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.

Why the Encompass Case Took on Such Importance

A major reason for the let-down in the outcome of the Encompass appeal is the fact that such great expectations were built up around it in the first place.  There were a number of reasons for this.

First and foremost among those reasons was the fact that an expanded bench of five judges was empanelled.  A Full Bench of the Federal Court of Australia normally comprises three judges.  Enlarged panels are typically assigned to cases that are viewed of particular importance, or where there is reason to believe that the Court may be called upon to reconsider a previous three-judge decision.  In the Encompass case it was the latter circumstance that resulted in the five-judge panel being assigned, because Encompass had indicated its intention to base its appeal, at least in part, on an argument that one or both of Research Affiliates and RPL Central had been wrongly decided.

The possibility that these prior decisions – both of which involved appeals from Patent Office decisions – could be overruled led the Commissioner of Patents to intervene in the Encompass case (which she has a right to do, under Rule 34.23 of the Federal Court Rules 2011).  This, in turn, motivated the Institute of Patent and Trade Mark Attorneys of Australia (IPTA) to apply for leave also to intervene.

Interventions had Little Impact

In the end, these interventions amounted to nothing of any consequence, with the Court coming to its own conclusions with regard to Encompass’ claims.  To the extent that IPTA’s submissions were critical of the current Patent Office practice, and a number of recent Office decisions, the Court declined to involve itself in these matters, stating, at [76]:

We do not propose to opine on the correctness of the Commissioner’s decisions to which IPTA referred.  Those decisions are not before us in this appeal.  Similarly, we do not propose to embark on a consideration of what could be described as IPTA’s editorial comments on the drafting of the Manual.  For these reasons, we grant leave to IPTA to intervene, but only for the purpose of advancing [1] – [2] and [6] – [11] of its written outline of submissions.

To the extent that Encompass (and IPTA) suggested that Research Affiliates and/or RPL Central may have been wrongly decided, their attacks were founded on allegations that the Full Court, in those cases, had failed to treat the grounds of manner of manufacture, novelty, inventiveness and utility as distinct requirements for a patentable invention (see, e.g., Encompass at [53] and [72]-[74]).  In fact, two alternative arguments were advanced:
  1. that the primary judge (and the Commissioner of Patents) had misinterpreted Research Affiliates and RPL Central, and had as a consequence wrongly involved considerations of prior art in the assessment of patent-eligibility under the ‘manner of manufacture’ test; or
  2. that if, instead, this interpretation is indeed supported by Research Affiliates and RPL Central, then those decisions were wrong, and should not be followed.
The Court in Encompass soundly rejected the suggestion that either Research Affiliates or RPL Central was wrongly decided, e.g. at [91]:

The decisions, and the language used, in Research Affiliates and RPL Central must be understood likewise. In each case, the Full Court was seeking to describe the conceptual distinction between a manner of manufacture and an unpatentable abstraction. In each case, the Full Court was explaining that a claimed method that is unpatentable does not change its legal character merely because the method is implemented by the instrumentality of a computer.

However, the Court largely evaded any direct consideration of whether these decisions were misinterpreted by either the primary judge, or by the Commissioner of Patents.  As I have already noted above, the Court flatly refused to engage in any review of Patent Office practice, or recent Office decisions.

Does Prior Art Have Anything to do with Patent-Eligibility?

With regard to the reasoning at first instance, the Full Court seems to have been equivocal as to whether it considered the primary judge to have invoked considerations of prior art in assessing patent-eligibility, or whether the approach that he took involved any misinterpretation or misapplication of Research Affiliates and RPL Central.  The Full Court appears to have considered the fact that he arrived at the ‘correct’ conclusion more important than the manner by which he did so.  Thus, at [110], the Full Court states quite clearly that it sees ‘no error in his Honour’s approach’, then proceeding at [111] to blame Encompass for misunderstanding the way in which the primary judge employed three prior art methods in his evaluation of the alleged invention claimed in its patents.

