Contactless payment: High Court Lenovo case clarifies UK patentability
The contactless payment market is expected to grow rapidly over the next few years to reach US $20 billion by 2026. This is an area where innovation is very important and so protecting this innovation is vital. It is therefore no surprise that a very recent decision, which was handed down by the UK High Court, will be greeted with joy by innovators in this area.
In Lenovo (Singapore) PTE LTD and Comptroller General of Patents (the appeal) the appellant (Lenovo) was appealing against the decision of the Comptroller to refuse the patent application GB 1603975.2 (entitled “Selecting a contactless payment card”) on the ground that it is excluded from patentability by S1(2) of the Patents Act 1977 [S 1(2) UKPA], for relating to a computer program and a business method as such.
The High Court has allowed the appeal, finding that the invention was not excluded from patentability under S 1(2) UKPA. Following the appeal, the application will need to continue its passage through the UK patent office (UKIPO). As such, it remains to be seen whether or not the invention is found to meet other patentability requirements (including, in particular, inventive step).
In this article, we take a closer look at the judgment and consider possible implications for patentability of inventions. We also consider differences between the approach taken by the UK courts and the European Patent Office (EPO) in the assessment of patentable inventions.
The patent application (filed 08 March 2016 in the name of Lenovo) claims a priority date of 09 March 2015. The invention relates to completing purchases with contactless payment devices such as credit cards. In the application, it is explained that there is a problem known as, “card clash”. This may occur when a physical wallet presented by a purchaser contains more than one contactless card. In this case, which card is the electronic card reader supposed to read?
The following claim (an amended form of claim 1) was refused in the decision for reasons of non-compliance with S 1(2) UKPA:
“A machine-implemented method comprising:
receiving, from a user, one or more user preferences comprising a split transaction preference;
retrieving, from a plurality of contactless payment devices, a plurality of contactless payment identifiers, wherein each of the contactless payment identifiers pertain to a separate payment account;
automatically selecting multiple of the plurality of contactless payment identifiers based on the split transaction preference; and
transmitting a payment request for one or more purchases using the payment accounts corresponding to the selected multiple contactless payment identifiers.”
The key step of the claimed invention, in the context of the judgment, is the step of automatically selecting multiple of the plurality of contactless payment identifiers based on the split transaction preference of the user. This step provides a solution to the “card clash” problem.
The relevant law
In order to assess compliance with S 1(2) UKPA, the UKIPO and UK courts follow the decision of the Court of Appeal in Aerotel Ltd v Telco Holdings Ltd & Ors (Aerotel).
Aerotel sets out a four step test to be applied to identify excluded subject matter:
- Properly construe the claim.
- Identify the actual contribution;
- Ask whether it falls solely within the excluded subject matter.
- Check whether the actual or alleged contribution is actually technical in nature.
The Aerotel “contribution approach” is used in order to assess whether the contribution which is provided by the claimed invention over what is already known is actually technical in nature.
Furthermore, AT&T Knowledge Ventures/CVON Innovations v Comptroller General of Patents (AT&T) established a number of signposts for identifying whether or not the contribution provided by an invention was technical in nature. Of these signposts, there is one signpost, in particular, which is relevant for the case under discussion: “whether the claimed technical effect has a technical effect on a process which is carried on outside the computer”.
If the contribution provided by an invention has a technical effect on a process which is carried on outside the computer then the contribution provided by the invention will be considered technical in nature and therefore not excluded by the provisions of S1(2) UKPA.
Reasoning for refusal
In the decision to refuse the application the Deputy Director addressed issues including the problem to be solved, how the invention works, and a relevant item of prior art (US 8113438 B1) which had been identified (although no prior art search had been performed).
In paragraph 26 of the decision to refuse the application, it was stated that the invention lies in receiving user preferences and automatically deciding which payment accounts should be used for the transaction from those retrieved to make best use of incentives and account balances.
However, the Deputy Director stated that selecting an account by pressing a button (once those to be used have been chosen) is rather straightforward. Moreover, implementing a manual button press to select a user preference was well-known at the priority date of the invention.
Accordingly, it was held that the claimed invention did not meet the above-identified signpost of AT&T and thus did not pass the four step Aerotel test. The application was refused under S 1(2) UKPA.
In the judgment, it was agreed that the contribution provided by the claimed invention was a method of automatically selecting multiple contact payment identifiers based on user preferences to enable a purchase to be split across multiple accounts. In contrast, the prior art showed that the user had to actively select a split between multiple payment cards (such as by clicking options present on a screen).
As such, in the claimed invention, the user no longer needs to actively press a button to select the preferences and influence a payment – the key question is whether this produces a technical effect on a process outside the computer?
In the judgment, Judge Birss J rejected the reasoning provided in paragraph 26 of the decision, noting that just because adding something is a minor step to take does not mean that taking it away is equally minor.
Indeed, it was held that the point of the invention is actually the opposite to that outlined in paragraph 26 of the decision and demonstrated in cited prior art US 8113438 B1. In US 8113438 B1 the user has to press a button to choose which card to use or to split the payment between the two cards. In the claimed invention this is handled automatically at the point of sale, because the user’s preference have already been acquired and stored elsewhere. The automatic feature means that the “card clash” problem is solved without the user having to take any extra physical step at the point they use their contactless cards.
It was held that this is an effect of the invention which is neither a computer program as such nor a method of doing business; rather, the difference is technical in nature. Moreover, in the context of the invention as a whole, it is not one of the normal incidents of a conventional computer system.
Accordingly, the claimed invention was held to meet the requirements of S 1(2) UKPA as the invention does have an effect which is of the right character to satisfy the law.
While the claimed invention has been found not to be excluded under S 1(2) UKPA, the question remains as to whether the invention involves an inventive step. That is, it has not yet been addressed whether the “automatic feature” of the claimed invention is an obvious adaptation of the manual mechanism to split the payment described in US 8113438 B1.
Such an assessment should, however, be made under S 3 UKPA once a full prior art search has been conducted.
Article 52(1) EPC is the equivalent provision for assessing excluded subject-matter at the EPO. However, the approach which is used in order to assess the compliance of an invention with the requirements technical character varies between the UKIPO and the EPO. In particular, at the EPO technical character is assessed without reference to the prior art (see G 3/08 and T1173/97, for example). The technical contribution provided by the invention over the prior art is considered during the inventive step under Article 56 EPC (with only the novel features which contribute to the technical character of the invention being relevant for inventive step).
We are told by Symbian Ltd v Comptroller General of Patents (Symbian) that, in practice, the UK approach and the EPO approach should reach the same result. Nevertheless, it appears that the bar which is set by S 1(2) UKPA remains a high barrier for the applicant to overcome (in particular since it is not formally required that a prior art search is even conducted before taking a point on excluded subject-matter).
This case demonstrates the importance of drafting an application such that the technical effect and technical contribution which is provided by the invention is clear from the application as filed. If it can be demonstrated, using the sign posts of AT&T, for example, that the claimed invention provides a technical effect on a process outside the computer, then the invention should be held to satisfy the requirements of S 1(2) UKPA.
Case details at a glance
Decision level: High Court
Parties: LENOVO (SINGAPORE) PTE LTD (appellant) and COMPTROLLER GENERAL OF PATENTS (respondent)
Date: 09 July 2020
Citation:  EWHC 1706 (Pat)