“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  EWCA Civ 451 .
The 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  OJ EPO 14 ; confirmed and adopted into the English case-law both in Gale’s Application  RPC 305 and Merrill Lynch’s Application  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.
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  RPC 7 , 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  UKHL 18 –).
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  RPC 7 ). 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,  STC 382 ). The EPO Boards of Appeal endorsed that tendency when it comes to interpreting Article 53 EPC (Harvard/Onco-mouse (1990) T 0019/90  OJ EPO 376 –, [4.5]; Plant Genetic Systems/Glutamine Synthetase Inhibitors (1995) T 356/93  OJ EPO 545 , [18.5];  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  RPC 7 ).
The UK approach to the exclusions in Article 52 EPC is based on the Aerotol four-step test through which:
- i. what the patent application claims must be construed as the invention from a holistic perspective, meaning that its scope comprises a combination of non-technical and technical features;
- ii. what the actual technical contribution is must be identified, as well as whether the alleged inventor has indeed added to human knowledge/prior state of the art;
- iii. whether the technical contribution falls within the excluded patentable subject matters under Article 52 EPC must be analyzed;
- iv. whether the contribution is technical in nature (‘technical effect’) must be scrutinized (Aerotel Ltd v. Telco Holdings Ltd  RPC 7 , –, , –; subsequently confirmed in Symbian v. Comptroller-General of Patents  EWCA Civ 1066 ).
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)  EPOR 38 , –, –, ). It follows that the essence of these ‘substitute phrases’ (as described by Lewison LJ in the extract at the beginning in ) 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  RPC 7 ). 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  EWHC 343 (Pat); HTC Europe Co Ltd v. Apple Inc  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  EWCA Civ 1066 , ). 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.
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  RPC 7, ).
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)  EPOR 38, ). 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  EPOR 52, ; Hitachi/Auction Method, T258/03  EPOR 55, [3.7]-[3.8], [4.5]; Microsoft/Clipboard formats I, T424/03  EPOR 39, [5.3]).
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  1 Cowp 143  and Lord Bingham in Golden Straight Corporation v. Nippon YKK (The “Golden Victory”)  UKHL 12 . 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  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.