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28 September 2023
Software is now a vital part of innovation across various sectors, but many nations lack sufficient patent protection for software-related inventions. Excel V. Dyquiangco discusses the shift from hardware- to software-driven innovation and the significance of updating IP regulations.
Technology is the digital economy’s backbone, and software is largely responsible for its value. With its exponential growth, software is becoming more necessary to drive growth across all economic sectors. As such, this has brought significant ramifications for laws governing intellectual property.
Until the latter half of the 20th century, most of the functionality of innovative products, especially those that relied on semiconductors, was in hardware. Their patentability was without dispute. Today, however, innovation is no longer only driven by physical items – software is gradually replacing hardware as the primary source of technical capabilities. However, software-related innovations frequently lack or have very little protection under patent laws in many nations.
The enormous economic development and inventive potential of technology businesses that create hybrid products combining hardware and software and the software sector, in general, indicate that it is time to reevaluate IP regulations and bring them in line with modern commercial realities.
Chien-Chung Yuan, Vce CEO, Taiwan Rich IP & Co., Taipei
“We can find that most industries today must rely on software technology, which can be said to be ubiquitous – Industry 4.0, internet of things (IoT), AI and deep learning, big data, Fintech, blockchain, 3D printing,” said Chien-Chung Yuan, vice CEO of Taiwan Rich IP & Co. in Taipei. “While some research reveals that many start-up companies, especially the so-called unicorns, do not pay much attention to patent protection in the early stages of the establishment because of the use of funds or strategic priorities. Most of them survive a few years later are those companies that have sought patent protections for their innovations at the beginning, and most of the patents cover and claim software technology. For example, Uber, Snap, Amazon, Facebook and so on.”
He added: “In addition, most of the patents owned or used by the non-practicing entities (NPE) known to us for filing lawsuits are software patents. Obviously, software patents will become more and more important to enterprises, and even an important tool for enterprises to maintain their advantages in market competition.”
Protecting software and making adjustments
Taiwan has announced specific Patent Examination Guidelines for Computer Software-related Inventions since 1998 – with several revisions in 2008, 2014 and 2021. With the Taiwan Intellectual Property Office (TIPO) having good specifications and criteria for various patent requirements, TIPO has successively proposed case compilation or drafting guidelines for patent applications, claiming emerging information technologies so that inventors may have useful tools to protect their creations.
For patent litigation, Taiwan established an intellectual property court in 2008, reorganized in 2021, and exclusively hears cases related to intellectual property rights, including administrative, civil and criminal proceedings. In addition, due to the inclusion of administrative and civil lawsuits, ordinary courts often suspend litigation and wait for a decision on the validity of patents in the past, thus delaying the trial schedule.
However, in the Patent Examination Guidelines for Computer Software-related Inventions announced in 2014, some references were made to the USPTO’s standards for the subject matter’s eligibility and EPO’s examination standards for inventive steps.
“These guidelines resulted in a significant increase in the threshold and made it difficult for ecommerce related inventions to be patentable or granted,” said Yuan. “TIPO, however, adjusted its criteria to comply more with technological developments and world trends by referring to Japan Patent Office guidelines, so software or computer-based inventions will not be barred at the beginning. Accordingly, the patent examination guidelines for computer software-related inventions are more like the criteria for those inventions in other technical fields. At the same time, TIPO maintains good communication with the industry and constantly proposes new measures or revisions to assist inventors in protecting their creations. Therefore, if inventors and applicants have any questions, they are encouraged to contact TIPO directly, and TIPO is willing to work with the public to find better solutions.”
Unlike the USPTO, which follows U.S. Court of Appeals judgments to adjust the examination guidelines (MPEP), or China’s IP court, which makes judgments completely following the examination guidelines announced by the National Intellectual Property Administration of China (CNIPA), Taiwan’s TIPO and IP court have independent criteria for judging the validity of patents.
“Accordingly, there will inevitably be inconsistencies,” said Yuan. “This also leads to the fact that software patents may have a quite high approval rate in the application stage – just like Japan. The JPO is called ‘the paradise of software patents.’ But in the litigation stage, the winning rate for the patentee is relatively low.”
He added: “Taiwan revised and announced the Intellectual Property Cases Trial Law on February 15, 2023, expected to be implemented on August 30, 2023, which will establish a judicial and administrative information exchange system to aim an objective to avoid divergent judgments and settle disputes at the one-time. Of course, to avoid this situation, patent applicants should still pay attention to the quality of patent drafting.”
