ava i lab le at www.sc ienced i rec t . com

www.compseconl i ne .com/ publ i ca t ions /prodc law.h tm

c o m p u t e r l a w & s e c u r i t y r e p o r t 2 3 ( 2 0 0 7 ) 1 9 9 – 2 0 4

Software patents

Court of Appeal parts company with the EPO on softwarepatents

David Bainbridge

Barrister, Professor of Business Law, Aston Business School, UK

a b s t r a c t

In the recent case of Aerotel Ltd v. Telco Holdings Ltd and Macrossan’s Patent Application ([2006]

EWCA Civ 1371), the Court of Appeal departed from underlying reasoning in the line of

cases developed under the European Patent Convention since VICOM/Computer-related in-

vention in 1987 considering itself bound by its own previous decisions. That being so, UK

law and practice on software inventions no longer reflects current thinking at the EPO.

This is a very serious matter which could have grave economic consequences for the soft-

ware industry.

ª 2007 David I. Bainbridge. Published by Elsevier Ltd. All rights reserved.

1. Introduction

The scope of the exceptions to the meaning of ‘invention’ in

Section 1(2) of the Patents Act 1977 (equivalent to Article

52(2) and (3) of the European Patent Convention) has always

been difficult to pin down with any degree of precision. The

list of excepted matter lacks any unifying logical reason for

their exception.1 Some, such as aesthetic creations, are pro-

tected in other ways, by copyright or design rights. Others,

such as discoveries and scientific theories, intrinsically lack

practical application in the absence of teaching how those dis-

coveries or theories can be used in technology. The most dif-

ficult exception to grasp has been that of computer

programs, especially when the function they perform relates

to other excepted matter such as business methods and men-

tal acts.

The Statute of Monopolies 1623 brought an end to abuses

associated with the granting of monopolies by restricting

them to inventions that were ‘any manner of new manufac-

tures’.2 This phrase formed the basis on patent law in England

and the United States and was still used in the Patents Act

1949.3 Australia and New Zealand patent law is still based

on manner of manufacture.4 Patent law in a large number of

countries not party to the European Patent Convention

(‘EPC’), including the United States, Japan and Australia,

have no express exclusions for computer programs or busi-

ness methods.

The UK Patents Act 1977 was passed, inter alia, to give effect

to the European Patent Convention (‘EPC’). The phrase ‘any

manner of new manufactures’ disappeared and now the basic

requirements for patentability are that the subject matter is

an invention (not defined), is new compared with the state

1 For a discussion on possible explanations for the exceptions, see the discussion of Peter Prescott QC, sitting as a deputy judge of theHigh Court in CFPH LLC’s Application [2006] RPC 259, paras 28–42.

2 21 Jac 1 c 3, Section 6.3 Section 101(1) of which, the interpretation section, carried a definition of invention still based on ‘any manner of new manufacture’.4 See, for example, Section 18(1)(a) of the Australian Patents Act 1990 requires a patentable invention to be a manner of manufacture

within the meaning of Section 6 of the Statute of Monopolies.0267-3649/$ – see front matter ª 2007 David I. Bainbridge. Published by Elsevier Ltd. All rights reserved.doi:10.1016/j.clsr.2007.01.001

c o m p u t e r l a w & s e c u r i t y r e p o r t 2 3 ( 2 0 0 7 ) 1 9 9 – 2 0 4200

of the art, involves an inventive step, is capable of industrial

application and is not excluded from the grant of a patent. It

is arguable that the requirement of industrial application

equates to a manner of manufacture. What seems reasonable

to assume, however, is that the intention was to restrict the

availability of patents to new and inventive things that could

be put to practical use in industry and commerce.

