A Proposal for Reforming the Current UK Patent Law System Post-Brexit

By Oskar Luong
June 1, 2019

“The UK legislator should reconsider its current position, especially vis-à-vis computer programs, which are of paramount importance in today’s business world.”

It is, to me at least, regrettable that because these apparently simple words [computer programs … as such] have no clear meaning both our courts and the Technical Boards of Appeal at the EPO have stopped even trying to understand them. However, we are so far down that road that “returning were as tedious as go o’er”. Instead we are now engaged on a search for a “technical contribution” or a “technical effect”. Instead of arguing about what the legislation means, we argue about what the gloss means. We do not even know whether these substitute phrases mean the same thing […].Lewison LJ, in HTC Europe Co Ltd v Apple Inc [2013] EWCA Civ 451 [143].

BrexitThe above extract has inspired this article, in an effort to scrutinize whether the critique by Lewison LJ is still controversial today, six years after that judgment was rendered in the United Kingdom. In doing so, the article analyzes the two divergent approaches on determining whether a particular subject matter is patentable under UK and EU patent law, focusing specifically on the patentability of computer programs/software.

First, I discuss the “technical contribution/effect approach” by the UK courts (“UK approach”) and the “any hardware approach” by the European Patent Office (“EPO approach”). The differences between these two approaches become apparent in comparing the former to the latter, in light of HTC Europe v. Apple, and by attempting to define the legal terminology addressing “computer programs” and “technical contribution’/‘technical effect”.

Problematic is the conflict between copyright and patent law vis-à-vis computer programs, i.e. which legal regime should be applied for their protection. Initially, copyright law was preferred, as computer programs are excluded from constituting patentable subject matters in both section 1(2)(c) Patents Act 1977 (hereinafter abbreviated as ‘PA’) and Article 52(2)(c) Convention on the Grant of European Patents of 5 October 1973 (EPC). But subsequently, the EPO and UK courts held that inventions involving a computer program could be patentable if the invention as a whole was technical (see Vicom/Computer-related invention, T 208/84 [1987] OJ EPO 14 [16]; confirmed and adopted into the English case-law both in Gale’s Application [1991] RPC 305 and Merrill Lynch’s Application [1989] RPC 561).

The UK approach to technical contribution/effect is to define the statutory provisions in the Patents Act 1977 as an investigative approach to ascertain what the legislation means by examining the legislator’s will. However, Lewison LJ is right in saying that the above-mentioned terms are too vague because of their interchangeable and undistinguishable use by courts. That is why this article urges the UK legislator to consider the reforms proposed below in order to solve this conflict for the sake of legal certainty for parties in litigation.

UK Approach

The outdated UK approach used to define a patentable invention positively as a “manner of new manufacture” (section 6 Statute of Monopolies 1623). Subsequently, section 1(1)(d) and section 1(2) PA 1977 and Article 52(2)-(3) EPC have changed that to a negative definition of inventions by excluding certain categories of non-technical works from constituting patentable inventions in section 1(2)(a)-(d) PA. Among these excluded categories are computer programs (section 1(2)(c) PA), which Lewison LJ criticized as being hard to define. In Aerotel Ltd v. Telco Holdings Ltd [2007] RPC 7 [11], the UK Court tried to resort to the travaux préparatoires (official negotiation records) to the EPC and academic articles to solve this legal issue by trying to derive the terms’ initial meaning from the legislator’s intention. The Court referred to two articles published in 2005 by Justine Pila, “Dispute over the Meaning of ‘Invention’ in Article 52(2) EPC – The patentability of computer-implemented inventions in Europe” 36 IIC 173; Justine Pila, “Article 52(2) of the Convention on the Grant of European Patents: What Did the Framers Intend? A Study of the Travaux Preparatoires” 36 IIC 755). However, the travaux préparatoires could not assist the Court in its quest to determine the scope of the excluded categories. Normally, it would follow that the exclusions’ purpose under the new UK and EU approaches would be that the leftover categories are the patentable ones.

