Computerised Decision-Making – Coming Soon to an IP Office Near You?

The Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Act 2018 (the ‘PC Part 1 Act’) received Royal Assent, and thus passed into law, on 24 August 2018.  Following an initial consultation, which confirmed (in case any confirmation was required) that the proposal to abolish the innovation patent system remained controversial, it had an easy passage through the two houses of the Australian Parliament after the corresponding provisions were dropped from the Bill at the eleventh hour.  (These same provisions have since been incorporated into the draft of the Intellectual Property Laws Amendment Bill (Productivity Commission Response Part 2 and Other Measures) Bill 2018.) 

The PC Part 1 Act implements a number of less-contentious recommendations made by the Productivity Commission in its 2016 Report into its inquiry into Australia’s intellectual property arrangements, including clarifications on the legality of parallel imports, reducing the initial period before a registered trade mark may be challenged on grounds of ‘non-use’, and reducing reporting obligations relating to pharmaceutical patents with an extended term.  The Act also implements a number of measures that have been on IP Australia’s policy agenda for a while, most of which are intended to streamline and align the administration of the Australian IP system and make ‘technical amendments’ to correct or clarify IP legislation.

Included among the ‘streamlining’ measures are provisions to enable the Commissioner of Patents, and the Registrars of Trade Marks, Designs, and Plant Breeder’s Rights ‘to arrange for a computer program under their control to make decisions, exercise powers, and comply with obligations under the legislation’, i.e. to permit computerised decision-making.  When this idea was originally proposed in a public consultation process conducted in June-July of 2015, it was described as the ‘expanded use of automated systems’, and would have required the Regulations to prescribe specific decisions that may be automated.  The small number (three) of submissions received on this proposal were generally positive, but all noted the important role of the Regulations in controlling, and/or keeping the public informed, of the types of decisions that might be computerised.

However, three years is an eternity when it comes to progress of digital technologies, and with advances in machine learning and other techniques, the range of decisions that might presently, or in the near future, be wholly or partly automated has expanded greatly since the initial consultation in 2015.  The provisions that have actually been enacted (and which came into effect immediately upon receiving Royal Assent, i.e. on 24 August 2018) include no requirement for Regulations to be made permitting the automation of particular decisions.  Going forward, therefore, any decision, or related action, under the Patents, Trade Marks, Designs, or Plant Breeder’s Rights Acts may be automated using a computer program, if/when the relevant Commissioner or Registrar considers it appropriate.  The legislation has been drafted such that this may include both procedural actions (e.g. allowing an extension of time when no objections have been raised) and substantive actions (e.g. preparing an issuing examination reports).

While it might seem unlikely that computers will be examining patent applications any time soon, a submission made by IP Australia to the World Intellectual Property Organization (WIPO) prior to a meeting of international IP Offices held in May 2018 indicates that fully or partially automated trade mark examination – at least at the stage of an initial report – may be much closer to reality.

In any event, the necessary legislative permission is now in-place to enable any part of IP Australia’s decision-making processes to be automated, and an increase in the removal of human beings from the day-to-day execution of routine tasks that perhaps do not require high levels of adaptability and/or creativity is most likely now inevitable.  Fortunately, the legislation includes provisions that will make it easy for a computerised decision to be ‘overruled’ by a human decision-maker.  Furthermore, both computer and human decisions may be appealed to the Administrative Appeals Tribunal.

To find out more about how this will all work – and what IP Australia is up to in automating trade mark examination – please read on.

The Legislative Framework

The PC Part 1 Act inserts almost identical provisions into each of the Patents, Trade Marks, Designs, and Plant Breeder’s Rights Acts to enable computerised decision-making.  By way of example, what follows is the text of new section 223A of the Patents Act 1990:

(1)  The Commissioner may arrange for the use, under the Commissioner’s control, of computer programs for any purposes for which the Commissioner may, or must, under this Act:
        (a)  make a decision; or
        (b)  exercise any power or comply with any obligation; or
        (c)  do anything else related to making a decision to which paragraph (a) applies or related to exercising a power, or complying with an obligation, to which paragraph (b) applies. 

Note: A reference to this Act includes the regulations (see Schedule 1).

