Business Patents and methods -validity

HITACHI/Auction method (T258/03)

(EPO (Technical Bd App)) European Patent Office (Technical Board of Appeal)

In the Hitachi case H appealed a decision of the Examining Division refusing its patent application in relation to an Internet based system for remote Dutch auctions.

H’s system involved a method of auction. It consisted of a computer server apparatus and a computer program to carry out the method. The server automatically collected desired and maximum ids amongst client computers, checked on product quantity, set a price then lowered the price to the highest desired price. If there were two equal desired prices, the price was raised until only one maximum price was left.

It was held that H’s business method was not an invention, that the apparatus defined subject matter with a protection equivalent to that of the method claim, and in any case, no inventive step existed.

H argued that (1) the apparatus was an invention within the meaning of the European Patent Convention 1973Art.52(1) (2) the business method should not have been excluded from patentability under Art. 52(2) as it included technical features, and (3) the method, apparatus and computer programme all involved inventive steps.

The appeal was dismissed. The important factor in considering the concept of “invention ” within the meaning of Art. 52(1) was the presence of technical character which might be implied from the physical features of an entity or the nature of an activity, or which might be conferred to a non technical activity by the use of technical means. However, methods involving the use of technical means still had to be new and had to represent a non obvious solution to a technical problem in order to be patentable. Neither the method, the apparatus nor the computer program involved inventive steps. The method and apparatus contained standard data transmission and storage features which simply circumvented rather than solved the technical problem of delays between receiving bids and which were a mere automation of a non technical activity. The computer program was defined by the same steps as the method and was therefore not patentable under Art. 56 of the Convention.

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