The EU Directive 2009/24/EC of the European Parliament and of the Council on the Legal Protection of Computer Programs (“Legal Protection of Computer Programs Directive”) sets out the provisions regarding the rights arising, the rights of the beneficiaries, the exclusive rights of the rights holder, limited rights and exceptions related to them, and the cases where the program users are permitted to convert the program back into source code. The ideas and principles underlying any element of a computer program, including those underlying the interfaces, are not protected by copyright under the Legal Protection of Computer Programs Directive. Accordingly, a computer program would be subject to copyright protection provided that it is of a unique nature in terms of the creator's own intellectual creation. However sole copyright protection for stand alone software and software as a medical device (“SaMD”) may be circumvented through reverse engineering. Unlike patent protection that protects against individual discoveries, copyrighted works may be decompiled without the knowledge of the author. Particularly for functional software, such as algorithms, copyright protection would not be available for IP protection, since the expression in the computer program is protected under the copyright regime and not its functions.
In the disruptive software market, Technical Protection Measures (“TPM”) are crucial. TPMs are often used to protect copyright works, for example, through encryption. TPM’s can have an important role in enabling copyright owners to offer content to consumers in different ways, as well as protecting against unlawful copying; in other words, piracy. EU, US and Turkish law protects the right of copyright owners to use TPM’s to protect their works, and circumvention of such technology is illegal. Even though the use of TPM’s could potentially prevent activities that are permitted by copyright exceptions, they would not provide protection against unlawful acts such as reverse engineering.
Copyright Protection in Turkey
As per the Law on Intellectual and Artistic Works (“FSEK”) software and computer programs are described and considered as scientific and artistic works under copyright regime. Based on the Legal Protection of Computer Programs Directive, an original computer program shall be under copyright protection in any form (source code or object code), including software integrated into a system or stand alone software. As in the Legal Protection of Computer Programs Directive, the FSEK does not seek high characteristics or high aesthetic value for computer programs. The code or design, however, shall be under copyright protection, if it can be characterized as a computer program at any stage of development.
Similar to the EU legislation, limitations to copyright protection are specified as general and special limitations for use, reproduction and distribution of software. The FSEK describes general limitations as: ordre public, public good, educational collected or complied works and freedom of quotation. Special limitations, however, are constrained to certain personal uses, distribution and reproduction of computer programs. Had the legally obtained personal and scientific use was considered “fair use”, this would hinder the commercial exploitation of the computer programs entirely. Therefore, only debugging of software, decompilation for software interoperability, testing and necessary back-up copying are allowed. Even though it is allowed pursuant to the relevant legislation, restricting the abovementioned special limitations in contract is not advisable to intellectual property rights (“IPR”) holders as courts may consider the restrictions on special limitations mala fide intention to restrict users.
Copyright Protection in the United States
Pursuant to the U.S. jurisprudence, stand alone software (source and object codes) is considered as copyrighted works. Pursuant to the 1974 U.S. Copyright Act 102 (a), copyright protection is valid for works that are fixed in an environment, are original in nature and that are created as a result of an expression, can be detected or reproduced, transmitted directly or through a device/machine. Computer programs are also considered as literary works under the Copyright Act. Yet under Fair Use exemptions for copyrighted works, third parties using, distributing or reproducing software may hinder economic exploitation of software. Fair Use under U.S. law is much broader than its European counterparts (limitations as mentioned above), therefore patent application for a proprietary (closed) software may be required to prevent reverse engineering of software and protect the monopoly right. Given the flexible patentability requirements of the U.S. Patent and Trademark Office (“USPTO”) and the inherent cyber security risks of TPM’s, software patents for medical devices (e.g. software in medical device) are more favorable for IPR holders.
Patent Protection in Continental Europe and Turkey
The European Patent Convention (“EPC”) states that software as such are not patentable, preventing stand alone software to be patented, even if it achieves a technical solution to a problem. Pursuant to the EPC, computer programs as such are described as non-patentable subject matter, alongside business methods. Hence stand alone software is not considered to be patentable-subject matter. If the code or design must be used only in its functional form, such as an algorithm, and is not suitable for copyright protection, opting in for computer-implemented inventions may be more favorable for IP protection of the software.
