29 May 2016

Utility Futility? Usefulness of Inventions and ‘Fatal’ Promises Made in Patent Specifications

InutilityThe Australian Patents Act 1990 requires, in section 18(1)(c) and 18(1A)(c), that an invention must be ‘useful’ in order to be patentable.  This is also commonly known as the requirement for ‘utility’.  Failure to meet this requirement, i.e. inutility, is therefore a ground upon which a patent application may be rejected, or a patent revoked.

A number of ‘rules’ have been developed by the courts over the years for assessing utility.  These were succinctly summarised by Justice Beach in Streetworx Pty Ltd v Artcraft Urban Group Pty Ltd [2014] FCA 1366 (a decision that was upheld on appeal) in the form of three questions:
  1. What has the patentee promised for the invention as described in the relevant claim?
  2. Is the promise useful?
  3. Has that promise been met?
Furthermore, it has been held that ‘everything that is within the scope of a claim must be useful, otherwise the claim will fail for inutility’ (H Lundbeck A/S v Alphapharm Pty Ltd [2009] FCAFC 70 at [81]).

One aspect of the utility requirement that has perhaps been less consistently addressed is whether, if a patent applicant makes multiple promises for an invention, it is necessary that all of those promises be met by every claim.  For example, suppose a patent is directed to bionic implants promises to create a human cyborg that is better, stronger and faster than the original.  Is a claim for a bionic eye invalid because it only achieves one of these three objectives?

In practice, it is not uncommon for patent specifications – particularly those drafted primarily with the US in mind – to include multiple ‘object’ statements, without a necessary expectation that each and every claim satisfies each and every stated object.  It is a common practice of Australian patent attorneys to amend such statements in order to moderate the promises being made such that, for example, no more than some substantive progress towards achieving at least one of the desired benefits is asserted.

It should, in fact, be the standard practice of all Australian patent attorneys to do this, as a recent Federal Court judgment demonstrates.  In Ronneby Road Pty Ltd v ESCO Corporation [2016] FCA 588, Justice Jessup found all claims of an opposed patent application to be invalid for lack of utility because none would deliver each and every one of six advantages listed in the specification, notwithstanding that a number of the claims would deliver one or more of those stated advantages.

22 May 2016

Are Patent Attorneys Really to Blame for Overly Broad Claims?

BlameLast week Eric Sutton, who is Senior Patent Counsel at Oracle Corporation, published an open letter to the patent attorney profession on the IP Watchdog blog.  In short, he accused us – and particularly those of us who practise in the ‘software-related arts’ – of filing too many ‘extremely short’ and ‘overly broad’ patent claims.  We should stop doing this, he says, because not only is it bad form, it is costly for our clients, who end up spending more (by perhaps US$10,000) during the examination process and, in the US at least, increasing risk due to prosecution history estoppel.

Apparently Sutton’s superior knowledge of the prior art has placed him in a position to challenge many patent attorneys over the past couple of years, enabling him to inform those attorneys that – in his words – ‘you’re wrong, fix it’ when they have sought to defend their short, broad claims.  In his concluding paragraphs, Sutton calls on his own experience at Oracle to suggest that a particular source of this problem is laziness on the part of the patent attorneys.  ‘Laziness is bad,’ he says, ‘and I am calling you [i.e., the ‘Dear Patent Attorney’ addressed by the article] out on it.’

While Sutton’s piece strikes me as stunningly arrogant in its tone, this is perhaps excusable considering that he works for Oracle – a company that received over 600 US patents last year.  Although he is at pains to point out that the opinions expressed are his own, ‘and do not necessarily represent those of Oracle Corporation, its subsidiaries or affiliates’, there is no question that he is well-placed to know what he is talking about.  And there is no disputing the facts established by his analysis of the thousands of patents/applications of two large (but anonymous) software-related product/service companies:
  1. many applications in the data set were filed with remarkably short independent claims;
  2. examination (‘prosecution’) of patent applications generally (and not just those with ‘extremely short’ claims) results in amendments that lengthen the independent claims; and
  3. on average, applications filed with shorter independent claims are subject to lengthier and more costly prosecution, and to more extensive claim-lengthening amendments.
I am sure that we can generally agree that it is less than ideal to file patent claims that are so broad they have virtually no prospect of allowance without significant narrowing amendment.  But is erring on the side of breadth in the independent claims at filing really such terrible strategy?  And does the ‘blame’ for this lie so squarely with ‘lazy’ patent attorneys?

