Grahame Smith - [2020] APO 21

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Grahame Smith [2020] APO 21

Innovation Patent: 2018102114

Title:A PUBLIC INTERFACE FOR IMPROVED BANKING SECURITY, SHARING STATEMENT TRANSACTIONS AS WRITTEN POSITIVE REVIEWS FOR ONLINE MARKETING:

Patentee:  Grahame Smith
Delegate:  Dr S.D. Barker – Deputy Commissioner of Patents
Decision Date:  01 May 2020
Hearing Date:  Written submissions filed on 19 December 2019 and 16 March 2020

Catchwords: PATENTS – examiner objections – allowability of amendments proposed during examination – amendments not allowable – consequently invention is not a manner of manufacture – lack of novelty and lack of innovative step – innovation patent will be revoked

Representation: Mr Smith was assisted by his daughter.

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Innovation Patent: 2018102114

Title:A PUBLIC INTERFACE FOR IMPROVED BANKING SECURITY, SHARING STATEMENT TRANSACTIONS AS WRITTEN POSITIVE REVIEWS FOR ONLINE MARKETING:

Patentee: Grahame Smith
Date of Decision: 01 May 2020
DECISION
The specification as filed did not include all features of the invention that was developed by Mr Smith. When objections were raised during examination, Mr Smith sought to insert new information about the invention by amendment. These amendments are not allowable, and as a consequence this information cannot be used to overcome the objections. As the objections cannot be overcome the innovation patent must be revoked.
If Mr Smith wishes to pursue patent protection, it is open to him to file a new application, containing all the necessary information in relation to the invention. Whether a new application will be able to proceed to acceptance or certification will depend on the additional information included in the new application.[1] I urge Mr Smith to obtain professional advice before adopting any course of action.
To allow Mr Smith to consider his options I will defer revoking the innovation patent until three months after the date of this decision.
REASONS FOR DECISION
[1] I note that there could be numerous timing issues in relation to a new application, depending on whether it is filed as a divisional and whether Mr Smith relies on the grace period afforded by section 24. Professional advice should be sought on these matters.

This matter arises under the Patents Act 1990 (the Act) as amended by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012.
Innovation patent number 2018102114 was filed by Grahame Smith on 21 December 2018. Mr Smith is listed as both the inventor and the applicant. The innovation patent was granted on 23 January 2019. Mr Smith requested examination and a first examination report issued on 2 April 2019. A total of three adverse reports have issued, and Mr Smith has filed amendments and submissions. The Examiner is not satisfied that Mr Smith has overcome the objections. The matter was set for a hearing and Mr Smith filed written submissions. On 23 January 2020 I wrote to Mr Smith requesting further information on some matters. A response was filed on 16 March 2020.
The invention as described
I approach the construction of the specification in the way set out by Middleton J in Eli Lilly and Company Limited v Apotex Pty Ltd:[2]
"It is well settled that the Court should, from the outset, approach the task of patent construction with a generous measure of common sense. The Court must place itself in the position of a person skilled in the relevant art, being the subject matter of the patent. From this perspective, the patent is to be read as a whole, in the context of the specification and in light of the prevailing common general knowledge and state of the relevant art at the priority date."
[2] [2013] FCA 214, 100 IPR 451 at [139].
The specification as filed relates to online banking. The objects of the invention are variously described as relating to security and advertising:
"addresses security issues on private bank systems and apps"[3]
"This innovation has been specifically devised in order to improve security and utilise shared positive reviews as an improved online marketing and business network."[4]
[3] Specification as filed at page 1.
[4] Specification as filed at page 1.
The solution is an interface having various design features:
"An interface in accordance with this innovation comprises of a method to share secure bank transactions"[5]
[5] Specification as filed at page 1.
The secure information is shared using encryption:
"The interface will also still maintain a private encrypted section that can only be viewed or accessed by the client or the bank's internal security."[6]
[6] Specification as filed at page 1.
The interface also shows other information:
"It also incorporates a messaging system for business communication built into the reviews later described."[7]
[7] Specification as filed at page 1.
The interface allows an online purchaser to have secure communication with their bank in order to pay for the purchase, and at the same time provide a public review of the goods they have purchased. The bank can provide rewards to purchasers who provide reviews. The steps of the process of interacting with the bank can be seen in Figure 1 of the specification as filed.[8]
[8] A copy of Figure 1 as filed appears at the end of this decision.
The specification goes on to mention the way in which the information is passed between the interface and the bank:
"The data communication between the public supplementary interfaces combine with the private online banking interface and banking app. This is to maintain the same public feed within the software, so when the user logs in to either they will see all their posts. It also maintains the private interfaces that have the same security."[9]
[9] Specification as filed at page 2.
Significantly, there is no suggestion that banking information and review information are combined or mixed for transmission.
The specification suggests a technical improvement in the security of the transaction:
"The innovations described in this document are all due to improving the online banking security system, sharing online transactions to improve marketing strategies and receive instant bank incentives or make purchases."[10]
[10] Specification as filed at page 5.
The improved security appears to be the result of using an encrypted communication for the banking aspect of the transaction and an unencrypted communication for the marketing aspect of the transaction. No specific encryption technique is disclosed.
After describing the technical aspects of the platform in generic terms, the specification goes on to describe incentives that are provided when users give a purchase review. Specific incentives are:
·interest on spending;
·extra interest if a donation is made to a charity;
·ecoins; and
·any other accumulated point system determined by the bank.[11]
[11] Specification as filed at page 4.
