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Archived updates for Monday, August 01, 2005

Wagering System not Patentable 'Invention' in the UK

In In the matter of Patent Applications GB 0226884.3 and 0419317.3 [2005] EWHC 1589 (Pat)(July 21, 2005), the court considered what is an invention, with regard to the bold-faced portions of the following claim:

A wagering system having a population of wagerable event outcomes, each of
said outcomes having a minimum wagering amount, the system comprising a wagering processor, a plurality of client workstations connectable to the wagering
processor; and a database storing credit for each client; wherein in response to
a login by the client at a workstation the processor makes available for display on the workstation the credit available for the client and in accordance with the stored credit selects from the population for display on the workstation a list of wagerable event outcomes having minimum wagering amounts that do not exceed the credit for the client:

said wagering processor being operable to receive a client selection from a client workstation so as to wager on said wagerable event outcome; and

in response to the client selection, to reduce substantially immediately the stored credit for the client and make available for display on the workstation the client's updated credit and to select from the population an updated list of outcomes having minimum wagering amounts that do not exceed the updated credit.

A related claim was also considered which included a "processor being operable to synchronise unsynchronised data from the feeds, to compare the displayed pricing information and market data with pricing information and market data from the synchronized data of said data feeds in real time and to amend the information supplied to the workstations if data from multiple sources do not agree with each other after synchronization."

According to the court, the "clever idea" in these claims was the use of what was referred to in argument as "dynamic filtering", the implementation of this idea via master financial information files which store credit and are updated in real time (both upon wagering and maturing of a wager (claimed as the credit database, updated in real time) and the use of the credit information to select from the population of wagerable event outcomes. Thus at login the client is shown his available credit and only shown those wagers which the value of his credit selects from the totality of wagers – i.e. those wagers that the system determines that he can afford. Upon placing a wager, the value of his credit in the credit database is reduced substantially immediately and an updated (i.e. reduced) list of wagers which are within his revised credit is selected from the population of wagers and is transmitted for display instead. As the dynamic filtering is performed prior to transmission, only the data which is relevant to that particular client/credit combination is transmitted and caused to load into the transmission system.

After a detailed discussion of the difficulties in defining the term "invention," the court noted that the UK Patent Office does not use the same reasoning as the European Patent Office, even though they are working under what is essentially the same legislation:
Let me first outline the practice of the UK Patent Office. They look at the
applicant's claim, and ask themselves: what is his "technical contribution"? If
there is none – as in my tax-planning example – they reject the application.
They hold that is not an 'invention'. If there is some "technical contribution",
they still have to decide whether to reject it for being old, or obvious. It is
an 'invention', but it may be an old invention, or an obvious one.

Now let me outline the practice of the European Patent Office. They look at the
applicant's claim, and ask themselves: does it have any "technical features"? If
there are no "technical features" at all they reject the application, for not
being an 'invention'. But they consider it is an invention if there is any
"technical feature" at all. They take it very far. Even paper, or ink, can count
as a technical feature. I suppose a detective story, written on paper with
ink, would pass that part of their test. What they then go on to do is to ask
themselves, "Yes, but is it old, or obvious?" And in deciding if it is old or
obvious, they ignore anything that is not a "technical feature".

In short, the difference between the two approaches is that the EPO filters out
excluded subject-matter at the stage of considering obviousness – at the last
stage – while the UK Patent Office does so at the first stage (when considering
excluded subject-matter). Or to put it a little more precisely, what the UK
Patent Office does is to consider the exclusion under the description 'novelty',
but the EPO does so under the description 'inventive step'.
However, in the court's judgment, what was claimed was not a patentable "invention:"

In any market there may exist the problem that the transmission of prices or bids
is delayed. (In the Wall Street crash of 1929 one of the terrifying features was that the ticker-tape, which was the mode of transmitting data that was employed in those days, fell behind by two and a half hours.) In the case of the parent application, what is the advance in the art that is said to be new and non-obvious? It is that you get
corroboration from multiple sources and correct for any lack of synchronicity, if necessary spreading your prices to reflect the uncertainty, or even refusing to do business at all. I have not the slightest doubt that, supposing that to be new and non-obvious in the first place, it is so under the description 'business methods', and nothing else.

I appreciate that Claim 1 does not itself state that you spread your prices or, if necessary, refuse to do business at all. It just says that you "amend" the transmitted information if there is a lack of synchronicity. It does not say how. That does not cause me to classify what is said to be the new and non-obvious development of Claim 1 under the description 'technology', as opposed to 'a method of doing business'. I am entitled to interpret the claim in the light of the description in the rest of the patent application, and so was the Hearing Officer.

I am satisfied that neither of the two alleged inventions are patentable. And even if the tests that are currently used by our Patent Office had been applied the result would be the same. So also if the tests currently used by the European Patent Office had been applied.

The judge then offered the following additional remarks:

Despite the prohibition on granting patents for computer programs as such, it is
said that the EPO has granted more than 40,000 of them. It is said that not a
few of these pertain to business methods as well. From the point of view of the
applicants in our case, if there is any chance of getting such a patent it may
be said to be a rational business choice to try it. If not, their competitors
might. I have pointed out that patents that are wrongly granted can be very
expensive to challenge, and perhaps beyond the means or inclination of small and
medium enterprises. An accumulation of patents of that sort (sometimes known as
a "patent thicket") may be a serious barrier to entry.

The only safeguard against that wrong – and it is a wrong – is the vigilance of the
Patent Office. When I was a Patent Office examiner (though that was many years
ago) we knew that we sometimes granted patents that we shouldn't, but did it
anyway because we thought the Patents Appeal Tribunal would not support us. I
believe that when a Patent Office examiner upholds the law he or she ought to be
named and praised. And even if the Patents Court may disagree with the objection
on appeal, it is a matter of praise all the same if the objection was reasonable.

I understand that the Examiner who objected to these applications was Mr Roland Whaite. The Hearing Officer who, rightly in my judgment, upheld the objection was Mr H Jones.

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