Invention Pathways Pty Ltd

[2010] APO 10

IP AUSTRALIA

AUSTRALIAN PATENT OFFICE

Invention Pathways Pty Ltd [2010] APO 10

Patent Application:        2009201212

Title:METHOD FOR COMMERCIALISING INVENTIONS

Patent Applicant:           INVENTION PATHWAYS PTY LTD

Delegate:P.M. SPANN - DEPUTY COMMISSIONER OF PATENTS

Decision Date:               21 JULY 2010

Hearing Dates:               22 APRIL 2010  CANBERRA

Catchwords:                  PATENTS – examiner’s objections - application for an invention specific commercialisation system to facilitate success of inventions - business system or method - whether a manner of manufacture - whether collecting information into a computer implemented electronically fillable checklist meets requirement for an artificially created state of affairs - subject matter of a claim considered as a whole must fall within the scope of patentable subject matter - physical effect identified peripheral and subordinate to the substance of the claimed method - whether obvious - whether prior art ascertained - claimed method obvious - application refused

Representation:              For the Applicant:

Mr Gourley and Mr Lewis, Patent Attorneys, Cullens Brisbane

IP AUSTRALIA

AUSTRALIAN PATENT OFFICE

Patent Application:        2009201212

Title:METHOD FOR COMMERCIALISING INVENTIONS

Patent Applicant:           INVENTION PATHWAYS PTY LTD

DECISION

DelegateP.M. SPANN - DEPUTY COMMISSIONER OF PATENTS

Date: 21 JULY 2010

Decision:Patent application 2009201212 is refused pursuant to subsection 49(2) of the Act.

REASONS FOR DECISION

1. This matter concerns examiner’s objections in respect of the application and whether I should exercise the Commissioner’s power to refuse the application under subsection 49(2) of the Patents Act 1990.

Background

1. Patent application 2009201212 was filed as a divisional application on 27 March 2009. The parent application 2008201680 was filed as a standard complete application on 16 April 2008. It was the subject of six adverse examination reports and, having not obtained acceptance under subsection 49(1) of the Act, lapsed at the end of the period prescribed for that purpose. The present application relates to the same general invention but includes additional descriptive matter and substantially revised claims. Nevertheless three adverse examination reports have issued including similar objections of lack of patentable subject matter and obviousness as raised on the parent. No amendments to the claims and description of the complete specification have been proposed in response to the examiner’s objections.

The patent specification

1. The subject matter of the application is somewhat unusual being a method for commercialising inventions that includes the step of applying for patent protection.  The specification indicates that the method is intended to facilitate the uptake of commercialisation of inventions taking into account the restricted timeframe to file for intellectual property rights and the effect of automatic patent publication. The latter is a reference to the practice in most jurisdictions of publishing patent applications 18 months after their earliest priority date.

1. From the detailed description it becomes clear that what is intended is a commercialisation planning process, called an invention specific commercialisation program (ISCP), that supports particular commercialisation or related business activities and promotes their completion within a timeline that is related to particular intellectual property (IP) treaties. The benefit of this is said to be to ensure that all commercialisation activities are completed in time to maximise the opportunities for the invention within the time constraints placed by the IP rights rules. Beginning on page 25 is a table said to reflect an illustrative ISCP that includes check lists and related information for 16 separate commercialisation steps or activities. This may appear in a planning software package which may have a number of other features including reminder and reporting functions. Figure 1 is a flow diagram including the flow between the 16 commercialisation steps and a timeline that appears to relate to patent applications filed under the Patent Cooperation Treaty (PCT). The remaining figures 2 - 4 appear to relate to specific commercialisation steps.

1. The claims of the application are as follows:

1. An invention specific commercialization system to facilitate success of inventions, the system including the steps of:

a) applying for patent protection for the invention in a country which is party to the Paris Convention,

b) conducting a review of specific commercialization process required by the invention,

c) preparing a research and development plan, testing the business dynamics of the invention,

d) conducting prototype testing, developing a prototype cost/benefit analysis,

e) determining product positioning and packaging,

f) conducting a manufacturing checklist,

g) entry of the information collected in steps a) to f) into an electronically fillable checklist having a prescribed time limit for each step to form a commercial entry strategy (CES) with a number of sub-steps, the CES prepared on the basis that each of the sub-steps in the CES are to be completed by a corresponding deadline, all deadlines falling within 30 months from the earliest priority date of the patent application, the checklist being computer-implemented and stored in computer or human readable format in data storage means and associated with processing means to allow updating of the checklist; and

h) policing compliance with the deadlines for the completion of the sub-steps through the production of reminders based on the prescribed time limits in the checklist to ensure that all sub-steps are completed within the deadlines.