Mr Smith has proposed amendments to add additional information to the description. The proposed amendments introduce many changes, but the more significant changes relate to "algorithms and data used to develop new encryptions" and "the method for data from purchases that is sent to the user to create their marketing".[12] As will be explained later, these amendments are not allowable as they add new matter to the description.
[12] Correspondence dated 1 September 2019.
The invention as explained by Mr Smith
Submissions filed by Mr Smith on 16 March 2020 help to clarify the invention as Mr Smith sees it. I am assisted by Mr Smith's helpful responses. In response to my question "What do you consider is the technical advance achieved by your invention", Mr Smith responded:
"The technical advancement is the scrambler which has never been implemented in computers or systems due to data being used by external companies and other various communication to other devices and software."[13]
[13] Correspondence received 16 March 2020.
In relation to how the invention differed from the known state of the art, Mr Smith stated:
"the difference is in the technical functionality of the scrambler and how this communicates and interacts with the interface and other devices in a more secure way"[14]
[14] Correspondence received 16 March 202.
Mr Smith similarly referred to a:
"unique encryption method outlined in the patent which is a product of the scrambler"[15]
[15] Correspondence received 16 March 2020.
I think it should also be noted that Mr Smith's invention involves simultaneously scrambling marketing and banking information:
"Marketing and banking have never before been merged as a way of preventing fraud by producing these unique, tamperproof codes."[16]
"In fact it is the combination of data that is manipulated to create a code, which is dependent on the review and transaction information that makes it new and specific to the prevention of bank fraud."[17]
[16] Correspondence received 16 March 2020.
[17] Correspondence received 16 March 2020.
Mr Smith explained that scrambling and encryption are different technical concepts:
"They are different processes within the same technical procedure to produce the desired outcome. Without both, the system would not be successful in the new technical step and functionality described."[18]
[18] Correspondence received 16 March 2020.
Regardless of the technical differences, it is fair to say that Mr Smith considers that the term "scrambler" probably does not fully reflect the capability of his invention:
"the word 'scrambler' lacks the same incredible functionality of the 'new' data transformation and unique encryption which is evident in the process described in the patent and requested diagrams submitted."[19]
[19] Correspondence received 16 March 2020.
It seems probable that Mr Smith's process combines marketing and banking data (i.e. scrambles the data) and also encrypts this data.
I asked Mr Smith whether the details of the scrambler were included in the specification as filed. Mr Smith suggested that these details were present in the specification as filed, but were later found to be missing. He also said that the amendments were just clarifying what was already described:
"not just once but twice there have been issues with this submission where the information was found to be there originally as was referred to in examination then suddenly two of the description of figures were missing in the entire description, there was no explanation as to how the forms were different so I just re-uploaded all my copies with red highlighted sections and any requested further information or breakdowns of the original system outlined. Nothing new was added, it was just a further breakdown of each step in the first figures provided. I only pulled the steps apart to show the intricate processes of that step to rectify any confusion in the technical vocabulary of improvement suggested."[20]
[20] Correspondence received 16 March 2020.
I have been unable to find any evidence supporting the assertion that the specification has been changed after filing.
Relationship between the invention as described and the invention as explained by Mr Smith
The best that can be said is that scrambling and encryption are not inconsistent with the specification as filed. However, the specification as filed did not suggest scrambling, and encryption was only described as a generic concept.
The invention as claimed
Mr Smith has proposed amendments to the claims. The amendments add new matters similar to the situation in relation to the description. I will set out all versions of the claims.
The correct approach to the construction of claims was discussed by Bennett J in H Lundbeck A/S v Alphapharm Pty Ltd:[21]
"the words in a claim should be read through the eyes of the skilled addressee in the context in which they appear … while the claims define the monopoly claimed in the words of the patentee’s choosing, the specification should be read as a whole … it is not permissible to read into a claim an additional integer or limitation to vary or qualify the claim by reference to the body of the specification … terms in the claim which are unclear may be defined or clarified by reference to the body of the specification"
[21] [2009] FCAFC 70, 81 IPR 228 at [118]-[120].
Claim 1 as filed reads as follows:
The system of public interfaces that share secure online bank transactions, by posting a positive review with the name of the product or service, written or automated and doubles as advertising for the businesses or personal clients they made the transaction with; including any external application in accordance with the internal interfacing with the banks applications and online banking.
This claim is directed to a system characterised solely by the posting of reviews that double as advertising.
There are three claims directly or indirectly appended to claim 1. The fifth claim is an independent claim that reads:
The system of the external application and any internal system that uses instant bank incentives to reward business employees for work achievements and bank clients who share personalised marketing videos as positive reviews.
This claim is clearly directed to a system, characterised solely by rewarding people for sharing reviews.
It is clear that the claims as filed were focussed on the provision of reviews through online channels without any technical limitations.
On 2 September 2019 Mr Smith filed a new set of claims. Claim 1 as proposed to be amended reads:
Any bank platform, as a system of interfaces, that instantly sends a notification at point-of-purchase where the client's transaction data is combined with other marketing data to generate a unique marketing product that is edited, both written or automated and posted as a positive review story to the business's public profile and feed with its encryption preventing bank fraud; including any external platform that utilises the same system.
