28 August 2013

A Conversation with the Commissioner of Patents (Part 3)

CommunicatingIn the first of this series of articles documenting my recent conversation with the Australian Commissioner of Patents, and Deputy Director General of IP Australia, Fatima Beattie, we learned a bit about her about her background as a chemical engineer working with steel, about how she came to the role of Commissioner, and about what the job involves on a day-to-day basis. 

In the second part of the interview, we spoke about the law reform process – what has already been achieved through the Raising the Bar amendments, the further reforms which are currently ongoing, and the opportunities for future reform.

In this third, and final, part of the discussion we speak about the patent-eligibility of contentious subject matter such as computer-implemented inventions, business processes, and genetic materials, as well as the challenges facing the patent system over the coming years.

Part 3: Patentable Subject Matter and Other Challenges

Mark Summerfield: One thing I did manage to learn about you via Google was that one of the first public tasks you had, it appears, when you became Commissioner of Patents, was to respond to the media on an issue that arose in relation to an international e-commerce patent obtained by a company called DE Technologies. Now that patent, you may or may not know, is actually still in force. The company has been around doing its thing, largely in the US, for many years, although it filed for a Chapter 11 bankruptcy last year or the year before. But they’ve been maintaining that patent.

I had a look at that patent, and the claims, and it seems to me – and I work in this area as you’re probably aware – that those claims would not have got past an examiner at IP Australia today. Now, I think that practitioners such as myself, and applicants in this area, started to notice a tightening up, let’s call it, of the rules that were being applied in relation to computer-implemented inventions and business method-type inventions around about 2008-2009, which led to a fairly dense series of Patent Office decisions on rejected applications which is very unusual on any single topic, let alone patentable subject matter – and of course to the appeals that are currently before the Federal Court. Which probably both of us can’t talk about to a great degree.

But to the extent you can comment, was there something in particular that led to this change in practice – this tightening up – of the way in which the manner of manufacture test was applied in relation to that subject matter?

Fatima Beattie: I can’t comment specifically on any of the cases that you might be alluding to. What I can say is that the Office practice is very much about understanding the government’s policy objectives as they are translated into the legislation that we administer. We interpret the legislation in the context of the policy objectives and judicial guidance in relation to the legislation.

MS: Not looking at the particular cases I guess, but just at – in terms of judicial guidance – there was nothing between 2006, when the Grant decision came out, and 2008. And normally when there’s a change of practice within the Office – such as there was, for example, with inventive step – that is flagged through an Official Notice, or through amendments to the Examiners Manual. Yet there didn’t seem to be any sort of indication that applications that people might have expected would have gone through, on their past experience, were now going to be subject to perhaps a slightly different approach, and a tightening up of the guidelines…

FB: Again, I think we need to note that we interpret the legislation in the context of the policy objective and the judicial guidance, and there has been judicial guidance, which has resulted in the practice that we have. Depending on what comes out of the court cases that are proceeding at the moment, further changes in practice may result. The government also has the option to change the legislation if the policy objective is not being served by the current legislation.

MS: Moving on to a very different area of subject matter… In April 2011, you personally appeared before the Senate Legal and Constitutional Committee in relation to gene patents, and in particular from reading the Hansard reports of those hearings, it appears that your main purpose there was to explain IP Australia’s position and practice in relation to the patenting of isolated gene sequences.

Now, that particular bill that the Committee was looking at, the Human Genes and Biological Materials Bill, was ultimately defeated, although I think it would be fair to say that there were plenty of people who ended up being opposed to that bill who were actually in favour of some of the principles behind it, and that a different implementation might have got a different result.

But that issue of whether or not gene sequences, particular human gene sequences I think, ought to be patent-eligible, remains controversial, and it remains the case that events such as the Federal Court issuing a decision in the Myriad proceedings generates interest in the mainstream media. Now, those of us who live half our lives on the Internet have the impression that computer software and business methods are a controversial area, but you can’t get that onto the op-ed page of The Age or The Australian whereas gene patents do appear there…

I see that recently IP Australia published a report that was commissioned from the Centre for International Economics, on the Economic Analysis of Human Gene Patents, which seemed to me to deliver the message that if isolated gene patents were ever a significant issue, that that’s no longer the case for various reasons, and I think I would actually agree with that. But the legal and economic arguments don’t seem to have proven effective in actually changing the fact that this is a controversial area.

