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In 2012 Member States and the European Parliament agreed on the "patent package" - a legislative initiative consisting of two...

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In the UK, nearly all adverse decisions by the Intellectual Property Office (IPO) can be appealed to the Patents Court. In recent years, the number of these appeals has increased on account of the strict approach adopted by the IPO when refusing patent applications for excluded subject matter, in particular when the patent applications involve computer-implemented inventions. To date, the Patents Court has handled these appeals essentially as a re-hearing, rather than a review of the Decision appealed. However, a recent Decision by the Patents Court on such an appeal suggests that this approach may change, with the appeal concentrating on whether there was an error of principle by the hearing officer. If this occurs, then the likelihood of successfully appealing a Decision by the IPO will be reduced.

From the many appeals to the Patents Court, a varied body of case law has developed concerning what is and what is not excluded subject matter. The current approach for assessing whether an invention is excluded from patentability employs the Aerotel test (as discussed in the Spring 2007 edition of this newsletter), namely:

i) properly construe the claim;

ii) identify the actual (or alleged) contribution;

iii) ask whether the identified contribution falls solely within the excluded subject matter;

iv) check whether the actual or alleged contribution is actually technical in nature.

The difficulty with the Aerotel test is that the concept of the invention being "technical" is central, but the meaning of "technical" is unclear. As all computer-implemented inventions can be considered to be "technical" at one level, some higher level of technicality is required to lift the invention out of being excluded subject matter. To assess the level of technicality, the second step of the Aerotel step requires a factual examination of the contribution over the state of the art.

In his Decision on an appeal by the Really Virtual Company Limited against the refusal of UK patent application No. 0723276.2, Mr John Baldwin QC (sitting as a Deputy Judge of the Patents Court) raised (on his own initiative) whether this factual examination means that the purpose of the appeal should be to determine whether or not the IPO Hearing Officer had erred in principle in coming to a conclusion, in which case the Judge on appeal should not overturn the Decision simply because he does not agree with the conclusion reached by the Hearing Officer. In contrast, if what is being appealed is purely a question of law, then the Judge is entitled to review all the evidence and come to an independent conclusion.

While the Deputy Judge did not feel able to depart from the approach of previous appeals, there is a real risk that the practice on appeal will change in the future to concentrate on a review of the Decision by the Hearing Officer. We would not welcome such a change, because the feedback given by Judges can be very helpful in clarifying this complicated area of law and should not be restricted.

As a practical matter, this Decision reinforces the importance of vigorously prosecuting patent applications to achieve a positive result before the IPO at first instance.