Recent Enlarged Board of Appeal referral, G1/23, seeks to obtain clarity on when a product, or published technical information relating to such a product, can be considered to be state of the art, depending on the degree to which the composition and internal structure of the product may be analysed and reproduced. However, one potential consequence of a Decision on the referral could be to introduce an “on-sale bar” type exclusion from patentability, as applied by the United States Patent and Trademark Office (USPTO). This could, for example, apply to patent applications directed to commercial products historically covered by trade secrets, where reverse engineering the exact products would be expected to be extremely difficult.
Background of the case
The case giving rise to the referral to the Enlarged Board of Appeal – T483/19 – was an appeal against a Decision of the Opposition Division rejecting an opposition filed against European Patent No. 2 626 911. The patent was directed to a material suitable as an encapsulating material for a solar cell, the material comprising an ethylene/alpha-olefin copolymer and defined by a number of parameters, including melt flow rate, density and shore hardness.
In this case, novelty of the claimed material was not at issue but rather it was the availability to the public of a commercial product – ENGAGE® 8400 – named in an example of a prior art document, which was considered to be of critical importance in determining the closest prior art for the purposes of assessing inventive step. For context, ENGAGE® 8400 was commercially available and prior art data sheets show the product to have all of the properties of Claim 1, except for aluminium content. What wasn’tin the public domain was how to make ENGAGE® 8400.
The Patentee argued that, in order for the commercial product to be considered state of the art, the skilled person must be able to produce a polymer that is exactly (and not just similar to) ENGAGE® 8400 and do so without undue burden. This, the Patentee argued, was in line with established jurisprudence following the Enlarged Board of Appeal Decision in G1/92.
According to the headnote for Decision G1/92, the “chemical composition of a product is state of the art when the product as such is available to the public and can be analysed and reproduced by the skilled person, irrespective of whether or not particular reasons can be identified for analysing the composition” and the “same principle applies mutatis mutandis to any other product”.
In the reasons for the Decision, the Enlarged Board in G1/92 stated that an: “essential purpose of any technical teaching is to enable the person skilled in the art to manufacture or use a given product by applying such teaching. Where such teaching results from a product put on the market, the person skilled in the art will have to rely on his general technical knowledge to gather all information enabling him to prepare the said product. Where it is possible for the skilled person to discover the composition or the internal structure of the product and to reproduce it without undue burden, then both the product and its composition or internal structure become state of the art“.[Emphasis added] – paragraph 1.4 of the Reasons.
The Opponent in T483/19 sought to cast doubt on the reproducibility criterion in the reasons of G1/92, pointing to an alleged inconsistency between the reasons and the headnote to the Decision. The Opponent also pointed to other Decisions of the Enlarged Board (including G2/88) which might be seen to suggest that the intention was for availability to the public (so as to be considered state of the art) to be determined by accessibility of the public to the prior art product, rather than depending on whether the accessible product could be reproduced without undue burden.
On the other hand, the Patentee identified Decisions applying G1/92 and establishing three criteria for a product to be considered available to the public so as to be state of the art: 1) a member of the public is able to access the product; 2) a skilled person must be able to analyse the composition or internal structure (i.e. must be able to access the information that is inherent to the product); and 3) a skilled person must be able to reproduce the product based on common knowledge and without undue burden, as only then, it was argued, does it represent a complete technical teaching.
The submissions of both parties established an apparent divergence in the application of G1/92 which was considered justification for the referral to the Enlarged Board of Appeal for guidance.
G1/23 – The referral
The Technical Board in T483/19 referred the following questions to the Enlarged Board of Appeal:
1. Is a product put on the market before the date of filing of a European patent application to be excluded from the state of the art within the meaning of Article 54(2) EPC for the sole reason that its composition or internal structure could not be analysed and reproduced without undue burden by the skilled person before that date?
2. If the answer to question 1 is no, is technical information about said product which was made available to the public before the filing date (e.g. by publication of technical brochure, non-patent or patent literature) state of the art within the meaning of Article 54(2) EPC, irrespective of whether the composition or internal structure of the product could be analysed and reproduced without undue burden by the skilled person before that date?
3. If the answer to question 1 is yes or the answer to question 2 is no, which criteria are to be applied in order to determine whether or not the composition or internal structure of the product could be analysed and reproduced without undue burden within the meaning of opinion G 1/92? In particular, is it required that the composition and internal structure of the product be fully analysable and identically reproducible?
Thus, the referral seeks to establish the extent to which the reproducibility criterion is critical for a product to be considered state of the art and whether published technical information relating to the product can be considered state of the art, regardless of whether the composition or internal structure of the product can be analysed and reproduced without undue burden.
Clearly, the referral in G1/23 is focused on commercial products having compositions and internal structures that are not readily reverse engineered. Nevertheless, the potential reach of a Decision on the referral is significant and not only limited to polymer technologies, nor indeed only chemical inventions.
USPTO on-sale bar
Many readers will be familiar with the USPTO’s “on-sale bar” provision – a statutory bar found in Section 102 of the United States Patent Act – which excludes from patentability products or processes which have been on-sale before the priority date of the US patent application. Following the enactment of the America Invents Act (AIA), an important distinction has arisen in that disclosures of the invention in a public manner (e.g. publication in a journal) by the inventors is permitted up to 12 months before the filing of a US patent application, but not when the invention has been made available in the form of a commercial sale.
