07 December 2014

Are Subject Matter Rejections Hurting the Patent System?

BandaidsThe primary requirements for an (alleged) invention to be patentable are that it must relate to eligible subject matter (e.g. not be a law of nature, mathematical equation or abstract idea), it must be new (i.e. possess novelty) and it must not be obvious (i.e. must involve an inventive step).

Subject matter eligibility is currently highly contentious in many jurisdictions.  As recent decisions of the US Supreme Court (in the Alice and Myriad cases) and the Australian Federal Court (in the Research Affiliates and Myriad cases) demonstrate, the most strongly contested subject matter relates to the areas of business processes, computer software and biotechnology. 

But even so, qualification as patent-eligible subject matter remains a threshold test, and should not be a substitute for the proper evaluation of an invention for novelty and inventiveness.

The problem with evaluating novelty and inventive step is that it often involves hard work.  To show that something is not new, or that it is obvious, requires evidence of prior art, which in turn may require diligent searching, extensive reading, and careful construction of legal and technical reasoning to explain why the requirements for patentability are not satisfied.

It is, therefore, so much easier if an invention can be knocked out at the first hurdle, and be deemed fundamentally ineligible for patent protection, without having to go to all the trouble of conducting a comprehensive prior art search.

Recent developments in various jurisdictions (e.g. the US, Australia and the UK) suggest that, in ‘difficult’ fields of technology, the cart is getting put before the horse.  Subjective evaluations of the ‘merit’ of an invention, i.e. that it perhaps seems unworthy of patent protection, may be leading decision-makers at all levels to turn too quickly to subject matter grounds as a basis for rejecting claims.  Legal reasoning may therefore be developed in order to arrive at the desired outcome, without sufficient regard to consistency across different cases. 

Subject matter is becoming a form of ‘obviousness by stealth’ as courts start looking for the ‘inventive contribution’ made by a claimed invention as a basis for assessing eligibility.  The case law is becoming increasingly incoherent, as decision-makers try to rationalise their own findings in light of prior decisions that are themselves inconsistent.  Certainty is eroded as a result, and applicants, patentees and other stakeholders are losing faith in a system that appears increasingly capricious.  I also suspect that the quality of prior art searching may be suffering, with examiners now relying on subject matter rejections in cases that appear ‘too hard’ to search effectively.

The Rise of Subject Matter Rejections

Even though most patent offices require examiners to consider all grounds of patentability when preparing an examination report, I cannot help feeling that there may be an increasing tendency, in some fields of technology, to rely more heavily on subject matter eligibility as a basis for rejection.  This may be particularly so when the prior art is difficult to search, e.g. because large quantities of relevant material may exist outside the well-ordered world of databases of prior patent publications and the professional technical literature.  Software and business processes are particular cases in point here.

The position is likely to be similar whether we consider examination, or disputes decided in court or other tribunals.  For any decision maker, and for any party seeking to invalidate an opponent’s patent, a successful subject matter attack is simpler, less evidence-intensive (and hence cheaper), and can be far more devastating than any attack based on prior art.  An objection that an invention lacks novelty, or is not inventive, may take out only a few claims, whereas a subject matter objection can, in principle, invalidate entire patents in one fell swoop (as happened, for example, in the US Alice decision).

It concerns me, however, that decisions based on patent-eligibility increasingly involve an excess of subjectivity – also known as ‘personal opinion’.  Unlike prior art grounds, which require objective evidence and sound reasoning, eligibility grounds are susceptible to arguments being tailored to achieve a predetermined outcome.  Unfortunately, this may also lead to decisions that are inconsistent, confusing and capricious.  As a result, the law may be left in an untidy and uncertain state.  Yet the one thing that all businesses desire, when it comes to their intellectual property as much as any other aspect of their operations, is certainty.

A recent decision in the UK therefore caught my attention for three reasons (in addition to the fact that it was reported on the IPKat blog).  Firstly, because I think it is wrong on the issue of patent-eligibility.  Secondly, because it appears inconsistent with previous decisions of both the UK courts and the European Patent Office (EPO).  And thirdly, because I am sure that there is relevant prior art, which no examiner identified, and which would have provided a far better basis for rejection of the patent claims at issue.

The UK Lantana Case

On 13 November 2014, the Court of Appeal for England and Wales decided Lantana Ltd v The Comptroller General of Patents, Design and Trade Marks [2014] EWCA Civ 1463.  The case was an appeal from a decision of Mr Justice Birss in the England and Wales High Court, Lantana Ltd v The Comptroller-General of Patents, Designs and Trade Marks [2013] EWHC 2673 (Pat), which was itself and appeal from the UK Patent Office decision in Lantana Ltd (Patent) [2013] UKIntelP o05613.  At all levels, Lantana’s patent claims were rejected as being directed to an ineligible computer program ‘as such’.

