A recent YouTube spat over an AI created cover of Britney Spears’ 2004 song “Toxic” demonstrates that AI has now made it possible for one artist to sing a cover of another artist, no human required! In this case, a group called DADABOTS, which describes itself as “a cross between a band, a hackathon team and an ephemeral research lab”, created the rendition using software enabling generation of audio content in the voice of a particular artist, in a particular genre or as a novel fusion. The end result was a Frank Sinatra cover of the Britney Spears song.

Whilst this is a prospect that is bound to be exciting to some, from the perspective of conventional copyright law (and perhaps defamation law), the path to creating such a custom cover track using AI is fraught with complexity and uncertainty.

Yet that didn’t stop DADABOTS rendition being met with something a little more conventional, a copyright takedown notice and subsequent removal from YouTube, as Futurism’s Dan Robitzski recently reported. Futurism noted that GreyZone Inc., a company which offers copyright infringement identification and reporting services, was responsible for the complaint but wasn’t able to identify on whose behalf.

Appeal of YouTube take down

The basis for the original takedown notice is unclear – presumably representatives of either Frank Sinatra or Britney Spears’ respective record labels took the view that their copyright was infringed in some form. In Australia, their songs are likely to be covered by a suite of copyright and related rights, potentially including copyright in the lyrics, the musical work, performance rights and recording rights.

In this case, DADABOTS appealed YouTube’s decision to remove the rendition, calling in aid the US copyright doctrine of fair use. This doctrine is codified in the US Copyright Act and allows “fair use” of copyright works without infringing copyright. Unlike in Australia where the equivalent “fair dealing” is limited to quite specific circumstances, the US Courts have a broad discretion to determine what use is “fair”, depending on factors such as the nature of the copyright work, the purpose of the use and the effect of the use on the potential market for the copyright work. YouTube accepted the appeal and DADABOTS upload was reinstated, albeit with YouTube flagging it as a cover of “Toxic”. YouTube offers a service which allows eligible copyright holders to set up rules dealing with any third party copies of their exclusive copyright content uploaded on YouTube. This might include blocking the uploaded media, taking ad revenue from it or tracking the viewership information. YouTube’s flag of the DADABOTS version presumably makes it subject to any such controls in place in respect of “Toxic”.

Use of copyright works during development of AI powered applications

To make the rendition, DADABOTS used an AI software tool developed by California based OpenAI. Known as “Jukebox”, the software utilises neural networks, a form of machine learning. To become competent, Jukebox was trained by processing various datasets, which in turn allowed it to create the rendition on the basis of what it learnt from that data processing. In this case Jukebox then performed lyrics (of “Toxic”) in the voice and/or genre of the artist on which the software had been trained (Frank Sinatra). According to Open AI’s website, Jukebox was trained on 1.2 million songs, corresponding lyrics and metadata, including artist, genre, year and associated keywords.

Interestingly, Futurism’s article suggests the YouTube appeal arguments were crafted without reference to the use of AI to create the DADABOTS rendition. The fair use arguments were focussed on the end result (i.e. the new rendition) as a fair use in itself, rather than by reference to the method used to create it. Separate to issues around copyright ownership of works created wholly or substantially by AI technologies, the use of copyright works for AI related functions, such as machine learning and datamining is very much a live issue globally. The extent to which such uses are thought to be “fair uses”, is likely to influence the development of the fair use doctrine in copyright, the bounds of which already vary considerably from country to country, if not lead to specific copyright provisions. One notable mover in this space is Japan, which from 1 January 2019 enacted various provisions in its Copyright Act aimed at exempting computer data processing and analysis of copyright works from infringement in certain circumstances. The way in which the law on this topic develops globally may well be a factor which influences where companies with a focus on developing AI powered applications choose to base themselves (if it is not already). Differences in the law on this topic around the globe may also lead to potentially complicated questions of jurisdiction where AI generated material is exported from one country to another.

In Australia, the current law is likely to be less friendly to machine learning and AI powered applications, as a result of the stricter confines on fair dealing, and other limited exceptions to copyright infringement. Certainly where AI applications are used for development which is commercial in nature, it is unlikely that Australian copyright exemptions would apply. While section 40 of the Copyright Act 1968 (Cth) does provide an exemption for fair dealing for research purposes, it has generally been given a narrow reach.

Indeed, extension of the fair dealing provisions in Australia was a topic considered extensively by the Productivity Commission in its review of intellectual property laws in Australia and consequent report issued in 2016. Submissions made on this issue included those from tech companies supporting a broader fair use exception and specifically referring to machine learning in this context. The Productivity Commission ultimately recommended significant reforms in this area paving the way for a US-style fair use exception. However following two years of further consultation, the Government announced in August 2020 only a limited extension of the fair dealing exceptions for non-commercial quotation.

As a consequence, use of datasets to train AI systems in Australia appears likely to carry with it a significant risk of copyright infringement for the foreseeable future, in the absence of an appropriate licence. As the law in this area continues to develop worldwide, this is clearly a space to watch for both copyright owners and anyone using databases of copyright material to power or utilise AI technologies.

Authored by Onur Saygin and Katrina Crooks

Aristocrat Technologies Australia Pty Limited v Commissioner of Patents [2020] FCA 778

Aristocrat Technologies Australia Pty Limited (ATA) appealed to the Federal Court from an Australian Patent Office decision that four of its innovation patents (the Patents) for electronic gaming machines (EGMs) should be revoked to failing to define patentable subject matter.  The Federal Court allowed the appeal, finding that the EGMs were patentable subject matter.

Background

EGMs, also called “slot machines”, are a combination of hardware and software components.  The hardware includes cabinets with video display screens, a “slot” or other vending device to receive money or other forms of credit, and various internal electronics, including an internal computer to operate software to operate the EGM.  The internal computer, commonly called a “game controller”, runs software to visually display reels with symbols on the screen and simulate movement of the reels, in order to play a game based on the displayed symbols.  Typically, a person makes a wager or monetary bet via the vending device to play the game on the EGM.  In this case, the novel and innovative features of the Patents lay in the aspects of the game played on the EGM, as controlled by the computer, and not in any aspect of the hardware (which was essentially generic for EGMs).

ATA had filed the Patents and requested examination of each one before the Australian Patent Office.  The Patents each defined in their respective independent claims an EGM comprising various hardware components and the steps performed by the game controller to execute the game.  During examination, the Patents were each objected to for failing to define patentable subject matter (known as “manner of manufacture” under the Australian Patents Act 1990 (Cth)).  The basis of the objection was that the substance of the invention was in the rules or procedure for playing the game, and so was a mere scheme that was unpatentable.  ATA requested a hearing before a Delegate of the Commissioner of Patents to decide the issue.  The Delegate agreed with the examiner and held that the Patents did not define patentable subject matter, finding that the hardware components of the claimed EGM did not add anything of substance to the “inventive concept”, being the game. ATA appealed the Delegate’s decision regarding each of the Patents to the Federal Court.

Decision

In the Federal Court appeal, Burley J reviewed the authorities on patentable subject matter and found that in determining whether a patent defined patentable subject matter, there was a two-step test.  The first step was to consider whether the invention related to a mere scheme or business method.  If so, the second step was to consider whether the invention is in the computerisation of the scheme or business method.

