20100427 Cruickshank Software Patents - A Practical Overview, Michael O'Connor

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Michael O'Connor of Cruickshank Intellectual Property Attorneys presentation on a practical overview to patents

Michael O'Connor of Cruickshank Intellectual Property Attorneys presentation on a practical overview to patents

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  • 1. Michael O’Connor Partner, Cruickshank Intellectual Property Attorneys European Patent Attorney Software Patents – Practical Overview April 27th 2010 Irish Software Innovation Network
  • 2. Topics for Discussion: • Patentability of Software • Examples of Patented Software Inventions • Enforcement of Software Patents • Copyright Vs. Patents • Why patent software - A Case Study • Trademarks
  • 3. “Software is not patentable, right?”
  • 4. Tell that to Microsoft®…… • April 2009, Uniloc® awarded US$388 million • May 2009, i4i® awarded US$200 million • May 2009, Parallel Networks® issue infringement proceedings • June 2009, Microsoft® appeal US$358 million award to Alcatel Lucent® More on these later…
  • 5. Patentability of Software • Software patentable in United States and Europe • Common misconception that software not patentable in Europe • European Patent Office (EPO) granting software patents since mid-1980s
  • 6. Where does the misconception that software is not patentable in Europe come from? • Historical Issues? • Text of the European Patent Convention (EPC)? • European Parliament Vote on CII Directive on 6th July 2005? • Relatively low grant rates?
  • 7. Current Examination Practice of the EPO • Patentability requirements for computer programs are the same in principle as for other inventions • Patents will be granted where a non-obvious technical solution to a technical problem can be identified
  • 8. Patentability of Software • Technical problems include (although not limited to): • Speed of data transmission • Data security • Data transmission integrity • Improved interfaces • Speed of data processing • Improvements to memory storage
  • 9. Patentability of Software • Non technical problems include (although not limited to): • Mere automation of an existing process • Purely administrative functions • Implementing a new business process on a computer (without any technical problem)
  • 10. Examples of patented software inventions EP1,678,607 – Symbian • Dynamic Link Library functionality • Some functions are named, other functions are numbered • Provided technical advantages • Refused initially in UK, granted on appeal
  • 11. Examples of patented software inventions EP1,307,807 – Symbian • User interface functionality • Most popular option presented in middle of a list to prevent unnecessary scrolling • Next most popular option at one end of list to enable rapid selection
  • 12. Examples of patented software inventions EP0,927,945 – Amazon.Com • “Gift Ordering” Patent • Users sent a gift recipients email address to the server which in turn contacted the recipient to get a postal address for delivery of the gift • Granted during examination • Revoked during opposition • Wouldn’t be granted now
  • 13. Examples of patented software inventions US 5,960,411 – Amazon.Com • “One Click” Patent • Users data including billing details and delivery address was stored in a server system and all they had to do to order a good was click on it once instead of use a shopping cart ordering model • EP0,902,381 withdrawn during prosecution at European Patent Office
  • 14. Enforcement of Software Patents – Remember Microsoft? • April 2009, Uniloc® awarded US$388 million • May 2009, i4i® awarded US$200 million • May 2009, Parallel Networks® issue infringement proceedings • June 2009, Microsoft® appeal US$358 million award to Alcatel Lucent®
  • 15. Examples of enforcing software patents US 5,490, 216 – Uniloc • Prevents unauthorised use or copying of programs • Windows® XP operating system and Office® infringed • $388 million in damages • Triple damages? • David Vs. Goliath
  • 16. Examples of enforcing software patents US 5,787,449 – i4i • System and method for manipulation of architecture and content of a document • Word 2003® and Word 2007® use XML in a way that infringed • $200 million in damages • Raised to $290 million • Injunction on Word! • Received financial support to bring proceedings
  • 17. Examples of enforcing software patents US 5,894,554 – Parallel Networks • System for managing dynamic web page requests • A separate page server is used to free up a web server • Parallel Networks now effectively a patent holding company • Parallel Networks have previously sued Netflix, Amazon.com, Orbitz and Priceline.com
  • 18. Examples of enforcing software patents US 4,763,356 – Alcatel Lucent • User interface functionality – form entry system • Users click on a date rather than typing it in to access it in Outlook® Calendar • Outlook® infringed • $358 million in damages • Increased to $511 million to include interest • Goliath Vs. Goliath • Successful (-ish) appeal
  • 19. Copyright Vs Patenting Copyright • does not protect the idea itself but rather only protects the specific expression of the idea • prevents copying of your code – requires proof that copying actually took place • does not prevent someone from programming their own code to do the same thing
  • 20. Copyright Vs Patenting Patents • protect the invention not simply the specific implementation of that invention • prevent not just copying of the code but any implementation • do not require you to prove that copying actually took place
  • 21. Copyright Vs Patenting • Common misconceptions about software patents: • They can be easily worked around (just ask Microsoft®) • Making minor changes to the code will avoid infringement • Using a different programming language will avoid infringement • Writing code from scratch will avoid infringement
  • 22. Why Patent Software – A Case Study • Company A invents a new application called a “word processor” • Company A does not file a patent application for their invention • Company A relies on first mover advantage and copyright protection • Company A generates a lucrative market for “word processors” and competitors begin to enter the market
  • 23. Why Patent Software – A Case Study • Company B develops their own “word processor” application with new functionality which they call “cut and paste” that allows them to move blocks of text around in the document • Company B files a patent application for their “word processor” with “cut and paste” • Company B enters the market and soon “cut and paste” functionality is deemed a must-have for any “word processor”
  • 24. Why Patent Software – A Case Study • What becomes of Company A? • Company A’s word processor is now obsolete. • Company A cannot provide a “word processor” with “cut and paste” functionality required by the market as they would infringe Company B’s patent. • Company A loses their market share to Company B unless Company A can buy or licence Company B’s technology.
  • 25. Why Patent Software – A Case Study • What if Company A had patented their “word processor”? • Company A could prevent company B from entering into the market altogether • Company A could enter into a cross licensing deal with Company B on favourable terms so that they could use the “cut and paste” functionality in their “word processor”
  • 26. Trade Marks • A Trade Mark is any sign, capable of being represented graphically, that is capable of distinguishing the goods or services of one undertaking from those of another • Trade Marks include for example words, logos, sounds, get up, smells, shapes and colours • Perhaps the most valuable asset that any company possesses
  • 27. Trade Marks/Brands - what are they worth? $12 Billion $14 Billion
  • 28. Trade Marks/Brands - what are they worth? $32 Billion $57 Billion
  • 29. Conclusions • Software inventions are patentable • Software patents have been granted for numerous disparate inventions from user interfaces to dynamic link library nomenclature structures to e-commerce applications • Patent protection offers more robust protection against infringers than copyright protection • Software patents are enforceable
  • 30. For further information, visit www.cruickshank.ie or contact moconnor@cruickshank.ie Thank you for your attention