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Software and Business Methods — Patentable Subject-Matter in Europe?

The CLS Bank case (CLS Bank Int’l v. Alice Corp. Pty. Ltd., 2011-1301) decision issued by the Court of Appeals for the Federal Circuit highlighted the difficulty that those working in the field of software patents in the US are having in deciding what constitutes patent eligible subject-matter (discussed in a prior Mintz Levin advisory). On the other side of the pond, a similar debate continues to rage, with possibly a small amount of ground having been gained by patentees in a decision issued by the England and Wales Court of Appeal (HTC Europe & Co. Ltd. v Apple Inc.[2013] EWCA Civ 451, dated 3 May 2013). We discuss this decision here, in the context of how the UK courts and the European Patent Office have been viewing this type of subject-matter over the last few years.

Unlike the situation afforded by US legislation, computer programs and business methods, along with, among other things, “mathematical methods”, “mental acts”, “games” and “presentations of information”, are, at first glance, specifically excluded from patentability by the European Patent Convention and the UK Patents Act. Despite this rather unpromising start, a glimmer of hope lies in the fact that the legislation stipulates that these things are only excluded from patentability “for an application or patent that relates to these activities as such”. So are they excluded or not? This combination of wording has resulted in the legislation being widely viewed as unclear, and as a consequence, as in the US, the patentability of this type of subject-matter is in practice determined with reference to the large and ever-increasing body of case law.

How does the European Patent Office handle computer-related subject-matter?

Having started out from the original premise that this sort of subject-matter is not patentable, the EPO has gradually adapted over the years, such that many inventions can be protected after all. For a start, it is now accepted that a computer-implemented method is not a computer program as such and therefore constitutes patentable subject-matter (T424/03 Clipboard formats/Microsoft). Another important milestone was the allowance of a claim to a computer program product as a claim category — however, in order to meet the requirements of inventive step, the program needs to “produce a further technical effect which goes beyond the normal physical interactions between the program and a computer” (T1173/97 Computer program product/IBM). A third case (T641/00 Two identities/Comvik) expounds the “any hardware” approach which is the currently-favored method of assessing whether an invention relates to excluded matter — the presence of any sort of hardware, e.g. a computer-readable medium or a processor, will result in the invention overcoming the excluded matter hurdle, but, the solution that the invention provides to the problem being solved must be technical. In other words, if the invention uses only standard computing equipment and is in fact an automated business method, it will fall at the inventive step stage.

How does this compare to the position in the UK?

The UK Intellectual Property Office is bound by decisions of the UK courts, so we can refer to “the UK” as encompassing the approach in all these forums. As in the EPO, business methods remain difficult to have allowed, unless they include some sort of technical innovation that would in fact be applicable to many other types of data, not just the business data in question. However, the good news is that the UK has moved forward in a somewhat similar manner to the EPO, which means that computer-implemented inventions are allowable, as are claims to computer programs products under certain circumstances. The most noticeable difference is how an answer is arrived at, insofar as this is not by way of the “any hardware” approach of the EPO. Rather, the UK approach follows a 4-step test which came out of the Aerotel/Macrossan case (Aerotel Ltd. v Telco Holdings Ltd. (and others) and Macrossan’s Application [2006] EWCA Civ 1371, [2007] RPC 7), to determine whether or not an invention makes a “technical contribution” to the world.1 A subsequent case, AT&T (AT&T Knowledge Ventures LP’s Patent Application (2009 EWHC 343(Pat), [2009] FSR 19), identified a number of “signposts” to assist in determining whether a technical contribution has been made.2 A third case, Symbian (Symbian v Comptroller-General of Patents [2008] EWCA Civ 1066, [2009] RPC1), provided a helpful aside, namely the principle that “a better computer is not excluded subject-matter” — in other words, the technical contribution can be something happening inside a computer.

The HTC v Apple decision was an appeal to the Court of Appeal from an infringement action decided by the High Court. Part of the appeal was against a finding that one of the patents in question related to excluded subject-matter. This patent related to a touch screen that was able to handle multiple touches. The alleged “technical contribution” was an improved handling of multiple user touches, by means of the interaction of the operating system with the application layer of the software. The lead judge decided that the invention resulted in a new and improved interface to application programmers because it made it easier for such programmers to write application software for a multi-touch device. In this regard, the Court of Appeal disagreed with the High Court’s decision and found it to relate to patentable subject-matter. In the previously-issued AT&T decision mentioned above, the fourth “signpost” was limited to asking whether the software caused a computer to have an “increase in speed or reliability”. A significant point that comes out of this latest decision is that this signpost is too narrow, and that “more efficient or effective running” of a computer should also be considered to give rise to a technical effect. This decision would therefore seem to broaden the ways in which an invention embodied only in software can give rise to a “better computer” and hence be found to be patentable.

What does all this mean in practice?

There has long been a tendency to think that it is only worth applying for patent protection for software in the US, where the starting position for the development of the body of case law was much more generous to patentees than the starting position in European legislation. However, the EPO and the UK have moved on in recent years and it is now possible to obtain protection for computer-related matters, where once it would have been thought impossible. Providing the software causes some sort of technical effect — either inside or outside a computer, but beyond what would be expected just by virtue of embodying an invention in software — there is a good chance of success. Not only that, but if your invention is primarily to a computer-controlled device or computer control of a separate device, as well as claiming the device, you should also be able to have allowed a claim to the computer program. The key is to ensure that your patent application includes enough technical detail to explain how the program interacts with the computer hardware, the operating system software or an external device or system.


1 The four-step Aerotel/Macrossan test:

  1. Properly construe the claim
  2. Identify the contribution to the stock of human knowledge which the inventor believes he/she has made
  3. Ask whether the identified contribution falls solely within excluded subject-matter
  4. Check whether the actual or alleged contribution is actually technical in nature

2 The AT&T signposts:

  1. Whether the claimed technical effect has a technical effect on a process carried on outside the computer
  2. Whether the claimed technical effect operates at the architecture level i.e. regardless of nature of data
  3. Whether the claimed technical effect results in the computer being made to operate in a new way
  4. Whether there is an increase in the speed or reliability of the computer
  5. Whether the perceived problem is overcome rather than being merely circumvented

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