Gemstar v Virgin Media - a missed opportunity?

Back in January 2008, the IPKat commented on the pending case involving Gemstar and Virgin Media relating to three of Gemstar's European patents.  All of the patents related in some way to electronic programme guides (EPGs) for TV set top boxes.  The IPKat thought at the time that the issues would be interesting ones to follow, because they might just shed some further light on the exclusions of Section 1(2).  However, this has unfortunately not turned out to be the case.

Fortunately for Virgin, and unfortunately for Gemstar, all of the patents were found by Justice Mann in the High Court invalid for lack of novelty or inventive step (see here for the judgment, and here for a brief IPKat comment and a rather longer one from someone involved with the case itself). The issue of whether the 'contribution' following the Aerotel/Macrossan test was 'technical' or not was not the deciding factor, although was thrown in for good measure (see paragraph 33 onwards of the judgment).

This has now been emphatically confirmed by Jacob LJ in the Court of Appeal, in a judgment that issued earlier this week, with the full title of Gemstar- Tvguide International Inc & Ors v Virgin Media Ltd & Anor [2011] EWCA Civ 302. One of the patents, EP0969662, was taken out of play and not disputed further. The others, EP1377049 and EP1613066, had been found by Mann J to be not novel, which Gemstar appealed against. Jacob LJ, in a fairly short judgment that was approved by the other two Lords Justice, then proceeded to agree completely and dismiss the appeal.

For those of us who would like to see some sensible developments in UK patent law, it is unfortunate that the patents turned out to be so lacking in substance, as it would have been nice to see Jacob LJ get to grips again (for perhaps one last time?) with the issue of excluded subject matter, after making what turns out to have been such a hash of it with the earlier judgment in Aerotel, and following the decision of the Enlarged Board in G 3/08. For better or worse, the four-step test lives to fight another day, and we will just have to wait until the right case comes along before it gets demolished in favour of a proper test based on European patent law.  Any ideas on what this case will be?

Declining to deal: how complex does it need to be?

Who should be entitled to a patent?  Or, in the case of a pending application, who is entitled to have the patent that could result?  Section 7 of the UK Patents Act says that any person may make an application for a patent alone or jointly with another, but then goes on to say that a patent may only be granted to an inventor or (to paraphrase somewhat) his legal successor in title.  To account for the fact that most inventions are made by people who are employed for the purpose, Section 39 says that such inventions will (usually) belong to their employer.

The upshot of all this is that, under UK law, an application for a patent could be made by someone who does not have the right to be granted a patent for the invention.  There is nothing to stop such a patent being granted (notwithstanding the wording of Section 7), but there are provisions that could stop that person from keeping hold of the patent.  Sections 8 and 12 allow for the situation where someone who would have been entitled to be granted a patent for the invention to have the application or patent transferred to them.

Decisions arising from applications under sections 8 and 12 are not very common.  To see two come out of the UK-IPO in quick succession, both of which deal with these sections, is therefore a bit surprising.  Not only this, but both relate to the same question of whether the IPO was the right place for the question of entitlement to be decided.  Under Sections 8(7) or 12(2), the comptroller can decline to deal with an issue of entitlement if it appears to him that it would be better dealt with by the courts.

The first of these, Amir Azam v Carl Livesey (BL O/438/10), related to an international application that was filed naming the defendant (Mr Livesey) as sole inventor and applicant, and claiming priority to two GB applications. The subject matter of the application related to providing additional information to the viewer of a moving image file, in which the viewer could request information on, and place orders for, products displayed in the image file. The claimant (Mr Azam) initiated proceedings before the comptroller under section 12(1), claiming either sole or joint entitlement to the application on account of being a sole or joint inventor. 

As part of the rounds of evidence, the defendant presented an assignment document that apparently transferred all rights from the claimant to a company controlled by the defendant. The effect of this document was disputed by the claimant. The hearing officer invited submissions regarding whether, as a result of the nature of the disputed evidence, the comptroller should decline to deal with the reference according to section 12(2), as the matter might be more properly dealt with by a judge. The claimant consented to the matter being transferred but the defendant did not.

The dispute centred on whether the claimant had in fact contributed to the development of the invention before the priority date. Evidence in support of the defendant being the sole inventor was presented in the form of video files showing the concept of the invention, which were apparently dated before a meeting had first taken place between the parties. The claimant alleged that this evidence had instead been created after the dispute arose.