That patents should be granted for things that are useful in

commerce (as distinguished from industry) is not beyond

doubt, in particular because of the exclusion of computer pro-

grams and business methods as such. However, the PatentsAct

1977 contains a few clues that patents are possible for inven-

tions used in commerce. Section 4(1) states that an invention

is capable of industrial application if it can be made or used

in any kind of industry including agriculture. Section 48, which

applies to compulsory licences, defines a WTO proprietor, inter

alia, as a proprietor having a real and effective industrial or com-

mercial establishment in a WTO country. In Schedule A2 to the

Act, paragraph 3 denies patents for the use of human embryos

for industrial or commercial advantage.5

The term ‘software invention’ or ‘computer-implemented

invention’ covers a range of inventions which are imple-

mented by means involving a programmed computer. The

ill-fated proposed Directive on the patentability of com-

puter-implemented inventions6 defined a ‘computer-imple-

mented invention’ as:

any invention the performance of which involves the use of a com-

puter, computer network or other programmable apparatus and

having one or more prima facie novel features which are realised

wholly or partly by means of a computer program or computer

programs

Some points can be made about the grant of patents for

inventions involving computer programs and/or business

methods. The keywords in Article 52(3) EPC ‘as such’ empha-

sise that there should be no objection in principle to the grant

of a patent for the practical application of a computer program

or a business method. In terms of the latter, the possible rea-

son for the exception, as such, is that it was seen as undesir-

able to monopolise business methods. In principle, however,

this objection disappears if patents are available for a particu-

lar application of a particular business method rather than for

the method itself. In termsof computer programs, the programs

themselves have copyright protection. But an application to

patent a computer operating under the control of a computer

program is not an application to patent a computer program

as such. It is about what the program does, not what it is.

The Boards of Appeal of the European Patent Office

(‘EPO’) made the first important foray into the scope of

the exclusion of computer programs, as such, from the

meaning of ‘invention’ in VICOM/Computer-related invention.7

5 See also recital 41 to Directive 98/44/EC of the European Parlia-ment and of the Council of 6 July 1998 on the legal protection ofbiotechnological inventions, L 213, 30.07.1998, p. 13.

6 Proposal for a Directive of the European Parliament and of theCouncil on the patentability of computer-implemented inven-tions, COM(2002) 92 final, 2002/0047 (COD).

7 Case T208/84 [1987] 2 EPOR 74.

In that case, the emphasis was on whether the program,

when run on a computer, made a technical contribution

to the state of the art. By and large, the Court of Appeal

has followed that case. However, there have been a number

of important decisions of the Boards of Appeal on software

inventions since VICOM. It would be no exaggeration to

say that these developments have been significant. In Aero-

tel Ltd v. Telco Holdings Ltd and Macrossan’s Patent Applica-

tion,8 the Court of Appeal recently examined these

developments but felt unable to follow them, being bound

by its own previous decisions. That being so, UK law and

practice on software inventions no longer reflects current

thinking at the EPO. This is a very serious matter which

could have grave economic consequences for the software

industry.

2. The exceptions from the meaning ofinvention

Before looking at the case law before the EPO and the Court of

Appeal decision in Aerotel, it is worth reminding ourselves of

the exceptions from the meaning of ‘invention’ under the

EPC. Article 52(1) to (3) states:

(1) European patents shall be granted for any inventions

which are susceptible of industrial application, are new

and which involve an inventive step.

(2) The following in particular shall not be regarded as inven-

tions within the meaning of paragraph 1:

(a) discoveries, scientific theories and mathematical

methods;

(b) aesthetic creations;

(c) schemes, rules and methods of performing mental acts,

playing games or doing business, and programs for

computers;

(d) presentations of information.

(3) The provisions of paragraph 2 shall exclude patentability

of the subject-matter or activities referred to in that provi-

sion only to the extent to which a European patent applica-

tion or European patent relates to such subject-matter or

activities as such.

This is broadly in line with Section 1(1) and (2) of the Pat-

ents Act 1977 which is supposed to be equivalent to these

provisions by virtue of Section 130(7) of the Act.9 The key to

the exceptions in Article 52(3) is that they only apply if the

patent application or patent10 relates to the excepted matter

as such.

8 [2006] EWCA Civ 1371.9 There has been some judicial criticism of the drafting of the

Patents Act 1977 in that some provisions which should be thesame as in the EPC were rewritten in slightly different languageand then declared to be framed to have, so far as is practicablethe same effect as in the Conventions (EPC, CPC and PCT). See,for example, Jacob LJ in Aerotel at para 6.