Expert evidence

In deciding the issue, Burley J followed the recent Full Federal Court decision in Commissioner of Patents v Rokt Pte Ltd [2020] FCAFC 86, where it was held that expert evidence on patentable subject matter was of limited use.  As such, the extensive expert evidence filed by both parties during trial before the Rokt decision issued was mostly ignored.  However, Burley J did rely on expert evidence as to the highly regulated nature of EGMs in Australia as an indication that EGMs must have a particular construction and are built for a specific (and limited) purpose.

Are inventions relating to EGMs a mere scheme?

In applying the two-step approach, Burley J found that the invention claimed by each of the Patents was not simply a mere scheme or business method.  Rather, Burley J construed each of the claimed inventions as a “mechanism of a particular construction, the operation of which involves a combination of physical parts and software to produce a particular outcome in the form of an EGM that functions in a particular way”.  As the initial question was answered in favour of patentability (ie, not a mere scheme), it was not necessary to answer the second question (ie, whether the invention lay in the computerisation).

In support of his finding, Burley J pointed out specific hardware components of an EGM, including the display for displaying the virtual reels, credit input mechanism (vending device), game play mechanism (buttons) and the game controller that are characteristic of EGMs.  Also, due to the highly regulated environment in Australia in which EGMs can be operated, these factors demonstrated that the invention is a machine specifically designed to provide a specific gaming function.  Accordingly, the combination of the physical hardware components and the virtual software components (being the virtual reels and displayed symbols) produced the “invention”.  Thus, the invention had a specific character and a single purpose – to enable a person to play a game.

The fact that the hardware components were agreed by both ATA and the Commissioner to be part of the common general knowledge in the art did not detract from this finding.

Mechanical equivalent

It was also noted by Burley J that the Commissioner of Patents had conceded that a traditional gaming machine comprised solely of hardware and mechanical components that implemented the same game without any software would have been patentable subject matter.  To Burley J, this concession was inconsistent with the Commissioner’s position that effectively separated the game rules or procedure from the hardware in an EGM only because of its electronic nature.

Comment

It seems that the particular construction of EGMs and their highly regulated nature influenced Burley J’s assessment of whether the claims of the Patents defined patentable subject matter.  Despite the agreement of both parties that the hardware components were conventional in the art of gaming machines, the specific function and purpose of those hardware components, compared to generic computer or processor parts typically found in other computer-implemented inventions, led to the finding that the invention was not simply a scheme or business method, and so was decisive.

While this reasoning seems logical to some extent, the test for when hardware forms part of the invention appears to remain somewhat arbitrary. It could be said that hardware components of EGMs are just as “generic” or “conventional” within the EGM field as general computer elements, like a processor or memory.

Justice Burley J relied upon previous Federal Court decisions in which EGMs were found to be patentable subject matter: Neurizon Pty Ltd v LTH Consulting and Marketing Services Pty Ltd (2002) 58 IPR 93 at [15] and [101] (Dowsett J) and Aristocrat Technologies Australia Pty Limited v Konami Australia Pty Limited (2015) 114 IPR 28 at [60] (Nicholas J). However, each of those previous decisions was decided prior to keyFull Federal Court decisions confirming the current principles for determining the patentability of computer-implemented inventions, particularly Encompass Corporation Pty Ltd v InfoTrack Pty Ltd [2019] FCAFC 161 and Rokt.

While this decision is of benefit to EGM manufacturers, it should be noted that the claims are limited to those hardware components.  As such, the claims are of limited scope to physical EGMs and thus online gaming platforms, mobile devices and even desktop computers appear to be free to simulate the same game the subject of these claims without fear of infringing the claims if they do not also provide the hardware components defined by the claims of the Patents.

Significance

The decision provides some guidance on the patentabilty of computer-implemented inventions that employ specific and not generic hardware.  Where a computer-implemented invention employs hardware components are specific to the invention or purpose-built, then the invention will be patentable, even if those hardware components are well-known in the technical field.

However, due to this requirement for specific or purpose-built hardware, the decision has limited application to the patentability of computer-implemented inventions in general, such as those found to be unpatentable in previous Federal Court decisions.  In particular, many computer-implemented inventions are specifically, and advantageously, designed to be “hardware-neutral” so they can efficiently leverage a wide variety of computer technologies (such as personal computers, smartphones, physical and wireless internet networks, satellites, etc).  This recent decision does not provide any additional hope for companies seeking patent protection in Australia for such inventions.

Accordingly, in the appropriate circumstances, patent applicants should carefully draft their patent applications to emphasise the combination of hardware and software in achieving a computer-implemented invention, and especially whether the hardware components are specific to a particular technical field or serve a particular purpose, and are not simply generic computer components applicable to all fields of computer technology.

Authored by Andrew Lowe and Duncan Longstaff

During the past decade, the patent-eligibility of computer-implemented methods has been a particularly vexing focal point for Australian patent law and practice. With computer technologies now ubiquitous and relatively mature, applying the centuries-old “manner of manufacture” test in a way that is practical and predictable in the eyes of practitioners and their clients has proven somewhat elusive for examiners and hearing officers of the Australian Patent Office and judges of the Federal Court at both first instance and on appeal.

In many ways, this Australian experience has mirrored the challenges faced by US patent practitioners seeking consistency in application of the principles set down by the Supreme Court in Alice Corporation Pty Ltd v CLS Bank International (2014) 134 S Ct 2347 and by UK and European practitioners in grappling with legislative exclusions of computer-implemented schemes and presentations and statements of principle in cases such as Aerotel Ltd v Telco Holdings Ltd (and others) and Macrossan’s Application [2006] EWCA Civ 1371.

The decision in late 2019 of an expanded 5-member bench of the Full Court of the Federal Court of Australia in Encompass Pty Ltd v InfoTrack Pty Ltd [2019] FCAFC 161 has provided additional clarity on where Australian law draws the line between unpatentable schemes or ideas with incidental computer-implementation and patentable inventions involving technical applications of ideas or improvements in how computers operate. The principles and approach endorsed in the Encompass decision were followed by another Full Court in last week’s long-awaited decision in Commissioner of Patents v Rokt Pte Ltd [2020] FCAFC 86. Other recent decisions of the Australian Patent Office and Federal Court of Australia have produced outcomes that are generally consistent with the principles articulated in Encompass and applied in Rokt, in finding both for and against patent-eligibility in different cases.

Accordingly, Australian practitioners are now better-placed to advise their clients on the likely strength of “manner of manufacture” issues and grounds relating to methods involving some element of computerisation, both during drafting and prosecution of patent applications, and in connection with both enforcing and seeking to revoke granted patents. In this article, we provide commentary on these recent developments and practical guidance on the new best practice with respect to Australian patents with computer-implemented aspects.

The Encompass Case

Background

The Encompass case concerned two similar innovation patents relating to a method of displaying information related to “entities” (such as individuals and corporations) and the connections between those entities so as to provide business intelligence. The claimed method would allow a user to generate and display a “network representation” by querying remote data sources. The claimed method would then allow the user to select a node (representing an entity) on the network representation, perform further searches to retrieve information related to the selected node and provide the retrieved information to the user – such as by updating the network representation to display further nodes, from which further searches could be performed, and so on.

