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Sunday, 24 June 2012

On the threshold of a dream? Patents and computer-implemented business methods in Europe

Oliver was disappointed to hear from his
patent attorney that "looking cute" couldn't
be patented as a business method unless
he could write some software to give it
technical effect ...
Whatever happened to patents for computer-implemented inventions in Europe? Not so many years ago, the debate over how to harmonise the way national patent offices applied the provision in the European Patent Convention (EPC) that excluded computer programs "as such" from patentability was so raucous and incoherent, having been hijacked by a bigger debate over whether software should be patented at all, that it was hard for even the most strident voices to make themselves heard. A parallel and increasingly overlapping debate over what to with business methods -- which need not involve computer programs but generally do --  also got eclipsed in the process.  The debates may have gone quiet, but that doesn't mean that the subject has become any less important, as some recent European Patent Office (EPO) decisions has shown.  In this blogpost, Bruce C. Dearling (Hepworth Browne, Leeds) has responded to the IPKat's challenge to tell us what's going on.  This is what he says:

The Patentability Threshold: Computer Implemented
Inventions 
& Business Methods

Recent Board of Appeal (“BoA”) decisions in T1769/10-IGT & T1051/07-SK Telecom appear out of step with earlier EPO case law on the patentability of computer-implemented inventions (“CIIs”) and other “mixed” inventions containing interacting technical and non-technical features. The latter decision has been described (unofficially) by some senior examiners as “barking” (not Barking in Essex), a term painful to the ears of cats.

The underlying issue with securing grant for such mixed inventions (including business methods, ‘apps’ and gaming systems) is that the meaning of “technical contribution” or “technical effect” is undefined in the EPC. Indeed, even when given the chance, the Enlarged Board of Appeal (“EBA”) has tried its utmost to delay, if not avoid, defining the term ‘technical’: “It is hoped that readers will accept these assertions without requiring a definition of exactly what falls within the boundaries of “technical”” - see section 9.2 of G03/08. The lack of clear guidance does however mean that viable claims are frequently rejected out of hand for apparently encompassing statutory excluded subject-matter, especially since “non-technical” features may actually form a dominating part of a claim. The decisions in T1769/10-IGT & T1051/07-SK Telecom reflect a degree of discomfort and perhaps a growing concern that firmer guidance is required. In fact, these recent decisions suggest that the point of patentability of “mixed” inventions is easing.

The length of the hearing in T1769/10-IGT (some 10 hours) is not reflected in its headnotes, nor does the decision itself reflect the long deliberation of the Board with respect to referral questions to the Enlarged Board of Appeal and the detailed line of arguments made out at the hearing and in the accompanying written submissions.

The Problem... and its solution

The problem-solution approach is not the only mechanism for assessing inventive step before the EPO. However, it is the de facto standard. There are also fields of technology where even the modified problem-solution approach (i.e. the formulation of a problem as an ‘aim to be achieved in a non-technical field’ as set out in T0154/04-Duns Licensing) encounters unsolvable difficulties. For example, the assessment of inventive step is very difficult, if not inappropriate, where at least part of the originality involves appreciating the existence of a problem or the opportunity for an unexpected improvement.

Further, during the assessment of inventive step for mixed inventions it is “too easy to throw too many things [read here: claim features that bring about an overall interaction and technical effect in the real world] out of the basket” to quote (without precise attribution) a senior EPO employee. Indeed, the rejection of features from consideration encourages the use of the defunct “contribution approach” that was expressly rejected by the EBA in G03/08. Quite simply, it is easy to identify differences over the prior art and then to exclude them from consideration under the misguided understanding that they cannot contribute to an invention and achievement of an overall technical effect. Also, the isolating of features encourages the framing of a problem using subjectivity and impermissible hindsight. Problems that are formulated in this way (even when stated “as an aim to be achieved in a non-technical field”) inappropriately suggest that the underlying invention relates to excluded “as such”, i.e. non-patent eligible, subject-matter.

