England and Wales High Court (Patents Court) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION PATENTS COURT

		CaseNo:CH/2QQ6/APP/19 Royal Courts of Justice Strand, London. WC2A 2LL
		22 May 2007

Mr Justice Kitchin:

Introduction

1. This is an appeal from the decision of the Comptroller, acting through the Deputy Director, Mr Kennell, whereby he refused patent application no. 0218848.0 of the appellant ("Raytheon"). He did so on the ground it offended against s.l(2)(c) of the Patents Act 1977 because the invention consists of a program for a computer.
2. Raytheon submits that the Comptroller erred in reaching this decision. The Comptroller submits that the decision was correct but that the appeal can also be dismissed on the grounds that application offends against s.l(2)(c) because the invention consists of a scheme, rule or method for doing business and against s.l(2)(d) because the invention consists of the presentation of information. Raytheon says that these further grounds of objection are not open to the Comptroller on appeal because they were not maintained at the hearing before him. It also says they are, in any event, misconceived.
3. Two issues therefore arise on this appeal: first, whether it is open to the Comptroller to take objections which he did not maintain at the hearing; second, whether the claimed invention is excluded by the Act.
4. Section 1(2) implements Art 52(2) and 52(3) of the EPC and provides, so far as relevant:

"It is hereby declared that the following (among other things) are not inventions for the purposes of this Act, that is to say, anything which consists of-

…..

(c) a scheme, rule or method for performing a mental act, playing a game or doing business, or a program for a computer;

(d) the presentation of information;

but the foregoing provision shall prevent anything from being treated as an invention for the purposes of the Act only to the extent that a patent or an application for a patent relates to that thing as such."

5. The invention relates to a method of inventory management. The application explains that organisations are often faced with the need to relocate or reconfigure a facility and that where the facility includes an extensive array of fixtures, equipment, racks and systems the exercise of relocation or reconfiguration can involve considerable time, effort and expense. The prior art methods of inventory management mostly used manual inventory tracking. But even where the inventory information was stored in a database, previous methods relied upon a text only description of the items it contained. These earlier methods made it difficult accurately to track the movement of items to be relocated or reconfigured and often resulted in errors.
6. The invention addresses these deficiencies by providing a first database of information defining the layout of the facility and a second database of information defining all of the items themselves. Importantly, the databases contain both textual and pictorial information about the facility and all the items it contains which can be displayed on, for example, a web browser. The system provides an interactive graphical map of the facility and its layout from which the user can select a particular equipment rack and view a more detailed representation of it. The detailed representation is synthesised from individual digital images of the components of the rack which are stored in the databases. Consequently it is not necessary to store an image of each rack and all the items it contains. Instead, it is only necessary to store one image of each of the possible "building blocks". This means that any combination of items of equipment on a rack can be displayed without requiring a new image of the rack to be loaded onto the databases. This reduces the load on the processor and memory usage.
7. Two sets of method and apparatus claims were in issue before the hearing officer, claims 1 and 25.1 need only set out claim 1 as broken down into integers by Mr Birss, who appeared on behalf of the Comptroller:

Claim 1:

i) A method for generating and displaying inventory data for a facility, comprising:

ii) creating a database of information defining the facility and layout of any fixtures, equipment, equipment racks, and systems in the facility, the facility and layout information including above and under floor connection capabilities;

iii) creating a database of information defining any of the fixtures, equipment, equipment racks, and systems in the facility;

iv) receiving individual digital images of the facility, fixtures, equipment racks and systems for storage in the created databases;

v) assigning identification information to the defined fixtures, equipment, equipment racks and systems to create an identification database;

vi) storing the created databases in one or more memory locations of a computer network;

vii) providing an overall and interactive graphical map, of the facility and layout of the fixtures, equipment, equipment racks, and systems in the facility utilising the information stored in the created databases; and

viii) in response to a user selection of one of the equipment racks shown in the graphical map, providing a synthesised visual representation of the selected equipment rack and associated equipment from the individual digital images of the equipment stored in the created database.

