Lenovo case provides guidance on patentability in the UK

Mark Marfé of Pinsent Masons, the law firm behind Out-Law, was commenting after the Patents Court in London, a division of the High Court, upheld an appeal by Hong Kong-based device manufacturer Lenovo against an earlier decision by an official within the UK's Intellectual Property Office (IPO) on a patent application it had filed.

The patent application relates to use of contactless payment devices such as credit cards and the issue of 'card clash'. In the claimed invention, the user presents multiple contactless payment devices – cards – to a reader. Each card relates to a separate payment account. The system automatically splits the payment between several payment accounts based on one or more pre-set user preferences.

In his initial decision in December 2019, an official on behalf of the comptroller general of patents at the IPO refused Lenovo’s patent application on the basis that the subject matter was excluded from patentability under UK patent law. Specifically, the official held that the patent application relates to a computer program and a business method – both are examples of types of innovation which are listed under section 1(2) of the Patents Act 1977 as being ineligible for patent protection.

In its appeal, Lenovo argued that the decision to reject its patent application was wrong and that the official had erred in his application of the law to its case. Those claims were upheld by the Patents Court.

Marfé said: "In his ruling, Mr Justice Birss rightly noted that an assessment of patentability is only a part of the overall assessment of a patent’s validity. While a patent may be obvious, and therefore invalid, when considered in light of earlier disclosed innovations, known as 'prior art', what is important for an assessment of patentability under section 1(2) of the Patents Act is that the invention has an effect of the right technical character to satisfy the law that it is patentable. The judge found that was the case here."

The judge reached his decision after considering leading case law on the application of section 1(2) of the Patents Act.

The so-called 'Aerotel' case set out a four-step test to be applied when assessing whether an innovation qualifies as an invention for which patent protection is ineligible. The test involves first properly construing the patent claim, then identifying the actual contribution the innovation makes, before assessing whether this contribution falls solely within subject matter which is excluded from patentability under the legislation. The fourth and final step is to check whether the actual or alleged contribution is actually technical in nature.

In the Lenovo case there was no dispute over the construction of the company's patent claims, but there was in relation to the innovation's actual contribution. In his initial decision, the IPO official had concluded that the idea of a card reader reading multiple cards at the same time was already known, and that the new part of Lenovo’s application lay in the subsequent step of allowing the payment to be made automatically across more than one account. Mr Justice Birss agreed with the official's approach. He said: "Invention can lie in a new combination of old features and so, while identifying an individual feature as disclosed in prior art is a relevant thing to do, it will always be necessary to consider it in the context of the invention as a whole before reaching a conclusion".

The judge further confirmed that it is not formally necessary to conduct a prior art search as part of the patentability analysis. It would not be wrong to do that, but the comptroller general of patents at the IPO, or officials acting on his behalf, "need not do so".

"Some cases may be such that no reference to prior art at all is needed to see that the subject matter is unpatentable and in that kind of case, the extra cost and trouble of a search would be wasted," Mr Justice Birss said. "Others, like this one, can be addressed based on prior art which the examiner was aware of without having to undertake a formal search."

The judge then confirmed that the third and fourth steps of the test outlined in the Aerotel case –considering whether the contribution falls solely within excluded categories, and then checking whether the contribution is technical in nature – should be considered together. This approach had been taken by the IPO official in the Lenovo case who had explained that consideration of those two steps together was "appropriate" since "whether the contribution is technical in nature will have a direct impact on whether it falls solely within excluded matter".

However, despite endorsing much of the approach taken in the assessment of the Lenovo patent application, Mr Justice Birss said the official had erred in applying other relevant case law to the facts of the Lenovo application.

In a 2009 case involving a company called AT&T Knowledge Ventures, the High Court set 'signposts' to help guide the assessment of the technical effect of an invention for which patent protection has been applied for. Mr Justice Birss said the IPO official in the Lenovo case had erred in finding that two of the signposts listed were not met by Lenovo's patent application.

The relevant signposts from the AT&T Knowledge Ventures case were whether the claimed technical effect has a technical effect on a process which is carried on outside the computer, and whether the perceived problem that the inventor is seeking to fix is overcome by the claimed invention as opposed to merely being circumvented.

Mr Justice Birss noted that the core question in this case was whether the Lenovo invention involves a different physical interaction with the world outside the computer, as compared to what had gone before. The judge’s decision hinged on whether the user not having to split up payments by clicking a series of buttons on a screen, as had been done before, was a 'technical effect'.

The IPO official had considered that the process of splitting payments across multiple accounts through the clicking of a single button was an invention that did not have a technical effect on a process which is carried on outside the computer. However, the judge said that official had misunderstood what the alleged technical effect of the invention was in this case.

Instead of the alleged technical effect involving implementing a button press, it involves getting rid of it, he said. This is done by automating the selection of multiple contactless payment identifiers. "Just because adding something is a minor step to take does not mean that taking it away is equally minor," the judge said.

Mr Justice Birss said that, in the Lenovo invention, multiple payments are "handled automatically at the point of sale because the user's preferences have already been acquired and stored elsewhere". He said "the automatic nature of the process is recognised" in the inventive contribution and that, "as a result of this automatic feature, the card clash problem experienced with contactless payment cards is solved without the user having to take any extra physical step at the point they use their contactless cards".

Marfé said: "With that assessment, the judge concluded that this distinguished Lenovo's invention from one which consists of a computer program or a method of doing business or a combination of the two."

Lenovo's patent application was therefore considered an invention of the type that is not ineligible for patent protection and will now be further considered by the IPO as whether it meets the other tests of patentability under UK patent law.