Patents for Bioinformatics Software - Why Bother?

Everyone in the software industry knows that obtaining patents can be expensive and labour-intensive and, in some cases, a torturously slow means of protecting a key product, particularly when compared with copyright law, where rights arise automatically as original source code is written. Compare this with other sectors, such as the life sciences industry, where products are not normally protected by copyright and the ethos is that patents are valuable assets, attracting outside investment and providing vital legal weaponry.

What, then, are decision-takers in the bioinformatics industry to do? The question becomes more pressing as the range of attractive bioinformatics business models expands from providing tools and services to engaging directly in drug discovery.

Inevitably, the decision comes down to risk-benefit analysis and the strategic preferences of a particular company. Copyright is essentially free, but it will not prevent a competitor from taking the ideas expressed in your software and creating a functionally equivalent version, provided he does not copy your code or a substantial part of it. Patents can be expensive and time-consuming to obtain, but they do give you the ability to build strong protection around the functional aspects of software.

One of the strongest – although perhaps the least palatable - reasons for obtaining patent protection for software may simply be that “everyone else is doing it”. More and more software companies seem to be deciding that if they do not seek patent protection, someone else may secure patent rights that limit what they can do with their software.

More positively, a credible patent portfolio means that you will have stock-piled bargaining chips, which you can exchange for licence fees or rights to other companies’ patents (cross-licences). Patents might also be seen as proof of value: you can get copyright protection for your software regardless of how innovative it is, but if the patent system is operating properly, you will not get a patent unless your software contributes a measurable and non-obvious improvement to the state of the art.

The Proposed Software Patents Directive

One of the complicating factors in deciding whether to pursue patent protection for software should soon vanish. Despite the fact that the European Patent Office (EPO) has issued some 20,000-odd patents on software-related inventions, there has been uncertainty regarding the validity of such patents under the European Patent Convention (the treaty from which the EPO derives its authority) given the language of section 52(2) which excludes from patentability computer program “as such”. Legal uncertainty is generally bad for the internal market, and the European Commission recently proposed a Directive on “computer-implemented inventions” that essentially endorses current EPO (and, indirectly, UK Patent Office) practice and removes any doubt that inventions that use software are eligible for patent protection.

European patents, like UK patents, require that the patented invention:

• be new;

• involve an inventive step (in the US, this is called “non-obviousness”); and

• be capable of industrial application (similar to US “utility”, but traditionally setting a lower threshold).

To satisfy the inventive step test, the software must make a “technical contribution”. What then, asks the logical applicant, does “technical contribution” mean? Unfortunately, there is no simple definition. However, to paraphrase the proposed Directive, the question usually comes down to whether

• the invention solves a technical problem;

• the invention uses technical means to solve a problem (which may be a non-technical problem);

• the invention solves a problem in a way that yields a technical result or effect; or

• the inventor had to consider technical issues to arrive at the claimed invention.

Given the lack of clarity in the draft Directive and the range of approaches that courts have taken in the past, applicants for software patents are well advised to address the technical contribution of the software as a question both of subject matter and inventive step.

International Filing Strategy

When it comes to international filings, software is special. Different countries have different rules on the subject and these need to be taken into account at the start. It should be noted that under the proposed Directive, software “as such” is still unpatentable subject matter, in contrast to the rule in the US, which requires software to have “utility” but does not expressly require that it make a technical contribution to the field. You should consult both a European patent agent and a US patent attorney if you plan to file in both the EU and the US, as the application should be drafted with an eye towards meeting the technical contribution requirement in the EU while taking advantage of the greater scope permitted in the US.

Controlling Costs

Remember also that, even if your application ultimately fails, rigorous prosecution of the application through the EPO or UK Patent Office may keep the application pending long enough to secure your commercial goal. Under most patent systems, applicants can defer some costs by taking advantage of various grace periods along the way to grant of the patent. For example, in the UK you can file a provisional application for a relatively modest fee, which secures your filing date for priority purposes, and defer filing the full application and paying the related fees for twelve months. Also, under the international Patent Cooperation Treaty, you can file your foreign applications up to one year after filing in the UK (or other “home” country). Taking full advantage of grace periods and extensions means you will have the maximum time to evaluate the commercial potential of your invention, raise funds, etc., while still keeping the benefit of an early filing date.

Database Rights

Bioinformatics toolkits increasingly package software with one or more proprietary databases containing biological information. In certain cases, the contents of such databases may be products that qualify independently for patent protection. Copyright law may likewise provide limited protection for databases, but only if, by reason of the author’s selection or arrangement of the contents of the database, the database satisfies the originality requirements of the Copyright, Designs and Patents Act 1988. However, in the UK and the European Union generally, database owners will primarily rely on database rights to protect the contents of their databases from unfair use. The European Directive 96/9/EC on the legal protection of databases provides protection for databases when the “maker” of the database has made a “substantial investment in obtaining, verifying or presenting the contents”. Qualifying databases are usually protected for 15 years from the date that the database is created or significantly modified (with an additional investment of effort), which means that a database that is updated periodically can be protected for an indefinite term. The owner of rights in a database can prevent others from extracting or re-utilising all or a substantial part of the contents of the database.

The maker of the database must be a national or resident of an EEA state. A US database maker would not be able to secure database rights in the UK and a US company that wished to secure European database rights might therefore consider setting up a subsidiary in the EEA or outsourcing the creation of the database to an EEA company, and taking an exclusive licence to the results.

A few Basic Do’s and Don’ts

If you decide that patenting your bioinformatics software is commercially worthwhile, bear in mind the following:

• Do file early and make full use of provisional applications.

• Don’t disclose the invention except under conditions of strict confidentiality (documented in writing).

• Do keep track of the resources that were used whilst arriving at the invention, so that when you arrive at that long-awaited moment of commercialisation (or perhaps sale of your company) there aren’t any skeletons in the closet. Think about the following questions:

  – Who could be considered the “inventors”? Were they all employees?

  – Did you develop the invention with the help of any intellectual property owned by third parties?

  – Does the invention incorporate any third-party intellectual property rights?

  – Was any funding (particularly government or university funding) involved that might give rise to a third-party interest in the invention?

Comment

Bioinformatics providers – along with software owners generally - should consider in advance the range of rights available in the jurisdictions where they intend to operate or commercialise their products. Although recent developments in the EU suggest that there will soon be greater legal certainty as to the criteria for patenting software, there is still no world-wide standard. Developing a comprehensive strategy for protecting your software will help you to control costs and minimise the risk of inadvertently compromising patent applications in one jurisdiction because you are focused solely on the rules pertaining to another jurisdiction.

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The opinions expressed in the articles published in this section do not necessarily reflect those of Pharmalicensing or UTEK Corporation. No actions including proposals to or agreements with other companies should be taken by any reader without obtaining specific business or legal advice. Neither the publisher nor the authors accept any liability for any actions or activities undertaken by any reader or other third party as a consequence of these articles or for any errors or omissions therein.