16 September 2019

‘Generic’ Implementation of an Abstract Idea is not Patentable, but Does Prior Art have Anything to Do with It?

Abstract ComputersOn Friday the 13th of September 2019, an expanded five judge panel of the Full Bench of the Federal Court of Australia handed down its much-anticipated judgment in the appeal by Encompass Corporation Pty Ltd against the finding of a single judge that its computer-implemented method for displaying information gathered from multiple sources was ineligible for patenting under Australia’s ‘manner of manufacture’ subject matter test: Encompass Corporation Pty Ltd v InfoTrack Pty Ltd [2019] FCAFC 161.  For those of us who had been hoping that this case would bring some much-needed clarity to the law relating to patent-eligibility of computer-implemented inventions, the decision is something of an anticlimax.  The Full Court has unanimously dismissed Encompass’ appeal, easily finding, at [112], that there was ‘no error’ in the primary judge’s ‘ultimate conclusion that no manner of manufacture is involved in the method and apparatus as claimed.’

The concern that many interested stakeholders had with the first instance decision in the Encompass case was the way the judge appeared to conflate considerations of novelty and inventive step with his evaluation of the subject matter of the invention.  As I pointed out at the time, this would violate what I called the ‘ball point pen principle’ (after an analogy drawn in the earlier unanimous Full Court decision of CCOM Pty Ltd  v Jiejing Pty Ltd [1994] FCA 1168).  According to this principle, while advances in technology will generally restrict what is subsequently patentable on grounds of anticipation or obviousness, the question of whether or not something is suitable subject matter for a patent is – or should be – independent of the state of the art.  Put simply, a ball point pen does not cease to be the ‘kind of thing’ for which a patent might, in principle, be granted simply because it is no longer new and inventive.

This issue has significance beyond the Encompass case, because it is now the published official practice of the Australian Patent Office to take the prior art into account when assessing patent-eligibility under the ‘manner of manufacture’ test: see Section of the Patent Manual of Practice and Procedure (as archived on 8 March 2019).

For this reason I had hoped – in vain, as it turns out – that the five judge panel in Encompass would take the opportunity to state expressly, once and for all, whether the Court had intended, by various comments in its two previous decisions on patentability of computer-implemented inventions (Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150 and Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177) to bring considerations of prior art into the assessment of patent-eligibility.  My own view is that it did not, and that Encompass implicitly reinforces that position.  However, in seemingly being reluctant to expressly criticise the primary judge’s reasoning, the Full Court in Encompass stops short of making any explicit statement to this effect.

The fact is that Encompass was not an appropriate case for the Court to consider broader principles for patentability of computer-implemented inventions.  It was readily able to find the alleged invention ineligible on the well-established basis that the claims merely required generic computer implementation of an otherwise unpatentable abstract idea or scheme.  This finding requires no consideration of the state of the prior art, notwithstanding that the primary judge might have appeared to follow such an approach.

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