28 July 2010

Method for Commercialising Patentable Inventions Found Neither Patentable nor an Invention

Invention Pathways Pty Ltd [2010] APO 10 (21 July 2010)

Hearing in relation to examiner's rejection of a patent application - whether the claimed invention a manner of manufacture - whether the claimed invention involves an inventive step

In this Patent Office decision, the Commissioner's Delegate, Deputy Commissioner Phil Spann, considered whether a claimed method for commercialising inventions constituted patentable subject matter (ie was a "manner of manufacture" under the Australian law), and also whether the method involved an inventive step (ie was non-obvious).

The answer to both questions was, in this case, an emphatic "no".

BACKGROUND

The patent application in question had an inauspicious history.  The applicant, Invention Pathways Pty Ltd ("IPPL"), originally applied for a patent via application no. 2008201680, which received no fewer than six adverse examination reports within the 21-month period allowed for overcoming all objections to acceptance.

However, prior to this application lapsing, IPPL filed a divisional application no. 2009201212, relating to the same general invention but with additional description and new claims.  The divisional application received three adverse examination reports before IPPL (presumably) requested to be heard in relation to the rejection of the application.

The issues in all nine examination reports, and at the hearing, were lack of patentable subject matter and obviousness.

THE ALLEGED INVENTION

The general scheme of the "invention commercialisation method" is shown in Figure 1 of the patent specification (reproduced below).  Broadly speaking, the essence of the method lies in recognising that the filing of an initial patent application sets in motion a sequence of events which, unless the application is abandoned or withdrawn in the meantime, will result in:
  1. the need to file a further application, specifically an international patent application under the Patent Cooperation Treaty (PCT) after 12 months;
  2. publication after 18 months; and
  3. the necessity to file corresponding national applications, at potentially very great expense, after 30 months.
It is therefore desirable, if not essential for ensuring the availability of sufficient funds, to significantly advance commercialisation plans within the 30-month period.  The application described and claimed a method involving the establishment, monitoring, and achievement of specific milestones with the 30-month window.

(Click on the image to enlarge, use the Back button on your browser to return.)

At this point, I imagine our patent attorney readers may be thinking: "So what?  I have a computerised docketing system that does pretty much the same thing."  Well, perhaps, but we should give the applicant the benefit of the doubt for the moment!

Claim 1 reads as follows:
1. An invention specific commercialization system to facilitate success of inventions, the system including the steps of:
a) applying for patent protection for the invention in a country which is party to the Paris Convention,
b) conducting a review of specific commercialization process required by the invention,
c) preparing a research and development plan, testing the business dynamics of the invention,
d) conducting prototype testing, developing a prototype cost/benefit analysis,
e) determining product positioning and packaging,
f) conducting a manufacturing checklist,
g) entry of the information collected in steps a) to f) into an electronically fillable checklist having a prescribed time limit for each step to form a commercial entry strategy (CES) with a number of sub-steps, the CES prepared on the basis that each of the sub-steps in the CES are to be completed by a corresponding deadline, all deadlines falling within 30 months from the earliest priority date of the patent application, the checklist being computer-implemented and stored in computer or human readable format in data storage means and associated with processing means to allow updating of the checklist; and
h) policing compliance with the deadlines for the completion of the sub-steps through the production of reminders based on the prescribed time limits in the checklist to ensure that all sub-steps are completed within the deadlines.
On the face of it, therefore, the claimed "system" (actually a method) differs from a conventional use of an intellectual property docketing system only in that deadlines and checkpoints relate specifically to commercialisation activities.  The applicant also faces the problem that the general process for commercialising a new technology is, presumably, well-known to entrepreneurs, experienced business managers, and commercialisation advisors.

The specification further includes 11 dependent claims, of which claims 2 to 8 relate generally to specific information-gathering steps, such as providing for the completion of computerised forms, claim 9 specifies that the system may be used whether or not the patent application filed at step (a) is ever granted, and claims 10 to 12 are forms of omnibus claims, directed to the specific system disclosed in the specification and drawings.

PATENTABLE SUBJECT MATTER

In deciding whether or not the claims were directed to a "manner of manufacture", ie statutory subject matter (or, in lay terms, one of the kinds of things for which patents may legitimately be granted), the Delegate reviewed the usual authorities on the matter (National Research and Development Corporation v Commissioner of Patents [1959] HCA 67, CCOM Pty Ltd v Jiejing [1994] FCA 1168, International Business Machines Corporation v Commissioner of Patents [1991] FCA 625, Welcome Real-Time v Catuity Inc [2001] FCA 445 and Grant v Commissioner of Patents [2006] FCAFC 120).