Turning to what is frequently asserted as the leading European case for mixed invention, T641/00‑Comvik, this widely applied decision: 
(i)     provides no real and clear guidance, especially since on the one hand we are told that it is necessary to consider “all those features which contribute to said technical character”, whilst on the other hand appreciating that “features making no such contribution cannot support the presence of inventive step”.
(ii)    provides no consistent and repeatable approach because, especially, Headnote 1 is interpreted by different people in different ways;
(iii)   fails to provide an effective test and objective framework for assessment of inventive step because it is poorly framed and confuses the (a) reasonable exclusion from consideration of features that inherently fail to support any form of technical interaction with (b) the totality of interaction(s) between mixed features that in the real world bring about some form of tangible, technical effect or benefit; and
(iv)   leaves the assessment of what constitutes invention and technical contribution open to abuse and/or subjectivity.

To place Comvik into context, it is necessary to refer to section 10.13.2 of G03/08 in which the EBA questioned whether the present “elaborate” system for assessment of invention was correct. The EBA, while being aware of the use of T258/03-Hitachi and T641/00-Comvik, stated circa May 2010:

We note, in passing, that it is somewhat surprising that the referral does not address any of its questions to the validity of this way of judging an inventive step, an issue which is surely of general interest (and one which Lord Justice Jacob proposed should be put to the Enlarged Board – “How should those elements of a claim that relate to excluded subject matter be treated when assessing whether an invention is novel and inventive under Articles 54 and 56?”, Aerotel/Macrossan at 76, question (2)). The Board can only speculate that the President could not identify any divergence in the case law on this issue, despite the fact that (at present) approximately seventy decisions issued by a total of fifteen different Boards (in the sense of organisational units) cite T641/00, COMVIK (OJ EPO 2003, 352), and over forty decisions by eight Boards cite T258/03, Hitachi, the decisions which essentially defined the approach. Nor is the Enlarged Board aware of any divergence in this case law, suggesting that the Boards are in general quite comfortable with it. It would appear that the case law, as summarised in T154/04, has created a practicable system for delimiting the innovations for which a patent may be granted” [emphasis added].

Statute only precludes patentable invention when such excluded subject-matter is “alone”, so the question is really ‘what qualifies as excluded subject-matter and when does something take on a technical significance?’ Comvik highlights an artificial approach that again doesn’t seemingly reduce the legal assessment to fundamental first principles, but rather produces an undesirable degree of arbitrariness with respect to what is or isn’t technical. In contrast, the objective assessments of invention and patentability both evidently require a step back and a mentally astute enquiry as to what is actually taking place and/or what in practical reality is being achieved by the claimed “mixed” invention. Is it not the advantage in practical reality that inherently establishes technical contribution and the presence of patentable subject-matter subject, of course, to conventional considerations of novelty and non-obviousness over the prior art? The answer appears to be ‘it must do’, since what in totality is achieved appears fundamental and significant in any objective assessment.

A change in approach: T1769/10-IGT

According to the reasoning accompanying the decision in T1769/10-IGT issued on 7 July 2011, the BoA recognized the inherent difficulties in using the problem-solution approach. A generic statement on the application of the problem-solution approach to mixed inventions is recorded on pages 10 and 11 of that decision: 
“In the problem-solution approach, the objective technical problem to be solved is formulated based on the technical effect caused by the distinguishing features of the claim over the prior art, and thus depends on the individual case...

In the case where some general form of implementation of the aim to be achieved in the non-technical field is already known from the prior art, the objective technical problem to be solved may be formulated more specifically as how to implement technically the aim in the non-technical field, or, reworded, to provide a technical solution involving technical means how to achieve the aim in the non-technical field” [emphasis added].