Construing Excluded Categories

However, it remains contentious and open-ended as to whether there exists a residual positive requirement or concept of invention when none of the listed excluded subject matters is relevant to patent applications. There is no final decision by the Supreme Court, formerly the House of Lords, on this matter (see comments obiter dictum by Lord Hoffmann, in Biogen Inc. v. Medeva Plc [1996] UKHL 18 [43]–[46]).

The difficulty lies in the absence of any indication expressing the legislative will as to how categories shall be construed by patent offices and courts—either broadly or restrictively (Aerotel Ltd v Telco Holdings Ltd [2007] RPC 7 [12]). This differs between UK and EU law: generally, the Court of Justice of the European Union (CJEU) interprets exceptions to a general principle restrictively (as explained in the AG Opinion by La Pergola, Amengual Far v. Amengual Far, C-12/98, [2002] STC 382 [8]). The EPO Boards of Appeal endorsed that tendency when it comes to interpreting Article 53 EPC (Harvard/Onco-mouse (1990) T 0019/90 [1990] OJ EPO 376 [18]–[19], [4.5]; Plant Genetic Systems/Glutamine Synthetase Inhibitors (1995) T 356/93 [1995] OJ EPO 545 [8], [18.5]; [1995] EPOR 357).

Contrary to the EU approach, in Aerotol Ltd v. Telco Holdings Ltd, excluding categories with no overarching principle is not an exception to some general principles, but instead the default rule to determine a patentable subject matter (Aerotel Ltd v. Telco Holdings Ltd [2007] RPC 7 [12]).

The UK approach to the exclusions in Article 52 EPC is based on the Aerotol four-step test through which:

Defining “Technical Contribution/Effect”

However, step four of the test is problematic since the term used is vague and hard to grasp. When resorting to the literal interpretation of the terms “effect” and “contribution”, both words have a similar meaning in their definitions in the Oxford English Dictionary, namely, how one thing causes something to happen. In the case of patents, courts concentrate on how the invention has caused changes to the prior state of the art. Generally, they do not pay much attention to distinguish between these two terms. This can be also observed on the part of the EPO Boards of Appeals in Duns Licensing Associates, in which it even adopted another formulation called “technical character”, a new term, which it used multiple times throughout its decision as if it was a firmly established term of art or commonly invoked standard in EPO decisions that should have been familiar to any patent lawyer (Duns Licensing Associates/Estimating Sales Activity (T 0154/04) [2007] EPOR 38 [5], [7]–[9], [13]–[14], [20]). It follows that the essence of these ‘substitute phrases’ (as described by Lewison LJ in the extract at the beginning in [143]) lies on the meaning of ‘technical’, and not on the definition of contribution/effect or character.

Although the facts in Aerotel indicated that traditional computers could have implemented the telephone system in question, its technical contribution was to provide a ‘new physical combination of hardware’ (Aerotel Ltd v. Telco Holdings Ltd [2007] RPC 7 [53]). Thus, the system was going beyond being merely a computer with a program, and it was also more than conducting a method of doing business. Consequently, it did not fall within the subject matter excluded by Article 52 EPC, but instead it fulfilled the third step. The system was technical in nature and thus passed step four. Ultimately, the court deemed it to constitute patentable subject matter.

In the Macrossan application of the Aerotel test, the court held that the technical contribution under the second step for an interactive website, involving no new hardware, comprised solely an up-and-running computer program and was thus excluded subject matter. It was merely a system for doing what could have been otherwise realized by lawyers or company formation agents. Furthermore, it was excluded, under the third step, as being purely a method of how to do business. For these two reasons, the system was not patentable (for more examples in the case-law and for an even deeper insight into the considerations of various courts in determining whether there is a technical contribution or technical effect, please refer generally to: AT&T Knowledge Ventures [2009] EWHC 343 (Pat); HTC Europe Co Ltd v. Apple Inc [2013] EWCA Civ 451).

