Software Patents

What is a software patent?

Generally, a software patent is a patent on a piece of software, such as a computer program, library, user interface, or algorithm. However, the term "software" is considered to be ambiguous (EPO = “computer-implemented inventions”)

Amazon's one-click ordering: A patent that allowed customers to make a purchase with a single click. Apple's "slide to unlock": A patented feature for smartphones that provided a novel way to unlock the device. Google's PageRank algorithm: While the algorithm itself was not patentable, a processoriented patent was granted for its application in the search engine

Irish Patents Act, 1992

S.9. (1) An invention shall be patentable under this Part if it is susceptible of industrial application, is new and involves an inventive step.

(2) Any of the following in particular shall not be regarded as an invention within the meaning of subsection (1): (a) a discovery, a scientific theory or a mathematical method, (b) an aesthetic creation, (c) a scheme, rule or method for performing a mental act, playing a game or doing business, or a program for a computer, (d) the presentation of information.

European Patent Convention, 1973 (EPC)

52. (1) European patents shall be granted for any inventions, in all fields of technology, provided that they are new, involve an inventive step and are susceptible of industrial application.

(2) The following in particular shall not be regarded as inventions within the meaning of paragraph 1: (a) discoveries, scientific theories and mathematical methods; (b) aesthetic creations; (c) schemes, rules and methods for performing mental acts, playing games or doing business, and programs for computers; (d) presentations of information.

Computer-Implemented Invention (EPO)

• The European Patent Convention, 1973 (EPC) does not provide a positive definition of a ‘computer-implemented invention’.

• Instead, Article 52(2)(c) EPC excludes "programs for computers" from patentability, but only when claimed "as such" (Article 52(3) EPC). However: • The European Patent Office (EPO) defines a ‘computer-implemented invention’ as an invention “which involves the use of a computer, computer network or other programmable apparatus, where one or more features are realised wholly or partly by means of a computer program.”

Gottschalk v Benson 409 US 63 (1972)

The link you provided is for the US Supreme Court case: Gottschalk v. Benson, 409 U.S. 63 (1972).

This is a landmark US patent law decision that established a critical principle regarding the patentability of computer software and algorithms. The case determined that a mathematical formula or algorithm, even when implemented on a computer, is not patentable on its own.

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Case Summary and Ruling1. Facts of the Case

Gary Benson and Arthur Tabbot sought a patent for a method for converting numerical information from binary-coded decimal (BCD) numbers into pure binary numbers for use in programming a general-purpose digital computer. Their claims were broad, covering the use of this method in any general-purpose digital computer.

2. Legal Question

The central question was whether this mathematical conversion method qualified as a patentable "process" under 35 U.S.C. § 101 of the Patent Act.

3. Supreme Court Ruling (Decision)

The Supreme Court, in an opinion delivered by Justice Douglas, reversed the lower court and ruled that the method was not patentable.

4. Rationale (The Benson Rule)

The Court based its decision on the long-standing principle that certain things are the "basic tools of scientific and technological work" and must remain free for public use.

• Preemption of an Idea: The method was essentially a mathematical algorithm. The Court found that allowing a patent on this method, which had no substantial practical application except in connection with a digital computer, would wholly preempt the mathematical formula and, in effect, grant a patent on the algorithm itself.

• Fundamental Truths are Not Patentable: Phenomena of nature, mental processes, and abstract intellectual concepts (like mathematical formulas) are not patentable subject matter. They are merely ideas or truths, not applications that result in a "new and useful art."

• Lack of Transformation: Traditional process patents required a transformation and reduction of an article to a "different state or thing" (e.g., chemical or physical changes). The method in question did not transform a material; it only manipulated numbers, which is an abstract mental step.

• The Benson Exclusion: This case established the rule that an algorithm, when claimed in the abstract, is not patentable. This rule formed the first part of what later became the "abstract idea" exclusion in US patent law, severely limiting the patenting of pure software.

Diamond v Diehr 450 US 175 (1981)

Diamond v. Diehr, 450 U.S. 175 (1981)

This landmark US Supreme Court case clarified that a technological process does not become unpatentable simply because it incorporates a mathematical formula or a computer program.

Aspect	Summary
Invention	A process for precisely curing synthetic rubber that used a computer to continuously measure the temperature inside the mold and calculate the exact moment to open the press using a mathematical equation.
Issue	Was this process ineligible for patent protection because it included a non-patentable mathematical formula and a computer program?
Ruling	Yes, the process was patentable. The Supreme Court reversed the rejection.
Key Principle	Claims must be considered "as a whole." The process was eligible because the mathematical algorithm was integrated into a larger industrial process that performed a physical function the patent law protects: the transformation of matter (raw rubber to cured rubber). The use of the computer was merely a tool for applying the formula to the physical process.

