Business method and software patents post-Macrossan

20.12.07 Share

 

The truth - is it really out there? The problem is that truth is a relative concept whose truth would you like?

For example is the European Patent Office (EPO) case-law "mutually contradictory" or is the UK four-step test as set out in Aerotel / Macrossan "not consistent with a good faith interpretation of the European Patent Convention" (EPC) or more simply, "irreconcilable with the European Patent Convention"?

One general truth is apparent; the UK and European jurisdictions are pursuing their own approaches to Article 52 of the European Patent Convention exceptions. Those approaches are determinedly different. The difference in semantics of the two approaches should not, on first principles, result in different conclusions being reached in relation to any particular set of facts. The problem is that the two jurisdictions appear to have a different philosophical approach to patenting of items otherwise falling within the exceptions to patentability. This different philosophical approach is resulting in two widely diverging streams of case-law.

The root of the problem

The root of the problem lies in the somewhat vague drafting of Article 52 EPC as follows (emphasis added):

Article 52 (1) EPC

"European patents shall be granted for any inventions which are susceptible of industrial application, which are new and which involve an inventive step."

Article 52(2) EPC

"The following in particular shall not be regarded as inventions within the meaning of paragraph 1:

(a) ...

(b) ...

(c) schemes, rules and methods for ... doing business, and programs for computers

(d) ..."

Article 52(3) EPC

"The provisions of paragraph 2 shall exclude patentability of the subject-matter or activities referred to in that provision only to the extent to which a European patent application or European patent relates to such subject-matter or activities as such."

Approaching Article 52 in a simplistic, comprehension-of-text manner results in the following analysis:

  • A patentable invention is something more than an invention, it has the following characteristics:
  • An invention and
  • It is susceptible to industrial application and
  • It is new and
  • It involves an inventive step
  • The definition of "invention" only includes methods of doing business and programs for computers provided that the patent application or patent relates to more than that thing "as such".
  • There is no definition given of "as such".
  • When considering the patentability of business methods and programs for computers the Article directs us to consider the "as such" issue within the context of defining an invention, not within the context of assessing industrial application, novelty or inventive step those items feature later in the analysis.
  • The word "technical" does not feature in Article 52.
  • The text which follows is that of Articles 52 and 53 EPC 1973, amended to show the differences made by the text of EPC 2000.

Article 52 (1) EPC 2000

"European patents shall be granted for any inventions, in all fields of technology, provided they are new, involve an inventive step and are susceptible of industrial application."

Article 52(2) EPC

"The following in particular shall not be regarded as inventions within the meaning of paragraph 1:

(c) schemes, rules and methods for ... doing business, and programs for computers;

Article 52(3) EPC

"Paragraph 2 shall exclude the patentability of the subject-matter or activities referred to therein only to the extent to which a European patent application or European patent relates to such subject-matter or activities as such."

As may be appreciated, the amendments to this Article are mere window-dressing. The opportunity to clarify the definition of "as such" or to include some indication as to the relevance of the "technical" character tests has been entirely side-stepped. Consequently we do not expect the changes to the wording of the EPC in this respect to have any effect on the outcome of the various cases presented to the EPO, to UK Intellectual Property Organisation (UKIPO) or to the UK Courts.

"As such" define?

It is the definition of these two words "as such" that is causing so much difficulty. What do they mean? Do they involve any qualitative assessment of the invention under consideration or do they require a formulaic response? Are we considering form or substance?

The distinction between form and substance is what divides the UK and the EPO. The EPO seems clear in its approach that the addition of any "technical" element, whether known or not, will lift the invention into being more than the thing as such. The UK appears to require the additional technical element to contain some element of novelty.

Who is right? Frankly, we don't know. All that we can know for certain is that the EPC does not contain a definition of the phrase "as such". Further, it simply does not refer to any "technical" requirement as being the way in which the "as such" requirement should be defined.

The outcome is that the "as such" definition is up for grabs by the various case-deciding authorities applying the EPC, including the EPO, UKIPO and the UK Courts. Consequently it is important to understand which decisions bind others in terms of legal precedence.

Who binds who?

The EPO and the UKIPO/UK Courts cannot bind each other they are wholly independent decision-making bodies.

Within the EPO, the Boards of Appeal perform a judicial function but are not bound by any previous Board of Appeal decisions.