2. An invention specific commercialization system as claimed in claim 1 including provision of the checklist as at least one fillable form.

3. An invention specific commercialization system as claimed in claim 1 or claim 2 wherein the checklist is provided as an electronically fillable form as a part of a computer program.

4. An invention specific commercialization system as claimed in anyone of the preceding claims provided as a computer program executable on a computer.

5. An invention specific commercialization system as claimed in any one of the preceding claims provided as a computer program executable on a network of computers as a website.

6. An invention specific commercialization system as claimed in claim 5 including a user interface with at least one data entry field for updating information in the checklist.

7. An invention specific commercialization system as claimed in anyone of the preceding claims wherein step (a) includes a sub-step of providing a user with a fillable invention disclosure form in order to gather information regarding the invention.

8. An invention specific commercialization system as claimed in claim 7 wherein the invention disclosure form is provided as an electronically fillable form as a part of a computer program.

9. An invention specific commercialization system as claimed in anyone of the preceding claims wherein use of the system is independent of whether the patent sought in step (a) is granted.

10. An invention specific commercialization system to facilitate success of inventions, the program being substantially illustrated in figure 1.

11. An invention specific commercialization system to facilitate success of invention, the program containing at least some of the features illustrated in figure 1.

12. An invention specific commercialization system substantially as hereinbefore described with reference to the figures.

1. A key feature of the claimed invention is that “each of the sub-steps in the CES are to be completed by a corresponding deadline, all deadlines falling within 30 months from the earliest priority date of the patent application”. The Paris Convention mentioned in the claims is a fundamental intellectual property treaty which establishes inter alia a right of priority for an invention first disclosed in a patent application filed in a member state. That right of priority extends to other member states so long as an application for the same invention is made in or for those states within 12 months of the filing of the first application. In that case, the date of filing the first application would generally be the earliest priority date relevant to an invention disclosed in a subsequent application and against which patentability requirements, including for novelty and an inventive step, are assessed.

1. The significance of the 30 month period however arises not in relation to the Paris Convention, but for an international application made under the PCT. This will enjoy the same right of priority deriving from the Paris Convention (PCT Article 8) but has the advantage that it is taken to have the effect of a national application made in each member state on the international filing date. Subsequently, the applicant (with rare exceptions) has at least 30 months to notify selected member states that it wishes to separately pursue and obtain a patent in or for those jurisdictions and to pay relevant national fees. This process is commonly referred to as “entering the national phase”.

1. Of this the specification at page 20 states:

“If an inventor has lodged an application for a patent the clock ticks from that application/priority date and the critical decision making points from then on occur at 11-12 months from priority date, when if a PCT application is lodged, a further critical time is 29-30 months from the priority date. At that stage decisions regarding overseas market commercialisation decisions have to be made or opportunities for IP protection commercial advantage in those markets are lost.”

1. The specification does not suggest any other significance for the 30 month period and therefore while the step of filing an international application under the PCT is not explicitly stated in the claims, I consider it to be inherent. Otherwise any advantage suggested for the claimed method would not be realised and the period merely an arbitrary and meaningless limitation.

10.Turning to other matters, I observe that while the claims of the application have incorporated elements of computer implementation, for example, “an electronically fillable checklist” in claim 1, “an electronically fillable form as a part of a computer program” in claim 3 and “a computer program executable on a network of computers as a website” in claim 5, this was not the case with the invention described in the parent application other than the statement that “The program may be embodied in a computer implemented planning package which may be available over a network of computers or other media such as the internet”. “Program” in this context apparently does not mean a “computer program” but has its more general and broader connotation. I note also that the invention claimed in the parent involved an additional commercialisation step “apply for government funding (if applicable)” and instead of steps g) and h) ends with the step of “preparing a commercial entry strategy including an outline and checklist that all the above steps be conducted within 30 months from the earliest priority date of the patent”.

