T 2626/18 (Insurance risk prediction/SWISS RE) 28-09-2022
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System and method for forecasting frequencies associated to future loss and for related automated operation of loss resolving units
Inventive step - all requests (no)
Inventive step - insurance risk predicition and loss frequency (not technical)
I. This appeal is against the decision of the examining division to refuse European patent application
No. 11190452.0 for lack of inventive step, because it was an obvious computer implementation of a business method on a computer system (Article 56 EPC).
II. In the statement setting out the grounds of appeal, the appellant requested that the decision under appeal be set aside and the case be remitted to the examining division for further search and examination on the basis of the claims according to the annexed "Anhang A" (main request), which essentially corresponded to the refused claims, or that a patent be granted on the basis of these claims (auxiliary request).
The appellant additionally requested ("Zusatzantrag") that the Board establish that the approach adopted by the examining division to determine technical character of the invention contradicted established case law.
III. The Board arranged for oral proceedings as a videoconference. In a communication accompanying the summons, the Board set out its preliminary opinion that claim 1 lacked clarity and inventive step (Articles 84 and 56 EPC) and that the examining division's approach complied with established case law.
IV. With a reply dated 29 August 2022, the appellant filed amended main, first and second auxiliary requests. It requested that the decision under appeal be set aside and that a patent be granted on the basis of the claims according to the annexed "Anhang A" (main request) or, alternatively, on the basis of the claims according to the annexed "Anhang B" or "Anhang C" (first and second auxiliary requests). Additionally, it requested that the oral proceedings be held on the premises of the Boards of Appeal in Haar.
V. In a communication dated 13 September 2022, the Board acceded to the appellant's request to hold the oral proceedings in Haar.
VI. The oral proceedings took place on 28 September 2022. The appellant's final requests were that:
- the case be remitted to the department of first instance for further prosecution including the carrying-out of a search on written prior art (main request),
- a European patent be granted on the basis of the claims of "Anhang A" (first auxiliary request) or "Anhang B" (second auxiliary request) or "Anhang C" (third auxiliary request), all of these claim sets filed with the reply dated 29 August 2022.
VII. At the end of the oral proceedings the Chairman announced the Board's decision.
VIII. Claim 1 according to Anhang A reads:
"A forecasting and signaling system for automated and automatically tuned operation of a loss resolving unit (40) by means of a control unit controller (10) by forecasting loss frequencies and severities based on captured measure parameters of measuring devices (201,...,261), interacting electronically by signal generation modules and appropriate signal generation, whereas the signal generation is based on forecasted frequencies associated to future loss and loss distributions for individual risks of a plurality of operating units (30) by means of the control unit controller (10), the operating units being exposed to said risk measurable by physical parameters for causing a loss at a loss unit (20,...,26), whereas in case of an occurring loss at a loss unit (20,...,26) the system comprises measuring devices (201,...,261) to scan for, measure and transmit measure parameters to the control unit controller (10), and whereas the control unit controller (10) comprises means to operate the automated loss resolving unit (40) resolving the occurred loss, characterized
in that the control unit controller (10) comprises a trigger module to dynamically scan, monitor and capture for measuring devices (201,...,261) assigned to the loss units (20,...,26) for measure parameters and to select measurable measure parameters capturing a process dynamic and/or static characteristic of at least one liability risk driver (311-313) by means of the control unit controller (10), each liability risk driver (311-313) representing a measurable real-world liability exposure (31) of an operating unit (30), wherein measuring possibilities at the measuring devices (201,...,261) are dynamically captured and the at least one liability risk driver (311313) is generated based on the on the captured measuring devices (201,...,261) and assigned to the currently measured parameters, and wherein the measuring parameters associated with the generated liability risk drivers (311-313) are measured and transmitted to the control unit controller(10),
in that the control unit controller (10) comprises a driver selector (15) to select a set (16) of liability risk drivers (311-313) parameterizing the liability exposure (31) of the operating unit (30) and dynamically assign the measured measure parameters to the liability risk drivers (311-313), whereas a liability exposure signal of the operating unit (30) is generated based upon measuring the selected measure parameters by means of the measuring devices (201,...,261),
in that the driver selector (15) comprises means to dynamically adapt the set (16) of liability risk drivers (311-313) varying the liability risk drivers (311-313) in relation to the measured liability exposure signal by periodic time response, and adjust the liability risk driven interaction between the loss resolving unit (40) and the operating unit (30) based upon the adapted liability exposure signal,
in that the control unit controller (10) comprises a scenario generator (131) for generating loss scenarios, wherein loss scenarios are given by variables of the control unit controller (10) connecting the liability risk drivers (311-313) to form a function structure, wherein for each scenario a loss model is generated with a frequency distribution function assigned and wherein an expected loss in generated by an aggregator (135) based on a model input and a generated frequency of losses out of the frequency of events and a distribution of a number of losses per event, and
in that a structure of the currently used liability risk divers (311-313) is adapted by the control unit controller (10) by generating and assigning the appropriate liability risk drivers (311-313) based on the currently scanned measure parameters, wherein the liability risk driver structure is based on the generated scenarios, and wherein a specific risk is decomposed by the scenarios into system components of the control unit controller (10), on which the risk drivers (311-313) act independently."