Based on my own experience, I would suggest that the answer to both of these questions could well be ‘no’.  More data is needed if we are going to understand what is truly going on here.  I doubt very much that it is as clear-cut as Sutton proposes.

16 May 2016

Patentable Subject Matter Continues to Confound in the US Despite Hopeful Signs

Hope - DespairThe past couple of weeks have brought some slightly brighter news for innovators in life sciences and software fields seeking patent protection in the United States.  First, the US Patent and Trademark Office (USPTO) issued an update to its Interim Guidance on Subject Matter Eligibility which provides some much needed clarification on what is expected from examiners, as well as additional examples which will give new hope to applicants with inventions relating to diagnostic methods.  Second, the US Court of Appeals for the Federal Circuit (CAFC) issued a rare decision (Enfish LLC v Microsoft Corporation, appeal no. 15-1244 [PDF, 604kB]) finding that a computer-implemented invention is not ‘abstract’, and is therefore patent-eligible.

The USPTO’s updated guidelines require examiners to provide more detail in their rejections, to provide distinct rejections for every claim, and to provide more reasoning when maintaining rejections in the fact of applicant arguments.  They also prohibit examiners from expanding the scope of unpatentable subject matter beyond the specific examples provided by court rulings.  These clarifications will hopefully create greater certainty and consistency in the approach taken by examiners across all fields in which subject matter eligibility is commonly at issue.

The new life sciences eligibility examples will also be welcomed, especially by applicants with inventions in the field of diagnostics.  At the same time, however, at least one of those examples also serves to highlight just how absurd the approach to subject matter eligibility has become in this area, thanks in large part to the US Supreme Court tying itself in knots trying to establish a consistent approach, while at the same time avoiding setting down any hard and fast rules about identifying excluded subject matter within the established categories of ‘abstract ideas’, ‘laws of nature’ and ‘mental steps’.

Interestingly, the USPTO’s ‘diagnostic’ example, and the patent-eligible computer-implemented invention in Enfish have something in common – both demonstrate that the most effective way to avoid a finding of ineligibility is to bypass the eligibility analysis altogether, by ensuring that the patent claims are not ‘directed to’ (i.e. ‘recite or describe’) any recognised judicial exception, such as a law of nature or abstract idea.

08 May 2016

A Conversation With IP Australia’s Chief Economist, Part I

Benjamin Mitra-KahnI have written previously about what I have called the growth profession of ‘IP Economist’, including the trend in recent years for IP administration authorities to develop an in-house capacity for economic analysis.  IP Australia is no exception in this regard, having established its own Office of the Chief Economist back in 2012.

Among a number of projects, including production of the annual Australian Intellectual Property Report, the Office of the Chief Economist has developed the IP Government Open Data resource (a.k.a. the IPGOD) which was used to assess the Economic Impact of Innovation Patents.  That study, in particular, is having a significant policy impact, with both the (now defunct) Advisory Council on Intellectual Property (ACIP) and the Productivity Commission subsequently recommending that the innovation patent system be abolished (see ACIP Says ‘Abolish Innovation Patents’ Based on IP Australia Report and Australian Productivity Commission Releases Draft Report on Intellectual Property Arrangements).

In this context, I was very interested to have the opportunity a short while ago to sit down and have an on-the-record conversation with the Chief Economist himself, Dr Benjamin Mitra-Kahn.  He and I approach the IP system from quite different perspectives – whereas I work at the ‘coal face’ (as it were), largely focussed on what my clients hope to achieve through their engagement with the system, Ben’s interest is in obtaining and analysing the data that will enable his team (and the rest of us) to better understand the IP system as a whole, and the role it plays in the economy.

I immediately liked Ben and enjoyed our discussion immensely.  Over the next few weeks I will be bringing it to you in instalments, and I hope you will find it as interesting as I did.  In this first part, we talk about how Ben got into the economics of IP, the process of bringing together the annual IP Reports, and a bit about the role of economics in shaping IP policy. 

