Appeal court rejection clarifies UK stance on business model patents

The Court of Appeal has all but closed the door on software and business model patents in the UK, rejecting Australian businessman Neal Macrossan’s bid to patent an automated system to incorporate a UK company.

Lord Justice Jacob found that Macrossan’s automated system should be excluded as it failed a four-step test to find for a technical contribution as defined in the UK Patents Act.

“Step four – is that contribution technical? – is again easy. No. So the exclusion applies,” said Jacob LJ.

The court heard the case to clarify the UK’s exclusion of software patents, and Lord Justices Chadwick, Neuberger and Jacob considered Macrossan and similar case Aerotel Ltd v Telco Holdings Ltd simultaneously.

Morag Macdonald, co-head of IP at Bird & Bird, said: “The Court of Appeal adopted a structured approach. The judge is very aware this needs to be a coherent judgment.”

Taking a bold step, the court used the judgment to ask three questions to the Enlarged Board of Appeal at the European Patent Office on the patentability of software.

“Surely the time has come for matters to be clarified by an Enlarged Board of Appeal,” said the court.

Bristows acted for Aerotel, instructing Simon Thorley QC at 3 New Square. Linklaters advised Telco, instructing 8 New Square’s Daniel Alexander QC. Macrossan represented himself and Colin Birss at 3 New Square was counsel to the Patent Office.