Symbian v. Comptroller-General of Patents was the first important case before the Court of Appeal after the Aerotel decision, in which the patent application for a computer program was granted due to an expansive interpretation of the list of excluded patentable subject matters, contrary to the more restrictive approaches in prior court decisions that strictly adhered to the list excluding computer programs in general. Symbian has established that the decisive factor whether a computer program has a technical effect is if it can solve technical issues not just outside computers, but also inside computers, i.e. it does not matter whether the computer program improves hardware or software in order to be considered as potential patentable subject matter as long as there is some form of technical improvement to the prior state of the art (Symbian v. Comptroller-General of Patents [2008] EWCA Civ 1066 [56], [58]). To sum up the UK’s ‘technical contribution/effect approach’: it is the courts’ desperate attempt to fill the gap between the exclusions as disconnected statutory categories in section 1(2) PA and Article 52(2) EPC with a seemingly overarching test.

EU Approach

Article 53 EPC is different from Article 52(2) EPC in that the former, titled “[exceptions to patentability”, names them clearly, and thus the exception principle of construction may apply to them, whereas the latter is not an exception to patentability but rather establishes positive categories of works that are not viewed as patentable inventions (Aerotel Ltd v. Telco Holdings Ltd [2007] RPC 7, [12]).

The EPO criticized the UK approach as inconsistent with interpreting the EPC in good faith in accordance with Article 31 of the Vienna Convention on the Law of Treaties of 1969 (hereinafter abbreviated as ‘VCLT’) (Duns Licensing Associates/ Estimating Sales Activity (T0154/04) [2007] EPOR 38, [12]). In order to give a full account of State obligations under public international law, it shall be added here that the EPO could have cited more precisely from the VCLT for the sake of completeness and precision for making its argument even more persuasive, i.e. that the UK is bound by the principle of good faith in the context of interpreting a treaty ratified by States, such as the EPC. This principle is enshrined more specifically in the general rule of interpretation laid down in Article 31(1) VCLT, and, in addition to that, in the Preamble of the VCLT, which is, in turn, relevant for the purpose of treaty interpretation according to section 31(2) VCLT. The preamble also declares that the principle of good faith and the principle pacta sunt servanda are ‘universally recognized’. In this context, treaties in force must be observed since they are binding to the State parties that concluded them, and States must perform them in good faith under Article 26 VCLT.

As a result, the EPO’s ‘any hardware approach’ is broader than the UK approach since it does not generally exclude subject matter with technical features, understood in a wide sense to encompass most hardware types (as can be seen e.g. in Pension Benefit System Partnership, T931/95 [2002] EPOR 52, [5]; Hitachi/Auction Method, T258/03 [2004] EPOR 55, [3.7]-[3.8], [4.5]; Microsoft/Clipboard formats I, T424/03 [2006] EPOR 39, [5.3]).

Moving Forward

Under UK jurisprudence, terms like “computer programs” and “technical contribution”/”technical effect” cannot be clearly defined or distinguished from each other. But even including static legal definitions would render them useless over time when considering the fast-paced technological progress. The legislator is not suitable to amend these definitions regularly due to the time-consuming legislative process. Thus, it is in the courts’ competence to modify their interpretation and application. However, courts use these terms interchangeably in some cases, while according different meanings to them in other decisions. Hence, those vague terms have become mere ‘labels’ because their interpretation and application is inconsistent, resulting in a not uniform but rather fragmented case law. Keeping this terminology in the statutory provisions creates increasingly more divergent case law and confusion about these concepts for parties in litigation. This violates the fundamental principle of legal certainty under English law (e.g. as enshrined under English commercial law see Lord Mansfield in Vallejo v Wheeler [1774] 1 Cowp 143 [153] and Lord Bingham in Golden Straight Corporation v. Nippon YKK (The “Golden Victory”) [2007] UKHL 12 [1]. The principle of legal certainty can be also found in public law, e.g. as held by Laws LJ in R (Nadarajah and Abdi) v. Secretary of State for the Home Department [2005] EWCA Civ 1363; for a comprehensive overview of the principle of legal certainty under various legal regimes under the English common law system, see Lord Mance, “Should the law be certain”, The Oxford Shrieval lecture given in the University Church of St Mary The Virgin, Oxford, on 11th October 2011).