The on-sale bar in the US even extends to confidential sales, as confirmed by the U.S. Supreme Court in Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA Inc. In that Decision, it was concluded that the AIA did not narrow the scope of the on-sale bar in patent cases, and that the term “on sale” had a well-settled judicial interpretation that included confidential sales, prior to the enactment of the AIA. More recently, in an appeal to the Federal Circuit – In re Certain High-Potency Sweeteners (Inv. No. 337-TA-1264) – it has also been held that a confidential process could give rise to an on-sale bar.
Potential consequences of G1/23
One might question whether it is legitimate for an innovator company who has sold a product covered by a trade secret – where the composition and internal structure of the product are not specifically disclosed and cannot be identically reverse engineered – to later apply for patent protection for the same product. A clear benefit to the public of said company pursuing patent protection is the full knowledge of the composition and internal structure of the product and an understanding of how the product is reproduced, which information would be expected to be contained in a (sufficiently enabled) patent application. In general, there is a tranche of European Patent Office (EPO) case law following G1/92 which would appear to give the green light to such a practice. However, there is the potential for the Decision in the new G1/23 referral to disrupt this notion.
Although in the referring case, T483/19, it is only inventive step which is at issue, it seems clear that the referral in G1/23 is not limited to that particular context and a Decision could equally be relevant to the consideration of novelty. This is of course particularly the case if it is decided that the reproducibility criterion is not an essential requirement in order for the commercial product to be considered state of the art (question 1 of the referral), even if its composition and internal structure is not state of the art.
If it is decided that technical information about a commercial product can be state of the art, even when the product itself may not be analysed or reproduced, then this potentially opens the door for publicly available disclosures of such information (which pre-date the patent filing) to be taken into account from either a novelty or inventive step perspective. This is of particular relevance when considering the closest prior art and technical effects underpinning a claimed invention which form part of the EPO’s problem-solution assessment of inventive step (as we have seen in the referring case, T483/19). It is also likely to be of greater significance when claims are defined by reference to performance parameters, as opposed to purely compositional and structural features.
In these scenarios, the result could be a shift closer to something resembling an on-sale bar, despite the fact that the commercial product could not be analysed and reproduced prior to the filing of the patent application.
Another interesting element to the referral is the notion that there could be a distinction over when a product may be considered available to the public based on the degree to which its composition and internal structure may be analysed and reproduced. Should it be necessary for its composition and internal structure to be fully analysable and identically reproduced without undue burden (question 3 of the referral) in order for the commercial product to be considered state of the art? If not, where should the line be drawn?
What if, for instance, the commercial product may be analysed and reproduced to a degree that yields a closely related (but not identical) product which shares the same or very similar performance characteristics reported in technical information for the commercial product? Would that then mean that the commercial product itself forms part of the state of the art? If that was the case, then there would again be a shift more towards something resembling an on-sale bar than currently exists at the EPO.
With increasing advances in analytical chemistry (particularly with the potential contributions of AI in the future) understanding what might constitute an “undue burden” for the skilled person to analyse and reproduce the product is clearly a concept that should evolve with the advances in the technology at the disposal of the skilled person. Thus, it also seems possible that what might constitute an undue burden now, may not be considered so in the future.
Impact on IP / commercialisation strategy
If as a consequence of the Decision in G1/23 there is the perception of at least some movement toward an on-sale bar type exclusion before the EPO, then there may be incentive for applicants to consider filing patent applications earlier, or at least before commercialising the products of their innovations. Alternatively, it may prompt a more considered approach as far as product marketing is concerned, and particularly in terms of the content of technical brochures etc., for those innovators who might still wish to seek patent protection after an initial commercial sale of a product covered by a trade secret.
If there is the potential for technical information to be considered state of the art, even where the commercial product to which it relates is not (fully) analysable or (identically) reproducible without undue burden, it may prompt applicants to consider how claims to such products are defined in later filed patent applications. For instance, there may be a preference to avoid defining such products by reference to parameters, if those same parameters are disclosed in technical brochures associated with the commercial product. This may prompt applicants to consider defining products by features of their chemical composition instead, where possible, or possibly even by features of a process used to prepare them.
Alternatively, it may encourage innovators to take additional steps to preserve their trade secrets in preference to pursuing patent protection, albeit at the risk that third parties could independently develop the same technology at some point in the future.
Watch this space…
A Decision in G1/23 brings with it the possibility of somewhat of a sea change in the way the EPO assesses disclosures of products having compositions and internal structures of varying degrees of analysability and reproducibility. Depending on where the line is drawn in considering whether those products, or published technical information relating to those products, may be considered state of the art, it seems that there is the real possibility for the EPO to inch closer to an on-sale bar type exclusion. This could have an impact on the IP and commercialisation strategies of innovators in numerous technology fields.
Commentary by Partner Nicholas Fox has been featured in Law360 and World IP Review giving an insight into the implications of the Court of Appeal’s ruling that a member of the public can have access to the evidence and pleadings in the now settled Ocado v Autostore dispute.
Read more on the subject of the ruling by Partners Nicholas Fox and Alexander Robinson below.
The Court of Appeal of the Unified Patent Court (UPC) has now ruled that a member of the public can have access to the evidence and pleadings in the now settled Ocado v Autostore dispute. However, obiter comments in the Court’s decision mean there are still outstanding questions about the Court’s commitment to openness and transparency.
