There are various theories on this simple-looking question alone.  In the 19th century, for example, there were heated discussions in patent law disputes, which led to the so-called four theories of patent law^[1].

o   Property or natural rights theory: labor theory (John Locke): everyone has a natural right to the fruits of his labor. Their unauthorized use is "intellectual theft".

o   Reward theory: The inventor provides a service to the general public, in return for which he is entitled to a reward in the form of an exclusive right for a limited period of time.

o    Incentive theory: Inventions require effort and investment, which are only made if the result cannot be immediately adopted by everyone. By preventing immediate imitation, patent protection strengthens the willingness to invest labor and capital and thus promotes technical progress.

o    Disclosure theory: Patents are only granted if the invention is disclosed. In this way, the general public can make the invention their own after the term of protection has expired. The patent is consideration for the inventor's waiver of secrecy.

o    From today's perspective, there is widespread agreement that deontological justifications for patent law are not convincing. In addition to fundamental objections, the argument against the work theory is that inventors stand on the shoulders of their predecessors - the share that the inventor adds is small and hardly measurable. Arguments against the reward theory are that many fundamental achievements remain unrewarded, that discoveries can also be worthy of reward and that an exclusive right is more of a market opportunity than a reward.

Therefore, there is agreement that justification of the patent system is based on utilitarian considerations: The patent system is a means to an end of promoting innovation. The restrictions on competition that it entails are justified if and to the extent that they serve this purpose.

It can be stated that the patent is a subjective private right that owes its creation to an act of grant under public law. It is a right to the exclusive use and commercial exploitation of an invention. Patents reward their owner with a temporary and geographically limited monopoly of use. At the same time, they fulfill an important information function: the publication of the invention provides incentives for further research and development. Inventors and consumers benefit equally from this promotion of innovation and the increase in knowledge^[2].

The grant is made by means of an administrative act, which has a legal effect^[3]. The creation on which the invention is based does not entitle the inventor to exclude third parties from using it. It initially only gives him the substantive right to his intellectual creation. On the one hand, it contains the inventor's personality right, which primarily concerns the inventor's relationship to his creation and the resulting personal status and appreciation. On the other hand, its further meaning is the right to the invention. As such, it gives its owner the sole authority to obtain a protective right for the invention^[4].

The patent law applicable in Europe can be described as a legal pluralism consisting largely of national law under a partial umbrella of international law^[5]. Unlike US law, German and European law excludes non-technical objects from patent protection (§ 1 III PatG).

The patent is thus an examined exclusive right to a technical teaching. The invention is therefore an intellectual property right.

It is now questionable how computer systems and other software systems are compatible with German patent law and to what extent they are patentable.

Up to now, the focus has been on sectoral harmonization provisions or legal acts relating to intellectual property in general, which also apply to patents. The proposal for a software patent directive failed in 2005 and was no longer pursued^[6].

^[1] DEUTSCHES UND EUROPÄISCHES PATENTRECHT PROF. DR. ANSGAR OHLY
SS 2022

^[2]https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwiylqKApKOCAxW7SfEDHdFRDcoQFnoECBIQAw&url=https%3A%2F%2Fwww.dpma.de%2Fpatente%2Fpatentschutz%2Findex.html%23%3A~%3Atext%3DSchutz%2520f%25C3%25BCr%2520Ihre%2520technischen%2520Erfindungen%26text%3DMit%2520Patenten%2520k%25C3%25B6nnen%2520Sie%2520Ihre%2Cbefristetes%2520und%2520r%25C3%25A4umlich%2520begrenztes%2520Nutzungsmonopol.&usg=AOvVaw2LGsEpRWuA-8tzC7yZGgCb&opi=89978449

^[3] BGH GRUR 1974, 146 (147) – Schraubennahtrohr; BGH GRUR 1999, 571 (572).

^[4] Benkard PatG/Bacher, 12. Aufl. 2023, PatG § 1 Rn. 2a.