Therefore, I propose to abolish these terms because they cause and further confusion among courts. Instead a non-exhaustive list of patentable subject matters like in some civil law jurisdictions should be introduced by amending the Patents Act 1977. For the sake of providing guidance vis-à-vis the question whether to interpret the list of excluded subject matter in regards to computer programs in section 1(2)(c) PA restrictively or widely, I recommend drafting a memorandum to give full expression to the legislator’s will for amending the current provision. In that way, courts and the UK Intellectual Property Office (UKIPO) would have a clear framework for determining patentable subject matter in the difficult case of computer programs. Potential applicants would also have legal certainty as to estimating their chances of a successful patent application and in case of litigation. These proposals would reduce the litigation costs dramatically for all parties, since there would be less disagreement, especially as to what constitutes patentable computer programs, between the UKIPO and the courts (considering that an appeal would make the whole litigation more complex and longer) as well as disputing parties. The UK legislator should reconsider its current position, especially vis-à-vis computer programs, which are of paramount importance in today’s business world.

The EPO approach is less restrictive in excluding patentable subject matter and more uniform than the UK approach. Indeed, UK courts have significantly resorted to the EU approach to fill the gaps left in the Patents Act 1977. However, Brexit makes it unforeseeable whether the UK will be a member of the Unified Patent Court, and thus these legal uncertainties cannot be solved by the judiciary alone but must be tackled by the legislative body in a timely manner. This is the best possible course of action because it upholds the separation of powers in a modern democracy.

 

The Author

Oskar Luong

Oskar Luong is a law student at Heidelberg University, Germany. He has published academic articles on international law. As a classical pianist, Oskar has a strong personal interest in intellectual property law. He was a registered visiting student reading law at the University of Oxford, St Catherine’s College. Prior to that, Oskar studied law at UNSW Sydney and achieved a distinction average mark (Scholar Medallion). He worked as a research assistant for the Max Planck Foundation for International Peace and the Rule of Law, Germany, and as a stagiaire for AG Kokott, the German Advocate General at the Court of Justice of the European Union. Oskar was also a legal trainee in antitrust law at Gibson Dunn in Brussels.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 13 Comments comments.

  1. Anon June 1, 2019 12:45 pm

    While the article is written for the topic under consideration in different Sovereigns than the US Sovereign (and I do not impugn the choice of a Sovereign to decide as they will), I DO want to point out that the following encapsulates a false dichotomy:

    Problematic is the conflict between copyright and patent law vis-à-vis computer programs, i.e. which legal regime should be applied for their protection.

    This is a false dichotomy precisely because software as an item simply has more than one aspect to it, and the different forms of IP protection merely protect different aspects.

    In other words, the appropriate form of protection is that form for each aspect.

    For the aspects of utility, patent protection is an appropriate form.

    For the aspects of expression, copyright protection is an appropriate form.

    There is NO need to be forced to choose only one or only the other.

  2. Oskar Luong June 1, 2019 5:12 pm

    Good day,

    Many thanks for commenting and expressing your interest in my article! In essence, I agree with what you have written about the applicability of both copyright and patent law to computer programs. The reason why I wrote the sentence you have quoted is to give an introductory explanation as to the legislative will and the drafting history as to why computer programs were excluded as patentable subject matter in the first place.

  3. MaxDrei June 2, 2019 7:02 am

    As the author of Comment #1 knows well, from our respective contributions on another blog, a counterpart to the debate between the UK’s “contribution approach” to eligibility and the EPO’s “any hardware” approach can be discerned in the debate about 35 USC 101 in the USA.

    So this article is perhaps more topical than its author realises.

    Unfortunately, very few people outside EPO circles seem to realise that the EPO approach to eligibility (“technical character”) is inseparable from its approach (“technical effect”and “objective technical problem”) to non-obviousness. Think of two tourists riding a single camel, sitting in a single saddle with two baskets, one each side of the camel’s back. To pull out EPO jurisprudence on eligibility and ignore the “knock-on” non-obviousness jurisprudence is not a helpful approach.

    You can find embarrassing quotes a-plenty from English patents court judges (even now, never mind 6 years ago) because no litigator, pontificating at them in their open court, has ever explained to them accurately how the EPO approach to eligibility is only one half of a coherent, self-consistent, logical AND pragmatic approach to overall patentability. If he had been alive today, Oscar, instead of in 1774, Lord Mansfield would I am sure have been an enthusiastic advocate of the EPO approach.

