Computer programs and business models

Computer technology penetrates nearly all areas of our life, not only in business environments but also in daily surroundings.  A computer cannot operate without instructions.  These instructions, so-called computer programs or software, may be incorporated in the computer or any other apparatus, but are often stored, reproduced and distributed on portable media such as CD-ROMs or transmitted on-line.

Once created, it is often possible to reproduce software easily at very low cost in an unlimited number.  Although copyright protection is available for “literal expressions” of software, it does not protect the “concept” behind the software, which often is a core part of its commercial value.  Since such concepts behind the software often provide technical functions, such as controlling machines or processing data, protection of software through the patent system is often available to protect such technical functions.

Generally, several approaches have been taken in protecting software by patents.  While some countries grant patents for all types of software, in many countries, in addition to, inter alia, the schemes, rules and methods of performing mental acts, scientific and mathematical theories, the computer programs are expressly excluded from patentable subject matter. However, in many of those latter countries, the computer programs are only not patentable “as such” thus making it possible to obtain patent protection for computer-related inventions having a technical character.  As reasons for excluding software from patent protection, it is often said that innovation in this field typically involves cumulative, sequential development and re-use of others' work, and that the need to preserve interoperability between programs, systems and network components does not fit with the mechanisms of the patent system because the range of options available to the second comer may be constrained. On the other hand, some argue that patent protection of computer software is necessary in order to provide adequate incentive for investment in this field and to support innovation in various technological areas which increasingly develop together with computer technology.

In recent years, another similar issue arose, namely the question of the patentability of business methods.  Traditionally, business methods have been either in the public domain or protected under trade secret law.  Today, however, information technology offers possibilities for new business models, using information technology as a tool for processing and transmitting various data, such as technical, commercial and financial data.  Due to high economic stakes put on those new business methods and the expansion of e-commerce in our society, the debate on the feasibility of patenting business methods has continued at various fora.