Background to the Decision
On 10 April 2024, the UPC Court of Appeal finally issued a decision permitting a member of the public sight of the evidence and pleadings which had been filed by Ocado in a case brought by Ocado against Autostore
The Ocado and Autostore dispute had been brought by Ocado in June 2023. However, shortly thereafter, the two parties settled the dispute and made a request to withdraw the action and the proceedings between the two parties were declared closed on 8 September 2023.
In the short time whilst the Ocado v Autostore dispute was pending, a member of the public filed a request to be given access to the statement of claim in the case. That request was filed on 15 August 2023 and then subsequently granted by the Court of First Instance in October. However, Ocado appealed the decision granting access and access to the court documents was withheld pending the appeal. The Court of Appeal have now rejected Ocado’s appeal and upheld the original order so that now access to the pleadings has finally been granted.
Concerns about speed and transparency
The decision of the Court is to be welcomed. However, the decision still leaves troubling questions about the Unified Patent Court’s commitment to transparency.
The UPC Court Rules state that written evidence and pleadings shall be available to the public upon “reasoned request”. However, the timeline of the proceedings outlined above demonstrates that it has taken 7 months and 26 days for the Court to process what should have been an administrative matter. This is concerning for a court which has been launched on the promise of speedy and transparent justice. The fact that a party has been able to block access to court documents for such a long period of time, even when a case has been settled, raises serious questions about the ability of third parties to access court documents in anything approaching real-time.
The reality of access to court documents in the Ocado v Autostore case is a far cry from that promised in early drafts of the UPC Court Rules which provided that written evidence and pleadings lodged at the Court would be available to the public for on-line consultation. Why the content of pleadings and evidence before the UPC should be shrouded in secrecy, whereas the content of oppositions before the European Patent Office are freely available, is entirely unclear.
Equally concerning are obiter comments in the Court’s decision which seem to suggest that despite the Court rules not containing any such limitation, Court documents should only be available after the conclusion of a case and that the public should not normally be permitted access to evidence and pleadings whilst a case is on-going unless there is a “direct legitimate interest” in the subject-matter of the proceedings.
The Court’s obiter comments in this respect would seem to be in conflict with the norms set out in the Council of Europe Convention on Access to Official Documents (Tromsø Convention) and the recommendations of the Council of Europe which require limitations on public access to be set down precisely in law. If it was intended that the public should only have access to written pleadings and evidence lodged with the court after a case has concluded, then this should have been made explicit in the wording of the relevant rules. The fact that no such limitation appears in the rules, suggests that there is no justification for any kind of blanket ban.
Rather, access should only be denied if parties to proceedings can establish that there are substantial reasons specific to the case which would mean that permitting third parties access would threaten the integrity of the proceedings.
However, it is difficult to envisage why publication of pleadings in patent infringement and revocation matters would prevent parties from bringing forward arguments and evidence in an impartial and independent manner, without external interference; or why such publication would cast doubt on the integrity of the Court’s deliberations and decisions. Such public access does not appear to threaten the integrity of the EPO’s opposition procedure. Nor does it threaten the integrity of court actions in for example the UK, Sweden or Finland, where Court rules permit third parties access to pleadings and evidence in pending matters.
Mathys & Squire test case
Mathys & Squire filed a test case to secure public access to evidence in the UPC at the end of November 2023. That case was stayed, pending the UPC Court of Appeal’s decision in Ocado v Autostore. Mathys & Squire now has three weeks from the date of the Appeal decision to submit comments on the decision to the judge handling our test case, who will then invite comments from the parties to the main proceeding where we are requesting access. The judge will then rule on the substance of our request and will hopefully confirm the right of third parties’ access to court documents in on-going proceedings.
Although the Ocado v Autostore decision has clarified a number of issues, as the main proceedings had settled long before the case came before the Court of Appeal, the Court was not in a position to settle how access should be decided in relation to on-going proceedings and it looks likely that many of those questions will now be the subject of decisions in our test case.
Commentary by Partner Max Thoma has been featured in Accountancy Age, International Tax Review and World Intellectual Property Review, discussing how making the Patent Box relief more generous would act as an incentive for domestic firms to invest more in research and development (R&D).
Read the extended press release below.
The amount of tax saved by businesses through HMRC’s Patent Box scheme has increased by 23% over the last five years, from £1.14 billion in 2017/18 to £1.4 billion in 2021/22, says leading intellectual property (IP) firm Mathys & Squire.
The Patent Box, introduced in 2013, is a tax incentive that allows UK businesses to pay just 10% corporation tax on profits derived from any UK or EU patents. It was introduced by the Government to encourage businesses to invest more in research and development (R&D).
With Corporation Tax now at 25% that tax break has become increasingly attractive.
Max Thoma, Partner at Mathys & Squire says that making the Patent Box relief more generous would act as an incentive for domestic firms to invest more in R&D. This is possible now that the UK is no longer a member of the European Union and bound by its state aid restrictions.
The Patent Box tax relief is seen as one way to help improve the UK’s low level of R&D spend. Overall spending on R&D in the UK is estimated to be 2.9% of GDP*. This trails behind countries such as the US (3.47% of GDP), Japan (3.27%) and Germany (3.13%).
Says Max Thoma: “The Patent Box rules have had a positive effect on the amount British businesses invest in R&D. However, we still lag behind some of our global competitors – an even better Patent Box would help to close that gap.”
Additionally, the UK lags significantly behind other G7 countries in terms of the total number of patent applications. In 2022, applications to the IPO reached 19,500**- however this is dwarfed by the number of patents filed by applicants based in China (1.58 million), the United States (505,000) and Japan (405,400)***.
