HTC Europe Co Ltd v Apple Inc

Factual and Procedural Background

This appeal concerns a judgment dated 4 July 2012 following the trial of four actions between Company A and Company B (together "Company A") and Company C ("Company C"). The actions involved four patents owned by Company C, but the appeal focuses on two European patents, namely the 948 patent and the 022 patent.

The 948 patent relates to computer devices with touch-sensitive screens capable of responding to multiple simultaneous touches. The trial judge found certain claims invalid for relating to computer programs as such and for obviousness. Company C appeals these findings.

The 022 patent relates to methods of unlocking computer devices with touch-sensitive screens. Multiple claims were found invalid for lack of novelty or obviousness, and Company C appeals only the obviousness findings concerning claims 5 and 17 in light of an earlier device known as the "Neonode".

Company C was granted permission to appeal findings of non-infringement on certain claims, but due to settlement, Company A did not participate in this appeal and the non-infringement appeal is not pursued. The Comptroller intervened in the appeal to protect the public interest in preventing invalid patents from being restored.

Legal Issues Presented

1. Whether claims 1 and 2 of the 948 patent are invalid because they relate to computer programs as such and thus claim excluded subject matter;
2. Whether claim 1 of the 948 patent is invalid for obviousness in light of the common general knowledge;
3. Whether claims 5 and 17 of the 022 patent are invalid for obviousness in light of the Neonode device.

Arguments of the Parties

Appellant's Arguments

• The judge erred in concluding claims 1 and 2 of the 948 patent were excluded as relating to computer programs as such, arguing the invention made a technical contribution by solving a technical problem related to multi-touch devices.
• The judge failed to properly identify the inventive concept and did not consider an appropriate baseline for obviousness, which should have included multi-touch devices known in the research community and commercial devices like the iPhone 1.
• The obviousness case against claim 5 of the 022 patent was not properly developed, with critical evidence introduced late and insufficient expert analysis on whether adding multiple unlock images to the Neonode's status screen was obvious or practical.
• The judge incorrectly treated the Neonode status screen as being in a user-interface lock state, which was disputed.

Appellee's Arguments

• The judge correctly found that claims 1 and 2 of the 948 patent related to excluded subject matter, as the invention was implemented in software and did not produce a relevant technical effect.
• The judge's obviousness findings were properly based on the common general knowledge and expert evidence, including the iPhone 1 as a baseline, and the use of flags for filtering events was known.
• The Neonode disclosed the relevant features and the addition of unlock images providing user feedback was an obvious improvement, supported by expert evidence despite limited direct written reports on this point.
• The status screen of the Neonode was properly regarded as locked with respect to the individual applications requiring further gestures to unlock.

Comptroller's Role

• Intervened to protect the public interest by assessing the validity of the patents and assisting the court with relevant materials.
• Maintained a balanced position consistent with preventing invalid patents from being restored.

Table of Precedents Cited

Court's Reasoning and Analysis

The court analyzed the patents with reference to the exclusion of computer programs "as such" under the Patents Act 1977 and Article 52 of the EPC, applying the four-step Aerotel test to identify whether the inventions made a technical contribution beyond excluded subject matter.

Regarding the 948 patent, the court found that the invention addressed a technical problem of handling multiple simultaneous touches on multi-touch devices, proposing a method involving flags associated with views on the screen to control touch event processing. This solution was held to be technical in nature because it operated at the system software level, improved programmability, and simplified application development, thus making the device a better device in practical terms.

Although the judge below found the claims invalid as relating to computer programs as such, the appellate court disagreed, emphasizing substance over form and identifying sufficient technical contribution. However, the judge's finding of obviousness for claim 1 was upheld based on the common general knowledge, including the iPhone 1 as a known multi-touch device, and the known use of flags to filter input events. The judge had properly evaluated expert evidence and cautioned against hindsight.

Claim 2 of the 948 patent was found to survive the obviousness attack and not to be excluded subject matter.

For the 022 patent, the court considered whether claims 5 and 17 were obvious in light of the Neonode device. The judge found that the Neonode's lockscreen and status screen disclosed relevant features and that adding unlock images with user feedback was an obvious improvement. The court accepted the judge's interpretation that the device could be in a lock state with respect to individual applications even while overall unlocked, consistent with the patent's purposive construction.

The court rejected the appellant's submission that the status screen was not a lock state and found the evidence sufficient to support the conclusion that claims 5 and 17 were obvious in light of the Neonode, despite limited expert evidence on the practicalities of implementing multiple unlock images.

The court also discussed the complex and unsettled nature of the legal tests for computer program patentability, noting the shift from literal interpretation of "computer program as such" to assessing technical contribution or effect, while recognizing the inherent difficulty in defining these concepts.

Holding and Implications

The court issued the following rulings:

• Dismissed the appeal in relation to claim 1 of the 948 patent, affirming its invalidity for obviousness.
• Allowed the appeal in relation to claim 2 of the 948 patent, holding it valid and not excluded as a computer program as such.
• Dismissed the appeal in relation to claims 5 and 17 of the 022 patent, affirming their invalidity for obviousness in light of the Neonode.

The direct effect is that claim 2 of the 948 patent remains valid, while claim 1 of the 948 patent and claims 5 and 17 of the 022 patent are invalid. No new precedent was established beyond the application of established principles regarding computer program patentability and obviousness.