10 The mention of patent as well as an application must relate toa challenge to the validity of a granted patent.

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3. The decisions of the Boards of Appeal ofthe EPO

In VICOM an application was made for a patent for a new dig-

ital image processing system, the process steps being

expressed mathematically in the form of an algorithm. The

Board of Appeal held that if a claim is directed to a technical

process which is carried out under the control of a program

(whether implemented in the hardware or the software),

then the claim cannot be regarded as related to a computer

program as such. It is an application of the program for deter-

mining the sequence of steps in the process and it is the pro-

cess for which protection is sought. The subject matter in

VICOM was the practical application of a computer program,

the technical effect resulting from the operation of the pro-

grammed computer and not the computer program itself.

The Board of Appeal also held that a computer of a known

type which is set up to operate according to a new program

cannot be considered to be part of the state of the art. Further-

more, it would be illogical to grant protection for a technical

process controlled by a suitably programmed computer but

not to protect the computer itself when set up to execute

that control. The Board also held that a process carried out

under the control of new hardware and/or software is not nec-

essarily capable of industrial application, an example being in

the case of a game.11

In IBM/Card Reader,12 the Board of Appeal dismissed an ap-

peal against a refusal to grant a patent in relation to an inven-

tion whereby an automatic card-reading machine could read

any card. This would allow the use of any bankcard with

a machine such as an automated teller machine to carry out

a transaction. The Board confirmed that the subject matter

of a patent must have a technical character and be industrially

applicable. It also went on to say that applying technical

means to perform a business activity does not mean that the

business activity has a technical character and is thus an

invention.13

Subsequently, in IBM/Computer programs,14 IBM applied to

patent a data processing system used to display information

in windows such that any information displayed in one win-

dow and obscured by a second window is moved automati-

cally to a new position so that it was no longer obscured.

The first few claims concerned the process and had been

accepted by the EPO as having a technical effect but some sub-

sequent claims were rejected. Some of these focused on

a computer program product (that is, a storage device on

which the program was stored) and which, when run, caused

11 Not withstanding the fact that any board games have beengranted patents as well as some electronic games.12 Case T854/90 [1994] EPOR 89.13 This was in line with judgments in the UK. For example, in

Raytheon Co’s Application [1993] RPC 427, a patent was refused fora software means of identifying ships, being a scheme or methodof performing a mental act as such. Similarly, in Fujitsu Limited’sApplication [1997] RPC 608, the Court of Appeal considered thatmanipulating crystalline structures by means of a programmedcomputer was probably a method of performing a mental act assuch.14 Case T935/97 [1999] RPC 861.

the computer to execute the process. The Board of Appeal held

that a computer program product was not excluded, per se. A

claim for a computer program product may have a technical

character resulting from the potential technical effect which

will be revealed when the program is run on a computer.

The same applied to the apparatus adapted for carrying out

the technical effect.15

Following these developments, there has been a line of

cases at the EPO where the requirement for technical charac-

ter (to take the matter out of the class of non-inventions) has

been clarified and the emphasis has been more on whether

the alleged invention is novel and inventive. The cases could

be seen as a continuing development and refinement of

VICOM but some English judges have not seen them as such

and have described them as contradictory.16

The first significant development was PBS Partnership/Con-

trolling pensions benefits system17 in which the Board of Appeal

accepted that it was implicit that an invention had to have

a technical character to be patentable. Methods only involving

economic concepts and practices of doing business were not

inventions. A feature of a method which concerned the use

of technical means for a purely non-technical purpose and/

or for processing purely non-technical information did not

necessarily confer a technical character to such a method.

However, an apparatus constituting a physical entity or con-

crete product, suitable for performing or supporting a business

or economic activity, was an invention. Whether it made

a technical contribution to the art might be relevant to novelty

and inventive step, rather than its status as an invention. PBS

Partnership seemed to diminish the exclusion of computer pro-

grams as such from inventions almost to vanishing point. The

emphasis swung to inventive step. Although a programmed

computer could be an invention, the state of the art included

the idea of using computer technology in the economic sector.