The Enlarged Boards of Appeal exist for the purposes of (a) deciding points of law referred to them by the Boards; and (b) deciding which conflicting Board of Appeal decision should prevail if asked to consider such a scenario by the President of the EPO.

Until the EPC 2000 entered into force the Enlarged Boards of Appeal did not perform an appellate function on behalf of the parties, Since the EPC 2000 these Boards may now hear petitions for review of decisions of the Boards, except for fundamental procedural defects.

The UK Courts bind the UKIPO. House of Lords' decisions bind all junior courts, Court of Appeal decisions bind all junior courts absent a House of Lords' authority; however, the Court of Appeal does not bind itself.

That would appear reasonably clear but as with all matters in this area, the practice behind the words merits some scrutiny.

Lord Hoffman in Merrell Dow v Norton said, in relation to EPO decisions on provisions of the EPC, which are supposed to have their mirror in the Patents Act, such decisions have "great persuasive authority". UKIPO's Manual of Patent Practice notes: "Hence, although not binding on the Office, decisions on patentability given by EPO Boards of Appeal are of persuasive value in interpreting ss.1-4". These statements appear to herald some form of informal precedence but, as may be appreciated, neither the UK Courts nor UKIPO are paying any attention to the decisions of the EPO, save to denigrate and ignore the same.

Despite the fact that the various Boards of Appeal decisions have no precedential value on any other such decisions, the Boards frequently refer back to decisions of previous Boards in order to bolster their pronouncements. So it would seem that there is an unofficial system of precedent in relation to the decisions of the Boards, although we suspect it only exists when the Boards want it to.

Light the blue touch paper...Aerotel / Macrossan 27 October 2006

Aerotel / Macrossan was a decision of the Court of Appeal regarding two separate cases.

Aerotel had applied for a patent in the telecommunications field which involved a new system of charging a caller for calls made by use of an exchange which the user dialled with a special PIN to access his account. If the user had sufficient credit he was permitted to make the call and his account, as opposed to the phone's account, would be charged. The patent also claimed the new configuration of known hardware necessary to insert this special exchange function into the normal workings of a telecommunications system.

Macrossan had applied for a patent for a system of automating the process of setting up a limited company which involved software to interrogate details from the user, collation of the relevant information, inputting the information into the relevant forms and sending such forms to the relevant body. The system used a general purpose computer and the internet.

Jacob LJ gave the judgment of the Court and set out the now, well-known four-step test for determining whether one is considering an invention or not (N.B. novelty, inventive step and susceptibility to industrial application are to be considered once the four-step test has been passed):

  1. Properly construe the claim;
  2. Identify the actual contribution;
  3. Ask whether it [the contribution] falls solely within the excluded subject matter;
  4. Check whether the actual or alleged contribution is actually technical in nature.

It is interesting to note that the word "technical" does not feature in the first three questions. Further, the fourth question, which is the only question in which the word "technical" does appear, is generally regarded as otiose. If the first three questions have been passed then the fourth question is largely redundant. Its reason for being is to attempt to tie-in the previous Court of Appeal authority, Merrill Lynch, to avoid any argument that there are competing Court of Appeal authorities.

In Merrill Lynch Fox LJ said "it seems to me to be clear...that it cannot be permissible to patent an item excluded by section 1(2) under the guise of an article which contains that item that is to say, in the case of a computer program, the patenting of a conventional computer containing that program. Something further is necessary. The nature of that addition is, I think, to be found in the Vicom case where it is stated: "Decisive is what technical contribution the invention makes to the known art". There must, I think, be some technical advance on the prior art in the form of a new result (e.g. a substantial increase in processing speed as in Vicom)."

In this particular case Macrossan's patent was found to be invalid as it contained nothing more than a computer program as such, whereas Aerotel's patent was found to be valid because part of the claim concerned a new combination of known hardware.

As is well-known Jacob LJ did not confine himself to giving judgment. He annexed to his judgment a thorough review of all preceding case-law and announced that the EPO case-law was mutually contradictory. He therefore asked the then President of the EPO, Prof Alain Pompidou, to refer various questions to an Enlarged Board of Appeal. Prof Pompidou roundly refused to refer the questions and the House of Lords has refused to hear Macrossan's appeal.