Does IP Australia understand why this is such a concern for so many people in the community?

FB: We do understand why it’s a concern, and I think it’s a fair concern for people to have. But our role is to apply the legislation, and the judicial guidance, and that’s all we can do. So our role in the Senate committee was really to explain to the Senate the way that our practice applies, the way that it has evolved over time and to present the facts about the extent of patenting. What came out of those enquiries was that there wasn’t a lot of economic information around gene patents, and that’s what that report is seeking to serve – to explore what are the economic issues, what is the extent of patenting, what is the trend that the industry has experienced.

What we’re trying to do is simply present the facts as we understand, and as we have experienced over time. Our role has been to present information to those fora. But it is a sensitive subject for the community. And it’s not just a sensitive subject for the Australian community, it’s sensitive internationally.

MS: Does it concern you that if there’s a perception in the community that the patent system is out of step with the community’s values, that that might actually undermine support for the patent system as a whole – if that is something which should be a factor in policy-making?

FB: The role of government is to listen to what are the issues for the community and whether or not the policy settings are appropriate. It is a balancing act in terms of understanding those concerns, and also understanding the contrary concerns of industry and researchers and the innovators at the same time. The patent system is all about balancing the various concerns, and trying to get something that leads to an optimal solution for everybody.

MS: Just to open up your thoughts about the future - what are the main challenges that you see for IP Australia and for the national and international patent systems? Obviously IP Australia is very involved in the international processes, so, if you were going to predict what’s going to be the big focus perhaps in the next one to five years, where do you think that will be?

FB: I think, in terms of what’s happening around the world is that there is concern out there about the value of the patent system, and I think the primary challenge for the IP system both in Australia and internationally, is to demonstrate the value in an environment where you’ve got increasing community activism around affordable health care, food security, clean environment. So all of those factors are there, they’re real. People want to have access to all of those things, and they want it to be affordable, but they don’t want to wait 20 years before it becomes affordable.

I think we have to think about whether the IP system, the way it’s structured now, is providing the value which the community at large wants and expects from it.

The are concerns around claims – whether purpose-bound claiming might be more appropriate? There’s a lot of work going on in the World Health Organisation around how to fund differently the very expensive pharmaceutical research, through various other initiatives such as R&D prizes. Is that a better model? Demonstrating value is something that we need to consider and continue to make sure the balance is appropriately struck in that regard.

MS: Is this why IP Australia is now employing economists?

FB: Well, I think that is part of the story, and it’s not just IP Australia. It’s happening in other offices as well. There is a need to understand what is the economics of the IP system, and is it appropriately balanced in terms of meeting all those interests.

From an IP Australia perspective, I mean from an operational perspective, we have challenges around things like, how do we translate to a predominantly electronic transaction service. That’s a big challenge which includes consideration of the skills mix of our staff. Our other challenge is continuing to attract and retain high‑talent staff within the organisation. These are similar challenges to those faced by any other business in the world.

MS: Well, I think we’re out of time and will have to wrap up there. Thank you again very much for taking the time to speak with me today.

FB: Thank you for the opportunity.


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Alex said...

your first question about the e-commerce patent already says alot about IP Australia....when is this fraud going to stop?

axman6 said...

If you read the interview, you'll see that the eCommerce patent in question would likely not be allowed by today's office. So, if your problem is with patents like the one in question, the answer is that it already has.

Alex said...

no, i was referring to IP Australia's fraud in changing its practices. Ip Australia could have informed applicants about the changes but it chose not to, its fraud.

Mark Summerfield said...

There is no definition of the word 'fraud' that is reasonably applicable to this situation.

Whatever your views -- or mine -- on the matter, the fact is that patenting of computer-implemented inventions, and especially those that may be characterised as 'business methods', is controversial in the community, and is a legitimate subject of public policy.

A lack of transparency (assuming that is a fair assessment of what has happened here) is clearly undesirable in a democracy, and is something in which even opponents of 'software patents' should take an interest. However, it is hardly something that amounts to 'fraud'.

Incidentally, Justice Middleton will be handing down his decision in the RPL Central case this Friday. Let's hope that he is able to clarify the criteria against which software patent claims should be assessed in Australia.

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