    We do not need the UK to re-write its patent statute. We commentators like Oscar Luong to take the trouble to understand the way EPO jurisprudence on eligibility meshes with its jurisprudence on non-obviousness and then explain it to Supreme Court judges like Lord Lewison.

    Gene you have published an article by Brian Cronin on EPO non-obviousness. Can you perhaps get him to comment on Oscar Luong’s analysis?

  4. Anon June 2, 2019 11:47 am

    MaXDrei,

    Our other exchanges are ultimately unsatisfying as you simply do not take a meaningful stand (or integrate whatever it is that you think may be your stand into the actual debate within the US Sovereign).

    You (again) seem to glorify the EPO approach (and disdain the UK approach), with the Oscar Luong piece is rather light on analysis of the EPO approach, while merely being critical of the UK approach – as taken from: https://www.theylj.co.uk/determining-whether-a-subject-matter-is-patentable-under-uk-and-eu-law/

    The Luong article is merely conclusory then of any distinctions between the UP and the EPO.

    For example, what difference is there between the
    Under UK jurisprudence, terms like ‘computer programs’ and ‘technical contribution’/‘technical effect’ cannot be clearly defined or distinguished from each other

    and

    the LACK of actually defining “technical” for the EPO perspective? You yourself lay claim to the need of NOT defining the term, which is tantamount to what Luong criticizes in the UK approach.

    BOTH leave it up to the courts to “ever decide.” In this manner, the criticism of the one is identical to an UNSTATED criticism of the other.

    Further, the conclusion from Luong of:

    1.The EPO approach/CJEU jurisprudence is more uniform than the UK approach. UK courts have significantly resorted to the EU approach to fill the PA’s gaps</I." is a self-contradiction accompanying a first conclusory assertion. Your constant portrayal against Res Judicata necessarily means that the EPO approach is NOT constrained to be “more uniform.” So the assertion — without more — of that approach being more uniform carries no weight. And then after asserting this contrast, the author then states that the EU “significantly” resorted to by the UK courts.

    I do “get” that you appear to think that Luong is “light” on his understanding of some “inseparableness,” but you provide zero depth to WHY or HOW there is “lightness.”

    I find your “legibility inseparable from non-obviousness” assertion to be vague and rather meaningless. Perhaps you can explain what you think the difference actually is, as in NO jurisdiction, are patents granted in an “either-or” manner, and so in all jurisdictions, there is an element of “inseparableness.” It appears that your use of the word hinges on some unexplained need of conflation between the two [in truth] different legal concepts. It is eminently NOT a helpful approach to start down the path you have taken here in your paragraphs 3 and 4.

    Much like certain commentators (for example, Malcolm Mooney), confuse and conflate different aspects of the US Sovereign laws (of 101 and 103), such confusion and conflation is worse than your assertion of “To pull out EPO jurisprudence on eligibility and ignore the “knock-on” non-obviousness jurisprudence is not a helpful approach.

    Most all people “get” the fact that the Sovereigns handle the law differently.

    Emphasizing that fact (without any additional detail as to how that different handling actually makes a meaningful difference), and [you yourself] ignoring the plain fact that to obtain a patent ALL sections (in all Sovereigns) must be met, INVITES a befuddlement and lack of clarity.

  5. MaxDrei June 2, 2019 4:07 pm

    The EPO approach is intellectually satisfying because i) it looks first at eligibility and uses for that a criterion “technical character” which is timeless and not dependent on the state of the art (and therewby steers clear of any determination whether or not there is any “contribution” to that state of the art), and ii) it then looks at obviousness and uses as criterion the “objective technical problem” which prevents the obviousness enquiry straying outside the realms of technology (and into non-technical fields like playing games, doing math or business).

    A definition of “technical” is not needed at the EPO because i) it is a civil law jurisdiction (without binding precedent) and ii) it issues more than a thousand unappealable decisions each year, from which established case law one derives, with ever greater precision, what is the meaning of “technical”.

    The UK courts do not insist upon a definition of “obvious”. Nor need they insist upon a definition of “technical”.

  6. Anon June 2, 2019 6:52 pm

    Your position on lack of state decisis somehow (inexplicably) leading to “ever greater precision” is a direct contradiction.