This claim is also directed to a system, although it uses the term "platform" which is defined as a "system of interfaces". The system sends a notification containing transaction data and marketing data. The data is encrypted. There are three claims directly or indirectly appended to claim 1. There is a fifth independent claim that reads:
The external application and any internal bank system that creates instant bank and business incentives as a product to reward business employees for work achievements and clients who share personalised marketing material created as positive review stories or 'I owe you' posts.
This claim is clearly directly to a system, characterised solely by rewarding people for sharing reviews.
On 24 October 2019 Mr Smith filed a further set of claims. Claim 1 as proposed to be amended is as follows.
A computing system of interfaces, that instantly manipulates and scrambles client's transaction data with other marketing data at point-of-purchase as a technical step to instantly generate and send a unique marketing product that is edited, both written or automated and posted as a positive review story to the business's public profile and feed with its technical inbuilt encryption method preventing bank fraud; including any external platform that utilises the same system.
It is plain that the claim is directed to a computing system. The key features of the system is that a client involved in a purchase sends to the bank computing system transaction and marketing data that has been manipulated and scrambled. The technical features to achieve the manipulation and scrambling are not specified. There is also reference to encryption. It is not apparent whether scrambling and encryption are separate steps. It seems to me that the claim includes the option that the scrambling step is the inbuilt encryption method.
Claim 2 is appended to claim 1, and further specifies that the bank computing system generates ecoins. Claim 3 is appended to claim 2, and further specifies that the ecoin value is determined by the bank. Claim 4 is appended to claim 2, and further specifies that the customer can make a donation to charity. Claim 5 is a further independent claim that reads
The external application and any internal bank computing system that transforms raw bank data to customer friendly data for instant bank and business incentives as a technical step to generate a reward product tailored for business employees for work achievements and clients who share personalised marketing material created as positive review stories or 'I owe you' posts.
This claim is clearly directly to a system. While different language is used, compared to the previous forms of this claim, it is still characterised by rewarding people for sharing reviews without reference to any technical features.
The objections
The objections raised in the most recent report are as follows:
i)the amendments are not allowable;
ii)the claims do not define a manner of manufacture; and
iii)as the amendments are not allowable, the novelty and innovative step objections in relation to the former set of claims have not been overcome.
Mr Smith's submissions
Mr Smith filed written submissions dated 19 December 2019. Mr Smith requested that I also have regard to his earlier correspondence. Mr Smith filed written correspondence related to the examination objections dated 23 October 2019 and 1 September 2019. On 23 January 2020 I wrote to Mr Smith regarding issues arising from his submissions, and invited him to provide further information. Further information was provided on 16 March 2020. I have had regard to all of this information. Other correspondence relating to extensions of time does not appear to be relevant to the present decision. I note that there are also records of telephone conversations, but they do not contain information in addition to the written correspondence.
Mr Smith's written submissions are directed to the issue of manner of manufacture at length, but only briefly touch upon the allowability of the amendments and the novelty and innovative step grounds. I do not take this to be an admission that these matters are correctly raised by the examiner. Rather I consider that Mr Smith sees these matters as less important.
Mr Smith's submissions on manner of manufacture draw attention to several aspects of the invention. I will summarise the points that I take from Mr Smith's submissions.
i)The system transforms data
Mr Smith states that the system transforms data (both transaction data and marketing information) within the system. This is apparent in the following submissions:
"a tangible computing system that co-ordinates and transforms data within the system"[22]
"mine is a system of manipulation of data that produces secure encrypted marketing products that are implemented by computer or even printed and used offline and are of substantial technical benefit to the bank transactional data and review computing system."[23]
"my computing system is patentable on the grounds of manipulating data which has desired technical steps outlined in the patent to improve the product result."[24]
[22] Submissions dated 23 October 2019.
[23] Submissions dated 19 December 2019.
[24] Submissions dated 23 October 2019.
As already noted, the way in which the system encrypts data is not set out in the specification as filed.
ii)The system produces ecoins
Mr Smith also points out that the system produces ecoins:
"Ecoins are a tangible product that are both again printable and transferable on or offline as vouchers or rewards and are novel … They also provide economic benefit and gain"[25]
[25] Submissions dated 23 October 2019.
I note that ecoins are not a feature of all claims.
iii)The system can be hardware, software, or a combination of both
Mr Smith has stated that his invention can be implemented by hardware, software or a combination of both.[26]
iv)The new and useful effect is the marketing product, and the prevention of bank fraud
[26] Submissions dated 19 December 2019.

Mr Smith said the 'review' product is stored as a unique code that cannot be fraudulently edited within the computing system. He indicated that the key is the use of the scrambler:
"the improvement of functionality comes with the actual scrambler (or data fuser as later described in this letter for lack of understanding of what a scrambler is or originally the 'social analyser' as described on the original patent, which is all part of the computing system). Again to reiterate, the second improvement is also described as prevention of bank fraud or transactional data that can not be altered or accessed fraudulently."[27]
v)The scrambler
[27] Submissions dated 19 December 2019.
There is emphasis throughout Mr Smith's submissions on the feature of a scrambler, which it seems can also be referred to as a data fuser:
"the scrambler, for lack of a better word, relabelled as 'data fuser' "[28]
"both the scrambler/data fuser and code generator for transactional data are elements which improve the functionality of the computer"[29]
"[w]ithout them there is no inbuilt system that prevents bank fraud and other external 'readers' or hackers of your information"[30]
[28] Submissions dated 19 December 2019.
