13 December 2015

Australian Appeals Court Kills Another Patent on a Computer-Implemented Invention

Sad On 11 December 2015, a Full Bench of the Federal Court of Australia handed down a unanimous judgment in Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177, overturning the decision of the primary judge and finding a computer-implemented method (which the court characterised as a ‘business method’ or ‘scheme’) to be unpatentable subject matter under Australia’s ‘manner of manufacture’ standard.

Regular readers of this blog will know that I have been involved in this matter from the outset.  I drafted the original patent specification on behalf of Watermark client RPL Central Pty Ltd.  I represented the client in guiding it through examination, resulting in its approval and certification by IP Australia.  I again represented the client in opposition proceedings, in which we successfully defended against allegations that the invention lacked novelty (raised by the opponent), but went down on the basis that the claimed invention was not a patent-eligible ‘manner of manufacture’ (raised not by the opponent, but by the Commissioner’s Delegate, i.e. the Hearing Officer in the opposition).  I have continued as an advisor in the Federal Court appeals, first through the ‘high’ of success before a single judge, and now the ‘low’ of this decision of the Full Court.

It will therefore come as no great surprise that I am disappointed by this decision.  I am disappointed for our client, for whom this has been a roller-coaster ride (which may not be over yet).  I am disappointed for other operators of small, innovative technology businesses, because I genuinely believe that the kinds of innovation represented by the patent in this case ought to be protectable under our patent laws.  I am disappointed on behalf of patent applicants and their advisors, who will find this decision to be quite unhelpful in clarifying where the boundary lies between what is patentable and what is not in the realm of computer-implemented inventions.  And, of course, I am disappointed for myself, because obviously I would have preferred to win!

These are all personal observations, which have nothing to do with the merits of the judgment.  As is my normal practice in cases where I and/or Watermark are directly involved, I shall refrain, for the present, from revealing my own views on the judgment, and stick to the facts of what has been decided. 

The Invention Considered by the Court

Broadly, the claimed invention relates to the assessment of the competency or qualifications of individuals with respect to recognised standards.  Specifically, the invention is defined in claim 1 as follows:

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 responses 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 files stored on the individual's computer, which are transferred to the assessment server.

The Full Court summarised the claimed invention (at [37]), stating that it involves:

  1. using a computer to retrieve the criteria using the Internet. This involves the user using conventional web-browser software;
  2. the computer processes the criteria to generate corresponding questions relating to the competency of the individual to satisfy the elements of competency and performance criteria associated with the recognised qualification standard;
  3. those questions are presented;
  4. the individual answers the questions and, if he or she chooses to do so, uploads documentation from his or her computer.
Paragraphs [40]-[95] of the judgment summarise the decisions of the primary judge (Middleton J), of the Commissioner’s Delegate, followed by the grounds of appeal, and the submissions made on behalf of the Commissioner and RPL Central.  The court’s consideration of its reasons begins at paragraph [96].

The Court’s Reasoning

The court began by considering the patent-eligibility of business methods and schemes:

The basis for the analysis starts with the fact that a business method, or mere scheme, is not, per se, patentable. The fact that it is a scheme or business method does not exclude it from properly being the subject of letters patent, but it must be more than that. … 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. (At [96].)

The court then turned to its own recent decision in Research Affiliates v Commissioner of Patents, noting that:

Relevantly, the Full Court in Research Affiliates said (at [94]) that the distinction to be drawn was between the employment of an abstract idea or law of nature and the idea or law itself and that there is a distinction between a technological innovation which is patentable and a business innovation which is not.  … A technological innovation is patentable; a business innovation is not, although a business method may be the subject of letters patent.  (At [100].)

In Research Affiliates the court had discussed the opinion of Judge Lourie in the US Court of Appeals for the Federal Circuit (CAFC) decision in Bancorp Services LLC v Sun Life Assurance Co of Canada 687 F3d 1266 (Fed Cir 2012).  The RPL Central court noted that:

Their Honours emphasised a further comment by Lourie J, that to be patentable, ‘a computer must be integral to the claimed invention, facilitating the process in a way that a person making calculations or computations could not’.  (At [101].)

The court further noted that the fact that a method cannot, as a practical matter, be carried out without the use of a computer is insufficient to

…render the claimed invention patentable if it involves simply the speed of processing and the creation of information for which computers are routinely used. In those circumstances, the claimed invention is still to the business method itself.  (At [104].)

The court acknowledged the difficulties inherent in determining whether or not the involvement of a computer might be sufficient to render a method patentable:

Is the fact that the scheme cannot practically be implemented without a computer, that is, that the computer is integral to the working of the scheme, sufficient to make it patentable? The answer is not straightforward because this is not a case where the computer simply processes the information entered by the user, for example by using an algorithm, or retrieves information from the Internet in response to a user's question. (At [107].)

Ultimately, however, the court decided that:

RPL Central does not claim any invention or ingenuity in any program or operation of a computer, or implementation by a computer to operate the method. Accordingly, the ingenuity of the inventors must be in the steps of the method itself. The method does utilise the speed and processing power and ability of a computer but there is no suggestion that this is other than a standard operation of generic computers with generic software to implement a business method. This is the method of taking the information as to available criteria for Units of Competency and reframing those criteria into questions and presenting them to, and receiving the answers from, the user together with any documents that the user wishes to append. The reframing of the criteria into questions may be outside the generic use of a computer but the idea of presenting questions, by reframing the criteria, is that: an idea. It is not suggested that the implementation of this idea formed part of the invention. (At [110].)

Therefore the court concluded, at [113], ‘that the claimed invention is to a scheme or a business method that is not properly the subject of letters patent.’

Conclusion – Or Is It…?

It is open for RPL Central Pty Ltd to apply for Special Leave to appeal the Full Court’s decision to the High Court of Australia, up until 8 January 2016.  Given that I may be called upon to provide input in relation to possible grounds for appeal, it is obviously inappropriate for me to express any opinion on the correctness or otherwise of the Full Court’s decision at this time.

What I will note, however, is that whatever else may be said about RPL Central’s patent claims, there has been little agreement as to whether or not they define patent-eligible subject matter.  An Australian Patent Office examiner initially approved them.  An opposition Hearing Officer then denied them.  A single judge of the Federal Court then overturned that decision.  And that judge’s decision has now, itself, been reversed by a panel of three judges.  This is not a situation that inspires confidence in the clarity of the law.


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