8. Claim 2 is to a method in essentially the same form save that the information defining the equipment includes the height and width of the equipment; the digital images must include digital photographs of the equipment and the display includes edited versions of the digital photographs providing an accurate representation of the pieces of equipment in height and width relative to each other.
9. It can be seen that claim 1 has at its heart the creation of a synthesised representation of the selected equipment whereas claim 2 requires the display of edited versions of the stored digital photographs.
10. On this appeal Mr Fernando, who appeared on behalf of Raytheon, focused on claim 1. He submitted that there are three aspects to the contribution made by the invention. First, it provides a method of stock control in which textual descriptions are replaced by visual representations. This is an advantage because items can be identified more easily by visual appearance than textual description so reducing labour costs and the risk of errors. Second, the representations are synthesised in real time from individual images of the components of the rack which are stored in digital form in the database, so reducing the usage of memory and the load on the processor. Third, the system is navigable by the user who starts with a high level interactive graphical representation and can "drill down" to the particular rack or component of interest by, for example, clicking a particular location on the screen.
11. I consider this analysis of the contribution made by the invention to be a fair one subject to the qualifications that the claim is not limited to synthesis in real time and that "drilling down" is defined by integer viii) and requires no more than the provision of a representation of a rack and the equipment it carries when that rack is selected by the user.

The decision of the Deputy Director

12. The case came on for hearing before the decision of the Court of Appeal in Aerotel Ltd v Telco Holdings Ltd; Macrossan's Patent Application [2006] EWCA Civ 1371; [2007] RPC 7. The hearing officer therefore approached the issues before him in accordance with the principles explained by the Court of Appeal in Fujitsu Ltd's Application [1997] RPC 608, the Board of Appeal of the European Patent Office in case T 208/84 VICOM [1987] 2 EPOR 74 and the High Court in Halliburton Energy Services v Smith International [2005] EWHC 1623 and CFPH's Application [2005] EWHC 1589.
13. At the outset he directed himself that what was important was the substance of the invention rather than the precise form in which it was claimed, and whether this substance represented a patentable advance. So he said at paragraph [27]:

"I think the more fundamental concern which I must address is whether there is a patentable advance in the synthesising and editing features because of the reduced processing burden and increased flexibility arising front the ability to synthesise and display a particular item with an accurate representation of its width and height relative to other items. I do not for one moment doubt that this is a practical tool which will considerably ease the lot of those faced with the task of configuring industrial and business facilities, but that ultimately is not decisive of the matter."

14. He explained at paragraph [29] that the invention was concerned with the provision of a computerised system and the claims set out the rules and procedures necessary to get the computer to operate in the desired manner:

"It is apparent from the specification of the patent application that the invention is concerned with replacing entirely the manual element in designing facilities from inventories of equipment by a computerised system. I accept that the claims are not drafted in terms of a program as such, but they set forth the rules and procedures which will be necessary to get the computer to operate in the desired manner and can therefore be regarded as relating to a computer program as explained in the Oracle decision."

15. In paragraph [30] he acknowledged the invention provided an advance in reducing the load on the processor but considered this was simply the result of the design of the program:

"I have some sympathy with Mr Lawrence in that there is undoubtedly an advance in that the load on the processor is reduced by enabling only those pieces of equipment which are selected to be synthesised in detail. However, it seems to me that this advance arises simply because a program has been devised which tells the processor to do less work. I think this is somewhat different from the situation in the EPO Board's decision in VICOM, another case relied on by Mr Lawrence. As pointed out by Aldous LJ in Fujitsu, the technical advance in VICOM was not altogether easy to ascertain, but fundamentally it appeared that there was an enhancement of the quality of the image produced by the manipulation of data according to the mathematical technique of the invention."

16. In paragraph [31] he developed the analogy with Fujitsu:

"I think that the reasoning of Aldous LJ in Fujitsu, although he was applying the "technical contribution" test which then held sway, still carries force. In Fujitsu the invention related to a method and apparatus for combining data relating to two crystal structures in order to model a new structure. Finding that the invention was excluded as relating to a computer program, Aldous LJ stated in the paragraph bridging pages 618 -619 of the RPC.

