T 1798/13 - Simulating the weather is not technical (and G 1/19)

Key points

• In this examination appeal about a claim directed to a “method for forecasting a value of a weather-based structured financial product”, i.e. about predicting the value of a financial product, the applicant argues that the method steps provide "an improvement in the weather data by calculating and further processing", which would be a technical effect. 
• “In the Board's view this leads to the key issue in this case, namely whether improving the accuracy of given data of a weather forecast is technical. If it is not, then the details of the algorithm, the "mathematics" as the division put it, does not help.”
• “The Board judges that it is not. The "weather" is not a technical system that the skilled person can improve, or even simulate with the purpose of trying to improve it. It is a physical system that can be modelled in the sense of showing how it works. In the Board's view, this kind of modelling is rather a discovery or a scientific theory, which are excluded under Article 52(2)(a) EPC”.
• It seems to me that the present Board effectively proposes an answer in the pending referral G1/19 . Of course, question 1 therein assumes "the computer-implemented simulation of a technical system or process", but the actual subject-matter of the claim 1 at issue in  G1/19 is  "a computer-implemented method of modelling pedestrian crowd movement in an environment", and pedestrian crowd movement is in my view quite similar to 'the weather': neither pedestrians nor clouds are “a technical system that the skilled person can improve”, to quote the present Board. Claim 1 at issue in G1/19 does not recite a 'building' and in any case, it isn't the building that is simulated (e.g. constructional modelling) but the pedestrians.
• The present decision is consistent with T 1227/05, in that simulation of 1/f noise in an (electric) circuit is technical because the skilled person can try to improve the electric circuit,  in particular, to improve the noise resistance. 

EPO T 1798/13 -  link

EPO Headnote

" The "weather" is not a technical system that the skilled person can improve, or even simulate with the purpose of trying to improve it. It is a physical system that can be modelled in the sense of showing how it works. This kind of modelling is rather a discovery or a scientific theory, which are excluded under Article 52(2)(a) EPC and thus do not contribute to the technical character of the invention "

VIII. Independent claim 1 of the sole request reads as follows:

"1. A method for forecasting a value of a weather-based structured financial product for steering of an optimal weather derivative portfolio based on specified weather measures comprising temperature and/or precipitation and/or hours of sunshine and/or heating degree days and/or cooling degree days and/or wind speed retrieved from a weather data measuring and monitoring system comprising:
calculating reference weather data at least including temperature data from historical weather data at least including temperature data stored in a database (16) or retrieved from an external weather-data measuring system (5) by means of a weather reference module (11) for a defined time period and a defined geographical area, wherein the historical weather data covering a plurality of years as a time series, is decomposed in portions with deterministic data and a portion with stochastic data, wherein the deterministic portions include historical trend data and seasonal pattern data, and wherein the reference weather data is determined for the defined time period and the defined geographical area defined in correspondence with the parameters of the structured financial product to be forecasted by establishing the reference weather data from the deterministic data, applicable to the defined time period, through auto regression, and from stochastic data determined for the time period;
establishing forecasted weather data by means of a weather forecast module (12) based on multi-year historical weather data and long-term weather forecast data covering one or more months and storing the forecasted weather data as multiple sets of forecasted weather data for subsequent time periods in database (16) assigned to their respective time period;
calculating weighted forecasted weather data by means of a weighting module (121) from the multiple sets of forecasted weather data stored in the database (16), wherein each set of forecasted weather data is weighted by a weighting factor having a value that increases from one time period to the next subsequent time period;
calculating a forecasted weather index at least including an average temperature, a cumulative temperature a number of heating degree days or a number of cooling degree days for the defined time period and the defined geographic area from the forecasted weather data, wherein the type of index is defined by a respective parameter of the financial product to be forecasted, and calculating a forecast value of the structured financial product based on forecasted weather data for a defined time period and a defined geographical area, wherein the forecast value is calculated by applying structural parameters of the financial product to the forecasted weather index determined from the forecasted weather data;
calculating a reference weather index at least including an average temperature, a cumulative temperature a number of heating degree days or a number of cooling degree days for the defined time period and the defined geographic area from the reference weather data by means of a reference module (13), wherein the type of index is defined by a respective parameter of the financial product to be forecasted, and calculating a reference value of the structured financial product based on the reference weather data, wherein the reference value is calculated by applying the structural parameters of the financial product to the reference weather index determined from the reference weather data;
calculating a ranked probability score for the reference weather data by integrating a cumulative distribution function of the forecasted weather data representing the actual relevant weather situation, and calculating a ranked probability score for the forecasted weather data, by integrating a cumulative distribution function of the forecasted weather data representing the actual relevant weather situation,
calculating a quality indicator by means of a quality indicator module (15), indicative of a forecasting quality associated with the forecasted weather data, based on the forecasted weather data and the reference weather data, wherein the quality indicator is calculated as a ranked probability skill score from the ranked probability score for the forecasted weather data and the ranked probability score for the reference weather data, the ranked probability skill score indicating the accuracy of the forecast of the weather data compared to the reference weather data according to the percentage of improvement in accuracy of the forecast weather data over the reference weather data; and
calculating the value of the financial product by means of a value forecasting module from the reference value and from the forecast value weighted by the quality indicator, wherein the influence of the forecasted value on the calculated value of the financial product is adjusted."

Reasons for the Decision

2.9 The applicant's second argument is essentially that also an improvement in the weather data by calculating and further processing it is also technical. In the Board's view this leads to the key issue in this case, namely whether improving the accuracy of given data of a weather forecast is technical. If it is not, then the details of the algorithm, the "mathematics" as the division put it, does not help.

2.10 The Board judges that it is not. The "weather" is not a technical system that the skilled person can improve, or even simulate with the purpose of trying to improve it. It is a physical system that can be modelled in the sense of showing how it works. In the Board's view, this kind of modelling is rather a discovery or a scientific theory, which are excluded under Article 52(2)(a) EPC.

2.11 As Mellulis puts it (see Benkard, EPC, 3rd ed. (2019) on Art. 52, paragraph 232, translation from German by the Board): like the discovery, scientific theories also contain instructions for (technical) action. They are an attempt at a rational explanation of observed or expected processes based on natural laws or logical considerations. They are frequently based on a knowledge, expectation or presumption of laws, which can also be based on empirically gained knowledge. In terms of content, they resemble discoveries; there is some overlap here. They are not patentable even if they provide an explanation for activities that are in use.

2.12 This applies in the Board's view to the understanding of "weather" in the present application. The modelling of weather in terms of historic or calculated reference data, predictions or established forecast data, trends and seasonal patterns etc. aim at a better understan-ding of "weather", of the causal relationships and correlations between different kinds of weather data, thereby enabling better use of previous experiences. Thus, in the Board's view, the improvement of the data in this case is rather an improvement of a model utilising a scientific theory and thus does not contribute to the technical character of the application.

2.13 Furthermore, the parametrisation of these models is ultimately influenced by the business requirements. The application explains at page 1, lines 9 to 26, that weather-based financial instruments have a start date, maturity date, are defined for a specific geographical region and at least one weather condition, such as temperature, precipitation, hours of sunshine, heating degree days, cooling degree days or wind speed. It is also the business person who, as an expert in weather-based financial derivates, has not only expertise about finance, but also about mathematical models and methods and weather-based parameters which are required to define these financial instruments.