Patent(ability) pending for computer-implemented inventions - Patent

Patents for computer-inventions continue to be difficult to obtain in Australia, with ordinary uses of computer technology routinely refused patent protection. Aristocrat Technologies Australia Pty Limited v Commissioner of Patents [2020] FCA 778 (Aristocrat), itself subject to appeal, provides the best recent success – finding that physical devices "of a particular construction" which interact with specific software are patentable. The key take aways are:

the Patent Office and Court continue to be reluctant to find patentable subject matter in computer-implemented inventions;
inventions which involve the use of generic computer technology to perform ordinary computing functions are very unlikely to be found to be patentable, while those that demonstrate some kind of improvement in computer functionality are more likely to be found to be patentable; and
given the continuing difficulty in obtaining patents for computer-implemented inventions, careful attention should be given to how copyright or confidential information might effectively protect inventions.

In this article, we discuss two recent decisions, Repipe Pty Ltd v Commissioner of Patents (No 3) [2021] FCA 31 (Repipe No 3) and Amazon Technologies, Inc. [2021] APO 7 (Amazon Technologies), which demonstrate the continued restrictive approach to patentability taken both by the Commissioner of Patents and in the Federal Court.

The Repipe dispute

Repipe applied for two innovation patents in 2017 claiming inventions in the field of "risk management for the sharing and completing of Workplace Health and Safety (WHS) documents using computer technology".¹

The first application was directed to providing documents (such as task templates) to the personal devices of workers at field locations, prompting them to select relevant information provided by administrative workers to populate those documents and store the responses. The second was directed to the same invention in circumstances where the field worker has multiple roles and levels of authority in relation to the relevant job, and the document and provided information would be selected based on the worker's role and authority level.²

The Commissioner rejected the applications on the basis that they did not claim a manner of manufacture. On appeal to the Federal Court, McKerracher J agreed with the rejection, concluding that the applications were directed to unpatentable schemes for the sharing of WHS documents which were implemented through the use of computers for their ordinary function.³ The problem solved by the inventions was fundamentally a business problem – the patents identified the issue as being a volume of paperwork which was inefficient, and Repipe's experts referred to the difficulties of sharing new information and creating multiple documents, neither of which is a technical problem.

Following the decision in Repipe No 1, Repipe applied for and was granted leave to amend the claims of the patents to overcome the finding of a lack of manner of manufacture.⁴

Repipe's Amendments

A fundamental difficulty facing Repipe was that in circumstances where Repipe No 1 determined that, by reference to the specification and the claims of the applications, the substance of the claimed inventions was an unpatentable scheme, any amendment which was properly drawn from the specification (and therefore allowable) could not alter the substance of the invention.⁵

Repipe therefore proposed three categories of amendments to address the finding of a 'lack of manner of manufacture':

Configuration steps: details regarding the configuration requirements of the server and smartphones to enable performance of the steps of the claims. These steps were intended to make clear that the subject matter of the claims was in substance a method of controlling a server and a smartphone.⁶
GPS tracking/Geofencing: further integers to certain claims requiring that the personal device use GPS tracking to monitor the user's movements, and in the case of one of the patents, to notify the user if they were within a designated area after their permit to work in the area had expired.
Pseudo-code: human-understandable computer program instructions which could be translated into machine level instructions by the skilled addressee. It is likely that Repipe sought to introduce pseudo-code into the specification to address previous objections that the specification did not disclose specific application software, computer programming logic or code.⁷ Repipe ultimately abandoned these amendments.⁸

McKerracher J concluded that nothing in these amendments changed that fact that the inventions were directed to solving a business (as opposed to a technical) problem in the WHS field, and that the substance of the inventions was a scheme requiring nothing more than generic computer implementation.⁹

Taking the GPS tracking/geofencing amendments as an example, the gathering of location data for tracking and geofencing is the use of generic GPS technology in the way it is ordinarily used, notwithstanding that it is being used in the context of a new scheme.¹⁰ The disclosure of these features as optional embodiments in the unamended specification had not altered the conclusion in Repipe No 1 that the invention was in substance a scheme.¹¹