Encompass’s innovation patents in suit referred in the body of their specifications to each specific function of the claimed method being realised “in a number of ways, depending on the preferred implementation”. The patents did not stipulate any specific hardware, programming or software to perform the invention. Indeed, the specifications repeatedly emphasised that the steps of the claimed method “may be achieved in any suitable manner” or “using any other suitable technique” or “mechanism”.

First Instance Decision

At first instance in Encompass Corporation Pty Ltd v InfoTrack Pty Ltd [2018] FCA 421, Perram J found all claims of both of Encompass’s innovation patents invalid for failing to meet the manner of manufacture requirement. His Honour also found some claims (those which lacked a “purchasing step”, which was held to contribute substantially to the working of the invention) invalid for lacking innovative step in light of a prior art platform known as “They Rule”, and otherwise dismissed InfoTrack’s other challenges to validity based on novelty and innovative step in light of prior art, alleged self-anticipation, secret use and section 40 (clarity, support and sufficiency).

Expanded Full Court Appeal Decision

An expanded Full Court of five Judges (Allsop CJ, Kenny, Besanko, Nicholas and Yates JJ) heard the appeal by Encompass and its exclusive licensee SAI Global. The Commissioner of Patents also exercised her right to appear and make submissions, which were broadly aligned with those of InfoTrack in arguing the Encompass Patents did not satisfy the manner of manufacture test. The Institute of Patent and Trade Mark Attorneys (IPTA) also sought, and ultimately was granted, leave to make written submissions in the appeal as amicus curiae, which were broadly aligned with those of Encompass and SAI Global in arguing the Encompass Patents should qualify as patent-eligible computer-implemented methods.

The Full Court essentially upheld all of the findings of the primary judge, finding all of the claims of both of Encompass’s patents invalid for failing to meet the manner of manufacture test and the claims that lacked the “purchase step” (claims 1 and 3-5 of the 164 Patent) invalid for lack of innovative step.

Generic computer implementation

The Full Court confirmed that where, as a matter of substance, there is “no more than an instruction to apply an abstract idea [or scheme] (the steps of the method) using generic computer technology”, there will be no patentable subject matter. It is not enough that an “uncharacterised electronic processing device (for example, a computer) is employed as an intermediary to carry out the method steps”. An “idea for a computer program” where it is “left…to the user to carry out that idea in an electronic processing device…which itself is not characterised” is not patentable subject matter. The Full Court upheld the primary judge’s findings that Encompass’s innovation patents fell into this category and accordingly failed to claim (or even disclose) any patentable subject matter.

The role of Prior Art in the “manner of manufacture” assessment

An issue raised before the Full Court by IPTA as an intervener was the trend in examination practice before the Australian Patent Office of considering prior art in assessing patentability. The Full Court emphasised the caution expressed in previous judgments against importing concepts of novelty and obviousness in the assessment of manner of manufacture, but declined to comment on the examination practices of the Commissioner of Patents in unrelated matters.

In a seminar delivered in November 2019, the Patent Office stated that to identify the substance of the claim and what is the alleged or actual contribution, the need to understand “inventiveness” may include a consideration of prior art. This approach has attracted criticism from members of the profession. The Full Court in Encompass did not provide any firm guidance as to the approach adopted by the Commissioner. It is important to refer to the Patent Office Manual of Practice and Procedure at 2.9.2.2 identifying the current practice:

In order to determine the substance [of a claim]…. 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.

As outlined below, the Full Court’s comments in the very recent Rokt decision suggest this approach may no longer be followed.

In any event, there are a number of ramifications to the consideration of prior art in assessing patentable subject matter, which have not yet been tested. Of particular concern is Section 24 of the Patents Act 1990 (Cth), which provides a grace period in which authorised or unauthorised publication or use of the invention in certain prescribed circumstances is disregarded for the purposes of novelty and inventive/innovative step. However, this provision does not exclude such disclosures from being considered for the purposes of manner of manufacture. It is currently unclear if, when utilising these grace period provisions, disclosure of the invention before the priority date could prevent a patentee from obtaining a valid patent on the basis of patentable subject matter.

Related Patent Office Opposition Decision

InfoTrack subsequently succeeded in its opposition to the grant of Encompass’ Australian Standard Patent Application No. 2013201921, the parent application of the two innovation patents in suit in the Federal Court proceedings described above: InfoTrack Pty Limited v Encompass Corporation Pty Ltd [2019] APO 48 (31 October 2019). The Delegate followed the reasoning of the Full Court in finding that standard patent application invalid for lack of manner of manufacture, despite some of its claims including more specific steps relating to techniques for disambiguation, and also found the claims to be obvious in light of the They Rule prior art.

The Rokt Case

Background

The case involved a patent application entitled “A digital advertising system and method” belonging to tech company, Rokt Pte Ltd. The application related to a computer implemented system and method that linked users to online advertising by presenting an “engagement offer” when a user accessed a website. The engagement offer was targeted based on a user’s previous interactions. It provided a context-based advertising system in which users who were more likely to engage with advertising were shown specific offers to increase engagement over traditional methods of digital advertising.

Patent Office and First Instance Appeal Decisions

In 2017, an unsuccessful hearing decision issued in which the Delegate of the Commissioner of Patents decided that the application was not patentable on the basis that it was not a “manner of manufacture”. In 2018, Rokt successfully appealed the outcome of the hearing decision to the Federal Court, in which the primary judge (Robertson J) ruled that the invention of the application was directed to patentable subject matter. Disagreeing with the Federal Court’s judgement, the Commissioner of Patents appealed the Federal Court’s decision to the Full Federal Court.

Full Court Appeal Decision

Overturning the primary judge

The judgement of the Full Court (Rares, Nicholas and Burley JJ) closely followed the guidance of the expanded Full Court’s earlier decision in Encompass in assessing patentable subject matter by focusing on the disclosure and detail provided by the specification, assessing whether the invention is a scheme, and then considering the implementation of the scheme in the computer.

The Full Court found that the primary judge erred in his findings in the original decision by relying too heavily on the opinion of Professor Verspoor, Rokt’s technical expert, in adopting her answers to the questions which characterised the substance of the invention. The primary judge was also found to have relied on the technical problem and solution identified in the specification, without addressing the question of whether the technical solution was actually claimed.

The Full Court found that the primary judge did not engage in any analysis of the central question of whether invention was found to lie in the implementation, or whether it amounted to simply “an instruction to ‘put’ the scheme into computer technology.” Their Honours emphasised the danger in adopting an expert’s opinion without additional legal analysis, noting the importance of the legal approach to understand the invention under assessment of manner of manufacture.

Limiting the use of common general knowledge to construing the claims and specification

The Full Court’s decision emphasised that consideration of the common general knowledge should be used only for construing the specification, and not to provide characterisation or evidence of what constituted ’generic software’ or the use of computers for their ‘well known’ purpose. The approach endorsed by their Honours was to carefully review the specification to ascertain whether the computer technology is being utilised for its basic, typical or well-known functions to implement anything more than a mere scheme.

