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Who is the notional businessman and does it matter?


24th Aug 2017

Well, it might if you are in the business of online shopping or transaction authentication because on appeal, the European Patent Office has decided to grant a patent for an invention in this area.

At first instance, the Examining Division (ED) refused to grant a patent for the claimed invention. In essence, the ED held that the claimed invention lacked the required inventive step as being a straightforward, albeit technical, implementation on a standard computer network, of non-technical measures such as business measures and programming measures.

The claimed invention related to a centralized merchant authentication processing system, MAPS. This determined a particular type of payment instrument (such as MasterCardRTM or VISARTM) being used for a transaction based on received payment information including a number identifying the particular payment instrument being used. The MAPS system included a number of different plug-ins, of known functionality, which were activated by the MAPS system based on the received payment information. The activated plug-in then obtained an authentication for the transaction from a payment network associated with the payment instrument being used.

In other words, the claimed invention replaced a known three-machine system: a consumer’s computer, a merchant’s server, and an authenticating server with a four-machine system: a consumer’s computer, a merchant’s server, and authenticating server, and the MAPS system including the plug-ins. It was this four-machine system which the Examining Division considered to lack the required inventive step, and which led to refusal of the patent at first instance.

At second instance the Board of Appeal considered the arguments submitted by the appellant and ED. With reference to inventive step, they said that these arguments were unsatisfactory because “neither approach distinguishes precisely enough between technical and non-technical aspects”.

Usually, the EPO’s approach in assessing inventive step follows a well-established 3-step test. Firstly, the closest prior art is determined and secondly, the objective technical problem to be solved is established. Finally, a determination is made as to whether or not the claimed invention, starting from the closest prior art and the objective technical problem, would have been obvious to the skilled person.

The formulation of the objective technical problem is a crucial step in the consideration of inventive step, and it is well established that non-technical elements do not contribute to inventive step, and may therefore appear in the formulation of the objective technical problem. However, it is not permissible for the objective technical problem to be formulated so as it contains pointers to the technical solution, because this results in a hindsight assessment of inventive step. Therefore, in the assessment of inventive step, it is necessary to distinguish between technical features of a claimed invention and non-technical aspects.

To this end, the Board introduced the concept of the notional business person to help determine what non-technical aspects or requirements might be given to the skilled person, and may therefore appear in the objective technical problem.

The Board made it clear that the notional business person would not require the use of specific technical means:

He would not require the use of specific technical means such as the internet, wireless, or XXXX processors. This approach ensures that, in line with the Comvik principle, all the technical matter, including known or even notorious matter, is considered for obviousness and can contribute to inventive step.

However,

He might do things that a real business person would not, such as include requirements that go against business thinking at the time – a sort of business prejudice….If this were not the case, business requirements would need to be evaluated and would contribute to inventive step, contrary to the Comvik principle.

Applying these principles to the case in hand, the Board decided that:

…transaction authentication…cannot be abstracted to a purely business activity because it has aspects such as the use of plug-ins and servers.

It also 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 business person might well have noticed that expense and difficulties were involved in running the merchant server; but she has no technical appreciation of why that is or that using another server might help. Those are matters for the a programmer or network engineer.

Programs for computers are, in general, not considered technical. However, the choice of where a particular computation is carried out in a distributed system will normally have implications for availability, for latency and so on, and those are technical matters. The Board is persuaded, that the decision to centralise the plug-ins in a separate server that can be accessed by several merchant servers, in order to simplify installation and maintenance and reduce load, should be considered a technical one.

Interestingly, after having decided what aspects of the claimed invention were technical, and hence can contribute to inventive step, the Board decided not to follow the usual 3-step test for inventive step.

Rather, they simply considered the obviousness of the relocation of the plug-ins from the merchant’s web server to the central server and concluded that:

…at the priority date, plug-ins were installed on the merchant’s web server. The skilled person might have been aware that their installation and maintenance involved difficulties and their relocation on a central server was possible. However, there was no hint to do so and a prima facie prejudice against doing so which is not rebutted by any of the documents on file. In the Board’s judgement, in such circumstances, their re-location cannot be considered to have been obvious.

The technical prejudice was evidenced by statements from a number of expert witnesses, although the Board dismissed much of these statements as business prejudices. Usefully, however, the Board described technical prejudices as the potential for an increase in latency, possible reductions in the number of transactions 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.

Accordingly, the Board considered that the claimed invention had the required inventive step, and ordered the ED to grant a patent. However, it remains to be seen whether any third party will oppose this patent during the 9-month opposition window provided by the European Patent Convention.

In summary, this decision may be useful for those applicants with inventions defined by a mixture of technical and non-technical features. This is because it introduces the concept of the notional businessman to more precisely distinguish between these aspects. It is clear that this notional person cannot require the technically-skilled person to use a specific technical solution such as the use of the internet, wireless, or particular processors. Thus, these features must not appear in the formulation of the objective technical problem. This ensures that all technical matter, including known or even notorious matter, is considered for obviousness, and can contribute to inventive step. In essence, the concept of the notional business person might be useful as an extra check to avoid an ex post facto analysis of inventive step.

Further, this decision shows that technical prejudices must be taken into account in the assessment of inventive step but non-technical prejudices must not. Finally, this decision also shows that expert witnesses should be carefully selected for their technical expertise and not their business acumen.

This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice. Please contact Reddie & Grose LLP for advice before taking any action in reliance on it.

Author
Mark Bentall
Senior Associate
About the author

Would you like to know more? You can talk to Mark Bentall who will be able to help. Call +44 (0)20 7242 0901

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