The issue of patent protection for computer software in Europe has been a politically difficult one for a number of years. The European Patent Convention specifically lists computer programs in a category of subject matter that is unpatentable and the initial guidelines of the European Patent Office (EPO) instructed examiners to reject all applications where the invention involved a computer program. Case law of the EPO's Boards of Appeals, however, focused on the fact that the bar in the Convention on patents for computer programs applied only when the invention related to a program "as such" and upheld the grant of patents for software-related inventions as long as the invention was of a "technical character." Although this result seemed to satisfy many, pressure for even broader protection was brought by some members of the computer industry and it was widely expected that the Diplomatic Conference to revise the European Patent Convention that took place in December 2000 (see our February 2002 Newsletter) would remove all impediments from the grant of patents on software-related inventions. This did not happen. Instead, The European Commission concluded a consultation exercise on the subject. This found widely varying degrees of support for patent protection for software throughout the various countries of Europe (from 0% in Ireland to 100% in Finland) and, somewhat surprisingly, only 50% support for patent protection from those who were consulted in the United States. Furthermore, an EPO Appeal Board in the Controlling Pension Benefits Case (see our February 2002 Newsletter) held that, to be patentable, not only was it necessary that the invention have a technical character as a whole but that its inventive step must also be of a technical nature.

The European Commission has now issued a proposal for a directive to harmonize the law on the patentability of computer-related inventions throughout the EU. If adopted, this will require that all member states of the EU amend their national laws to comply with the directive. Although not directly affected by the directive, it is likely that practice within the EPO will be heavily influenced by any directive that is adopted, as was the case, for example, when the EU adopted a directive on the protection of biotechnology inventions.

The Commission's proposal starts from the assertion that "general principles of European patent law...have always required a technical contribution" and that the present position in the United States is a "test case" for the proposition that a technical contribution might not be required for computer-related inventions. It goes on to note concerns in the United States that patents for computer-implemented inventions strengthen big players' market positions and that patents for incremental innovation which is typical of the software industry entail the economic costs of figuring out the patent holders and negotiating the necessary licenses. The Commission notes that the TRIPs Agreement precludes discrimination between inventions in different areas of technology but goes on to point out that the EPO Boards of Appeal and courts of the Member States have held that computer-implemented inventions can be considered as patentable when they have a technical character, i.e. when they belong to a field of technology. From these starting positions, it is not surprising that the proposed directive largely endorses the approach taken by the EPO Appeal Board in the Pension Benefits case. Thus, the key proposals are that:

Other provisions adopt a liberal view as to the way that any invention which passes the above test may be claimed, specifically noting that claims to a programmed computer should be accepted and provide that any patents granted for computer-related inventions shall have no effect on the application of the Directive on Copyright Protection for Computer Software that provide for decompilation of programs in certain circumstances, for example, to ensure interoperability with other programs (see our Information Letter N.S. 177).