(2)  For the purposes of this Act, the Commissioner is taken to have:
        (a)  made a decision; or
        (b)  exercised a power or complied with an obligation; or
        (c)  done something else related to the making of a decision or the exercise of a power or the compliance with an obligation;
that was made, exercised, complied with or done by the operation of a computer program under an arrangement made under subsection (1).

Substituted decisions

(3)  The Commissioner may substitute a decision for a decision the Commissioner is taken to have made under paragraph (2)(a) if the Commissioner is satisfied that the decision made by the operation of the computer program is incorrect.

Additionally, a new subsection 224(1A) ensures that both an initial computerised decision, and any subsequent ‘substituted decision’ made under subsection 224A(3) may be appealed to the Administrative Appeals Tribunal.

Broad Discretion

Notably, these provisions provide the Commissioner of Patents, and the Registrars of Trade Marks, Designs, and Plant Breeder’s Right, with an extremely broad discretion to automate decision-making, unfettered by any requirement for further legislative or regulatory action.  As stated in the Explanatory Memorandum to the Bill which became the PC Part 1 Act:

As computing capabilities and functions continue to exponentially improve, it is difficult to predict precisely which of the numerous decisions under the legislation might be suitable for computerised decision-making. If the legislation were to include a prescriptive list of those decisions to which computerised decision-making could be applied, it is likely that the legislation would need to be continuously amended as capabilities improve and either existing, or new types of, decisions need to be added to the list.

Furthermore, the power to arrange for computer programs to contribute to IP Australia’s statutory roles and activities is not limited to decision-making.  In the words of the Explanatory Memorandum:

… to gain maximum benefit from computerised decision-making the enabling powers need to permit a computer program to undertake actions related to making decisions, exercising powers, and complying with obligations under the legislation.

Thus, while issuing an examination report is not itself a ‘decision’ (e.g. to accept or reject an application) under any of the Acts administered by IP Australia, it is something that certainly falls within the scope of the new provisions, i.e. under paragraph 224A(1)(b) or (c) of the Patents Act 1990.

Addressing Concerns About Computerised Decision-Making

When IP Australia conducted a consultation on an exposure draft of the PC Part 1 Bill, between October and December 2017, just three non-confidential submissions addressed the proposed computerised decision-making provisions.  In its response, IP Australia summarised these submissions as follows:

Submissions sought greater prescription of the decisions to be automated, either by defining decisions in a legislative instrument or through limiting types of decisions that can be made. Submissions also sought an additional right to be heard for parties who are adversely affected by a computer decision.

Both of these calls were rejected, with IP Australia noting the similarity of these concerns to the issues raised in the earlier consultation in 2015, and further responding that:

IP Australia will develop a governance framework to ensure that appropriate consideration and review is in place to determine how decisions are computerised.

IP Australia understands the desire to have specific appeal provisions against decisions taken by a computer.  However, we note that all decisions taken by a computer will be as if they are made, exercised, complied with or done by the Commissioner/Registrar. Where the initial decision is appealable to the Administrative Appeals Tribunal (AAT) or a court, this will remain appealable if the decision is made by a computer program.  If a person is dissatisfied with a computer generated decision, they could exercise their existing statutory right of review under the legislation.  In addition, a person may apply to the AAT for review of a substituted decision if the initial decision is appealable to the AAT.

If a person believes a computer program has made an incorrect decision, they would be able to contact a staff member of IP Australia to discuss the issue. 

So its seems that the onus may fall upon users of the Australian IP system (whom IP Australia would call ‘customers’ or ‘clients’) to be vigilant in reviewing the outcomes of computerised processes.  Firstly, we must trust IP Australia’s (yet to be defined) ‘governance framework’ to ensure that processes are automated only where appropriate.  Then, a person who is dissatisfied with the results of a computerised process or decision may, in the first instance, raise the issue directly with an IP Australia staff member – which is presumably the avenue to obtaining a ‘substitute decision’ in the case that an automated decision is incorrect.

Who Will Bear the Costs of Computer ‘Errors’?

