Aerotel Ltd v Wavecrest Group Enterprises Ltd & Ors

A patent claim is not rendered inventive merely because it implements a commercial choice using conventional computer-controlled hardware. In assessing obviousness, the court must identify the inventive concept, compare it with the prior art, and ask whether the differences required invention. Choosing pre-payment rather than post-payment for telephone calls was a commercial decision which was obvious. The associated functions of recording, verifying and monitoring credit, and disconnecting a call when credit expired, followed inevitably from that choice and involved no inventive step where the patent left the relevant hardware and software unspecified.

For excluded matter, the contribution must be assessed in substance. A known exchange, enhanced by programming to accommodate pre-payment, did not constitute a new technical combination. The patent was therefore invalid for obviousness and excluded subject matter.

Aerotel brought a patent infringement claim against Wavecrest concerning a patent for making prepaid telephone calls from any available telephone through a computerised “Special Exchange”. Wavecrest counterclaimed for revocation on grounds including lack of novelty, obviousness, excluded subject matter and insufficiency.

The patent had previously been considered by the Court of Appeal in Aerotel Ltd v Telco Holdings Ltd, where the patent had been restored following summary revocation. In the present action, further prior art and evidence were available, including WATS resale systems, ATS III/65, Matsuda and BT AccountCall. The central issues were whether the claimed system involved an inventive step and whether its actual contribution was excluded from patentability.

1. Obviousness. The court applied the structured Windsurfing approach as arranged in Pozzoli v BDMO: identify the skilled person and common general knowledge, identify the inventive concept, identify the differences from the prior art, and decide whether those differences required invention.
2. The inventive concept was a system and method for making prepaid telephone calls from any available telephone using a Special Exchange behind the local exchange. The skilled addressee would be a commercially oriented telecommunications team with access to appropriate computer expertise.
3. Pre-payment and post-payment were established alternative methods of paying for telephone calls. Choosing pre-payment was a commercial and business decision and was completely obvious. Once that choice was made, storing credit, verifying the caller, monitoring the remaining credit and terminating the call when it expired were inevitable or conventional consequences. The patent did not claim any particular technical implementation of those functions.
4. The WATS resale systems, Matsuda and BT AccountCall disclosed Added Exchanges behind local exchanges, using computer-driven switches and memory to validate callers and handle calls. Adapting such an exchange to record and monitor pre-payment required no inventive step. The claims were therefore invalid for obviousness. The ATS III/65 Version 2.0 material was not shown to be a pre-priority publication, but the evidence established ATS III/65 as a commercial WATS resale example, so the same obviousness reasoning applied.
5. Excluded matter. Applying the four-step approach in Aerotel Ltd v Telco Holdings Ltd, the actual contribution was the use of a known Added Exchange with enhanced computer capacity to accommodate pre-payment. That contribution lay in a business method and, insofar as programming was involved, a computer program. It was not a new overall combination of apparatus or a new interaction between known components. The claims were consequently excluded under article 52 of the EPC.
6. The patent was also alleged to be insufficient, but the court did not consider separate findings necessary. If valid, claims 1 and 9 would have been infringed by the Calling Card System, GoTalk and Talkback. The claim was dismissed, the counterclaim succeeded and the patent was revoked.

The judgment records earlier proceedings concerning the same patent:

• Court of Appeal: In Aerotel Ltd v Telco Holdings Ltd [2007] RPC 7, an appeal from Lewison J’s decision at first instance, the patent was restored after summary revocation on excluded-matter grounds.
• High Court (Patents Court): The present court held the patent invalid for obviousness and excluded subject matter, dismissed the infringement claim and revoked the patent.