Accordingly, one truth is known the four-step test as set out in Aerotel / Macrossan is the law in the UK.

Anything you say may be used against you: the EPO

An examiner's view

Colin Stratford, Patent Examiner at the EPO, Directorate 2.2.21 (Computers) and 5.2.1 (Patent Law) gave a presentation to the Charted Institute of Patent Attorneys (CIPA)in July 2007 concerning this topic and explaining how, in fact, the EPO approaches the thorny issues of computer programs and business methods.

Mr Stratford said that he would not discuss the four-step test but instead would focus on the EPO practice, which is simply put as:

  1. Is there an invention?
  2. Is the invention inventive?

Mr Stratford presented a slide in which he described the EPO's approach as:

  • "Invention = technical character
  • The question of whether there is an invention has to be evaluated without reference to the prior art."

Mr Stratford went on to characterise the consequences of this approach as:

  • "Regardless of how well-known, a technical object (or the use of one) is sufficient to confer technical character to the claim as a whole.
  • A hammer, paper and pencil, a CD or DVD, a general purpose computer: these are all technical objects.
  • It is not the presence of non-technical features which concerns us, it is the absence of technical features ("technical goggles" filter out all that is non-technical, what are you left with?)."

In the writer's view the consequences of this approach are to render the exclusions in Art 52(2) toothless and to shift all investigation of whether to grant a patent onto consideration of novelty and inventive step (and industrial application).

It may be argued that this is a fair interpretation of the philosophy behind patents i.e. to reward invention wherever it may occur but in that case, what is the point of the exclusions? They must have been included in the EPC for some purpose?

If one applies the EPO's approach the exclusions enter by the back door. When assessing novelty and inventive step, the EPO puts on its "technical goggles" and disregards all non-technical features.

The assessment for novelty and inventive step is allegedly pursued based solely on the items capable of being perceived via the "technical goggles" i.e. the technical features of the claim. If the technical features of the claim reside solely in known items such as CDs, hammers, paper and pencil then the application will be found to be both not novel and lacking in inventive step. In order to obtain a patent it would appear that even before the EPO you will need to claim some advantage to your invention that goes beyond a mere computer program working on a normal general purpose computer. Why go to all the bother of considering novelty and inventive step if the patent is bound to fail?

But, as with all things in this field, once the case-law is examined it soon becomes apparent that the "technical goggles" are not as black and white as the EPO would have us believe.

The Implementing Regulations to the Convention on the Grant of European Patents

The constant reference to the word "technical" finds support in Rule 29 of the Implementing Regulations to the EPC in which it is said:

"Rule 29 Form and content of claims

(1) The claims shall define the matter for which protection is sought in terms of the technical features of the invention. Wherever appropriate claims shall contain:
(a) ...
(b) a characterising portion ... stating the technical features ... it is desired to protect.
... "

The EPO October 2001 guidelines

The approach evinced by Colin Stratford is amply supported by the EPO's own guidelines (which are of course non-binding on the Examiners or any of the Boards).

In particular Part C, chapter IV contains the salient directions regarding the EPO's approach to the exclusions from patentability as follows (emphasis added):

Part C Chapter IV

1.2(ii) "the invention must be of "technical character" to the extent that it must relate to a technical field, ... must be concerned with a technical problem and must have technical features..."

2.1 "The EPC does not define what is meant by "invention"...an "invention" within the meaning of Art 52(1) must be of both a concrete and a technical character..."

2.2 "... the examiner should disregard the form or kind of claim and concentrate on its content in order to identify whether the claimed subject-matter, considered as a whole, has a technical character..."

"It must also be borne in mind that the basic test of whether there is an invention within the meaning of Art.52(1) is separate and distinct from the questions whether the subject-matter is susceptible of industrial application, is new and involves an inventive step."

The EPO has set up a website dealing specifically with CIIs. The CII website reiterates that CIIs may be patented if:

  • "They have technical character and solve a technical problem
  • They are new
  • They involve an inventive technical contribution to the prior art"

Anything you say may be used against you: the UK

The UKIPO's view

Julyan Elbro, Deputy Director of UKIPO also gave a paper to the CIPA conference in July 2007 at which he said that the UK approach to the exclusions in Art 52 is as follows:

UKIPO were represented in the Aerotel / Macrossan case and it was they who proposed the four-step test which was, with a little amendment, adopted by Jacob LJ and is now the law in the UK.