    Your NOT defining “technical” and (here) throwing in some sort of “timeless” factor is ALSO a contradiction of your past position. If indeed timeless, then such is eminently definable.

    Sorry sir, but your positions are inane.

  7. Anon2 June 3, 2019 3:55 am

    The UK might be leaving the European Union, but the European Patent Convention (EPC) is an international treaty unrelated to the European Union, and the UK will still be bound by that treaty. Therefore, exiting the European Union does not give the UK in particular new options to diverge from the current patent regime based on the EPC.

  8. AnotherAnon June 3, 2019 4:42 am

    Doesn’t Oskar realise that the UK will remain an EPC Contracting State, even after Brexit? Meaning that the Boards of Appeal decisions will still have some influence.

  9. Oskar Luong June 3, 2019 4:28 pm

    Good day,

    Many thanks to all of you who have shown your interest in my article and for your discussion!

    @Anon (1st, 4th and 6th comment) and @MaxDrei:
    My article is not about deciding whether either the UK or the EPO approach is better. Both of them have difficulties as regards to the determination of what actually constitutes patentable subject matter when it comes to computer programs/software, as can be seen in my article. This is not just a problem of finding a comprehensive legal methodology, but it is also a factual problem due to the ever-changing nature of fast-developing technology and new inventions.
    Intellectual property law, as a form of national private law, is handled differently in various jurisdictions and legal traditions (most notably in civil and common law jurisdictions, but there are also other legal traditions across the world). It is clear that UK patent law is influenced by its EU/EPO counterpart: there should be some overlaps in jurisdictions that have subjected themselves to a supranational legal regime, such as international treaties and EU treaties. I have shown some problematic aspects regarding computer programs/software as to their patentability as subject matters with some prominent examples from the decisions by the UK courts and the EPO.

  10. Oskar Luong June 3, 2019 4:36 pm

    Dear Anon2 (from the 7th comment) and dear AnotherAnon (8th comment),

    As I have explained and criticized in my article under the section titled ‘EU Approach’, the EPC is indeed an international treaty concluded by States, the High Contracting Parties, and thus the VCLT (Vienna Convention on the Law of Treaties of 1969) applies to its interpretation as the EPO Boards of Appeal has rightfully noted in its decision that I have discussed above. My point is that it should have quoted the relevant provisions more precisely to base its argument on a solid legal basis.

  11. Anon June 3, 2019 7:38 pm

    Mr. Luong,

    Thank you for the clarifications and the replies to posted comments.

    Please keep in mind though that some of my comments are more geared to MaxDrei, than they are directly to your article.

    I also wanted to point out that FOR the US Sovereign (noting that this is outside of the scope of your comparison of the UK and EPO systems), international treaties are typically NOT self-executing, and thus — in and of themselves — do not carry the force of law, and the adjacent treaties then do NOT carry force as well until (or rather, IF) subsequently codified into law by our legislative branch.

  12. MaxDrei June 4, 2019 2:28 am

    Thanks Oscar for your reply at # 9. I agree that the UK approach has:

    “difficulties as regards to the determination of what actually constitutes patentable subject matter when it comes to computer programs/software”

    but I disagree when you suggest that the EPO approach is just as problematic. it is the EPO’s “problem and solution approach” to obviousness which is the key difference between the UK and the EPO approach to eligibility/patentability.

    My comment at # 3 and # 5 above were intended to help you (and other readers) better understand the EPO approach, to the extent of recognising that it provides the solution to the difficulties that emerge under the UK approach.

    Commentator “anon” will continue to complain, that absent a definition of “technical” the EPO approach is, to use his word “inane”. But the proof of the pudding is in the eating of it, at the EPO, over the last 40 years, in thousands of final decisions.

  13. Anon June 4, 2019 8:07 am

    MaxDrei,

    The insanity is in your portrayal – and not in the underlying system.

    Unlike you, I do not begrudge any Sovereign from the power to make choices as they see fit, and then running their system consistently under their choices.

    Such – though – does not result in the conclusions that you wish to draw. It is your drawing of conclusions that just do not follow that provides the inanity.