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A Boost for Fintech Patents in the UK

1st Sep 2020

A recent decision from the High Court gives a boost to those seeking to protect fintech inventions. In Lenovo v UK IPO Comptroller of Patents Mr Justice Birss shows that the UK can be pro patent for business-method and software, provided you know where to look…

The invention in question is a payment method that deals with a well-known issue. Many of us carry around several different contactless payment cards. When the time comes to complete a transaction we whip out our holder and carefully remove the desired card, presenting it gingerly to the contactless payment device and hoping we won’t have to remember the pin. The contactless device receives the relevant information from the card, including a contactless payment identifier that links the card to your account, and extracts your hard earned cash. Not removing the card from the holder first risks the dreaded problem of “card clash” – which card should the contactless device use for the transaction? Which account should it debit?

The patent application in question describes a contactless payment system that simultaneously obtains all of the contactless payment identifiers from all of your cards and then automatically splits payment across more than one payment account corresponding to the payment cards based upon predefined user preferences. The reason for splitting the payment is not claimed in the application, but during proceedings the applicant ran the argument that it allows payment incentives to be maximised and card limits to be respected.

The claimed invention was considered against an earlier US patent, US 8113438B1. This describes a payment system that also reads multiple cards. However, rather than automatically debiting various accounts based on predefined preferences the user is presented with various options at the point of transaction (e.g. which card or combination of cards to debit).

It’s worth at this point considering the UK approach to patentable subject matter. The current test, introduced by the Court of Appeal in Aerotel Ltd v Telco Holdings Ltd, is set out in the decision along with the guidance from the signposts of the AT&T and HTC cases. It can all be distilled to one question. Does the claimed invention provide a technical contribution over the prior art?

In this case the contribution can be boiled down to this: in the system of the earlier US patent the user has to enter their preferences at the point of sale whereas according to the invention these preferences are pre-stored and available to be used at the point of transaction for it to proceed automatically. The need for the user to decide their preference for a transaction at the point of sale is removed, and a button press is saved.

According to Mr Justice Birss, this automatic feature solved the card clash problem without the user having to take any extra physical step at the point they use their contactless cards. He believed that this was a technical contribution. The application will now continue in examination at the UKIPO where it will be assessed for novelty and inventive step.

This case demonstrates the level of detail applicants need to consider when looking to protect inventions related to financial transactions. The general steps involved in a card transaction are too broad, and aimed at the non-technical subject matter of a business process, so we need to look deeper. Maximising payment incentives and card limits between accounts is also a business or administrative aim (consider, for example the European Patent Office’s decision in Comvik) so, again, we need to look deeper. However, eliminating the problem of card clash is rooted in a technical issue related to the system in which the payment transaction takes place. Multiple cards are normally held together and this can lead to uncertainties on how the system should resolve payment. Improving this system could be considered solving a technical problem with how the system operates.

In this particular case, the Court identified patentable subject matter by focussing on how previous payment methods were implemented and identifying the removal of a physical step – a button press. Under UK law (and the law applied by the European Patent Office for that matter) even small differences such as this can improve the system and therefore provide the basis for a technical contribution.

When looking to patent fintech inventions applicants need to consider how their invention works at the system level, identify the differences over how existing systems operate and look at whether any of these differences relate to the types of problems software engineers would be involved in solving, rather than a business or financial expert. This is something a patent attorney can help with. However, don’t be surprised if the focus of the patent application is quite different from the problem that you originally thought you were solving. In the fintech field patent applications need to be carefully crafted to push the right buttons.

At Reddie & Grose LLP we regularly advise on protecting inventions in fields traditionally considered to be non-patentable. If you would like to know more, please get in touch.

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.

Pete Sadler
About the author

Would you like to know more? You can talk to Pete Sadler who will be able to help. Call +44 (0)20 7539 4454


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