Open Sesame! (part 1)

I have always thought of case law decisions as well as experts’ commentaries on the patentability (or rather the unpatentability) of business methods as a tough read.

Fortunately for many bloggers and authors around the world, the name of one of the most significant recent U.S. decisions in this respect, namely Alice Corp. v. CLS Bank International, has elicited a mass of enjoyable headings and extended metaphors (most of them involving Wonderland one way or another) making the read somewhat more fun.

We in France did have a relatively significant recent decision on this topic as well.

And fortunately for us French bloggers and authors, the decision’s designation, Sesame Active System v. Directeur général de l’INPI, also makes a number of (bad) puns possible.

Even more fortunately for me, my partner and friend Aujain Eghbali agreed to comment on the case, in a two-part post. He does the hard work, I make the bad puns, teamwork at its best.

So thanks to Aujain, the Sesame ruling will now open up for us.

In the case at hand, Sesame Active System filed a patent application before the INPI (French patent and trademark office) in 2012 to protect a communication platform dedicated to light commercial vehicle goods transportation or haulage. The platform receives and compares information related to charterers’ offers and carriers’ capacities and constraints, so as to send most relevant offers to carriers who can thereby optimize their load. The platform has a specific architecture and specific software, and it processes data concrete and specific to vehicle loading. The platform optimizes such vehicle loading and thereby offers many advantages including global traffic reduction.

In 2013, the INPI sent a communication declaring that no search report could be established and that a rejection was to be expected, as the application related to subject-matter excluded from the scope of patentability. As far as we can tell based on the facts set forth in the judgment, it seems that this communication was sent to the applicant after the INPI itself received a similar declaration from the EPO. Indeed, French patent applications which do not claim a foreign priority are sent to the EPO which is in charge of establishing the search report, owing to an agreement between the two offices.

A few letters were exchanged between the patent office and Sesame’s representative, who attempted to resolve the situation with claim amendments and arguments.

But finally, the director of the INPI refused the application on the ground that it was directed to subject-matter excluded from the scope of patentability (in other words, to ineligible subject-matter), as it related to a method for performing mental acts or doing business as such, and the mere fact that it was automated owing to generic computing means was not sufficient to change its nature.

In addition, the director of the INPI considered that no search report could be issued: the only technical elements of the claim were those of a very generic and well-known computing system which was manifestly not novel, without a need to perform any prior art search; and no relevant comparison with the state of the art could be made as there were no technical features.

In 2015, the applicant lodged an appeal before the Cour d’appel de Paris, which led to the decision at stake.

Unsurprisingly for European practitioners familiar with this field of innovation, the Cour d’appel de Paris confirmed that the claimed system may not be patented. The court relied on general principles similar to those usually relied on by the EPO in similar cases; but on the other hand, the court also departed from the EPO’s well-established methodology set in particular by the famous Comvik decision T 641/00.

The key to the Sesame ruling.
The key to the Sesame ruling.

It should first be noted that the grounds on which the INPI can refuse a patent application are listed in Art. L. 612-12 of the Code de la propriété intellectuelle, which notably provides:

Any patent application will, wholly or partly, be refused: (…) 5° If its subject-matter can manifestly not be considered as an invention in the meaning of Article L.611-10, second paragraph;

Art. L. 611-10 which is referred to recites almost exactly the same provisions as Art. 52 EPC, and its second paragraph thus excludes from the scope of patentability methods for performing mental acts or doing business, and programs for computers.

Now, relying on these statutory provisions, the Cour d’appel de Paris held the following:

Even though this exclusion relates to “methods”, it does not follow that the mere definition of the claims with the terms “system” and “process” necessarily leads to patentability […].

The legislator was not concerned with the phrasing of the claims.

The spirit of the statute is to exclude patentability of solutions that are not at a technical level but at a business level.

The Court thus followed the general principle that, in order to get a valid patent, there needs to be a solution of a technical nature (rather than of a business nature) to a technical problem. As such, this is in line with well-established EPO case law: refusal of applications directed to business schemes is regularly approved by the boards of appeal, regardless of the incorporation of the schemes into claims involving computer hardware – such as a computer system claim or a computer-implemented method claim.