11.At the hearing I raised a number of issues concerning the construction of the claims. I was informed that while termed a “system”, what was claimed was indeed a method as would normally be understood from the recital of each of the steps a) to h). However it was submitted that while step g), and logically therefore step h), followed the other steps, steps a) to f) were not to be understood as being sequential. This is said to be supported by the statement that the system is invention specific and certainly by figure 1 of the specification which shows a non-sequential arrangement of tasks.

12.A further issue that arises from this is whether all of the steps, in whatever order, should be considered essential to the invention claimed. In this regard the description indicates that “each invention being unique, requires a customised set of steps and tasks for the effective commercialisation therefore not all tasks or steps are necessarily included in a commercialisation plan”. Similarly at the top of page 5 there is an indication that the inventor and/or commercialisation mentor choose a group of sub-steps in the CES checklist. In the broader context what seems to be envisioned therefore is a system that has a number of optional elements that are applied selectively. For example, in a computer implementation of the method the user might be prompted to answer whether a research and development plan is required and if so a specific module is activated to record information about the development of a R&D plan (see step 4 on page 25). This tends to suggest that certain of the steps are not mandatory but are options that flow from the determination at step b) which provides for a specific commercialisation process to be determined. I note in this regard that the steps claimed also do not have direct correlation with the 16 steps described in the preferred embodiment and that the mandating of the claimed steps and their scope is not explained in the patent specification.

13.For its part, the applicant submits that all the steps are essential because they materially affect the way the invention works and that there is a working inter-relationship between them. It is readily apparent to me that steps a), b), g) and h) are indeed essential to the operation of the claimed invention but the mandating of steps c) to f) in the context of step b) and the description appears to be arbitrary unless a person skilled in the art would understand that there is some significance in the mandating of those steps and particularly that they form a fundamental subset to which the step b) of customising the commercialisation process does not apply. I do not have any evidence before me on this point but think this unlikely noting that it is not difficult to envisage circumstances where an invention is considered that does not require a research and development plan, prototype testing or a manufacturing checklist. Therefore if all steps are taken as essential I would consider the claims to lack fair basis and that this could not be remedied simply by a consistory statement which is also inconsistent with what is disclosed as the invention from a consideration of the specification as whole. Nevertheless, given the applicants submissions are made on this basis, I will proceed on the assumption that all the features of claim 1 are essential.

14.As to the interpretation of the terms of steps a) to f), I was informed and accept that they would be well understood by those concerned with the commercialisation of inventions and in a general sense are each part of common general knowledge in the field. The limitation being that amongst those persons there would be different understandings as to the sub-tasks that would be required to complete the particular task mentioned.

15.In relation to step g) it was submitted that an “electronically fillable checklist” was to be understood broadly, and in that case I would understand the term to include, in addition to a specifically programmed software application, many other means by which an updateable checklist could be created electronically. For example, by using many common text editing, word-processing, or spreadsheet applications. Conversely I take the phase “electronically fillable form” in the dependent claims to be limited to its meaning in the ICT field, that is, to involve the application of specific forms technologies or tools.

16.Step g) also requires the entry of information collected in steps a) to f). The difficultly is that steps a) to f) do not explicitly require the collection of information nor is the nature of any information collected apparent from the task itself. It seems that what can be inferred is that each task would appear as a sub-task in the checklist and therefore in the commercial entry strategy (CES). Each task would have a due date consistent with the 30 month limit specified in the claims (this seems apparent from step h) and the information collected therefore, consistent with the notion of a checklist, must at least include whether the task had been completed. Conversely the limitation cannot mean that all information collected by carrying out a step a) to f) is entered because this would be inconsistent with the notion of a checklist and indeed is not comprehended by the invention as described.

17.Step h) provides the policing of deadlines through the production of reminders. There was in aspects of the applicant’s submissions a suggestion that this implied reminders in an electronic system. However, while this is one method of implementation, clearly claim 1 is not limited to any particular means of policing compliance or producing reminders.