Accordingly, and not surprisingly, UKIPO is applying the four-step test which Mr Elbro characterised as follows:

  • Construe the claim straightforward
  • Identify the contribution to the sum of human knowledge. Mr Elbro was at pains to explain that identifying the contribution does not amount to identifying the inventive step and all that is entailed in such an analysis.
  • Is it solely within excluded subject matter straightforward (apparently!)
  • Check whether actually technical that is, even though the application or patent has passed the first three steps is it in fact the type of thing the UKIPO gives patents for or not?

Mr Elbro attempted to explain UKIPO's approach by asking the audience to imagine inventing a computer program for use in a washing machine which gave some advantage e.g. greater water efficiency. If a patent application claimed both the washing machine and the program whilst identifying the technical advantage then it would pass the exclusions. The contribution is not the program; it is the improved washing machine. Mr Elbro was of the view that if steps 1 and 2 are answered correctly then question 3 will answer itself whereas question 4 is largely unnecessary.

Mr Elbro finished by saying that if you attempt to claim a program or algorithm it will be regarded as a claim to that thing "as such". If you tether the claim to a result, e.g. a better washing machine, then you will pass the "as such" test.

UKIPO's Practice Note on Patentable Subject Matter 2 November 2006

UKIPO issued a Practice Note following the Aerotel / Macrossan decision approving the four-step test and announcing that it would be using such test with immediate effect.

UKIPO acknowledged that:

"...whilst that approach is different from the one currently adopted in the EPO (as exemplified by the Board of Appeal decision in Hitachi T 0258/03 we consider that the end result will be the same in nearly every case irrespective of whether the approach followed is the Court of Appeal's or that of the EPO..."

And in the very same breath (or at least within the very same practice note) then went on to say:

"...Whilst the judgment [Aerotel/Macrossan] maintains the emphasis on substance over form, it also characterises the first step as deciding what the monopoly is, and if the monopoly does not go beyond the program, the contribution is also unlikely to go beyond "a program for a computer". Accordingly, whilst examiners will continue to assess each case on its merits, it seems likely that few claims to programs in themselves (or programs on a carrier) will pass the third test."

This last paragraph heralds, in the writer's view, a fifth step, namely "no claims to a computer program (or program on a carrier) regardless of the remainder of the assessment of the claim.

The case-law

As is often the way, you can analyse the legislation and the guidance put forth by any tribunal but it is not until such legislation and guidance is tested before the tribunal bodies that a true understanding of how the law is being applied can be reached.

This paper considers selected EPO and UK decisions in order to highlight the radically different experience patentees are encountering when before the EPO or the UK Courts/UKIPO.

EPO case-law

Dun's Licensing T 0154/04 15 November 2006 but published in July 2007

The patent application concerns a method for estimating the sales performance of particular products. The case was published post Aerotel / Macrossan and is clearly concerned with the same. The case provides the following key principles at paragraph 5:

  • "technical character is an implicit requisite of an "invention" within the meaning of Article 52(1)..."
  • "Article 52(2) EPC does not exclude from patentability any subject matter or activity having technical character..."
  • The four requirements of invention, novelty, inventive step and susceptibility of industrial application are essentially separate and independent criteria of patentability. "Novelty in particular is not a requisite of an invention within the meaning of Article 52(1) EPC but a separate requirement of patentability."
  • "It is legitimate to have a mix of technical and non-technical features appearing in a claim in which the non-technical features may even form a dominating part of the claimed subject matter. Novelty and inventive step, however, can be based only on technical features ... Non-technical features to the extent that they do not interact with the technical subject matter of the claim for solving a technical problem, i.e. non-technical features "as such", do not provide a technical contribution to the prior art and are thus ignored in assessing novelty and inventive step."
  • "For the purpose of the problem-and-solution approach, the problem must be a technical problem which the skilled person in the particular technical field might be asked to solve at the relevant priority date. The technical problem may be formulated using an aim to be achieved in a non-technical field and which is thus not part of the technical contribution provided by the invention to the prior art..."