The notional skilled person would think the invention obvi-

ous. The Board of Appeal made a distinction between a claim

to a concrete product, such as a programmed computer, and

a method claim, saying the latter was not an invention.

HITACHI/Auction method,18 differed from PBS Partnership by

accepting that method claims could be inventions. The alleged

invention was a method of conducting on-line auctions. A

technical problem was that of delays in computer networks

when persons placed bids. This was overcome by using

a Dutch auction system in which a bidder placed two bids,

the desired bid price and the maximum bid price. The Board

of Appeal confirmed that a method using technical means,

15 The UK Patent Office changed its practice soon after to giveeffect to this decision: Patent Office Practice Note [1999] RPC 563.16 In Aerotel, Jacob LJ said (at para 23) that the decisions of the

Boards of Appeal were mutually contradictory. In CFPH LLC’s Ap-plication [2006] RPC 259, Peter Prescott QC, as deputy judge of theHigh Court said (at para 54): ‘The jurisprudence of the EPO is notconstant. Like the declination of the compass, it can shift overtime. Therefore, cases decided by our courts a few years agomay not be saying quite the same thing as the EPO is sayingnow. That is particularly true of the topic of patents and businessmethods. Our courts have followed decisions of the EPO whichthe EPO itself no longer applies’.17 Case T931/95 [2002] EPOR 522.18 Case T258/03 [2004] EPOR 548.

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as well as the apparatus itself was an invention. Whether the

subject matter of the alleged invention had a technical charac-

ter and this could be implied by the physical features of an

entity or the nature of an activity, or may be conferred on

a non-technical activity by the use of technical means.

A purely abstract concept devoid of technical implications

would not be an invention under Article 52(2) EPC. Anything

carried out by a programmed computer, whether claimed in

that way, as a concrete entity, or the activity performed by

the programmed computer, had a technical character and

was an invention. The Board accepted that its decision gave

a very wide meaning to ‘invention’ and would include:

. activities which are so familiar that their technical character

tends to be overlooked, such as the act of writing, using pen

and paper.19

HITACHI reinforced the emphasis on novelty and inventive

step over invention. However, in applying its logic, the Board

held that the invention in HITACHI did not solve the technical

problem by technical means. It simply circumvented it by

adapting a Dutch auction system for use on a computer. It

could have been implemented by a system of postal bids in-

stead. Consequently, there was no inventive step. In any

case, the invention merely automated a non-technical activ-

ity, although the Board of Appeal did go on to say that if

a step in such a method was designed to be particularly suit-

able for being performed on a computer then, arguably, it

had a technical character. It is interesting to note that VICOM

was not mentioned in HITACHI.

The latest decisions involved applications at the EPO by the

Microsoft Corporation for patents concerning the use of clip-

board formats to transfer non-file data between software ap-

plications in MICROSOFT/Clipboard format I20 and MICROSOFT/

Clipboard format II.21 The decisions of the Boards of Appeal22

followed HITACHI and held that a method using technical

means was an invention and a computer system including

a memory was a technical means. A method implemented

in a computer system represents a sequence of steps actually

performed and achieving an effect, and not a sequence of

computer-executable instructions (that is, a computer pro-

gram) which only has the potential of achieving such an effect

when loaded into, and run on, a computer. The claims in the

application were not, therefore, claims to a computer program

as such. Even though a method of operating a computer may

be put into effect by means of a computer program, a claim to

such a method does not claim the computer program as such.

The Boards of Appeal went on to say that the steps in the

claimed method solved a technical problem by technical

means as functional data structures (clipboard formats)

were used independently of any cognitive content in order

to enhance the internal operation of a computer system

19 At para 4.6. The Board confirmed that methods using technicalmeans still have to be new, represent a non-obvious solution toa technical problem, and be susceptible of industrial application.20 Case T424/03, 23 February 2006.21 Case T411/03, 23 February 2006.22 The Boards had the same panel and the same Chair, S.V.