Despite the rising amount of relief being provided through the Patent Box system, the number of companies claiming relief has fallen from 1.540 in 2017/18 to 1,510 in 2021/22. Mathys & Squire point out that this could be a sign that the Patent Box scheme is much less well known than R&D credits.
Sectors including construction (1% of Patent Box claims) and IT (4% of claims) make very limited use of the Patent Box scheme, suggesting that businesses in these sectors are missing out of opportunities to both protect their IP and reduce their corporation tax bills.
Says Max Thoma: “A significant number of companies may not be aware of the benefits of the Patent Box or that they could be claiming a significant tax relief.”
“Construction and IT are both sectors where businesses are not always aware that they may be able to patents systems and techniques they have developed. Some are paying too much tax as a result.”
Change in number of companies claiming Patent Box relief and amount of relief claimed (in £m)
*World Bank
**IPO
*WIPO
On 6 March 2024, Mathys & Squire sponsored and attended the inaugural Non-Law Into Law Conference at the London School of Economics (LSE). The event brought together (and was co-organised by) students and law societies from LSE, Imperial College London, University College London, Queen Mary, Warwick University and Durham University, alongside firms from across the legal field.
Partner James Pitchford and Technical Assistant Louis Brosnan ran an intellectual property (IP) workshop in which the attendees worked in groups to tackle different challenging scenarios. Participants were encouraged to first think like an inventor and then as patent and trade mark attorneys – to devise solutions to real-world problems and then analyse the ways in which the innovative elements of their ideas could be protected as valuable IP assets.
Later in the evening, Technical Assistants Louis Brosnan and Annabelle Carver participated in a panel discussion on joining law from a non-law background. They sat alongside trainees from Linklaters, Slaughter and May and Jones Day and discussed questions relating to navigating the interview process and the fresh perspective that a non-law degree can bring to the industry. Louis and Annabelle provided insights on topics such as getting the most out of training sessions, how Mathys & Squire promotes diversity & inclusion in the workplace, and our approach to environmental considerations and social responsibility. They also discussed in detail what the day-to-day job of a patent attorney entails, and how the cooperative working environment at Mathys & Squire really makes a difference to those stepping onto the first rung of their career ladders.
Left to right: Technical Assistant Annabelle Carver, Partner James Pitchford and Technical Assistant Louis Brosnan of Mathys & Squire
Mathys & Squire is proud to continue fostering the development of those interested in pursuing a career in IP.
Mathys & Squire is proud to have worked with MS-RT – an offshoot of Ford’s rally partner M-Sport – in protecting their IP as they redefine the landscape of commercial vehicle design with the introduction of the all-new Ford Transit Custom MS-RT and Ford Ranger MS-RT.
Developed by MS-RT in partnership with Ford Pro, these new MS-RT models seamlessly blend Ford Motor Company’s renowned durability with motorsport-inspired design innovations. The launch has received huge praise across the automotive industry, with over 200 individual articles posted within the first 24 hours of the launch. The new models are available to order from Ford Pro dealers across Europe, with cars expected on the road in mid-2024.
Working closely with MS-RT’s design and legal team, Mathys & Squire prepared and filed a comprehensive set of design registrations meticulously covering various aspects of MS-RT’s innovative designs in various formats to provide a broad scope of design protection, ensuring that the distinctive features of the MS-RT vehicles remain exclusive to the brand.
Adam Gilbertson, Associate at Mathys & Squire, says:
‘For a company like MS-RT whose business and USP is all about its unique designs that transform the look of these vehicles, and which get so much attention, protecting their design IP is critical as the business continues to grow. We are delighted to be part of MS-RT’s journey and see the launch go so well.’
Carolyn Mills, Legal and Contracts Director at MS-RT, says:
‘Having the expert guidance of the Mathys & Squire team to steer us through the process and set a filing strategy has been extremely reassuring.’
Joe Pace, Managing Director at MS-RT, says:
‘Having invested a significant amount of time and money into the development these designs, we felt it was essential to protect this investment with proper design protection. Many thanks to the Mathys and Squire team for all your help with registering our designs for the MS-RT Custom and Ranger. Great work and excellent support throughout the whole project.‘
Mathys & Squire has a dedicated and experienced designs team which has helped numerous household names secure strategic protection for their designs internationally. Find out more about our design services here and contact us here.
An article by Technical Assistant Rebecca Bennett and Partners Anna Gregson and Andrew White outlining the available protection for AI-driven bioinformatics has been featured in the latest edition of The Patent Lawyer.
Read the feature below.
The bioinformatic landscape has undergone a profound shift with the infusion of artificial intelligence (AI) technologies. The integration of AI, and specifically its subsets like machine learning and deep learning, has catalysed a revolution in bioinformatics. This transformative impact is most evident in the enhanced analysis and interpretation of biological data, unlocking invaluable insights from expansive datasets. The synergy between AI and bioinformatics is not only expediting drug discovery but also enriching our understanding of complex biological systems. Today, AI stands as an indispensable instrument within the bioinformatics toolkit, propelling the field into new realms of discovery and innovation.
However, a prevalent misconception has persisted, particularly in Europe, that bioinformatic inventions are inherently unpatentable due to their classification as mathematical methods or computer programs by the European Patent Office (EPO) and as such fall within excluded subject matter (Article 52 European Patent Convention (EPC)). This has led to the belief among inventors that their innovations may be ineligible for patent protection. While it is true that mathematical methods and computer programs, in isolation, are excluded from patentability, it is essential to recognise that many AI-driven inventions, particularly those in the dynamic field of bioinformatics, do not fit this restrictive narrative and are not classed as excluded subject matter.
