German Federal Court: bread crumbs navigation is not patentable

In a judgment of 24 February 2011, the reasons for which only became available recently, the German Federal Court (BGH) upheld a decision of the Federal Patent Court which invalidated Siemens' German patent DE 101 15 895 C1, which I take the liberty of referring to as the "bread crumbs patent".

Siemens' patent, filed in March 2001 and issued in December 2002, claims a method for navigating websites, comprising the following steps (unofficial and slightly abbreviated translation from German):

Method of generating a display for retrieval (Wiederfinden) of a page already visited from the home page of a content provider and subsequently left, which is accessible over the internet, an intranet or an extranet, which comprises the following steps executed on the server

a) registering the user when accessing the home page,

b) registering the pages visited immediately or subsequently from the home page by the user,

c) generating a display which shows the sequence of the pages visited by the user.

The patent explains that the registration of the user may occur, for example, by placing a "Cookie" on his access device. It is evident that the patent claims the very popular bread crumbs navigation.

Someone - the judgment is anonymous - took issue and filed for a declaration of nullity, citing lack of patentable subject matter, lack of novelty and lack of inventive step. The Federal Patent Court agreed with the plaintiff and declared the patent null for lack of patentable subject matter.

On appeal, the BGH confirmed. The claimed method was technical in nature, since it concerned the storage, retrieval and transmission of data by technical means (para. 16). However, since computer programs "as such" are not patentable, case law requires that the claimed method comprises instructions for the solution of a technical problem by technical means (para. 17). Here, the claimed method merely taught to register and display the information entered by the user. The usability of the navigation method depended on the interaction of the user and the visual display of the information. Merely implementing this method by technical means known in the state of the art did not make it technical in nature (para. 23).

Since the claims lacked patentable subject matter, neither court needed to address the issues of novelty and inventive step. For website owners in Germany, the nullification of the bread crumbs patent is certainly good news. This is one of those patents that must have been infringed by thousands of people. Whether Siemens ever tried to enforce the patent is unclear.

Software Patents as Stalking Horses for the Patent System

For those of you who like your discussion about the intersection between IP and innovation/ commercialization/ entrepeneurship laden with rhetorical spice, you cannot beat the commentary of Vivek Wadhwa. Just his current set of affiliations is enough to grab your attention (Visiting Scholar at the School of Information at UC-Berkeley; Senior Research Associate at Harvard Law School; and Director of Research at the Center for Entreneurship and Research Commercialization at Duke University). If credentials were a tradable currency, then this set of affiliations would certainly be the gold standard.

A good example of the Wadhwa-way of writing about these issues can be found in his recent post in the August 7 issue of TechCrunch. Entitled "Why We Need to Abolish Software Patents" here, Wadhwa makes an impassioned plea in favour of abolishing that most maligned of IP rights, the software patent. He makes the following main points in support of his position:

1. Software patents "don't foster innovation, they inhibit it. That is because things change rapidly in this industry. Speed and technological obsolescence are the only protections that matter."

2. Left to their own devices, software companies (especially start-ups) would more likely than not eschew software patents. In support of this, he summarizes the findings of a 2009 article by Stuart Graham, Robert Merges, Pamela Samuelson and Ted Sichelman, "High Technology Entrepeneurs and the Patent System: Results of the 2008 Berkeley Patent Survey". The article concluded, inter alia, that only 24% of startups filed for patent protection, compared with 76% in medical devices and 75% in biotech.

3. He recalled his own experience in connection with a startup, where he was involved in four patents. "I didn't really expect them to give me any advantage ... [b]ut I needed to raise financing, and VCs wouldn't give me the time of day unless I could tell a convincing story about how we we, alone, owned the intellectual property for our secret sauce."

4. Further referring to the Berkeley report, he made the following additional points:

a. "Venture-backed companies also file more patents than others that file patents. They file, on average, 5.9 patents as against the all-company average of 1.7."

b. "Software executives consider patents to be the least important factor for competitiveness". More important are first mover advantage, followed by complementary assets, copyright. trademarks, secrecy, and making reverse engineering difficult.

c. Patents are filed to: (i) prevent competitor copying; (ii) improve the chances for funding: (iii) enhance a company's reputation; and (iv) obtain a bargaiing chip with others. Even venture capitalists are skeptical that patents lead to greater innovation.