Insights

One consequence of Repipe withdrawing its "pseudo-code" amendments and McKerracher J's conclusion that the amendments could not change the characterisation of the invention was that the Court did not have to address the question of the extent to which disclosure of a specific application or code is required, and the form and extent of disclosures that might satisfy such a test. Repipe submitted that its amended claims involved the same level of specificity as the claim in CCOM Pty Ltd v Jiejing Pty Ltd (1994) 51 FCR 260 (CCOM), which was held by the Full Court to concern a manner of manufacture.¹² The claimed invention in CCOM was a processing apparatus for assembling text in Chinese language characters.

The Full Court has said that comments regarding the disclosure of generic software that requires skilled addressee to devise their own code are a "litmus test" for whether an invention is an unpatentable scheme.¹³ One consideration that arises from references to the need for the addressee to devise their own code is whether considerations of enablement are intruding into the assessment of manner of manufacture. Regardless, it remains unclear what level of disclosure of specific software is necessary to satisfy this "litmus test".

The other key insight from Repipe No 3 is the limited ability of patentees to avoid or overcome a finding that a computer-implemented invention lacks a manner of manufacture. The Court has made it clear that the language used by a patent attorneys while drafting claims cannot confer patentability on a substantively unpatentable scheme,¹⁴ and the principles governing permissible amendments confine the ability of a patentee to clarify the substance of the invention in the specification.

Amazon's application

Amazon's patent application concerned a method of managing large-scale computing resources, which it offered to its customers via virtual machines.

A virtual machine is a software simulation which mimics the operation of a physical computer and provides a user with the illusion that they are the sole operator and administrator of computing hardware.¹⁵ Amazon operates large-scale computing hardware, each of which hosts multiple virtual machines.

The application was directed to solving the problem that arises when virtual machines operated by different customers rely on the same physical computing resource, and make competing demands on the computing power of that resource.

The invention claimed in the application was a method whereby each customer would accumulate "rolling resource" credits as part of their regular payments. Where the customer's machine was performing less work than a given threshold, those credits would accumulate up to a given limit, and when the machine needs to perform a more intensive task, those credits would be consumed – effectively purchasing an additional share of the hardware's computing power.¹⁶

Over the course of six examination reports, the various examiners objected to the grant of the application on the basis that the application was directed to solving an administrative problem (rather than a technical problem) and to the extent there was a technical aspect to the invention, it was achieved through the generic implementation of computers and computer functions.¹⁷ Amazon requested a hearing by a delegate of the Commissioner of Patents.

The proceeding before the Commissioner's delegate

After considering the specification in detail, the delegate concluded that it was directed to overcoming the problem of efficiently, utilising fixed computing resources when clients had unpredictable demands. The solution to that problem was the allocation of processing tasks, but this solution was not achieved through technical processes such as optimisation algorithms, directing of tasks by artificial intelligence, advanced critical path analysis functions, or other improvement to computer hardware or architecture. The solution was in effect a set of business rules, and the task of allocating computing resources like CPU, memory, disk space, and bandwidth was otherwise an entirely generic computing function and a natural use of computers.¹⁸

Amazon submitted that there were two technical problems solved by the inventions:

first – determining a guaranteed minimum level of computing resources while providing the flexibility offered by the resource credit system.
secondly – how to guarantee that customer requests for processing power would provide flexible high performance without wasting underutilised fixed resources.¹⁹

The delegate considered that both of these problems were fundamentally business problems. Amazon was providing its customers a contractual arrangement for a level of service incorporating a minimum guarantee and the ability to purchase increased performance with sufficient resource credits. Setting the minimum guarantee and the level of increased performance is a business decision based on the resources available to Amazon and their customers' demand. Further, the principle of not having underutilised assets is a core tenet of business, and Amazon was merely structuring its business to avoid having underutilised assets.20

