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The time has come for Software Patents in Malaysia

Industries invest millions in developing computer-related systems every year. However, these systems do not seem to be given ample intellectual property protection. Computer programs enjoy copyright protection, but these will only protect them against copying. Patent protection, on the other hand, prevents competitors from copying, reverse engineering or independently inventing a system that embodies the same inventive concept. Initially, most jurisdictions around the world expressly prohibited software from being patented. Nevertheless, advances in computer-related systems have resulted in some countries realising that software needs patent protection and a more liberal interpretation has ensued.

The recent English Court of Appeal case of Symbian Ltd’s Application [2008] EWCA Civ 1066 (‘Symbian’) highlights the willingness of the English courts to accept certain computer software as patents, in line with the current developments in technology, although the law prima facie denies computer software in general from being patentable.

The patent application in Symbian is about how a library of functions (a “Dynamic Link Library”), useable by multiple application programs running on a computer, is accessed. It provides a way of indexing the library functions so that the computer will continue to work reliably even after making changes to the library. The Court of Appeal took the view that the contribution made by Symbian was not merely a computer program because “it has the knock-on effect of the computer working better as a matter of practical reality”. The Court concluded that a program that results in a computer running faster or more reliably may be considered to provide a technical contribution even if the invention solely addresses a problem in the programming. Thus, it satisfies the requirement of a patent as it consists of a technical contribution, in line of Section 1 of the Patents Act 1977.

In the European Union, while “programs for computers” and “methods for doing business” are among the items excluded from patentability under Article 52(2) of the European Patent Convention, if the claimed subject matter has a technical character it may be patentable if it meets the other requirements for patentability. However, a program will be patentable if it produces a further technical effect going beyond the normal physical interactions between the program and the computer. The European Patents Office has time and time again showed that they are willing to accept computer software as valid patents, as seen in cases like Re Sohei O.J.E.P.O. 525 (1995), Re Pension Benefit System Partnership O.J.E.P.O. 441 (2001) and Hitachi Auction Method (T 258/03).

In the United States, software had been granted patent protection since the US Supreme Court case of Diamond v Diehr 450 U.S. 175 (1981). In 1998, the US appeal court for patent matters ruled in State Street Bank v Signature Financial 149 F.3d 1368 (1998) (“State Street”) that a computerised method of managing mutual funds was patentable subject matter, based on the very broad definition of patentable subject matter in the US patent statute (149 F.3d 1368). The statute provides that a person who invents or discovers any new and useful process, machine, manufacture or composition of matter, or any new and useful improvement of it, may obtain a patent. The Court in State Street held that software is patentable if it provides a ‘useful, concrete and tangible result’. However, this case seems to be overturned in the recent case of Re Bilski 88 U.S.P.Q.2d 1385 (2008), where the Court of Appeal held that computer software is patentable if it is tied to a particular machine or apparatus, or it transforms a particular article into a different state or thing. This case was petitioned to the U.S. Supreme Court for a writ of certiorari in January 2009 and the outcome of this case was still not known at the time of writing. However, it is still certain that although Bilski would mean that there is stricter control to software patents, software is still patentable under US laws.

In Japan, the Japan Patent Office expressly states that they would allow patenting of computer software, or ‘Business Method Patents’ subject to several restrictions. However, patent rights are denied for software dealing with application of a technology to another specific field, automation of manual tasks and any change of design based on artificial arrangements. The Patent Office also published a guideline regarding the patentability of software. The stand of the Japan courts can be best summarised in Justsystem Corporation v Matsushita Electric Industrial Co. Heisei 17 (NE) 10040 (2005), where the newly formed Intellectual Property Court then held that the manufacture and sale of a word processing software constitutes indirect infringement of Article 101, Subparagraph 2 of the Patent Law, thus recognising software as patentable products.

In Australia the leading authority is the case of National Research Development Corporation v. Commissioner of Patents (1959) 102 CLR 252, where the High Court said “a process, to fall within the limits of patentability … must be one that offers some advantage which is material, in the sense that the process belongs to a useful art as distinct from a fine art … that its value to the country is in the field of economic endeavour.” If the methods of doing business are pure or abstract then they are not considered to be patentable, but if the method is implemented using a computer, it avoids the exclusion business methods.

In view of the developments above, it would be natural for software developers in South East Asia to expect at least partial patent protection for their software, particularly with the implementation of the Multimedia Super Corridor in Malaysia, as well as the emphasis on information technology in Singapore.

In Malaysia Section 13(1)(a) of the Malaysian Patents Act 1983 specifically excludes from patentable subject material “discoveries, scientific theories and mathematical methods” and paragraph (c) excludes “schemes, rules or methods for doing business, performing purely mental acts or playing games”.

With the advancement of technology, copyright protection no longer provides sufficient protection to inventors of computer software. The developed world has recognized this, and thus, allowed to a certain extent, software patents. In Malaysia and Singapore there is at present no case law that has interpreted these sections to allow software patents in certain circumstances. However with the Symbian decision, it is likely that the courts in Malaysia will adopt the position in Symbian, as the English and Commonwealth decisions are highly persuasive here especially in commercial and intellectual property matters. Therefore software patents should be upheld in Malaysia to the extent that they are allowed in the UK.

This is a welcome development for software developers and will see the further development of intellectual property rights in the region.