"...In the present case the combined structure is the result of the directions given by the operator and use of the program. The computer is conventional as is the display unit. The two displays of crystal structures are produced by the operator. The operator then provides the appropriate way of superposition and the program does the rest. The resulting display is the combined structure shown pictorially in form that would in the past have been produced as a model...."

17. He then addressed the other objections briefly at paragraph [33]:

"As I have explained above, the examiner did not at the hearing press objections previously raised that the invention also related to a method for doing business and to the presentation of information. Although I make no decision on these grounds, I would add for completeness that I am satisfied on the basis of Mr Lawrence's arguments at the hearing that the invention is not solely about the presentation of information. I take no view whether the invention relates to a "method for" doing business as required by section 1(2)."

18. He concluded the invention was not patentable because it related to a computer program as such.

New objections

19. It is apparent from paragraph [33] of the decision that the examiner did not press the objections that the invention related to a method of doing business or the presentation of information. The transcript reveals that the hearing officer also made it clear that the only objections which stood at that time were those relating to a mental act and a computer program. Of those the former is not pursued. In these circumstances Mr Fernando submitted it is simply not open to the Comptroller to resurrect the business method and presentation of information objections on appeal.
20. In support of this submission Mr Fernando referred me to the unreported decision of the Court of Appeal in Jones v MBNA International Bank given on 30 June 2000. The case concerned a claim for wrongful termination of Mr Jones's employment contract. On appeal Mr Jones sought to take two points which had not been argued below and represented a departure from his pleaded case. The Court did not permit the new points to be taken. Peter Gibson LJ said:

"It is not in dispute that to withdraw a concession or take a point not argued in the lower court requires the leave of this court. In general the court expects each party to advance his whole case at the trial. In the interests of fairness to the other party this court should be slow to allow new points, which were available to be taken at the trial but were not taken, to be advanced for the first time in this court. That consideration is the weightier if further evidence might have been adduced at the trial, had the point been taken then, or if the decision on the point requires an evaluation of all the evidence and could be affected by the impression which the trial judge receives from seeing and hearing the witnesses. Indeed it is hard to see how, if those circumstances obtained, this court, having regard to the overriding objective of dealing with cases justly, could allow that new point to be taken."

21. May LJ put it this way:

"Civil trials are conducted on the basis that the court decides the factual and legal issues which the parties bring before the court. Normally each party should bring before the court the whole relevant case that he wishes to advance. He may choose to confine his claim or defence to some only of the theoretical ways in which the case might be put. If he does so, the court will decide the issues which are raised and normally will not decide issues which are not raised. Normally a party cannot raise in subsequent proceedings claims or issues which could and should have been raised in the first proceedings. Equally, a party cannot, in my judgment, normally seek to appeal a trial judge's decision on the basis that a claim, which could have been brought before the trial judge, but was not, would have succeeded if it had been so brought. The justice of this as a general principle is, in my view, obvious. It is not merely a matter of efficiency, expediency and cost, but of substantial justice. Parties to litigation are entitled to know where they stand. The parties are entitled, and the court requires, to know what the issues are. Upon this depends a variety of decisions, including, by the parties, what evidence to call, how much effort and money it is appropriate to invest in the case, and generally how to conduct the case; and, by the court, what case management and administrative decisions and directions to make and give, and the substantive decisions in the case itself. Litigation should be resolved once and for all, and it is not, generally speaking, just if a party who successfully contested a case advanced on one basis should be expected to face on appeal, not a challenge to the original decision, but a new case advanced on a different basis. There may be exceptional cases in which the court would not apply the general principle which I have expressed. But in my view this is not such a case."

