Menashe Business Mercantile Ltd v William Hill Organisation Ltd

For indirect infringement under section 60(2) of the Patents Act 1977, the supplied means must be suitable and intended to render the claimed invention effective in the United Kingdom. An effect merely experienced within the jurisdiction is insufficient.

Where a claimed computer system has components in different countries, its place of use does not depend solely upon their physical locations. A person operating a terminal in the United Kingdom may, in substance, use the entire system there, including a host computer situated abroad. Supplying software which enables that use may therefore put the invention into effect in the United Kingdom.

The respondents owned or claimed an exclusive licence under a European patent for an interactive computerised gaming system comprising terminal computers, communications and a host computer. The appellant supplied United Kingdom customers with software which enabled their computers to communicate over the internet with a host computer situated in Antigua or Curaçao.

The patent claim alleged indirect infringement under section 60(2) of the Patents Act 1977. On agreed facts, Jacob J answered in the negative the preliminary question whether the foreign location of the host computer and part of the communications provided a defence: [2002] EWHC 397; [2002] RPC 47.

The appellant challenged that answer. The central issue was whether supplying the software was intended to put the claimed system into effect in the United Kingdom when a necessary component was physically abroad.

1. Appeal dismissed unanimously. Lord Justice Aldous delivered the judgment with which Lord Justice Dyson and Sir Denis Henry agreed. Although the judge below reached the correct answer, the Court of Appeal adopted a different route to it.

2. Section 60(2) of the Patents Act 1977 concerns means suitable and intended to put the invention itself into effect in the United Kingdom. Under section 125, the relevant invention is the invention specified in the patent claims. The provision therefore requires the supplied means to be intended to render the claimed apparatus effective or usable in the United Kingdom. It does not establish infringement merely because the invention produces an economic, physical, emotional or other effect there.

3. That construction was supported by the relationship between direct infringement under section 60(1) and indirect infringement under section 60(2), and by Articles 25 and 26 of the Community Patent Convention. The legislative materials, the headings to those Articles and their other language versions indicated that Article 26 concerned implementation or use of the invention within the relevant territory. Section 60(3) likewise contemplated means intended to place the invention in an infringing state.

4. The physical position of every component did not determine where this networked invention was used. The claimed system differed from an ordinary machine because the host computer's location was immaterial to the user and to the operation of the claimed system. A customer operating a terminal in the United Kingdom used the whole gaming system there in substance. That use included the input to and output from the foreign host computer, even though the host itself operated abroad.

5. Accordingly, supplying the software in the United Kingdom to a United Kingdom customer was capable of being intended to put the claimed invention into effect there. The foreign location of the host computer and part of the communications was therefore no defence to the section 60(2) claim on the agreed facts.

1. Court of Appeal: The appeal was dismissed unanimously. The preliminary issue remained answered in the negative, although the court's reasoning differed from that of Jacob J: [2002] EWCA Civ 1702.

2. High Court, Chancery Division: Jacob J held that the foreign location of the host computer and part of the communications was not a defence to the section 60(2) claim: [2002] EWHC 397; [2002] RPC 47.