This misconception is evidently mirrored in the discernible contrast in the number of patent applications across various jurisdictions. In 2022, both the United States and China saw a substantial surge in bioinformatics-related patents, with over 4000 published patent applications each. In stark contrast, Europe recorded roughly half that number, totalling just over 2000 published patent applications in the same year. This marked divergence in patent activity may be attributed, in part, to another prevalent misperception — the belief that the United States is more permissive when it comes to software-related inventions, such as those at the intersection of bioinformatics and AI implementation. It’s essential to note that while the United States Patent and Trademark Office (USPTO) may have exhibited a historically more permissive stance toward software-related innovations, including those in bioinformatics and AI, the landscape has significantly evolved in the past decade. A discernible shift towards a more rigorous approach has emerged.
The way that many AI-related bioinformatics inventions are assessed for patentability in Europe is often under the guise of inventive step. In performing this assessment, when considering whether any features contribute to the presence of an inventive step, the EPO will assess whether those features are “technical” or provide a technical contribution in the sense that they provide a technical solution to a technical problem. There is no explicit definition of what is considered “technical” or not, rather this is framed by case law of the EPO Boards of Appeal built up over the last few decades.
It is often in this domain where we find that the argument on patentability can be won or lost. To support arguments on inventive step, it is helpful to be able to refer to statements in the application as originally filed of technical advantage associated with any features that are being argued over. Therefore, care should be taken at the time of drafting to gain input from a European practitioner, experienced and knowledgeable on EPO case law, as to what may help support the presence of an inventive step and therefore the patentability of the invention in Europe. Adding in statements in a letter of response to the EPO is often not as effective as including such statements in the application as originally filed.
Helpfully, the EPO offers illustrative instances of AI applications across various technology fields to help explain what may be considered “technical” or not. For instance, utilizing a neural network in a heart monitoring device to identify irregular heartbeats constitutes a clear technical contribution. Similarly, the classification of digital images based on low-level features, such as edges or pixel attributes for images, exemplifies typical technical applications of classification algorithms. Therefore, although this a hurdle that an invention has to overcome, there are clear circumstances and approaches to meet this requirement.
Additional challenges arise when assessing whether a patent application provides an enabling disclosure of an invention. In particular, according to the EPC, a fundamental requirement is that “The European patent application shall disclose the invention in a manner sufficiently clear and complete for it to be carried out by a person skilled in the art.”. This sufficiency criterion gains heightened significance in the context of patents that encompass machine learning technologies. In some cases, this may require the description and or disclosure of training data, if these cannot be generalised in some way that is reproduceable by the skilled person.
As European practitioners working with bioinformatics inventions, we witness first hand compelling instances of successful bioinformatic applications implementing AI culminating in granted patents. A prime illustration of this lies in the field of genetics. The EPO has rendered affirmative judgments on inventions pertaining to computational methodologies for detecting mutations, including Single Nucleotide Polymorphisms (SNPs) and Single Nucleotide Variations (SNVs). Furthermore, the EPO has extended its positive rulings to encompass predictive technologies for phenotypic traits—ranging from symptoms and their severity to disease prognosis—based on viral genotypes. These instances underscore the EPO’s recognition of the technical merit and innovative impact of AI-driven bioinformatic solutions, offering encouragement and assurance to companies operating in these cutting-edge domains.
In conclusion, the prevailing misconceptions surrounding bioinformatics inventions, especially those implementing AI, are often unfounded, as these innovations are indeed patentable in Europe. The notion that they face insurmountable obstacles is often unsupported.
In December 2023, it was announced that the UK Intellectual Property Office (UKIPO) had received permission to appeal the High Court’s ruling in Emotional Perception AI Ltd v Comptroller-General of Patents, an appeal that will be heard on 14 May 2024. The Court of Appeal will therefore be revisiting the question of the patentability of software inventions and will have its first opportunity to comment on the patentability of artificial neural network (ANN)-based inventions.
The ongoing Emotional Perception case has generated significant interest in the artificial intelligence (AI) industry and patent profession alike, at a time when global interest in use and development of AI technology is sky rocketing – indeed, the UK Government recently identified AI as one of the five technologies of tomorrow critical to helping drive future discoveries and economic growth in its recent Science and Technology Framework. Emotional Perception is the first UK patent court case to focus on AI technology, and the importance of the case is underlined by the fact that the UKIPO, immediately following the first instance judgement, changed their practice for examination of ANN inventions – a change that, at least for the time being, effectively removes ANN inventions from the scope of the computer program exclusion and has led to a flurry of AI-related patents being allowed.
Seen by many as a long-awaited breakthrough towards the recognition of AI as a technical field in its own right, eligible for patent protection commensurate with its increasing role in driving innovation worldwide, the first instance judgement is also highly controversial, as it represents a significant divergence from established European Patent Office (EPO) practice and has sparked debate and has polarised views amongst the patent community. If not overturned on appeal, the Emotional Perception case will make the UK a far more favourable patentee-friendly place for patenting AI inventions for the foreseeable future.
The decision at first instance
The invention at the heart of the Emotional Perception appeal relates to a system and method for providing improved media file recommendations to an end user which is implemented using an artificial neural network (ANN) trained in a specific way which is said to align its output more closely to how a human semantically perceives the content of an input file.