Generic software

Following the decision in Encompass, their Honours considered the matter of whether the claimed method was implemented using generic software. The Full Court observed in Encompass that the claims of the invention did not define any particular software of programming to carry out the invention, and so it was left up to those using the method to implement a suitable computer program for the purpose of carrying out the method. Agreeing with that approach, the Full Court in the Rokt case identified the problem addressed by Rokt’s invention as enhancing consumer engagement levels. The solution was determined to be the provision of an intermediate “engagement offer” targeted to a user interacting with digital content.

A Marketing scheme

In light of these observations, the invention was classified as “a marketing scheme”. This gave rise to a key consideration in assessing patentable subject matter: whether the computer is a mere tool in which the invention is performed, or whether the invention lies in the computerisation. Following the approach laid out in Encompass, their Honours came to some strikingly similar conclusions regarding the detail in the specification:

in our view nothing about the way that the specification describes the computer hardware or software indicates that either is any more than a vehicle for implementing the scheme, using computers for their ordinary purposes

The specification does no more than describe the architecture of the hardware in a most general sense.

…the claim provides no content to suggest a different conclusion. Despite its length and detail, it contains no integer that serves to characterise the invention by reference to the implementation of the scheme beyond the most general application of computer technology utilised in an online environment.

Although it was determined that the specification represented a solution to problems in marketing, the lack of detailed description suggests that the scheme in which this solution was achieved did not involve the use of computer technology “other than as a vehicle to implement the scheme”.

In drawing a direct parallel between the position of the patentee in Encompass, their Honours concluded that the claimed invention amounts to an instruction to carry out the marketing scheme, and that the invention provides no more than a list of steps which may be implemented using computer technology for its well-known functionality.

At the time of publication of this article, Rokt still has the ability to seek special leave to appeal to the High Court of Australia.

Other Recent Federal Court and Patent Office Decisions

Technological Resources Pty Limited v Tettman [2019] FCA 1889 (2019)

The Federal Court of Australia recently overturned an Australian Patent Office (APO) opposition decision regarding the “manner of manufacture” requirement for patentable subject matter. In the Federal Court appeal, Jagot J found that the Delegate had mischaracterised the claimed invention and that the claimed invention was not analogous to those considered to be mere schemes.

Background

After Mr Tettman successfully opposed the grant of Australian Patent No. 2011261171 entitled “Separating mined material” (171 Application) before the Commissioner of Patents, Technological Resources Pty Limited filed an appeal to the Federal Court of Australia.

The 171 Application claims methods and apparatus for identifying and separating mined material on a bulk basis (a form of ore sorting in which a sensor is used to make an assessment of material on a bulk basis) and describes how low grade iron ore can be upgraded by implementing a system that assesses the grade of segments of ore and then separates the ore based on the assessed grade of segments of ore. The main ground of contention in the decision was that the claimed invention was not a manner of manufacture (i.e. not patentable subject matter) on the basis that what was claimed was a mere scheme, involved only mere working directions and was a mere collocation.

Arguments – mere collocation, mere scheme and working directions

Mr Tettman argued that the individual integers of the claimed method were known and the claimed invention involved the use of known systems to a purpose to which they were all well suited.

Technological Resources argued that the invention of its method claims was not a combination of parts at all, but rather a method comprising a series of steps undertaken in a sequential manner for the processing of ore, and does not proceed to the next step until it has completed the previous step. Accordingly, it was argued that the steps plainly have a working inter-relationship.

Mr Tettman relied upon the initial reasoning of the Delegate which found that the claimed invention did not involve a manner of manufacture since what was claimed was a mere scheme and mere working directions. Technological Resources argued that the 171 Application did not involve a business method or scheme and is distinct from gathering, processing or presentation of information in the fields of finance or business. The “…claimed invention resides in the field of mining or mineral processing, a technical field, and involves methods and apparatus for the processing of ore in a series of physical process steps to produce upgraded material, a physical and tangible result. So understood, the invention is a classic example of a manner of manufacture according to traditional principle”.

Decision

Justice Jagot found that the methods and apparatus claimed were in fact different to anything that formed part of the common general knowledge that had been supported by the parties’ expert evidence.

Justice Jagot also found that the claimed invention was not analogous to those considered to be mere schemes. Her Honour found that the Delegate’s reasoning involved a mischaracterisation of the claimed invention, which “involves physical steps carried out on a physical product using physical apparatus, to produce a physical and tangible result. It does not bear a resemblance to the cases on which the Delegate relied” Importantly, no meaningful analogy to Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177 or Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150 could be drawn.

Repipe Pty Ltd v Commissioner of Patents [2019] FCA 1956 (2019)

Two innovation patents directed to software inventions were revoked after the Court determined that a lack of technical detail in the specifications meant the patents were not patentable subject matter. The claimed inventions failed to provide sufficient technical detail to be considered more than mere generic computer implementation.

Background

Repipe Pty Ltd (Repipe) was the owner of two similar innovation patents, directed to methods of providing information to a portable user device to improve compliance by employees with field risk management procedures and requirements in industries such as construction and mining.

After three adverse examination reports issued in relation to each of the Patents, and an unsuccessful hearing in which a delegate of the Commissioner of Patents issued a decision (Repipe Pty Ltd [2018] APO 42), Repipe appealed that decision to the Federal Court. Both parties agreed that the only issue disputed was whether the Patents claimed inventions that were a manner of manufacture under s 18(1A)(a) of the Patents Act 1990 (Cth).

Arguments

Repipe submitted the substance of the invention claimed in the first patent was the combination of the server, communications network and a portable computing device configured and controlled in the specified way by a specific software application so the user can use and create an expanding collection of items to select from as each field worker completes his or her own risk management document. It was submitted that each of the inventions claimed in the Patents provided a technical solution to a technical problem.

The Commissioner argued that the substance of the invention in both Patents was a mere scheme for sharing and completing workplace health and safety documents, emphasising that there was a lack of any meaningful technical detail in the claims or the accompanying description of the specification. In particular, the claims recited ordinary computer functions without prescribing the technical means by which any such functions must be performed. The lack of detail left the selection of hardware and creation of software to implement the steps entirely up to the person skilled in the art.

Decision

The decision of the Court hinged on the question of whether or not the method of each invention merely required generic computer implementation of a scheme or abstract idea. Justice McKerracher determined that there was “no meaningful technical content” in either specification, despite providing detail as to the computing device functionality, and highlighted the absence of specific application software being claimed or even identified in any claim of the Patents, as well as drawing attention to the absence of computing programming logic or code being disclosed. In paragraph 93, His Honour noted:

To implement the scheme, a reader must use his/her own skill and knowledge to write an appropriate software application. No such application is disclosed in the Patents.

Justice McKerracher relied heavily on the authority of the recently issued expanded Full Federal Court decision in Encompass. His Honour found the claimed methods merely required generic computer implementation and therefore could not be a manner of manufacture.

Watson v Commissioner of Patents [2019] FCA 1015 (2019)

In this Federal Court of Australia decision, Mr Dale Watson appealed a decision by the Delegate of the Commissioner of Patents to revoke an innovation patent entitled “A Method of Innovation”.

