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October 27, 2006 | Glyn Wintle

Key UK Software Patent Ruling

The Court of Appeal has ruled on two cases involving software patents today. It rejected one and unfortunately granted the other. It was hoped that the ruling would confirm that software development which relates only to new business logic does not have to worry about patent threats. As more and more companies in the United States get tied up in business method patent litigation, this decision should be a worry for UK companies. The full ruling is here, for those of you that are really keen. If you want some more details or are a member of the press I recommend you check out the FFII's comments on the Court of Appeal Judgement in Macrossan and Aerotel.

These two cases are of vital interest to anyone concerned with the ongoing debate over the patentability of software and business methods in the UK and Europe. Both of the cases at issue concern patents in the area of software and business methods and so the appeal presented a historic opportunity for the UK courts to reaffirm the clear exclusion of these areas from the scope of patentability as well as to send an important signal to legislators and patent officials at the European level. It has not done so.

Aerotel’s patent that was granted today claims the making of telephone calls using prepayments. The essential idea is to have a telephone exchange which keeps a record of clients’ credit. Clients can then dial into the exchange, and have their calls completed for as long as they have credit to pay for them.

Why are these cases so important? High Court decisions do not establish binding precedents on other High Court cases, but decisions by the Court of Appeal do bind lower courts. Today's decision is the first time the Court of Appeal have ruled on software and business method patentability since 1997, and gives a definitive statement of the UK law in this area.

Both patents do not contain anything novel except new administrative or business logic, with solely administrative and business consequences. At stake was not only the Court of Appeal's decision, but how it decides it. We will be looking closely at these rulings and posting again to provide you more information.

Macrossan’s patent application was rejected by the UK Patent Office. In the High Court, Macrossan appealed against this rejection, but the appeal was dismissed by Judge Mann, finding that although not specifically a business method, it was a method of performing a mental act by a computer. It has been described by one software contractor as an absolutely conventional “fill-in-the-blanks website that picks the right docs based on guided answers, then fills them in appropriately and disgorges them wherever required”. The only new idea was to apply this to the documents needed to incorporate a company. Quite rightly this patent was rejected today on appeal.

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Comments (1)

  1. Ben:
    Oct 30, 2006 at 03:43 PM

    I thought that the Aerotel patent claimed a novel network system (remember this is a very old patent which has almost expired) and that is why it was allowed? (ie it makes a "technical contribution"- a novel network system, regardless of excluded content (the novelty/inventiveness of which is immaterial) in addition to this). The UK patent office seems never have rejected a new network system excluded, so why should it do so now?



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