[29] Submissions dated 19 December 2019.
[30] Submissions dated 19 December 2019.
It is clear that Mr Smith regards the scrambler as a key feature of the invention:
"The technical advancement is the scrambler which has never been implemented in computers or systems due to data being used by external companies and other various communication to other devices and software."[31]
"the difference is in the technical functionality of the scrambler and how this communicates and interacts with the interface and other devices in a more secure way"[32]
[31] Submissions dated 16 March 2020.
[32] Submissions dated 16 March 2020.
The way in which the scrambler functions includes mixing banking and marketing data, and is critical to providing security:
"my invention mixes the data relatable to the purchase, client interest data and interchangeable data that can coincide with weather or other specified daily events. This creates a unique marketing product using transformed data with already described improvements as above."[33]
"both the scrambler/data fuser and code generator for transactional data are elements which improve the functionality of the computer. Without them there is no inbuilt system that prevents bank fraud and other external 'readers' or hackers of your information."[34]
"you can not improve banking security without posting the reviews because of the way the scrambler and encryption is used to facilitate and store this sharing of transformed data"[35]
[33] Submissions dated 19 December 2019.
[34] Submissions dated 19 December 2019.
[35] Submissions dated 16 March 2020.
CONSIDERATION
There are numerous issues raised by this innovation patent. The issue of central importance is whether or not the claims are directed to a manner of manufacture. However, it is logical to first consider whether the amendments are allowable so that I understand the form of the specification that I am considering. I will then consider the grounds of manner of manufacture, novelty and innovative step.
Allowability of the amendments
I consider that Mr Smith thought that he could supplement his specification by amendment as a means to overcome objections raised by the examiner. However, amendments can only be allowed if they meet the requirements set out in section 102(1) of the Act, which states:
(1) An amendment of a complete specification is not allowable if, as a result of the amendment, the specification would claim or disclose matter that extends beyond that disclosed in the following documents taken together:
(a) the complete specification as filed;
(b) other prescribed documents (if any).
The Explanatory Memorandum, Intellectual Property Laws Amendment (Raising the Bar) Bill 2011 makes it clear that section 102 as amended is intended to prevent the addition of new matter to the description:
"The item introduces a provision preventing amendment of a complete patent specification after filing to add new matter that would go beyond the disclosure contained in the specification at its filing date. An applicant would not be able to amend the specification to add any material that the hypothetical skilled person could not directly derive by reading the information in the specification as filed."[36]
[36] Item 29, at page 61.
Recently this provision was considered in Commonwealth Scientific and Industrial Research Organisation v BASF Plant Science GmbH[37] (CSIRO). Beach J considered a number of decisions of United Kingdom courts, and saw no reason not to follow them.[38] Among those cases is Richardson-Vicks Inc’s Patent,[39] where Jacob J stated:
"I think the test of added matter is whether a skilled man would, upon looking at the amended specification, learn anything about the invention which he could not learn from the unamended specification."[40]
[37] [2020] FCA 328.
[38] CSIRO at [214].
[39] [1995] RPC568.
[40] at 576.
Referring to European Central Bank v Document Security Systems Inc,[41] Beach J noted that he should compare the specification as proposed to be amended with its unamended form in order to:
"see whether any subject matter relevant to the invention has been added. And this comparison is a strict one. Subject matter will be added 'unless it is clearly and unambiguously disclosed in the application as filed.' Moreover, it is appropriate to consider what has been disclosed both explicitly and implicitly."[42]
[41] [2007] EWHC 600 (Pat).
[42] CSIRO at [203].
What is clearly and unambiguously disclosed does not extend to matter that would have been obvious to the reader of the specification:
"what I am considering and applying is not an obviousness test. As Kitchen J described it, a patentee 'is not permitted to add matter by amendment which would have been obvious to the skilled person from the application.' "[43]
[43] CSIRO at [203].
It follows that in the present case Mr Smith cannot add new matter to the specification as filed. In assessing whether an amendment adds new matter it is necessary to consider what was clearly and unambiguously disclosed and not what might have been considered an obvious extension of the disclosure. In the present case the specification as filed contained little detail apart from the Figures as they stood at that time. The amendments seek to add a number of integers to the description that were not present in the specification as filed. While these integers are not inconsistent with the invention as described in the specification as filed, and with the benefit of hindsight are an adjustment of the description consistent with the invention as Mr Smith described it in his correspondence of 16 March 2020, the question is whether these integers were foreshadowed in the specification as filed. The examiner noted that the amendments insert a reference to a scrambler, which was not mentioned in the specification as filed. Additionally, Mr Smith sought to insert circuitry diagrams relating to "the review system that transforms purchase data to become a tangible marketing product and as a result is encrypted".[44] The circuitry appears in Figure 6 as proposed to be amended. I cannot see how this detail could be directly derived from the specification as filed. I agree that the amendments would insert new matter in relation to the scrambler, and consequently the amendments are not allowable as the disclosure of these features is as a result of the amendment.[45]
[44] Submissions dated 23 October 2019.
[45] The meaning of "as a result of the amendment" is as set out in RGC Mineral Sands Ltd v Wimmera Industrial Minerals Pty Ltd [1998] FCA 1358, 42 IPR 353 at page 360.