05 May 2016

Australian High Court Rejects ‘Software Patent’ Appeal

FinToday, Thursday 5 May 2016, the High Court of Australia dismissed the application by RPL Central Pty Ltd for special leave to appeal last December’s decision of the Full Court of the Federal Court of Australia that its patent claims covering a computer-implemented method of evidence gathering for recognition of prior learning (RPL) were not directed to patent-eligible subject matter (i.e. a ‘manner of manufacture’) under Australian law.

The Court’s decision was made solely on the basis of the parties’ written submissions.  No hearing was conducted.  I understand that this is a relatively recent practice of the High Court, in order to expedite the disposition of many special leave applications, for which a hearing is not deemed necessary.  No reasoning for the decision has been provided as yet, although I understand that brief reasons will be published, and made available via AustLII’s High Court of Australia Special Leave Dispositions Decisions database under the neutral citation [2016] HCASL 84.

The RPL Central case has been a long journey, with more than its share of ups and downs.  The innovation patent (no. 2009100601) was filed in June 2009.  Between August and October of that year it was examined and certified.  No objections were raised regarding the subject matter of the patent.  In March 2011 an opposition was filed, raising only the ground of lack of novelty.  The Commissioner’s Delegate hearing the opposition raised the issue of lack of ‘manner of manufacture’ (i.e. subject matter eligibility), and requested submissions on this ground.  The opponent’s objection of lack of novelty was readily dismissed, but the Delegate found the patent invalid on subject matter grounds

This decision was appealed to the Federal Court where, at first instance, Justice Middleton upheld the appeal, and overturned the Patent Office ruling.  The Commissioner of Patents appealed to the Full Court, which reversed the primary judge’s decision in its December 2015 judgment.

With the High Court’s rejection of RPL Central’s application to appeal that decision, all avenues are exhausted.

So this is the way it ends – not with a bang, but a whimper.

Update: Friday 6 May 2016

The brief reasons of the High Court have now been published:

The Full Court was plainly correct and, accordingly, none of the applicant's proposed grounds of appeal enjoys sufficient prospects of success to warrant the grant of special leave to appeal.

01 May 2016

The Australian Productivity Commission’s Deeply Flawed Proposal to Abolish ‘Software Patents’

Metropolis - MariaDraft Recommendation 8.1 of the Australian Productivity Commission’s (PC) draft report on Intellectual Property Arrangements is that ‘the Australian Government should amend section 18 of the Patents Act 1990 (Cth) to explicitly exclude business methods and software from being patentable subject matter.’

In my view there are two major flaws in the analysis that leads the PC to this recommendation.  Firstly, it conflates business methods and software into a common category, using the abbreviation ‘BM&S’ throughout its discussion.  Secondly, it is clear that the PC has very little idea about the vast scope of activity and technological advancement that takes place under the general banner of software development. 

As has been the case in many previous attempts to ‘reform’ the law in relation to patenting of computer-implemented inventions (including the farcical process that delayed introduction of the New Zealand Patents Act 2013 for years) the PC primarily views software through the lens of its own rather limited experience of mass market consumer software and online services, along with the rather narrow perspective provided by disproportionately vocal free and open source software (FOSS) advocates.

There is, however, so much more to software than this, and the PC’s draft recommendation of a blanket exclusion is, simply, a terrible and deeply flawed idea!

Australian Productivity Commission Releases Draft Report on Intellectual Property Arrangements

PC Draft Report CoverOn 18 August 2015 the Australian Government (through the then-Treasurer Joe Hockey) directed its Productivity Commission (PC) to undertake a 12 month public inquiry into Australia's intellectual property (IP) system.

The PC’s draft report was released on 29 April 2016.  and is open for further submissions and feedback up until Friday, 3 June 2016.  The PC then anticipates holding public hearings during June, most likely in Sydney, Melbourne and Canberra.  The final report to the Government (whomever that may be, given that an election is anticipated in the meantime) is due in August.

It seems safe to say that many of the PC’s draft recommendations will prove controversial.  Of course, being a review of the entire IP system it takes in copyright, trade marks, registered designs, plant breeder’s rights, and various related areas of public policy.  As usual, however, my focus here is to summarise the draft recommendations relating to the patent system in particular.  In future articles I will be discussing some of these proposals in more detail.

Copyright © 2014
Creative Commons License
The Patentology Blog by Dr Mark A Summerfield is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Australia License.