IX. Claim 1 according to "Anhang B" adds, at the end of the preamble, the following wording:
"the loss resolving unit (40) comprising dedicated repair nodes comprising automatic or semiautomatic systems to maintain operation or recover loss of the loss units (2) in case of the occurring loss".
X. Claim 1 according to "Anhang C" adds the following wording to claim 1 of the first auxiliary request after "a frequency distribution function assigned":
"wherein the scenario generator (131) comprises a processing module to generate the frequency of loss scenario and the severity in natural units of a loss unit (20,...,26), and".
XI. The appellant argued that the claimed invention included more technical features than the use of a general-purpose computer to implement a business scheme.
Firstly, predicting future losses was a complex task which before the present invention was typically performed by a human expert. The present invention replaced the human expert with an automated method including operations which the human expert would not have carried out. This enhanced the standard computer functionality by more than just routine programming and, therefore, contributed to technical character.
Secondly, while the human experts used only historic data, the claimed invention analysed measured, up-to-date physical parameters in order to improve the accuracy of risk predictions. This was an implementation choice which could only have come from the technically skilled person who was aware that electronic sensors capable of measuring physical parameters existed. While using sensors might seem trivial today, at the priority date it was not.
Thirdly, the fact that the claimed invention dynamically adapted its structure to the sensor measurements also involved technical considerations.
Fourthly, the claimed invention scanned measured parameters in order to select parameters which could be used for loss prediction. This step involved technical considerations similar to those discussed in decision T 2079/10 (Steuerung von zellulär aufgebauten Alarmsystemen/SWISSRE, Reasons, points 4.2 and 4.3).
Fifthly, the appellant argued that the claimed features were not limited to the abstract business concept and could not have been provided by the business person to a technical expert for programming. Nor would the technical expert starting from a networked standard computer system have had corresponding knowledge (see page 20, section d) of the letter dated 29 August 2022).
The claimed subject-matter should have been covered by a prior art search. Lack of such a search made it impossible for the appellant to provide arguments in favour of technicality and inventiveness.
1. Admissibility under Article 13(2) RPBA 2020
The Board admits the first, second and third auxiliary requests into the proceedings under Article 13(2) RPBA2020, because they are a bona fide attempt to overcome clarity objections raised by the Board in the appeal proceedings.
2. Background
2.1 The invention concerns insurance-risk prediction and provides a model analysing potential losses of a company to be insured in order to determine the price of the company's insurance policy (originally filed application, page 2, line 6 to page 4, line 15).
The model analyses a hypothetical scenario, in which an event causes a loss to the company (page 18, line 1 to page 19, line 9). While not explicitly disclosed, but argued by the appellant during oral proceedings, such an event could be, for example, an accident on the company's premises. Looking at the Table on page 35 of the original application, the model contains interconnected components called liability risk drivers or LRD members. For example, there is a liability risk driver predicting possible property damage and human injuries resulting from human error (page 44). Another liability risk driver predicts the amount awarded by courts to injured persons as a result of mass litigation (page 35, line 19, to page 36, line 25). The model combines the output of the liability risk drivers and calculates the expected loss cost (page 51, line 26 to page 52, line 8). As shown in the third column of the aforementioned Table, the liability risk drivers employed by the main embodiment analyse business and legal factors only.