The amendments add similar features to the claims. Scrambling transaction data with marketing data and inbuilt encryption are explicit features of claim 1 as proposed to be amended. As already noted, claim 1 as filed was very broad and defined a system characterised simply by posting reviews. Encryption was implicit due the environment of online banking. It follows that it is reasonable to conclude that the claims as filed included the possibility of these features. It is likely that any deficiencies with regard to the claims do not arise as a result of the amendments to the claims.[46]
[46] Deficiencies that do not arise "as a result of the amendment" are not objectionable under section 102(1): Apotex Pty Ltd v Les Laboratoires Servier (No 2) [2009] FCA 1019, 83 IPR 42 at [28].
While the amendments as a whole are not allowable, in the remainder of this decision I will consider the claims as most recently proposed to be amended as that aspect of the amendment would be allowable if progressed separately.
Manner of manufacture
Section 18(1A) of the Act relevantly reads:
Subject to subsections (2) and (3), an invention is a patentable invention for the purposes of an innovation patent if the invention, so far as claimed in any claim:
(a) is a manner of manufacture within the meaning of section 6 of the Statute of Monopolies;
The classic definition of "manner of manufacture" is set out in National Research Development Corporation v Commissioner of Patents[47] (NRDC):
"The right question is: 'Is this a proper subject of letters patent according to the principles which have been developed for the application of s. 6 of the Statute of Monopolies?' "[48]
[47] [1959] HCA 67, 102 CLR 252.
[48] NRDC at 269, [14].
The High Court then went on to set out a test in terms relevant to the facts of that case:
"a process, to fall within the limits of patentability which the context of the Statute of Monopolies has supplied, must be one that offers some advantage which is material, in the sense that the process belongs to a useful art as distinct from a fine art ... that its value to the country is in the field of economic endeavour."[49]
and
"The effect produced by the appellant's method exhibits the two essential qualities upon which 'product' and 'vendible' seem designed to insist. It is a 'product' because it consists in an artificially created state of affairs, discernible by observing over a period the growth of weeds and crops respectively on sown land on which the method has been put into practice. And the significance of the product is economic; for it provides a remarkable advantage, indeed to the lay mind a sensational advantage, for one of the most elemental activities by which man has served his material needs, the cultivation of the soil for the production of its fruits."[50]
[49] NRDC at 275, [22].
[50] NRDC at 277, [25].
However, the High Court was not laying down a precise formulation that can be applied unthinkingly:
"This Court in NRDC did not prescribe a well-defined pathway for the development of the concept of 'manner of manufacture' in its application to unimagined technologies with unimagined characteristics and implications. Rather, it authorised a case-by-case methodology."[51]
[51] D'Arcy v Myriad Genetics Inc [2015] HCA 35, 258 CLR 334 (Myriad) at [23].
That case-by-case approach must have regard to the substance of the claimed invention, not simply the form of the claim.[52] The point is made most succinctly by Gageler and Nettle JJ in the Myriad case:
"Whatever words have been used, the matter must be looked at as one of substance and effect must be given to the true nature of the claim."[53]
[52] Myriad at [6] and [88].
[53] Myriad at [144].
In Commissioner of Patents v RPL Central Pty Ltd[54] (RPL) the Full Court of the Federal Court said the same thing in the context of a computer implemented invention:
"A claimed invention must be examined to ascertain whether it is in substance a scheme or plan or whether it can broadly be described as an improvement in computer technology. The basis for the analysis starts with the fact that a business method, or mere scheme, is not, per se, patentable. The fact that it is a scheme or business method does not exclude it from properly being the subject of letters patent, but it must be more than that. There must be more than an abstract idea; it must involve the creation of an artificial state of affairs where the computer is integral to the invention, rather than a mere tool in which the invention is performed. Where the claimed invention is to a computerised business method, the invention must lie in that computerisation. It is not a patentable invention simply to 'put' a business method 'into' a computer to implement the business method using the computer for its well- known and understood functions.
Is the mere implementation of an abstract idea in a well-known machine sufficient to render patentable subject matter? Is the artificial effect that arises, because information is stored in RAM and there is communication over the Internet or wifi, sufficient? Does any physical effect give rise to a manner of manufacture? Are the mere presence of an artificial effect and economic utility, without more, sufficient to determine manner of manufacture?
It is not a question of stating precise guidelines but of deciding, in each case, whether the claimed invention, as a matter of substance not form, is properly the subject of a patent."[55]
[54] [2015] FCAFC 177, 115 IPR 461.
[55] RPL at [96] – [98].
The Full Court then went on to discuss a range of considerations that are helpful in the technology of the RPL case. The Full Court in Encompass Pty Ltd v InfoTrack Pty Ltd[56] (Encompass) did not find it necessary to revisit the correctness of RPL. These recent Full Court cases have focused upon the computer's role to ascertain whether the claimed invention involved "something more" than an abstract idea or scheme.[57]
[56] [2019] FCAFC 161 at [7].
[57] Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150, 109 IPR 364 at [116], RPL at [96] and Encompass at [99]-[102].
In Aristocrat Technologies Australia Pty Limited[58] I summarised the considerations arising from RPL as:
[58] [2016] APO 49, 123 IPR 341.
"I conclude that it is relevant to consider a range of matters. Without seeking to be exhaustive, these include:
·there must be more than an abstract idea, mere scheme or mere intellectual information;
·is the contribution of the claimed invention technical in nature;
·does the invention solve a technical problem within the computer or outside the computer;
·does the invention result in improvement in the functioning of the computer, irrespective of the data being processed;
·does the application of the method produce a practical and useful result;
·can it be broadly described as an improvement in computer technology;
·does the method merely require generic computer implementation;
·is the computer merely an intermediary or tool for performing the method while adding nothing of substance to the idea;
·is there ingenuity in the way in which the computer is utilised;
·does the invention involve steps that are foreign to the normal use of computers; and
·does the invention lie in the generation, presentation or arrangement of intellectual information."
