Reports had suggested that the Bees were hoping to sign Paterson from Forest in January, as they look to bolster their options.
But it seems that this rumours are wide of the mark, with Smith suggesting that his side would be look elsewhere over the coming month.
“He’s a player I like, that’s for sure,” Smith said. “He was one who was close to me, who I brought through.
“But he’s a Nottingham Forest player, on loan at Huddersfield, so it’s not one we’re pursuing at the moment.”
Smith worked with Paterson at Walsall, earlier in their respective careers.
Paterson showed some wonderful form at the Banks’s Stadium, which earned him his move to Forest.
Since the 24-year-old has been at the City Ground his form has not been quite as impressive, and he was sent out on loan to Huddersfield Town earlier in the campaign.
Paterson has caught the eye while on a temporary spell with the Terriers, scoring five times in 20 appearances this term.
The attacker’s future at Forest is now up in the air, but it seems likely that any move will not take place until the summer, after his temporary spell at Huddersfield comes to an end.