The much-awaited decision of the Court of Appeal in Neal Macrossan and Aerotel v Telco Holdings and Others was rendered on 27 October, 2006, and on 2 November, 2006, the UK Patent Office issued a notice announcing an immediate change in the way examiners should assess whether inventions have patentable subject matter. Article 52(1) of the European Patent Convention (EPC), which has its equivalent in Section 1(2) of the Patents Act 1977, requires that for an invention to be patentable, it must be susceptible of industrial application which is new and involves an inventive step.
Article 52(2) EPC specifically excludes discoveries; mathematical methods; schemes, rules and methods for performing mental acts or business; and programs for computers from patentability. These exclusions have been at the source of the uncertainty of the patentability of business methods and inventions involving computer programs.
In its judgment, the Court of Appeal acknowledged that it was necessary to review in depth what the correct interpretation of the exclusions under Article 52 EPC should be.
The court also noted that the approach taken by the European Patent Office (EPO) in its decisions over computerrelated and business method inventions was marked by some level of confusion, the EPO having adopted at least three different approaches in the last decade:
. The contribution approach (whether the inventive step resides only in the contribution of excluded matter. If so, then the invention is excluded from patentability).
. The technical effect approach (whether the invention as defined in the claim makes a technical contribution to the known art. If it does not, then it cannot be patented).
. The any hardware approach (whether the claim involves the use of or is through a piece of physical hardware, however mundane. If yes, then it is not excluded from patentability).
The court concluded that only one test, comprising four steps, should be applied to assess patentability of all claims. These are: to properly construe the claim; identify the actual contribution; ask whether it falls solely within the excluded subject matter; and check whether the actual or alleged contribution is actually technical in nature.
As to the excluded subject matter, the exclusions set forth in Article 52(2) EPC should be treated as specific things that are not to be regarded as inventions as opposed to a list subject to a narrow or broad interpretation.
The Macrossan patent application was directed to a patent for an automated method of acquiring the documents necessary to incorporate a company. The court found that the invention did not fall solely within the excluded subject matter, contrary to what was held by the trial judge. Implicit in the reasoning of the lower court were that there must be something abstract about a method before the exclusion can apply and that the exclusion only applied where what is claimed involves the completion of a business transaction. The Court of Appeal stated that there was no over-reaching principle that the exclusions of Article 52(2) EPC were to be limited to abstract matters.
Nor did Article 52(2) EPC include any requirement that the exclusion be limited to a completed transaction. However, on the fourth prong (whether there is anything technical about the contribution), the Court of Appeal confirmed the decision of the Patent Office and of the High Court, holding that the Macrossan invention was no more than a computer program, and therefore, could not be patentable. In its notice, the Patent Office stated that examiners would, with immediate effect, apply the approach outlined by the Court of Appeal. The Patent Office also expressed the view that the new approach, while different than that of the EPO’s current practice (the contribution approach), would likely result in the same outcome for any patent invention being examined.
The Macrossan decision leaves open what should be considered a scheme, rule or method for performing a mental act in Article 52(2) EPC. The court noted in obiter that it was doubtful as to whether this extended to electronic means of doing what could otherwise be done mentally. However, in earlier decisions, the court had expressed a different view (albeit also in obiter).
The decision has left open the question over permissible forms of claims, in other words, can claims for computer programs (or program on a carrier) be allowable when other claims in different forms, claims covering use of that particular program, would be allowed? While the decision of the court emphasises the need to examine the application on substance over form, it is unlikely that even with a broad approach, inventions directed at computer programs with nothing more will be considered patentable.
While the test of patentability has been made clearer, there will remain uncertainty with respect to the patentability of computer-related or business method patents in the UK, as the court did not set out clear guidance on how the assessment of the excluded subject matter should be made.
The UK will not follow the US approach — the court having rejected this temptation and noted that, if anything, the US approach on business methods patenting had resulted in much unnecessary litigation. This view is supported in practical terms by the UK Patent Office as the notice says that the Patent Office would consider irrelevant the position adopted by a foreign patent office in its review of any invention.
Pierre Dubois is an intellectual property partner at Kirkland & Ellis in London.