In relation to whether the comptroller should decline to deal with the reference under section 12(2), the hearing officer referred to guidance given by Warren J in Luxim Corporation v Ceravision Limited [2007] EWHC 1624 (commented on by the IPKat here), and in particular to what would constitute a 'complex' matter that would justify a case being more properly dealt with by a judge. Different types of issues, such as technical, factual or legal issues, would be judged differently according to who was handling them. Complex technical or patent law matters, for example, could usually be handled by a hearing officer, while complex factual and non-patent law issues might be more properly dealt with by a judge.

The hearing officer considered that there were no particularly complex technical or patent law issues to be dealt with. The factual and non-patent law issues, however, included allegations of falsifying evidence and matters of contract law, which were serious matters that might be more appropriately handled by a judge. Overall, the hearing officer determined that the reference involved matters that would be more properly determined by the court and declined to deal with the matter in accordance with section 12(2). The claimant was then given a short extension of time to the normal set period of 14 days under CPR rule 63.11(2) within which to bring proceedings before the court, on account of the upcoming Christmas period.

The second decision, Mastermailer Holdings plc v Data Security Ltd. & Stephen Black (BL O/433/10), also related to an international application, which had been filed in the name of the first defendant (DSL) and named the second defendant (SB) as inventor. The claimant (MH) requested that the application, and subsequent national phase applications, proceed instead in their name as a result of a previous relationship in which MH had contracted services from DSL and due to SB's fiduciary duties in his role as director or employee of companies within the same group as the claimant. High court proceedings were also being pursued by the claimant against SB for misappropriation of funds. As a result, the claimant requested that the IPO decline to deal with the application under Sections 8 and 12 so that they could consolidate the case with the ongoing high court proceedings.

The hearing officer, again referring to Luxim v Ceravision,  considered that the comptroller's discretion to decline to deal should be exercised if the case was complex when judged against the expertise to be expected of a hearing officer as compared with a judge. A further issue to be considered in this case was whether there was a significant overlap between the matters under consideration in relation to the ongoing high court proceedings.

The claimants had put the question of fiduciary duty owed by SB at issue, and this was relevant to the question of ownership of the applications. SB's fiduciary duty as director was also in issue in the high court proceedings. There was therefore a degree of overlap, which meant that there was likely to be some evidence in common in determining the two questions. The hearing officer also considered that the allegation of breach of fiduciary duty was one that might normally be expected to be more appropriate for a judge to deal with. The hearing officer determined that the question referred was consequently one more properly determined by the court, and declined to deal with the application.

Another interesting aspect to the second case is that the corresponding European application, EP07824696,  is currently on hold as a result of the application made to the UK IPO.  Under Rule 14 EPC, proceedings before the EPO can be stayed if entitlement proceedings have been instituted according to Article 61 EPC. While the UK case continues, the European application will therefore not be allowed to proceed, but cannot be withdrawn.  The renewal fees, however, continue to become due while the application is stayed.  A good summary of the situation in this case was provided by the EPO legal division to the applicant, available from the register here.

These two cases are good illustrations of how far issues can be handled by IPO before they become too involved.  The boundary seems to be reached once issues are brought into play such as allegations of fraud or other difficult areas outside the remit of the Patents Act. The IPO may be a good place to settle issues that relate to complex technical issues, but we should apparently not expect hearing officers to be judges.  I wonder though whether unscrupulous claimants, wishing to escalate proceedings for whatever reason, could use the fact that hearing officers will in some cases decline to deal to get the matter 'bumped up' to the courts, with all the resulting increase in complexity and cost that this results.

EPO and Google to break the language barrier - but not yet

The EPO announced some news today, which has been in the offing for some time. With the help of Google, they will soon be offering a much improved machine translation service for patent publications.  This is very good news, and I for one am looking forward to seeing how good Google's methods of translation can be when applied to patents (I am actually quite hopeful that it will be good).

I couldn't help looking to see if the EPO were practising what they had in mind, by taking a look at the German version of the EPO's news page.  This is what I saw:

Oh dear.

J 18/09: When is a Euro-PCT application pending?

