Requirement for Technical Effect
This article was included in the spring 2011 issue of Innovate - the patents newsletter.
Two recent decisions have illustrated the UK Intellectual Property Office's hard line on requiring a technical effect in software and business method related inventions.
Intuit Inc's application related to a patent application for monitoring the usage of a computer program, making recommendations for an updated version of the program based on the results of the monitoring and enabling the installation of the recommended version. The hearing officer agreed with the examiner in that "While the invention may result in a software upgrade which may then operate faster, more reliably, or require less memory, the computer remains unaltered." As the computer itself did not operate any better as a result of this invention, there was no relevant technical effect and accordingly the patent application was refused.
In eSpeed's application the patent application related to apparatus for carrying out electronic trading. In the fast-moving world of financial trading, by the time a trading command is sent over a network and received the bid price may have changed; this can lead to transactions being concluded at prices that are not agreed. The claimed invention provided a means for preventing such incorrect execution of bids by notifying a trader of the fact that a value of a bid or offer has changed and then providing the trader with an opportunity to submit, modify or cancel the trade command. In this way the trader is safeguarded against trading at an erroneous price.
The applicant sought to argue that the problem arose because of technical deficiencies (i.e. delay) in the network system, and accordingly any solution had the requisite technical effect. The hearing officer and the examiner disagreed. Given that the invention did not in any way change the network system, although there may be a business problem, there was no underlying technical problem which the invention solved; i.e. it did not solve or eradicate network delays in the system. Thus, the contribution provided by the patent was a non-technical business contribution; i.e. a better and more reliable business method. As such the invention is excluded because it relates to a method of doing business and a computer program as such, and did not provide a relevant technical effect.
It is clear from the eSpeed decision that the UKIPO was influenced by references in the patent application to the business method aspects. The application derived from a US priority application. In the US there is more leniency towards software and business method patents. Had the application been drafted from the outset with regard to British and European practice one can speculate that the application may have had an easier ride.