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- 1. www.iam-magazine.com82 Intellectual Asset Management January/February 2015 xxx As China pursues innovation-driven development, IP issues are under growing scrutiny. Multinationals would be well advised to protect their software by following best practice when it comes to applying for patents By Li Xiang Patenting software in China A multinational corporation needs a strong and stable patent portfolio in China in order to protect any software that it owns. To acquire such rights, in-house counsel should have comprehensive knowledge of patent examination regulations for computer program-related inventions, along with a deep understanding of the relevant rules and regulations. This article provides a thorough analysis on how to patent computer programs – especially the subject matter – in China, including specific patent examination procedure and detailed explanations of the related requirements, in order to help users to understand and respond to office actions from the State Intellectual Property Office (SIPO) and draw a clear line between patentable subject matter and non-patentable subject matter. It also sets out suggestions for drafting patent applications for computer program-related inventions in order to avoid rejection and to help achieve a successful patent portfolio in China. Intellectual property in China China’s market has been growing ever since the country began to reform and open up, particularly in fields such as information technology, automobiles, biotechnology, automation and green energy. For multinational corporations, China’s market is a key battlefield for global success. And in recent years the key to increasing market share or competitiveness for multinationals in China has been not only cost performance, but also intellectual property. Intellectual property, which has made the United States a powerful and prosperous nation, is now blazing a remarkable trail in mainland China. According to SIPO’s latest statistics, it received 825,000 invention patent applications in 2013, up by 26.3%. The annual number of applications for invention patents in China – which correspond to utility patents in the United States – is now the highest in the world. As China’s IP enforcement continues to improve, more and more cases reveal the true value and importance of intellectual property in the Chinese market. Both domestic and foreign companies have noticed this and are sparing no effort to create powerful patent portfolios in China. The United States and Japan are the biggest participants – according to the 2011 Annual Report of Chinese Patents in Force, they account for more than 35% of all valid invention patents in China. Running a comprehensive IP system in a country means transforming competitive mechanisms from product sales to IP rights-product sales (as shown in Figure 1). This means that a company’s market share depends not only on its product (or cost performance), but also on the quantity and quality of its IP rights. In other words, commercial interests come from IP rights as well as from products. HTC v Apple starkly demonstrates the vital importance of strong IP rights. In order to ensure the early acquisition of strong and stable IP rights, a company’s IP
- 2. Intellectual Asset Management January/February 2015 83www.iam-magazine.com xxx Copyright is automatically granted and trade secret protection takes effect after three related conditions are met. However, a patent will not be granted until an application has been filed with SIPO and passes first a preliminary and then a substantive examination, a process which lasts 22 months on average and costs about $600. In 2012 Microsoft raised eyebrows when it filed over 785 patent applications (including applications for invention patents, utility model patents and design patents) with SIPO. Multinationals should make a considered decision before filing multiple applications in this way. Then, why patent for software? Computer programs written in computer programming language are a kind of human logic, which is relatively easy to disseminate from one skilled in the art to another. Different computer programs can be implemented to achieve the same target and result, which tends to make copyright protection virtually useless. For computer software there is no such thing as know- how, in the way that there is for chemistry or biotechnology, which tends to make trade secret protection useless. Patents, which makes design-around difficult, are therefore a reasonable protection choice for computer programs, despite the cost. Patent examination for computer programs For multinationals in computer-related fields, how to acquire strong and stable patent rights in China is not a new question, but it remains a complicated one. The Patent Law is revised or substantially amended every eight years. It first entered into force on April 1 1985, having been adopted at the Fourth Meeting of the Standing Committee of the Sixth National People’s Congress on March 12 1984, and was amended in 1992, 2000 and 2008 respectively. Every amendment has seen the law become more mainstream, while maintaining its own idiosyncrasies when it comes to the examination of computer program-related inventions. To see the whole picture, we first need to discuss the substantive examination of computer programs. Examination procedure As shown in Figure 2, a computer program- related invention is first examined to identify the eligibility of its claimed subject matter, including “rules and methods for intellectual activities” (Article 25.1.2 of the Patent Law); and to ensure that the invention provides “new technical solutions proposed for a product, a process counsel should