I repeat that in considering these issues I am considering the invention as described and the claims as proposed to be amended.
What is the subject matter of the claims
The invention defined by claim 1 as proposed to be amended is a computing system used in online banking. This is a computing technology, so the considerations in RPL and Encompass are relevant. The system scrambles and encrypts data, but there is no indication that this involves any new technology (at least in so far as the invention is claimed and described). The only feature that is emphasised, both in the claims and the description, is the business review aspect of the system.
What is the contribution to the claimed invention
Mr Smith has stated that the claimed invention "co-ordinates and transforms data within the system."[59] I believe that this is a reference to the scrambler. The scrambling function appears in the invention as claimed, but the operation of the scrambler is not described in the specification as filed. This absence of detail suggests that the scrambler is not a contribution to the claimed invention.
[59] Submissions dated 24 October 2019.
The specification as filed makes reference to marketing strategies and incentives for providing reviews. This information is encrypted and secure according to the specification as filed.[60] This is implicit in the claim. The ability to provide business review information within an online banking platform seems to be at least part of the contribution to the invention.
[60] Specification as filed at page 2.
Does the invention as claimed solve a technical problem in the computer
The provision of the capability to provide business review within an online banking platform appears to be a design choice rather than a technical advance.
The provision of scrambling, assuming that it might be a contribution to the claimed invention, is a technical step. However, the effect of scrambling (over and above the effect of encryption) is not apparent. The specification as filed, and the submissions provided by Mr Smith, do not explain what is achieved by the scrambling. The mere assertion of an unspecified advantage is not sufficient. I am unable to determine whether scrambling solves a technical problem in the computer.
Is there an improvement in the computer
The computer is only improved to the extent that it can now carry out a function that it could not do previously. This in itself is not a relevant improvement when considering manner of manufacture.[61]
[61] Mere implementation on a computer is not sufficient: Repipe Pty Ltd v Commissioner of Patents [2019] FCA 1956 at [37], [44] – [47].
Is there a practical and useful result
The invention allows a user to provide a business review from within the online banking platform, retaining the security advantages that flow from the use of that platform. This is a useful result.
Conclusion
On balance the substance of the invention lies in the concept of including a business review within an online banking platform. Marketing concepts are not a manner of manufacture.
I do not consider that the concept of scrambling is part of the substance of this invention. It is possible that the balance of considerations could be different if the specification were differently drafted. I should add that if the scrambler is already part of the common general knowledge then merely adding a description of it may not assist.
It follows that it is not necessary to consider whether the invention is novel and innovative. However, it may be of assistance to Mr Smith for me to provide a quick discussion of these matters.
Novelty
Section 18(1A) of the Act relevantly reads:
Subject to subsections (2) and (3), an invention is a patentable invention for the purposes of an innovation patent if the invention, so far as claimed in any claim:
…
(b) when compared with the prior art base as it existed before the priority date of that claim:
(i) is novel; and
(ii) involves an innovative step;
It is well established that the general test for novelty is the reverse infringement test. The classic formulation of this test is that given by Aicken J:
"The basic test for anticipation or want of novelty is the same as that for infringement and generally one can properly ask oneself whether the alleged anticipation would, if the patent were valid, constitute an infringement."[62]
[62] Meyers Taylor Pty Ltd v Vicarr Industries Ltd [1977] HCA 19, 137 CLR 228 at 235.
This test is satisfied if the alleged anticipation discloses all the essential features of the invention claimed.[63] Australian Courts have followed the principles established in General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd[64] where it was stated:
"If the prior inventor's publication contains a clear description of, or clear instructions to do or make, something that would infringe the patentee's claim if carried out after the grant of the patentee's patent, the patentee's claim will have been shown to lack the necessary novelty, that is to say, it will have been anticipated. The prior inventor, however, and the patentee may have approached the same device from different starting points and may for this reason, or it may be for other reasons, have so described their devices that it cannot be immediately discerned from a reading of the language which they have respectively used that they have discovered in truth the same device; but if carrying out the directions contained in the prior inventor's publication will inevitably result in something being made or done which, if the patentee's patent were valid, would constitute an infringement of the patentee's claim, this circumstance demonstrates that the patentee's claim has in fact been anticipated.
If, on the other hand, the prior publication contains a direction which is capable of being carried out in a manner which would infringe the patentee's claim, but would be at least as likely to be carried out in a way which would not do so, the patentee's claim will not have been anticipated, although it may fail on the ground of obviousness. To anticipate the patentee's claim the prior publication must contain clear and unmistakeable directions to do what the patentee claims to have invented: Flour Oxidizing Co. Ltd. v. Carr & Co. Ltd. ((1908) 25 R.P.C. 428 at 457, line 34, approved in B.T.H. Co. Ltd. v. Metropolitan Vickers Electrical Co. Ltd. (1928) 45 R.P.C. I at 24, line I). A signpost, however clear, upon the road to the patentee's invention will not suffice. The prior inventor must be clearly shown to have planted his flag at the precise destination before the patentee."
