In a recent decision of the EPO's Boards of Appeal, T1463/11 (Universal merchant platform/CardinalCommerce), the appellant successfully appealed a decision of the Examining Division to refuse the grant of a patent by proving the existence of a technical prejudice through the submission of four sworn statements. The Board of Appeal also emphasised the need to precisely distinguish between technical and non-technical subject matter in the assessment of inventive step in mixed-type inventions and provided further guidance on the notional "business person" and what may be provided to the technical "skilled person" by the notional "business person".
The decision centres on European patent application No. 03760289.3 in the name of CardinalCommerce Corporation (US). The field of the application is in the authentication of online payments. In conventional systems, when an online shopper makes a payment, that payment is authenticated using "plug-in" software located at a server belonging to an online merchant. There may be multiple plug-ins located at the merchant's server and a relevant plug-in is selected based upon payment type, eg credit card, debit card, etc. The selected plug-in communicates with the corresponding payment provider and provides the merchant server with a decision as to whether the payment can be authorised.
In the alleged invention, rather than each online merchant having its own servers with its own copies of the plug-in, a central server is provided with plug-ins which may be accessible by any number of online merchants. The plug-ins themselves require no modification, thus key to the invention is the location of the plug-ins on a separate centralised server.
In this case, there was no dispute over the fact that the claimed subject matter defined a method containing both technical and non-technical elements. In such "mixed-type" inventions, the well-established approach set out in T 641/00 (Two identities/COMVIK) is applied for the assessment of inventive step. In particular, only those elements deemed to have technical character may contribute to an inventive step. Any non-technical elements may appear in the formulation of the objective technical problem as a "statement of requirements".
The Board in this case emphasised the need to precisely analyse what is and what is not technical, as inventive step may hinge upon whether a difference over the prior art that has been determined to be non-obvious is technical or non-technical. To that end, the Board raised the question of "what requirements can the business person actually give to the technically skilled person?"
Whilst the characteristics of the notional "skilled person" are reasonably well defined in the case law, less well defined are the characteristics of the "business person". The Board in this case provided some welcome guidance, indicating that "the business person is just as fictional as the skilled person" and that the business person "represents an abstraction or shorthand for a separation of business considerations from the technical. A real business person, a real technically-skilled person, or a real inventor does not hold such considerations separately from one another".
The Board further notes that a real-world business person "is not unaware of technology" and "might require some particular technology to be used". The Board provided some examples of the type of requirements a real-world business person may have, such as, "We should do this on the internet", "Let's do this by wireless", or "We have a lot of XXXX processors, please use them to implement my business idea".
By contrast, the notional business person would not provide any requirement that includes technical matter, as any technical matter must contribute to the assessment of inventive step in accordance with the principles set out in COMVIK. The requirements provided by the notional business person should therefore be purely business matter, such as, "Move the money from the payer's account to the payee's account".
However, the Board concluded that there is no need to determine the business thinking or business prejudices at the time of the priority date, unlike the requirement to determine the common general knowledge and technical prejudices of the notional skilled person. The requirements provided by the notional business person may not align with those of the real-world business person given the business prejudices of the time. The Board noted that if business prejudices were to be evaluated, such an evaluation would provide a non-technical contribution to the assessment of inventive step, going against the principles set out in COMVIK.
With the above in mind, the Board was critical of the approaches taken by both the Examining Division and the appellant, stating the following:
The examining division, in essence, considered that the problem solved by the invention amounted to how to outsource the authentication of a commercial transaction to a third-party, which was an administrative or business activity. It would thus be a requirement given to the skilled person. The appellant argued that the business person would never have formulated this problem because it went against the thinking at the time. In the Board's view both of these approaches are too simplistic and need to be qualified by the considerations given above. In particular, neither approach distinguishes precisely enough between technical and non-technical aspects.
While the Board agreed that "outsourcing a purely commercial transaction could be a requirement given to the skilled person", the Board judged that "the transaction authentication in the present case cannot be abstracted to a purely business activity because it has aspects such as the use of plug-ins and servers. It follows from the above that the business person cannot require the technically-skilled person to use, for the plug-ins, a server other than the merchant server, and which is (perhaps) accessible to other vendors". The Board concluded that the decision to centralise the plug-ins in a separate server was a technical decision. As such, the determination of inventive step was based upon whether such a decision was a non-obvious decision for the skilled person.
The Board was convinced that a technical prejudice existed against the relocation of plug-ins in a centralised server. The appellant had provided four sworn statements as evidence. Three of those were testimonies from those that could be considered to be "real-world" business persons being directors or senior managers of companies from the banking and payments sector. As expected from the testimonies of "real-world" business persons, the Board considered that the statements contained a mixture of both business prejudices and technical prejudices. For example, the business prejudices included, "merchants considered it was essential that they keep control over consumer transactions" and "the payment operators were worried the introduction of another party would affect profits". The technical prejudices included, "potential for an increase in latency, possible reductions in the number of transaction that can be processed in a given time period, and the increase in the number of points at which communications could be subject to hacking".
While the Board considered that it could "ascribe little value to these statements", it could not "simply ignore them". The Board concluded that "[o]n balance, these observations establish a prima facie case for technical prejudice against relocating the plug-ins to a centralised server."
In reaching its decision, the Board made no reference to the existing body of case law establishing the standard for the burden of proof required for demonstrating a technical prejudice. From the EPO's own commentary on the case law, "[g]enerally speaking, established board of appeal case law is very strict when it comes to recognising the existence of a prejudice. A solution put forward as overcoming a prejudice must clash with the prevailing teaching of experts in the field, ie their unanimous experience and notions, rather than merely cite its rejection by individual specialists or firms" ("Case Law of the Boards of Appeal", Part I-D, 10.2, available here: http://www.epo.org/law-practice/legal-texts/html/caselaw/2016/e/clr_i_d_10_2.htm). It remains to be seen whether this aspect of the current Decision will be followed in future cases.
Given that the Board was satisfied that a technical prejudice had existed against the centralisation of plug-ins and that the prior art provided no hint of doing so, the Board concluded that the claimed subject matter involved an inventive step and decided to grant a patent in favour of the appellant.
In conclusion, the decision of T 1463/11 emphasises the need to clearly separate the technical and non-technical elements of a claim in order to carry out a correct assessment of inventive step in mixed-type inventions. Following COMVIK, any non-technical subject matter may be provided as a requirement to the technical "skilled person" by the notional "business person". The Board emphasised that these requirements must not contain any technical matter and that unlike a "real-world" business person, the notional business person has no knowledge of technology. In addition, the Board concluded that it is not correct to assess the business thinking or business prejudices of the notional "business person" as doing so would violate the principles set out in COMVIK.
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