Back in September 2010 the EPO Enlarged Board of Appeal issued its decision in G 1/09 (reported by the IPKat here). This answered the question of whether an application could be considered pending for the purpose of filing a divisional application after a decision had been made to refuse the application but before expiry of the period in which an appeal could be filed, when no appeal was in the end actually filed.  The Enlarged Board decided that an application was indeed still pending for the purpose of Rule 36 EPC, even if no appeal was filed.  This decision would theoretically give applicants a bit more breathing space in which to decide whether a divisional would be worth filing, rather than make sure one was filed before oral proceedings just in case.  However, the two year rule now in force under Rule 36 most probably makes the usefulness of this decision somewhat limited, since there will probably be very few, if any, cases where the two year period from a first examination report has not expired by the time the examining division finally refuses an application.

G 1/09 considered the question of whether an application was still pending, but did not answer the question (because it was not asked) of when an application is first pending before the EPO.  A suggestion (which, under English law, would probably be regarded as obiter dicta) was however made that, because Article 23(1) PCT prevents the EPO from processing a PCT application before the 31 month regional phase deadline, an application could not be considered to be pending before the EPO until after that date, for the purposes of Rule 36 EPC (see 3.2.5 of the reasons).

This suggestion has now been officially confirmed and developed further in J 18/09.  This decision, which will be published in the EPO Journal in due course, came out only shortly after G 1/09, but for some reason only appeared on the EPO website recently (and, largely due to laziness and prevarication, only appears here now).  It has already been commented on at length at K's law here.  In brief, the applicant decided to file a divisional application one day before the end of the 31 month deadline (it does not seem, by the way, that it would have made any difference if it had been after the deadline) and then did not enter the European regional phase for the claimed parent application, which had in the usual way been given an EP application number by the EPO.  The EPO receiving section decided that the application could not be dealt with as a divisional application because the international application could not be recognised as a pending European application since it had not validly entered the European regional phase.

The Board of Appeal agreed with the Receiving Section, finding in summary:

"An international application which does not fulfil the requirements according to Article 22 PCT for entering the European phase is not pending before the European Patent Office and therefore cannot be considered a pending earlier European patent application pursuant to Rule 36(1) EPC".

There were various reasons for finding this.  For international applications, proceedings before the PCT authorities were initiated as from the filing date, while proceedings before the EPO were initiated only from the day on which the requirements under Article 22(1) PCT for entering the regional phase were fulfilled, which includes paying the relevant fees (reasons, para. 13).  Allocating a European application number to the PCT application did not mean that the application was pending at the EPO, because this was just an administrative act to make it easier for the EPO to handle incoming applications (reasons, para. 17).  The fact that the EPO issued a notification of loss of rights relating to the parent application not proceeding into the EP regional phase in time did not mean that the application was pending.  Instead, the statement of deemed withdrawal was "not a constitutive procedural act but only a declaratory one with respect to the non-pendency of the proceedings before the European Patent Office" (reasons, para. 18).  Finally, there was no need to refer the question to the Enlarged Board, since the situation did not correspond with that leading to the referral in G 1/09 and the question could be answered directly from the provisions of the PCT and EPC (reasons, para. 20).

Although the decision might seem to be stating the obvious, it is an important one for those applicants who find that, due to Rule 164(2), they are unable to proceed at the EPO with the invention they really want, rather than the one that was searched during the international phase.  The only option in such cases, as many will already have suspected but until now could not be sure about, is to enter the EP regional phase for the parent application, paying all relevant fees, and then to file a divisional application for the application that is actually wanted and abandon the parent.  This may seem like a ridiculous way to proceed, but is unfortunately the way the EPO apparently wants it to be.  

Excluded matter at the UK-IPO - Halliburton strikes again

The name Halliburton should be familiar to all those who have been keeping an eye on developments in excluded subject matter issues over the last few years.  The name is associated with an unusual case from 2005, Halliburton Energy Services, Inc. v Smith International (North Sea) Ltd [2005] EWHC 1623 (Pat), in which Pumfrey J decided that a claimed invention that would otherwise fall foul of the exclusions of section 1(2) of the Patents Act could be remedied by adding a manufacturing step. The inventions in that case related to methods of designing a drill bit for use in the type of drilling used in oil exploration. The methods were carried out using computer simulations, and resulted in an output drill design of sorts but not an actual drill bit. Although the patents in question were found to be invalid for a lack of sufficiency, one of Pumfrey J's findings was that if they had been found to be sufficient their further problem with covering unpatentable subject matter could have been remedied by adding a manufacturing step to the claims.

Halliburton have now appeared again with further inventions relating to methods of designing drill bits, this time in a recent decision from the UK IPO (BL O/080/11).  In this decision the hearing officer concentrated on one of the three applications in question, as all had similar issues to address and all had been objected to by the examiner under section 1(2).