Steinbrener, as in HITACHI.

with a view to facilitating the exchange of data among various

application programs. The claimed steps provided a general-

purpose computer with a further functionality. The computer

thus programmed assisted the user in transferring non-file

data into files. Finally, a computer program on a technical car-

rier is not a computer program as such and may contribute to

the technical character of the subject matter of what is

claimed to be a patentable invention. Both Microsoft applica-

tions were held to be patentable, being new and inventive

over the prior art.23 However, the Microsoft cases are distin-

guishable from HITACHI and PBS Partnership as in the latter

two cases the technical character was in relation to other mat-

ter declared to be non-inventions.

4. The Court of Appeal decision in Aerotel

The courts in the UK have tended to refer to VICOM, some-

times expressly approving of it, sometimes distinguishing it.

Section 91 of the Patents Act 1977 requires judicial notice to

be taken of decisions of the Boards of Appeal at the EPO.24 In

Genentech Inc’s Patent,25 Purchas LJ approved VICOM although

Mustill LJ said that the report of the case was so compressed

as to be ‘almost incomprehensible’. In Merrill Lynch’s Applica-

tion26 and Gale’s Application,27 some members of the Court of

Appeal appeared to distinguish VICOM. But, in Fujitsu Limited’s

Application,28 Aldous LJ said (at 614):

However, it is and always has been a principle of patent law that

mere discoveries or ideas are not patentable, but those discoveries

and ideas which have a technical aspect or make a technical con-

tribution are. Thus the concept that what is needed to make an

excluded thing patentable is a technical contribution is not sur-

prising. That was the basis for the decision of the Board in Vicom.

It has been accepted by this court and by the EPO and has been

applied since 1987. It is a concept at the heart of patent law.

The apparent move away from VICOM at the EPO was first

noticed judicially by Peter Prescott QC, as deputy judge of the

High Court, in CFPH LLC’s Application.29 He concluded that the

interpretation set out in HITACHI was the correct approach.

The mere fact that the claimed invention contained or used

a computer program did not mean that a patent would fore-

close the use of a computer program. He used an analogy, say-

ing (at para 104), in the context of automatic pilots and

computer driven processes for making canned soup:

The question to ask should be: is it (the artefact or process) new

and non-obvious merely because there is a computer program?

Or would it still be new and non-obvious in principle even if the

same decisions and commands could somehow be taken and

issued by a little man at a control panel, operating under the

23 The closest prior art was Windows 3.1.24 This is not to say that such decisions are binding on the courts

in the UK.25 [1989] RPC 147.26 [1989] RPC 561.27 [1991] RPC 305.28 [1997] RPC 608.29 [2006] RPC 259.

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same rules? For if the answer to the latter question is ‘Yes’ it be-

comes apparent that the computer program is merely a tool, and

the invention is not about computer programming at all. It is

about better rules for governing an automatic pilot or better rules

for conducting the manufacture of canned soup.30

Following these developments, the UK Patent Office again

decided to change the manner in which it examined com-

puter-implemented inventions as suggested in CFPH LLC. At

this stage, it seemed that the UK Patent Office and the courts

were attempting to reflect the current thinking of the Boards

of Appeal. However, this desire for uniformity with the deci-

sions of the Boards of Appeal at the EPO came to a shuddering

halt with Aerotel Ltd v. Telco Holdings Ltd and Macrossan’s Patent

Application.31

Aerotel concerned two separate appeals heard together. One

was to a telephone system allowing pre-payment from any

available telephone (the Aerotel patent). The other was to

a method of automatically acquiring the documents required

for the formation of a company (the Macrossan application).

After reviewing the decisions of the Boards of Appeal of the

EPO and of the Court of Appeal, Jacob LJ identified three differ-

ent approaches, one of which had itself three variations. The

approaches were as follow.

4.1. The contribution approach

Does the inventive step reside only in the contribution of ex-

cluded matter? If YES, the subject matter is not an invention

under Article 52(2). This was the approach adopted by Fal-

coner J at first instance in Merrill Lynch but expressly rejected

by the Court of Appeal.

