Patentability of Software in the EPO

The analysis in the European Patent Office of claims to methods of doing business (and other subject matter excluded from protection by Article 52(2) EPC) has tended to elevate form over substance, leading to different analyses for method and apparatus claims. Decision T0258/03 HITACHI applies the doctrine from Decision T931/95 PENSION BENEFIT SYSTEMS PARTNERSHIP but extends it equally to methods and apparatus claims.

The invention in question was to an automated Dutch auction method and system. In a Dutch auction, the price for a lot is shown on a type of one-handed clock. It starts high and the hand of the clock falls steadily until a bidder stops it. The first bidder wins the lot. It is a very common method for selling flowers and other perishable goods, because it is quick and generally ensures the goods are not left unsold. A problem with an automated or distributed system lies in time delays between the time a bidder places his or her bid and the time the bid is registered in the system. Synchronisation between computers of different bidders is problematic, but it is critical that the first bid is registered first.

So far, the problem presented sounds like a technical problem. Indeed the Board of Appeal took this view. However the solution presented was not considered a technical solution. The solution was not an on-line live auction, but a means by which a “stop the clock” price could be specified in advance, together with a higher “competition state” price for situations where two bidders simultaneously bid the same price. In effect, once the clock was stopped, the price could be bid up again by those parties bidding at the stop price. This was deemed not to be a technical solution, but a change to the auction rules – i.e. a business solution.

Both method and apparatus claims satisfied the patentability criteria of EPC Articles 52(2) and (3), but both were rejected under the inventiveness requirement of Article 56 because “only those features which contribute to a technical character” could be taken into account when assessing inventive step.