The application, GB 0523735.9 (published as GB2420433), related to a method of designing roller cone drill bits used for forming wellbores in subterranean formations, in which a computer simulation of interactions between the drill bit and the material being drilled was used to optimise various design features of the bit, thereby reducing or avoiding the need for extensive field testing. The method involved an iterative design process performed wholly within a computer, in which a simulated test was performed regarding whether the drill bit resulting from an iteration of the design parameters being considered was optimised, the method stopping once optimisation was determined to be achieved. The examiner, relying on the previous decision in Halliburton Energy Services v Smith International [2005] EWHC 1623 (Pat), had objected to the claimed invention as being a method for performing a mental act as such, although considered that the claims would be allowable if they included a final step of manufacturing the drill bit.

Following the Aerotel/Macrossan four step test (see paragraph 40), subject to the clarification provided by Symbian, the hearing officer determined that the actual contribution was that of a method of designing drill bits that included simulation of the performance of the drill bit based on calculating a three dimensional mesh for each cutting element and for the earth formation, and using that to determine the forces acting on each mesh segment of the cutting element, determining the forces and stresses acting on each element. As with the invention in Halliburton, the invention in question was concerned with a method of designing a drill bit. Pumfrey J's reasoning as to whether the invention related to excluded subject matter referred to the EPO decision in T 453/91 (IBM), in which a method of designing a semiconductor chip was deemed to be allowable provided a final step of manufacture was added to the claims in order to 'tether' the claims to an industrial activity.

The applicant argued variously that the present invention differed from that considered in Halliburton, that the mental act exclusion had been too broadly interpreted and subsequently doubted by the Court of Appeal in Aerotel, the comments regarding 'tethering' by Pumfrey J were obiter dicta and in any case wrong in light of the later decision in Astron Clinica [2008] RPC 14, and the judgment was no longer good law in light of the more recent EPO decision in T 1227/05 (Infineon; see the IPKat here for a post on the case).

The hearing officer considered that, although the contribution of the invention differed from that in Halliburton, the invention was still a method of designing a drill bit based on certain selected criteria using simulation. The inclusion of three dimensional mapping might make it a better method of designing, but did not itself provide a relevant technical contribution. The contribution was therefore no more than a scheme for performing a mental act. Providing an additional step of outputting the results to a resource would not change this, regardless of the form in which the results were output. The hearing officer further considered whether Halliburton remained good law. Leaving aside the issue of 'tethering', the later decision of Pumfrey J in Bloomberg [2007] EWHC 476 (Pat) (which post-dated Aerotel) indicated that the invention in Halliburton would still be excluded under the four-step Aerotel test as a scheme or method for performing a mental act. 

Regarding any doubts expressed by Jacob LJ in Aerotel (see paragraph 118) regarding the mental act exclusion being over-broadly interpreted, any such comments were considered to be obiter and therefore not to be followed in preference to Halliburton. Regarding the 'tethering' point, the hearing officer considered that there was some force in the argument that adding a manufacturing step did not make an otherwise unallowable claim allowable, as this could elevate form over substance. There was consequently some doubt over whether adding such a step would make the claims allowable, although this point was not decided as no such amendments were proposed by the applicant. Regarding the more recent EPO Board of Appeal decision in Infineon, the hearing officer considered that EPO decisions were not binding, although could be persuasive, and that Halliburton remained a binding decision regardless of the developments in EPO case law. In summary, the hearing officer found the contribution to fall solely within excluded subject matter and refused the application.  Similar decisions were then made regarding the other two applications in quick succession, for the same reasons.

This decision is one where it appears everything possible has been thrown into the mix, including the use of a renowned barrister, which is unusual (although far from unheard of) in IPO hearings.  The arguments come down to one of the key areas in which the UK IPO now clearly differs from the EPO when it comes to considering excluded matter under section 1(2) (equivalent to Article 52(2)-(3) EPC), and highlights the difficulty in implementing in the UK what has been a significant change in EPO case law following Infineon, given the binding nature of English precedents.  It seems that, as with Vicom and IBM in previous times, the decision in Infineon will need to be taken to the courts in order to establish a precedent sufficient for the UK IPO to follow.  I wonder whether this will be the one to do it, and whether it could even be taken further to resolve the outstanding issues over G 3/08, which is currently being studiously ignored for the same reasons in decisions by the UK IPO (see here for a good example). Perhaps this would be asking too much though.