31 December 2016

Time to Abandon Concerns About the ‘Scintilla of Invention’ and Focus on What Really Matters

FocusInventive step is hard.  It really is.  I have worked with and around patents for nearly 20 years, the majority as a practising patent attorney.  I have been an inventor, I have studied, practised and taught patent law, and I have thought and written about patents and patent law for many years.  And I still think that inventive step is genuinely hard.  If anyone tells you otherwise they are either a liar or a fool.

Just stop and think for a moment about the job that the law of inventive step (or obviousness, nonobviousness – whatever your preferred formulation, the problem is substantially the same) is required to achieve.  Firstly, it is supposed to be technology-neutral, since inventions can be made using electronics, software, chemicals, biological molecules, natural and man-made materials, mechanical components, and more, individually and in combination, across all industries.  A better mousetrap, an improved mechanical lock, a new cancer medication, a stronger cryptographic security system and an advanced process for genetic manipulation must all be assessable under the one law to determine whether they are ‘inventive’ or ‘obvious’.

Secondly, the law of inventive step is expected to be objective.  Ideally, the answer to the question ‘is it obvious?’ is independent of the decision-maker and free from any subjective or value-based judgment.

Thirdly, inventive step is expected to satisfy policy objectives.  Whether it is the US Constitutional purpose of ‘promot[ing] the progress of ... the useful arts’, or the (generally less-explicitly stated) economic rationale in Australia and other jurisdictions, inventive step is the ultimate gatekeeper of the patent system.  After it has been established that an alleged invention lies in a field of patent-eligible subject matter, and is novel (i.e. not already known in the same form) determining whether it constitutes a sufficient advance to be worthy of a state-sanctioned exclusive property right is wholly the work of the law of inventive step.

This is important work.  If the bar to be cleared by the inventor is set too low, then we may make the mistake of granting patents on trivial developments that are not worthy of protection, thereby preventing others from making use of technology that should be freely available.  Conversely, if the bar is set too high we may fail to provide the necessary incentives for inventors, investors and industries to take risks in bringing new or improved products and services to market, building businesses, creating employment, and generating new economic activity and productivity improvements through technology.

And because it is so hard to satisfy all of these complex and challenging requirements, the law of inventive step has become very complex over the years, through the combined efforts of courts and legislators.  One particular creation of the courts that has received much critical attention over the years is the notion that all that is needed to support the grant of a valid patent is a ‘scintilla of invention’.  This sounds like it sets the bar pretty low.  However, although the Australian courts seem determined to hang on to the ‘scintilla’, my view is that under the current law it actually has no bearing on what is required to establish an inventive step.

In a sense, then, the persistence of the anachronistic ‘scintilla of invention’ in the case law should be (mostly) harmless.  However, so long as it continues to be cited by the courts, and raised by critics of the patent system as a significant issue, it is a distraction that gives rise to the risk that we will fail to recognise and address the real problems plaguing the law of inventive step in Australia. 

The Productivity Commission Drinks the ‘Scintilla’ Kool-Aid

The latest group to be dragged down the ‘scintilla’ side-alley are the members of the Productivity Commission charged with conducting the recent Inquiry into Australia’s IP Arrangements.  The Commission’s Report recommends that the law be amended, and the Explanatory Memorandum accompanying the amendment expressly state that a ‘scintilla of invention’ is an insufficient threshold.

The big problem with this proposal is that it will not have the desired effect.  The ‘scintilla’ is, and has been for decades now, a red herring.  The word is unnecessary and performs no real work.  The Patents Act 1990 requires an ‘inventive step’ – something which will be present when the subject matter of a claim is ‘not obvious’ in all of the relevant circumstances. 

Assuming that it is possible to establish the appropriate factual context for evaluation of the claimed subject matter, then it is either inventive, or it is not.  It is either obvious, or it is not.  To talk about degrees of invention in reaching legal conclusions is not useful.  Certainly, in everyday conversation we might agree that the transistor was ‘more’ inventive than the Frisbee, though we might have a little more trouble ranking the transistor and the light bulb. 

