Insurance needed against insurance patents
11/09/2007

The question of patents for non-technical subject matter is once again hitting the headlines in the USA. Bancorp Services LLC is sueing Metropolitan Life Insurance Co. for infringing a patent for a system that administers and tracks the values of insurance policies in separate accounts (U.S. Patent No. 7,249,037). Bancorp filed suit the same day that the patent issued.

Just three months ago, Bancorp failed to succeed in a similar claim of infringement against MetLife for a related patent (U.S. Patent No. 5,926,792) directed to a system for administering separate account life insurance policies. Bancorp has appealed this decision to the U.S. Court of Appeals for the Federal Circuit. Prior thereto Bancorp had successfully enforced its '792 patent against Hartford Life Insurance Co. with payment of a US$80 million settlement.

Bancorp is now seeking damages from and an interdict against MetLife for infringement of the '037 patent. Apparently, Bancorp believes that its appeal to the Federal Circuit on the related '792 patent case will be successful, and that even if it is not, the result will not impact on its recent '037 patent.

The situation in South Africa is, at present, murky. Although our Patents Act specifies that business methods, as such, are not patentable, there is no case law on the subject. However, because the South African Patent Office does not examine patent applications to determine if they relate to forbidden subject matter or if the relevant invention is "new" and "inventive", a patent will be granted for such subject matter in South Africa if the relevant formalities have been satisfied. Further, even though a patent will be granted, it does not follow that the patent is valid or enforceable. Any other interested party will be able to attack the patent, although the onus will be on this other party to show that the patent is invalid.

The filing of a patent application in South Africa will also establish a priority date, which will reserve the applicant's right to file a corresponding patent application in the USA (and other countries) for 1 year.