5. The conclusion: software patents serve mainly "patent lawyers and patent trolls, not entrpeneurs."

I have several thoughts about Wadhwa's observations:

1. It really does not come as any surprise that patents are less important in software than in other fields. After all, patent protection came later, after copyright and trade secrets had been well-established as the primary forms of legal protection, and software patents have always been uneasily viewed. Because of this, there is a bit of straw-man feel to his argument.

2. Wadhwa's real target is the patent system more broadly, with software patents providing a convenient rhetorical platform to promote his position.

3. If, as summarized in the Berkeley study, venture-backed companies file more patents (no matter what the field!), then the more interesting question is why the apparent disconnect between venture capitalists and other types of companies with respect to patents? Wadhwa suggests that they may not be acting in their own best interests with respect to patents.

4. Maybe yes, maybe no. I would give more credit to those who are putting their (or their client's) money on the line. At the least, more analysis is needed to convince me that venture-backed companies are involved in patent activities for mostly the wrong reasons.

5. Innovation is not equivalent to patenting. There can be innovation without patents; patents without innovation; competition with patents; and competition without patents. The creative, inventive world is complicated, and the multi-faceted role of patents merely reflects that complexity. Accordingly, there is nothing inherently repugnant about any of the motivations for patenting described in 4(c) above.

At the end of the day, Wadhwa's observations are like my last visit to a Chinese food restaurant, tasty but unsatisfying.

Don't change European software patent rules, say CIPA

A press release from the Chartered Institute of Patent Attorneys (CIPA) in the UK today affirms its position on computer software patents in the light of the European Patent Office's Enlarge Board referral in Case G3/08 (see earlier post here). The deadline for submitting amicus briefs is today. Says CIPA:

"... the Chartered Institute of Patent Attorneys has urged the EPO’s Enlarged Board of Appeal to reject calls to make radical changes to the rules on patenting computer programs. Changes to established practice would cause the kind of confusion that exists in the USA ...

Chairman of CIPA’s Computer Technology Committee, Simon Davies, says that any major changes to the established practice “would create confusion in the computer industry throughout Europe.” [Quite true -- but failure to change current practice appears to have created a present state of confusion too. Which is better? Our current, known, confusion, or future unknown confusion?]

“Although computer programs as such are not inventions, under EPO rules,” Davies explains, “this does not necessarily exclude patent protection for an inventive product or process which is implemented by a computer program. Over many years, the EPO Boards of Appeal have developed a carefully formulated approach in which patents are granted for a technical solution to a technical problem. This has now become well-established practice before the EPO in general.” [Is it agreed that the formula is one which is susceptible of reliably consistent application to any given set of facts? Does it need (i) to be left completely alone, (ii) to be gently fine-tuned or (iii) to be supplemented with further clarificatory guidance?]

According to CIPA, the situation at the EPO is in stark contrast with difficulties in the USA. For example, the State Street Bank decision from the US Court of Appeals for the Federal Circuit caused a big increase in the range of subject matter for which a patent could be obtained. However, the recent Bilski decision from the same court represents a potentially significant contraction. These two decisions have left US patent law in a state of great uncertainty [This may be true -- though some US patent experts disagree -- but it doesn't really address the problems in Europe].

There have also been problems in the UK, where the Intellectual Property Office has issued four different Practice Notices relating to computer-implemented inventions in the last five years. CIPA is not in favour of such frequent changes, as patents have a lifetime of up to twenty years. [Is there something missing here? It looks as though perhaps CIPA would be more in favour of frequent changes if the maximum patent term were different]

CIPA’s submission to the EPO states that ‘the current approach provides a sensibly balanced and legally coherent treatment of excluded subject matter that benefits both applicants and third parties. This approach should continue.’

The IPKat appreciates the need to limit change in the interests of stability and predictability, particularly when each change is followed by an empirical stage in which patent applicants and litigants have to pay for the privilege of finding out what those changes mean in practice. But Merpel wonders whether the crucial criterion is not that of either stability or predictability, but of whether the present system works so well that no change is justified in terms of functional utility.

"If it aint broke(n), don't fix it" here and here