3. The claimed invention
The claimed invention additionally assigns to the liability risk drivers physical parameters acquired by measuring devices. The application is not specific as to what sort of physical parameters are used; it discloses merely that the measuring devices "can comprise...all kind of sensors and data capturing or data filtering devices" (page 14, lines 9 to 11). The application does not disclose any embodiment in which particular sensor measurements are processed.
Furthermore, the claimed invention comprises a loss resolving unit that resolves an unspecific loss occurring at a so-called loss unit.
The claims do not provide any technical details of the computer implementation. The application merely states that the claimed units can be implemented in software (page 15, lines 20 to 22).
4. First auxiliary request, Article 56 EPC
4.1 The Board finds it more efficient to directly analyse the patentability of the auxiliary requests before deciding on the main request for remittal.
4.2 In the communication accompanying the summons, the Board raised several clarity objections and the appellant amended the claims in order to address them. Although the Board considers that claim 1 of the first auxiliary request is still unclear, the above understanding of the claimed invention allows the Board to assess inventive step.
4.3 The examining division considered that a notoriously known computer system was an appropriate starting point for assessing inventive step of the claimed invention and did not cite any written prior art. The European Search Report merely contained a so-called no-search declaration. The examining division considered that the distinguishing features defined a business method. Furthermore, following the COMVIK approach (T 641/00 - Two identities/COMVIK), they held that the implementation of this method on the computer system would have been obvious once it had been provided by the business person as a requirement specification to the technically skilled person within the framework of the technical problem of implementation.
4.4 The examining division interpreted measuring devices as administrative units acquiring administrative values which did not contribute to the technical character of the invention. However, the Board interprets them as sensors according to the above invention summary and explanations provided by the appellant during the oral proceedings.
Based on this understanding, the Board considers that the appropriate starting point is a computer system connected to sensors rather than just a computer. The Board judges that computer systems collecting sensor measurements were notorious at the priority date. Accordingly, no written evidence is required.
4.5 The claim differs from this starting point by the control unit controller, its sub-units, the loss units and the loss resolving unit.
4.6 The main point of dispute in this appeal is whether these distinguishing features define a technical solution, as argued by the appellant (see section XI., above), or non-technical matter that could be envisaged by the business person and thus be part of the requirement specification given to the technically skilled person, as considered by the examining division.
4.7 Based on the above understanding of the claimed invention, the Board concludes that the distinguishing features relate per se to an abstract insurance model for predicting future losses and resolving losses that have already occurred. The Board agrees with the examining division that this model constitutes a business method excluded from patentability under Article 52(2)(c) EPC.
4.8 The Board accepts the appellant's argument that the claimed model could be automatically executed on a computer, thereby replacing human experts in performing the risk analysis. This, however, does not alter the finding that designing a new abstract insurance model is a non-technical innovation. Technical considerations come into play only when the model is implemented on a computer. However, in view of the lack of technical detail of the claimed subject-matter, which is merely specified on a meta level, the claimed implementation is limited to routine programming,. Moreover, the Board does not see any technical hurdles to be overcome or any unexpected technical effects that have been achieved. When applying the COMVIK approach, an implementation would have been obvious to the skilled person, i.e. a programmer with ordinary programming skills, tasked with implementing the claimed insurance model using physical parameters.
4.9 The Board also accepts that the claimed model predicts future losses in a different way from a human expert.
However, it is established case law that a comparison with the prior art, for example with what humans did before the invention, is not a suitable basis for establishing technical character of subject-matter excluded from patentability or for distinguishing between technical and non-technical features (see T 1358/09, Reasons, point 5.4).
4.10 The Board disagrees with the appellant's view that only the skilled person could have come up with employing directly observed up-to-date physical parameters.
