Most read 2019: Making simulations non-patentable ‘big step back for European industry’
The EPO Enlarged Board of Appeal’s decision in G1/19 is coming, and in-house counsel say it is important for their businesses and European innovation that computer-implemented simulations be patent eligible
The EPO’s Enlarged Board of Appeal will soon decide the potentially highly important G1/19 case on patentability of computer-implemented simulations. EPO president Antonio Campinos weighed in on the questions posed on a method for simulating people movement around a space last month, shortly after the EPO took in the last amicus curiae letters on the matter.
With that decision looming, in-house counsel at manufacturing, energy and software companies tell Patent Strategy they are fearful that the EBoA will side with the referring board and rule that computer-implemented simulations are not patent eligible.
Their concern is perhaps not surprising when the outcome of that case is likely to have a rejuvenating or crippling effect on the booming simulation software market in Europe. According to market research company Industry Research, the market has been valued at $7.16 billion and is expected to reach $16.9 billion by 2024.
A decision to make simulation non-patentable, counsel say, would probably have broader repercussions on computer-implemented invention patentability because the two concepts are so closely related, and damage European industries that either create simulations for profit or increasingly rely on software to test physical processes and methods before they are implemented.
Many innovations in fields such as medical devices, manufacturing and engineering, and in internet-of-things-enabled (IoT) products broadly, are achieved with computer simulations. If engineers want to run a process in an artificial intelligence (AI) environment, they must first present it in a computer-readable form to model it, which enables them to effectively control a physical device.
That framework only works, however, with a digital simulation and a twin of the physical device.
“There is a real danger that the EBoA supports the referring board of appeal and facilitates a big step back in computer-implemented invention patentability,” says Beat Weibel, chief IP counsel and group senior vice president at Siemens in Munich. “I do not understand why the referring board has made a distinction between computer-implemented inventions and simulations because there is no difference between the two, and we have good and stable case law for the former.”
He adds that computer-implemented inventions are everywhere – in factories, aeroplanes and surgical equipment – and that reducing the likelihood of getting a patent on these products would be a big step back for European industry.
Until that decision comes out, he says, his business will continue to follow its current strategy for computer-implemented simulation patents.
Cassandra Derham, senior IP attorney and head of technical IP at Amadeus in France, says she is similarly following the case with interest because she suspects that, depending on how it goes, it could have a knock-on effect on all computer-implemented inventions, including AI.
Speaking from the perspective of a simulation user, Thyssenkrupp patent lawyer Wolfgang Kauffmann in Germany says it is important for manufacturers such as his firm to be able to license or purchase simulation programs. These inventions can help manufacturers gain a technical effect in various processes and be more competitive as a result.
“The outcome of this matter won’t be as important to us as other companies in the automotive industry, for example, because we are not looking to simulate moving pedestrians,” he says.
“But it will have an effect on our simulation use, about 90% of which is related to manufacturing plans and technical equipment. We have opportunities at the moment to use outcomes of simulations for certain technical aspects, and this is something I am very hopeful that the Enlarged Board will not inhibit.
“Simulation and designs are important for all companies and help them to be competitive with Asian firms in particular. I hope the Enlarged Board decision will be in favour of simulations patentability, because otherwise competitors can very easily copy them or use them for free and create products that are just as good as ours, without spending money,” he adds.
Stephan Wolke, head of Thyssenkrupp’s IP department, adds that he supports these views and hopes that the right decision will be made.
The IP director of an oil and gas company suggests that a ruling of ineligibility would also be detrimental to his industry, considering that it has been going through a period of digitalisation for the past four years and that simulations play an important role in improving vessel and plant processes.
Ocado head of IP Lucy Wojcik also told Patent Strategy last month that one of the ways the business has made automated warehouse grocery packing and delivery more efficient is by simulating new processes and creating digital twins to test environments before they are built.
The G1/19 matter reached the EBoA after the EPO rejected a patent application (03793825.5) from James Douglas Connor in February for a simulation of pedestrian movement that could be used to help design or modify venues such as railway stations or stadiums.
The examining division determined that the subject matter of claim one lacked inventive step, and Connor appealed against the decision to the EPO’s Technical Board of Appeal, which referred following questions to the EBoA:
In the assessment of inventive step, can the computer-implemented simulation of a technical system or process solve a technical problem by producing a technical effect which goes beyond the simulation’s implementation on a computer if the computer-implemented simulation is claimed as such?;
If the answer to the first question is ‘yes,’ what are the relevant criteria for assessing whether a computer-implemented simulation claimed as such solves a technical problem?; and
What are the answers to the first and second questions if the computer-implemented simulation is claimed as part of a design process, in particular for verifying a design?
Stakeholders were asked to submit amicus curiae letters responding to these questions to help inform the EBoA’s decision, and 24 such letters were submitted from organisations including Philips, IBM and the IP Federation.
To the relief of in-house counsel, EPO president Campinos also submitted answers, suggesting that a computer-implemented simulation of a system or a process claimed as such could solve a technical problem. He also said that it is sufficient for a claimed computer-implemented simulation of a technical system or process to solve a technical problem if the simulation method reflects technical principles underlying the simulated system or process.
He added that the third question did not require an answer in view of his first and second answers.
While his views are not binding on the EBoA, they do largely fall in line with the result businesses say they would like to see from the G1/19 matter. Thomas Buchholz, senior patent counsel at BSH Home Appliances Group in Munich, who told Patent Strategy last week about the patent eligibility hurdles associated with IoT products, says Campinos is right with his views on this topic.
Weibel at Siemens similarly says he and Campinos have come to the same conclusion on the case, although their approaches differ.
Derham at Amadeus says she is in two minds whether the EBoA will follow Campinos’s answers. She says that while she would be relieved if the board followed them because it would maintain the status quo, she would like to see the board issue a more permissive ruling that would enable her business to get more European patents.
Computer-simulated inventions are entwined with computer-implemented inventions and a ruling of ineligibility could be a huge step back for companies in Europe.
The convergence of technologies is making software more important in many industries. An inability to patent computer-implemented inventions or simulations – if there is a difference between the two – could make Europe-based companies and branches less competitive than their US or Asian counterparts.