4.2. The technical effect approach

Does the invention as defined in the claim make a technical

contribution to the known art? If NO, Article 52(2) applies. A

possible clarification (at least by way of exclusion) of this ap-

proach is to add the rider that novel or inventive purely ex-

cluded matter does not count as a ‘technical contribution’.

This is the approach (with the rider) adopted by the Court of

Appeal in Merrill Lynch and subsequently followed by the Court

of Appeal in Gale and Fujitsu. The approach (without the rider

as an express caution) was that first adopted by the EPO Boards

of Appeal in VICOM and other cases in the following few years.

4.3. The ‘any hardware’ approach

Does the claim involve the use of, or is to, a piece of physical

hardware, however, mundane (whether a computer or a pencil

30 In Halliburton Energy Services Inc v. Smith International (North Sea)Ltd [2006] RPC 25, Pumfrey J. said that contribution must lie ina technical effect and not merely in excluded matter. He notedthat, in Case T453/91 IBM/Method for physical VLSI-chip design, 31May 1994, the Board of Appeal felt unease with VICOM. The Boardexplained VICOM, saying that it equated the image in questionwith a material object as it was an image of a material object.31 [2006] EWCA Civ 1371. Jacob LJ gave the judgment of the court.

Unusually, the judgment has an Appendix setting out the caselaw at the EPO, in the UK and Germany on software patents.

and paper)? If YES, Article 52(2) does not apply. This was the

approach in PBS Partnership, Hitachi and Microsoft. It was specif-

ically rejected by the Court of Appeal in Gale.

However, Jacob LJ noted that there were three variants of

this approach:

(3)(i) Where a claim is to a method which consists of an ex-

cluded category, it is excluded by Article 52(2) even if

hardware is used to carry out the method. But a claim

to the apparatus itself, being ‘concrete’ is not so ex-

cluded. The apparatus claim is nonetheless bad for ob-

viousness because the notional skilled man must be

taken to know about the improved, excluded, method.

This was the specific approach taken in PBS Partnership.

(3)(ii) A claim to hardware necessarily is not caught by Arti-

cle 52(2). A claim to a method of using that hardware is

likewise not excluded even if that method as such is

excluded matter. Either type of claim is nonetheless

bad for obviousness for the same reason as above.

This is the approach in HITACHI, disagreeing with

PBS Pensions about method claims.

(3)(iii) Simply ask whether there is a claim to something ‘con-

crete’ e.g. an apparatus. If YES, Article.52(2) does not

apply. Then examine for patentability on conventional

grounds – do not treat the notional skilled man as

knowing about any improved excluded method. This

is the Microsoft approach.

Instead of applying the current thinking at the EPO (HITA-

CHI and Microsoft), Jacob LJ said that he had no choice but to

follow the previous Court of Appeal decisions because of the

doctrine of stare decisis.32 On the basis of those decisions, there

must be a technical contribution which is not itself within the

matter excluded from the meaning of ‘invention’. This is the

second approach with the ‘rider’.33 Perhaps he drew some

comfort from the fact that the German Bundesgerichsthof de-

clined to follow HITACHI on one occasion.34

Mr. Birss, on behalf of the Comptroller suggested the fol-

lowing structured approach to applying the Court of Appeal

decisions in Merrill Lynch, Gale and Fujitsu:

1. Properly construe the claim.

2. Identify the actual contribution.

32 None of the exceptions in Young v. Bristol Aeroplane Co Ltd[1944] KB 718 applied. The House of Lords has consistently saidthat the Court of Appeal cannot add to the exceptions in Youngv. Bristol Aeroplane, see, for example, Davis v. Johnson [1979] AC264. However, more recently, Baroness Hale of Richmond didnot rule out the possibility of a very limited extension of the ex-ceptions in relation to conflicting Privy Council decisions in In reSpectrum Plus Ltd (in liquidation) [2005] 2 AC 680.33 Applying this Jacob L.J. held that the Aerotel patent was valid.

