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Software Patenting in Singapore, Indonesia and Malaysia
In this article, the author provides a survey of the current software patenting practice and law in Singapore and its two neighbouring countries - Indonesia, and Malaysia.
The development in Europe shows that it is difficult to come up with a universally
acceptable standard for determining software patentability. Attempts to formulate
a test such as a requirement for technical contribution still yields results
that do not satisfy all quarters and are arguably artificial. The word 'technical'
has been described as 'vague'. Judges in the UK are frank to admit the difficulty
in determining the boundary of what is and what is not a technical contribution.1
One concern is that a less restrictive test may lead to a flood of applications for software-related inventions, particularly those implementing business rules or methods. Patent offices acknowledged that they do not have adequate resources to deal with this relatively new area of technology, at least from the patenting perspective. One difficulty is that algorithms for computer programs are still fiercely protected from disclosure and such protection prevents accessibility when conducting prior art search.
A computer program is in a unique position as it is already protected as copyright work although the nature of protection is in the literary expression (including its machine language coding) rather than the broad working idea behind the computer programs.
Some patent offices in ASEAN countries appear
to adopt a wait and see approach with regard to the development in more patent
sophisticated countries such as the European Patent Offices and the US Patent
Office. In the case of Singapore, its Courts have taken a rather bold step
in upholding a patent for data processing relating to credit card payment
and currency exchange.
Singapore
Singapore used to have the same limitation as the UK position in which a computer
program 'as such' is not patentable. This exception was removed with effect
from 1996. This was apparently meant to comply with the TRIPS requirement.
The good thing is that this removes a limitation that artificially blocks out deserving inventions which meet the novelty, inventiveness and industrial application test. On the other hand, opponents are concerned that this would unnecessarily stifle software development where copyright law appears to be adequate.
The 2007 Court of Appeal decision in First Currency
Choice Pte Ltd v Main-Line Corporate Holdings Ltd [2008] 1 SLR 335 confirms
that business method/software patents are here to stay. The patent claimed
a data processing system for recognising the issuer of a credit card and determining
the operating currency of the card issuer. The subject invention was to allow
the credit card holder to charge based on his home currency even when he is
charging in a foreign country.
The Court of Appeal rejected the defendants' argument that the patent was
anticipated or that it was obvious.
In the Court below, the trial judge made the finding of inventiveness with respect to the capability in the invention in identifying the card's operating currency through extracting information from the card (found in the Bank Identification Number ('BIN')) which is part of the card number stated on the credit card:
While moving from a manual system to an automatic one may be the obvious wish in almost every process, what has to be obvious is the step in making that transition. I do not think that the notional person skilled in the art would have naturally gravitated towards the idea in the [P]atent to make that transition.
Thus, the inventive step does not lie in the fact that a possibly hitherto process has now become automated but rather a step taken to achieve this automation.
In this case, the patentee sued a Singapore bank and the supplier of the credit card payment system for patent infringement. The infringement claim was upheld following the dismissal of the invalidation claim against the patent. The Court of Appeal upheld this decision.
The Singapore patent system adopts what some
call a 'self-examination' process. A patent would still be granted even when
the examination report is unfavourable because of adverse prior art. In this
regard, patentees may submit examination reports of corresponding overseas
patent offices such as the USPTO or the Australian Patent Office. Given the
more favourable rules under the USPTO towards software patents, patentees
would prefer to submit examination reports issued by the USPTO.
Indonesia
The Indonesia Patent Law specifically excludes from the interpretation of
invention: rules and methods of doing business as well as rules and methods
concerning computer programs. The exact scope of this exclusion is still not
clear. Under the proposed amendment to the Patent Law, the exclusion would
be regarded as excluded subject matter from patentability rather than excluded
from the meaning of invention. Although the proposed amendment would not effectively
change the position, it would at least do away with the artificial barrier
in denying software development as invention. The current exclusion notwithstanding,
the author has come across granted patents that appear to be software related.2
Under the Indonesian Patent Office practice, a patent application can be granted
if the applicant submits evidence of grant of a corresponding patent from
Patent Cooperation Treaty countries in which the patent offices are known
to substantively examine issuing allowances. The author believes that this
could be a reason why patent applications involving software are not as thoroughly
screened as they should be.