After having recalled this general principle, the Cour d’appel de Paris then held that it was not met by the invention at stake:

The claimed “system” is thus characterized by the fact that it comprises sets and subsets of data of a business nature related to deliveries to be performed for charterers (type, delivery place and date) and to haulage offers (capacity and positioning of the vehicle) as well as a CPU which compares this data.

The data “registers” are not characterized on a technical level (format, compression, etc) but only by the type (business-related) of data they contain.

The mere fact that this data is grouped into three sets (type of loading/time/space) of two subsets (charterers/carriers) relates to a mere information organization which does not bring about any technical character as such.

No technical indication is provided on the CPU, which is only characterized by the fact that it performs comparisons, that is, operations of an intellectual nature that consist in putting data in relation one with another.

Therefore, similarly to the EPO in T 172/03 (Order management/RICOH) and T 696/06 (Freight exchange/ELGRABLY), the French judges did not see any technical considerations in the data structures and data processes involved in the method of claim 1, as they were of a business and intellectual nature.

By way of comparison, T 172/03 was concerned with “an improved office system suitable to select, out of a plurality of suppliers, a supplier of expendable supplies of items needed by a section of the office“, while T 696/06 was directed to “a data processing system (x) adapted to confront an offer (o) and a demand (d) in the field of transporting travelers or goods“.

The Court further established that the automation of such data processing of a non-technical nature did not remedy the above deficiencies:

The solution thus relies on a computer system that allows its automation.

Such a system is commonly used in human activities and notably business and thus does not bring about any specific configuration.

It is not characterized at a technical level and is only defined by reference to data gathering and comparison operations that it allows to perform.

This is also in line with EPO case law which consistently holds that the mere automation of a non-technical process cannot be awarded a patent, when conventional systems are at use. See the above-cited decision T 172/03 (Order management/RICOH) and also landmark decision T 258/03 (Auction method/Hitachi).

More surprisingly, although the reasoning would have appeared sufficient with the above considerations, the French judges went a step further by adding the following subsidiary statement:

In addition, the problem raised is not solved by this data processing since the carrier is then only put in front of possible choices that could optimize his profitability.

Although very succinct and arguably not necessary for the court’s demonstration, this consideration is quite something of its own.

It clearly reminds us of the so-called “broken technical chain fallacy” concept laid out by the boards of appeal in T 1741/08 (GUI layout/SAP) and T 1670/07 (Shopping with mobile device/NOKIA). According to this concept, the need for the intervention of a user to solve an alleged technical problem breaks the technical chain and makes the whole chain non-technical.

In summary, the Sesame decision shows that, when the EPO does not grant patents for software for implementing business or administrative methods, applicants probably do not have much more to expect from French courts.

Actually, the accuracy with which the Cour d’appel applied principles also in use at the EPO in this field is remarkable. It is sometimes believed that courts in France tend to set out a “loose” reasoning. But the decision at hand shows that, even in the complex field of business method software patentability, the Cour d’appel de Paris can reach the same general conclusion as the EPO in a precise and well-reasoned manner.

That said, the Cour d’appel de Paris did not follow the exact same approach as the EPO.

Specifically, under European case law, the application should probably have been refused on the ground of lack of inventive step; whereas the Cour d’appel approved the director of the INPI for refusing the application on the ground that it was directed to subject-matter excluded from patentability. Discrepancies of this kind are not a surprise for French practitioners. Usually, such discrepancies between French practice and European practice are apparent at the litigation stage only. But in the present case, there could be consequences on prosecution before the INPI as well.

Thank you Aujain for the detailed account as well as the final cliffhanger. I am looking forward for the second part.

CASE REFERENCE: Cour d’appel de Paris, pôle 5 chambre 2, February 26, 2016, Sesame Active System v. Directeur général de l’INPI, RG No. 15/01962.

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