Walmart’s venture into the world of financial services and suffered a setback courtesy of the UKIPO in its recent decision regarding Walmart’s patent application. The US retail goliath applied for patents in relation to its mobile payment invention in the US, Canada, Japan, China and the UK, and was on course for success in each of these jurisdictions. The UKIPO has, however, bucked the trend by refusing Walmart’s application.
Walmart own Asda, which has 642 retail units in the UK. Walmart may have been hoping that Asda could compete more effectively against its supermarket rivals by taking advantage of this patent application and gaining control of the mobile payment space.
This decision was made on two grounds: added matter and unpatentable subject matter. It is the conclusion reached on the second of these grounds however that is most revealing. This lays bare some of the challenges that can be faced when seeking patent protection for computer-implemented inventions before the UKIPO.
The application concerned a method for limiting the amount of sensitive data shared by a mobile device during a financial transaction. Consequently, it prevents the unauthorised acquisition of this data by third parties.
During examination the UKIPO argued that the invention was excluded from patentability because it related to a computer program and a business method as such. Walmart argued that just because a method is used in business does not make it a method of doing business. Furthermore the invention solves a technical problem regarding the security of financial transactions and so it does not fall within the above exclusions.
In its decision the UKIPO argued that the contribution was in the security of a communication system in a financial transaction. In this case the contribution was non-technical. In particular, the decision concluded:
any improvement in network security arises from the way in which the invention restricts information from being transmitted via the communications system… The avoidance of account information being intercepted within a retail store environment relates only to administrate [sic] steps of a financial transaction.
The hearing officer further stated that any technical problem regarding a secure communications link was not solved by the invention but merely circumvented. As a result he decided that the invention fell solely within excluded matter as a business method and computer program as such. The application was therefore refused.
Supermarkets are not traditional users of the patent system, but this case indicates the growing importance of patents in all areas of business. Asda will no doubt be disappointed by their failure to gain a monopoly right in this mobile payment space, but this will not be the end of the story. It will be interesting to see how the other supermarkets in the UK react, and whether this will be the start of a new supermarket battleground.