Background

Mr Dale Watson was the owner of an innovation patent entitled “A Method of Innovation”. Method claim 1 of the innovation patent recited:

A method of innovation comprising the steps of an organisation engaging with an innovation services provider to innovate, said organisation disclosing aspects of the organisation to said innovation services provider and specifying a financial return to said innovation services provider for said innovation, wherein said innovation services provider describes or defines said innovation as a corresponding IP right prior to its disclosure to said organisation and the amount of said financial return is determined, at least partially, from the value or benefit or advantage of any sort or any other consideration or value of any kind to said organisation of said IP right.

During examination for certification of the innovation patent, five examination reports were issued, all of which concluded that the invention was directed to a business model, and therefore was a mere scheme and not a “manner of manufacture”. After the fifth examination report, a hearing was requested. In the resulting hearing decision, the Delegate of the Commissioner of Patents also concluded that the claims were directed to a business scheme or model. That decision of the Delegate was appealed to the Federal Court.

Arguments

Mr Watson submitted that a necessary step in the method of the claims was the definition of the innovation as a corresponding IP right (such as a patent, trade mark, design, plant breeder’s right or copyright). Mr Watson then contended that the product of the claimed invention was the IP right created by following the method of the invention, and as such the product consisted of an “artificial state of affairs”. Mr Watson argued that the invention claimed was patentable because it was “something that can be made by man… or at the least [was] some new mode of employing practically his art and skill”, thereby amounting to an observable phenomenon. Mr Watson further submitted that the IP right, as claimed in claim 1, was “a useful product” that was a “tangible, physical and observable effect”.

Decision

Justice Rares dismissed Mr Watson’s appeal, concluding that the claimed invention is directed to an abstract idea for a business scheme under which persons can agree to contract for intellectual property services, where those services might result in the creation of an IP right that might be useful and, if so, make an additional agreement as to a reward.

The claims were considered to involve a collocation or combination of well-known steps. The idea of providing remuneration on the basis of success and the calculation of a reward based on some relationship of the value of what is created for the engaging party was not considered to be new, nor was the combination of such a method of remuneration with the engagement of a professional. The claims were determined to amount to no more than assertions of a method that might produce a result.

Justice Rares noted that one would have to follow the claimed method in full before knowing whether or not the original engagement of the innovator fell inside or outside of the scope of the claims. As Rares J put it, “to allow such a… monopoly would have a chilling effect on all intellectual property professionals… because they would be at risk of infringing the patent if they followed the supposed method and succeeded in producing a useful result”. Consequently, his Honour concluded that the method was not considered to be patentable based on the claimed subject matter being a mere scheme or business model and the unsettling ramifications of allowing such subject matter to be deemed eligible for a patent.

Leave to Appeal Refused

An application by Mr Watson for leave to appeal was recently refused in Watson v Commissioner of Patents [2020] FCAFC 56. The Full Court refused leave to adduce fresh evidence to challenge the primary judge’s observations. Despite Mr Watson’s attempts to align the claims of the application to those of NRDC (National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252), the Full Court rejected this assertion and instead considered the claims to be more in line with the scheme of Grant (Grant v Commissioner of Patents (2006) 154 FCR 62), stating that “at most, the claimed invention is a business innovation, not a technological or technical innovation.” Ultimately, the Full Court confirmed the primary judge did not err in his findings, and concluded that the claim was “a description of an idea, said to be new, as to how parties might go about organising their affairs in relation to the creation of an intellectual property right and payment for it. There is no greater specificity or substance in the claim than that.”

Apple Inc. [2019] APO 32

An invention relating to computer user interfaces, and more specifically to context-specific user interfaces for indicating time, was found by the Patent Office to be a manner of manufacture. Whilst the original Examiner and the Delegate were divergent in their characterisation of the substance of the invention, it was ultimately found that the claimed invention of re-using animation sequences to produce user interface objects provided a technical advantage in reducing computational burden.

Background

Apple Inc (Apple) is the owner of Australian Patent Application 2015298710 (710 Application). The 710 Application was the subject of an earlier Patent Office decision, in which the Delegate remitted the application back to examination to determine the state of the art so that an informed decision could be made on whether the substance of the invention was a manner of manufacture.

Upon the application returning back to examination, the original Examiner maintained that “the substance of the alleged invention is a presentation of specific aesthetic content” and concluded that the invention as claimed was not a manner of manufacture. On 20 November 2018, Apple then filed a request to be heard a second time, which resulted in a further decision from the Australian Patent Office (the later decision)

Decision

During examination and in submissions for the hearing of the earlier decision, Apple argued that the substance of the invention lies in the re-use of animation sequences in order to generate varied presentations while using less memory to store the animations used as compared to individually storing each full presentation (and thus storing duplicated content multiple times). Apple disagreed with the Examiner’s characterisation, that the substance of the invention “is a presentation of specific aesthetic content” and submitted that instead, the characterisation set out in the earlier decision should be adopted.

In assessing manner of manufacture requirements, the Delegate referred to the principles set out in D’Arcy v Myriad Genetics Inc [2015] HCA 35, Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177 and Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150.

The Delegate ultimately found that the claimed invention was directed towards a manner of manufacture. In particular, the Delegate was of the view that the specific manner in which the invention re-used animation sequences to produce user interface objects provided a contribution to the art. That contribution, which reduced computational burden in producing user interface objects, was technical in nature and therefore lies within established principles of what constitutes a patentable invention.

Facebook, Inc. [2020] APO 19

In this recent Patent Office decision, it was found that claims to a method that helps applications share information are directed to patentable subject matter based on the technical improvement provided by the invention, despite concluding that the claims only required generic computer implementation.

Background

The subject of the long-awaited decision is Australian Patent Application 2014209546 (546 Application) in the name of Facebook, Inc (Facebook). The 546 Application provides a method which enables applications to communicate with each other by accessing a shared memory. Most applications, when installed on a mobile device, are “sandboxed”, which means that application data and code execution are isolated from other applications. As such, the applications do not have the ability to communicate with each other. Facebook’s invention enabled data to be written to a shared memory location that is outside of the application’s sandbox, thereby allowing information to be shared.

Facebook requested the hearing back in August 2018, reaching an impasse with the Examiner after a fourth Examination Report was issued. The only matter under consideration was the outstanding patentable subject matter / manner of manufacture objection. After the initial hearing on 21 November 2018, Facebook was invited to file further submissions on three different occasions, including to make comments on a piece of prior art raised by the Delegate as evidence of the state of the art.

The Delegate’s Decision

The Delegate’s decision focused predominately on consideration of five questions taken from Aristocrat Technologies Australia Pty Limited [2016] APO 49 (Aristocrat). These questions included:

  • Is the contribution to the claimed invention technical in nature?
  • Is the computer merely the intermediary, configured to carry out the method, but adding nothing of the substance of the idea?
  • Does the claimed invention merely require generic computer implementation?
  • Does the invention result in an improvement in the functioning of the mobile device?
  • Does the claimed invention solve a technical problem in the functioning of the computer?

The Delegate considered that the substance of the invention lies in a series of steps where data is received, executed, an indication is stored and then the indication is transmitted through a different application along with user information. The claims allow for advertising attribution and conversion tracking, and the Delegate concluded that the conversion tracking was not technical in nature.