22. In reliance upon these statements of principle Mr Fernando submitted that the Comptroller could and should have raised all his grounds of objection at the first hearing. Raytheon was entitled to know where it stood. In the interests of fairness I should not allow the new points to be raised on appeal
23. In considering this submission it is important to note at the outset that the hearing before the Comptroller is of a rather special nature. It is not an inter partes hearing but takes place as part of the pre-grant procedure. If the examiner reports to the Comptroller that any of the requirements of the Act are not met then the Comptroller must give the applicant an opportunity to make observations pursuant to s.18(3) of the Act. If the applicant fails to satisfy the Comptroller that the requirements have been met, or to amend the application so as to meet them, the comptroller may and, in practice will, refuse the application. But before doing so he must give the applicant an opportunity to be heard pursuant to s.101 of the Act. At that hearing the examiner appears, not as a party but to assist the hearing officer acting for Comptroller. Consequently the applicant is the only party appearing before the Comptroller.
24. On an appeal the Comptroller is generally represented by counsel. As Jacob LJ explained in Aerotel at [4], the Comptroller is essentially seeking the guidance of the court rather than defending the decision of the hearing officer. His job is to reject patents which should not be granted and to grant patents which should. For this reason counsel acting for the Comptroller seeks to present matters in an objective and non partisan manner.
25. The court clearly has a discretion whether to allow new grounds of objection to be taken on an appeal of this kind. I also accept that it is important in the interests of fairness and justice that the Comptroller takes all the appropriate objections at the hearing before him. This will ensure that the proceedings are dealt with in the most cost effective and expeditious manner. Moreover, an applicant is entitled to know where he stands. He has a reasonable expectation that new objections will not be raised on appeal and this is particularly so in the case of objections which the hearing officer has expressly considered but chosen not to maintain.
26. On the other hand it seems to me that the following considerations point in favour of allowing the new objections to be taken, at least in this case. First, if it appears to the Comptroller that he has failed to take a proper objection then I believe he has an obligation to seek to raise it on appeal consistent with his statutory duty to refuse applications which do not comply with the requirements of the Act. Similarly, the court must take into account the public interest in not allowing a defective application to proceed to grant.
27. Second, the further objections do not depend upon evidence. Raytheon cannot say that further evidence might have been adduced had the objections been maintained or that a decision upon them depends upon an evaluation of evidence already given or an impression received from seeing and hearing the witnesses.
28. Third, the application was refused. Consequently Raytheon cannot and does not suggest that it has acted to its detriment by relying upon a favourable decision of the hearing officer.
29. Fourth, Mr Birss identified the further objections in his skeleton argument served on the 19 June 2006. This point is of some significance. At that time this appeal was due to be heard on or after 20 June 2006. That would have given Raytheon very little time to consider and prepare a response and it might have suffered considerable prejudice as a result. In the event, however, it was agreed that this appeal should not be heard until after the decision of the Court of Appeal in Aerotel and so both sides have had ample time to consider the further issues and to prepare supplementary skeleton arguments. I would observe that if the Comptroller is contemplating taking new objections or arguments on appeal it is clearly very important that they are identified at the earliest possible opportunity.
30. Fifth, in many cases of this kind I anticipate that any prejudice can largely be compensated for by an award of costs. I address this issue at the end of this judgment.
31. In the light of all these considerations I have reached the conclusion that I should allow the Comptroller to take the further objections on appeal. I believe the statutory obligation on the Comptroller, the public interest in ensuring that defective applications do not proceed to grant, the nature of the proceedings, the nature of the new objections and the fact that Raytheon has now had ample notice of them do constitute special circumstances which justify allowing them to be taken at this stage.

The objections

32. In Aerotel the Court of Appeal explained that the correct approach has four steps: i) properly construe the claim;

ii) identify the actual contribution;

iii) ask whether it falls solely within excluded subject matter;