And yet, immediately following, at [112], the Full Court appears to acknowledge that the primary judge might have conflated conceptually distinct grounds of objection:

It is true that, at [194] – [197], the primary judge made a number of statements about whether the method and apparatus described in the specifications resulted in a computer being used to do something it has not been used to do before.  His Honour also described the “enhanced user experience” afforded by the invention as resulting from a “combination of well-known computing mechanisms”.  We accept that his Honour’s use of this language suggests that other, conceptually distinct elements of patentability might have intruded into his Honour’s consideration of whether the claimed method and apparatus were directed to a manner of manufacture:  see, for example, the caution expressed in CCOM at 291, which was repeated in Research Affiliates at [111]. But, at the end of the day, we see no error in his Honour’s ultimate conclusion that no manner of manufacture is involved in the method and apparatus as claimed.

Notably, although the specific passage is not quoted, the reference to CCOM (51 FCR 260 at 291) appears to be a citation of the same ‘ball point pen’ analogy that I have referred to above (i.e. [1994] FCA 1168 at [112]):

The immediate significance of this is that in the 1990 Act, manner of manufacture, novelty, inventiveness and utility are stated as distinct requirements of a patentable invention. Thus, whilst a claim for the ball point pen now would fail for anticipation and obviousness, it would still be a claim for a manner of manufacture. Yet in the present case there are passages in the reasons of the primary Judge … which suggest he was influenced in the determination of the issue as to "manner of manufacture" by asking whether what was claimed involved anything new and unconventional in computer use.

Accordingly, despite the coy evasion by the Full Court of any direct criticism of the primary judge, it appears to have acknowledged that, at the very least, his reasoning could be interpreted as allowing considerations properly associated with novelty and/or inventive step to have influenced his conclusions on patent-eligibility; and that, to the extent that this were so, it would have been an incorrect approach, even though it might have led to a correct conclusion.

‘An Idea for a Computer Program’

The path taken by the Full Court to find that the Encompass claims were not directed to a patent-eligible manner of manufacture is far more straightforward.  It found, at [99], that ‘the method claims in suit are, in truth, no more than an instruction to apply an abstract idea (the steps of the method) using generic computer technology’ and further, at [100], that the claims ‘do not secure, as an essential feature of the invention, any particular software or programming that would carry out the method.  It is left entirely to those wishing to use the method to devise, and then to implement, a suitable computer program for that purpose.  As we have said, all that the specification teaches is that the processing system be “suitably programmed”.’

Encompass argued that the claims themselves provide ‘a high-level description of a computer program’.  However, this was rejected by the Full Court, which found, at [101], that:

If approached from this point of view, the method is really an idea for a computer program, it being left (as we have said) to the user to carry out that idea in an electronic processing device.  Indeed, the method, as claimed, is no different in principle to the methods claimed in Research Affiliates and RPL Central.  Patentable subject matter is not provided simply because the method is a “method … in an electronic processing device”, which itself is not characterised.  To find otherwise would be to elevate form over substance.

Notably, the Full Court was able to arrive at this conclusion without any consideration of the prior art.  The problem is not (as the primary judge appeared to believe) that the claimed invention is substantially constructed from a number of previously known processes, but rather that the claims are so broad and vague as to embrace any means of implementation of a high-level abstract process or idea.  As such, Encompass’ patent specifications fail to describe and claim any sufficiently concrete patentable ‘technology’ (for want of a better word).  This problem exists independently of whether or not instructions or examples may be found in the prior art from which some implementation of the invention might be constructed.

Broad Description and Abstract Claims – a Recipe for Ineligibility?

Encompass failed in its appeal not because its alleged invention was composed of elements taken from the prior art, but rather – according to the Full Court – because it failed to described and claim any invention more specific than a general recipe or scheme suitable for computer-implementation.  As the Court noted, at [22]-[23]:

We observe that this description is largely agnostic as to how the method should be implemented.  Thus, the entities and relationships may be of “any appropriate form”; the network representation may be generated “in any appropriate manner”; information can be determined “in a number of ways depending on the preferred implementation”; for step 110, the representation displayed to the user by the electronic processing device “can be achieved in any one of a number of manners”; for step 120, the user-selected node “may be selected in any appropriate manner”; for step 130, the process of determining a search “can be achieved using any suitable mechanism” or (in respect of an example given) “achieved using any other suitable technique”; for step 140, the search performed by the electronic processing device “may be achieved in any suitable manner”; and, for step 150, the display of additional information “may be achieved in any suitable manner”.