In fact, the nature of “how” arose in a more limited sense in T1051/07-SK Telecom. The question of what was being achieved by the claimed subject-matter was largely ignored. The decision actually states, in section 4.1, second paragraph that the objective problem was: “to provide the system with means allowing a user to load money on his account in the host computer (or to realise money from his account)”. The objective problem did not consider ‘what’ in practical reality the invention sought to protect, although it is evident that the effect in the real world is a computerised banking system that provides access to funds, i.e. a computer-implemented business method that moves and releases funds to a client! The recited ‘technical’ means in the allowed claim supports implementation of the loading of a mobile financial account granted to a cell phone and very little else. In fact, it is not unreasonable to conclude that the “how” approach in T1051/07‑SK Telecom could in reality correspond to “the mere technical implementation of excluded subject-matter per se” as expressed in T1543/06-Gameaccount, so the allowance of the appeal in T1051/07 suggests that there is a liberalization with respect to the assessment of inventive step or that the decision was highly questionable. In short, T1051/07‑SK Telecom seems to divorce the question of “how” from the question of “what”.

In T1051/07-SK Telecom, the “transaction system for providing a financial transaction service to a subscriber” seemingly becomes entirely subordinate to the way in which the system or method is achieved. But if the what being achieved is irrelevant, then we are left with the situation where any technical implementation is patentable even though the totality of the claims is directed towards a practical realization of excluded subject-matter, i.e. the claim is merely a dressed-up version of an underlying business method or the computerized implementation of a mental act or business process [see T0038/86, Headnotes 3 and 4]. Expressing this differently, in following the line of argument in T1051/07-SK Telecom, interactions between identified differences that were considered to be “administrative and commercial aspects and rules of games” seemingly only have ancillary impact and can by and large be ignored when considering inventive step under Art.56 EPC provided that the claim is otherwise based on some form of machine or transformation of data in the real world. The further technical effect, required in T1173/97 and T1543/06-Gameaccount, is possibly satisfied by the presence of the machine alone, even in circumstances where the “substance [is] held to be the straightforward technical implementation of an administrative... procedure lying outside the patentable regime”  but provided that the claim is “not confined to merely reciting an administrative... procedure alongside straightforward technical means for its implementation, but rather provides a technical solution, involving technical means to the technical problem of how to...” [emphasis added]. See section 4.3 of the decision in T1051/07-SK Telecom.

If T1051/07-SK Telecom and T0012/08-Nintendo merely represent evolution of the law rather than a step-change in approach, is it reasonable to say that these decisions are entirely consistent with inter alia T1543/06-Gameaccount to support a unified approach? Clearly, the questions of “how” and ‘what’ are not the same, especially since the latter imposes a contextual aspect and apparent requirement to identify an appropriate and further technical effect that arises (or is achieved by the features of the claim as a whole) in practical reality, i.e. in the real world. Is it a question of “how” something is achieved or instead a question of “what” is achieved or a combination of both?

Observations

There are reasons for the EPO to attempt to sweep these recent decisions under the carpet and maintain uncertainty within the system. There is a belief that a defining principle is easier to work with than a rigid set of rules and, more significantly, no-one appears to want to be held responsible for grabbing the tiger by its tail. However, commercial uncertainty is not desirable.

Certainly, at face value, T1769/10-IGT reinforces the earlier finding in T1051/07‑SK Telecom and suggests the patentability threshold for CIIs is lower than the seemingly Draconian standards frequently applied by EP Examining Divisions.

Does the test for inventive step (cf non-patent eligible subject-matter under Art.52(2) EPC) in mixed inventions or CIIs reduce to “how” functional features are implemented, with the “how” being irrespective of what the claimed invention in totality seeks to protect and/or the further effect to be achieved? We leave it to the reader to decide whether the statement is always valid, although we have our doubts.

Resolution

Rather than provide our further opinion and commentary in a direct form, it seems better to list some of the questions that the BoA were asked to address in the appeal work in T1769/10. These “Threshold Questions” seek to drive the questions surrounding the patentability of mixed inventions and technical contribution back to a consideration of fundamental principles. The questions attempt to re-focus the legal issue surrounding the point of technical contribution to first principles by setting out consistent and effective tests.