And at paragraphs 12 & 13 the EPO expresses its views on the four-step test:

"The "technical effect approach" endorsed by Lord Justice Jacob in the Aerotel/Macrossan judgement...is not consistent with a good faith interpretation of the European Patent Convention..."

"The "technical effect approach (with the rider)" applied in the Aerotel/Macrossan judgement is irreconcilable with the European Patent Convention also for the further reason that it presupposes that "novel and inventive purely excluded matter does not count as a 'technical contribution'....In fact a non-technical feature may interact with technical elements so as to produce a technical effect, e.g. by its application for the technical solution of a technical problem...for some purely excluded matter...to the extent it contributes to the technical effect it must count as a contribution to the technical character."

Duns Licensing therefore emphasises and solidifies the difference in approach between the EPO and the UK. However, Duns Licensing goes further and explicitly acknowledges that when determining if an invention is present any technical feature will do. When assessing novelty and inventive step any such assessment may take account of technical and non-technical features and is not limited to a review of the technical features considered when assessing the invention. In other words, you may have your cake, eat it and patent it!

Nasdaq Stock Market Inc T 1161/04 6 December 2006

This patent application concerned a method for automatically rebalancing a capitalization weighted stock index and was accordingly initially regarded as a mathematical or business method as such.

The Board found that the patent was in fact not the excluded item as such due to the presence of data processing means such as a computer and output means. In this respect the Board followed PBS T 931/95.

When considering inventive step the applicants acknowledged that the hardware defined in the claims was well known as such. The invention concerned the way data relating to stocks in a stock index is processed. Since the computer implementation of the process has to be assumed to be straightforward, an inventive step can only be involved if the data processing features contribute to the technical character in that they form a solution to a technical problem.

In this case the data processing features were regarded as a mathematical or business process as such and so the appeal was dismissed.

Honeywell T 0306/04 2 March 2007

The application concerned a method of scheduling tasks in an industrial process. In the auxiliary requests the industrial process was identified as an industrial refinery in order to give the application the necessary technical elements.

The Board decided that whilst it may be possible to draft the application in order to avoid the "as such" exclusions by claiming the method as run on computerised system this application was not so drafted. The application as claimed did not recite any technical means and the mere possibility of using technical means disclosed as an embodiment is not sufficient. Further the reference to an industrial refinery in the auxiliary requests whilst bringing the claimed method closer to a technical application was not sufficiently specific to define or imply any specific technical process. Accordingly the appeal was dismissed.

King T 1284/04 7 March 2007

This application concerned an account management data processor which periodically adjusted the level of compensation on financial contracts.

The Board, when reviewing the exclusions on patentability noted that the claims claimed a "computer-implemented method". Accordingly, and referring to Hitachi T 258/03 the Board decided that the method has technical character and thus constitutes an invention within the meaning of Article 52.

When considering inventive step the Board applied the approach adopted in Comvik OJ EPO 2003, 352 that "an inventive step can result only from claim features contributing to a technical character." In this case nothing was claimed other than a general purpose computer and so the patent was regarded as lacking inventive step. The appeal was therefore dismissed.

Fujitsu T 1351/04 18 April 2007

This application concerned a file search method and apparatus and index file creation method and device.

Again the Board referred back to Hitachi T 258/03 when assessing the "as such" exclusions and noted that the claimed method requires the use of a computer. Accordingly it has technical character and constitutes an invention under Art 52(1).

In this case the Board found that the particular technical features did constitute an invention with inventive step and so the decision under appeal was set aside.

Aukol T 0690/06 24 April 2007

This application concerned a financial records maintenance system which application had been rejected initially due to lack of inventive step. The appeal was upheld due to a misapplication of the Comvik approach which permits "an aim to be achieved in a non-technical field" to appear in the formulation of the problem. In this case the prior decision had included solely technical features in the formulation of the problem which features (being components of a general purpose computer) were well-known in the field.

Citibank T 0368/05 15 May 2007

This application concerned an integrated full-service consumer banking system and system and method for opening an account. It was initially refused for lack of inventive step.

Applying Duns Licensing the Board noted that "The integration of various accounting components in a single account and the opening procedure for such an account are not part of a technical teaching since they are not related to the technical solution of any technical problem. They must thus be ignored in assessing inventive step."