Initially, the UKIPO rejected Emotional Perception’s application on the grounds that the invention was excluded from patentability for being a computer program as such. That rejection was then reversed by the High Court which concluded (among other things) that the claimed invention, in so far as it relates to the training and use of a trained ANN, did not involve a computer program at all so did not engage the exclusion, and even if it did, the novel method of identifying and providing files to a user was a sufficient “contribution” and sufficiently “technical” to prevent the invention from being considered a “computer program as such”. It is this decision which is now under appeal.
The Law
Since 2007 the UKIPO have used the test set out in Aerotel Ltd v Telco Holdings Ltd to determine whether an alleged invention relates to excluded subject matter. This test involves the following steps:
A key question at the heart of the Emotional Perception case was: what was the actual contribution of the claimed invention? Counsel on both sides accepted that the invention related to an ANN-based system for providing improved file recommendations and that the fundamental insight on which the invention was based was the training of the ANN to analyse physical properties of a file using pairwise comparisons of training files. Once trained the trained ANN could then be used to identify, swiftly and accurately, files from a database which correspond semantically to a target file, and to provide file recommendations to a user device.
The judge concluded that although potentially implemented in software, a software ANN was not operating a program in the traditional sense of a set of instructions provided by a programmer because, rather than processing data on a step-by-step instructional basis, machine learning uses training data to self-learn and reconfigure an ANN to solve a specific problem. No other candidate program was identified, and for this reason the “contribution” was held not to engage the computer program exclusion at all. The judge went on to consider step 4 of the Aerotel test anyway and concluded that the contribution was technical in nature and thus also not a computer program as such, because: (i) the end result of sending the file recommendations to an end user provides a relevant external technical contribution; and (ii) a trained ANN itself can also amount to a technical contribution external of the training it received.
Differences of approach in the UK and the EPO
The UKIPO and EPO’s approaches to the assessment of patentable subject matter diverged in the early 2000s when the EPO changed their practice in PBS Partnership/Pension Benefits T931/95. Following that decision, the EPO adopted an “any hardware” approach whereby if a claim involves the use of technical means (e.g. a computer) or is directed to such technical means it avoids the exclusions. As a result, the EPO do not currently raise excluded subject matter objections to “computer-implemented” inventions unless a claim is directed to a purely abstract concept.
The question of whether or not an invention gives rise to a “technical effect” (i.e. whether or not a claimed invention provides a technical solution to a technical problem) remains part of the EPO’s assessment of patentability. However, rather than being considered as part of an assessment of patentable subject matter, it is considered as part of the EPO’s assessment of inventive step.
For computer-implemented inventions, assessment of inventive step involves an exercise of dissecting a claim into technical and non-technical features. Features which serve a technical purpose and contribute to solving a technical problem are taken into account when determining whether or not an invention involves an inventive step. In contrast, features of a claim which are identified as being non-technical are considered to form part of the background to the “technical problem” that an invention might be said to address and are essentially ignored for the purposes of assessing inventive step. Examples of what are considered technical purposes and processes which enable examiners to assess whether or not particular features are “technical” are set out in the EPO’s Guidelines. If an invention is not considered to address a “technical” problem, then it will be considered to be unpatentable in the EPO.
This approach was explicitly endorsed by the EPO’s Enlarged Board of Appeal in Bentley/Pedestrian Simulation G1/19.
The UK Courts have repeatedly stated that the UKIPO and EPO’s approaches are capable of reconciliation and amount to two different ways to (in principle) arrive at the same result. The first instance Emotional Perception decision, however, puts the two approaches into direct conflict.
First, the High Court’s ruling that ANNs inventions do not engage the computer program exclusion at all will in many cases allow AI-based inventions to pass directly to the inventive step stage and even to grant without any consideration of the technical character of the invention.
In contrast to the EPO, assessment of inventive step in the UK is limited to an assessment of whether or not it would be obvious to a person skilled in the art, using common general knowledge to modify any existing item of prior art to arrive at a claimed invention. All claim features are taken into account as part of this assessment and there is no formal separate assessment of the technical character of a claim at the inventive step stage.
Second, the High Court’s ruling that the end result of providing improved file recommendations provides a relevant external technical effect is in direct conflict with the established jurisprudence of the EPO Boards of Appeal who have consistently refused patent applications relating to recommendation systems and methods for lacking a relevant technical effect because any effects of the recommendations (e.g. playing a song, or requesting further recommendations) depends on the subjective choices of the user (see T 0306/10, T 1869/08, T 1983/18, and more recently T 0183/21).
These decisions underline the EPO’s emphasis on the concepts of technical problem, technical purpose and an objective technical effect. By contrast, there was no consideration by the High Court in the Emotional Perception decision of whether or not the invention served a technical purpose or solved any kind of technical problem, or even whether the output of the ANN was to be used as part of a subsequent technical process. Although the judge acknowledged the subjective effect of the recommendation on the user, he then focused on how the recommendation was generated and concluded that this was sufficient to overcome the “technicality” check in the final step of the Aerotel test. Hence, the judgement supports the notion that a trained ANN, processing data through its nodes in a technical way using logic it has learned itself, fulfils the requirements of the Aerotel test regardless of the purpose and the subsequent use of a machine’s output.
The long term impact of the Emotional Perception decision will depend upon the views of the Court of Appeal.
