Inventor of revoked payment patent says UK system is a joke

Payment solutions firm Ingenico challenged the patent's validity.

A Hearing Officer of the IPO threw out Ingenico's complaint about obviousness: "To people in the hospitality industry, using a combined authorise and pay system would not have occurred," he wrote. He also threw out an allegation that the patent lacked inventiveness.

But a third challenge succeeded, in which Ingenico argued that the process was not a patentable invention. The Patents Act excludes methods of doing business and computer programs as such.

A landmark ruling in 2006 in the cases of Aerotel and Macrossan changed the way the UK-IPO assesses whether inventions are patentable. A new four-step test was introduced for the assessment of patentability:

1. Properly construe the claim;
2. Identify the actual contribution;
3. Ask whether it falls solely within the excluded matter;
4. Check whether the contribution is actually technical in nature.

Step 3 caused the patent to fall. The patent can cut fraud and enable gratuities to be paid by card at the same time as the principal sum; but the Hearing Officer wrote: "while they may be advantages of the invention, they are not achieved by technical means... They are achieved by changing the business process – i.e. changing the sequence of steps – in which the terminals are used. The claim is to how a business uses a known system."

"The contribution falls squarely within the business method exclusion. It also falls within the computer program exclusion given its implementation by means of a computer program," he concluded.

Jeremy Nielsen told OUT-LAW that the entire experience with the patent has been an awful one. "Patents in the UK are a joke," he said. "We spent £100,000 trying to enforce this patent before we had to pull out because it was too expensive. We never managed to sell a licence – it was simply stolen."

"It's not a business method and I still believe in it," said Nielsen. "But I wouldn't recommend that anyone in the UK takes out a patent unless they're a huge company."

The patent rights were transferred to a company called Pendawell before the revocation claim was heard. Nielsen expects Pendawell to appeal the ruling. He said Pendawell also holds the US rights for his invention. The US patent has withstood a similar challenge, he said.

Pendawell declined to comment for this story. Ingenico did not respond to a request for comment.

See: The Hearing Officer's ruling (15 page/72KB PDF)

Copyright © 2007, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.