Thursday, November 02, 2006

More on Aerotel's ruling

I've finished reading Aerotel v Telco Holdings, and I have to say that I have been impressed with a lot of the excellent reasoning displayed by Lord Justice Jacob in the ruling. I have selected some quotes:

"[...] despite the fact that such patents have been granted for some time in the US, it is far from certain that they have been what Sellars and Yeatman would have called a "Good Thing." The patent system is there to provide a research and investment incentive but it has a price. That price (what economists call "transaction costs") is paid in a host of ways: the costs of patenting, the impediment to competition, the compliance cost of ensuring non-infringement, the cost of uncertainty, litigation costs and so on. There is, so far as we know, no really hard empirical data showing that the liberalisation of what is patentable in the USA has resulted in a greater rate of innovation or investment in the excluded categories. Innovation in computer programs, for instance, proceeded at an immense speed for years before anyone thought of granting patents for them as such. There is evidence, in the shape of the mass of US litigation about the excluded categories, that they have produced much uncertainty. If the encouragement of patenting and of patent litigation as industries in themselves were a purpose of the patent system, then the case for construing the categories narrowly (and indeed for removing them) is made out. But not otherwise.

In our opinion, therefore, the court must approach the categories without bias in favour of or against exclusion. All that is clear is that there was a positive intention and policy to exclude the categories concerned from being regarded as patentable inventions. We must simply try to make sense of them using the language of the Convention."
In one of the most interesting parts of the ruling, Jacob J asks the EPO Board of Appeals for clarification with regards to their application of Article 52 of the European Patent Convention. This has been commented as a non-decision, but I completely disagree. It is clearly a decision because the ruling already talks about Macrossan's patent application. What is done here is to ask for clarification, although it is not the time and place to do it. Jacob J asks based on opinions by the parties and the British Comptroller of Patents:
"(1) What is the correct approach to adopt in determining whether an invention relates to subject matter that is excluded under Article 52?
(2) 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?
(3) And specifically:
(a) Is an operative computer program loaded onto a medium such as a chip or hard drive of a computer excluded by Art.52(2) unless it produces a technical effect, if so what is meant by 'technical effect'?
(b) What are the key characteristics of the method of doing business exclusion?"
I would very much like to know the answer to those questions as well.

1 comment:

Neal Macrossan said...

As to the initial quote from the judgment, selected as an example of the excellent reasoning ...

The Court of Appeal appears to have ventured into legally irrelevant considerations in the course of giving judgment.

The Court identified its statutory interpretation task at paragraph 8 of the judgment -


"The provisions about what are not to be "regarded as inventions" are not easy. Over the years there has been and continues to be much debate about them and about decisions on them given by national courts and the Boards of Appeal of the EPO. They form the basis of a distinct industry of conferences and are the foundation of a plethora of academic theses and publications. There has also been much political debate too: some urging removal or reduction of the categories, others their retention or enlargement. With the political debate we have no concern – it is our job to interpret them as they stand." (emphasis added)

Having so identified its task, it is surprising that the Court then went to the trouble of writing a mini-essay at paragraph 20 of the judgment (under the heading 'Other considerations') on the question as to whether the comparatively liberal approach to patenting of computer implemented inventions in the USA has proved to be a "good thing" –


"Fourthly despite the fact that such patents have been granted for some time in the US, it is far from certain that they have been what Sellars and Yeatman would have called a "Good Thing." The patent system is there to provide a research and investment incentive but it has a price. That price (what economists call "transaction costs") is paid in a host of ways: the costs of patenting, the impediment to competition, the compliance cost of ensuring non-infringement, the cost of uncertainty, litigation costs and so on. There is, so far as we know, no really hard empirical data showing that the liberalisation of what is patentable in the USA has resulted in a greater rate of innovation or investment in the excluded categories. Innovation in computer programs, for instance, proceeded at an immense speed for years before anyone thought of granting patents for them as such. There is evidence, in the shape of the mass of US litigation about the excluded categories, that they have produced much uncertainty. If the encouragement of patenting and of patent litigation as industries in themselves were a purpose of the patent system, then the case for construing the categories narrowly (and indeed for removing them) is made out. But not otherwise."

The question therefore inevitably arises whether the Court took these irrelevant considerations into account, even subconsciously, when formulating its decision.

(The above is one of a number of commentaries on the case which I have posted at
http://www.ukcorporator.co.uk/patentappeal.php ).