The conclusion at first instance that the computer program exclusion requires the presence of an identifiable set of instructions provided by a human that a computer is to perform is highly questionable and may well be overturned. However, equally important will be how the Court of Appeal addresses the question of whether the technical purpose or nature of the output of an invention is something which needs to be taken into account when assessing patentability. If it does not, then that would leave the door firmly wide open in the UK to the patentability of a wide range of inventions that leverage AI and machine learning, including those in traditionally non-technical fields such as finance, business and administration which would likely be considered to be unpatentable by the EPO.
That having been said, this second part of the Emotional Perception decision seems to be significantly more grounded in UK precedent. In previous decisions such as Protecting Kids the World Over vs Comptroller and Gemstar v Virgin Media, the UK High Court has considered that transfer of data files is sufficiently “technical” to overcome the final check in the Aerotel test, and that there is therefore no need to consider whether or not the output of an invention has a “technical” purpose.
We can expect the outcome of the appeal sometime in the latter half of 2024.
Commentary by Partner Nicholas Fox has been featured in Managing IP, giving an insight into the implications of the UPC Court of Appeal’s ruling that members of the public cannot have access to court documents without using a professional representative. This story has also been covered in JUVE Patent which also discusses the test case which Mathys & Squire have launched in this area, more details of which are discussed here.
The Court of Appeal of the Unified Patent Court (UPC) has decided that members of the public cannot have access to court documents without going through a professional representative. This will act as a further barrier to public access by imposing additional costs, and compares unfavourably to the practice of other courts. It also raises the prospect that the Court of Appeal could dismiss a pending case on access to court documents without giving a ruling on the core issue of how far the Court’s obligation of public access extends.
This is the upshot of the latest procedural order in the protracted dispute over public access to documents in the Ocado v Autostore litigation at the UPC. In an order dated 8 February 2024 the Court of Appeal interpreted its Rules of Procedure so that the requirement for a “party” to be represented also extends to members of the public when applying for access to documents lodged with the Court, even though such members of the public are not parties to the litigation.
The Court of Appeal had requested submissions on whether the member of the public who made a request to access documents filed in the Ocado v Autostore case needed professional representation. Both Ocado and the member of the public who had made the request submitted that representation was not needed, because a member of the public is not a “party” and so the rules requiring “parties” to be represented did not apply to him.
The Court of Appeal has now taken a decision which diverges from the views of both Ocado and the member of the public. Although the Court states that it “does not consider this requirement [for representation] to be unnecessarily burdensome” it has the undesirable effect of making public access more complex than it needs to be. Members of the public will now need to go to the additional expense of appointing a professional representative just to take care of what should be a simple administrative process.
This compares unfavourably with the practice of the European Patent Office (EPO), where any member of the public can access virtually any document filed with the Office simply by consulting the online register. It also compares unfavourably with the practice of the federal courts in the United States, where all pleadings, motions, memoranda and associated documents are available to anyone via the electronic PACER system. Similarly, public access is available in various European countries such as in England and Wales, where statements of case are available to anyone subject to payment of a small fee, and Sweden, where documents held by the court can be requested by email or post subject to payment of a small fee for large numbers of documents or pages.
The ruling raises an important question in relation to the outcome of the appeal. Ocado had previously raised no objections that a member of the public could request access without having to engage legal representation. However, now that the Court has ruled otherwise, it raises the question of whether the original request for access by the unrepresented applicant should be ruled void. Notably, in the context of the appeal, the Court has ordered that previous submissions by the unrepresented applicant should be disregarded as they were not lodged through a representative. It is not clear why the same logic should not also apply to the applicant’s original request, particularly as the Court of Appeal expressly states that the obligation for legal representation applies equally at first instance and during the appeal process.
Previously, Ocado, who are objecting to the release of documents, have not pursued this point as their stated position was that the obligations for legal representation did not apply to access requests. However, now it is to be expected that the validity or otherwise of the initial application will be brought into question.
The Court of Appeal has granted the member of the public 14 days to appoint a representative and has scheduled a hearing on the substance of the appeal to be held on 12 March 2024.
The Court’s order is not yet available on the UPC website, but its contents have been reported here.
By default, European patents granted by the European Patent Office (EPO) in effect in countries participating in the Unified Patent Court (UPC) are subject to the jurisdiction of that Court. However, patent proprietors have the option to opt their European patents out from the UPC’s jurisdiction. Such opt-outs are defensive in nature as an opt-out protects a European patent from being revoked in a single court action. Opted-out patents can only be revoked in national proceedings brought on a country-by-country basis.
Given the defensive nature of UPC opt-outs, it would be expected that one factor which patent proprietors will consider when deciding whether to opt patents out of the jurisdiction of the UPC would be the likelihood of revocation actions being brought against their patents. EPO oppositions are by far the most common form of revocation action which are brought in Europe. Hence, EPO opposition rates should provide a reasonable indication of the rate at which revocation actions are sought against patents in different technologies. With that in mind, it would be expected that in general there might be a correlation between EPO opposition rates and opt-out rates in different technologies. But is that really the case?
Differences in opt-out rate vs EPO opposition rate across technical fields
The figure below shows the opt-out rate vs. EPO opposition rate for the different technology fields for which the EPO grants patents apart from food chemistry which has been omitted in the interests of clarity due to the exceptionally high rates of opposition filed against Food Chemistry patents.
As can be seen in the graph above, there is relatively little correlation between opt-out rates and opposition rates across technologies as a whole. However, a glance at the graph does demonstrate that there are very few technologies associated with high-opt out rates which are associated with low opposition rates and vice versa.