In 2007, the Supreme Court revoked a patent for an online ticketing and payment system. The grounds for the revocation included: the invention concerns business method as well as lack of novelty and inventive step. There was, however, no discussion on the software exclusion ground.
This revocation case, a first in Indonesia, was brought by national carrier, Garuda Indonesia Airlines. The case concerns an online ticketing and payment system which Garuda was using. In reaction to an infringement claim of a patent covering the same subject matter, Garuda filed a revocation system against this patent. At first instance and before the Supreme Court, the patent was found invalid on the ground that it relates to a business method which is excluded from the definition of invention under Indonesia's Patent Law. Other grounds which the court relied on were lack of novelty, obviousness and that it was not capable of industrial application.
It is unfortunate that there was no discussion of the other exclusionary ground - rules and methods concerning computer programs are not considered as invention. Although the online ticketing case provides some guidance on the scope of the exclusion, there is still insufficient guidance as to what would fall within the bar - 'rules and methods concerning computer program'. Would rules and methods concerning the operation of computer hardware be acceptable? In the Garuda case, the patent claim involved co-operation of various hardware and software to give effect to the ticket sale and payment invention. Claim one of the patent read:
1. System for payment of tickets sales through
On-Line Banking Facilities comprising:
communication software (8) functioning as input software for entering ticket
reservation data;
interface facilities (10) functioning to serve and process data of ticket
reservation based on communication software (8) used for reserving tickets;
database (16), ticket reservation data storage connected to and working to
support interface facilities (10);
computerized reservation system server (12) connected with interface facilities
(10) to serve ticket reservation, this server covering data of seat availability
and other information with respect to said tickets;
payment transaction facilities (18);
banking server (20) connecting interface server (10) and payment transaction
facilities (18);
where said interface facilities (10) include application servers, each having
a specific function to serve and confirm ticket reservation in accordance
with type of communication software
(8) used.
Strictly speaking, such a claim would not fall within the prohibition 'rules and methods concerning computer program' since the invention is evidently more than that.
A strong policy argument is that the decision
avoids the use of patent to foreclose computer programs or improvements from
the public.
Malaysia
In the current Malaysia Patent Law, there is no specific provision dealing
with software related inventions. Specifically excluded from patentable subject
material are 'discoveries, scientific theories and mathematical methods' as
well as 'schemes, rules or methods for doing business, performing purely mental
acts or playing games'.
The Malaysian examination system allows for reliance on allowance of corresponding claims in other countries.
Modified examination is available where the applicant has obtained the grant of a parallel Australian, European, UK, Japanese, Korean or US patent. The request has to be accompanied by a certified copy of the foreign patent and, if necessary, amendments will have to be made to the Malaysian specification necessary for conformity to the specification of that foreign patent.
As such, there is scope to rely on a software patent granted by the USPTO or Japan Patent Office as a basis to get the patent accepted under the modified examination route.
Anecdotal evidence is that software patent filings
at the Malaysian registry are on the rise.
Concluding Remarks
In the case of Singapore, which is in a way leading in upholding software
patents, it remains to be seen how its finance industry can benefit from protection
of software, particularly those relating to finance transactions. Would this
lead to a hotbed of new financial ideas or would this foreclose computer programs
to the public?3
This will be of interest for Singapore given its pre-eminence in the finance industry - whether this will encourage or stifle innovation. Proponents argue that this would spur new ways of doing business while opponents think that over protection is likely to restrict competition and restrict consumer choices.
Chow Kin Wah
Rouse & Co International
www.iprights.com
E-mail: kchow@iprights.com
Notes
1 Fujitsu Limited's Application [1997] EWCA Civ 1174 and CFPH LLC, Patent
Applications by [2005] EWHC 1589.
2 Call Box Management System Application No P991045 (P00-1999-000000-001045).
3 Decision of the UK Patent Office in Oracle's
patent application - http://www.ipo.gov.uk/patent/legal/decisions/2005/o25405.pdf.