Court of appeal

Ground Breaking Selection

A ground-breaking choice was delivered by the Court of Appeal in the instances of Aerotel Ltd v Telco Holdings Ltd (and other individuals) [2006] and Macrossan’s Application [2006] on 27 October 2006. This crucial choice implies that there is now a new technique by which patent examiners will assess irrespective of whether or not an invention is patentable. The choice is specially relevant to these wishing to patent ‘business methods’ or ‘computer programs’.

A patent is successfully a legal monopoly for a method or item. When granted a patent, the patent holder will be exclusively permitted to exploit a patented item or method for the life of the patent. When a patent is applied for, the patent examiners ought to make sure that the item or method which is the topic matter of the patent application meets the test for patentability. Up till this ground-breaking ruling, the test was particularly difficult to apply in practice due to the substantial quantity of case law dealing with the interpretation of the suitable legislation. Now the test has been concisely summarised by this choice.

The Legislations: There are two key pieces of legislation which had to be interpreted by the courts to offer the basis for the test of patentability. These are s1(two) of the Patents Act 1977 and its equivalent European legislation, namely Report 52(two) of the European Patent Convention (“EPC”). Each pieces of legislation outline what is excluded from patentability.

The wording made use of in the Patents Act 1977 is distinctive to the wording made use of in the EPC. So far as relevant, s.1 reads:

(two) It is hereby declared that the following (amongst other issues) are not inventions for the purposes of this Act, that is to say, something which consists of:

(a) a discovery, scientific theory or mathematical technique

(b) a literary, dramatic, musical or artistic function or any other aesthetic creation whatsoever

(c) a scheme, rule or technique for performing a mental act, playing a game or performing enterprise, or a system for a laptop

(d) the presentation of data

but the foregoing provision shall avert something from getting treated as an invention for the purposes of this Act only to the extent that a patent or application for a patent relates to that point as such. Whereas the Report 52 EPC, so far as relevant, reads:

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

(two) The following in certain shall not be regarded as inventions inside the which means of paragraph 1:

(a) discoveries, scientific theories and mathematical approaches

(b) aesthetic creations

(c) schemes, guidelines and approaches for performing mental acts, playing games or performing enterprise, and applications for computer systems

(d) presentations of data.

Despite the fact that no-one particular has but expressly recommended that the distinction in wording would outcome in a distinction in practice, to make sure absolute consistency with other EPC contracting states, the court mostly focussed on examining how the European legislation has been interpreted. The explanation for performing this was cited as follows:

“The distinction in wording has at least the prospective to lead to an erroneous building of a provision which is intended to have the identical which means as that of the EPC… Operating utilizing the EPC text obviates that threat”

Background: The problem arising in Aerotel Ltd v Telco Holdings Ltd [2006] relates to the patent of a enterprise technique. Aerotel held a UK patent for a phone technique which makes it possible for the user to make a contact from any obtainable telephone and have the price of this contact billed from the credit relating to this account. After this credit runs out, the contact would be disconnected. Aerotel believed that Telco had infringed their patent, and sued them. Telco counterclaimed to have Aerotel’s patent revoked. Aerotel had their patent revoked by summary judgment on three May well 2006. They are now attractive to have it reinstated.

In Macrossan’s Application [2006], they applied for a UK patent for a laptop system. The computer software makes it possible for customers to receive all the vital legal documentation for the incorporation of a corporation. The customers answer queries asked by a remote server and from their answers the suitable types are compiled and filled in automatically. The customers are then sent the documents. In the initial application, the UK Patent Workplace took the view that the topic matter of the patent was unpatentable. Mr Macrossan has now appealed to have the application reviewed.

The new four Stage Test: The choice introduced a new four stage test in establishing irrespective of whether an invention is patentable. The UK Patent Workplace is of the opinion that this choice need to be treated as the definitive way in which the law on patentable topic matter of an invention is to be applied in the UK. This substantially reduces the require to refer back to prior case law. The new four stage test to be made use of by patent examiners is constant with prior UK judgments and is as follows:

Step A single: Effectively construe the claim. This new very first step is made to make the examiners establish what monopoly would be made had been the patent to be granted. After the monopoly has been identified, the examiners will then go on to ask irrespective of whether the monopoly is in an excluded class of monopolies:-

o If the monopoly is in an excluded class, then the very first step would fail.

o If the monopoly is not in one particular of the excluded classes, then the very first step would be passed.