The Delegate accepted the use of the computer was intrinsic to the claimed method, as the invention operates entirely between a mobile device and an online system and therefore requires the use of a computer. However, he was not convinced that the steps of the claim (including executing data and installing an application) were more than generic computer implementation.

In considering whether the invention resulted in an improvement in the functioning of the mobile device, the Delegate agreed with Facebook that the claimed method appeared to be performing something new. There was enough detail to confirm that the method provides a technical improvement as “the device is now able to do something that it could not do previously”.

The Delegate also agreed that the “sandboxing” of native applications was a technical limitation faced by application developers. Interestingly, whilst it was recognised that “sandboxing” still exists in light of the method being utilised, the Delegate concluded that the invention works around the existing sandboxing, and therefore ruled that there was a technical improvement in the device.

After determining the substance of the invention to be a technical improvement in the functioning of the device, which worked around a technical limitation, the claims were found to be a manner of manufacture.

Implications, Commentary and Practical Guidance

Australia’s legal test for patent-eligibility of computer-implemented inventions

Australian patent law does not explicitly exclude software or computer-implemented inventions from patent-eligibility. Computer-implemented inventions may still be patentable in Australia on a case-by-case basis, particularly where they result in an improvement in computer technology. The scrutiny applied to computer-implemented inventions arises as computers can readily be programmed to perform all manner of schemes, tasks or ideas that might improve the human experience, but which are not themselves patentable subject matter.

Recent guidance in this area has made it easier to predict when inventions are likely, or unlikely, to meet the requirements for patentable subject matter, by considering whether the inventive concept of the invention lies in an idea or scheme which can be generically implemented using computers, or in a technical application which makes an improvement to computer technology or otherwise involves some physical effect or phenomenon.

Inventions involving physical steps carried out on a physical product using physical apparatus, to produce a physical and tangible result, remain patentable if they give rise to an artificially created state of affairs of utility in a field of economic endeavour (the useful arts), as established by the High Court of Australia in NRDC. Applications directed to abstract ideas, schemes and intellectual information have never been held to be patentable in Australia. The Patent Office remains poised to reject applications if they lack a useful physical result or technical effect, if they lack well-defined boundaries, or if granting the patent would be negative effects on innovation.

However, the implementation of an idea in a computer may be considered patentable if the invention lies in the computerisation. There is required some ingenuity in the way in which the computer is used, rather than simply using the computer for its well known or generic functions. Implementation of an abstract idea can be characterised as “generic” when an invention claimed is indifferent as to the particular device or lacks detail as to the particular means of implementation. Where the claims identify wholly generic or conventional means of carrying out some part of an abstract idea or scheme – any ingenuity is in the scheme and not in the computerisation or use of a computer. That is, the computer is considered as acting only as a tool for implementing the abstract idea.

As the Full Court in Encompass warned, a patent specification should not, “…having identified the cardinal steps of the exemplified method, [leave] 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.”

If the invention includes or uses more than generic software or hardware, this must be reflected in the claims and supported in the specification by meaningful technical detail. Claims reciting specific (non-generic) software or programming steps, rather than just the idea or information flow, may satisfy the manner of manufacture test.

Further, as demonstrated in Facebook, Inc., an invention which overcomes or circumvents a technical limitation by providing a technical improvement to how a device functions may still be considered patentable subject matter where the use of the computer is intrinsic to the method, even if the steps are themselves considered to be generic.

Practical guidance for drafting and prosecuting Australian patent applications for inventions with computer-implemented aspects

The recent decisions on computer-implemented inventions have provided practical guidance for drafting and prosecuting Australian patent applications in this space.

Many of the inventions which were the subject of recent decisions failed the patentable subject matter test based on a lack of technical detail as to the function, implementation and application of the software and hardware of the invention. The key takeaway is that technical detail within the specification is crucial to showing that the contribution of the invention is technical and provides an improvement to computer technology, or that the inventive concept lies in the computerisation of the method.

Accordingly, it is necessary to avoid using only functional language to describe the result or purpose of a step in an invention. An application should describe how the invention is actually performed and implemented, in a technical sense, rather than broadly describing an idea or information flow. Specifications should include sufficient technical detail on how any hardware, computer functions or software used for carrying out the invention actually perform their technical functions and improve computer technology. Describing the details of a particular algorithm or technical effect may reduce the risk of the invention being characterised as abstract or requiring mere generic computer implementation. Similarly, figures should have detail and support the technical description of the invention.

Broad, sweeping statements such as “any appropriate manner”, “any generic system” or “any suitable manner”, “mechanism” or “technique”, or “can be implemented in any manner, such as executed by a computer” should be avoided or at least minimised if the patentee wants to show that the computerisation is more than generic utilisation of a computer. Phrases such as these leave the details of the implementation up to the user, and during later prosecution, can give rise to difficulties in arguing that these are more than just generic steps. Similarly, generic figures or paragraphs which could appear in any patent application in the computer-implemented space can result in adversely diluting the technical effects and advantages of the invention. These may additionally give rise to potential section 40 support/enablement or sufficiency issues.

There should be a focus on understanding and describing the detail of how the computer-implemented invention works, rather than focusing solely on what it achieves or the end result. Engaging with the inventors and programmers or technical staff when having the application drafted is good practice as it provides good technical description as well as insight into the unique details of the inventiveness. This information can then be used to support arguments and assertions made by the patentee of the technical effects and advantages when prosecuting the applications.

Every application is examined on a case-by-case basis. Drawing analogies with other issued decisions or cases may not prove persuasive if there is not a significant overlap in the technology. However, arguments against patentable subject matter objections can ultimately be strengthened by technical detail disclosed in the specification.

Whilst the test of patent eligibility remains somewhat nebulous, and that is appropriate given there is a need to provide flexibility, it is becoming easier to predict which side of the line a purported invention is likely to fall by considering where the inventive concept lies: in the idea/scheme which can be routinely implemented using computers (unlikely to be patent-eligible), or in some technical application which either improves the use of the computer or otherwise involves some tangible product or effect beyond the idea (more likely to be patent-eligible).

Shelston’s deep expertise and experience with patents for computer-implemented inventions

Shelston’s team includes experienced ICT-focused patent attorneys who can consult as to relevant questions of patent drafting and patentable subject matter. Our expert litigators are very well-placed (particularly having represented clients in both the Encompass and Research Affiliates matters) to advise on enforcement or revocation strategy in this important and highly active area of patent law.

* The authors were engaged by InfoTrack in its successful challenge to the two Encompass innovation patents at first instance and before an expanded bench of five Judges in the Full Court of the Federal Court of Australia and its successful opposition to a related patent application in the Australian Patent Office.

Authored by Duncan Longstaff, Alana Gibson, Mark Vincent and Tam Huynh

Mr Vitaly Pilkin appealed from a Federal Court decision summarily dismissing his patent infringement proceedings against Sony Australia and refusing leave to serve Sony entities out of jurisdiction in the US and the UK (see our discussion of that earlier decision in our Best Patent Cases 2019 publication).  The Full Federal Court refused Mr Pilkin’s application for leave to appeal the decision, upholding the primary judge’s findings that due to a deferral in the patent priority date to the date of key amendments, the claimed invention could not be novel in light of prior art products.  The Full Court observed that Mr Pilkin had a substantial and contestable case in response to prior US patent publication considered by the primary judge to deprive the claimed invention of novelty, but noted that was to no avail because the appeal failed, and his infringement case should be summarily dismissed, on other grounds.

