SaaS Agreements – IPR – Software Patents

The issue of software patents has recently been highlighted by a proposal to change German patent and copyright law. The proposal recommends preventing computer software being registered as a patent, arguing that computer software should only be protected using copyright law, as this is sufficient to protect a software developer’s rights. In light of the current German proposal, below is a brief summary of patent and copyright law in relation to SaaS software in the UK, Germany and non-EU countries.

Patents

A patent protects a new invention and covers how things work, what they do, how they do it, what they are made of and how they are made. It gives the owner the right to prevent others from making, using, importing or selling the invention without permission. Generally SaaS software cannot be patented in the UK but there are limited exceptions which are set out below in more detail.

Software Patents in the UK

Despite the general presumption that SaaS software cannot be patented in the UK, it is possible to patent some computer software inventions in the UK. This is because software uses technology (computers) but often for non-technical purposes. Whether a computer software invention is patentable depends on the contribution the invention makes. For example, if computer software provided improved control of a car braking system, it would be likely to be patentable in the UK, but if it merely provided an improved accounting system, it would probably not be patentable in the UK.

Patents outside the UK

The law on what is patentable within the EU is generally the same as in the UK, as national patent laws are derived from the European Patent Convention (EPC). However, individual EU countries may interpret the terms of the EPC differently resulting in different rules actually applying in each EU country. For example, in Germany only software that substitutes a mechanical or electro-magnetic component is patentable. Outside of the EU in the US and Japan software patents can be registered with very few restrictions.

Copyright v Patent Law

Copyright alone does not adequately protect computer software as it does not protect the functionality of software. This is because copyright only protects the expression of ideas in the software NOT the ideas themselves. For example, if a third party substantially modified your SaaS software to create its own software that performed exactly the same function it would not breach your copyright as there is no ‘copying’ of your SaaS software.

The main objection to the use of patents to protect SaaS software, particularly in the open source software community and companies which use and contribute to open source, is that patents impede and/or prohibit the distribution of free software, as licence fees become payable for use of the patents. This results in technological progress being hindered and allows monopolies and powerful companies to exclude others from developing computer software e.g. Amazon “one-click” which is patented in the US but not in the EU.

Help

Irene Bodle is an IT lawyer specialising in SaaS agreements with over 10 years experience in the IT sector. If you require assistance with any SaaS, ASP, software on demand contracts or any other IT legal issues contact me:

irene.bodle@bodlelaw.com
www.bodlelaw.com

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