Step Two: Determine the actual contribution. The goal of this step is to enable the patent examiners to recognize categorically what an inventor has contributed to the stock of human information via the creation of his or her invention. It is the substance of the invention which demands the consideration. The invention is looked at as a complete. As lengthy as the general substance of the invention, when it is deemed in its entirety, contributes suitably to the stock of human information, the second step will be passed. In the finish the test ought to be what contribution has essentially been created, not what the inventor says he has created.

Step 3: Ask irrespective of whether it falls solely inside the excluded topic matter. This third step is intended to establish irrespective of whether the invention is comprised of solely unpatentable topic matter. There is a list of matters which will not be afforded patent protection beneath Report 52(two) of the EPC. These are outlined above. If the invention in query falls:-

o wholly inside excluded topic matte, it would fail the third step

o only partly inside excluded topic matter, it would pass

o outdoors all the categories of excluded topic matter, then it would also pass.

Step 4: Verify irrespective of whether the actual or alleged contribution is essentially technical in nature. The final step is somewhat uncomplicated in comparison to the prior 3. The examiners will merely contemplate irrespective of whether the contribution to the stock of human information is technical in nature:-

o If it is held by the patent examiners that it is not technical in nature, then the fourth step would fail.

o If it is held by the patent examiners that it is technical in nature, the fourth step would be passed.

The Application Of The New Test In The Situations: The Aerotel Appeal: The patent application consisted of two halves. The very first half was for the technique of carrying out the phone calls. The second half was for the actual technique which required to be made use of in carrying out the phone calls. It was held by the court that the technique as a complete was new, regardless of it partly getting created up of current elements, and consequently the patent application was for anything a lot more than merely a technique of performing enterprise. The technique of carrying out the phone contact would be not possible without having utilizing the new technique.

The monopoly to be made was the technique of carrying out the phone calls by utilizing the new technique. As a result the claim was held to be appropriately construed. The actual contribution to the stock of human information was the new technique, which incorporated a piece of new hardware. The claim partly fell inside one particular of the excluded categories (namely the ‘business method’ category) due to the truth that the application was for each the new technique and the technique of carrying out phone calls. And lastly it was clear that the contribution was technical in nature. For these causes the appeal was granted.

The Macrossan Appeal: The court held that the patent application was for each a enterprise technique and a laptop system. The monopoly to be made was for the technique comprising of the technique of promoting documents to customers by utilizing the laptop system. Despite the fact that no new hardware has been made, the court held that the general contribution was the technique itself. It is the third step exactly where the Macrossan Appeal falls down. The contribution issues solely excluded topic matter. It is for each a enterprise technique and a laptop system. Practically nothing a lot more. It was consequently not vital for the court to contemplate the fourth step, even even though the contribution was clearly technical in nature.

The Position Outdoors Europe: Each enterprise approaches and laptop applications are patentable in the USA. These choices had been created in the instances of State Street Bank v Signature Economic Group (1998) and Re Alappat (1994) respectively. The main explanation is that there is no equivalent of Report 52(two) beneath US law. This implies that the excluded categories in Europe and the UK are not represented across the Atlantic.

The truth that patents can be granted in the USA for what are excluded categories in the UK has resulted in an boost in such US patent applications. It is a industrial necessity that if patents are applied for, and granted, in the USA, then they need to be applied for everywhere. Even so, it is intriguing to note that there is no important information which suggests that there has been an boost in innovation or investment in the excluded categories, specially enterprise approaches and laptop applications, in the USA considering that the choices in 1998 and 1994.

Conclusion: If all 4 components of the test are passed, the invention in query is probably to be afforded patent protection. The Patent Workplace insists that this new test does not modify the boundaries involving what is and what is not patentable. The goal is to enhance the way the choice method requires spot and to offer proof of improved reasoning behind a choice exactly where a patent application is turned down. It does nonetheless recognise that there is probably to be the odd instances on the boundary which would be decided differently beneath this new technique. As this early stage, we would have to wait and see irrespective of whether this choice leads to an boost in the quantity of patent applications for enterprise approaches, games or laptop applications and the quantity of granted patents for such topic matters.

If you call for help with patenting your enterprise technique or laptop applications, speak to us at [email protected].

© RT COOPERS, 2006. This Briefing Note does not offer a complete or full statement of the law relating to the challenges discussed nor does it constitute legal assistance. It is intended only to highlight basic challenges. Specialist legal assistance need to generally be sought in relation to certain situations.

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