Part of the problem with considering opt-out and opposition rates across all technologies is that opposition rates vary considerably across technical fields. For that reason, it is worthwhile drilling down and considering patents in related technical fields.
Assessing opt-out rates and opposition rates in electrical engineering fields
The following graph illustrates opt-out rates and opposition rates, but this time only considering technologies in electrical engineering.
When only electrical engineering patents are considered, then a much stronger trend appears with a significant proportion of variation of opt-outs across different fields being correlated with EPO opposition rates. As a whole, across electrical engineering technologies, differences in opposition rate account for around a third of the variation of opt-out rates. As can be seen from the graph above, most of the remaining variation is accounted for by the relatively high opt-out rate of computer technology patents compared with the numbers of oppositions filed against such patents and the relatively low opt-out rate of semi-conductor patents.
Comparable patterns in patents related to mechanical engineering
Similar trends can also be observed with mechanical engineering patents, with one obvious clear exception, namely patents in the field of textiles and paper, which have opt-out rates far in excess of what might be expected given the relatively low numbers of oppositions which are filed against such patents. In the graph below, the trendline for mechanical engineering patents other than in the field of textiles and paper is shown. If textiles and paper inventions are excluded, the variation in opposition rates accounts for around half of the variation in opt-out rates across mechanical engineering technologies.
More variation in chemical technology fields
Significantly more variation is to be found in chemical technologies, illustrated in the graph below. Food chemistry has been included in this graph as the higher rates of opposition in chemical technologies as a whole mean that the inclusion of food chemistry with its very high rates of opposition does not cause the opposition rates for other technologies to cluster as would have done in the first figure.
As can be seen in this graph, there is practically no correlation between opt-out rates and opposition rates across chemical technologies, with variation in opposition rates explaining only around 7.5% of the variation in opt-out rates in chemical fields. This suggests that factors, other than the actual likelihood of revocation actions being brought, are the primary factors behind the variation in opt-out rates in different fields of chemistry. Most likely, the significant value of some chemical patents, particularly those in the pharmaceutical field, results in extra caution on the part of patent proprietors in certain fields where the risk of a revocation action is not insignificant, and the potential commercial impact of the loss of individual patents can be very large.
Conclusions
Proprietors’ assessment of the risk of revocation is clearly only one of many factors which proprietors consider when deciding whether to opt their patents out of the jurisdiction of the UPC. The costs involved in filing and registering UPC opt-outs are limited and as a result significant numbers of European patents have been opted-out. If the risk of central revocation is a significant one, it would be expected that patent proprietors are well placed to identify patents which are at risk. However, other factors are clearly of importance and the extent to which out-opts have been risk-based has varied considerably across different technological fields.
The outcome of the test case filed by Mathys & Squire to secure public access to evidence in the Unified Patent Court (UPC) is expected early in 2024. Commentary provided by Mathys & Squire has been featured in JUVE Patent, Law 360, the Solicitors Journal and World Intellectual Property Review.
An extended version of the press release is available below.
The Unified Patent Court (UPC) has now set a schedule for hearing an appeal which is likely to be determinative on the rights of the public to access evidence and pleadings filed with the Court.
Two weeks ago, Mathys & Squire brought a test case before the Munich Section of the Central Division of the UPC arguing that, by default, evidence and pleadings filed with the Court should normally be made available to third parties on request and that access should only be restricted when it is absolutely necessary to protect confidential or personal information.[1]
Mathys & Squire also applied to intervene in an appeal where a party is seeking to overturn the decision of a judge in the UPC’s Nordic-Baltic division to permit a third party to obtain copies of evidence and pleadings.[2]
The appeal pending before the UPC Court of Appeal has now been assigned to the second panel of the Court of Appeal with judge Ingeborg Simonsson being appointed as the judge-rapporteur for the appeal. Ms. Simonsson has been a full time judge in the Swedish courts since 2008 and in 2020 was appointed Judge in the Svea Court of Appeal and the Patent and Market Court of Appeal.[3]
Judge Simonsson has now set a 15-day deadline for the parties to comment on Mathys & Squire’s application to intervene. She will then make a decision as to whether or not to accept Mathys & Squire’s application. The parties will then be given a further 15 days to submit written arguments to the court on the substance of the appeal. An oral hearing will then be held on 15 February 2024.
Nicholas Fox, Partner at Mathys & Squire, says: “We welcome the appointment of Judge Simonsson as judge-rapporteur in the appeal. The Swedish Courts have an exceptionally long history of transparency and openness, and the principle of public access is considered an essential principle of Swedish law. Judge Simonsson will be an excellent judge to consider this appeal.”
The case pending before the Munich Section of the Central Division has been stayed pending the outcome of the Appeal.[4]
Alexander Robinson, Partner at Mathys & Squire, says: “The decision to stay the proceedings pending the Court of Appeal decision supports our arguments that we have a legal interest in the appeal and should be allowed to intervene.”
In the cases being brought, Mathys & Squire are being represented by Nicholas Fox and Alexander Robinson, partners from our London office, and Andreas Wietzke, a partner from our Munich office.
[1] Pending as case no. APP_588681/2023. A copy of the arguments that Mathys & Squire submitted to the court is available here.
[2] Case No. APL_584498/2023,
[3] A biography of Judge Simonsson can be found here.
[4] Preliminary Order UPC_CFI_75/2023
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