The Board noted that the application features an improvement and innovation in banking and marketing of financial services as opposed to a technical field. It noted that "the regime of technical and thus patentable subject matter is entered only with the technical implementation on a computer system". Accordingly, given that the technical features were conventional, the application was regarded as lacking inventive step. The appeal was dismissed.

Infineon Technologies AG T 1227/05 13 December 2006 but only recently published in English

This application concerned a computer implemented method for performing numerical simulation in a circuit in which the subject-matter of the application generated a type of electrical noise using a random number generator. The purpose of the application was to enable modelling of the circuit to combat this noise in order to produce more accurate circuits. It is a virtual prototype in some respects.

The application had been reused on the grounds of being a mental act or mathematical method "as such". The addition of "computer implemented" enabled the Board to find that the application contained an invention (Hitachi) but the assessment then centred on novelty and inventive step to what extent could the formulae expressed in the application contribute to the technical character? Could the technical goggles see such formulae?

In brief, the Board decided that the formulae could contribute to the technical character despite being, at first glance, mere mathematical formulae because:

"Without technical support, advance testing of a complex circuit and/or qualified selection from many designs would not be possible, or at least not in reasonable time. Thus computer-implemented simulation methods for virtual trials are a practical and practice-oriented part of the electrical engineer's toolkit. What makes them so important is that as a rule there is no purely mathematical, theoretical or mental method that would provide complete and/or fast prediction or circuit performance under noise influences."

In the headnote of the report it is further noted that:

"Specific technical applications of computer-implemented simulation methods are themselves to be regarded as modern technical methods which form an essential part of the fabrication process and precede actual production, mostly as an intermediate step. In that light, such simulation methods cannot be denied a technical effect merely on the ground that they do not yet incorporate the physical end product."

In other words this is a clear demonstration of the EPO sticking to its guns when applying the "technical" test but remaining very fluid and open to modern technical methods when determining what in fact amounts to a "technical" feature. It cannot be argued that there is anything concrete in the sense of hardware involved in this application but it is undeniable that in the real world this type of testing method provides the same function and value as old-fashioned test apparatus for various technologies. Just because this type of testing exists in a virtual world why shouldn't it be patentable when it provides all of the same technical benefits that a more conventional apparatus does?

With regard to this particular case the Board remitted the application to the Examiner in order to carry out a new search for the assessment of novelty and inventive step.

Summary

  • The "as such" exclusion is easily overcome by the inclusion of any technical feature within the claim regardless of how well known.
  • But, if all of the technical features are well-known then the patent will be invalid for lack of inventive step.
  • In order to succeed with a patent application you need to claim something that is not only technical but is also inventive albeit that some non-technical features will be permitted to contribute to the analysis of inventive step.
  • The EPO will amend its view of what amounts to "technical" in light of real-world business practices.

Oneida Indian Nation's Application [2007] EWHC 954 1 February 2007

This application concerned apparatus to perform a new method of conducting gaming transactions. The case was an appeal from a UKIPO decision rejecting the application on the grounds that it was not patentable subject matter.

The Court (Christopher Floyd QC) applied both Aerotel/Macrossan and Merrill Lynch and decided that the advantages relied on by Oneida were simply advantages resulting from a new method of doing business and so fell wholly within the "as such" exclusion. The Court noted that such advantages could be described as technical but they did not count as such, they were merely the consequence of putting the new business method into effect. The hardware involved was standard and formed no part of the contribution. It was therefore irrelevant whether Oneida might be able to establish a technical effect. The advantages claimed were of the nature of reducing processing steps and creating a more secure and robust system.

Capellini / Bloomberg [2007] EWHC 476 13 March 2007

Mr Justice Pumfrey presiding.

Bloomberg's application concerned data to a user being transformed and mapped into a form suitable for whichever application the specific user wishes to use.

Capellini's application concerned an algorithm to effectively plan a number of different courier routes.

Aerotel/Macrossan applied but Mr Justice Pumfrey noted that the Court of Appeal decision in Fujitsu is equally binding upon him although he doubted whether the result of any case would be affected differently depending on which authority was followed.

In relation to Bloomberg's application the court noted that the contribution lies in the idea of appropriately treating data to match the requirements of a particular end user prior to transmission to the end user. The data mapping did not lessen the burden on the network and sometimes increased it. Further the Court noted that the physical aspects of the system lacked importance and lastly that there was no technical result.

