Despite a growing number of court cases on whether computer-implemented inventions can be patented, some onlookers are concerned with a perceived unsettled area in Australian law.
It was the subject of debate in the 2015 Federal Court case of Commissioner of Patents v RPL Central. The court ruled that an idea or scheme implemented on a generic computer using standard software and hardware is unpatentable.
But five years on, after a number of decisions, the topic has not become any clearer, creating much uncertainty for in-house counsel.
Battles on several fronts
Some of the recent judgments include the 2019 Federal Court case of Encompass Corporation v Infotrack, in which the court confirmed that computer implementation is insufficient in providing patentability to an unpatentable scheme. This contrasts with the 2018 decision in Rokt v Commissioner of Patents, where the Federal Court said that a computer-implemented invention was patentable subject matter. This case is on appeal, however.
The current problems in Australian patent law relating to computer-implemented inventions have arisen from cases concerning the computer automation of methods of doing business and IP Australia’s adoption of new examination practices in this area.
For patent applicants, the obstacles now usually start with the patent office. It means that, increasingly, more applicants have to resort to fighting in court for their inventions.
“We’re seeing a growing number of cases in this area, and the problem is that no one knows where to draw the line on patentability, something many had hoped that the Encompass case would, but didn’t, do,” says the IP counsel at an Australian technology company.
He continues: “Because right now, all inventions with a scent of computer implementation are being lumped into the same basket rejected by the patent office. Only a handful of these applicants have the resources to fight it at court levels, which creates unpredictable pockets of patent-eligible and non-patent-eligible technologies within a continuum of computer inventions.”
The Rokt case, representing a win for patent applicants, concerned mainly an engagement tool for a digital advertising system; Encompass, which disappointed many patent applicants, focused more on IT systems.
The in-house counsel adds: “Such granular categorisation between different industries is not a good thing if we want to de-escalate these disputes and focus resources on innovating. Neither does it help when almost everything having computer implementation is being dumped by the patent office into a black hole and then, if that doesn’t crush the patent eligibility of your invention, randomly worm-holed into different galaxies that seemingly follow different patent eligibility rules.”
Few wins so far
Natalie Shoolman, special counsel at Clayton Utz in Sydney, says that of the recent computer-implemented invention cases at the Federal Court, no inventions have been held patent eligible except for the invention in Rokt. She says that in the unsuccessful cases, the claimed computer-implemented inventions were held to be methods/schemes requiring generic computer implementation. There wasn't an improvement in computer technology at the software or hardware level.
“The court held that Rokt's computer-implemented invention was patentable because it lay in the computerisation and there was an improvement in the computer technology,” says Shoolman.
However, the Rokt appeal was heard on February 10 2020 and it remains to be seen whether the first-instance decision will be upheld by the Full Federal Court (comprising three or more judges).
Shoolman adds that it would assist companies if there was guidance in the grey area between what is and is not patentable.
A problematic approach
Philip Gehrig, councillor and director at the Institute of Patent and Trade Mark Attorneys of Australia (IPTA), says that IP Australia’s current examination practice seems somewhat skewed towards considering any computer-implemented invention as a computer-automated method of doing business. He adds that it can be difficult to convince IP Australia otherwise, even when there are very clear technical reasons why the invention does not concern a mere method of doing business.
He says that IP Australia generally accepts the broad principle that a technical solution to a technical problem is patentable subject matter. However, when applying for a computer-implemented invention, it can often be difficult to convince an examiner that: (i) the claimed invention does indeed solve a technical problem; and/or (ii) the substance of the invention is technical.
The current practice of IP Australia dictates that certain claimed features of the invention be disregarded if the examiner considers them to have been well known at the priority date. This means the examiner will often not consider the subject matter claimed as a whole; rather, the current approach is to equate the substance of the invention to what IP Australia assesses to be the contribution of the invention to the art.
“This approach appears to derive from an earlier European approach that is no longer followed by the EPO,” says Gehrig. “It is problematic because it confuses and conflates the questions of novelty and inventive step with the issue of patentable subject matter.”
Gehrig says that the approach lacks legal rigour and is applied in unpredictable ways, and the outcomes it produces often diverge significantly with results in other jurisdictions, such as the US, EPO, Japan, Korea, and Canada.
The test for patentable subject matter in Australia is based on the question of whether the subject matter concerns a manner of manufacture. Any clarification on the scope of the term as it applies to computer-implemented inventions needs to come from the Australian courts. The highest court to consider that question in respect of computer-implemented inventions is the Full Federal Court, most recently in the case of Encompass, in which it ruled against the patentee.
Gehrig says that in reaching that decision, however, the Full Federal Court avoided enunciating any broadly applicable principle in this area and confined itself to considering the specific claim formulations of that particular case.
“In view of the very narrow and anti-patent disposition of the Full Federal Court, it seems that an appeal to the High Court of Australia may be required in order to obtain more lasting legal clarity in this area,” he says. “How long it will be before there is such an appeal, however, is unknown.”
According to Gehrig, IPTA members are highly concerned by the approach taken by IP Australia in this area for a number of reasons.
First, the current practice of the IP office, particularly its doctrine on contribution to the art, appears to be in conflict with Australian jurisprudence.
The examination practice of IP Australia is also significantly out of step with that of the IP offices in some of Australia’s trading partners.
Third, it is considered problematic for Australia’s innovators in this field by creating significant barriers to protecting their technology in their home market, and for the country’s reputation as an advanced economy where innovations in disruptive technologies can be protected, creating a disincentive for investment in the economy.
Plan B
To counter the challenge of filing patents for computer inventions, the in-house counsel at an entertainment company says that many have to look at ways of re-focusing on the traditional hardware aspects of inventions so that they can be patented.
While it will not suit everyone, another approach is to register design patents, which focus on visual and aesthetics aspects. This can be important if the invention includes distinctive-looking computer interfaces or graphical user interfaces.
For those who have already established strong and successful brands, a further strategy is to make use of trademarks to bolster protection.
Two developments that Australian businesses and lawyers are waiting for are the appeals from the Rokt and Aristocrat Technologies Australia v Commissioner of Patents decisions. These can be expected in the next three to six months.
In the meantime, IPTA and its members are continuing to engage in discussions with IP Australia on the subject of manner of manufacture and IP Australia has actively been seeking input from IPTA on the subject. For patent applicants and businesses, it remains a time of uncertainty.