It used a new combination of existing apparatus and was nota business method as such. In Macrossan, the alleged inventionwas to an interactive system to do the work normally done bya solicitor or company formation agent. This was a businessmethod as such and also a claim to a computer program as such.34 Jesco Schwarzer, 28 September 2004, 17 W (pat) 31/03.

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3. Ask whether it falls solely within the excluded subject

matter.

4. Check whether the actual or alleged contribution is actually

technical in nature.35

Jacob LJ though this useful and applied it to the Aerotel pat-

ent and the Macrossan application. He did say that the fourth

step should have been covered by the third step though it was

useful as a final check to ensure that the contribution was

technical and the Court of Appeal decision in Merrill Lynch

was being followed.

The Court of Appeal in Aerotel expressed some doubt, obiter,

as to whether the exclusion for a scheme, rule or method of

performing a mental act, as such, extended to electronic

means of carrying out mental acts. This was in contrast with

the view, also obiter, in Fujitsu. This leaves the lower courts

and the UK Patent Office in the unenviable position of having

to decide which to follow. In the end the Patent Office has de-

cided to follow the view in Aerotel.36

5. Conclusions

By narrowing the scope of the exceptions to the meaning of

‘invention’, the Boards of Appeal at the EPO have brought

the focus of the enquiry more on whether a software inven-

tion satisfies the requirements of novelty and inventive step.

This is preferable to getting involved in an over-elaborate

analysis as to whether the subject-matter makes the right

sort of technical contribution so as to bring it within the

meaning of invention. There should be no objection to this ap-

proach as many software ‘inventions’ will fail to meet these

stringent requirements.

One could argue that the exception of computer programs ‘as

such’ from the meaning of invention ought to be repealed. This

would bring the EPC more in line with patent law elsewhere.

Indeed, the Agreement on the Trade Related Aspects of Intellec-

tual Property Rights does not have an equivalent exclusion for

computer programs or, for that matter, business methods.

35 This is now the basis of the test adopted by the UK PatentOffice in the light of Aerotel, recognising that this case mustnow be followed.36 Patent Office, Practice Notice: Patentable subject matter, 2 Novem-

ber 2006. Cases such as Raytheon Co’s Application, op cit, must nowbe doubted.

The decision in Aerotel is regrettable in two ways. It con-

firms that the law on the patentability of software inven-

tions in the UK harps back to the position over 15 years

ago. All the refinement at the EPO is ignored. Perhaps

more seriously, patent law in the UK relating to the excep-

tions to the meaning of invention is now at odds to the

position at the EPO. This can only result in conflicting deci-

sions with software patents being more readily available at

the EPO. Applicants may now more readily get a UK(EP) pat-

ent from the EPO more easily than by direct application for

a UK patent. Worse still, a UK software patent obtained

through the EPO will be subject to challenges in the UK

based on different criteria than those used at the EPO to de-

termine whether the application was patentable in the first

place.

To be fair to Jacob LJ, he did see that the position was very

unsatisfactory and he even went so far as to formulate ques-

tions for the Enlarged Boards of Appeal at the EPO. Of course,

the position is not the same as that concerning European

Union legislation with the possibility of seeking preliminary

rulings from the Court of Justice and there is no requirement

for the Enlarged Board to look at questions offered for its con-

sideration. The EPO may even think it presumptuous for such

questions to be suggested. Nevertheless, there is force in what

Jacob LJ feels about the issue and it would be timely for a deci-

sion of the Enlarged Board which can be convened to consider

particular points of interpretation without a case where the

point has been raised: in vacuo so to speak. However, even

then the High Court and Court of Appeal could not apply

such a ruling because of stare decisis. It would take a House

of Lords judgment to free the lower courts and the UK Patent

Office from the difficult position they are now in. Perhaps in

a future case on software patents, the leapfrog procedure

could be used to fast track an appeal from the High Court to

the House of Lords.

David Bainbridge, (d.i.bainbridge@aston.ac.uk) Report Correspon-

dent, Barrister, Professor of Business Law, Aston Business School,

Aston University, Birmingham, UK.