Australia: Federal Court win for software inventions

Last Updated: 24 February 2014
Article by Mark Williams

The Federal Court decision in RPL Central Pty Ltd ("RPL") v Commissioner of Patents ("the Commissioner") [2013] FCA 871 has held that a computer implemented invention can be patentable subject matter in Australia, particularly where there is substantial disclosure in the patent specification of how the invention is to be implemented on the computer.

The Court confirmed that, when determining manner of manufacture, the claimed invention must exhibit a physical effect and rejected the Commissioner's argument that the physical effect must be "substantial" or "central" to the claimed invention (physical effect in the sense of a concrete effect or phenomenon or manifestation or transformation as required by the decision in Grant v Commissioner of Patents [2006] FCAFC 120. The Court also rejected the Commissioner's notion that if an invention could be performed without the use of a computer, and if one were to strip away the computer aspects of the claims, one would be left only with a non-patentable method for performing an aspect of a business.

Background

This Federal Court decision is the result of an appeal from a decision by the Commissioner of Patents, stemming from an opposition proceeding against innovation Patent 2009100601, that the claims of this patent do not constitute a manner of manufacture under s 18(1A)(a) of the Patents Act 1990 (Cth) ('the Act').

Interestingly, this was not a ground raised during examination of the innovation patent, nor raised by the opponent, but rather raised and pressed by the Commissioner of her own volition.

As a result, this Federal Court decision focuses solely on manner of manufacture. Although the patent is an Australian innovation patent, the test for manner of manufacture is the same as that for a standard patent.

The Claimed Invention

The claimed invention is directed to a system and method for gathering evidence for an assessment of an individual's competency relative to recognised standards (i.e. "Recognition of Prior Learning (RPL)"). The invention automatically generates a series of questions to be presented to the individual on their computer and receives the corresponding responses from the individual via their computer interface. The received responses may be text based responses to the questions or may take the form of uploaded supporting documentation (including documents, audio or video). A copy of the specification may be found here.

The specification includes eleven pages of description of the invention and five claims (noting that the application in an innovation patent which is limited to five claims) and six drawings. The drawings illustrate a computer system showing the operation of the overall system together with a number of pseudo code/method flow charts explaining the operation of the invention and the steps carried out by the computer system. Also, examples of the questions that may be generated and posed to the user are also provided.

Claim 1 (reproduced below) is an independent method claim, while the other independent claim (claim 5) is a system claim which largely corresponds to claim 1.

  1. A method of gathering evidence relevant to an assessment of an individual's competency relative to a recognised qualification standard, including the steps of:

a computer retrieving via the Internet from a remotely-located server a plurality of assessable criteria associated with the recognised qualification standard, said criteria including one or more elements of competency, each of which is associated with one or more performance criteria; the computer processing the plurality of assessable criteria to generate automatically a corresponding plurality of questions relating to the competency of an individual to satisfy each of the elements of competency and performance criteria associated with the recognised qualification standard; an assessment server presenting the automatically-generated questions via the Internet to a computer of an individual requiring assessment; and receiving from the individual via said individual's computer a series of responses to the automatically-generated questions, the response including evidence of the individual's skills, knowledge and/or experience in relation to each of the elements of competency and performance criteria, wherein at least one said response includes the individual specifying one or more filed stored on the individual's computer, which are transferred to the assessment server.

Manner of Manufacture

Paragraphs 53 to 110 of the judgment includes a comprehensive summary of the development of the law in Australia on the question of manner of manufacture with regard to software and computers starting from National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252 ('NRDC') to International Business Machines Corporation v Commissioner of Patents (1991) 33 FCR 218 ('IBM (1991) 33 FCR 218'), CCOM Pty Ltd v Jiejing Pty Ltd (1994) 51 FCR 260 ('CCOM'), Welcome Real-Time SA v Catuity Inc (2001) 113 FCR 110 ('Catuity') and finally Grant v Commissioner of Patents (2006) 154 FCR 62 ('Grant').

Submissions by RPL on Manner of Manufacture

RPL argued that the approach taken by the Commissioner with regard to manner of manufacture was incorrect in that they went further than that required by NRDC or the decision in Grant by imposing a further test that the "concrete effect of phenomenon or manifestation of transformation" which was referred to in Grant is "significant both in that it is concrete and also that it is central to the purpose or operation of the claimed process or otherwise arises from the combination of the steps of the method in a substantial way". [Our Emphasis]

RPL also submitted that it is unclear how to undertake such an assessment required by this test. Further, even if a test were allowable, lack of manner of manufacture must be shown on the face of the specification and, in any event, that the invention did demonstrate a physical effect that is a concrete effect central to the invention claimed.

RPL also submitted that it was wrong for the Commissioner to cherry pick and "separate out features of the claim and give some more weight and meaning than other features". That is to say that the combination of features is claimed and is part of the invention as a whole rather than according to its individual parts.

Submissions by the Commissioner of Patents of Manner of Manufacture

The Commissioner submitted that the principles of NRDC caused difficulties where two categories of subject matter intersect – namely business methods and computer related inventions – and that in their view RPL's invention was involved in such an intersection.

The Commissioner submitted that the law is not certain as to whether "a physically observable effect" is required for a patent application for a method and device rather than for simply a method alone. The Commissioner also submitted that more than a mere change in state or information in part of a machine must be required to establish the requisite for the physical effect since any normal operation of a computer results in a change in state of information in part of a machine.