Citing Grant (which related to an asset protection method), the Delegate noted (at [23]) that while the Full Federal Court had stated that business methods were not necessarily excluded from patent protection as such, there is a requirement that a patentable invention produce an "artificial state of affairs, in the sense of a concrete, tangible, physical, or observable effect" (Grant, at [30]) and that “[a] physical effect in the sense of a concrete effect or phenomenon or manifestation or transformation is required" (Grant, at [32]).

In this case, as in Grant, the Delegate found that the claim was directed to a mere scheme, without physical consequence.  The applicant argued that the creation of an electronically fillable checklist involves a physical effect, namely a transformation in the state of a computer memory.  The Delegate considered this peripheral to the central purpose of the claimed system, providing a useful analogy with a hypothetical unpatentable "method of acquiring a house", which would not become patentable subject matter merely by the inclusion of a step of building the house, which is not characteristic of a method of acquisition (at [38]).

More particularly, the Delegate stated (at [40]):
...it is however clear that the substance of the claimed method is a scheme to encourage the completion of certain commercialisation assessments within a specified period that relates to time limits present in the patent system. To the extent that this is facilitated by a computer implemented updateable checklist, its utility lies in the information it holds and conveys to a commercialisation agent about the commercialisation steps a) – g) and particularly whether they have been completed within the specified timeframe of 30 months from the earliest priority date.
Since the method includes no processing resulting in the creation of any new information, and no other synergistic effect results from operation of the method on a computer, it does not comprise patentable subject matter.  The substance of the method does not reside in the achievement of physical effects within a computer (at [43]).

In the alternative (and following a similar line of alternate reasoning in Grant), the Delegate found that "the claimed method is also not a patentable invention because it merely represents the new use of a known product (a computer with standard software) with known properties for which its known properties makes it suitable" (at [44]).  Although we know what the Delegate means here, eg that the method can be implemented merely by recording information in an ordinary spreadsheet or web form, we do wonder if this statement may one day come back to haunt him. 

For example, spreadsheet software, such as Excel, may be programmed to perform sophisticated iterative and branching computations, and could certainly be used to implement many inventions involving numerical calculations.  Similarly a web browser can be programmed (eg via Javascript) to perform new and potentially inventive functions.  We therefore wonder where the dividing line might lie between unpatentable "standard use", and patentable "non-standard use".  This may be a question for another day.

OBVIOUSNESS

The Examiner had maintained objections of lack on inventive step based on two prior art documents:
  1. US 2003/0149588 (D2), relating to an apparatus and a method for providing information for protecting an invention or new idea; and
  2. US 2003/0101073 (D3), relating to a computerised system in for collecting information about an invention or pending patent application, such as information about prior art which can inform commercialisation or submissions required by a patent office.
Under the Australian Patents Act 1990, assessment of inventive step is strongly evidence-based.  In particular, to prevail in an obviousness attack based on a combination of prior art documents it is necessary to establish that the relevant person skilled in the art (PSA) would have : (i) ascertained; (ii) understood; (iii) regarded as relevant; and (iv) been reasonably expected to have combined the references in the manner required to arrive at the claimed invention.

The applicant in the present case attempted to argue that the PSA would have fallen at the first hurdle in this analysis, ie would not have "ascertained" (ie found) the prior art references.  In particular, the applicant submitted declaratory evidence to the effect that "commercialisation agents do not routinely conduct patent searches" and therefore "that this prior art would not have been ascertained by the relevant skilled person" (at [60]).

The Delegate, in response, cited Commissioner of Patents v Emperor Sports Pty Ltd [2006] FCAFC 26, wherein the court stated that "[t]he Commissioner is an administrative decision-maker equipped with technical expertise. Subject to the rules of natural justice both common law and statutory ... she is entitled to make use of that expertise, and draw inferences that may be rationally drawn from technical knowledge, including how skilled persons of various descriptions may act in their respective occupations." 

The Delegate concluded (at [66]) that:
Commercialisation agents I presume rarely invent and develop their own inventions but, in the event they do, I have very little doubt that they would conduct a review of the prior art including patent documentation. This is because the importance of prior art searching in relation to both the development and patenting of an invention is so well recognised that a commercialisation agent would not fail to do what they would be obliged to advise their clients to do, or have done for them by a skilled searcher.
Thus the cited prior art would have been ascertained by the relevant PSA.