State Street Bank v Signature Financial Group 149 F 3d 1368 (Fed Cir 1998

Invention	A computer system (machine) for managing a mutual fund investment structure (Hub and Spoke) by performing complex financial calculations.
Issue	Was this system unpatentable because it was merely a "mathematical algorithm" or a "business method"?
Ruling	Patentable. The Federal Circuit reversed the district court.
Key Principle	"Useful, Concrete, and Tangible Result" Test. The court held that if a computer program or algorithm produces a final, tangible outcome, such as a final share price or account balance, it is patent-eligible. The court also explicitly rejected the "business method" exception to patentability, holding that business methods are statutory subject matter if claimed as a machine or process.

Bilski v Kappos 561 US 593 (2010)

Invention	A method for energy market hedging, which is a way to protect against the risk of price fluctuations. The method was not tied to a specific machine.
Issue	Was this business method a patentable "process" under 35 U.S.C. § 101, and was the "machine-or-transformation" test the sole test for patent eligibility?
Ruling	Unpatentable. The Supreme Court affirmed the rejection.
Key Principles	1. Machine-or-Transformation Test is Not Exclusive: The Court held that the Federal Circuit's "machine-or-transformation" test (tying the process to a machine or the physical transformation of matter) is an important clue for patent eligibility, but not the sole test for a "process."
	2. Abstract Ideas Remain Unpatentable: The Court found the hedging system was an unpatentable abstract idea. The method of simply explaining and applying the basic concept of hedging, without more, was not patent-eligible subject matter.
	3. Business Methods Are Not Categorically Excluded: The Court also rejected a blanket, categorical exclusion of "business methods" from patentability, but cautioned that most will fail the "abstract idea" exception.

T 1173/97 IBM (Computer program product) (1998)

A computer program itself is not patentable, but a "computer program product" (a program on a carrier) can be patented if its operation produces a further technical effect.

This European Patent Office (EPO) Board of Appeal decision is a cornerstone of European patent law regarding software, establishing a key test for when a computer program is considered a patentable invention.

Aspect	Summary
Invention	A computer program product (software on a carrier like a disk) for asynchronous resynchronization of a database commit procedure.
Issue	Was a computer program claimed as a product excluded from patentability under Article 52(2) and (3) of the European Patent Convention (EPC), which excludes "programs for computers as such"?
Ruling	Patentable. The Board reversed the Examining Division's decision.
Key Principle	"Further Technical Effect" Test. A computer program is not excluded from patentability if, when it is run on a computer, it produces a "further technical effect" that goes beyond the "normal" physical interactions between the software and the computer hardware. In this case, the method of ensuring system reliability through asynchronous resynchronization was deemed to have such a technical effect.

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Context Note

This decision moved the EPO away from a strict interpretation that all computer programs were excluded, opening the door for patenting software that solves a technical problem using technical means, which remains the core test for computer-implemented inventions in Europe (often referred to as the COMVIK approach, which was later clarified and formalized).

T 931/95 Pension Benefit Systems Partnership (2000)

Schemes, rules, and methods for doing business are not patentable, though an apparatus used to carry out such a method could be.

This European Patent Office (EPO) decision is a crucial ruling that helped define the treatment of business methods and establish the modern standard for assessing the inventive step of computer-implemented inventions in Europe.

Aspect	Summary
Invention	A system and method for controlling a pension benefits program, which involved administering employer accounts and calculating financial metrics (like average age, costs, and contributions) using data processing and computing means.
Issue	Could an invention primarily concerned with a method for doing business be patented if claimed as a computer apparatus? If so, how should its inventive step be assessed?
Ruling	The apparatus/system claim was deemed an "invention" under Article 52(1) EPC and therefore not excluded from patentability. However, the claim was ultimately refused for lack of inventive step (Article 56 EPC).
Key Principle	The COMVIK Principle (Technical Contribution to Inventive Step). The decision established that: 1. Exclusion (Article 52): An apparatus claim, even one implementing a business method, is a "physical entity" and is not excluded as such. A method claim for a business scheme is excluded. 2. Inventive Step (Article 56): When assessing inventive step for a "mixed" invention (combining technical and non-technical features), only features that contribute to the technical character of the invention (i.e., those that solve a technical problem) are considered. The novel non-technical features—such as the specific way the pension scheme was designed—are treated as mere requirements or constraints that the skilled person (the engineer) must implement, and thus do not contribute to inventive step.

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Context Note

T 931/95, alongside T 1173/97, rejected the "contribution approach" at the Article 52 (exclusion) stage, but introduced a "technical contribution" analysis at the Article 56 (inventive step) stage.

