Recent speculation that Facebook and Google may be considering a takeover of Twitter for an estimated $8-10 billion has shocked the business world.
The fact that a social networking business can achieve this kind of valuation in just five years is phenomenal and yet, in the UK, such businesses still find it difficult to protect many of their commercial interests by applying for patent protection.
In May last year, a long-awaited decision by the European Patent Office's (EPO) Enlarged Board of Appeal ended in disappointment for the UK software industry. It was hoped the decision would bring more clarity to the issue and perhaps force a change of practice by the UKIPO (the new name for the UK Patent Office). But the UKIPO disregarded it on the basis that the challenge put to the EPO was found to be "inadmissible" on largely technical grounds, and so it regarded the ruling as inconclusive.
For any UK company developing software or computer-based inventions, this outcome leaves them commercially disadvantaged compared with their counterparts in other parts of Europe and the world. With significant difficulties in obtaining patent protection for some types of software innovation, the simple act of bringing their inventions to market in the UK could leave them exposed to unfair competition.
The main issue is the difference in approach applied by the EPO and the UKIPO in examining software-related inventions. At the EPO, the individual features of the invention are looked at, and distinction is made between technical and non-technical features, with only the technical features counting towards patentability.
This provides a relatively clear test, and many software implemented inventions are found to be patentable. By contrast, at the UKIPO, a distinction appears to be drawn between software that has an effect outside the computer, or directly on the computer hardware, both of which are considered patentable, and other types of software. For example, in a recent case, the UKIPO refused an application for an invention involving the incremental migration of data from a legacy database to a new database on the grounds that it did not affect the computer architecture, despite there being clear evidence of the invention solving technical problems.
To be fair to the UKIPO, however, it may not be taking a different position from the EPO by choice. The UKIPO is bound by UK court precedents, and it is only once these are challenged in the light of now-settled EPO practice that UK practice can change. Ever since Symbian's successful appeal in 2008, the industry-led lobby on the issue of software patentability has been gathering support. It is therefore only a question of time before another UK-based frontrunner decides to challenge the current position and a favourable outcome should allow the UKIPO to fall into line.
For the moment, the status quo prevails on the issue of software patentability in the UK. However, as the values being attributed to global software-based businesses continue to rise, the commercial impetus for UK companies to mount a challenge seems greater and change is definitely in the air.