develop a deep understanding of various IP laws in the company’s target markets and develop a strategy for protecting its products in different markets. For instance, the IP counsel for a company operating in the fields of computing, computer software, computer hardware, telecommunication, data processing or automation (eg, IBM, Intel, Honeywell or Microsoft) needs first and foremost to understand the difference between Chinese patent law and US patent law. Protection for computer programs Computer programs can be protected by copyright according to Article 3 of the Copyright Law, and can be registered under the Registration of Computer Software Copyright Procedures. Computer programs can also be protected as trade secrets under the Contract Law or by patents, as is the case in the United States and the European Union. Product 1 Product 1 Application Product 1 Product 1 Product 2 Product 2 USPTO/SIPO IP rights Product 3 Product 3 Consumer Consumer Sales Sales Figure 1. Transforming competitive mechanisms from product sales to IP rights- product sales
- 3. www.iam-magazine.com84 Intellectual Asset Management January/February 2015 xxx by a process or method steps and is to be interpreted by an examiner as including all different implementations of processors which can achieve or perform those steps. However, embodiments of processors in the specification contain only descriptions of computer programs (ie, software), but no specific hardware, such as semiconductor elements to compose the processor. Moreover, people who are ordinarily skilled in the art are incapable of determining other equivalent technical solutions (eg, hardware solutions that are not mentioned in the specification) without a creative effort. This can therefore constitute a reason for the examiner to apply Article 26.4 to reject the independent claim, as the “written claim is not based on the written description” or “support issue”. In fact, this results in the rejection of many computer program-related inventions. It also illustrates the reason for the emergence of virtual-device claims, as described in Part II, Chapter 9 of the 2010 Guidelines for Patent Examination. Virtual-device claims are found only in China. So far, there has been no case law involving such claims to provide guidance on how to enforce or litigate them. If an applicant can provide only computer program embodiments in the description and yet still wishes to draft a product claim, a virtual-device claim is an easy option to follow. Chapter 9 describes how to draft such claims. However, how an examiner conducts an examination under Article 26.4 deserves in-depth analysis. Figure 3 illustrates the examination procedure set out in Article 26.4. Procedure P10, which is designed to examine whether the invention described in the specification and claims is based solely on computer program flow, includes the following steps: or the improvement thereof” (Article 2.2). Article 25.1.2 sets out similar criteria to the ‘abstract idea’ of US patent law, under which a claimed subject matter is applied not to the real world, but to human logic per se (eg, a new way to play poker). A claimed subject matter describing the mechanisms of designing levels, balance of weapons or races and game play in StarCraft would be rejected by SIPO under Article 25.1.2. Article 2.2’s definition of ‘invention patent’ is similar to the assessment of ‘technical character’ found in the European Patent Convention. Under this, a solution composed of computer program steps to solve a management or a business problem may not be a technical solution, as required by Article 2.2. Following the examination for claimed subject matter, the computer program- related invention is examined to ensure that the “written claim shall, based on the written description, contain a clear and concise definition of the proposed scope of patent protection” (Article 26.4) – which is a different step from that taken by either the US Patent and Trademark Office (USPTO) or the European Patent Office (EPO). Finally, computer program-related inventions are examined under Articles 22.2 and 22.3 to check for novelty and inventiveness (identical to the EPO’s ‘inventive step’) of the subject matter in the written claims. Article 22.3 uses a three- step analysis (from the EPO) to determine the non-obviousness (from the USPTO) of the subject matter in written claims, in which the criterion of inventiveness lies somewhere between that set out by the EPO and the USPTO. Of these three stages of examination, those which that confuse foreign applicants are the eligibility articles and Article 26.4. Applying Article 26.4 to computer program-related inventions To illustrate Article 26.4 with a real case, we have chosen Patent Cooperation Treaty application WO2007092945, which contains the following independent claim: “An apparatus comprising: at least one processor configured to perform spectral shaping on modulation symbols to obtain spectrally shaped symbols, and to generate a single-carrier frequency division multiplexing (SC-FDM) signal based on the spectrally shaped symbols; and a memory coupled to the at least one processor.” The subject matter requires protection for an apparatus which includes at least one processor and a memory, which makes it a product claim. The processor is described Computer program – related invention A25.1.2 Eligibility Novelty and inventiveness Examination procedure A26.4 A22.2 A22.3A2.2 Figure 2. Computer program-related invention examination procedure
