Software, patents and interoperability – the UPC regime and UK implementation


The UK IPO is currently consulting on its draft secondary legislation to implement the Unitary patent and UPC provisions into UK law.  One provision, Article 27(k) of the Agreement on a Unified Patent Court (2013/C 175/01 – the “UPC Agreement”), contains an exception to patent infringement to allow the development of interoperable software.  The changes will be made by amending the Patents Act 1977 (the recently published draft SI and information about the consultation is available here and the exception would take effect in relation to all patents, whether national patents, European patents or the new Unitary patents..  The consultation is open until 2 September 2014, and something stakeholders may well wish to comment on is whether the Article 27(k) exception should apply for national patents, given the uncertainty of its scope.

Computer programs are primarily protected by means of copyright. Article 10(1) of the TRIPs Agreement requires that computer programs, whether in source code or object code, should be protected as literary works, and in Europe that provision is reflected in Directive 2009/24/EC on the legal protection of computer programs (the “Software Directive”).   Articles 5 and 6 of the Software Directive allow users of computer programs to (without infringing copyright) perform certain acts, such as observing, studying and testing the program, or decompilation to gain access to the underlying code, in order to understand the functionality of the program or to make an independently created program interoperable.

It is also possible to obtain patents relating to software.  While it is not possible to patent software “as such” (Article 52 EPC, s.1(2) Patents Act 1977),  nonetheless, patents can be available for “computer implemented inventions”, such as APIs, hardware-software interfaces, protocols and codecs (compression/decompression methods).  An example of a software invention that was recently held to be patentable can be found in Apple v HTC (a way of handling multi-touch events in a touch-screen device through flags which governed whether a view was able to respond to more than one touch ([2012] EWHC 1789 (Pat) and [2013] EWCA Civ 451)).

The new exception

The exception states that the acts permitted by Articles 5 and 6 of the Software Directive will not constitute patent infringement.  According to the draft SI, the amended Patents Act 1977 s.60(5) would read:

(5) An act which, apart from this subsection, would constitute an infringement of a patent for an invention shall not do so if—

(k)it consists of an act or use referred to in Article 27(k) of the Agreement on a Unified Patent Court;

In turn Article 27(k) of the UPC Agreement states:

The rights conferred by a patent shall not extend to any of the following:

(k) the acts and the use of the obtained information as allowed under Articles 5 and 6 of Directive 2009/24/EC, in particular, by its provisions on decompilation and interoperability;

What is the motive for the change?

The aim of the provision is clear – to remove barriers to interoperability.  This has been a preoccupation at the European level for many years with a high profile example being the Commission’s investigation into Microsoft launched in the 1990s.  As an example of how patents can hinder interoperability, the Commission’s Working Document (SWD(2013) 209 final 6 June 2013) cites a case where interoperability information about an API is made available but with some technology features protected by patents, meaning that the information obtained cannot be used in practice.  The thinking appears to be that any patent protection obtained should be subsidiary to the copyright framework, and therefore, in certain circumstances, the desirability of promoting interoperability trumps the monopoly usually granted by a patent.

However, limited, if any, attention seems to have been given to precisely how this novel exception to patent infringement should operate and whether the rules devised in the context of copyright can simply be transposed into patent law.  The copyright exception focuses on restricting protection to the expression of the program, not the idea underlying it, and if this exception is imposed on patent law, it would allow copying of the underlying idea, i.e. the very subject matter of the patent.

How will the exception be applied?

On a preliminary analysis it appears that the exception could be interpreted in two ways:

  1. as an equivalent (but independent) exception to that which exists for copyright allowing certain acts/uses for the purposes of interoperability in the context of patent law; or
  2. as a more restricted exception which provides that insofar as the acts which are alleged to constitute infringement satisfy the conditions for the copyright exception (i.e. the conditions in Articles 5 and 6 of the Software Directive), the party doing those acts will not be liable for patent infringement.

The second interpretation seems more likely as it is difficult to understand why, if that was not intended, express reference would have been made to the Software Directive rather than drafting new provisions adapted to patent infringement.  The reference to the Software Directive has a number of consequences: it restricts the exception to computer programs, it appears to apply the case law which has interpreted the meaning of Articles 5 and 6 (which are generally acknowledged to be very unclearly drafted) and it imports the conditions which limit the scope of the copyright exception.

Assuming the second interpretation is what was intended, how broad will the exception be and will it function as envisaged?  To answer this question it is necessary to consider the scope of the Software Directive and the acts permitted.

What is allowed under the Software Directive?

“Computer programs”

The Software Directive applies to “computer programs”.  These are not defined in the Directive but they include programs incorporated into hardware, as well as preliminary design work (Recital (7)).  In Bezpečnostní softwarová asociace v Ministerstvo kultury (C-393/09) and SAS Institute Inc. v World Programming Ltd (C-406/10) the CJEU gave guidance on the meaning of computer program, holding that it definitely includes source code and object code but not the programming language nor the format of the data files, nor the graphic user interface (these other elements may benefit from some protection under the InfoSoc Directive (2001/29/EC), but that is not referred to in the UPC Agreement).  Therefore the extent of the patent infringement exception appears to be limited to acts relating to the source code or object code of a computer program.