Background

Mr Pilkin (Pilkin) sued Sony Australia for infringing his innovation patent AU 2010101517 (the Patent), by its sale of the PS Vita, PS3 and PS4 consoles (the Consoles) in Australia since 22 February 2012.  Mr Pilkin also sought to serve proceedings on US and UK based Sony entities.  In response, Sony Australia and the Sony entities (the Sony parties) conceded that their consoles fell within the scope of the claim of the Patent but sought summary dismissal because the Patent had a later priority date than its claimed priority date, meaning that the sales of the Consoles anticipated the Patent, and that the Patent also lacked novelty over a US patent publication (the Case patent).

The Patent

The Patent was an innovation patent, converted from a national phase patent application of a PCT application, having a priority date of 5 October 2009.  The PCT application described the invention as an electronic device, with various options for the location of a touch pad and/or a joystick on the device.  The claims corresponded to this description, listing the possible locations of the touch pad and the joystick as alternatives.  The Patent was amended on 11 July 2014 to state only one claim, an electronic device having, inter alia, a front touch screen visual display, a rear touch pad and a joystick.  The possible locations of the joystick on the electronic device were omitted from the claim.

First Instance Decision

Priority Date

Justice Rares found that on a reading of the PCT application, he agreed with the Sony parties that the amendment was beyond the original disclosure in the PCT application.  It was clear that the location of the joystick on the device other than on the front surface was essential to the invention.  Hence, the omission of any particular location of the joystick in the claim of the Patent meant that the amendment was a broadening amendment, deferring the priority date of the Patent to 11 July 2014.

Novelty

The effect of the deferred priority date for the Patent meant that the sales of the Consoles anticipated the claim of the Patent as the sales occurred earlier, since at least 2012.  It was also held that the Case patent anticipated the claim of the Patent, as it described that a folded over laptop could include a joystick to control a cursor on the front screen display.

Summary dismissal

As there were no reasonable prospects of success in Mr Pilkin’s causes of action, in light of the novelty issues created by the deferred priority date of the patent, the patent infringement proceedings were dismissed.

Service out of jurisdiction

Justice Rares held that the facts pleaded by Mr Pilkin did not establish a prima facie case for relief to warrant service on the Sony entities in the US and the UK.  The US Sony entity was only incorporated in April 2016, and so did not exist at the time of first sales of the Consoles in 2012.  Also, the press release relied upon by Mr Pilkin did not establish that the US Sony entity had taken over manufacturing of the Consoles.  The failure of Mr Pilkin’s infringement claims also meant that there was no prima facie case against the UK based Sony entities.

Appeal Decision

Mr Pilkin sought leave to appeal on all grounds, repeating his submissions made in the first instance decision – that the amendment to the Patent only removed various alternatives listed in the PCT claims, and that the location of the joystick was not an essential integer to the invention.  Mr Pilkin further argued that the Case patent did not provide clear and unmistakable directions to all the features of the claim.

In a unanimous decision, the Full Federal Court refused Mr Pilkin leave to appeal, agreeing with Rares J’s reasons and findings on the deferred priority date for the Patent, its invalidity due to the sales of the Consoles and the lack of a prima facie case to warrant service out of jurisdiction.

However, the Full Federal Court considered that Mr Pilkin’s submissions on the Case patent were sufficiently reasonable to make that issue contestable.  The Full Court also noted that the central reason for the primary judge’s finding of lack of novelty was that a skilled person would have been able to produce the claimed device through trial and error experiments.  This central reason was not supported by evidence and related more to inventive step issues.  However, Mr Pilkin’s failure on his other grounds meant the issues relating to the Case patent were immaterial, because his application for leave to appeal was to be dismissed, and his infringement case was to be summarily dismissed, on the other grounds described above.

Significance

The decision illustrates the dangers in amending patent claims to remove integers asserted to be optional.  While the removal of optional integers may appear to narrow the scope of a claim, there could be an argument that this in effect broadens the scope of the claim beyond its original disclosure.  Patent applicants and patentees should exercise caution in amending the claims or drafting claims with too many alternative integers to avoid a potential loss of priority date and thus lose validity by reason of a later amendment.

The decision also highlights the need to clearly separate the criteria for novelty from the criteria for inventive step.  The basis for the finding on lack of novelty for the Case patent relied on matters relating to inventive step and unsupported by evidence.

Finally, the case emphasises the importance of accurately pleading consistent facts.  The contradiction between the dates of the alleged infringing conduct and the existence of the US Sony entity led to refusal of the application to serve out of jurisdiction.

Authored by Andrew Lowe and Mark Vincent

The long-awaited decision in the appeal of Rokt Pte Ltd v Commissioner of Patents [2018] FCA 1988 has finally been handed down, with the Full Federal Court finding the application to be “a marketing scheme”, and establishing that the claimed invention is not patentable subject matter.

The Full Federal Court has handed down their judgement in Commissioner of Patents v Rokt Pte Ltd [2020] FCAFC 86, overturning the decision of the primary judge and establishing that the claims are not a “manner of manufacture” and therefore not patentable subject matter.

The case involved a patent application entitled “A digital advertising system and method” belonging to tech company, Rokt Pte Ltd. (Rokt). The application related to a computer implemented system and method that linked users to online advertising by presenting an “engagement offer” when a user accessed a website. The engagement offer was targeted based on a user’s previous interactions. It provided a context-based advertising system in which users who were more likely to engage with advertising were shown specific offers to increase engagement over traditional methods of digital advertising.

In 2017, an unsuccessful hearing decision issued in which the Delegate of the Commissioner of Patents decided that the application was not patentable on the basis that it was not a “manner of manufacture”. In 2018, Rokt successfully appealed the outcome of the hearing decision to the Federal Court, which ruled that the invention of the application was directed to patentable subject matter. Disagreeing with the Federal Court’s judgement, the Commissioner of Patents appealed the Federal Court’s decision to the Full Federal Court.

The judgement closely followed the guidance of the Full Court’s earlier decision of Encompass Corporation Pty Ltd v InfoTrack Pty Ltd [2019] FCAFC 161 (Encompass) (issued late last year) in assessing patentable subject matter by focusing on the disclosure and detail provided by the specification, assessing whether the invention is a scheme, and then considering the implementation of the scheme in the computer.