18.A number of the dependant claims need to be construed carefully to avoid redundancy and address potential lack of clarity. For example, apart from the feature of an “electronically fillable form” mentioned previously I take references to “a computer program executable on a computer” to be to a program specifically developed for the commercialisation system rather than a general purpose program by which the invention can be implemented. In respect of claim 11, I simply find that it is of indeterminate scope being couched as an omnibus claim but being limited by only “at least some of the features illustrated in figure 1” without any indication of what those features are.

19.I will adopt the forgoing points of construction for the purpose of my decision on patentability. While it will be apparent that I have noticed several matters suggesting non-compliance with s 40, it is unnecessary for me to consider these in detail, or to make a formal finding, given my conclusions below on the requirements of s 18.

The examiner’s objections

20.As indicated previously the examiner has maintained objections on two grounds:

i.   That the application is not considered to be a manner of manufacture within the meaning of paragraph 18(1)(a) of the Act “because the claimed invention is still considered to be a scheme or plan which is not patentable subject matter”. The examiner also indicates “there is no direct involvement of any physical form or effect with the working of the claimed process and steps mentioned above [a to f] as required to be present in light of Grant v Commissioner of Patents (2006) FCAFC 120. Also there is no data transformation in connection with the above mentioned steps of the claimed invention disclosed.”

ii.   That the invention defined in claims 1-12 does not involve an inventive step when the obvious combination of the following documents are read in light of common general knowledge in the art:

D2 US 2003/0149588 A1 (JOAO) 7 August 2003

D3 US 2003/0101073 A1 (VOCK) 29 May 2003

21.The applicant’s attorneys made several detailed submissions concerning these objections during examination, at and subsequent to the hearing. It should be clear however that in considering the application I am not bound by the grounds or reasons relied on by the examiner or by his conclusions. Therefore I raised a number of further matters with the applicant at the hearing and will refer to all relevant submissions in my reasons below. Subsequent to the hearing the applicant also filed evidence in the form of statutory declarations made by the inventors Mr Hurlock and Mr Hone concerning the state of common general knowledge in the field of invention commercialisation and I will also refer to that evidence below in my consideration of the ground of lack of inventive step.

Manner of manufacture

22.Subsection 18(1)(a) of the Act provides that an invention is a patentable invention if, so far as claimed in any claim, it “is a manner of manufacture within the meaning of section 6 of the Statute of Monopolies”. The High Court in National Research and Development Corporation v Commissioner of Patents [1959] 102 CLR 252 has provided a definitive statement of the law in this regard which has been summarised as a requirement for “a mode or manner of achieving an end result which is an artificially created state of affairs of utility in the fields of economic endeavour” (CCOM Pty Ltd v Jiejing [1994] FCA 1168 at [128]). The decision of the High Court has since been applied in a number of cases that reflect the subsequent evolution of technology, particularly in the application of computers, and innovations in the service industries that have tested the distinction between the useful arts (having industrial or commercial or trading character) and the fine arts.

23.For example, computer related inventions in CCOM (apparatus for assembling text in Chinese language characters) and International Business Machines Corporation v Commissioner of Patents [1991] FCA 625 (method and apparatus for producing curves on a computer graphics display) have been found to be patentable. More recently and perhaps most relevant to the present matter are the decision of the Full Federal Court in Grant vCommissioner of Patents [2006] FCAFC 120 and Justice Heerey’s decision in Welcome Real-Time v Catuity Inc [2001] FCA 445. In Grant the Court found that a method of protecting an asset including steps of establishing a trust, making a gift to the trust, making a loan from the trust and securing the loan was not a manner of manufacture. Of particular note is that the Court observed at [26] that “The fact that a method may be called a business method does not prevent it being properly the subject of letters patent; see Catuity at [125]–[126]” and found at [30] that Mr Grant’s method (my emphasis):

“does not produce any artificial state of affairs, in the sense of a concrete, tangible, physical, or observable effect. It is quite different from the invention in Catuity, which was a method involving components such as smart cards and point of sale terminals, and produced tangible results in the writing of new information to the Behaviour file and the printing of the coupon (at [128]). While there was not a physically observable end result in the sense of a tangible product, the invention involved an application of an inventive method where part of the invention was the application and operation of the method in a physical device.”

and at [32]:

“A physical effect in the sense of a concrete effect or phenomenon or manifestation or transformation is required. In NRDC, an artificial effect was physically created on the land. In Catuity and CCOM as in State Street and AT&T, there was a component that was physically affected or a change in state or information in a part of a machine. These can all be regarded as physical effects. By contrast, the alleged invention is a mere scheme, an abstract idea, mere intellectual information, which has never been held to be patentable, despite the existence of such schemes over many years of the development of the principles that apply to manner of manufacture. There is no physical consequence at all.”