Claim 1 of the application is somewhat lengthy, and includes all manner of technical features, presumably in the hope of establishing that the invention relates to something more than just a computer program.  However, the essence of the invention was summarised by Mr Justice Birss (at [8]) as follows:

The claim envisages two computers connected via the internet. The user of the local computer wants to retrieve data from the remote computer. When required, the local computer creates an email message containing machine-readable retrieval criteria and sends it to the remote computer. The remote computer receives the email, works out if the email contains any machine readable instruction and, if so, executes that instruction, retrieves the data and sends back an e-mail containing the requested data.

The problem addressed by the invention is that of retrieving files from a remote computer – particularly large files that might take some time to download – without the need to establish a reliable continuous connection.  The solution is to send a file request via email that can be automatically parsed by the remote computer, which will then locate the file and send it back as an attachment to an email reply.

Of course, this does not eliminate the need for a continuous connection at all – but it does shift the requirement from a connection with the remote computer (which may just be a desktop PC) to one with the requester’s email service provider, which is far more likely to provide a high-availability, high bandwidth service throughout a greater part of the world.  So I shall assume, for present purposes, that there might actually be circumstances in which a ‘retrieve via email’ service actually has some advantage.

In any event, the practical or commercial usefulness of the invention is not what is at issue here.  The question is whether such a system – assuming that it is new and inventive (which it is not, but we will get to that) – is the kind of thing that is eligible for patent protection.

Patent-Eligibility of Lantana’s Invention

To my mind, at least, Lantana’s email file retrieval system is clearly patent-eligible.  There is a technical problem identified, namely that of providing for retrieval of files from a remote computer with which a continuous connection is, for whatever reason, unavailable, undesirable or impractical.  And the solution is also technical.  It involves providing two ‘new’ programs:
  1. one that runs on the requesting computer, which is configured to generate and send an email message containing instructions for the remote computer to retrieve a specified file; and
  2. one that runs on the remote computer that is configured to receive emails, identify and parse those that contain retrieval instructions, and then to generate an email response with the requested file attached and direct it back to the relevant return email address.
There is actually a lot more to the claims than this, and it was not suggested that they were directed to a mere abstract idea.  I have to say that it is very hard to see why such a system should not constitute patent-eligible subject matter, particularly when compared with inventions that have previously been found to be patentable by the UK courts.

Recent UK Cases With A Different Outcome

In 2011 Mr Justice Birss found, in Re Halliburton Energy Services Inc [2011] EWHC 2508 (Pat), that a computer-aided design method constituted patent-eligible subject matter.  The claimed method itself affected nothing outside the computer.  It took as input the details of an earth formation, and produced as output, via an iterative design-and-simulation process, a specification that could subsequently be used to fabricate a mining drill bit optimised for the earth formation.  A method of designing a drill bit, the court concluded, in more than a computer program ‘as such’, because the contribution made by the invention ‘does not fall solely within the excluded territory.’

Shortly after the Halliburton decision, Mr Justice Floyd, in the same court, issued a judgment in Re Protecting Kids the World Over (PKTWO) Ltd [2011] EWHC 2720 (Pat).  In that case, the patent claims were directed to a system for monitoring the content of electronic communications to ensure that users (e.g. children) are not exposed to inappropriate content or language.  The system essentially consisted of software running on a device connected to a network that monitors and analyses the data traffic to identify inappropriate content.  If it spots anything suspect, it sends a notification message (e.g. an email or an SMS message) to a specified recipient (e.g. a parent), who is then able to send a remote command to, for example, terminate further communications on the network.

The court found this system to be patent-eligible because ‘[t]he effect here, viewed as a whole, is an improved monitoring of the content of electronic communications.  The monitoring is said to be technically superior to that produced by the prior art.  That seems to me to have the necessary characteristics of a technical contribution outside the computer itself.’

Looking at the three decisions, in Halliburton, PKTWO and Lantana, it is difficult to discern any consistent basis for finding that a computer-aided drill bit design method and a system for generating alarms based on monitored data traffic should be eligible for patent protection, but a method and system for the retrieval of files from a remote computer should not be. 

Subject Matter – Or Obviousness By Stealth?

In Lantana the appeals court acknowledged the existence of a technical problem, i.e. how to transfer files without requiring a continuous connection.  However, it agreed with the UKIPO Hearing Officer, and Mr Justice Birss, that the claimed invention did not solve this problem, but instead circumvented it.  Furthermore, it did so without ‘truly original linear thinking’ (whatever that means), but by ‘a perfectly straight forward use of a familiar medium, namely the sending of an email’ (at [51]).

This is, in truth, an objection of lack of inventive step by stealth.  The logical corollary to the court’s reasoning is that if email were not ‘a familiar medium’ then the invention might have been patentable.  Does this mean that there would have been some earlier time at which the invention was patent-eligible?  If so, then the concern is not with any inherent characteristic of the subject matter of the invention, but with the state of the art.  Technology moves on and, as a result, something that would once have been considered inventive becomes nothing more than an obvious (or ‘straight forward’) use of a (now) well-known medium.