^[5] NJW 2023, 950 Rn. 1, beck-online.

^[6] NJW 2023, 950 Rn. 4, beck-online

Software is intangible property and may obtain protection under certain intellectual property rights, such as copyright and confidential information laws. "Computer program" is expressly included within the definition of a literary. ^[1]

A patent holder can prohibit anyone from commercially manufacturing the protected products or commercially using the protected process (§ 9 PatG). However, programs for data processing systems are excluded from patent protection under § 1 II Nr.3  PatG. According to the express provision of the law, they do not constitute protectable inventions. Only inventions of a technical nature that solve a technical problem and have technical features are protected here. However, the exclusion of software programs only applies to programs as such in accordance with § 1 III PatG, i.e. not to inventions that contain a program in addition to other components^[2].

It should be noted that the subject matter of a patent is always either a method, i.e. an algorithm, or a technical object (e.g. a computer system programmed in a certain way) ^[3]. This distinguishes the direction of protection of patent protection from that of copyright protection, in which the specific program and not the underlying algorithms are protected^[4]..

Beyond this general statement, however, none of the approaches is convincing in that it has found even a halfway clear distinction between patentable and non-patentable software. This is not surprising, because the reason for the legal regulation is difficult to recognize.

In the meantime, however, some criteria for differentiation have emerged in case law. First of all, the basis is that inventions protected by patent law can only be technical innovations. Non-technical innovations are excluded from patent protection. Despite some differences in wording, case law and literature understand technology to mean the "control of nature“^[5]. The BGH specifies that its invention is only technical if it exploits controllable natural forces in a planned manner and thereby achieves a direct causal success. Human intellectual activity is not one of the controllable forces of nature. Instructions to the human mind are not technical and cannot be patented^[6].

In general, if software is patentable in principle, it must fulfill the other requirements for a patent in order to be patented. It must be capable of industrial application, which should generally be the case, and must not belong to the state of the art prior to the date of filing the patent application (Section 3 PatG), nor must it be obvious to a person skilled in the art (Section 4 PatG). These requirements prevent, among other things, the patenting of software which, like open source software, had already been published previously. Both this software and the processes on which it is based are already known when the application is filed. Both this software and the processes on which it is based are already known when the application is filed. It is, of course, possible to apply for a patent first and only then publish the software as open source code^[7]..

If all the requirements for patentability are met, the Federal Patent and Trademark Office must grant the patent. The granting of a patent is preceded by a complex examination procedure, which cannot be discussed further here. In this procedure, the invention must be disclosed relatively early on, so that patent protection and secrecy are mutually exclusive^[8].

^[1] © 2023 THOMSON REUTERS. ALL RIGHTS RESERVED., HTTPS://UK.PRACTICALLAW.THOMSONREUTERS.COM/W-018-5815?TRANSITIONTYPE=DEFAULT&CONTEXTDATA=(SC.DEFAULT)&FIRSTPAGE=TRUE

^[2] (Redeker IT-R, Rn. 137, beck-online)

^[3]  Pfeiffer GRUR 2003, 581

^[4] Heide CR 2003, 165 (167)

^[5] Pesch MMR 2019, 14

^[6] Schuster/Grützmacher/Sabellek PatG § 1 Rn. 56 ff.; BGH GRUR 1977, 152 f.

^[7] Wiebe CR 2004, 881 (886).

^[8] Redeker IT-R, Rn. 155, beck-online

Programs that directly control and optimize data processing hardware are also considered patentable^[1]. These include, for example, the operating system and programs that record the current memory load and achieve optimized memory utilization by means of a loading strategy based on this^[2]. The question of whether a program can be patented depends on whether and with what degree of novelty it serves to solve a technical problem by technical means^[3].  The case law also states that if something can only be realized with a computer, this does not directly lead to patentability^[4].

^[1] BPatG GRUR 1997, 617 („Vorbereitung von Musterdaten“).

