Opening a can of worms? the location of the user as a measure of infringement

Author: Rupert Cross, Partner, Boult Wade Tennant

The judgment of the UK Court of Appeal in Menashe v William Hill¹ seems to offer the possibility of establishing patent infringement in the UK by computers located outside the country's jurisdiction. In determining whether use of patented apparatus infringes a UK patent, the Court focused on whether or not the user is located in the United Kingdom, rather than whether the used and claimed apparatus is located in the UK.

For many years, patent attorneys and lawyers have been troubled by the difficulty of employing essentially territorial patent legislation to catch infringers using patented transnational computer or telecommunication systems. For example, patents have been issued with claims directed to a constellation of satellites, defined in terms of numbers of satellites and their earth orbit parameters. Previous thinking had assumed that there could only be infringement of a United Kingdom patent covering claimed apparatus, if the apparatus itself existed within the UK jurisdiction. More generally, it was believed that there could be infringement of a patent claim to a computer system only if the system itself was located in the UK.

The Judgment in Menashe v William Hill concerned a particular question referred at first instance to the Patents Court as a preliminary point in an action for patent infringement by Menashe Business Mercantile Limited against William Hill Organisation Limited. Menashe had a UK patent with claims directed to an interactive computerised gaming system having at least one terminal computer (client) in communication with a host computer (server). The host computer (server) of the alleged infringer was outside UK jurisdiction.

William Hill were accused of "contributory infringement" by their supply to customers in the United Kingdom of program/ data on CD ROM which would enable those customers to use their PCs as the claimed terminal computers to access the overseas host computer.

Under UK law, contributory infringement is defined by Section 60(2) of the Patents Act 1977 as Amended. To paraphrase, this law says that someone who supplies means "relating to an essential element of the invention", knowing that they are suitable for and intended to put "the invention into effect in the United Kingdom" infringes a patent. As with other European countries contributory infringement in the UK is said to have a "double territorial" requirement, in that not only the contributory act, but also the final direct or primary infringement, must be within the jurisdiction. Or at least, so it was thought!