It is important to keep in mind that in most cases, the person who will actually ‘contact a staff member at IP Australia’ will not be the end user of the system, but their Australian attorney.  Therefore this seemingly simple approach to addressing potential errors in computerised decisions will result in real financial costs being incurred by applicants for Australian IP rights, and other users of the system.  Hopefully, this practical consideration will be prominent within the governance framework.  In particular, this suggests that the anticipated ‘error rate’ (i.e. the fraction of cases in which the automated system generates am outcome different from that of a human decision-maker) should be extremely low before a computerised process qualifies for deployment.

Additionally, while the legislation expressly provides for substitute decisions to be made where the automated process actually results in a ‘decision’, it is less clear how disputed outcomes from other types of computerised processes (i.e. ‘actions related to making decisions, exercising powers, and complying with obligations under the legislation) will be handled.  In the case of a computer-generated examination report, for example, the simplest response may be to reply to the report in the usual way, disputing its objections.  As with computerised decisions, this may be acceptable so long as the automated system rarely (or, ideally, never) raises objections that would not have been raised by an experienced human examiner.  Otherwise, the risk is that computerisation may produce savings for IP Australia, while nonetheless imposing additional costs on users of the IP system.

Ambitious Plans for Automated Examination?

There are many routine decisions made by IP Australia that involve little or no discretion on the part of the decision-maker.  Such decisions represent ‘low-hanging fruit’ that can be easily computerised, e.g. by automatically updating records and/or issuing correspondence upon expiry of a time-limit, without further human intervention.  However, there is some evidence that IP Australia has significantly greater ambitions for automation of its services.

On 25-28 May 2018, WIPO held a Meeting of Intellectual Property Offices (IPOs) on ICT Strategies and Artificial Intelligence (AI) for IP Administration.  In a written submission provided prior to the meeting, IP Australia identified a number of machine learning initiatives, including the publicly-available trade mark image search (which uses commercial the commercial TrademarkVision technology developed by Australian company See-out Pty Ltd) and Trade Mark Assist systems.  It also disclosed in-house development of a ‘Patent Auto-Classification’ tool and, most intriguingly, a trade mark ‘Smart Assessment Toolkit’, which:

…uses a combination of natural language processors and internally developed software trained by a dataset of historic adverse reports from 2008 to 2016 to detect similar existing trademarks. Once trained, it provides high ranking results to the user.

IP Australia’s presentation slides, which are published in the WIPO page for the meeting, indicate that this system aims to detect similarity of trade marks, along with goods and service, in order to identify existing marks that may present a barrier to registration of new applications.  If this system proves to be effective, automation of at least some aspects of the trade mark examination process – at least at the initial report stage – may be closer to reality than you might think.  I imagine the ‘Holy Grail’ here would be the complete automation of the initial stage of examination, with a human examiner only being required to step in upon receipt of an applicant’s reply seeking to overcome any computer-generated objections.

Conclusion – Have Authority, Will Use It!

IP Australia now has the legal authority to automate a broad range of decision-making and related activities, and I have no doubt that it intends to use this authority.

Giving credit where it is absolutely due, IP Australia is a leading IP agency internationally (as well as being a leader within Australian Government) in automation and digitisation of its activities.  Between 2012 and 2018, the proportion of customer transactions being completed digitally went from 12% to 99.6%, and IP Australia became the first fully-digital service delivery agency in the Australian Federal Government.  This is an impressive achievement in an environment – both public and private sector – in which many large-scale digital and IT transformation projects are notorious for coming in – if at all – both over time, and over budget.  IP Australia’s capabilities in this area are therefore not to be underestimated, in my view.

I am absolutely a realist when it comes to the capability of machine learning technologies, and have no qualms about calling out hype and (literally) fantastic claims where I see them.  At the same time, I have learned a great deal about machine learning over the past couple of years, and implemented a number of systems – for educational purposes, fun, and even profit (two models that I developed were used in the generation of the 2018 IPGOD data set).  Machine learning excels, and is at its most impressive, in making well-defined decisions in the context of complex inputs and environments, and where there are large quantities of data available for training.  There are many aspects of the international IP system that fit these requirements extremely well, and every reason to believe that successful applications of machine learning in this field will become more prevalent.

Like it or not, if you are involved with registrable IP in Australia, there are automated decisions in your future, so you had best get used to the idea!

Tags: Australia, Examination, Law reform, Machine learning, Patent Office, Trademarks