The Threshold Questions

Q1. In the context of computer-implemented inventions, in determining whether the totality of a claim is acceptable under Articles 54 and 56 EPC, is it not first necessary:
(i)      to identify what the claimed subject-matter purports to achieve, rather than how something is achieved;
(ii)      to ask whether the ‘what is achieved’ brings about a practical technical advantage in the real world in the sense that the skilled person is able unambiguously to derive the merest scintilla of an advantage that causes in practical reality the technical implementation of the claimed arrangement to operate in a better, faster, more secure or more reliable fashion;
(iii)     to check that the advantage does not seek to dictate or look to control inevitable human behaviour and, in the affirmative, to reject the claim;
(iv)     to confirm that the subject-matter of the claim:
a) is not merely the automation of an existing process, such as a mental act or a method, scheme or rule for playing a game or doing business; and
b) produces a technical effect in the real world irrespective of the nature of the data/content being processed or the application being run by the computer; and only then
(v)      to ask whether the features of the claim in totality are inventive over the prior art?
(vi)     If not, then what is the test and do any of points (i) to (v) have independent validity in such a test?

Q2. At what point does a commercial advantage take on a technical nature that in a corresponding claim element provides a technical contribution and/or further technical effect?

Q3. In following T1769/10, if “the objective technical problem to be solved may be formulated more specifically as how to implement technically the aim in the non-technical field, or, reworded, to provide a technical solution involving technical means how to achieve the aim in the non-technical field”, does this mean that a technical contribution (and more particularly an inventive step) arises when a machine is configured to operate in a different way or to effect any transformation of something, for example data, into something else,  e.g. higher resolution data that can be applied to enhance a real world effect, as in the processing applied within T208/84 Vicom? If not, then what is the approach to assessing inventive step and/or the exclusion of features from consideration?

Q4. Is the issue of “technical contribution” or “technical effect” the point where the skilled person is able unambiguously to derive the merest scintilla of an advantage that causes in practical reality the technical implementation of the claimed arrangement to operate in a better, faster, more secure and/or more reliable fashion? How does this differ, if at all, from requiring a further technical effect in T1173/97-IBM Computer Program Product?

Q5. Is it that a CII that automates a business process or a mental act not in fact looking to claim control of human behaviour and that, actually, any claim that dictates or controls inevitable human behaviour (through a claimed process or architecture) encompasses or defines “as such” excluded subject-matter? Is there a relationship between non-patentable subject-matter and “human behavioural control” and, if so, what is it?

Q6. Is it that a claim that seeks to protect a program for a computer or a scheme, rule or method of playing a game “as such” not actually lacking a practical application in the real word that would, if present, otherwise give rise to a tangible technical contribution, i.e. a computer program “as such” has no patentable merit because it only goes through a number of fixed steps to process content without making any use/application of the result in a practical and technical way?

Q7. Does a claim directed towards the implementation of an idea or function that brings about a surprising effect/advantage in practical reality that is a further effect in the real world always support patentable subject-matter, provided (of course) that the overall contribution (e.g. feature interaction) of a claim is non-obvious over the prior art? If not, why not?

Q8. If claimed CII-based subject-matter provides a choice to an individual, does such a claim not seek only to influence an effect in the real world having regard to external considerations, and in the sense that influence is not equivalent to inevitable, unvarying control in which there is simply no choice and thus to be potentially patentable? If not, then why not?

4 comments:

MaxDrei said...

I hope this item will produce a long thread of clear contributions. Anxious to get it rolling, even before I have read the cited Decisions, I offer the following thoughts:

1. I would not worry much about what certain senior members of DG1 think, about whether any particular decision of DG3 is or is not "barking". Given that it is DG3's job to tell EPO Examiners when they go wrong, I would expect nothing else from DG1 by way of reaction to a remittal. Bear in mind that DG1 folks have zero experience of deciding obviousness, except under EPO-PSA? They, unlike many members of DG3, have no idea how unsatisfactory is the treatment of obviousness in every other Patent Office.