- 4. Intellectual Asset Management January/February 2015 85www.iam-magazine.com xxx matter of the claimed invention must be patent eligible. For example, in the case of an invention involving management throw client/server or browser/server software, technical disclosures from colleagues in the R&D department may include detailed business logic of the software, which is not eligible subject matter according to Article 5.1.2 because it lacks any technical features. There is no definition of ‘technical feature’ from SIPO or the People’s Supreme Court, but normally scientific or technical features (eg, hardware-related features and data manipulation features) can help to ensure that a technical feature is present. When combined with technical features, business logic is now embodied in functions and interfaces. However, technical features are not necessarily technical means, which is crucial when it comes to composing technical solutions. In order to qualify as ‘technical means’, technical features must perform or operate in accordance with natural laws instead of social laws or manmade rules. For example, there is a function to rearrange graphical user interface (GUI) information and show GUI based on the size and shape of a client screen, which shows more readable GUI to users as in 201010108837.X. These technical features operate in accordance with natural laws that each client screen has a configuration accessible through application program interfaces, and that a full-sized GUI on a client is more operable or readable than a half-sized GUI. Technical means in a solution also require technical results, as well as technical purpose (Article 2.2). In other words, a technical means which is applied to manipulate non-technical information for a non-technical purpose only does not fall within the definition of a ‘technical solution’. Normally, technical solutions come from features and advantages of computer programs instead of operation manuals. To be eligible, a solution based on a computer program must demonstrate features which operate in accordance with natural laws or perform operations or calculations on natural objects – including matter, energy and information – which changes the attributes of these objects or generates new objects in order to reflect man’s ability to change the natural world. As for Article 26.4, a technical solution based solely on computer-program flow cannot yield a product claim. The first way to make this support a product claim is to include a detailed • S11 to review various implementation methods of invented technical solutions, especially the relations between computer programs and computer hardware of invented technical solutions disclosed in the specification. • S12 to determine whether the improvement of invented technical solutions involves hardware structure compared with the prior art. • S13 to determine whether the improvement of invented technical solutions involves direct control from computer programs to computer hardware. • S14 is based on the analysis of S11, S12 and S13 to determine whether the invention described in the specification and claims is solely based on computer program flow – if it is, then go to S15; otherwise go to S16. • S15 states that written claims can be method or virtual-device claims, but not product claims, which means that Article 26.4 is ready to be used on such applications. • S16 states that written claims can be method claims (ie, process claims) and product types. Patenting computer program-related inventions To patent a computer program-related invention, there are at least five barriers to cross – eligibility (Articles 2, 5 and 25), clarity (Article 26.4), support (Article 26.4), novelty (Article 22.2) and inventiveness (Article 22.3) – as shown in Figure 2. While there are tools that examiners can use to reject and object to applications, there are ways to prepare a patent application for a computer program-related invention that avoids obvious traps. Overcoming barriers step by step To draft a patent application for computer program-related inventions, the subject There is no definition of ‘technical feature’ from SIPO or the People’s Supreme Court, but normally scientific or technical features (eg, hardware-related features and data manipulation features) can help to ensure that a technical feature is present
- 5. www.iam-magazine.com86 Intellectual Asset Management January/February 2015 xxx performing a XXX-Algorism decryption on the data block of the multimedia file according to XXX-information from the header” for reading method. When it comes to monitoring data in data-centred solutions, a method to solve the ratio of the circumference of a circle to its diameter using a computer program is described in Part II, Chapter 9 of the Guidelines for Patent Examination, with a written claim such as the following: A method to solve the ratio of the circumference of a circle to its diameter using computer programs, characterised in that it includes the following steps: • calculate the number of dots in a square; • calculate the number of dots in the inner circle of the side square; and • solve the ratio of the circumference of a circle to its diameter using formula: Σ count value of the dots in the circle Σ count value of the dots in the square ×4 The guidelines offer the following analysis of this method: “this solution merely relates to a pure mathematical computing method or rule executed by computer programs, and is essentially an abstract human thinking method, therefore, this invention application belongs to rules and methods for mental activities as provided for in Article 25.1(2) and is not patentable subject matter.” However, there is no concrete analysis or detailed explanation why Article 25.1.2 applies to disclosure within the specification on the level of circuits or well-known integrated circuits in the art (e.g., 200810128132.7, which claimed the priority of JP2007- 