24.Accordingly in its conclusion the Court stated:

“Whether the method is properly the subject of letters patent is assessed by applying the principles that have been developed for determining whether a method is a manner of manufacture, irrespective of the area of activity in which the method is to be applied. It has long been accepted that "intellectual information", a mathematical algorithm, mere working directions and a scheme without effect are not patentable. This claim is "intellectual information", mere working directions and a scheme. It is necessary that there be some "useful product", some physical phenomenon or effect resulting from the working of a method for it to be properly the subject of letters patent. That is missing in this case.”

25.The Court had, however, further considered at [33]-[34] that:

“There is a separate issue as to whether quite apart from what might be called its lack of physicality, the alleged invention lies in a realm of human endeavour outside those in which patents may be granted.”

and

“The interpretation and application of the law would not be considered as having, in the words of NRDC, an industrial or commercial or trading character, although without doubt it is an area of economic importance (as are the fine arts) …. Legal advices, schemes, arguments and the like are not a manner of manufacture”

26.It also found that the proposed scheme represented new use of known products (a trust, a gift, a loan and a security) with known properties for which their known properties make them suitable (the creation of a structure of financial rights and obligations or even a change in the person’s legal circumstances) which was not proper subject of letters patent (NRDC; Commissioner of Patents v Microcell Ltd [1958] HCA 58; (1959) 102 CLR 232).

27.Since the decision of Justice Heerey in Catuity is relied on by the applicant it is worth noting for comparison with the present case the invention that was under consideration. Claim 1 of Welcome Real-Time’s patent read as follows:

“1. Method of processing coded information during a purchase or payment operation by a customer, holder of a card (4) with a chip (5), at a trader's, in which the contents of the memory (14) of the chip card are read and a coupon (12) is or is not printed on the basis of the information arising from the contents of said memory, characterized in that, with the memory of the chip card including a first identification file (18), termed the Member file, identifying the card-holding customer, a second accounting file (22), termed the Points file, and a third file (21), termed the Behaviour file, relating to the behaviour of the card holder towards the user trader or traders, a specified algorithmic processing is performed dependent, on the one hand, on the date of the operation and, on the other hand, on the information contained in said files, including the Behaviour file, the algorithmic processing including a step of incrementing or decrementing the Point [sic] file by a predetermined number of points depending on the frequency and/or the nature of first, second or xth visit by the card holder over a time period of specified duration, the coupon is printed only if the number of points contained in the Points file is greater than a specified value then data is written to the Points file, new information is written to the Behaviour file, and said coupon is or is not printed on the basis of the result of said algorithmic processing.”

28.His Honour at [128] was clearly not convinced that a “physically observable effect” was required. However, if so, he indicated that it lay in the writing of new information to the Behaviour file and the printing of the coupon. He also noted what was claimed was not a business method but concerned a method and device involving components such as smart cards and POS terminals in a range of retail businesses.

29.Both Justice Heerey and the Court in Grant referred with apparent approval to the reasoning of the US courts on the analogous subject matter requirements of 35 USC 101 and noted the decision in the United States Court of Appeals for the Federal Circuit in State Street Bank & Trust Co v Signature Financial Group 149 F.3d1368 (1998), 47 USPQ2d 1596 where the Court stated that:

“Today, we hold that the transformation of data, representing discrete dollar amounts, by a machine through a series of mathematical calculations into a final share price, constitutes a practical application of a mathematical algorithm, formula, or calculation, because it produces "a useful, concrete and tangible result" - a final share price momentarily fixed for recording and reporting purposes and even accepted and relied upon by regulatory authorities and in subsequent trades.”

