The EU has decided to protect computer programs by copyright (so called copyright approach). The Directive 91/250/EEC of 14 May 1991 (now codified version 2009/24/EC) on the legal protection of computer programs has established the copyright protection of software. The copyright law offers a range of claims for the rightholders to take action against infringers without monopolising product features. Additionally, the source code that is responsible for providing the product features is hidden in the software binary. According to this directive every computer program is protected by law and every developer or software company is enabled to distribute his or its software to gain profits and market shares. The copyright approach is therefore a democratic and performance-related approach for the IP protection of computer programs. The copyright protection system is a guarantee for open software markets and low market entry thresholds.

On the other hand, ten thousands of patents are granted on so called inventions covering computer programs. At least 121.718 EP patent documents are available that mention the word computer program in their claims on 30. May 2023. The patent claims represent abstract solutions that can be implemented in countless computer programs. In fact, software related patents are claiming features of computer programs. To receive such a patent the applicant does not need to disclose any source code or even does not need to be able to write any line of code. Vice-versa the patent owner receives an exclusive right to use the patented invention and to prohibit any use by third persons. For a simple outline of a feature, a patent as monopoly right can be acquired that prohibits the distribution of all the usually elaborate and complex implementations of the feature in source code. Hence, patent protection in the field of software leads to a blatant disproportion between the rather low intellectual performance that is needed to receive a patent and the extensive scope of the IP right obtained based of this effort.

Innovation needs legal certainty, especially with regard to IP rights. This applies in particular to the software industry. Tens of thousands of software-related patents have been granted on features of computer programs and prevent Freedom to Operate for market participants. As a result, new software developments are exposed to a high risk of patent disputes. Startups and SMEs in particular lack the capacity to conduct patent disputes. In this way, the SME- and competition-friendly system of copyright protection for computer programs is undermined. This creates serious obstacles to growth and barriers to market entry.

Furthermore, the vast majority of software related patents that is effective in the common market of the EU is owned by big tech companies resided in the US. These companies have built up a large stock of software related patents with broad claims that easily can be used to threaten and destabilize new market participants founded within the EU. As a result, software related patents preserve the dominance of US big tech companies about key technologies and the key infrastructure built on this software. Software related patents are a serious obstacle for the digital sovereignty of the EU and may outbreak initiatives to build European tech champions like Scale-Up Europe.

(1) First it must be secured that no further software related patents are granted.

A Software related Solution is hereby a solution/invention that needs a computer to be executed or implemented. Hence, a Software related Patent is a patent that covers a Software related Solution. Traditional approaches refer to the question if the software solution has got a technical character, uses technical means or causes a technical effect. But all of these questions are ultimately philosophical in nature. They are not sufficient to provide a clear response to patentability, in particular on the condition that the priority of copyright protection is respected. To give all market participants and stakeholders a clear formula to understand which solutions is eligible for patent protection and which solution shall only be protected by copyright we suggest a hands-on formula:

The Substitution Rule safeguards that the majority of software solutions is excluded from patent eligibility and thus in regard to these solutions an open area of Freedom to Operate and innovation for all developers and market participants is established. All participants are empowered to develop their own implementations of software features using different source code without infringing any patents.

On the other hand, the Substitution Rule won’t hinder the grant of patents of (control) processes or (control) devices which can use software as an implementation method or component but not depend on software. This is the case if the implantation can equivalently be realized by mechanic or electromechanical components. For example, methods for washing laundry in a program-controlled washing machine that does not include decisions based on calculations can also be realized with mechanic or electromechanical components. Such solutions and innovations are still eligible for patent protection.

(2) Second the stock of already granted software related patents must be defused:

The large stock of already granted software related patents must be defused to establish the open area of Freedom to Operate. Therefore, the Substitution Rule must be applied on already existing patents and in such way build a Protective Shield for the economic copyright of the software developers and companies.

The Protective Shield effects that no patent claims can be used against software in regard to implementations of a software related solution that is not eligible to patent protection according to the Substitution Rule.

To implement the Substitution Rule and the Protective Shield we suggest the following regulation:

Having regard to the Treaty  on   the   Functioning   of   the   European   Union and in particular Article 114 thereof, acting in accordance with the procedure laid down in Article 294 of the Treaty,

Whereas,

(1) Ten thousands of patents are granted on so called inventions covering computer programs. The patent claims represent abstract solutions that can be implemented in countless computer programs. In fact software related patents claim features of computer programs. To receive such a patent the applicant does not need to disclose any source code or even does not need to be able to write any line of code.

(2) Vice-versa the patent owner receives an exclusive right to use the patented invention and to prohibit any use by third persons. As a result, any programmer or software company is not allowed to use their own implementation of a patented feature within a software although it is protected by the directive 2009/24/EC of 23 April 2009 on the legal protection of computer programs.

(3) In particular the author or rightholder of a computer program which violates an already granted patent is not allowed to reproduce, alter or distribute their own computer program for business objectives outside the private domain. This is not in compliance with the exclusive rights of the authors laid down in Art. 4 of the directive 2009/24/EC.

(4) Therefore an amendment of the directive is necessary. First it must be secured that no further software related patents are granted. Second the stock of already granted patents must be defused.

The following directive shall be adopted:

Article 1

Article 8 of the Directive Regulation (EC) No. 2009/24 is replaced by the following:

Article 8 Protective shield, application of other legal provisions

1. Member States shall safeguard by their legislation:

(a)  A patent shall not be granted on inventions that comprise computer programs or require computer programs to be implemented. As an exception patents can be granted on such inventions if the computer program can be substituted equivalently by a mechanic or electromechanical component. The computer program cannot be replaced if the device that is subject of the patent application processes calculations or the process that is subject of the patent application requires calculations.

(b) A computer program shall be not object of claims (injunctive relief, damages etc.) resulting out of a patent violation, unless the computer program can be substituted equivalently by a mechanic or electromechanical component. The computer program cannot be replaced if the patented device process calculations or the patented process requires calculations.

2. The provisions of this Directive shall be without prejudice to any other legal provisions concerning trademarks, unfair competition, trade secrets, protection of semi-conductor products or the law of contract.
3. Any contractual provisions contrary to Article 6 or to the exceptions provided for in Article 5 (2) and (3) shall be null and void.

Article 2

This Directive shall enter into force on the 20th day following its publication in the Official Journal of the European Union.

Article 3

This Directive is addressed to the Member States.