The application underlying this decision relates to a system for automatically determining the value of real estate based on parameters such as prices of other properties in the same geographical area, view etc. However, the European Patent Office refused to grant a patent since claim 1 mainly addresses the automation of a business method. Here are the practical takeaways of the decision T2295/18 Evaluating real estate/TECNOCASA) of July 20, 2022 of Technical Board of Appeal 3.5.01:
Key takeaways
Using technical means for implementing a non-technical process cannot render the process technical.
Implementing a non-technical process using technical means needs to procude a technical effect that goes beyond the sheer technical implementation.
The invention
The application underlying the present decision mainly concerns the automatic determination of a real estate value. In order to determine a meaningful value for the real estate, prices of other properties in the same geographical area are evaluated. Therefore, items (i.e., real estate) in a real estate database are analysed to determine a homogenous area within a given radius around the geographical location of the real estate property to be evaluated. Based on the real estate data of said homongenous area a minimum and maximum economic value of the real estate property is computed.
Fig. 3 of WO 2014/080432 A1
Here is how the invention is defined in claim 1 of the main request:
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Claim 1 (Main Request)
“System for implementing a process for economically evaluating real estate, said process comprising :
- a first batch step (F1) for pre-processing data present on at least one database of real estates for providing pre-processed data adapted to be used in a following step of on-line computing an economic value of at least one certain real estate;
- a second on-line step (F2) of computing and providing an evaluation of the mean economic value of at least one of such real estate in a certain geographic zone depending on such pre-processed data; and
- alternatively, a third step adapted to determine and locate homogeneous geographic areas through which it is possible to select at least one sample comprising only real estate comparable with and pertaining to said certain real estate and define value interpolation bands, or a third step of using predefined homogeneous zones;
wherein said first step (F1) comprises the substeps of:
- providing (F101) said data from said database of real estate in at least one first pre-set data structure;
- geo-locating (F103) at least one of said real estate, said step (F103) of geo-locating at least one of said real estate providing that all addresses of said real estate are subjected to a Geographic Information System, GIS, for a geo-coding, saving the results in a second pre-set data structure;
- processing (F105) said collected data for homogeneous areas from estate agents and computing a trend of at least one of said areas;
- processing and analysing (F107) expense availability data arrived at said estate agents on said homogeneous areas;
- verifying (F109) the coherence of said data;
- processing (F111) said real estate data for said homogeneous areas for determining a mean offset of said economic value depending on one or more corrective parameters;
- processing (F113) mean sales times data of real estate on said homogeneous areas; and
- providing (F115) upon request said data to said second step (F2);
and wherein said second step (F2) comprises the steps of:
- providing (F201) geographic location data of said at least one real estate and a set of parameters P1, P2, P3, P4, where P1 is the radius value of a circumference whose centre is a point located from said geographic location data, P2 is a number of real estate contained within a minimum radius R1, P3 is a number of real estate contained within a minimum radius R2, and P4 is a comparison value of such minimum radius R2;
- locating (F203) from said database of real estate all said real estate being present within a radius equal to P1 from a point located from said geographic location data and included in the homogeneous zone where said real estate is present;
- from said step (F115) taking (F205) at least data related to said homogeneous area in which said real estate, defined by said geographic location data, resides;
- locating (F209) a first minimum radius R1 containing at least one number P2 of real estate and at least one second minimum radius R2 containing at least one number P3 of real estate all belonging to a same category;
- standardising (F211) said data so that, if P4 < R2, then real estate contained within said first radius R1 are taken into account, standardising them with the area parameter in order to cancel the difference in category, otherwise the real estate contained within said second radius R2 are taken into account, related only to the required category, and standardising the real estate values depending on parameters of said homogeneous area;
- statistically computing (F213) a minimum economic value and a maximum economic value of said real estate; and
- providing (F215) at least the results of said computation;
said system (1) comprising:
- storage means (3) of said database of real estate;
- first processing means (5) adapted to pre-process data present at least on said database of real estate for providing pre-processed data;
- at least one remote device (7) equipped with at least one caller application that requests on-line, through at least one Web Service, WS, interface (9) residing on a web server, an economic evaluation of at least one real estate identified through a geographic location thereof; and
- second processing means (11) adapted at least to statistically compute an economic value of said real estate at least depending on said geographic location;
- wherein said first processing means (5) are adapted to geo-locate at least one of said real estate, process said collected data for homogeneous areas from estate agents and compute a trend of at least one of said areas, verify the coherence of said data, process said real estate data for said homogeneous areas for determining the mean offset of the economic value depending on one or more corrective parameters, and process mean sales times data of real estate on said homogeneous areas.”
Is it technical?
In esssence, the applicant argued:
“The claimed system performs technical operations on technical data. Processing, aggregating and analysing real estate data involves technical algorithms and the computations are performed technically i.e. using technical means. It would not be possible to perform the calculations manually”
Furthermore, the applicant argued:
“Data defining a geographical location (coordinates) and a geographical area (a radius around a centre point) are technical by definition. The “standardisation” of data is also technical.”
However, the Board did not follow the applicant’s arguments. The Board referred to decision T 1463/11 (introduction of the notional business person) and stated:
“In the Board’s view, the claimed invention does not produce a technical effect that goes beyond the implementation of a business method on a networked computer system.”
The Board argued as follows:
Determining the economic value of real estate is inherently non-technical. Indeed, it is an activity normally performed by a real estate agent lacking technical knowledge and skill. In other words, this activity falls within the domain of the “notional business person”.
The fact that the determination of the real-estate value involves mathematical calculations does not matter, because mathematical methods are also excluded under Article 52(2) EPC.
The fact that the calculations cannot in most circumstances be performed purely mentally or manually using pen and paper is not decisive for assessing technical character. The sheer complexity of a method does not render the method technical (see for example T 914/02).
Using a computer for aggregating, analysing, and processing data is technical, but merely using a computer for performing a method is not enough to make the whole method technical (see for example T 1670/07 – Shopping with mobile device/NOKIA), point 9). There has to be a further technical effect beyond this.
Geographical data just indicates a location, which is not technical perse. The “standardisation” of data in claim 1 is part of the non-technical method of calculating the value of real estate and addresses the non-technical problem of real-estate belonging to different “categories” being included in the calculation.
As a result, the Board stated that the implementation of the non-technical process of evaluating real estate on the prior art computer system would have been routine for the skilled person.
Therefore, the Board dismissed the appeal due to lack of inventive step.
More information
You can read the whole decision here: T2295/18 Evaluating real estate/TECNOCASA) of July 20, 2022.
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