As at January 2014, the situation in Australia with regard to the patentability of computer implemented inventions is in a state of flux.  The Commissioner of Patents is currently bound by two (somewhat conflicting) Federal Court judgments on manner of manufacture – both of which [RPL Central Pty Ltd v Commissioner of Patents [2013] FCA 871 (“RPL Central”) and Research Affiliates LLC v Commissioner of Patents [2013] FCA 71 (“Research Affiliates”)] have been appealed and are awaiting judgement from the Full Federal Court of Australia.

In the meantime, the Australian Patent Office has issued a decision (Aqua Index Ltd [2014] APO 2) refusing a computer implemented invention for lack of manner of manufacture relying on solely upon the reasoning in Research Affiliates (since the subject matter of the patent application was similar to that of the patent application in Research Affiliates).

Background on Research Affiliates and RPL Central

In Research Affiliates, the Federal Court held that an invention which produced an index of securities or assets by way of a computer was not a manner of manufacture since (a) the only physical result generated by the method was a computer file containing an index, which is nothing more than a set of data, and (b) the specification contained virtually no substantive detail about how the claimed method was to be implemented by a computer.

In RPL Central, the Federal Court held that a computer implemented invention can be patentable subject matter in Australia, particularly where there is substantial disclosure in the patent specification of how the invention is to be implemented on the computer.  You can read more about this case in our previous blog post.

Despite the decision in RPL Central, we are yet to see a change in practice at the Australian Patent Office, rather (at the examination report stage) they are relying upon the decision of Research Affiliates in assessing manner of manufacture.

Aqua Index Ltd [2014] APO 2 is the first APO decision on manner of manufacture since the RPL Central judgment issued on 30 August 2013.

Background of the Aqua Index patent application

The applicant, Aqua Index Ltd filed a PCT application (PCT/IB2008/053327) which entered the Australian national phase as AU2008290256.  The Australian case was examined in May 2012 and a number of adverse examination reports issued – the Examiner maintaining that the claims of the patent did not constitute a manner of manufacture under s 18(1A)(a) of the Patents Act 1990 (Cth).  The Examiner initially cited the Delegates decision in Peter Szabo and Associates Pty Ltd [2005] APO 24and the Full Federal Court judgment in Grant v Commissioner of Patents (2006) 154 FCR 62, and later citing Research Affiliates (after the judgment was handed down).

The decision of the commissioner in this case is as a result of an applicant request for a decision on the written record.

The Aqua Index Invention

The invention relates to a method and system involving a computer to facilitate investment in a commodity (e.g. water) by determining a free market price of the commodity based on a virtual value of the commodity as the value is reflected in the price of a freely traded product and calculating an index value of the commodity.

A copy of the specification may be found here.  The specification includes 14 pages of description and four drawings (the drawings being a system overview diagram, two flowcharts illustrating the method of the invention and an example of calculating a price index).

There are number of independent claims.  Claim 1 (reproduced below) is an independent system claim.  All claims were refused.

Click here to view images.

The Decision of the Delegate

In a relatively short decision, the Delegate noted that both judgements in Research Affiliates and RPL Central are binding on the commissioner.

However, at 15 the Delegate stressed that even though aspects of the Judgments could be seen to be contradictory,  the Court at [162 to 172] in RPL Central considered there was no inconsistency between the present decision (i.e. RPL Central) and Research Affiliates which as the Delegate notes:

“on the basis of the role played by the computer in the implementation of the claimed invention and the extent to which the implementation was described”.

The delegate decided he need not resolve the authorities because of the similarity of the subject matter claimed in the invention and the invention in Research Affiliates:

“what is claimed clearly is of the same nature as that considered in the Research Affiliates case and different to that in RPL“.

Detail of computers in the specification

The Delegate also commented on the extent to which computers are described in the specification saying:

“If anything, the involvement of the processor and the description of its implementation are significantly less here than in Research Affiliates.”

To our mind, it is not entirely clear at what point the detail becomes unacceptable.  For example, we do not presently know how ‘much’ computer implementation detail is required to demonstrate that the invention is a manner of manufacture  – presumably it is somewhere between RPL Central and Research Affiliates.

For example in  Research Affiliates at [68]

“While the Specification appears to be intended to create the impression of detailed computer implementation, the Specification says almost nothing about how that is to be done. The reliance placed on the Colonial Index embodiment is a good example of what is not in the Specification. The discussion in the Specification provides no substantive detail regarding the implementation of the claimed method. The upshot of the discussion is merely that the method is implemented by a computer, but there is no disclosure of how that is to be done.”

Yet, in RPL Central, when commenting on the level of description referred to in the Research Affiliatesjudgement above, the court noted:

“It appears that in reaching this ultimate conclusion, his Honour was influenced by these matters, and the fact that the specifications contained virtually no substantive detail about how the claimed method was to be implemented by a computer”

The Aqua Index specification makes numerous references to computers and memory and it’s clear that the examples given in the specification would be carried out on a computer. However, it seems from the above comments, detailed information about how the invention is implemented by means of computers should be provided in the description and in the claims.

Approach to Manner of Manufacture and Claims

At 19, the delegate also noted that:

“when considering the manner of manufacture requirement under Australian law, a substantive rather than purely literal approach is to be taken to the claims” and cited a recent US Court decision where a similar approach was taken to computer system claims was taken [CLS Bank Intl. v. Alice Corp. Pty. Ltd., 2011-1301 (Fed. Cir. May 10, 2013)] that an “abstract idea” subject matter limitation applied “regardless of claim format”.

Interestingly the corresponding US case whose claims largely correspond to the Australian case, has been granted.

Aqua Index Ltd have filed a divisional application – presumably to take advantage of a positive outcome in the judgements of the Full Federal Court.  On that point, we expect a decision in the first quarter of 2014.

Conclusion

It appears that from this decision we are unlikely to see change in practice at the Australian Patent Office on manner of manufacture until the judgments in Research Affiliates and RPL Central are handed down.  We recommend delaying examination of computer implemented inventions where possible until the issue is settled.  We hope to have judgments in the first quarter of 2014.

Further, it is important that detailed information about how the invention is implemented by means of computers is provided in the description and in the claims.