Accordingly Bloomberg's appeal was dismissed by virtue of the application falling foul of the Article 52 exclusions. This result is most certainly different from what would have happened were the EPO to have considered the case but would the EPO have nevertheless dismissed the appeal for lack of inventive step?

In relation to Capellini's application this was held to be a mathematical method as such in that even when one of the claims condescended to claiming methods producing physical effects each such claim referred to conventional equipment and were thus methods of doing business as such. Again no technical effect was found and the appeal was dismissed. Again, were the EPO to have considered this application the initial decision regarding patentable subject matter would have been different.

Raytheon [2007] EWHC 1230 22 May 2007

Mr Justice Kitchin presiding.

This application concerned a database defining the layout of a facility and a second database using synthesised images of the stock to create a visual image of the stock availability. Raytheon claimed three advantages: (1) a method of stock control using imagery rather than text; (2) synthesising images of the racks and their stock used less memory and provided less of a load on the processor; and (3) the system was highly navigable enabling the drilling down of detail.

Kitchin J noted that regardless of the reduction in load on the processor and the economical use of memory and the enhanced navigation the contribution of the patent is a known type of computer running a new program. Accordingly it is nothing more than a computer program as such. With regard to the notion of presenting information pictorially such notion amounts to nothing more than a business method as such. The contribution was declared to be non-technical and the appeal dismissed.

IGT v The Comptroller of Patents [2007] EWHC 1341 7 June 2007

Mr Justice Warren presiding.

This case concerned four applications for gaming. UKIPO had refused the applications as a scheme or method for playing a game as such in that the applications lacked any technical effect.

Mr Justice Warren noted that he was looking to find whether the contribution over and above the prior art resided in the exclusions from patentability and found that the sole contribution of the patent resided in new software and nothing more. Accordingly the appeal was dismissed.

Schlumberger Technology Corporation BL O/342/07 20 November 2007

This application concerned a method for converting a black oil model of a reservoir into a compositional model it is a new method of modelling black oil delumping and is performed on a physical system and uses real data from the reservoir.

The Hearing Officer (in marked contrast to the EPO's approach in Infineon (see above) rejected the application as being no more than a mathematical method and a computer program as such.

The reason for the Hearing Officer's decision was:

"... the contribution made by the invention is a method of converting one model of a reservoir into another, and that amounts to no more than a mathematical method implemented via a computer program. The fact that a model is used to represent an oil reservoir makes no difference, it is a model all the same."

This case, when considered alongside Infineon neatly illustrates the difference in approach between the UK and the EPO.

Schlumberger Technology Corporation BL O/343/07 20 November 2007

This application derived from the same PCT reference as the application in consideration in BL O/342/07. The application focussed on the ability to couple one or more different oil field simulators in order to control the oil field. Previously, in addition to proprietary software issues, due to the differences between different types of simulators this combination of simulators had not been possible.

The patentee relied on the VICOM and IBM/Text Processing amongst other cases. Both VICOM and IBM/Text Processing state that even if the basic idea underlying an invention might reside in a computer program a claim directed to its use in the solution of a technical problem does not seek protection for the program as such. The Hearing Officer rejected the patentee's arguments by noting that in his view the contribution of the patent lies in providing interoperability between one or more simulators. The Hearing Officer noted that:

" ...There is nothing new in terms of hardware, the controller itself is a piece of software which manipulates data, which it then exchanges with the various reservoir simulation models an surface network models which are in themselves software applications. ... there is nothing in the current application to suggest that the program is used to control an actual physical device or process which might otherwise have saved it from exclusion. ..."

Again, this conclusion is in marked contrast to the EPO's approach in Infineon and pays no regard to the evolution of technology in the field concerned surely "technical" has to have a contextual definition as one rigid definition clearly cannot apply to all areas of patentable invention.

Astron Clinica & Ors -v- The Comptroller General of Patents CH/2007/APP/466 19 November 2007 heard judgment pending

This is an appeal from UKIPO on behalf of five software companies. The appeal focuses on UKIPO's practice, following Aerotel/Macrossan of refusing computer program product claims even when such claims refer to methods that are otherwise allowable other words an appeal against the "fifth step".

