The rapid advance of technology has meant that businesses are placing greater emphasis and value on software and associated methods of doing business than they were a decade ago. US businesses were quick to recognise the value of patents as a form of protection for innovation but European businesses have been slower to do so.

A patent prevents others from exploiting the invention covered in the patent without the patent owner's permission for 20 years, subject to renewal.

The existence of a patent may:

  • Deter rivals from infringing the patent.
  • Cause rivals to seek to find an alternative non-infringing process or product (known as "engineering round" the patent).
  • Prompt rivals to approach the patentee for a licence.

Despite a general exclusion of computer software from the European Patent Convention (EPC) and the Patents Act 1977, there has been an increasing degree of interest in protecting computer software by means of the patent system.

Traditionally, the form of protection for software is provided by copyright. Patents could, however, provide protection that is much wider in scope than that afforded by copyright. Patents could, for example, extend to the principles employed in the software, whereas copyright protection is generally limited to the form and content of software

If your company has invented software or a method of doing business, you may want to try to protect the invention by patenting it, giving your company a limited monopoly over its use.

Copyright v patent

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Compared with the European Patent Office (EPO) and the US, the UK Intellectual Property Office (IPO) generally takes a more restrictive approach to software and business method patents.

EPO and US approaches

Businesses need to be aware of the different approaches taken by the EPO and in the US to be able to assess their positions under the different regimes. It may be possible to obtain a patent in the US and/or the EPO, in circumstances where the UK IPO would reject the application.

The US has a much less restrictive approach to software and business method patents. The test of whether a computer program is capable of being patented there is whether it provides a "useful, concrete and tangible result".

Current developments

Patents can be highly valuable, profit-generating assets in the right hands. Never has the commercial value of patents been so well understood in the business community as in recent years. They may be used as a shield or sword. In fact, since April, Apple and Samsung have been locked in patent disputes in nine countries, with Apple arguing Samsung has infringed its touch-screen technology, and Samsung arguing Apple has infringed its 3G transmission patent. Initially an EU wide injunction against Samsung was imposed by a Court in Dusseldorf, then partially lifted after questions were raised about the jurisdiction of the Dussledorf court over a Korean company.

Recently, an Australian court has temporarily banned the sale of Samsung Electronics' tablet computer in Australia and Samsung has said it would try to stop the sale of Apple's iPhone 4S in France and Italy. Both companies also have actions pending in the United States. This case will shed light on issues of patent enforceability across different jurisdictions.