The Board points out that interacting with and exploiting information about the physical world belongs to the very nature of any business-related activity, including insurance-risk analysis (see T 154/04, Reasons, point 20). Accepting such features as sufficient for establishing patentability would render the exclusion of business methods under Article 52(2)(c) EPC meaningless.
Furthermore, in view of T 2455/13 (Reasons, points 3.10 to 3.12), the business person knows about the possibility of realising business-related concepts or models on a computer system and knows how to realise these on an abstract meta-level. The Board therefore judges that the business person, such as an insurance expert, would have recognised that a predicted loss could depend on physical parameters.
What the business person does not know, however, is how exactly the business-related concepts or models can be implemented on a computer system. This falls within the sphere of the technical expert and is subject to the assessment of inventive step (see T 1082/13, Reasons, point 4.8). Starting from the computer connected to sensors and given the requirement to use the information of physical parameters, the Board judges, however, that it would have been obvious for the technical expert to acquire such parameters from the sensors. Furthermore, in view of the lack of technical detail, the Board does not see the need for inventive skills to implement the abstract business model.
4.11 The Board judges that the claimed invention does not contain sufficient technical detail to credibly achieve a (further) technical effect by scanning and selecting measured parameters and by dynamically adapting the model to these parameters. For this to be the case, the processed physical parameters and criteria on which the selection is based would have needed to be defined in much more detail.
4.12 In any event, the Board disagrees with the argument that the claimed invention provides effects similar to those in case T 2079/10. In that case, the claimed invention refined measured data based on technical considerations about sensors' positions. In contrast, the invention in the present case passes the measured parameters to the insurance model without any such pre-processing.
4.13 With its argument that neither the business person nor the technical person could have come up with the claimed features, the appellant seems to thereby allege that only an imaginary third person could have devised concepts enabling the invention to be implemented on a computer system. The appellant apparently considers that the fact that such a third person is needed supports inventive step. However, the Board notes that, when assessing inventive step in the field of computer-implemented business-related inventions following the COMVIK approach and the corresponding case law, there is no room for such a third expert. When analysing the features of a claim and answering the question of whether they provide a technical contribution, each feature has to be judged to be either a contribution of the technical expert or a contribution of the non-technical business person in order to conclude whether there is an inventive technical contribution.
In the present case, the Board concludes that the business-related insurance model falls within the sphere of the business person for the reasons given above.
4.14 Hence, claim 1 lacks an inventive step.
5. Second and third auxiliary requests
5.1 Claim 1 of the third auxiliary request adds to claim 1 of the first auxiliary request that the loss resolving unit comprises repair nodes which automatically recover a loss and that the frequency and severity of predicted losses are provided in natural units.
5.2 The Board judges that, at the claimed level of generality, these features do not add anything of inventive merit. They define further refinements of the non-technical abstract insurance model, the implementation of which would have been obvious.
5.3 Hence, claim 1 of the third auxiliary request lacks an inventive step (Article 56 EPC).
5.4 The broader claim 1 of the second auxiliary request lacks an inventive step a fortiori.
6. Main request - remittal to the department of first instance
6.1 For the above reasons, the Board considers that the invention claimed by the independent claims of the auxiliary requests and, for the same reasons, by the broader refused independent claims lack an inventive step starting from the notorious prior art. Remittal to the examining division for a further search would therefore have no purpose.
Accordingly, the appellant's main request is refused.
7. Right to be heard
The appellant argued that the lack of written prior art and the fact that the examining division held that all relevant aspects of the invention were part of a non-technical method without any supporting evidence deprived it of a chance to argue for technicality and inventive step in a proper way. As a result, its right to be heard was violated.
However, the Board is not persuaded and it judges that the appellant's right to be heard was duly respected. In the Board's opinion, the approach applied by the examining division and the Board allowed the appellant to put forward arguments in favour of technicality and inventiveness, e.g. by identifying technical effects and technical considerations involved (see T 550/14, Reasons, point 3.4). In fact, the appellant did provide such arguments in the proceedings before the examining division as well as in the appeal proceedings, and those arguments were duly considered.
For these reasons it is decided that:
The appeal is dismissed.