^[2] BGHZ 115, 11 (21) = GRUR 1992, 33 („Seitenpuffer“).

^[3] Pesch MMR 2019, 14 (16).

^[4] Anders GRUR 2001, 555.

Examples

1. ABS ("anti-lock braking system")^[1]   The ABS is a program controlled system designed to optimize the braking process in the car.

2. X-ray machine^[2] : A program that automatically evaluates the relevant data occurring during the operation of an X-ray machine and controls the X-ray machine on the basis of this evaluation in order to optimize the machine as a whole is patentable.

3. Circuitry of electrical devices ^{[3] :} Similarly, a program that controlled a circuit of electrical devices and consumers based on immediately recognized and discriminated information

^[1] BGH GRUR 1980, 849.

^[2] EPA, Entsch. v. 21.5.1987 T 26/86, ABl. 1988, 19 („Röntgeneinrichtung“

^[3] EPA GRUR 1989, 42 („Rolladensteuerung“); GRUR 1991, 195 („Temperatursteuerung“); GRUR 1987, 799 (800) („elektronisches Stellwerk“).

On the other hand, programs that control custodial activities are not considered patentable. For example, it is largely undisputed that accounting programs are not patentable. The same applies to programs that translate characters between different fonts. The same applies, for example, to a program in which a computer sorts and retrieves documents stored in it,394 evaluates operating actions carried out by the customer, records data for a business evaluation396 or serves to optimize train intervals^[1]

^[1] Redeker IT-R, Rn. 141, beck-online

^[1] BPatG CR 1997, 296; CR 1998, 651; kritisch zu dieser Rechtsprechung Schöniger CR 1997, 598; zustimmend Scholch GRUR 2006, 969; Winterfeldt GRUR 2004, 361.

„ Committed to excellence“

The European Patent Office (EPO) examines European patent applications, enabling inventors, researchers and companies from around the world to obtain protection for their inventions in up to 44 countries through a centralised and uniform procedure that requires just one application.

The EPO stands for high-qualitiy patents and efficient service that foster innovation, competitiveness and economic growth. They want to empower and motivate their stuff to set worldwide standards in intellectual property. The Office wants to be effective and transparent, respond to the needs of the users and be agile in managing the changing demands and conditions of a dynamic global patent system^[1].

The European Patent Office (EPO) was set up in 1973. From 16 signatory states of the European Patent Convention in 1973, the Organisation has now grown to 39 member states, including all 27 EU member states plus countries such as Norway, Switzerland and Türkiye^[2].

^[1] https://www.epo.org/en/about-us/office/mission

^[2] https://www.epo.org/en/about-us/timeline

They say that the digital technology that has become so prevalent in recent decades consists of two complementary elements that are interdependent. One is the hardware. This refers to the physical components, such as the microprocessor chips and digital memory in a computer, as well as the external devices that the computer controls. The second, which is the main focus of our blog, is software. Software, on the other hand, includes all the protocols and instructions to tell the hardware what to do, when and how. Without software, hardware is useless; and without hardware, software cannot perform.

Patents can be granted for inventions in all fields of technology, provided that they are new, involve an inventive step and have an industrial application.

And now in other words (please compare the previous definition of software patentability here), an invention is patentable as long as it solves a technical problem in a novel and non-obvious manner.

Otherwise, abstract concepts and ideas, such as business methods or storylines for a new computer game, are not qualify as inventions in a field of technology by the EPO. From this follows that Patents are generally also not granted for mere implementations of abstract concepts and ideas through conventional hardware.

The EPC (European Patent Convention) an in particular Article 52, programs for computers are not regarded as inventions for the purpose of granting European patents. But this exclusion from patentability only applies to the extent to which a European patent application or European patent relates to a computer program as such^[1] . The EPO therefore subjects patent applications in this area to a much stricter examination than its American counterpart. However, this does not mean that all inventions, including certain software in general, are not patentable. Since 2013, the criterion for distinguishing between "inventions" and "non-inventions", i.e. the requirement for patentability at the EPO, has been that the subject matter must have a technical character. Whether the subject-matter has a technical character is assessed without reference to the prior art^[2].