In any event, the Delegate considered that the content of the common general knowledge (eg of commercialisation strategies and docketing systems) was sufficient to render the claimed system obvious, with the prior art simply serving as confirmation of the state of the art (at [69]-[71]):
I believe the hypothetical commercialisation agent in possession of the common knowledge and prior art indicated above would have looked to best practice project management methodologies and their knowledge of innovations in service delivery. Therefore they would have considered in conjunction with a person skilled in that field, a range of on-line and computer based tools designed to provide for project documentation and time management of complex tasks. These invariably would have included software tools which allow guided entry and sharing of relevant project information, establishment of timelines and due dates and creation of reminders. The commercialisation agent would also be aware of the significance of the 30 month PCT period and would have recognised the advantage of completing as much as is possible of the evaluation of the invention within that period. Consequently they would have realised that this fundamental feature of the international patent system should be addressed in the timeline for commercialising an invention when using or providing a tool to encourage timely completion of the commercialisation process.
Furthermore, for a commercialisation agent advising on the commercialisation of an invention it would have been routine to customise the commercialisation considerations required for a particular invention and to ensure those steps were included in the overall timeline for commercialisation. Steps c)-f) listed in the claim are acknowledged as common general knowledge and are merely some of several considerations that would be open to the commercialisation agent when considering a particular invention. Some inventions would require all steps to be carried out and others a smaller subset. In using one or more tools that readily suggest themselves, the commercialisation agent would have inputted information relating to the required steps in an updateable form and would have ensured that information was used to create reminders to encourage the prompt completion of the relevant tasks within the period before the substantive costs of entering the national phase were encountered.
On this basis, I find that a hypothetical skilled person in solving the problem would be led as a matter of routine to the claimed invention. I do not consider that, on the balance of probabilities, any of the claims reflect an inventive step based on common general knowledge alone. However if there is doubt concerning this I believe the prior art identified by the examiner would have been understood and regarded as relevant to the extent that it demonstrates systems which in some way support the commercialisation of patents and therefore could be applied usefully in addressing the fundamental business problem identified in the specification.
CONCLUSION

The claimed "system" is neither a manner of manufacture, nor inventive.  Therefore, the patent application was refused.

OTHER MATTERS RAISED IN THE DECISION

There were a couple of peripheral issues in this decision, that are worthy of mention in passing.

As a prelimary matter, the Delegate made some comments regarding fair basis of the claims.  In particular, he queried whether the particular claimed steps of the method were consistent with a reading of the specification as a whole, which appeared to imply that not all of those steps were "essential" to the invention (at [12]).

We must say that we are not entirely convinced by this line of reasoning.  Fair basis is generally raised where there is substantial incongruity between the disclosure in a specification, and the scope of the claims, and (more particularly ) when the claims are much broader in scope than appears to be justified by the disclosure.  The inclusion of "non-essential" steps (assuming that is the case) serves to narrow the scope of the claims, and we would have thought that it is the applicant's right to choose a more restricted scope of protection than the specification would allow, if that is appropriate in the circumstances.  By way of example, if a claim could only be valid if limited to "essential elements", it would seem to follow that all dependent claims (which add optional limitations not present in the independent claims) must be invalid, which is clearly not the case.

This issue was, however, of little significance, because the Delegate elected to accept the applicant's submission that all features of the claim were essential, despite his reservations.
 
Additionally, this must be the first Australian decision to cite the US Supreme Court's decision in Bilski v Kappos 561 U. S. ___ (2010) (Case No. 08-964).  Many recent Australian cases (incluidng Grant and Catuity) addressing the question of patentable subject matter have looked to the US as a point of reference, which the Delegate considered sufficient justification for him to do likewise. 
 
The Delegate considered the US Supreme Court's affirmation that "insignificant post-solution activity" is not sufficient to render an otherwise unpatentable claim patentable, stating that "I take from this aspect of US law however only confirmation of the unremarkable conclusion that one must consider whether the subject matter of a claim considered as a whole falls within the scope of patentable subject matter and that this cannot be achieved merely by pointing to some physical effect or transformation that, while present in the claimed method, does not alter its fundamental character" (at [38]).

1 comment:

Patent prosecution services said...

Commercialization patents of the type proposed here would fundamentally change the patent system simple-minded approach to a multifaceted problem.

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