Overturning the primary judge

Ultimately, Rares, Nicholas and Burley JJ established that the primary judge erred in his findings in the original decision by relying too heavily on the opinion of Professor Verspoor, Rokt’s technical expert, in adopting her answers to the questions which characterised the substance of the invention. The primary judge was also found to have relied on the technical problem and solution identified in the specification, without addressing the question of whether the technical solution was actually claimed.[1]

They found that the primary judge did not engage in any analysis of the central question of whether invention was found to lie in the implementation, or whether it amounted to simply “an instruction to ‘put’ the scheme into computer technology.”[2] Their Honours emphasised the danger in adopting an expert’s opinion without additional legal analysis, noting the importance of the legal approach to understand the invention under assessment of manner of manufacture.[3]

Generic software

The decision emphasised that consideration of the common general knowledge should be used only for construing the specification, and not to provide characterisation or evidence of “’generic software’ or the use of computers for their ‘well known’ purpose.” Instead, they defined these terms as a reference to computer technology that is utilised for its basic, typical or well-known functions, rather than referring to common knowledge in the art.[4]

Following the decision of Encompass, their Honours considered the matter of whether the claimed method was implemented using generic software. The Full Court observed in Encompass that the claims of the invention did not define any particular software of programming to carry out the invention, and so it was left up to those using the method to implement a suitable computer program for the purpose of carrying out the method.[5]

Agreeing with this approach, the problem addressed by the invention was characterised as enhancing consumer engagement levels. The solution was thereby determined to be the provision of an intermediate “engagement offer” targeted to a user interacting with digital content.

A marketing scheme

In light of these observations, the invention was classified as “a marketing scheme”.[6] This gave rise to a key consideration in assessing patentable subject matter: whether the computer is a mere tool in which the invention is performed, or whether the invention lies in the computerisation.

Following the approach laid out in Encompass, their Honours came to some strikingly similar conclusions regarding the detail in the specification:

  • in our view nothing about the way that the specification describes the computer hardware or software indicates that either is any more than a vehicle for implementing the scheme, using computers for their ordinary purposes.”[7]
  • The specification does no more than describe the architecture of the hardware in a most general sense.”[8]
  • “…the claim provides no content to suggest a different conclusion. Despite its length and detail, it contains no integer that serves to characterise the invention by reference to the implementation of the scheme beyond the most general application of computer technology utilised in an online environment.”[9]

Although it was determined that the specification represented a solution to problems in marketing, the lack of detailed description suggest that the scheme in which this solution was achieved did not involve the use of computer technology “other than as a vehicle to implement the scheme”.[10]

In drawing a direct parallel between the position of Encompass, their Honours concluded that the claimed invention amounts to an instruction to carry out the marketing scheme, and that the invention provides no more than a list of steps which may be implemented using computer technology for its well-known functionality.[11]

The decision brings the case in line with recent decisions in the patentable subject matter arena, and leaves applicants with the often difficult task of determining whether the inventive concept lies in the idea, or in the implementation.

Rokt have until 18 June to appeal the decision.


[1] Commissioner of Patents v Rokt Pte Ltd [2020] FCAFC 86 at [95].

[2] Ibid [96].

[3] Ibid [98].

[4] Ibid [91].

[5] Encompass Corporation Pty Ltd v InfoTrack Pty Ltd [2019] FCAFC 161 at [100].

[6] Commissioner of Patents v Rokt Pte Ltd at [108]

[7] Ibid [109].

[8] Ibid [110].

[9] Ibid [111].

[10] Ibid [110].

[11] [115]

Authored by Alana Gibson and Peter Treloar

In a recent Australian Patent Office decision of Facebook, Inc. [2020] APO 19 (21 April 2020), a Delegate for the Commissioner of Patents (the Delegate) found that claims to a method that helps applications share information are directed to patentable subject matter based on the technical improvement provided, despite concluding that the claims only required generic computer implementation.

The new decision sees the Delegate ask key questions to determine the substance of the invention. Whilst the invention was found not to be technical in nature, and only to require generic computer implementation, it was considered that the invention addressed a technical limitation and provided a technical improvement. In the end, the invention was found to constitute patentable subject matter under Australian law.

The Application

The subject of the long-awaited decision was Australian patent application no. 2014209546 (the Application) entitled “Conversion tracking for installation of applications on mobile devices” in the name of Facebook, Inc (Facebook). Facebook requested a hearing back in August 2018, reaching an impasse with the Examiner after a fourth Examination Report was issued. The only matter under consideration was the outstanding patentable subject matter / manner of manufacture objection.

The Application provides a method which enables applications to communicate with each other by accessing a shared memory. Most applications, when installed on a mobile device, are “sandboxed”, which means that application data and code execution are isolated from other applications. As such, the applications do not have the ability to communicate with each other. This can make it difficult for advertisers to track whether their advertisement is successful in getting a user to download a new app.

Facebook’s invention enabled data to be written to a shared memory location that is outside of the application’s sandbox, allowing them to share information with each other. So, using an example from Facebook’s hearing submissions, when a user sees an advertisement for Uber while browsing Facebook, and then downloads the Uber application by clicking on the advertisement link, Facebook can know that the Uber application has been installed and pass this information back to Uber.

The Decision

The decision of the Delegate relied upon 5 key questions in assessing whether the invention was a manner of manufacture. There were taken from the considerations discussed in Aristocrat Technologies Australia Pty Limited[1] (Aristocrat). These questions included:

  • Is the contribution to the claimed invention technical in nature?
  • Is the computer merely the intermediary, configured to carry out the method, but adding nothing of the substance of the idea?
  • Does the claimed invention merely require generic computer implementation?
  • Does the invention result in an improvement in the functioning of the mobile device?
  • Does the claimed invention solve a technical problem in the functioning of the computer?

The Delegate concluded that the claims allow for advertising attribution and conversion tracking, but considered that this was not technical in nature.[2] Although accepting that the use of the computer was intrinsic to the claimed method, he was not convinced that the steps of the claim (including executing data and installing an application) were more than generic computer implementation.[3]

However, upon consideration of whether the invention resulted in an improvement, the Delegate agreed that the method performed something new. There was enough detail to show that the device was now able to do something it could not do previously, and provided a technical improvement.[4] There was also agreement that the inability for some applications to communicate information was a technical limitation faced by application developers. Interestingly, the Delegate recognised that the “sandboxing” (or isolating) of applications still exists in light of the method being utilised, but that the invention works around the existing system.[5]

In light of the clear technical limitation along with the ability to perform something new, there was found to be a technical improvement in the device.

Key Points

Although the claims in this instance were not considered to be technical in nature, this does not mean that they did not address a specific technical problem. The key, in this case, was including enough information in the claims to specify that the method concerned a specific type of application (the type that could not communicate with each other). This addition made it clear to the Delegate that the invention solved, or worked around, a precise technical limitation.

Further, the decision provides a bona fide example that satisfying all the points outlined in Aristocrat is not necessary to show that the invention is patentable subject matter. The fact that the computer was intrinsic to the method and that there was a clear technical improvement provided by the method was enough to establish that the invention was patentable subject matter. This reiterates the importance of providing specific technical details when drafting a patent specification to ensure that the technical improvements provided by the invention are clear and unambiguous.

It will be interesting to see whether a similar approach is applied by the Full Court when it hands down its judgement in Commissioner of Patents v Rokt Pte Ltd later in the year.


[1] [2016] APO 49.

[2] Facebook, Inc. [2020] APO 19 (21 April 2020) at [79].

[3] Ibid [80] to [82].

[4] Ibid [83].

[5] Ibid [84] to [85]

Authored by Alana Gibson and Peter Treloar