For a medical device to be considered patent eligible, it has to cover a physical product. Even though pursuant to the MDD software can be considered a medical device, provided that the criteria under the relevant definition are met, the above argument regarding non-patentability would still apply. Therefore, it can be concluded that, only software integrated into a medical device can be considered patentable subject matter; whereas SaMD is a software as such, making it impossible to be patentable subject matter. Consequently, while methods for treatment of the human or animal body by surgery or therapy and diagnostic methods practiced on the human or animal body are non-patentable subject matter under the EPC, software integrated medical devices (software in medical devices) can be considered the physical product for a medical treatment method and can be filed for patent protection. With this respect, in case of patentability (novelty, inventive step and industrial applicability) the Amended European Patent Office (“EPO”) Examination Guidelines (G 03/08) requires ‘further technical effect’ of the filed software patent. The ‘further’ technical effect requirement under Art. 52(1) of the EPC is a prima facie test for patentability of the software and requires strict inventive step requirements for computer implemented inventions.
Turkey, as an EPO member state, considers any non-technical methods for compilation, distribution and presentation as non-patentable subject matter under the Turkish Industrial Property Law (“IPL”). Computer programs as such are considered non-patentable subject matter pursuant to the IPL which is inscribed in parallel to the EPC. Patentability requirements for software under Turkish legislation are compliant to the EPO practice as well and only software integrated medical devices would be granted as computer-implemented invention from the Turkish Patent and Trademark Office (“TPTO”). Alternatively, a European Patent, obtained from EPO can be submitted to the TPTO for patent protection in Turkey, if the European Patent application has already covered the country.
Patent Protection in the U.S.
In the case of patent protection of software, US Patent Law is more flexible when compared to the abovementioned Turkish and European approaches. The United States Patent and Trademark Office (“USPTO”) patent politics tend to allow software-implemented product and process patents, if they have the functional elements and practical applicability. In the past stand alone software was considered as patentable subject matter by the USPTO, however due to the current requirements of uniqueness and being tied to a machine, it is potentially impossible to patent the sole code. It is important to note that being tied to a machine implies solving a technical issue of a medical device or directly controlling the device that is solving the technical issue, unlike the abovementioned “computer-implemented invention” on an EU patent application, therefore the requirement of being tied to machine itself would not prevent SaMD to be patentable. In other words, a functional process leveraging a tangible machine would be considered patentable subject matter. For instance, software in medical devices that are means for solving a technical problem in the health sector would be eligible as patentable subject matter. As for patentability requirements, a software is required to offer some kind of identifiable improvement in comparison to prior art invention. Otherwise the invention would not be considered patentable, as it may not be novel or does not pass the inventive step test. SaMD’s patent-eligibility is, however, ambiguous. The recent Supreme Court decisions Alice v. CLS Bank Int and Bilski v. Kappos rejected financial software patents under the Patent Act. Yet there have been accepted applications from the USPTO on medical software patent applications. An application of a glucose sensor system that utilizes a pattern recognition algorithm for diabetic patients was granted a patent by USPTO, exemplifying the still pro-software patent approach of USPTO. Unless a verdict from US judiciary states otherwise, SaMD’s that fulfill the abovementioned patent eligibility and patentability requirements may be granted a patent.
Compulsory licensing is a statutory licensing scheme, where the licensing agreement is concluded without the consent of the IPR holder. Calculation of royalty rates and legal requirements for compulsory licensing (e.g. public health) may vary in different jurisdictions. However generally, royalty rates are calculated via court order or by state regulatory bodies and the ratio legis of most jurisdictions concern public interest. As explained above, SaMD’s may or may not be patentable subject matter, depending on the jurisdiction a patent filing is made. As a result, it would be exempted from compulsory licensing of patented products under European and Turkish national IP legislation. However, under Berne Convention and certain national legislations for copyright protection, compulsory licensing under copyright regime would be applicable. In Turkish legal system, for example, the FSEK defines public interest and public good as a general limitation for copyright infringement claims. Accordingly, even if the copyrighted work cannot be licensed out, it may be used for public health or in state of emergency. Still, copyright licensing could be possible for the IPR holders to avoid such loss of profit. In the case of computer-implemented inventions (including SaMD’s in the U.S.), however, all abovementioned jurisdictions have enacted compulsory licensing in their industrial property or patent legislation for protecting the public interest against the property rights of the IPR holder. This means, if the government requires patented products to be produced in vast amounts, for the sake of public health, they may opt in for compulsory licensing. As IPR holders assured not to enforce their IPR during the COVID-19 pandemic, 3D printing of protected designs or patented products (e.g. ventilators) were not subject to patent infringement litigation during the pandemic. Such strategies can be alternatives to prevent facing a government-based royalty rate from compulsory licensing. Consequently, the IPR holders are entitled to decide upon which strategy is more favorable for their business and public relations.