The problem here was that there was insufficient evidence to support a ‘proper’ finding of obviousness.  Prior art searching conducted by the examiner had failed to turn up any document that would clearly establish that it was known, or obvious, to use email communications in the manner claimed as the invention.  I am therefore left with the suspicion that every decision-maker who looked at this case – the examiner, the Hearing Office, the judge at first instance and the Ladies and Lord Justices on the Court of Appeal – formed the opinion that this just seemed too trivial, or obvious, to be the kind of thing for which someone should be granted a patent.  So, in the absence of actual evidence that it was not inventive, they fell back on subject matter grounds as a basis for rejection.

The Prior Art That Nobody Found

The really sad thing about all this is that all of those decision-makers were absolutely right – of course people have thought of using email as the basis for file retrieval long before now.  Those of us who have been around for too long can still remember when the Internet was the limited province of universities and public research institutes.  Back in those days (the 1980s and early ‘90s, in case you are wondering) everyone else in Australia made do with ‘store-and-forward’ data communications in which there was, by definition, no such thing as a continuous connection between any two sites.

More recently (and relevantly to Lantana’s claimed invention, which assumes availability of a ‘packet switched network’ such as the internet), the program POSTIE is a command-line mail processor developed by Andrew George Davison in the late 1990s.  The readme.txt file for version 6, dating to the year 2000, is available in the Internet archive, and includes the following description of one of the many features provided by POSTIE:

Can now request files with 'index' (or 'dir') or 'fetch filename' (or 'get filename') as the subject. Selected files are returned as an email attachment. Requested files are relative to the '-fetch:path' directory if specified. If not specified then fetch mode is disabled. Only list subscribers may fetch files unless '-open' is used.

In other words, for at least the past 15 years it has been possible to provide the core functionality claimed by Lantana using the existing POSTIE software.

It took me about five minutes to find references to POSTIE using Google, in part because of my absolute certainty that such a thing existed, and that searching using keywords such as ‘fetch file’, ‘email file request’ and so forth was bound to be fruitful.

The Lantana application originated in the United States.  The UK application was derived from an International (PCT) Application, on which a search had previously been conducted.  A corresponding US application was also filed and examined (and is now abandoned).  Prior patent documents were cited in all of the searches, but all examiners failed to identify any prior art as relevant as POSTIE.

Conclusion – A Lamentable Situation

It is lamentable that examiners are failing to find the most relevant prior art in some areas of technology.  It must be said, however, that this is not really the examiners’ fault.  In a rapidly-developing field of technology, few people will have the personal knowledge and experience to know where to look for prior art, and the databases and tools that would assist examiners in searching beyond the well-organised databases of patents and technical literature are clearly not up to the task.  ‘Crowdsourcing’ of prior art searching has been trialled, such as through the USPTO’s Peer Review Pilot programs, but has had minimal impact, no doubt largely due to the inexperience of the general public in reading and interpreting patent documents – and claims in particular.

Even so, the use of subject-matter eligibility grounds as a de facto basis for rejection of claims that do not appear susceptible to a formal prior art attack is a disturbing trend.  We have seen it in recent decisions of the US Supreme Court, it is arguably a factor in the recent Research Affiliates decision in Australia, and it certainly seems to have influenced the Lantana decision in the UK.

The big problem with all of these decisions is that the legal reasoning is developed in order to fit the desired outcome, based on a subjective view of the ‘merit’ of the claimed invention.  This is, inevitably, a recipe for inconsistency and uncertainty in the law, as it becomes increasingly difficult to see the coherent logic behind the differing outcomes in cases like Lantana, Halliburton and PKTWO.

Unfortunately, it is getting increasingly difficult to see a way back from the mess the courts are making of subject-matter eligibility, compounded by the efforts of patent offices to implement the increasingly confused and incoherent guidance they are receiving.

And, as a patent attorney trying to advise clients on these issues, there are days when I just want to bash my head against the desk and scream!

3 comments:

Mark Summerfield said...

Thank you for your post Mark. This is an excellent review of the status quo for patent eligibility. I agree with you on the point that the majority of the recent decisions have been largely driven by impressions. It almost seems that the decision-makers have asked themselves 'is it right to have patent in force for this?'. Once they found an answer to this question, they have been working hard to stitch it to legal precedent.
The result is a spread feel of uncertainty and frustration amongst clients, professionals, enterprises and investors.
Do you think RA will appeal the Full Court Decision? And if so, do you think the High Court would take on the appeal?

Mark Summerfield said...

Thanks for your comment, Pasquale.


Today (8 December 2014) is the deadline for RA to file an application for Special Leave to appeal the Full Court's decision. I had expected that they would apply, because I think that there are issues that the High Court might well wish to take on. But I have heard rumblings that they may have decided to cut their losses and let it go. We should know by tomorrow (keep an eye on my Twitter feed).

Mark Summerfield said...

"So, in the absence of actual evidence that it was not inventive, they fell back on subject matter grounds as a basis for rejection."

There are patents from facebook, google and microsoft that have been granted but could have been rejected on subject-matter eligibility grounds and surprisingly, nobody has mentioned a word 'conspiracy'?

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