But all of the work that the law requires is right there in the word ‘inventive’, i.e. the word that actually appears in the Act, which also tells us that this word means ‘not obvious’.  It is untenable to have a situation in which judges, examiners and other decision-makers are expected to make a further assessment of degree – just how inventive is it?  This would not result in consistent, objective, decision-making.  It would encourage the submission of additional ‘expert’ evidence relating to the essentially subjective issue of just how much of an advance is enough to make something ‘worthy’ of protection.  We would be saying, of some inventions, ‘yes, that is inventive, but I am afraid it is just not inventive enough to be deserving of a patent.’

This is not what the law requires.  It calls for a qualitative, binary judgment: inventive or not inventive; obvious or nonobvious.  As it is applied under Australia’s current patent laws, the infamous ‘scintilla’ does not establish a standard.  It merely emphasises the way in which the statutory framework operates.  Once the requirement for an inventive step has been met, there is no need to go further.  That is enough.

The ‘Scintilla’ Is Not What Distinguishes Australian Law

Contrary to what the Productivity Commission asserts, the law of inventive step operates no differently in other jurisdictions.  Just as a ‘scintilla’ of invention is sufficient in Australia to cross the qualitative line separating ‘obvious’ from ‘inventive’, there is no requirement, e.g. in the US or Europe, for anything more than enough of an achievement to clear a statutory bar.  Decision-makers in these jurisdictions are not required to evaluate anything other than the binary question of whether claimed subject matter is inventive or, alternatively, obvious.  There has never been a case in which a judge has said ‘I accept that this is inventive, but I am sorry to say that I just do not think that it is sufficiently inventive.’  That is not what happens.  The test is not quantitative.  What happens, as in Australia, is that claims are invalidated for obviousness, not for ‘insufficient inventiveness’.

Even so, it is true that the standards set in a number of other jurisdictions are higher than in Australia, in the sense that there are cases in which patent claims may be validly granted in Australia that would have been considered obvious elsewhere.  So if the ‘scintilla’ is not to blame for this, what is?

Prior Art, Not the ‘Scintilla’, Dictates Standards

The Productivity Commission has observed that, in Australia, ‘[t]he High Court noted that the UK may require more than a scintilla’, citing Aktiebolaget Hassle v Alphapharm Pty Ltd [2002] HCA 59 at [48].  The key word here, however, is ‘may’.  The judges had clearly not given the matter a great deal of consideration (and nor should they have – their job is to decide cases under Australian, not UK, law).  They relied for this contention upon a few words of Lord Justice Hoffman in the UK Court of Appeal, in which he posed the question of ‘whether the patent in suit “discloses something sufficiently inventive to deserve the grant of a monopoly”’ (Société Technique de Pulverisation Step v Emson Europe Ltd [1993] RPC 513 at 519).  This ignores a more comprehensive discussion by Sir Donald Nicholls VC, also in the Court of Appeal, the following year (Mőlnlycke AB v Procter & Gamble Ltd (No 5) [1994] RPC 49 at 112):

Under [section 3 of the Patents Act 1977 (UK)] the criterion for deciding whether or not the claimed invention involves an inventive step is wholly objective. It is an objective criterion defined in statutory terms, that is to say whether the step was obvious to a person skilled in the art having regard to any matter which forms part of the state of the art as defined in section 2(2). We do not consider that it assists to ask whether 'the patent discloses something sufficiently inventive to deserve the grant of a monopoly'. Nor is it useful to extract from older judgments expressions such as 'that scintilla of invention necessary to support a patent'. The statute has laid down what the criterion is to be: it is a qualitative not a quantitative test.  (Emphasis added.)

When Nicholls VC here refers to ‘older judgments’ he is acknowledging a critical point.  The notion of a ‘scintilla of invention’ predates modern statutes, such as the UK Patents Act 1977 and the Australian Patents Act 1990 in which the requirement for an inventive step is expressly set out in terms that the legislature plainly intended to be objective.  As the High Court has said subsequently to the Alphapharm judgment (a case decided, it should be noted, according to the law of inventive step under the Patents Act 1952, not the current law), in Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (No 2) [2007] HCA 21 at [40]:

Obviousness, or lack of an inventive step, was not clearly recognised as a separate ground of invalidity until late in the 19th century when a contemporary writer stated that the ground of invalidity emerged “as a brake upon the too rapid progress of patents for analogous uses”. This development continued early in the 20th century. It became commonplace to note in the cases that, in addition to novelty, it is necessary to ask separately whether an invention is “ingenious”, or to recognise ... [that]: “Invention means more than novelty. Novelty alone will not sustain a patent.” (Citations omitted.)

