiuma 2000: TRIPS and Exclusion of Software 'as such' from
Patentability <http://eupat.ffii.org/papers/iic-schiuma00/index.en.html>*
    The argumentation for universal patentability is based on a mixture
    of the TRIPs fallacy with some unreflected ideology. As a
    side-effect, the article reveals some interesting details, such as
    the fact that the German Parliament ratified TRIPs under the
    explicit assumption that TRIPs does not mandate software patentability
*->In a recent decsision the Swedish Patent Court of Appeals reject:
    As pointed out by the plaintiff, Sweden is bound to follow the rules
    in the TRIPs agreement since it joined the WTO in 1995. What's
    relevant to this case is that article 27 (1) says that the
    possibility to get a patent should be available for every invention
    in any technical field. This decision has not made any change in § 1
    PL [Swedish Patent Law] necessary. Neither article 27 (1) nor any
    other part of the agreement gives a legal definition of the concept
    "invention". There is no explanation of what is supposed to be
    considered a "technical" field, in this regard and for background on
    the article see Joseph Straus
    <http://eupat.ffii.org/players/straus/index.en.html> in GRUR Int.
    1996 p. 179: "Bedeutung des TRIPs für das Patentrecht", part V b))
    iii, items 35 to 37, in which the relationship to article 52 in the
    EPC is also discussed.
*->BPatG 2000: Patentansprüche auf "Computerprogrammprodukt" etc
unzulässig <http://eupat.ffii.org/papers/bpatg17-suche00/index.de.html>*
    A German verdict from 2000 which rejects the TRIPs fallacy in a
    similar way
*->IPR Commission 2002-09: Final Report
    Chapter 6 argues that developping countries should be careful not to
    follow the US or the European Commission in framing their patent
    policy with regard to software, genetics et al. They should adopt an
    approach similar to Art 52 EPC: explicitely exclude software,
    business methods and the like from patentability. This, the authors
    point out, is perfectly compatible with Art 27 TRIPs. The authors
    are british scholars, their work was commissioned by the british
*->DG IV Bakels 2002-06-19: The Patentability of Computer Programs
    This EU-commissioned study also rejects the TRIPs fallacy.
    Proponents of software patenting have argued that Article 27(1) does
    not allow software from being excluded from patentability, since
    computer software is to be considered a "field of technology". The
    discussions preceding adoption of the TRIPs agreement, however, do
    not confirm such a reading. In the absence of a legal definition of
    "invention", the agreement arguably leaves it to the member states
    to determine what constitutes a patentable invention, and whether or
    not that includes computer software as such.
*->Dan L. Burk and Mark Lemley, "Is Patent Law Technology-Specific?"
    Berkeley Technology Law Journal (2002) and "Policy Levers in Patent
    Law", 89 Virginia Law Review (forthcoming December 2003). US law
    scholar Mark Lemley explains the historical context of TRIPs and
    argues that Art 27ff can not be interpreted as rigidly as the
    one-size-fits-all advocates pretend it should be.
*->Patentanwaltsverband gegen Technizitäts-Erfordernis in Art 27 TRIPs
    In einem Positionspapier zu aktuellen Vertragsverhandlungen meint
    der Weltverband der Patentanwälte, es koenne "keinerlei Grund"
    geben, die Patentierbarkeit einzuschränken und Art 27 TRIPs sei
    "niemals restriktiv gemeint" gewesen. Deshalb müssten im neuen
    Entwurf eines Weltvertrages ueber das Materielle Patentrecht die
    Begriffe "Technik" und "industrielle Anwendung" fallen oder aber es
    müsse klar gestellt werden, dass ihnen keinerlei begrenzende
    Bedeutung zukomme. Insbesondere müsse sicher gestellt werden, dass
    der wirtschaftlich zunehmend bedeutende Dienstleistungssektor in den
    vollen Genuss der Segnungen des Patentwesens komme. Damit stellt
    sich FICPI im deutlich auf die Seite der amerikanischen und gegen
    die europäische Position zum "Vertrag über das Materielle
    Patentrecht" (MPRV/SPLT).
*->Software Patents in the USA
    The US government's patent lawyers have been fighting hard against
    incorporation of Art 27 TRIPs into the new Substantive Patent Law
    Treaty, because they see the words "technical" and "industrial" as a
    restriction on patentability.
*->Interoperability and the Software Patents Directive: What Degree of
Exemption is Needed
    Art 30 TRIPs is being used by corporate patent lawyers and their
    governmental supporters for lobbying against interoperability
    exemptions which have been favored by all concerned committees in
    the European Parliament.
*->Smets 2000: The Hidden Agenda of the European Commission
    The European Commission's patent expansion plans are based on a
    "consistent network of fallacies", including the TRIPs fallacy.
*->BMWi 2002-12-06 an Marcus Brinkmann: Bundesregierung in Brüssel für
Logik- und Textpatente
    Nils Baggehufwudt from the German Ministery of Economics uses the
    TRIPs fallacy in a letter in which he justifies the German
    Government's policy of supporting software patentability even beyond
    the level advocated by the European Commission.
*->Louvain Conference 2004/03/11-13
    At the conference, Prof. Alberto Bercovitz pointed out that EPO and
    European Commission is trying to create a TRIPs-incompatible sui
    generis patent law. Jean-Charles Van Eeckhaude from the European
    Commission's DG Commerce pointed out that the "IP Community" at WTO
    is undermining the TRIPs system by promoting extreme interpretations
    of TRIPs. One of the problems of the TRIPs system is that the
    arbitration process itself seems to be in the hands of the "IP
    Community", as can be seen from recent examples.
*->Exceptions to Intellectual Property Rights: Lessons from WTO-Trips
Panels <http://www.murdoch.edu.au/elaw/issues/v10n4/meyer104_text.html>*
    Three law scholars explain how the European Commission has been
    pressing for extreme interpretations of Art 30 TRIPs at the WTO
    panels, partially with success. E.g. the EU succeded in using TRIPs
    to disallow internal stockpiling of pharmaceuticals by Canadian
    generica manufacturers before the expiry of the patent term and to
    disallow royalty-free use of musical works in the context of
    smallscale events in the USA. The authors conclude: "WTO-TRIPS
    panels are restrictively interpreting the restriction to IPR's. They
    thereby confirm the monopolist strength of the IPR holder, whose
    powers remains absolute in most respects. Given the stance of
    WTO-TRIPS panels reinforcing the IPR holder/owner's position, WTO
    contributes to stifling innovation in the digital economy by
    limiting the exception for the public good ever further."
*->EU Boosts Microsoft's Monopoly
    The European Commission's competition procedings against Microsoft
    have led to a verdict which gives a big boost to Microsoft's
    monopoly position in the OS market and helps Microsoft expand this
    position to other markets. While the Commission may have earned
    substantial revenues for itself by imposing a one-time fine of 1% of
    Microsoft's liquid cash reserves, the smallprint of the verdict
    gives Microsoft green light to kill its main competitors in the
    operating systems market. This smallprint was simultaneously
    reinforced through backroom deals in the Council's Patent Policy
    working party, of which copies have been leaked to FFII. Immediately
    after the announcments the stock value of MSFT rose by 3%.

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