Mr Justice Kitchin heard the appeal but, given the system of precedence of case-law in the UK will be bound to apply the four-step test. Accordingly, in order for this case to fulfil its potential and deliver a fully argued exploration of the four-step test and the divergence between UK and EPO case-law the appellants will need an appealable decision from Mr Justice Kitchin, funds to take a case before the Court of Appeal (where they will no doubt encounter Lord Justice Jacob, the author of the adoption of the four-step test) and permission for a further appeal to the House of Lords (with the funds necessary to mount such an appeal). We can only wait and see.

Conclusion - the truth?

The similarities and differences

  1. Despite the absence of the word "technical" in the EPC 1973, Patents Act 1977 and EPC 2000 all of the tribunals used this non-defined concept to determine if an application is for excluded matter "as such".
  2. None of the tribunals apply their tests in a rigid fashion they all import extra considerations for example the fifth step before UKIPO and the consideration of non-technical elements in the assessment of novelty and inventive step by the EPO.
  3. All of the tribunals claim to be applying a test which rates substance over form but this is mere rhetoric. The EPC is quite clearly allowing anything "technical" to enable a finding of "invention" even a general purpose computer a triumph of form over substance. The UK tribunals are clearly not considering the definition of "technical" in a contextual form e.g. the Schlumberger cases referred to earlier in this paper.
  4. The EPO and UKIPO/UK Courts apply different tests when considering potentially excluded subject matter and reach obviously diverging conclusions such that it is markedly easier to obtain a patent for a business method or computer program invention before the EPO than it is in the UK.

The fight

The EPO's and the UK approach to patentable subject matter is completely at odds. Both sides have characterised the other's approach as "wrong" to put it mildly! The last President of the EPO, Prof Pompidou has refused to entertain Jacob LJ's questions for an Enlarged Board of Appeal and the House of Lords refused to hear Macrossan's appeal. We are in limbo as far as the row is concerned.

Resolution of the fight?

The only way in which this situation can be resolved is by new legislation, a reference to the House of Lords in the UK or a case-law shift by the EPO or a different approach from the President of the EPO who is now Alison Brimelow.

New legislation

This could take the form of new European legislation such as the ill-fated Software Directive or the EPC 2000 could have grasped the nettle thus forcing changes onto the UK by way of the Patents Act 2000.

  1. The Software Directive - in 2002 the Commission adopted a proposal for a Directive on the patentability of software implemented inventions know as the Software Directive. The Directive closed followed the approach in PBS in that it recognised that CIIs or software related inventions were suitable for patentability but that a "technical contribution" is required. Unfortunately the Directive died a death at the hands of the various lobbying parties and there is nothing new currently on the horizon.
  2. The EPC 2000 as may be appreciated from the amended text set out above the EPC 2000 has completely ignored the issue and restated the wording from the EPC 1973 in all material respects. We are still bound by the "as such" issue in relation to methods for doing business and computer programs and we are still lacking a definition of the same.

Reference to the UK House of Lords or a case-law shift at the EPO

  1. Currently there is nothing pending before the House of Lords which would resolve the discrepancies between the UK's and EPO's approach to this issue. The only case which we are aware of that appears to have the will for such an appeal is the Astron Clinica appeal from UKIPO to the High Court. However, the High Court is yet to give judgment and so any eventual appeal to the House of Lords is a few years away at best.
  2. There is currently nothing in the EPO's case-law which would suggest that such a shift is even being contemplated let alone imminent.

President of the EPO Alison Brimelow

  1. To date Ms Brimelow has called a public meeting to discuss the policy vacuum left by the rejection of the Software Directive. It is clear (and not surprising) that the issue of software patents at least is on her agenda but we will simply have to wait and see to discover what her view is and where she is aiming to guide the EPO during her tenure as President.

The truth?

Given the above contradictions, gaps in case-law and the doggedly different approaches being adopted by the UK and the EPO the only definition of truth that seems applicable is that provided by Oscar Wilde:

"The pure and simple truth is rarely pure and never simple."

This speech was delivered by director Alexandra Brodie at the 12th Annual Patents Seminar.

Key Contact

Gordon Harris, partner, +44 (0)121 629 1499 / +44 (0)20 7664 0326, gordon_harris@wragge.com

This analysis may contain information of general interest about current legal issues, but does not give legal advice.