Wongrat Ratanaprayul, Director, Tilleke & Gibbins, Jakarta
Looking for technical features
Meanwhile, in Indonesia, a computer program can be patentable if its characteristics have a technical effect and function to solve a tangible or intangible problem. Computer programs are protected under the copyright law. Enforcement in Indonesia, however, can be challenging in general, and not many cases related to software and computer-implemented inventions have been brought to court. Therefore, it is crucial during infringement actions to have adequate evidence and good expert witnesses who can explain the invention and the law to the court.
“It is quite important that in looking to patent or protect software or computer-implemented inventions (CII), patent drafters should make sure to include in the description and claims, if possible, that the software can be linked to a tangible medium,” said Wongrat Ratanaprayul, director at Tilleke & Gibbins in Jakarta. “A computer program with no connection to a tangible medium is not patentable in Indonesia.”
She stressed the importance of finding evidence that would convince the court that infringement occurred for challenges where cases of infringement are involved. As for patent invalidation, “a well-written patent specification demonstrating patentability under the Indonesian patent law is key.”
Desmond Tan, Principal, FPA Patent Attorneys Asia, Singapore
Similarly in Singapore, Desmond Tan, principal at FPA Patent Attorneys Asia in Singapore, said it is also about “technical features” of the invention, as this would be critical for determining both allowability and scope of the invention.
“Patents can be used to protect CIIs,” he said. “The use of patents to protect CIIs is consequential of a national thrust to make Singapore a hub for AI and Fintech, both as a centre for R&D and as a testbed for such innovations. There is case law in Singapore maintaining the validity of CII patents (Main Line v. UOB), so there is some certainty in this regard.”
He added that protecting software or CIIs in Singapore would require a similar approach to seeking the same protection in Europe. While identifying technical features of such inventions can be challenging, the consistent approach with Europe guides patent applicants to adopt Euro-centric strategies for Singapore for some certainty of success. This consistency is especially helpful when prosecuting an application under PPH in Singapore.
Having multiple IP mechanisms
In India, the legal framework for protecting software and computer-implemented inventions (CII) encompasses patent, copyright and IT law. The Indian Patent Act of 1970 stipulates that mathematical or business methods, computer programs per se, or algorithms are not patentable – but software or CII contributing to a technical process or enhancing hardware efficiency could be patentable, which has been expanded to cover digital inventions as per present industry growth by way of some latest judgments.
The Copyright Act of 1957 categorizes computer software as a “literary work,” enabling protection for the code, structure, software sequence and organization, safeguarding the expression of an idea rather than the idea itself. The Information Technology Act of 2000, dealing with digital signatures, cybercrime and data privacy, provides legal recognition of the digital rights of the software and CII.
Rahul Dev, Partner and Principal Attorney, Law Office of Rahul Dev, Gurugram
“The protection of software and computer-implemented inventions can be achieved through multiple intellectual property mechanisms,” said Rahul Dev, partner and principal attorney at the Law Office of Rahul Dev in Gurugram. “Patents can shield underlying ideas and methods, provided they meet novelty, non-obviousness, and utility criteria, though patentability laws for software vary globally. Copyright automatically protects the software’s unique expression, such as source code and user interface, but it can’t defend against the independent creation of similar works. Trade secrets offer protection for confidential elements like unique algorithms or techniques but can’t safeguard against independent discovery or reverse engineering.”
He added: “Trademarks, while not protecting the software itself, safeguard the brand name under which it is sold. Each protection form has its pros and cons, and often a comprehensive approach using multiple protections offers the best defense, depending on the invention’s nature, the business model, and jurisdiction-specific laws.”
While India has made substantial strides in strengthening its IP laws, the software protection or CII poses specific challenges.
“The patentability guidelines around software or CII contributing to a technical process or enhancing hardware efficiency are somewhat ambiguous, leading to uncertainty, which has been highlighted by courts in few of the recent judgments,” he said. “The lengthy patent application process, which often spans several years, can hinder fast-paced software or CII innovations. Enforcing granted patents is another hurdle, with the litigation process often slow and costly. Furthermore, a significant lack of awareness about intellectual property rights among software developers and businesses results in the patent system’s under-utilization.”
To address these challenges, he added that clearer guidelines from the Indian Patent Office, streamlined patent application processes possibly employing AI technology, enhanced enforcement mechanisms, and widespread awareness campaigns about patent importance and procedures could significantly improve the effectiveness of patent laws and their implementation.
“This would bolster protection for software and CII in India,” he said.
- Excel V. Dyquiangco