[63] Nicaro Holdings Pty Ltd v Martin Engineering Company [1990] FCA 40, 16 IPR 545 at 549.
[64] [1972] RPC 457 at 485 – 486.

More recently the Full Federal Court in Novozymes A/S v Danisco A/S[65] stated that a prior disclosure will only invalidate a claim if by carrying out the instructions therein, the skilled addressee would, rather than could, have arrived at the claimed invention:
"Although General Tire is part of Australian jurisprudence in the relevant area, it must be accommodated to the terms of s 7(1) of the Patents Act, upon which everything depends. That is to say, the inevitability of outcome to which GeneralTire refers must be such as would arise from recourse to the information referred to in the section. At the expense of repetition, it is here useful to remind ourselves of what the Court of Appeal said in that case ([1972] RPC at 485-486):
… if carrying out the directions contained in the prior inventor's publication will inevitably result in something being made or done which, if the patentee's patent were valid, would constitute an infringement of the patentee's claim, this circumstance demonstrates that the patentee's claim has in fact been anticipated.
[Emphasis added]
This proposition is explicitly hypothetical. It is concerned not with what has happened or with what could have happened, but with what would have happened if the directions were carried out. As such, the proposition is in complete harmony with s 7(1), and with every other presently relevant aspect of the jurisprudence in this area. It is not the doing of it, nor even the ability to do it, that amounts to anticipation: it is the content of the information. If the information contains directions which, if carried out, would constitute an infringement of the patent in suit, the invention under the latter is not novel."
[65] [2013] FCAFC 6, 99 IPR 417 at [177].
The objection of lack of novelty is based on two patent documents: US 2011/0213703 and US 2011/0213724.
US 2011/0213703
US 2011/0213703 (the '703 citation) states on its face that it was published on 1 September 2011.[66] The '703 citation is titled "Individual Customer Community Hub", and its content can be summarised as:
"The individual community hub provides individual customers the ability to access information related to events, businesses, offers, and activities that are a part of the individual customer's local community through the individual customer's online banking account. The individual customer can search, identify, receive offers or discounts from, review, etc. the events, businesses, and activities in which the individual customer might be interested. The information provided to the individual customer may be based on the customer's local community (e.g. geographic location), as well as the individual customer's transaction information captured by the bank each time the individual customer makes a purchase or completes a transaction through the bank. The information may also be based on information obtained from the bank's relationship with local businesses and/or other individual customers. In this way an individual customer's online banking account becomes the individual customer's source of local personalized community information."[67]
[66] Mr Smith stated in correspondence dated 1 September 2019 that no such document existed when he carried out research in December 2018. I accept that Mr Smith did not locate the document in his searching, but it does not follow that the citation was not published in 2011.
[67] Abstract of '703.
The customer accesses the platform as part of the bank's online banking:
"The individual customer can log onto the customer's online banking account, select a link to the community hub section of the online banking system and view information about local businesses that are also customers of the bank and/or local event information taking place in the individual customer's local community. In one embodiment, the information provided to the individual customer is based on the customer's local community, such as the individual customer's geographic location, as well as the individual customer's transaction information captured by the bank each time the individual customer makes a purchase or completes a transaction through the bank."[68]
[68] '703 at [0008].
The '703 citation then discusses the business review aspect of the platform:
"The business review application 28 generally provides a customer with a bank-hosted business review platform. The review forum provided by the business review application 28 can provide an advertising and feedback service for the bank's business customers 8 and provide a rating, review, feedback, and recommendation service for the bank's individual customers 6."[69]
[69] '703 at [0082].
Users can receive offers from businesses:
"the individual customer 6 can select an event or offer in which the individual customer 6 is interested"[70]
[70] '703 at [0106].
The '703 citation does not explicitly refer to encrypting the information. However, as the citation relates to online banking and the business review application is accessed from within the bank's online platform it is inevitable that the business review application has the same security as the remainder of the bank's online platform. In other words, it is inevitable that the business review would be encrypted. The '703 citation also does not mention scrambling marketing and banking information. As the claims include a form of the invention in which scrambling and encryption are synonymous, there is a lack of novelty in light of the '703 citation.
US 2011/0213724
US 2011/0213724 (the '724 citation) states on its face that it was published on 1 September 2011.[71] The '724 citation is titled "Community Hub Review", and its content is similar to that of the '703 citation. A summary of the content of the '724 citation is:
"The business review application provides a customer with a bank-hosted business review platform that provides an advertising and feedback service for the bank's business customers and provides a rating, review, feedback, and recommendation service for the bank's individual and business customers. Thus, the bank's customers can rate and review the bank's business customers. The bank uses its authentication systems used by its customers to access online banking services to authenticate the identity of the customer creating a business review in the business review platform. In some embodiments, the business review application only permits its customers to make one review of a business within a certain period of time or one review after a transaction with that business shows up in the customer's transaction information maintained by the bank. In this way, the bank can host a review platform that is much more accurate and trust-worthy than traditional business review platforms."[72]
[71] Mr Smith stated in correspondence dated 1 September 2019 that no such document existed when he carried out research in December 2018. I accept that Mr Smith did not locate the document in his searching, but it does not follow that the citation was not published in 2011.
[72] Abstract of '724.