2. Some folks still lament the absence of a definition of "technical". One might just as well lament the absence of a definition of "obvious". When we are down to bedrock terms, there is no more mining to be done. And we only need to debate "technical" in those <1% of cases which are pushing the CII patentability envelope.

3. Of course, CII cases on the edge of patentability will survive or not depending on the outcome of a "Technical Y/N" debate. So, debating skill will be decisive. But in a 50:50 case, the outcome will alwys inevitably depend on rhetorical skills (thank goodness).

4. Those who have known nothing else but EPO-PSA forget how, when it is absent, there is no framework around which to structure the debate on obviousness (Pozzoli steps only march you as far as the Start Line). Try debating the patentability of the Blue Squash Ball with and without EPO-PSA, to see what I mean.

5. It is only at the fuzzy edge of CII where EPO-PSA comes under passionate attack. The proponents of financial hedging and tax scheming inventions can get quite worked up about it, I imagine. One should not forget how EPO-PSA has, in all other fields, reduced obviousness to the last 30 minutes of most oral proceedings at the EPO.

6. My clients are real rather than financial engineers. I'm comfortable with the DG3 evolutionary approach to "technical". I like to think that skilled EPO practioners are becoming ever better at 1. predicting the outcome and 2. drafting to get as much as possible inside the DG3 patentabiliuty envelope. If you file at the EPO without giving such a person any chance to get insiude the envelope, you have only yourself to blame, when DG3 turns you down.

Anonymous said...

Both of these claimed inventions were initially refused by the respective examining divisions. Those refusals were overturned on appeal.

Anonymous said...

T1543/06-Gameaccount

states that where the "what" is excluded:

"The Board concludes
that inventive step can be based only on the particular
manner of implementation. To this end it is therefore
necessary to ask how the per se excluded subject-matter
(e.g. a game or business method) is implemented"

i.e it considered "how" as did the decisions above.

If the "what" is technical then it is relevant whilst if it is non-technical only "how" is considered.

Now in practice there is a big variation between examiners and members of Boards of Appeal as to which features they consider to be non-technical aims and which they consider to be the implementation of those aims but Im not sure there is any difference in principle.

Bruce Dearling said...

The point is that failing to consider the "what" causes a subjective approach to the assessment of mixed inventions by obscuring the point when an invention takes on patentable merit. Furthermore, just considering the question of “how” leads to some seemingly obtuse results.

Perhaps it is worth recalling one unusually clear statement in the decision in T0154/04-Duns Application [section 10]), namely that “the examination whether there is invention within the meaning of Art. 52(1) to (3) EPC should hence be strictly separated from and not mixed up with the other three patentability requirements... This distinction abstracts the concept of “invention” as a general and absolute requirement from the relative criteria of novelty and inventive step, which in the popular sense are understood to be the attributes of any invention... Decisive for the presence of a (potentially patentable) invention is the inherent character of the claimed subject-matter”.

Unfortunately, a continuing desire to embrace the contribution approach (at least at first instance) means that the absolute requirements of “invention” and “inventive step” are frequently and inappropriately combined. This combination gives rise to subjectivity in the legal assessment. Moreover, the issue about when something is actually “technical” remains open. In fact, the problem is that the assessment of “contribution” of individual isolated features is easy and neither: i) requires the more difficult and fundamental assessment of the total interaction achieved between claim features; nor ii) an understanding of what the “technical” effect is or otherwise achieves in the real world. To provide an exemplary context of the problem, is a method that modifies the operation of a gaming machine based on measurement of some commercial parameter “technical”? OK, the response will probably be "it depends", so please accept that the example is used to make the point and provoke some thought.

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