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European IP Bulletin, Issue 31, May 2006 - Patents

Patents

6. In Re Macrossan: Patents for Business Methods

Neal William Macrossan v Comptroller-General of Patents, Designs and Trade Marks [2006] EWHC 705 (Ch) was an appeal against a decision refusing a patent application. Mr. Macrossan had applied for a patent for an automated method of producing the documents necessary to incorporate a company. The patent involved a user sitting at the terminal and providing inputs to various questions. Based on his answers, the computer would produce electronic documents appropriate for incorporating a company. But the patent application for this invention was rejected by the Patent Office Hearing Officer in May 2005 on the grounds that it was excluded from patentability by the Patents Act 1977 for being: a mental act; a computer program; and a business method.

Mr. Macrossan, in his appeal, not only challenged all aspects of the Hearing Officer’s reasoning, but also raised an additional point of alleged “bias” on the part of the Hearing Officer. According to Mr. Macrossan, it arose due to the submission of a secret report of the Patent Office Examiner, and the post of Patent Office that stated: “The UK Patent Office has a strong tradition of rejecting patent applications for software…this tough approach has ensured that only patents with a ‘high presumption of validity’ are granted.”

After reviewing the submissions, the Court held against Mr. Macrossan on two of the three exclusions and on the bias allegation. However, it ruled in his favour on the point of “business method exclusion”. The Court accepted Mr. Macrossan’s contention that this exclusion was intended to apply only to abstract business methods rather than in any other way. Where the inventions were purely a means of conducing business, they will be un-patentable as the exclusion clause will apply. But where they are merely a facility that can be used in business, or a tool for conducting business, they can be patentable. Mann J accepted the analogy drawn by Mr. Macrossan with the telephone when he stated that if a telephone is assumed to be a new invention, then it could hardly be excluded from the patentability just because it is used in the business. It is merely a tool to conduct the business rather than the entire business and hence could be patentable. After defining the scope of this clause, the Court went further and explained the correct approach of ascertaining whether or not the exclusion applies to a particular invention. It held that the proper investigation is to examine whether or not the invention makes a technical contribution outside the excluded subject matter. On this basis, the Court found against the patentee.

On the issue of “bias”, the Court held that procedural fairness must be observed in the proceedings before the Hearing Officer even though the full bias rule as such does not apply to the present proceedings. Judging from the facts of the case, the Court held that there is nothing that the patentee could complain of in relation to the alleged bias.

The judgment has some positive ramifications for software and business inventions, confirming that whilst computer programs and business methods are per se excluded from patentability, this exclusion must be applied narrowly.

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