For you as an example, any subject-matter listed in Article 52(2) EPC can be an indication. Any subject-matter mentioned there can be an invention if it has or contributes to a technical character. But the patentable subject matterof Article 52(2) and (3) is only the first step towards patentability. Computer programs can also be refused and are often refused on the ground of lack of inventive step.

So to put it all in a nutshell the European Patent Convention states that software itself is not patentable. The European Patents Office grants software patents by declaring them as "computer implemented inventions"^[3].An invention is patentable if it provides a new and non-obvious "technical" solution to a technical problem. The problem, and the solution, may be entirely resident within a computer such as a way of making a computer run faster or more efficiently in a novel and inventive way.

^[1] Case law of the EPO boards of appeal: a review by internal and external experts, The patentability of computer-implemented inventions, Part 1: The legal basis for patentability - Article 52 EPC (Stefan Steinbrener). 

^[2] EPO boards of appeal and key decisions: Patentability of computer-based and business-related inventions from the perspective of a patent attorney (Part 1 of 3) ( Ian Harris)

^[3]https://fsfe.org/activities/swpat/swpat.en.html#:~:text=The%20European%20Patent%20Convention%20states,as%20%22computer%20implemented%20inventions%22.

Their accusation is that in practice, patents are primarily used to protect existing innovations against further developments by competitors (so-called strategic patenting) and that the idea of an exclusive right through patents contradicts the aspect of cooperation and sharing, which could be named as one of the most important strategy in these networked society.^[1]

This criticism led to the proposal for a directive on the standardization of patent protection for computer-related inventions being dropped by the Commission in 2005. However, this has not changed the overall practice of granting patents. A steadily increasing number of software patents continue to be assigned. The European Patent Office (EPO) alone received 15 193 applications last year (2022).^[2]

This is a massive problem, especially for the sector of small and medium-sized enterprises, because it is mainly large companies that apply for patents and the resulting abundance of patents is no longer manageable for them. This creates a monopoly of power for large companies and would prevent innovation and progress. For software developers, patents mean that they are no longer allowed to use certain versions of a protected problem solution commercially without the consent of the patent holder.^[3] Incalculable cost and liability risks would also make things more difficult for developers. Furthermore, patented software solutions cannot be reconciled with the licensing conditions of open source software, which makes effective progress in the field of software development significantly more difficult.

Here are some examples of opinions: ^[4]

·       From The Economist: "At a time when our future affluence depends so heavily

on innovation, we have drifted toward a patent regime that not only fails to fulfil its justifying function, to incentivise innovation, but actively impedes innovation."

·       From NPR's Planet Money: "[W]e talked to a half dozen different software engineers. All of them hated the patent system, and half of them had patents in their names that they felt shouldn't have been granted. In polls, as many as 80 percent of software engineers say the patent system actually hinders innovation. It doesn't encourage them to come up with new ideas and create new products. It actually gets in their way. Many patents are so broad, engineers say, that everyone's guilty of infringement. This causes huge problems for almost anyone trying to start or grow a business on the Internet."

In the end, critics of software patents do not feel that they are necessary. Software is already effectively protected by copyright law, explained Dr. Oliver Grün from the ´Bundesverband IT-Mittelstand´, among others. This is easy to handle and does not threaten software developers. ^[5]

^[1] translated from:  Softwareschutz: Urheberrecht und Patetntrecht (Dreier)

^[2] translated from: EPO, Pressemitteilung vom 28.03.2023

^[3] translated from: Unkalkulierbare Risiken für Softwareentwickler (Schulzki-Haddouti)

^[4] Speaking of software patents (Tiller)

^[5] translated from Software-Patente in der Kritik (hib 261/2013)

Johanna Schütt: 629088

Svea Rathmann: 629586