The England and Wales Court of Appeal has decided on the case of Aerotel Ltd. v Telco Holdings Ltd & Ors [2006] EWCA Civ 137. This seems to be one of those decisions that splits opinions, or rather, unites them into a negative opinion regardless of the side of the software patent debate in which you stand. I’ve heard negative comments from both advocates of software patents and critics.

The case deals with two separate appeals and two different patents. First is the Aerotel Appeal with patent number 2,171,877; and Macrossan’s Appeal, with patent application number GB0314464.9. The question at stake here is the application of Art. 52 of the European Patent Convention regarding patentable subject matter. The Aerotel patent is for a telephone pre-payment system where a user obtains a code, and their credit amount and code number would be stored in memory in a special exchange. Macrossan’s patent is for an automated method of producing the documents necessary to incorporate a company.

The ruling, deliver by Lord Justice Jacob, allows the Aerotel patent, but invalidates Macrossan’s application. I have only browsed the decision, but I find the fact that the Macrossan application was not allowed quite heartening, particularly because the case relies heavily on other recent cases to reach this decision, particularly Haliburton v Smith, CFPH’s Application and Shoppalotto’’s Application.

In my opinion, this enhances the latest trend to allow limited patentability of computer implemented inventions, but not allowing software patents that do not present any substantial advancement to the prior art.



Neal Macrossan · February 14, 2007 at 9:06 pm

Hasn't the Court of Appeal, in Aerotel/Macrossan, revived Falconer J's expressly overruled ‘contribution approach’(i.e. the 'contribution approach' which Falconer J adopted in the Merrill Lynch case at High Court level, which approach was expressly overruled in the Merrill Lynch case at Court of Appeal level)? …At paragraph 26(1) of the Court of Appeal Judgment, the Court gave the following summary of the "contribution approach" (and identified where it came from and how the Court of Appeal had itself previously expressly rejected it) –"Ask whether the inventive step resides only in the contribution of excluded matter – if yes, Art.52(2) applies. This approach was supported by Falconer J in Merrill Lynch but expressly rejected by this Court."Yet in adopting the Comptroller's suggested 4 step test (refer to paragraphs 41, 47 & 49 of the Court of Appeal Judgment), steps 2 and 3 of which are as follows –"(2) identify the actual contribution;(3) ask whether it falls solely within the excluded subject matter",the Court of Appeal seems have to revived Falconer J's expressly rejected "contribution approach". And wouldn't a suggestion otherwise merely be an exercise in semantics?Also, is this not unsurprising given the Court's apparent fondness for the "contribution approach" which it showed at paragraph 32 of the Court of Appeal Judgment when it said –"What then of the first, the "contribution" approach? Were the question open for free decision now, we think there is a lot to be said for it."?(The above is one of a number of my commentaries on the Court of Appeal judgment which I have placed on this resource page about the case at ).


Company Formation In · January 7, 2008 at 1:39 am

Is there any update yet on this Patent Appeal?


Andres Guadamuz · January 7, 2008 at 3:37 am

The decision stands. There is going to be a new review on software patents, see:

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