The delegate accepted that in some cases the invention would result in a technical effect of eliminating any waste of computer resources while guaranteeing processing capability. However, the delegate went on to find that this would only be realised in circumstances where the total demand of customers was equal to the total processing capability of the system – and would be largely dependent on a business decision resulting in computers being used for their ordinary functions.²¹

Further, the delegate found that there was no improvement to the computer technology utilised. There was no technical innovation in the allocation of resources, they were allocated based on business rules, and by software and hardware performing their ordinary functions.²² The description of the implementation of the invention was at a high level of generalisation and relied on generic computing technology.²³

On balance, the delegate concluded that the claimed invention was in substance a business innovation rather than a technical one, and that it was nothing more than a scheme for allocating resources and was therefore not a manner of manufacture.

Insights

The decision in Amazon Technologies is a largely orthodox application of the principles relating to the patentability of computer-implemented inventions as they currently stand. However, the delegate reasoned that even though the claimed invention would achieve a technical result, the fact that the result was not always achieved supported a conclusion that the invention is not patentable subject matter. This approach appears to import considerations of the utility of the invention into the assessment of manner of manufacture – a consideration which should remain separate.

What's next for computer-implemented patents?

For a computer-implemented invention to be patentable under the current test it must either provide some specific improvement in the functionality of the computer system or, as in Aristocrat, concern machines of "a particular construction" interacting with specific software related to the function of those machines. With judgment reserved in the Commissioner's appeal of Aristocrat,²⁴ it is possible that even this narrow window of patentability will contract further.

Repipe No 3, Amazon Technologies, and the Commissioner's recent refusal in Dropbox Inc [2021] APO 26 of an application for a project management system, all underscore that inventions which are directed to the application of ordinary computing technology in performing ordinary business functions will be found to be unpatentable.

With the options for patenting computer-implemented inventions remaining restricted, potential patentees should consider other avenues available to protect their inventions, including maintaining the confidentiality of their products or relying instead on the copyright subsisting in their code.

*Our thanks to Michael Dardis (law clerk) for his assistance in the preparation of this article.

Footnotes

¹ Repipe Pty Ltd v Commissioner of Patents (No 3)[2021] FCA 31 (Repipe No 3), [6].

² Repipe Pty Ltd v Commissioner of Patents [2019] FCA 1956 (Repipe No 1), [5], [7], [9].

³ Repipe No 1 [93]–[98].

⁴ Repipe Pty Ltd v Commissioner of Patents (No 2) [2019] FCA 2125 (Repip No 2).

⁵ Repipe No 3. [27], [63].

⁶ Repipe No 3, [8].

⁷ Repipe No 1, [93]–[94]

⁸ Repipe No 3, [26].

⁹ Repipe No 3, [66], [69]–[70] citing Commissioner of Patents v Rokt Pte Ltd [2020] FCAFC 86, [108], [115].

¹⁰ Repipe No 3, [67], citing Commissioner of Patents v Rokt Pte Ltd [2020] FCAFC 86, [85]. See also Repipe No 3, [22] in relation to the generic use of computer technology in the "configuration steps".

¹¹ Repipe No 3, [25].

¹² Repipe No 3, [29].

¹³ See our previous article, discussing Commissioner of Patents v Rokt Pte Ltd [2020] FCAFC 86, [90].

¹⁴ See, e.g, Repipe No 1, [94]; Repipe No 3, [22], [45].

¹⁵ Amazon Technologies, Inc. [2017] APO 7 (Amazon Technologies), [9].

¹⁶ Amazon Technologies, [11].

¹⁷ Amazon Technologies, [19].

¹⁸ Amazon Technologies, [60]-[62].

¹⁹ Amazon Technologies, [65], [67].

²⁰ Amazon Technologies, [68].

²¹ Amazon Technolgoies¸ [69]-[73].

²² Amazon Technologies, [74].

²³ Amazon Technologies, [78].

²⁴ NSD787/2020, https://www.comcourts.gov.au/file/Federal/P/NSD787/2020/actions.

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.