The Commissioner also submitted that the law is not settled as to whether, if a physical effect is required, there is a materiality or substantiality requirement. The Commissioner submitted that such a requirement would not merely be satisfied by the operation of one or more steps of a method on a computer.

The Judgment

The Court applied the key criteria relating to manner of manufacture articulated by the High Court in NRDC and elaborated upon by CCOM and Grant, as explained below.

Useful result:

At [129] the Court found that RPL's claimed invention did produce a useful result in that it overcomes a difficulty involved in seeking out relevant education providers and enables the recognition of prior learning.

Vendible product:

At [130] the Court found that the invention satisfied the "vendible" requirement of the "vendible product" test of NRDC (i.e. that the invention has utility in practical affairs) since the invention has application to the education sector of the economy.

At [133] the Court found that the invention satisfied the "product" requirement of NRDC as it did give rise to an artificially created state of affairs in the form of a physical phenomenon in which a new and useful effect is observed.

Physical effect:

At [143] the Court was satisfied on the face of the specification that each of the steps of the claimed method and system requires or involves a computer generated process, and that there are a number of physical effects that occur in implementing the claimed invention. The Court also found that each of the computer-effected steps of the invention constitutes or gives rise to a change in state or information in a part of a machine and therefore produces a physical effect in the sense of a concrete effect or phenomenon or manifestation or transformation as required by Grant. More specifically, for instance, the steps of generating for and then presenting questions to an individual creates an artificially created state of affairs on the individual's computer as data is retrieved and transformed into the questions.

Physical Effect: Concrete and Central to the Purpose or Operation the Claimed Process (the Commissioner's position)

At [147] the Court did not accept that the Commissioner's assertion that NRDC, CCOM and Grant imported a requirement of substantiality or centrality of physical effect and rejected the Commissioner's submission that such a requirement is merely a function of the application of these decisions "as properly understood". The Court noted that none of NRDC, CCOM and Grant "articulated a separate or new requirement of substantiality or physical effect".

The Court was critical of the Commissioner's approach to the manner of manufacture inquiry – namely the notion that RPL's invention could be performed without the use of a computer and that, if one were to strip away the computer aspects of the claims, one would be left only with a method for performing an aspect of a business.

At [157] the Court noted "Even if this were true I do not accept that this is the appropriate way to approach the question of manner of manufacture. One should not subtract from the invention any aspect of computer implementation, and then determine whether what remains is the proper subject matter of letters patent."

The Court also found at [159]:

"I do not consider it relevant that the invention in question does not involve steps which are "foreign to the normal use of computers", as asserted by the Commissioner. Such a requirement is not imposed by any of the binding authorities that were the subject of argument in this case, and I consider that to impose such a requirement strays dangerously close to the error identified in the primary judge's reasoning by the Full Court in CCOM". [i.e. incorrectly being influenced in determining manner of manufacture by asking whether what was claimed involved anything new and unconventional in computer use].

The Court's comment on a recent similar Federal Court decision

Interestingly, the Court at [162 to 172] was at pains to point out that there was no inconsistency between the present decision and a recent computer implemented invention decision which went against the patentee for manner of manufacture, namely Research Affiliates LLC v Commissioner of Patents [2013] FCA 71 (this is currently under appeal to the Full Federal Court).

Research Affiliates related to an invention which produced an index of securities or assets by way of a computer and was found not to be a manner of manufacture. The Court considered that Emmett J in Research Affiliates was influenced by the fact that the only physical result generated by the method was a computer file containing an index, which is nothing more than a set of data, and the fact that the specification contained virtually no substantive detail (our emphasis) about how the claimed method was to be implemented by a computer.

The Court at [172] found on that basis that Research Affiliates is to be distinguished from the present case. The Court also noted that: "the specification and claims in issue in this case provide significant information about how the invention is to be implemented by means of computer. The computer is integral to the invention as claimed in this proceeding. Accordingly, I do not consider that the conclusion reached in this case is at odds with what his Honour concluded in Research Affiliates [2013] FCA 71. I need say nothing further as to the correctness of the actual decision in Research Affiliates."

US Case Law

The Court also considered submissions from the Commissioner in relation to a number of decisions from the United States in relation to the question of whether business methods involve patentable subject matter. Interestingly, at [155] the Court noted:

"Each of these decisions considers the test for patentability in the United States. At best, they are merely persuasive. They provide intellectual stimulus and ideas for consideration. Nevertheless, I do not consider that I need to analyse these decisions in any further detail."
"....it must be recorded that there are differences between (for example) the United States and Australia in many aspects which may impact upon a Court's consideration of an invention's value to the country, and its patentability. In any event, it is the policy considerations inherent in the Australian law that must be considered and applied here, interpreting and applying as I am Australian legislation."

Conclusion

It appears that from this decision we may see a change in practice at the Australian Patent Office that will result in less manner of manufacture objections being raised in relation to a computer not being central to the operation of the invention. Indeed, it appears that it is no longer appropriate for the Patent Office to disregard the expressed operations of a computer in a claim when substantiating a manner of manufacture objection.

The Commissioner of Patents has until the Mid-September to file an appeal against the decision.

The take home message from this decision (and also the Research Affiliates decision) is that computer implemented inventions may be patent eligible subject matter provided a physical effect can be clearly identified. Detailed information about how the invention is implemented by means of computers should be provided in the description and in the claims to support an arguement for patent eligibility.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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