The basic acts which are the subject of Articles 5 and 6 are those set out in Article 4, namely:

  • 4(1)(a): permanent or temporary reproduction including reproduction as part of loading, displaying, running, transmission, storage;
  • 4(1)(b): translation, adaptation, arrangement and any other alteration.


The acts and uses allowed under the Software Directive are extended to a person having a right to use the program.  This could be wider than just a licensee under the terms of the licence, in light of the decision in UsedSoft GmbH v Oracle International Corp. (C-128/11) in which the CJEU considered that a person who has acquired a copy of the program could also have a right to use it.  The terms of the licence are relevant, although to a limited extent since certain provisions may be unenforceable if they go beyond the Software Directive.  Overall the exception in the Software Directive, particularly Article 6, should be interpreted strictly, but recent case law has made it somewhat broader.

Permitted acts and uses

The restricted acts of Article 4(1)(a) & (b) are then permitted in certain circumstances.  The most important rights in Articles 5 and 6 are the Article 5(3) right to observe, study and test and the Article 6 right to decompile and use the information for the purposes of interoperability.

Article 5(3) is likely to be less controversial as it is largely covered by the existing exceptions to patent law – private non-commercial use and experimental purposes.  It is also the case that since the invention will have been disclosed, it should (in theory at least) be available to observe and study in any case.

Article 6, however, focuses on obtaining and using interoperability information.  Broadly speaking, use of this information is permitted provided it does not go beyond what is necessary for interoperability purposes.  Paragraph 2 gives limitations on the use of decompilation information:

  1. decompilation information cannot be used for goals other than interoperability of the independently created program;
  2. it cannot be given to others except when necessary for interoperability; and
  3. it cannot be used for the development, production or marketing of a computer program substantially similar in its expression.

These conditions state what the information cannot be used for, but do not clearly state what is “allowed”, as implied by Article 27(k).  Restriction (iii) is of interest as it is clearly constructed to apply to copyright (referring to the “expression” of the program).  It is not intended to protect the underlying functionality of the program, and discussions at the time the Directive was drafted show that this restriction would not necessarily prevent a party developing a competing program (Explanatory Memorandum on the Common Position No.47).

Is the change necessary?

The need for change depends on an assessment of how patents could be restricting technological development and competition for consumers, set against the potentially drastic step of removing the reward available to patentees.  The decision to limit the scope of patent rights should be subject to a balancing exercise between rewarding innovation on the one hand and promoting competition on the other.  This issue has been encountered in contexts such as telecoms standardisation and has been solved in a different way, by introducing obligations to license on FRAND terms.  Indeed the effect of the new exception on the licensing of standard essential patents has been questioned, although in that context the interoperability is not so much of computer programs per se, but of the network as a whole.


Consider an internet messaging/communications service which uses a proprietary closed source protocol.  The licence terms of the service give its users permission to use some specific codec software which facilitates video functionality in calls between non-PC devices (Codec A made by Company A).

Imagine Company Y wishes to compete with Company A’s Codec A and offers a program to allow video call functionality which will interoperate with the messaging service program as is.  In that scenario the independently created new program made by Company Y will use the same command functions that the existing interface (between the messaging service and Codec A) uses, but the rest of the program will be written in a “clean room” re-write.  This would be “permitted” by the Software Directive.

Suppose Company Y decides its software will implement the patent covering Codec A.  Is Company Y now permitted to use the patent because it is doing an act permitted by the Software Directive?  This would risk putting the codec licensing industry out of business altogether, which seems unlikely to have been the intention of the Agreement.  One way to avoid this outcome would be to assess strictly what acts and uses are actually within the scope of the Software Directive i.e. to limit the permitted use of the patent to those elements of the source code which actually enable interoperation.  On that interpretation almost all of the code for Company Y’s new program would be outside the scope of the Software Directive altogether.  Another way to avoid the exception being too broad would be to interpret the Article 27(k) exception as subject to the same condition as the Article 6 exception, namely that the use of the patent be necessary in order to achieve interoperability.

Questions raised by the amendment

This wholesale exemption from patent infringement seems likely to have been intended to apply narrowly.  As noted above, the requirement that the steps be indispensible and necessary to achieve interoperability seems key.  If there are ways of making the software interoperable without using the patent then surely it will not be possible to rely on the exception.  As usual, it would be helpful to be provided with more concrete examples of how the provision is expected to operate. The consequences are likely to be felt in particular in the context of licensing and the value of patent portfolios, when companies question whether their acts truly oblige them to take a licence of a particular patent.  It remains to be seen whether companies will find potential to exploit the exception as a loophole when the use of the patent is really the target of the new program and the interoperation or decompilation is only secondary,  and what attempt the UPC will have at interpreting European Union law, potentially in parallel with the CJEU.

In light of these questions and uncertainties, patentees may wish to consider in any responses to the consultation whether it is necessary for national patents to be subject to the new exception.

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