This approach was later formally adopted and clarified in the landmark decision T 641/00 (Two identities/COMVIK), which is why the underlying principle is universally known as the COMVIK approach at the EPO. Under this approach, an inventor can only secure a patent if the new, non-obvious part of their invention is technical in nature.

T 641/00 COMVIK (Two identities) (2002)

When assessing inventive step in mixed technical inventions, only features contributing to technical character count; non-technical features cannot support patentability.

This decision is one of the most significant rulings by the European Patent Office (EPO) Technical Board of Appeal, formalizing the methodology for assessing inventive step for computer-implemented inventions (CIIs) and "mixed-type" inventions (those containing both technical and non-technical features). This methodology is now universally known as the COMVIK approach at the EPO.

Aspect	Summary
Invention	A method in mobile telephone systems where a Subscriber Identity Module (SIM) is allocated at least two identities which are selectively activated by the user. The commercial/administrative goal was to simplify cost distribution (e.g., for service and private calls).
Issue	When an invention combines a non-technical concept (e.g., a commercial or administrative rule) with general technical means (e.g., a computer or telephone network), how is the patentability requirement of inventive step assessed?
Ruling	The claim was refused for lack of inventive step (Article 56 EPC). The Board found that the non-technical features (the idea of having two identities for accounting) did not contribute to the inventive step, and the technical implementation of that idea was obvious.
Key Principle: The COMVIK Approach	When assessing inventive step using the EPO's Problem-Solution Approach for mixed-type inventions: 1. Technical Character: A claim is considered to have technical character (and thus not excluded as such under Article 52(2) and (3) EPC) if it involves any technical means, such as a computer or mobile phone system. 2. Inventive Step Assessment: Only features that contribute to the technical character of the invention are taken into account for assessing inventive step (Article 56 EPC). 3. Non-Technical Features: Non-technical features (e.g., rules for doing business, administrative schemes, or purely mathematical steps) that do not interact with the technical subject-matter to solve a technical problem are ignored when comparing the invention with the prior art. 4. Objective Technical Problem (OTP): The non-technical features are treated as non-technical requirements or constraints that must be met, and are placed into the formulation of the Objective Technical Problem (OTP). The question then becomes: Was it obvious for a skilled person (the engineer) to implement these non-technical constraints using common technical means?

Practical Application

In the COMVIK case, the features related to allocating two identities for billing purposes were considered non-technical constraints. The objective technical problem was essentially defined as: "How to technically implement the administrative requirement of providing two selectable identities on a SIM card in a GSM system." Since the technical means used to implement this (e.g., storing data in the SIM and modifying the home database) were found to be obvious to a person skilled in the art of data processing/telecoms, the claim lacked inventive step.

EPO T 258/03 (Auction Method/HITACHI) (2004)

inventions solving a technical problem by technical means are patentable.

EPO T 258/03 (Auction Method/HITACHI) (2004)

This landmark decision by the European Patent Office (EPO) Technical Board of Appeal, known as Auction Method/Hitachi, reaffirmed and clarified the patentability criteria for computer-implemented inventions (CIIs) and business methods, particularly solidifying the COMVIK approach (established in T 641/00).

Aspect	Summary
Invention	An automatic auction method executed on a server computer, designed specifically for wholesale fresh food auctions. It used a modified Dutch auction format where bidders submitted a "desired price" and a "maximum price in competitive state." The auction proceeded automatically (lowering and raising the price based on stored bids) without the need for bidders to be online and continually monitor the process.
Issue	Did the claim define an "invention" under Article 52(1) EPC, and if so, did it involve an inventive step (Article 56 EPC), given that the core of the invention was a novel business scheme?
Key Ruling Points	1. Technical Character: The Board confirmed a crucial principle: a method involving technical means is an invention within the meaning of Article 52(1) EPC, thus overcoming the "patentability exclusion" hurdle for "business methods as such" (Article 52(2) and (3) EPC). The presence of a server computer and a network conferred technical character to the method. This contrasted with the earlier T 931/95 (PBS Partnership) decision. 2. Inventive Step (COMVIK Applied): Following the T 641/00 (COMVIK) approach, the Board assessed inventive step by considering only the features that contributed to the technical character of the invention.     - The steps consisting of modifications to the business scheme (e.g., the specific price lowering/raising rules, and using "desired price" vs. "maximum price") were considered non-technical features.     - These non-technical features were relegated to being non-technical constraints in the formulation of the Objective Technical Problem (OTP).     - The OTP was essentially: "How to implement this specific, non-technical auction method using a known computer system and network." 3. Outcome: Since the implementation of the novel auction rules on a general-purpose server/network system was deemed to be an obvious task for a person skilled in data processing, the claimed invention was found to lack inventive step (Article 56 EPC), and the appeal was dismissed.

