22 May 2020

Full Federal Court again finds computer implemented method lacks patentability

This article was written by Kim O’Connell, Sarah-Jane Frydman and Louisa Dimarco.

The Full Federal Court has published a highly anticipated judgment that will impact the decision-making of technology companies and have ramifications for the intellectual property protection of software design.  The decision in Commissioner of Patents v Rokt Pte Ltd [2020] FCAFC 86 (Rokt) provides guidance on the “manner of manufacture” (patentable subject matter) requirement for patentability as it applies to computer implemented inventions.  The Full Court confirms that such inventions will not satisfy this threshold subject matter test where they are no more than instructions to apply a scheme using “generic” computer technology.

The Rokt decision follows the recent decision of Encompass Corporation Pty Ltd v InfoTrack Pty Ltd [2019] FCAFC 161, where the Full Court similarly found that a software-based invention was not patentable, as a mere scheme or idea implemented using “generic” computer technology is not a manner of manufacture. 

Background

In 2013, start-up technology company Rokt filed a patent application for a software-based method for providing targeted advertising messages to computer users.  In short, the method collects and evaluates user data and presents users with an intermediate “engagement offer” while on a particular website, based on the user’s previous interactions on the website.  If the user engages with the offer (i.e. by clicking on the offer), the user will receive targeted advertising messages.  The software intends to increase the likelihood of the user interacting with the advertising messages and thereby purchasing the advertised product.

In July 2017, following various amendments to and re-examinations of the application, the delegate of the Commissioner of Patents determined that the invention was not patentable as it did not disclose a “manner of manufacture” within s 18(1)(a) of the Patents Act 1990 (Cth).  

Rokt successfully appealed the delegate’s decision in the Federal Court.  The central issue in dispute was whether Rokt’s invention satisfied the “manner of manufacture” test for patentability.  The primary judge characterised that issue as it relates to computer implemented inventions as being whether there was an improvement in computer technology amounting to a “technological innovation”. 

In concluding that the invention was in fact patentable, the primary judge accepted the expert evidence of Professor Karin Verspoor that the substance of the invention “was to introduce a dynamic, context-based advertising system” and that this was “an improvement in computer technology”.  On the basis of that evidence, his Honour found that the invention solved both a technical problem and a business problem, and when the elements of the invention were assessed in combination, it indeed involved the new use of computer technology.

The Commissioner of Patents sought leave to appeal to the Full Court principally on the basis that the primary judge had erred in holding that the invention claimed in the patent application was a manner of manufacture and in accepting Professor Verspoor’s evidence as determinative of that issue. 

The Full Court’s decision 

The Full Court endorsed the principle in Commissioner of Patents v RPL Central Pty Ltd (2015) 238 FCR 27 at [96] that a business method itself is not a patentable subject, but that a computerised business method may be patentable provided that the invention lies in the computerisation.  On that test, the Full Court considered that the description of the computer hardware and software in the specification in question suggested it was no more than a vehicle for implementing the scheme, using computers for their ordinary purposes.  Their Honours pointed to the fact that the patent specification did not provide any guidance as to the computer hardware required to implement the claimed method, and contained only high level references to online computer implementation.

The Full Court also held that the primary judge had erred in relying on the expert evidence to determinatively resolve the construction of the specification and characterisation of the invention.  The Full Court characterised the relevant question as being whether, upon construction, the claims as read in light of the specification as a whole and in the light of the relevant prior art (including common general knowledge), were a manner of manufacture.  That task involved distinguishing between a patentable subject matter and a mere scheme or plan and its application to computer technology, and required characterising the invention claimed as a matter of substance, not merely of claim form.  The Court observed that the role of expert evidence in this regard is limited.  Professor Verspoor was not in a position to determinatively answer the legal question of the proper construction of the specification and characterisation of the claimed invention.

The Court endorsed the principle derived from RPL Central and further affirmed in Encompass that it is not a patentable invention simply to “put” a business method “into” a computer to implement the business method using the computer for its well- known and understood functions.  On that point the Court went further than RPL, holding that a consideration of the basic and well-known functions of computers did not require a review of the common general knowledge beyond the use of the common general knowledge, to the extent necessary, to construe the specification.  Further, a reference to “generic software” or to the use of computers for their “well-known” purpose is not a finding as to common general knowledge, but is a reference to computer technology that is utilised for its basic, typical or well-known functions.

The Full Court confirmed that “even if the scheme is new and ingenious, it is not made patentable merely because it can or must be implemented using computer technology”.

Implications

In the Rokt decision, the Full Court has affirmed the recent approach adopted by the Australian Patents Office rejecting the patent eligibility of computer-implemented “business innovations”.  What is clear from both this case and the Encompass decision is the difficulty and complexity involved in drafting a specification for a software based invention that will meet the manner of manufacture test for patentability. 

Notably, like the Full Court in Encompass, the Full Court in Rokt has not provided a definitive test as to when a computer-implemented invention will satisfy the manner of manufacture test and be patentable.

Regardless, the decision provides guidance (if not certainty) for innovator companies when assessing their ability to patent software developments – particularly confirming that software that uses standard computer technology is unlikely to be patentable.  The decision also highlights the importance for innovators of understanding the ability of copyright and confidentiality to protect and enhance the value of their software innovations, where patent protection cannot be obtained.

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