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

33. In the present case the claims present no particular difficulties of construction and I have identified the contribution in paragraphs [10] and [11] of this judgment. The crucial step is iii), whether that contribution falls solely within excluded subject matter.
34. In considering step iii) I would make the following preliminary observations. First, a convenient way of approaching the step is to ask whether there is any aspect of the contribution which does not fall within any of the exclusions. If there is then the invention does not relate to any excluded subject matter as such and is potentially patentable. Second, it is possible that the technical contribution does not fall wholly within any one of the exclusions but does fall wholly within two or more. Mr Birss submitted and Mr Fernando accepted that the invention would nevertheless be excluded. I agree. In such a case the contribution would still fall wholly within excluded subject matter. It would not be an invention within the meaning of Art. 52 of the EPC or s.l of the Act.
35. I turn then to consider whether the invention consists of a program for a computer as such. Mr Fernando submitted it does not because Raytheon has provided a new method and apparatus for managing and configuring facility layouts. All aspects of the contribution represent differences between what existed before and what is claimed. These are differences of substance and are not simply the result of computerisation. Moreover they have brought a technical advance, as the hearing officer himself recognised in paragraph [30] of his decision.
36. I accept these submissions, to a point. It seems to me that the first aspect of the contribution is the provision of a method of managing inventories and stock control which involves the replacement of textual descriptions by visual representations. This method has a character which exists quite independently of whether it is implemented on a computer. Further, I can well imagine such a method might be easier to use, so reducing labour costs and the risk of errors. So this is not a case where Raytheon has simply sought to protect the implementation on a computer of what had been done before. Further, the objection does not apply just because the only practical way to implement the invention is to use a computer. For these reasons I do not believe that this aspect of the invention can be said to be a computer program as such and, in the end, I think Mr Birss was constrained to accept this was the case. The hearing officer did not address this part of the contribution in his decision and in my judgment he fell into error in failing to do so.
37. However, I believe the second and third aspects of the contribution are different in nature. The second, and to my mind more important, aspect is the synthesis of representations of the rack from individual images of the components of the rack which are stored in digital form in the databases, so reducing the burden on the processor. Is this a computer program as such? It obviously must be carried out using a computer but, as I have explained, this does not determine the issue. Nor, as I have said, is it a case where Raytheon has simply sought to protect the implementation on a computer of what had been done before. Nevertheless, it seems to me that this aspect of the contribution is no more than a reflection of how the programmer has chosen to create the desired representation. Just as in Fujitsu the programmer had to devise a program to create a pictorial display which reproduced the effect of a model, so here the programmer had to devise a program to produce a visual representation of the rack and all it contains. The fact he has chosen to do it by synthesising the representation from a number of smaller images is simply a matter of program design. The result is not a new combination of hardware as in Aerotel. Nor is it an improved computer or an improved display as in Vicom. The result is a computer of a known type operating according to a new program, albeit one which reduces the load on the processor and makes an economical use of the computer memory. I agree with the Hearing Officer that this aspect of the contribution relates to a computer program as such.
38. I can deal with the third and final aspect of the contribution quite shortly. In my judgment it falls into the same category as the second. The display of the image in response to the user clicking on an appropriate part of the screen is once again an element of the program design.
39. The final step in relation to these aspects is to ask whether there is anything technical about the contribution they have made. In my judgment the answer is that there is nothing beyond the fact that they are aspects of a computer program.
40. I must now consider whether the first aspect of the contribution falls within one of the other exclusions and, in particular, whether it is a method for doing business or the presentation of information as such. I will take them in turn. As the Court of Appeal made clear in Macrossan, it is not necessary for there to be something abstract about the method before the business method exclusion can apply. Nor is the exclusion limited to completed transactions. So is the idea of presenting inventory information in pictorial form a method of doing business? I think it is. It is a convenient way of displaying inventory information needed in the conduct of the business, just as it might be convenient on occasion to present it in numerical or text only form. For the same reason it seems to me to be no more than the presentation of information. As for the fourth question, I do not believe there is anything technical about this aspect of the contribution.
41. For all these reasons I arrive at the same conclusion as the hearing officer, but by a slightly different route. The appeal must be dismissed.
42. As to costs, these would normally follow the event. But in the present case I must consider the consequence of the Comptroller taking the further grounds of objection on appeal. I think there may well be cases where the taking of late points will justify a special costs order. But in my judgment this is not one of them. Raytheon has known of the further grounds of objection for many months and has nevertheless chosen to pursue the appeal. It has suffered no material prejudice as a result. The Comptroller is entitled to his costs of the appeal.