1768632007/7/5). Another way would be to include a detailed disclosure within both claims and specification showing the creative software- hardware interactions or software-caused changes in hardware (eg, Patent Application 200710147817.1, which claimed the priority of JP 2006-260598, and Patent Application 200910036855.9). Tools for reviewers If you are not responsible for drafting patent applications, but merely review the work of a patent agent, you have no opportunity to implement these steps. A tool is needed to adjust improper applications or claims and identify claims with eligibility issues. Patent mining in a computer-related field is designed not only to generate technical disclosures, but also to transform non-technical solutions into technical solutions. Before filing an application with SIPO, it is advisable to conduct a quick check to ensure that all legal barriers have been overcome, especially with regard to eligibility issues. For computer program-related applications, a quick self-check and adjustment method emerges by rearranging solutions in written claims from new perspectives. This includes transforming a user-oriented solution to a device-oriented solution and transforming an effect- centred solution to a data-centred solution if necessary. In practice, a device-oriented solution is more acceptable than a user-oriented one and a data-centred solution is more acceptable than an effect-centred one. For example, a user-oriented solution may be drafted as: “inputting a username and a password to log in client system.” Its corresponding device-oriented solution may be rearranged as follows: “receiving and verifying a username/password pair from the user.” An effect-centred solution may be drafted as: “performing multimedia data encryption and decryption, which improves the security level of software and ensures the enforcement of digital copyrights.” Its corresponding data-centred solution could be rearranged as: “acquiring the header of a multimedia file, and performing a XXX-Algorism encryption on the data block of the multimedia file according to XXX-information from the header” for writing method and “acquiring the header of a multimedia file, and A26.4 Implementation in embodiments Changes of hardware? Controls of hardware? S14 S15 Method claims and virtual-device claims Method claims and product claims S16 y n Only disclose computer programs S12 S11 S12 P10 Figure 3. Examination procedure set out in Article 26.4. Procedure P10
- 6. Intellectual Asset Management January/February 2015 87www.iam-magazine.com xxx confer the technical character of a solution as required for an eligible computing algorithm. For example, a method of automatically computing the co-efficient of kinetic friction using computer programs is described in Part II, Chapter 9 of the guidelines, with a written claim that might include: “A method of automatically computing the coefficient of kinetic friction μ using computer programs, characterised in that it includes the following steps: (1) calculating the ratio of the position variables, S1 and S2, of the friction plate; (2) calculating the logarithm, logS2/S1, of the ratio S2/S1; (3) solving the ratio of the logarithm logS2/S1 to e.” Although the kinetic friction in this claim is a physical quantity, there is no industrial target to show the technical effect in the real world. One possible way to upgrade this claim is to apply this computing algorithm to a specific engineering field like so: “A method of controlling a product pipeline using computer programs, comprising: (1) receiving position variables S1 and S2 respectively from a first sensor and a second sensor at a friction plate of the product pipeline; (2) computing coefficient of kinetic friction μ by μ= (log S2 – log S1) /e; and (3) if μ is equal to or greater than XXX, switch a XXX-type electric motor to a ZZZ-type electric motor on the product pipeline to keep normal operation of the product pipeline.” This example – which is an imaginary scenario and assumes that there is no similar prior art – is not intended to act as a broad claim, but only to show how a computing algorithm can be made eligible for patentability with the right presentation. Automation Almost all technical fields have enterprise resource planning software to help manage business logic and facilitate communications, especially in automation where computer software and hardware are directly used to control mechanical and electrical equipment. For computer program-related inventions in automation, one way to draft claims is to construct a solution realising external technical data processing through the execution of a computer program. This is a technical solution and thus patentable subject matter. For example, there is a method of removing image noise based on the 3θ principle in probability statistical theory described in Part II, Chapter 9 such a claim. From the perspective of the technical character of the data within the solution, data processed in this solution includes the dots in the square, the dots in the inner circle and the ratio of the circumference of the circle to its diameter. All of these are conceptual entities or abstract mathematical definitions and show no connection to any real entity in the physical world. Therefore, the data’s technical character is not conferred, thus making the data flow in the solution which processes this data subject to Article 25.1.2. Proper ways for specific technical field Computer programs have different forms in different technical fields, including application and system software, computing algorithms, computer networks, telecommunication and automation. There are proper ways to draft applications and, especially, claims in each field. According