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Significance

The T 258/03 decision is important because it provides a clear two-step structure for analyzing computer-implemented business methods:

1. Technicality Threshold (Article 52): Is there any technical means recited in the claim? If yes (e.g., a computer, a network, a sensor), the claim passes the exclusion threshold.

2. Inventiveness Test (Article 56): The non-technical features (like the auction rules) are used only to define the problem (the set of user/business requirements), and only the technical solution (how the computer system is adapted or operates internally) can contribute to inventive step. If the technical implementation is obvious, the invention is not patentable.

T 154/04 DUNS LICENSING ASSOCIATES (2006)

consolidated the EPO's approach to computer-implemented inventions, confirming principles for assessing patentability of software-related claims under Article 52 EPC.

This decision, often referred to as Duns Licensing, is a significant European Patent Office (EPO) Board of Appeal ruling that clarified and solidified the "problem-solution approach" (or COMVIK approach) for assessing the inventive step of computer-implemented business methods.

Aspect	Summary
Invention	A method for estimating sales activity of a product at sales outlets, particularly non-reporting sales outlets, using a data processing system. The core of the invention was a statistical model that calculated a weighting factor based on the geographic distance between sales outlets to improve the accuracy of the sales estimate.
Issue	Did the claimed invention, which centered on a novel statistical/business research model, meet the requirement for inventive step (Article 56 EPC)?
Headnotes & Key Rulings	I. Methods of business research are excluded "as such" from patentability under Article 52(2)(c) and (3) EPC.1
II. Gathering and evaluating data as part of a business research method do not convey technical character to the business research method if such steps do not contribute to the technical solution of a technical probl2em.
Reasoning & Outcome	The Board applied the two-step COMVIK approach (also used in T 258/03): 1. Technical Character (Article 52): The inclusion of a "data processing system" and steps like "receiving sales data" and "determining the distance... using geographic data" (i.e., using a computer and network) was sufficient to give the claims technical character, thus avoiding the exclusion of "business method as such." (The Main Request without technical means was refused, but Auxiliary Request 1, which claimed a system, passed this test). 2. Inventive Step (Article 56): The Board used the problem-solution approach, focusing only on features that provided a technical contribution.     - The feature relating to calculating sales estimates using geographic distance (the core innovation) was a non-technical feature relating to a business research scheme.     - This non-technical feature was included in the formulation of the objective technical problem as a non-technical constraint/requirement that a technical system must fulfill (e.g., "Implement a method for estimating sales activity using geographic distance... on a data processing system").     - The only remaining technical features were the basic data processing and storage steps. The Board concluded that it was obvious for a person skilled in the art of data processing to implement the known business logic (the geographic distance model) on a standard computer system.     - Therefore, the claimed subject matter was found to lack inventive step.

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Summary of the EPO's Two-Step Approach for Computer-Implemented Inventions (CIIs)

T 154/04 is one of the most cited decisions confirming the framework for assessing patentability:

1. Is it an "invention"? (Article 52 EPC): The claim must have technical character. For CIIs, this is satisfied if the claim involves the use of technical means (e.g., a computer, a network, or a technical process like controlling a physical device).

2. Does it involve an "inventive step"? (Article 56 EPC):

   • Identify all features in the claim.

   • Separate them into technical features (which contribute to the technical character) and non-technical features (e.g., business methods, mathematical methods, mental acts).

   • Only the technical features are considered when assessing inventive step.

   • Any novel non-technical features are treated as known requirements or constraints in the definition of the Objective Technical Problem.

   • The invention is only patentable if the technical implementation of those requirements is not obvious to a person skilled in the art. In T 154/04, merely implementing a new business model on a general-purpose computer was deemed obvious.

G 1/19 Simulations (2021)

consolidated EPO's approach to computer-implemented inventions: technical character required for patentability; narrow interpretation of exclusions; only technical features support inventive step. -

These cases collectively establish that whilst computer programs "as such" are excluded from patentability, computer-implemented inventions that make a technical contribution or solve a technical problem can be patented in Europe.

This decision confirmed the rules for patenting computer-implemented simulations under the EPO's established COMVIK approach.

Aspect	Summary
Invention Type	A computer-implemented simulation (e.g., simulating pedestrian movement).
Key Ruling	Simulations are treated the same as all other computer-implemented inventions. The COMVIK two-step approach is mandatory for assessing inventive step.
Technical Effect Requirement	The simulation must produce a further technical effect beyond mere implementation on a computer. This effect can be: 1. Internal: An algorithm adapted to efficiently use the computer's resources (e.g., faster, less memory). 2. External: The numerical output is specifically adapted for a subsequent technical use (e.g., designing a physical structure or controlling a technical process).
Non-Technical Model	The underlying mathematical model or the rules of the simulation are generally non-technical features and do not contribute to inventive step. They are treated as constraints that an obvious technical solution must meet.