Australian Federal Court Overturns IP Australia’s Rejection of Computer Implemented Invention (CII).

In a blow to the recent practices of the Australian Patent Office of IP Australia when examining CIIs, the Federal Court of Australia has, in its decision by Robertson J in Rokt Pte Ltd v Commissioner of Patents [2018] FCA 1988 [Rokt], overturned IP Australia’s rejection of a patent application by Rokt Pte Ltd with a finding that the invention as claimed in Australian patent application no. 2013201494 does indeed satisfy the requirements to be a manner of manufacture and thus relates to patentable subject matter.

The rejection

Rokt’s patent application was filed on 13 March 2013 entitled “A Digital Advertising System and Method”. The priority date claimed by the application was 12 December 2012. The application was originally accepted by IP Australia on 3 July 2013.

Acceptance of the application was opposed, but the opposition was withdrawn after submissions of evidence, but before proceeding to a Hearing with the Commissioner’s Delegate of IP Australia. Despite the ground of patentable subject matter not being raised by the anonymous opponent, the IP Australia Delegate decided that examination of the application should be re-opened since, in the Delegate’s opinion, the claims of the application were not directed to patentable subject matter.

After much argument and amendments by Rokt in response to six Re-Examination Reports issued by the Examiner, the application was finally refused. Rokt appealed this rejection to a Hearing before the Delegate. The Delegate maintained the patentable subject matter objection yet invited Rokt to make further amendments, which were subsequently also rejected by the Delegate as not being sufficient to overcome the manner of manufacture objection.

Rokt subsequently appealed to the Federal Court, and it is the outcome of this appeal on which we now report.

The appeal

The Rokt invention generally relates to digital advertising, and specifically in methods for providing targeted advertising to consumers at relevant points during the user making a purchase. Rokt’s invention, however, was not to insert advertising into a web page, but rather to provide a targeted engagement offer into the publisher’s content at an appropriate time (say, when the user completed a transaction on the publisher’s site), where the engagement offer allowed interaction from the user to, if they wish, accept the offer; and then – if and only if the offer is accepted – the Rokt method presented an advertisement to the user. The intermediate step of the engagement offer ensured that the user was being offered advertisements to goods or services which they had just shown an interest in, and so the likelihood of the user proceeding with a further purchase from the advertisement was much higher.

In considering the evidence presented to the court by IP Australia and their expert witness, Robertson J was dismissive of the piece-wise dissection of the claim into discrete elements, stating at [202] (emphasis added):

In my opinion, the respondent’s focus tended to be on issues of separate or indeed discrete differences or distinctions rather than on the claim or claims as a whole and as a matter of substance. … This focus on similarities does not of itself gainsay that the claimed invention solved a technical problem or involved steps foreign to the normal use of computers as at December 2012. A focus on elements known as at December 2012 in isolation tends to lose sight of the combination of techniques or components in an innovative and previously unknown way.

Instead, Robertson J sided with Rokt’s evidence and expert at [203], stating that “the substance of the invention was to introduce a dynamic, context-based advertising system, introducing a distinction between an engagement offer, without a direct advertising benefit, and an advertisement designed to lead directly to the sale of the product” and that this feature was “an improvement in computer technology”.

Robertson J found at [205] that the invention “solved not only a business problem but also a technical problem providing “a single platform in which user engagement data could be coupled with transactional data and user context data to provide a personalised ranking of engagement offers to the user” and at [207] “… there was a business problem of attracting the attention of the user and having the user choose to interact with the advertiser, but this problem was translated into the technical problem of how to utilise computer technology to address the business problem.

Robertson J also found at [208] that the “use of computers was integral, rather than incidental, to the invention in the sense that there is an invention in the way in which the computer carries out the” invention. It was found to be “not feasible to store and manage large amounts of tracking data collected from real-time interactions with digital devices and manipulate large quantities of data for context-sensitive decision-making without the use of computers.

Finally – the crescendo, Robertson J ordered that:

  • the previous decisions by the IP Australian Hearings Delegate rejecting the application on the basis of the invention not being directed to patentable subject matter be overturned;
  • the Rokt application proceed to grant; and
  • IP Australia was to pay Rokt’s costs, as agreed or taxed.

The final word

This seems to be a positive step in the right direction for the patentability of computer implemented inventions by IP Australia. In particular, Robertson J identified that the practice of considering each integer of the claim in isolation from the substance of the invention as a whole had a tendency to lose sight of the combination of techniques or components in an innovative and previously unknown way, and thus perhaps, is inappropriate. Robertson J further clarified that an assessment of the claims relating to patentable subject matter should consider the substance of the invention as embodied in the combination of integers as claimed as a whole.

As professional advocates, patent attorneys and inventors, we can only hope that this decision leads to a re-think of IP Australia’s current examination practices in relation to manner of manufacture and patentable subject matter objections. Ultimately, we hope this decision leads to a mutual understanding between users of the patent system and the official gatekeepers of an acceptable practice on what constitutes patentable subject matter as it relates to computer implemented inventions. With luck, this decision may even start the discussion of establishing a set of clear guidelines which can be followed by users and patent Examiners alike for assessing the patentable nature of the subject matter of the invention.

We also look with keen interest to the Full Federal Court decision in the appeal of Encompass Corporation Pty Ltd v InfoTrack Pty Ltd expected to issue mid-2019, and hope this particular decision in Rokt Pte Ltd v Commissioner of Patents provides an indication of the nature of the Decision to come.