to Wikipedia, an algorithm in mathematics and computer science is a step-by-step procedure which is used for calculation, data processing and automated reasoning. For most engineers, algorithms are abstract solutions for abstract problems, often shown as pure logic steps accompanying abstract concepts. Computing algorithms are usually the key points of inventions in various software products and even hardware products. Many examples in the Guidelines to Patent Examination show which kinds of computing algorithm are patentable and which are not, but there are unlikely to be any positive instructions on eligible subject matter from SIPO. National patent offices are in a position to offer guidance on such issues, since detailed instructions change as society develops and productivity improves. For example, in the 1990s patents were not used to protect computer programs in the way that they are now. More recently patents have had to fulfil industrial targets – including functional advantages, performance improvement, cost saving or reduced complexity – in order to A solution Technical feature A25.1.2 Natural laws Technical means Technical results Technical purpose A2.2 Technical solutions Inventiveness Novelty A26.4 A22 Clarity and support A technical solution Allowable solution ✔ ✔ ✔ ✔ Figure 4. The process for patenting computer program-related inventions For computer program-related inventions in automation, one way to draft claims is to construct a solution realising external technical data processing through the execution of a computer program
- 7. www.iam-magazine.com88 Intellectual Asset Management January/February 2015 xxx possible to manufacture a potentially allowable solution in the claims as well as in the specification of a patent application before filing this with SIPO, which saves time and also prosecution costs. Future trends After SIPO granted a patent for an electronic-monetary system (ZL92113147.X) in 2002 to Citibank, attention has been drawn to business method patents in China, including whether such methods are patentable, how to determine their inventiveness and the examination procedure for a business method patent application. According to the current internal patent examination guidelines, a business method patent may be examined and rejected if: • the problem solved in the claimed solution is determined to be non- technical according to the background information provided by the applicant or common knowledge in the art (Article 2.2 – non-patentable subject matter); • the alleged problem of the claimed solution is a technical problem, but it has been solved in the prior art in the same way as with the claimed solution, in which case the real or objective problem solved in the claimed solution can be determined as a non-technical problem leading to a rejection based on Article 2.2; or • an examiner directly performs an examination for novelty and inventiveness before drilling into the subject matter of the claimed solution and rejects the claimed solution with prior art or prior art on the basis of Articles 22.2 and 22.3. of the guidelines, with a written claim such as: “A method for removing image noises characterised in that it includes the following steps: obtaining every pixel data of the image to be processed in a computer; computing the grey mean value and the grey variance of the said image from the grey values of all the image pixels; reading the grey value of all the image pixels, and determining whether the grey value of every pixel is within three times variance above or below the mean value, if yes, then not modifying the said pixel grey value, otherwise, regarding the pixel as a noise and removing it by modifying its grey value.” For computer program-related inventions in automation, another way to draft claims is to construct a solution realising a measurement or testing process control through the execution of a computer program. For example, a liquid viscosity measuring method controlled by computer programs is described in Part II, Chapter 9 of the guidelines, with a written claim such as: “A method of measuring liquid viscosity using computer programs characterised in that it includes the following steps: determining suitable rotating speed for sensor rotor through pre-set parameter signal processing program in terms of liquid type; starting the sensor rotor and making it shear rotate in the liquid at the said rotating speed by the sensor rotor control program, and converting liquid sticky resistance value detected by the sensor rotor into circuit signal; calculating the liquid viscosity basing on the said circuit signal by sensor rotor signal processing program, and sending the calculated viscosity value to the LCD for display, or sending it to the production control centre through communication ports.” In conclusion, patenting computer program-related inventions can follow the process illustrated in Figure 4. It is often As China pursues innovation-driven development, IP issues are under growing scrutiny. As a result, multinationals would be well advised to protect their market share through IP rights by following best practice in China, which includes the following: • A solution in a claim must comprise a technical feature, according to Article 25.1.2. • If it applies natural laws to become a technical solution, it must meet the criteria set out in Article 2.2. • The technical solution must be clear and supported by description in order to meet Article 26.4. • The technical solution must be novel and non-obvious compared to prior art to become an allowable solution, according to Article 22. Action plan Li Xiang is former IP counsel at Zhong Tian An Tai Information Technology, Beijing lixiang_email@126.com