Australia: Digital Advertising Invention Found Patentable By Australian Federal Court

Last Updated: 22 March 2019
Article by Ken Simpson and David Webber

Since 2010 a series of decisions at the Patent Office and in the Courts has made life more difficult for applicants seeking protection for computer-implemented inventions in Australia. A recent decision by Justice Robertson of the Federal Court in Rokt Pte Ltd v Commissioner of Patents1 swings the pendulum back in favour of innovators.

Subject matter eligibility for computer-implemented inventions in Australia

There is no statutory exclusion against computer programs and methods of doing business in the Australian Patents Act, unlike the UK Patents Act and the EPC. However, there is a requirement that the invention be a "manner of manufacture". The meaning of this term was clarified by the High Court (Australia's highest Court of Appeal) in the seminal NRDC decision2 in 1959. The High Court formulated a highly flexible and technology-agnostic test – to be a manner of manufacture, an invention should result in an "artificially created state of affairs" having economic (as opposed to aesthetic, for example) significance.

Courts, and the Patent Office, continued to apply the NRDC test for many years, including in relation to computer-implemented business methods. However, Patent Office practice changed in 2010 to take a much more restrictive view of patent eligibility. As a result, disgruntled applicants have been appealing Patent Office decisions to the Federal Court, resulting in a line of precedents that has taken some strange twists and turns. Patent eligibility for computer-implemented inventions has now evolved to a position that is akin to that under UK law, and can be summarised as follows:

  • Whether the invention is a manner of manufacture is to be judged by reference to the "substance of the invention". The "substance" is to be determined by reference to the specification as a whole, not just the wording of the claims.3
  • When identifying the substance of the invention, one should ask what the contribution of the invention is; that is, what does the invention contribute over the state of the art?
  • It is necessary to ascertain whether the contribution to the claimed invention is technical in nature. 4
  • Where the claimed invention is to a computerised business method, the invention must lie in that computerisation. It is not a patentable invention simply to "put" a business method "into" a computer to implement the business method using the computer for its well-known and understood functions.5

The reference to the state of the art to define the contribution of the invention is highly contentious as this has not, up until recently, been a consideration for patent eligibility under Australian law.

Rokt's invention

Briefly, Rokt's invention is directed to a computer implemented method and system for linking a computer user to an advertising message by way of an intermediate engagement offer. Code is delivered with publisher content to be injected into an interface, such as a browser page. The code tracks "engagement data" indicating interaction of the user with the browser, including with the publisher content, which is sent to a remote advertising system that continuously monitors for an "engagement trigger" such as the user responding to a poll. Once an engagement trigger is detected, the advertising system presents an engagement offer to the user. The engagement offer does not in itself present an advertisement, but if the user accepts the engagement offer, the advertising system then presents an advertisement to the user.

Did the invention make a technical contribution?

The Commissioner of Patents argued that the individual hardware and software components set out in the claims were almost all known prior to the application date and were capable of being programmed to implement the disclosed advertising method. The only novelty over prior art digital advertising systems was the "engagement offer", but this provided an advertising function rather than solving a technical problem, and did not involve "ingenuity in computer implementation".

The Court agreed broadly with the Commissioner's summary of the relevant legal principles (as broadly set out above). However, in considering the substance of the invention, Robertson J rejected the Commissioner's focus on individual elements of the claimed invention that may have been known at the priority date. Instead, the combination of the claimed techniques or components should be considered. In this regard, the Court held that known components had been integrated into a single system in an innovative and previously unknown way, such that they formed a working combination that had not previously been achieved, and such that the claimed invention involved the use of computers in a way that was foreign to their normal use as at the priority date.

The Court also rejected the Commissioner's argument that the invention solved only a business problem. It also solved a technical problem in that it needed to provide a single platform in which user engagement data could be coupled with transactional data and user context data to provide a personalised ranking of engagement offers to the user. This technical problem was solved by the introduction of the engagement offer and identifying what steps the software needed to execute in order to modify dynamically the website that the user was browsing while they were browsing it to, first, implement in the web browser or device the concept of the engagement offer, second, to implement in the computer system the necessary software for selecting engagement offers and advertisements for the given user based on the previous interactions with the system and the interactions of other similar users and, third, to have that system interact with the widget in the web browser in real time.

In finding that the invention was a manner of manufacture, Robertson J appeared to be strongly influenced by the qualifications of the respective experts and the level of detail in their evidence. Rokt's expert was a Professor of Computer Science with practical experience in implementing large-scale software systems, whereas the Commissioner's expert was a Director of Technical Services at a digital advertising company, and characterised by the Court as being a "user" of such systems rather than a developer. For that reason, Rokt's evidence in relation to the technical difficulties associated with online digital advertising, and the way in which those were addressed by the invention, was preferred by the Court.

Implications for other patent applications

The decision in this case appears to be highly fact-specific, although it is encouraging for two reasons.

First, the Court expressly rejected the Patent Office's element-by-element analysis of the contribution of the invention – instead, the contribution needs to be assessed by reference to the combination of claimed elements.

Secondly, the case indicates that if the invention solves a business problem, that does not render it ineligible so long as it also solves a technical problem. This reiterates the importance of highlighting any technical advantages in the patent specification.

This case is notable for the role that expert evidence played. This is somewhat unusual for Courts considering patent eligibility. It will be interesting to see if this approach is endorsed by the Full Federal Court as the Patent Office has applied to appeal this decision, and we are also awaiting a decision of the Full Court in Encompass v Infotrack6 (our article on the first instance decision is here).

Footnotes

[1] [2018] FCA 1988

[2] National Research Development Corporation v Commissioner of Patents [1959] HCA 67

[3] D'Arcy v Myriad Genetics Inc [2015] HCA 35

[4] Commissioner of Patents v RPL Central [2015] FCAFC 177

[5] Ibid

[6] NSD734/2018

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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