COURT OF APPEAL RULES ON BUSINESS METHOD AND COMPUTER PROG PATENTS
On Friday, the Court of Appeal delivered its judgment in the Aerotel and Macrossan cases. The former required a ruling on the meaning of the ‘business method as such’ exception to patentability, while the latter also required a ruling on the ‘computer program as such’ exception to patentability.
The application in Aerotel was for a telephone system, claims 1 and 9 of which read:
"1. A method of making a telephone call from any available telephone, comprising: obtaining a special code by making a prepayment; inserting the prepayment in a memory in a special exchange and being allocated to the special code in the memory for use in verifying a calling party call; dialling the special exchange when a telephone call connection is desired; inputting the special code for verification; inputting the number of called party; verifying at the special exchange by checking the special code and comparing the prepayment less any deductions for previous calls in the memory with the minimum cost of a call to the called party station; connecting the called and calling parties' stations in response to said verification; monitoring the remaining prepayment less deductions for the running cost of the call; and disconnecting the call when the remaining prepayment has been spent by the running cost of the call.
9. A telephone system for facilitating a telephone call from any available telephone station, comprising:
means for coupling a calling party station to a special exchange;
memory means in the special exchange for storing customer special codes and prepayment information individual to each customer;
means for verifying the calling party responsive to a code transmitted from the calling party station to the special exchange so as to verify that the code matches the special customer code in the memory means and the calling party has unused credit; and
means for connecting said calling party station to a called station responsive to the verification."
The application in Macrossan (as summarised by Mann J) was for
an automated method of acquiring the documents necessary to incorporate a company. It involves a user sitting at a computer and communicating with a remote server, answering questions. ..
'The essence of the invention is that by means of posing questions to a user in a number of stages, enough information is gleaned from the user's answers to produce the required documents. Questions posed in the second and subsequent stages are determined from previous answers provided and the user's answers are stored in a database structure. This process is repeated until the user has provided enough information to allow the documents legally required to create the corporate entity to be generated. A number of document templates are also stored and the data processor is configured to merge at least one of these templates with the user's answers to generate the required legal documents. The documents may then be sent in an electronic form to the user for the user to print out and submit, mailed to the user, or submitted to the appropriate registration authority on behalf of the user'
Both were found to be caught by the exceptions by the High Court, and both resulted in an appeal to the Court of Appeal.
Their Lordships held that the correct approach to the exceptions is as follows
(1) properly construe the claim
(2) identify the actual contribution;
(3) ask whether it falls solely within the excluded subject matter;
(4) check whether the actual or alleged contribution is actually technical in nature.
This was said to be a ‘reformulation’ of the Merrill Lynch and Fujitsu tests.
Applying this test, Aerotel’s appeal was successful. The system was new,and constituted a new physical combination of hardware (steps 1 and 2). It was clearly more than a mere business method (step 3) and it was technical (step 4).
However, Macrossan’s appeal was unsuccessful. The contribution (step 2) was an interactive system which will do the job which otherwise would have been done by a solicitor or company formation agent. Questions are asked, the answers incorporated in the draft, and depending on some particular answers, further questions are asked and the answers incorporated.
Contrary to Mann J’s ruling, a business method need not be abstract, nor need it result in the completion of a transaction. Macrossan’s claim was for the business of advising upon and creating appropriate company formation documents, which clearly was not technical (steps 3 and 40. Thus the claim failed as an application for a business method patent.
Likewise, in relation to the computer program exception, the Court of Appeal ran the test thus:
There is no difficulty over step 1. Step 2 – what is the contribution? – is again straightforward. It is to provide a computer program (in practice probably an interactive website) which can be used to carry out the method. The hardware used is standard and is not part of the contribution. Step 3 – is the contribution solely of excluded matter? – is again easy. The contribution is just the devised program up and running. Step 4 – is that contribution technical? – is again easy. No. So the exclusion applies.
The UK Patent Office has responded, saying that it will consider the Court of Appeal’s decision, and will issue a Practice Notice in the next few days.
The IPKat always favours clarity and so he welcomes the Court of Appeal’s nifty four-step test. He also notes the exception range of sources drawn on by the court: EPO Board of Appeal decisions, decisions of the ECJ, German decisions, US decisions, the book of Job and academic writings (this one makes the IPKat particularly happy).