Credit card patent swiped by UK-IPO

The IPKat thanks the ever-observant Tibor Gold for pointing out the recent decision from the UK Office of Ingenico (UK) Limited v Pendawell 2007 Limited (BL O/331/07). As far as the IPKat can work out, this is the very first decision since Aerotel/Macrossan to result in revocation of a UK patent for being excluded under section 1(2).

An application under section 72(1) was made by the claimant Ingenico for revocation of the defendant Pendawell's UK patent, GB2360867B. The patent, granted in 2002, related to an electronic payment method. The claimant alleged that the patent was not novel, lacked an inventive step and was excluded from patentability.

The sole claim in question at the hearing was directed to a method of handling online authorization relating to a payment transaction involving a customer’s transaction card, in which the customer was able to determine a gratuity amount to be added to an original amount during the transaction.

The hearing officer, following the modified Windsurfing approach of Pozzoli v BDMO [2007] EWCA Civ 588, identified the inventive concept as being that of determining the total amount, including the gratuity amount, that was to be paid electronically prior to obtaining authorisation, and processing authorisation and remote capture at the same time. Finding that the skilled person would be familiar with electronic systems existing at the time the application was filed, the hearing officer determined that there were no real technical issues in putting the claimed invention into effect. Indeed, if there had been, there would be questions relating to sufficiency of the patent. The difference was then determined to be the ability to add a gratuity to the total amount to be paid without the need for a pre-authorisation step. Since the hearing officer considered that the relevant skilled person would immediately reject such an approach, the claimed invention was held not to be obvious in light of the skilled person’s general knowledge.

The hearing officer then followed the established Aerotel/Macrossan four-step approach to determine whether the invention was excluded from patentability under section 1(2). The contribution, determined to be that of allowing existing online authorisation and uploading requests to contain a gratuity in their amount, was considered to be a method for doing business as such, and also a computer program since its implementation would be in software running on otherwise conventional hardware. Any “technical features”, while possibly advantages of the invention, would not be achieved by technical means, but by changing the business uses of a known system. Any reference to whether the contribution was technical in nature would make no difference to the outcome, once the contribution was determined to fall solely within excluded subject matter. The hearing officer consequently ordered the patent to be revoked.

The IPKat can see from the decision that the hearing officer was careful to do a very thorough job. The result is clearly supposed to show the proper textbook way of using the four-step approach (which was, let us not forget, a UK Patent Office invention) when dealing with a granted patent. The issues of novelty and inventive step should first be dealt with, and only then should Aerotel/Macrossan be brought in, if required. This seems eminently sensible, since the issues of excluded matter and inventive step are different and easily confused if care is not taken, particularly when considering what the "contribution" should be, which is not necessarily simply the same as the difference to be considered under the Windsurfing approach. The approach is also quite different from that of the EPO, where the issue of excluded subject matter is only dealt with when considering inventive step under Article 56 EPC, which the IPKat has always found difficult to understand.
Credit card patent swiped by UK-IPO Credit card patent swiped by UK-IPO Reviewed by David Pearce on Saturday, November 17, 2007 Rating: 5


  1. See Patent World, March 2007, Issue 190, pages 9-11, "Lost in the fog" for an explanation (amongst other things) of why the tests for obviousness and excluded matter can and should be looked at together.

  2. Thanks Dr Schoen. I will have a look. Personally I don't think they should be looked at together, not least because they relate to different provisions.

  3. The EPO dont look at them together. Ignoring features for S56 that dont contribute to the soution to the technical problem ha nothing to do 52(2). Indeed that wy of applying S56 orginally developed when considering chemical cases to which the exclusions would never apply

  4. How can ignoring features that don't contribute to a technical solution to a technical problem have nothing to do with Article 52(2)? The last commenter either has a definition of the word "technical" that doesn't involve A52(2), or he/she doesn't have a clue, and could therefore plausibly be a member of an EPO Board of Appeal.

  5. There's an overall urge in Germany to "take things one step at a time" ie decide things step-wise. Hence "Let's do Art 52, then move to Art 54, then Art 56". It is thought to keep things simple (in itself laudable). It gets embarrassing however when they decide eg novelty and announce their decision, then move on to inventive step and find they got it wrong on novelty. Doesn't matter though. There is always the appeal instance for a second bite at the cherry. With no Binding Precedent under civil law, all is possible. Just weep for legal certainty if the French Presidency 2nd half 2008 gets a civil law pan-European patent litigation regime up and running. Get interim injunctive relief. If not, resign yourself to a 10 year slog to a final decision rendered by court-appointed expert who is embarrassingly out of touch because all the real like experts are in the pocket of one or other industry player.

  6. It does make sense to take things "step-wise", particularly when considering novelty and inventive step. If the German courts are getting this wrong, this is not a good sign that the judges are familiar with basic patent law. Taking Article 52 first, however, is also wrong, as the deluded EPO approach shows, since even pen and paper can surmount the 'hurdle' of A52 (see T 258/03). We then get the ridiculous arguments over what 'technical' means, and the entirely artificial legal fiction of removing non-technical features from the (also artificial) problem-solution approach (see T 641/00), thus building a tower of cards on dodgy foundations. It therefore seems sensible (at least to me) to consider Article 54 first, then Article 56, and only if both are passed considering Article 52, i.e. in the sense of whether the 'contribution' provided (note the absence of the word technical) falls entirely within any of the exclusions. Any room for argument is then to do with how far the contribution can extend, which is effectively where we are at in the UK.


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