What you need to know
- The Full Federal Court has confirmed that marketing and business schemes implemented through a computer are not patentable.
- Innovators will face significant difficulty in gaining patent protection over computer-implemented inventions unless it can be shown that the claimed invention improves or changes how the computer operates.
What you need to do
- In light of these recent developments, applicants seeking patent protection for computer-implemented inventions should consider whether it is possible to reframe their invention as an improvement or change to computer functioning.
- If it is not possible to reframe the invention, companies should consider alternative methods for protection of their computer-implemented invention.
An invention is patentable if it is a "manner of manufacture" (s 18 Patents Act 1990 (Cth)). "Manner of manufacture" is not defined in the Patents Act and its interpretation has been left to the Courts. To determine whether the criteria is satisfied, the Court has held that the invention must create an "artificial state of affairs of economic utility" (National Research Development Corporation v Commissioner of Patents [1959] HCA 67).
It has long been held that business methods or mere schemes, do not satisfy the manner of manufacture test.
There are no express exclusions for computer-implemented inventions in Australian patent legislation. However, a rigorous approach has been taken to patent eligibility of such inventions. As a result, acceptance rates of patent applications for computer-implemented inventions (ie, software or methods that are implemented as computer software) have been notably lower than other types of inventions.
In recent years, the Federal Court has considered patentability of a number of computer-implemented inventions as applicants have appealed the Commissioner of Patents' denial of their patent applications. One such appeal was by Rokt who was successful at first instance in having the Commissioner's rejection of their patent application overturned.
Rokt decision at first instance
The main method claim of the application was a computer implemented method for linking a computer user to an advertising message by way of an intermediate engagement offer. The consumer response to the intermediate engagement offer was said to drive a higher level of engagement with a subsequent advertising message than if the advertising method was presented without the offer.
Relying heavily on the expert evidence submitted by Rokt, Justice Robertson concluded that the invention solved a business problem, that is, how to attract users to interact with an advertiser. However, the manner in which this problem was solved was technical. The introduction of an engagement offer and filtering of information presented to a given user based on their previous interactions with the system required a computer. Accordingly, it was determined that Rokt's invention was patentable (see further our article here).
The decision in Rokt was considered by many to provide a glimmer of hope for computer-implemented inventions. However, in an uncharacteristic move, the Commissioner appealed to the Full Court.
The hearing of that appeal was stayed pending the outcome of the much anticipated decision of a five-judge bench of the Full Federal Court regarding a different computer-implemented invention in Encompass Corporation Pty Ltd v Infotrack Pty Ltd [2019] FCAFC 161.
Encompass decision
In Encompass, the Full Federal Court concluded that a method for displaying information regarding entities was "no more than an instruction to apply an abstract idea (the steps of the method) using generic computer technology" (at [99]) and consequently not patentable subject matter.
The Full Court considered prior authorities on the "manner of manufacture" test and emphasised that if the claims, as a matter of substance, "merely require generic computer implementation" of an otherwise abstract idea, then the claimed invention cannot be a manner of manufacture (see further in our article here).
Rokt appeal
The Rokt appeal judgment was handed down last Thursday. Drawing on the reasoning in Encompass, the primary contention of the Commissioner on appeal was that the invention was not more than an instruction to apply an abstract idea or scheme, using generic computing technology. The Full Court agreed and overturned the decision at first instance.
The Full Court found Justice Robertson erred by relying on Rokt's expert evidence in construing the patent. Rather, the Full Court emphasised that claim construction is the duty of the Court and cautioned against adopting an expert's view without independent analysis.
Accordingly, the Full Court conducted its own analysis of the claims. It determined that the invention was a scheme for securing user's engagement with an advertiser. However, this by itself, does not render the invention unpatentable. The Full Court went on to consider whether the scheme can be broadly described as an "improvement in computer technology" (ie, whether the computer is a mere tool in which the invention is performed or whether the invention lies in the computerisation).
The Full Court concluded that the way that the specification described the computer hardware and software indicated that each component was no more than a vehicle for implementing the scheme. That is, the computer was being used for its ordinary purpose without any improvement.
In light of the above, the Full Court allowed the appeal, finding that Justice Robertson erred in characterising the invention claims in the patent application as manner of manufacture.
Conclusion
The Rokt appeal decision is consistent with the existing Full Court authority in Encompass and the other recent decisions on computer-implemented inventions (see our articles here and here). Together, these decisions suggest that innovators will face significant difficulty in gaining patent protection for computer-implemented inventions unless it can be shown that the invention improves or changes the operation of the computer.
Applicants seeking patent protection for computer-implemented inventions should consider whether it is possible to frame their inventions as an improvement or change in computer functioning. If not, companies developing software and other computer-implemented inventions should consider alternative methods for protection, including, for example, trade secret protection (see further in our article here).
Authors: Nina Fitzgerald, Partner; and Caroline Christian, Lawyer.
