Software - Patents

The new Siemens Somatom Sensation 64 computer tomograph is a tough act to follow. It is not only the industry’s fastest CT; it also has the highest resolution (see  Ceramic Detectors). Here, a key role is played by the Somatom’s software, which pieces together a myriad of values in seconds to create an image of internal body structures. The same holds true in many other areas. Whether we’re talking about navigation systems or cell phones—almost all recent cutting-edge inventions would have been impossible without innovative software. A key to market success thus involves protecting technologically meaningful software with patents in the same way that hardware innovations are safeguarded. "Patenting is becoming more important to our innovation strategy," says Dr. Winfried Büttner, Head of the Corporate Intellectual Property department. "Siemens posts 75 % of its sales from products that are less than five years old. That’s why our patents must also be renewed every five to six years. The most significant value creation today is in software." Some 60 % of the around 5 bill. € spent annually on R&D at Siemens, along with most of the roughly 7,000 inventions registered for patents by Siemens each year, are associated with software.

What’s more, the dividing line between software and hardware is becoming less distinct—for instance, in automotive electronic suspension systems. "Certain characteristics that used to require hardware, such as stability and rigidity, can now be achieved through software regulation," says Reinhold Achatz, Head of the Software & Engineering division at Siemens Corporate Technology.

Copyright or Patent Protection? Although software is generally covered by copyright law, these protections are easily circumvented. Often, all it takes is for a programmer to make slight modifications to code. Simply put, copyrights protect only the outward charcteristics of the software—in other words, the code. Considerably more effective are patents, which can be used to safeguard the general idea and the functionality behind a computer program.

In Europe, however, strict conditions must be met in order to make software eligible for a patent. In particular, the software must display the characteristics of a technological invention according to the prevailing legal definition (see  box). Computer programs commonly used by the general public frequently do not satisfy this criterion, whether they’re word processing programs or systems used for Internet trading forums.

This legal pattern, which has been developed by courts over the past decades, is now to be permanently established by the Competitiveness Council of the European Union (EU) in a directive on the "Patentability of Computer-Implemented Inventions." However, the European Parliament made changes in the fall of 2003 that would have had the effect of completely negating patent protections. Had the changes stood, nothing relating to computers or even to a programmable chip would have been left patentable in Europe. Now, however, the EU Council has adopted a version of the directive that addresses the interests of all parties involved. "We support the new rules," says Büttner. "They simply set down in writing what has already been legal practice for the past 20 years."

Patented Business Models? On the other hand, patent experts at Siemens do not consider it necessary and useful for Europe to adopt the farther-reaching patentability of software from the U.S. At the height of the Internet boom in the late 1990s, U.S. courts declared that new Web-based business models and processes were eligible for patent protections independent of their relationship to a technology. This, however, presents the threat that inventions requiring little intellectual input can enjoy patent protection.

Siemens rejects the idea of such "trivial patents," believing a certain measure of inventiveness to be necessary. "The systematic optimization of our patent portfolio makes for higher-quality patents," says Büttner. "In this way, we do our best to improve usefulness for customers, while strengthening our lead in trend-setting technologies." But often, says Büttner, software developers aren’t aware of the value of their inventions and their need for protection. "We still find it difficult to describe the functionality represented by a piece of software in such a way as to clearly define its patentability," adds Achatz.

This is why the patent department meets regularly with representatives of Siemens Groups, to review the eligibility of individual inventions for patenting. Using business strategy as a guide, it is determined which patents should be submitted by individual Groups in the course of the following year. To avoid trivial patents, each invention is assessed for its potential value, strategic importance, added value for the customer and attractiveness to competitors. Patent applications are only submitted for highly ranked inventions.

Despite the legal differences in various countries, Siemens intends to increase the overall number and quality of software patents worldwide. Why? Because patents not only protect its technological advantage, but also serve as a barometer of innovation resulting from the capital invested in R&D. They are thus extremely valuable, both strategically and financially.

Günter Heismann