The ‘scintilla of invention’ thus emerged at a time when the criteria for patentability, which we now recognise as discrete requirements for eligible subject matter, novelty and inventive step, were all bundled up in the requirement that an invention be a ‘manner of new manufacture’. 

Lack of inventive step as a distinct ground of invalidity first appeared in Australia in section 101(1)(e) of the Patents Act 1952, for a claimed invention that ‘was obvious and did not involve an inventive step, having regard to what was known or used in Australia on or before the priority date of that claim.’  It was the appalling decision of the High Court in the ‘3M Case’ (Minnesota Mining & Manufacturing Co v Beiersdorf (Australia) Ltd [1980] HCA 9) that read down the ‘known or used’ standard to encompass only the common general knowledge of the person skilled in the relevant art.  Meanwhile, in the UK, the ‘state of the art’ against which inventive step is assessed is defined in subsection 2(2) of the 1977 Act as ‘all matter (whether a product, a process, information about either, or anything else) which has at any time before the priority date of that invention been made available to the public (whether in the United Kingdom or elsewhere) by written or oral description, by use or in any other way.’

And that is the primary origin of the divergence in the law of inventive step between Australia and the UK.  Because even if the skilled persons hypothesised by the UK and Australian laws have the same characteristic skills and abilities, the UK exemplar is also assumed to have access to all information that might be remotely relevant, whereas their Australian counterpart does not.  The purported abandonment of the ‘scintilla of invention’ in the UK but not Australia really has nothing to do with it.  Whether or not you ask if there has been an inventive step taken, or if there is a ‘scintilla of invention’, makes no difference.  Either way, the test is objective and qualitative, not subjective and quantitative. 

We do not speak of ‘degrees’ of inventiveness in patent law.  We do not try to weigh up the relative inventive merits of the light bulb, the transistor and the Frisbee.  What is required, as Lockhart J stated in R D Werner & Co Inc v Bailey Aluminium Products Pty Ltd [1989] FCA 37 at [39] (cited with approval by the High Court in Lockwood at [40]), is that there ‘be some difficulty overcome, some barrier crossed.’  But there is no additional reward for clearing the barrier by a greater distance: the exclusive rights given by a patent are just the same.

Conclusion – Forget the Scintilla, Focus on Flexibility

For the reasons detailed above, it is my view that the difference between jurisdictions with regard to the height of the inventive step bar lies not in the application of different degrees of inventiveness, but in how the fundamental requirement for ‘invention’, as opposed to ‘obvious’ or ‘routine’ activity, is evaluated.  Therefore, raising the bar requires that we change what we mean by ‘inventive’ (or, equivalently, ‘not obvious’), not that we insist on something more than a ‘scintilla’.

This requires two things.  Firstly, a broad and objective approach to the prior art against which an alleged invention is assessed.  The starting assumption should be, as it is in Europe (and, broadly speaking, in the US, China, Japan and many other jurisdictions) that the entirety of the publicly-accessible state of the art is available, in principle, to the notional skilled persons employed as exemplars of ordinary, non-inventive, activity.

Secondly, a flexible, evidence-based approach is necessary to assess what is, or is not, ‘obvious’ or ‘routine’ activity at the relevant priority date.  The ultimate objective of the decision-maker is to put herself in the position of the non-inventive skilled worker, with the most relevant prior art information at her disposal, and answer the question: was this obvious?  While particular formulations, such as whether the skilled person would ‘directly be led as a matter of course to try’ a particular course of action or enquiry with a ‘reasonable expectation of success’, may be useful in particular cases, they should not be treated as binding principles of universal application.  In this, I agree with McHugh J who stated, in dissent in Alphapharm at [86], that ‘such judicial statements merely reflect reasoning processes concerning factual issues. They do not lay down any legal principles and they have no precedent value. They are not binding upon judges hearing future cases.’

These are the things on which we need to focus to ensure that Australia has a modern and relevant law of inventive step.  But a focus on the ‘scintilla of invention’ is misplaced.  At best, it will make no difference while, at worst, it may lead to subjective and inconsistent decision-making based upon perceived ‘degrees’ of inventiveness.  Furthermore, endorsing (or disendorsing) particular formulations for assessing obviousness runs counter to the objective of developing a flexible, evidence-based approach to inventive step.


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