The document discusses diverging approaches between the UK Patent Office and European Patent Office (EPO) regarding patents for business methods. [1] The EPO focuses on whether an invention has a technical effect, without considering the end result, while the UK considers both technical effect and whether the end result is simply a business method. [2] Recent EPO and UK decisions illustrate this divergence, with the UK making patents for business methods and software inventions more difficult to obtain. [3] The EPO and UK laws were intended to be harmonized but are now being applied differently, leading to differing scopes of patentable subject matter between the two offices.

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the Vicom decision (T208/84). The Vicom
.EUJ:Qpe. case related to digital image processing im-
plemented using a computer program and
Intelleetual Property The Divergenee of in this decision the requirement for a tech-
nical effect to avoid the computer program
Rights Transfer Pricing Approaeh to Business exclusion was established. Over the years
Rules in Brazil _.. Method Patents by many decisions have followed this lead and
th~ UK and European the test for identifying patentable subjeet
Brazil is now discussing some changes to its
Patent Offices matter by identifying a technical effect has
become well established.
legislation related to Transfer Pricing. The
new BiII No. 4695 of May 16, 200 I pro- An important decision on business meth-
posed by Deputy Nelson Proença was sent A recent decision by the European Patent ods in 1994 was the Sohei decision
ro the Foreign Relation and National Office (EPO) and a recent decision by the (1769/92). The Sohei application was for a
Defence Commission on May 30th for its UK Patent Office show a dear divergence computer system for a plurality of indepen-
appreciation. of approach between the two offices. Once dent types of management, such as financia!
Transfer Pricing in Brazil is presendy the EPO is satisfied that the technical effect management and inventory management,
ruled by Law 9,430 of December 27, 1996. requirement is meto it does not give any which used a single displayed transfer slip for
Under this law, intellectual property rights considerarion to the end result produced me input of data to be managed.The features
are expressly excluded trom the applicabil- by the invention.ln contrast, the decision of of the invention were carefulJy considered to
ity of transfer pricing rules. the UK Patent Office followed the identify that the use of the transfer slip re-
The proposed BiII however is induding authority of the UK Court of Appeal ín the quired technical considerations thus resulting
intelleetual property rights as subjeet mat- Merrill Lynch case in which the in a technical contribution. It was decided that
ter of transfer pricing rules. However; under identification of a technical effect is not the invention was not a method of doing
Section 35 of the BiII,the total payment of determinative. The end result of the business as such even though the end result
royalties related to intelleetual property invention is the deciding faetor and the was an improved business method. This ap--
rights must be less than 5% or less than 10% substance of the invention is studied to proach to treating business methods imple-
of the net sales. For companies that are re- determine jf the end result is simply a mented by a computer program the same as
ceiving incentives under the technology de- method of doing business. These two any other method is confirmed in a report
velopment program provided by the Law different approaches lead to differing scope published by me EPO in June 2000 (report
8,661 of 1993 are excluded from the applic- of allowable subject matter and these latest on Comparative Study carried out under
ability of transfer pricing. decisions confirm that patent protection Trilateral Projeet B3d,Appendix 6 available at
If this BiII is passed and enaeted by the for business methods and software related www.european-patent-office.orgltws/appen-
President, ali companies that are presently inventions is more difficult to obtain before dix6.pdf) which stated "insofar as the scheme
engaged in Trademark, Patent, Copyright the I)K Patent Office than the EPO.. for examination is concemed no distinctions
Licenses and Technology Transfer and are made on the basis of the overall purpose
Technical Assistance Agreements must re- TheLaw of the invention i.e. whether it is intended to
view their agreements to be in compliance filla business niche, to provide some new en-
with the new rules. The European Patent Convention (EPC) tertainment, ete ... ".
This BiII however is not revoking ali the and the 1977 UK Patents Aet were drafted The most recent decision of the EPO in
previous laws that regulate the payment and to be substantially me same in the interest this field is the Pension Benefit Systems
remittances of royalties related to intellec- of harmonisation of patent law across Parmership decision (T931/95). The
tual property rights and must be one of the Europe.Article 52 of the EPC and Sectíon Pension Benefit Systems Partnership appli-
topics to be addressed to the Congresso I of the UK Patents Aet include almost cation c1aimed both a method and appara-
identical wording in which a method of tus for controlling a pension benefit
Erica Aoki, Partner, Moreira Uma, Royster doing business as such is defined, among program for processing and producing in-
& Ohno with Steel Hector E Davis other things, as an invention that is not formation comprising administrative, actu-
patentable. The words as such have led to arial and/or financial information. The
this exclusion being given a fairly narrow in- method claims were rejeeted as being di-
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I terpretation. In practice, the law is being ap- reeted to a method of doing business as
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I If you wish to contribute any plied differently by me UK Patent Office such even though technical means were
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I and the EPO and the test for determining if used. The mere use of technical means does
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news or diary items contaet
I the invention is for excluded subjeet mat- not bring about a technical contribution. But
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r Debbie Spragg ter is different in the two offices. in this ground-breaking decision, the appa-
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I ratus c1aims were not rejeeted as excluded
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I Tel:44 (0)2074532145, The European
I subjeet matter since the business method
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Patent Office approach exclusion was considered to be limited
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I debbie.spragg@informa.com The approach of the EPO has its roots in only to method c1aims. The apparatus
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Patent World • November 2001
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