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Landmark ruling denies UK patent to document assembly

A landmark Court of Appeal ruling has refused a company the right to a patent for a piece of software. The ruling, at an unusually high judicial level, is a blow for companies which want the UK to follow America's lead and allow software to be patented.30 Oct 2006

Australian resident Neal Macrossan invented a system for filling in company formation forms online. He requested a patent for his system but was refused by the UK Patents Office.

The European Patent Convention (EPC) does not allow patents to be awarded for inventions which are nothing more than "schemes, rules and methods for performing mental acts, playing games or doing business, and programs for computers". That was brought into UK law by the Patents Act of 1977.

Macrossan appealed to the Patent Office and lost, then to the High Court, where he also lost. He has now also lost his appeal to the Court of Appeal where the case was heard by Lords Justice Chadwick, Jacob and Neuberger.

"We hold that Mr Macrossan's idea is excluded from patentability," wrote the judges in their decision. The judges found that the technology failed under the exclusions for "computer program[s] as such", as had the Patent Office and the High Court. "The exclusion applies," they wrote.

In their ruling the Court of Appeal judges disagreed with some of the conclusions reached by the High Court's Justice Mann in the earlier hearing of the case. Mann had ruled that the invention was not a method of doing business because it was not abstract enough and was therefore a "method of providing business services", and "that is not what the exclusion in the Act is aimed at, in my view".

"We do not agree," wrote the Court of Appeal judges. "Implicit in this reasoning are two things, first that there must be something abstract about a method before the exclusion can apply and second that the exclusion only applies where what is claimed involves the completion of a business transaction – the cash register must ring or at least a debt become due."

"As to the first point, we have already observed that there is no overarching principle that the exclusions are limited to abstract matters. There is no reason so to limit the business method exclusion."

"Nor do we see any requirement that the exclusion be limited to a completed transaction. Double entry bookkeeping was a good idea, but it was just a method of doing business, even though there was no completed transaction involved. So also the idea of having three trays: 'in, 'out' and 'too difficult'. They are all ways of conducting a business and no more."

The court, then, ruled that Macrossan's invention was both a business method and a computer program and therefore not patentable.

The decision will clear up uncertainty in the area, said the UK Patents Office. "This judgment is important because previous case law had left many users unclear as to the correct test for patentability," said a Patent Office statement. "The approach now laid down by the Court of Appeal should remove much of the confusion that had developed. It will be binding on both the High Court and The Patent Office."

The Patent Office said it would shortly issue a practice note outlining how its examiners will assess future patent applications.