At [0054] – [0063], the specification describes further “features” of the exemplified method but, apart from disclosing other ways in which the user might choose to implement the method, is not prescriptive.  Indeed, it adopts similarly permissive language to the description given at [0045] – [0053].  It is fair to say that, having identified the cardinal steps of the exemplified method, the specification leaves it to the user to implement the method in the way he or she might choose to do so, assisted by broadly-expressed and non-limiting suggestions or possibilities.

Such language is commonplace in descriptions of computer-implemented inventions, as are claims that define corresponding methods or systems in broad and relatively abstract terms.  This is understandable, since the applicant generally wishes to secure a sufficient scope of protection to prevent competitors from avoiding infringement by simply implementing essentially the same idea in a different way.

However, Encompass reconfirms that where an alleged invention relates to otherwise ineligible subject matter – such as a business method, scheme, or abstract idea – simply reciting generic computer functionality will not suffice to confer patentability.  Furthermore, the fact that implementation of the invention may require something more that ‘generic software’ will be of no assistance if this is not reflected in the claims.  As the Full Court noted, at [100], Encompass’ claims ‘do not secure, as an essential feature of the invention, any particular software or programming that would carry out the method.  It is left entirely to those wishing to use the method to devise, and then to implement, a suitable computer program for that purpose.’

Conclusion – ‘Generic’ ≠ ‘Known’

Requiring inventors to limit their claims to more specific elements of computer-implementation may seem harsh.  Sometimes the ingenuity lies wholly in the general method or idea – as was expressly acknowledged by the Full Court in Research Affiliates (at [119]: ‘[t]he claimed method in this case clearly involves what may well be an inventive idea, but it is an abstract idea’).  Where the corresponding implementation is entirely generic, or can be achieved in so many alternative ways that it is only through generic claim language that all of these may be captured, it might simply be that effective patent protection is unavailable in practice.  Harsh or not, this appears to be where the law – in Australia, and elsewhere – is settling.

As a general principle, I do not actually see this as being especially problematic.  There are sound policy reasons for denying patent protection to the ‘mere computerisation’ of otherwise unpatentable methods or ideas.  Difficulties have arisen, however, in the practical application of the principle.  The fact that an element of a claim can be found in the prior art might show that it was already known – which is relevant to considerations of novelty and inventive step – but does not, in itself, establish that the element is generic.  A ‘prior art’ approach has not been followed in any of the Full Court authorities dealing with computer-implemented inventions: CCOM, Research Affiliates, RPL Central, and now Encompass.  To the extent that the primary judge in Encompass adopted such an approach, this appears to have been obliquely disapproved by the Full Court on appeal, which notably had no need to refer to any of prior art considered at first instance in reaching its conclusions on manner of manufacture.

As at the time of writing, however, consideration of the prior art remains an explicit element of the approach to manner of manufacture at the Australian Patent Office.  Section of the Patent Manual of Practice and Procedure directs examiners, when determining the substance of an invention, that ‘consideration should be given to the claimed invention and the contribution that it makes to the art.  Logically this consideration may take into account the prior art at the priority date rather than merely common general knowledge.’  I see nothing logical in this at all.  On the contrary, it is completely illogical, inconsistent with the ‘ball point pen’ principle as stated in CCOM, and contrary to all of the Full Court authorities noted above, that a claim which would be considered a manner of manufacture at one point in time should subsequently cease to be so due to evolution of the prior art base.

In Encompass the Full Court may have declined to consider and expressly reject the Patent Office’s prior art approach.  Nonetheless, this practice is inconsistent with Encompass and, in my view, should be discontinued.  I very much doubt, however, that this will happen, and so we will most likely need to await a more suitable case in which the issue can be addressed head-on.


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