The business review aspect of the platform is explained as follows:
"The business review application 28 generally provides a customer with a bank-hosted business review platform. The review forum provided by the business review application 28 can provide an advertising and feedback service for the bank's business customers 8 and provide a rating, review, feedback, and recommendation service for the bank's individual customers 6. In general, the business review application 28 allows the bank's individual customers to rate and review the bank's business customers or, in some embodiments, both customer and non-customer businesses. In some such embodiments, the bank uses its authentication systems used by its customers to access conventional online banking services to also authenticate the identity of the customer creating a business review in the business review platform. Furthermore, in some embodiments, the business review application 28 only permits its customers to make one review of a business within a certain period of time or one review after a transaction with that business shows up in the customer's transaction information maintained by the bank. In this way, the bank can host a review platform that is much more accurate and trust-worthy than traditional business review platforms. The business review platform may be accessible by bank customers only or, alternatively, may be provided to the public generally. In one embodiment, access to the business review platform is free for the bank's customers but requires payment of a fee for non-bank customers."[73]
[73] '724 at [0075].
As the citation relates to online banking and the business review application is accessed from within the bank's online platform it is inevitable that the business review application has the same security as the remainder of the bank's online platform. In other words, it is inevitable that the business review would be encrypted. The '724 citation also does not mention scrambling marketing and banking information. As the claims include a form of the invention in which scrambling and encryption are synonymous, there is a lack of novelty in light of the '724 citation.
Innovative step
Innovative step is a matter specified in section 18(1A) of the Act. An invention is taken to involve an innovative step when compared to the prior art base:
unless the invention would, to a person skilled in the relevant art, in the light of the common general knowledge as it existed (whether in or out of the patent area) before the priority date of the relevant claim, only vary from the kinds of information set out in subsection (5) in ways that make no substantial contribution to the working of the invention[74]
[74] Section 7(4) of the Act.
The decision of the Full Court in Dura-Post (Aust) Pty Ltd v Delnorth Pty Ltd[75] confirmed the approach of Gyles J in Delnorth Pty Ltd v Dura-Post (Aust) Pty Ltd,[76] who at first instance made a clear distinction between an innovative step and an inventive step:
"There is no need to search for some particular advantage in the art to be described as an innovative step which governs consideration of each claim. The first step is to compare the invention as claimed in each claim with the prior art base and determine the difference or differences. The next step is to look at those differences through the eyes of a person skilled in the relevant art in the light of common general knowledge as it existed in Australia before the priority date and ask whether the invention as claimed varies from the kinds of information set out in s7(5) in ways that make no substantial contribution to the working of the invention ...
The phrase ‘no substantial contribution to the working of the invention’ involves quite a different kind of judgement from that involved in determining whether there is an inventive step. Obviousness does not come into the issue ... Indeed the proper consideration of s 7(4) is liable to be impeded by traditional thinking about obviousness."
[75] [2009] FCAFC 81, 81 IPR 480.
[76] [2008] FCA 1225, 78 IPR 463 at [52] – [53].
Gyles J at [61] also provided an indication as to what is encompassed by the requirement of a 'substantial' contribution:
"In my view the provenance of the phrase 'make no substantial contribution to the working of the invention' indicates that 'substantial' in this context means 'real' or 'of substance' as contrasted with distinctions without real difference".[77]
[77] at [61].
The Patent Examiner’s Manual of Practice and Procedure identifies some questions which can assist in determining whether there is an innovative step:
a)Does the difference identified between the invention and the prior art convey an advantage to the invention?
b)Does the difference provide a technical or functional contribution to the invention?
c)Is the difference a significant aspect of the operation of the invention?
In the present case I have found that there is a lack novelty, so there is no difference over the prior art. A lack of innovative step follows. Alternatively if the claims were differently drafted so that there is a separate scrambling step, then the difference between the invention as claimed and the information in the citations would appear to lie in that scrambling. If the scrambling makes a substantial contribution to the working of the invention then there would be an innovative step.
Other matters raised by Mr Smith
Mr Smith's submissions make reference to a range of personal circumstances. I will not repeat those matters out of respect for Mr Smith's privacy. Even if all of these matters are accurately reported, they are outside the scope of the Act and cannot alter the fundamental questions of whether the amendments are allowable and whether the invention is a manner of manufacture. I have already addressed the matters that are relevant to the grounds of novelty and innovative step.
Conclusion
I am satisfied that the invention as claimed is not a manner of manufacture, is not novel and does not have an innovative step. I am also satisfied that these grounds of objection cannot be overcome without adding new matter to the specification. Consequently any such amendment would not be allowable. It follows that I am not satisfied that the innovation patent complies with section 101E(1), and a certificate of examination cannot be issued. Pursuant to section 101F(1) I must revoke the patent.
Next steps
It appears that Mr Smith may have developed a scrambler that is separate to encryption as part of the work that led up to the present application. The Examiner has not assessed whether or not the scrambler is novel and innovative as it is not an allowable amendment to insert details of the scrambler. It is possible for a new application to be filed (possibly as a divisional) containing details of the scrambler in that specification as filed. However, whether it is a useful course of action to file a new application is a matter for Mr Smith to consider, and I encourage him to seek the services of a patent attorney or similar professional before deciding on a course of action. To allow Mr Smith to file a divisional application (if necessary) I will defer revoking the patent until three months after the date of this decision.
In the event that Mr Smith wishes to challenge this decision, section 101F(4) of the Act provides an avenue of appeal to the Federal Court.
Dr S.D. Barker
Deputy Commissioner of Patents
FIGURE 1 OF THE SPECIFICATION AS FILED