Macrossan case confines the 'business method' exclusion in Patent law

The recently decided Macrossan case [2006] EWHC 705 (Ch) before the High Court in England will be of interest to anyone who follows UK patent law.

The decision of Mr Justice Mann, handed down on 3rd April 2006, would appear to have significant implications for software patenting in the UK. The case concerned the patentability of an automated method of producing the documents necessary to incorporate a company. The system has been on the internet since May 2003 at www.ukcorporator.co.uk

A Patent Office Hearing Officer had rejected Mr Macrossan's patent application in March 2005, relying on all three of the commonly raised exclusions in the context of software patents, namely, the mental act exclusion, the computer program exclusion and the business method exclusion. Mr Macrossan sought to counter all three of these exclusions.

The Court ruled against Mr Macrossan on two of the three exclusions, however, it found in Mr Macrossan's favour on the 'business method' exclusion.

The Patent Office has, for years, been relying on the business method exclusion as a basis for denying all manner of patent applications, for example -

  • a method for facilitating online payment transactions between participants in a network based transaction facility (eBay case BL O/314/04),
  • an automated food ordering system for cafeterias (Fujitsu case Applic. No. 9912296.2),
  • a web-based on-line user interface for enabling a customer to custom configure a computer system (Dell USA's case),
  • an automated reminder and actioning system for use in a patent attorney's office (Venner case BL O/106/04), and
  • an automated system for machine translation of a foreign language communication (Wordlingo case BL O/110/04).

But the Court in Macrossan's case accepted Mr Macrossan's argument that the business method exclusion does not apply to 'partial methods' of doing business. Mr Macrossan argued that the business method exclusion was directed to entire methods of doing business, such as a method of running a particular franchise business. He drew a parallel with the telephone, submitting that a telephone (assuming for sake of the argument that it was a new invention) would hardly be excluded from patentability merely because it may be used in business. He argued that the telephone should be viewed as merely a 'tool' for use in business, rather than an entire business method. The Court accepted these arguments and ruled against the Patent Office on this point.

Even as recently as November 2005, a different approach was apparently applied by the same Court. The case concerned a lottery game playable via the internet. Players would select brands at random from a set of brands. The Court held that the system fell foul of the business method exclusion because it included an 'element' of reinforcing the message of the brand or brands selected by the player. (See the Shopalotto Case [2005] EWHC 2416 (Pat)) The approach in the Macrossan case would surely have rejected any such reliance on the business method exclusion - the brand reinforcement element was hardly an entire business method.

It will be interesting indeed to see how the Patent Office applies this new case in the future.