Case Summary:

The case involved a patent application for a "group-buying" method that dynamically adjusts product prices based on the number of buyers, enhancing user motivation for sharing. While lower courts and the administrative authority deemed it non-patentable, the Intellectual Property Court of the Supreme People's Court recognized the application as a technical solution due to its innovative use of encryption, data binding, and matching technologies to address order-tracking challenges.

Ruling:

The Intellectual Property Court of the Supreme People's Court stated that business methods fall under human intellectual activities, and without employing technical means, solving technical problems, or producing technical effects, they do not constitute patentable subject matter under the Patent Law. However, patent applications for business methods that incorporate technical features may qualify for protection under the Patent Law. Specifically, the determination should be made from the perspective of a person skilled in the art, considering the claims as a whole and comprehensively evaluating whether they employ technical means consistent with natural laws, solve technical problems, and produce technical effects. The Court emphasizes that an invention is not considered ineligible for patenting simply because the claims contain non-technical content or achieve commercially beneficial effects, separating the claims' technical and business features.

In this case, the Intellectual Property Court of the Supreme People's Court's final judgment differs significantly from the first-instance court’s judgment (and the challenged administrative decision) regarding the standards for determining whether the disputed patent falls under the protection of the Patent Law. The key differences are as follows:

1. Patent subject matter

Final Judgment (Intellectual Property Court of the Supreme People's Court)

• Comprehensive Assessment: This emphasizes that the patent claims should be evaluated as a whole and that technical features and business characteristics should not be arbitrarily separated.
  
• Criteria for Technicality: Whether the claims employ technical means consistent with natural laws. Whether they solve a technical problem or produce technical effects.
  
• Baseline Function: The patent subject matter eligibility review serves as a "baseline filter." Patents containing non-technical content should not be rejected outright unless it is evident that they do not involve technical solutions.
  

First-Instance Judgment

• Denial of Technical Problem: Concluded that the application seeks to solve the issue of business incentives and is not a technical problem.
  
• Denial of Technical Means: Asserted that the group-buying model and tail payment mechanism achieve business objectives and do not qualify as technical means under the Patent Law.
  
• Denial of Technical Effects: Held that the effect of the group-buying model is merely to promote product sales and does not constitute a technical effect aligned with natural laws.
  

2. Evaluation of the Claimed Technical Solution

Final Judgment

• The application's technical methods (e.g., encryption/decryption, data matching) effectively solve the issue of order tracking and payment settlement in the group-buying model.
  
• It was determined that the application meets the "three-element test" (technical means, technical problem, and technical effects) and qualifies as a "technical solution" under Article 2 of the Patent Law.
  

First-Instance Judgment

• Denial of Technical Problem: Held that the issue being addressed is sales promotion, which is a business problem, not a technical one.
  
• Denial of Technical Effect: The proposed solution's technical contribution to data processing and information binding was not recognized.
  

Summary: Key Differences

1. Patent subject matter about business matter: The final judgment introduced a more lenient subject matter eligibility review, whereas the first-instance court conflated eligibility review with substantive examination and applied stricter standards.
   
2. Recognition of Technical Features: The final judgment thoroughly evaluated the technical features and their role in supporting the business model, while the first-instance judgment separated and overlooked the technical aspects, focusing solely on the business features.
   

This decision highlights a more flexible approach to reviewing business method patents in China and offers clear guidance for similar future applications.