Johannesburg, 14 Apr 2009
In the previous Industry Insight, I looked at the issue of patented versus open source software in SA. In this, the final industry insight in this series, I look at what action needs to be taken.
As has been said earlier, the extent to which software is patentable is evolving constantly and varies from country to country, and there is no certainty as to what the final position will be. There is a general consensus that the present lack of certainty regarding software patents is harmful and that this needs to be clarified as quickly as possible.
Particularly in the US and Europe, various parties are lobbying for various amendments to the legislation. Some want the scrapping of the relevant restrictive sections in the legislation so that all kinds of business methods and computer software will always be patentable as long as they are new and inventive.
At the other end of the scale, some parties are lobbying for a return to the traditional conservative position of the patent offices, or for amendments to patent legislation, to ensure all patent applications for computer software and/or business method inventions are rejected out of hand.
Considering how far the various patent offices have moved away from this historical position, it is most unlikely they will return to this position of their own accord.
In the US, it may take a decision of the Supreme Court to clarify the parameters of software patentability finally. In Europe, what most parties want is a clarification of what is and what is not a 'technical effect'. Although (or perhaps because) there is a lot of case law on this question, there is still much uncertainty in this regard. At the moment, inventions have to be judged on a case-by-case basis to determine whether they would meet this requirement or not.
As there has yet to be a case in SA dealing with this subject, it seems an amendment to the Patents Act, perhaps following developments elsewhere, will be required to provide clarity.
Conclusion
South African companies involved in producing new computer software must educate themselves about patents and what can and cannot be patented, both locally and in other countries.
These companies should make an informed decision as to whether it is appropriate to file patent applications or not, considering their business models and their commercialisation strategies.
One thing that everyone can agree on is that uncertainty on this issue is undesirable from almost all points of view.
Chris de Villiers is a partner at Spoor & Fisher.
Due to the fact that patent applications filed at the South African Patent Office are automatically granted, and that the validity of a patent is only questioned if patent revocation proceedings are instituted in court, it is wise for a South African company to obtain as many patents in this area as possible. This can be looked at in business terms as a somewhat risky investment with possible long-term returns.
Where a South African software company is interested in conducting business overseas, especially in the US, patents are a must, whether to be used as a defensive shield or as part of a licensing scheme, for example. This applies to small and start-up businesses as well as larger companies.
One thing that everyone can agree on is that uncertainty on this issue is undesirable from almost all points of view. Rather than targeting software companies and making misleading statements suggesting there is anything wrong in such companies trying to patent their technology, therefore, anti-software patent activists would do well to press for clarification of SA's legislation.
They should appreciate, however, that there is also a strong counter view to theirs, to the effect that software-related inventions should be treated in the same way as other technology, and that SA's Patents Act should rather be amended to remove any outdated restrictions on the patentability of such inventions, as has been the trend in a number of other countries.
Restrictions on the patentability of technology that was in its infancy 30 years ago, when the relevant legislation was drafted, may no longer be appropriate today. The South African government also needs to resolve its own position on software patents.
* Chris de Villiers is a partner at Spoor & Fisher.
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