Amid reports of record online sales in December, UK retailers are increasingly concerned that they are unable to protect vital online trading systems adequately, according to a leading firm of patent and trademark attorneys, Withers & Rogers LLP.

In a recent controversial ruling, Amazon was stripped of its software patent for gift orders by the European Patent Office (EPO), effectively leaving the way open for online retailers to copy the system. The patent, which was originally granted in 2003, applied to the system used to take orders for gifts and then ship them directly to the recipient’s postal address.

Nick Wallin, patent attorney and IT sector expert, comments:

“At a time when some retailers are finding that online sales are propping up shortfalls in sales on the High Street, this ruling is extremely worrying. Web-based retailers could find that they are unable to protect online trading systems adequately and could face further software patent challenges.

“To obtain such software patents in Europe (and which also cover the UK), web-based retailers may be required to demonstrate that the systems used are genuinely ‘inventive’. This usually means having to show that the system has technical aspects which represent an improvement of the existing technology itself and not just the way the way the technology is used, even if, as in the Amazon case, it is in an advantageous manner.”

The present UK national patent law further compounds the difficulties as some software-based systems are excluded from patent protection in the UK, whereas they may be permissible in other parts of Europe and the US. This is because UK patent law provides exclusions that do not apply elsewhere.

Nick Wallin explains:

“Under UK patent law, as presently interpreted by the UK Intellectual Property Office, software programmes such as those that operate social networking sites like Facebook and online search engines like Google, would be very unlikely to gain patent protection. Such systems would be excluded simply because they relate to computer programmes per se, which is a worrying development for the software industry.

“These UK exclusions, combined with news of the recent Amazon ruling have raised concerns among web-based retailers operating in the UK that further software patent challenges could follow. If they arise, such challenges could affect other online ordering or payment processing systems.”

The difficulties faced by European and UK companies in obtaining protection in their home markets can be contrasted with the ease with which protection is obtainable overseas, and particularly in the United States. According to Nick Wallin, this means some web-based retailers could look to the US for patent protection instead. He said:

“For web-based retailers with a global outlook, patent protection for software systems such as e-commerce systems is readily available in the United States. This is because the criteria for patent protection are different. So even if it is not possible to obtain a patent for a software invention in the UK or Europe, it is likely to be possible in the US.

“It is always worth consulting your patent attorney with new ideas before launching innovative products.”

ENDS

For more information contact:

Richard Ayres, Marketing and Business Development Manager at Withers & Rogers Tel: 01926 310700 or message him.

Christine Smart, Joanna Buckle or Beth Zaltzman at SMARTS on 0121 456 3199 or christine.smart@iassmarts.com.

Notes to the Editor

Established in 1884, Withers & Rogers LLP is one of the top ten patent and trademark attorney firms in the UK providing expert advice on the protection and enforcement of intellectual property rights particularly for inventions, designs and trademarks.

With over 100 partners and staff, Withers and Rogers has three principal regional bases in the Midlands; London and the South East and the West and Wales. The firm’s client portfolio stretches across the Americas, the Far East, Japan and Australia as well as mainland Europe.

Withers & Rogers has a client base of more than 10,000 organisations ranging from major corporations and multi nationals to small and medium-sized enterprises, universities and science parks.