30.The situation in the US has however been unsettled and is the subject of the recent decision of the US Supreme Court in Bilski v Kappos 561 U. S. ___ (2010) (Case No. 08-964). This concerned a method of hedging risk in commodity trading claimed as follows:

“A method for managing the consumption risk costs of a commodity sold by a commodity provider at a fixed price comprising the steps of:
(a) initiating a series of transactions between said commodity provider and consumers of said commodity wherein said consumers purchase said commodity at a fixed rate based upon historical averages, said fixed rate corresponding to a risk position of said consumer;
(b) identifying market participants for said commodity having a counter-risk position to said consumers; and
(c) initiating a series of transactions between said commodity provider and said market participants at a second fixed rate such that said series of market participant transactions balances the risk position of said series of consumer transactions.”

31.The Court decided that while the “machine-or-transformation test” applied by the Court of Appeals for the Federal Circuit in In re Bilski 545 F.3d 943, 959-960 may be a useful and important clue, it was not the sole test for determining patent eligibility of a process under § 101 in the US. Under that test a claimed process was considered patentable if “(1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state of thing”. Similarly the Court did not endorse the State Street test indicated above which had been rejected as determinative by the Federal Circuit. Rather it decided the matter narrowly on the basis that the claimed method was an abstract idea within the Court’s decisions in Gottschalk v Benson 409 U.S. 63, Parker v  Flook 437 U.S. 584 and Diamond v Diehr 450 U.S. 175 and therefore not patentable.

32.In applying the Australian authorities it was essentially suggested to me that once any “physical phenomenon or effect” is identified in relation to one or more steps of a claimed method, here the applicant argued it was the creation of an electronically fillable checklist, there was no scope to ask to what extent that effect was material. It was submitted that a test of materiality was not part of the law in Australia and the Deputy Commissioner in Peter Szabo and Associates Pty Ltd [2005] APO 24 at [46] was incorrect when he expressed the view that “There would need to be some element of materiality in the inter-relationship between that element [an element involving the application of science and technology] and the remaining features of the claim”. Of course the Court in Grant subsequently rejected an equating of the requirement of an artificially created state of affairs with the application of science and technology. However the concern expressed by the Deputy Commissioner seems to be particularly pertinent and is reflected in the example he raised. That is, he did not believe a method of acquiring a house that involved the physical step ‘build the house’ – with all other steps setting out contractual relationships – became, by that step, patentable subject matter. He similarly might have asked whether, if the method involved the creation of a contract document reflecting the contractual relationships, it became patentable if, according to the method, it was prepared using a word processor and was then emailed to the respective parties.

33.It should be remembered that the Court in Grant was considering a claimed business method in which no physical effect could be identified. It is in this context that it stated that “a physical effect in the sense of a concrete effect or phenomenon or manifestation or transformation is required” and was not in my view stating a new principle which, despite the decision of the High Court in NRDC, equates the requirement of an artificially created state of affairs merely with the identification of some “physical effect” in the application of the claimed method. This would at the very least be inconsistent with the Courts statements that confirm that traditional exclusions from the scope of patentable subject matter, including mere schemes, abstract ideas and mere intellectual information, still apply.

34.It is also the case that the distinction between the useful and fine arts has never been held to be determined merely by the presence or absence of a physical step or element. Apart from the clear statement in Grant to this effect at [33], there are clearly many methods lying well within the realm of the fine arts that involve a physical effect or the use or transformation of physical things of which the typing of a novel, application of paint to a canvas, the playing of a musical instrument or even the application of colour and effect to a digital image are examples. Rather the quality of a patentable invention, as the High Court has stated (NRDC at [22] citing Re Virginia-Carolina Chemical Corporation's Application (1958) RPC 35), “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”. In the Virginia-Carolina decision, Justice Lloyd Jacob refers to several criteria that had been adopted over the years as offering a convenient rule of thumb to address this fundamental question. The first was the test of vendibility considered in depth in NRDC. The decision then goes on to provide a useful example of the distinction between fine and useful arts where information or visual content involved in an invention is significant: 

“A second category (printed sheets and the like) was the subject of a Law Officer’s Direction in 1899 upon which Patent Office practice has since been based. In the course of time, the principle that the intellectual or visual content of a paper or card related to the fine and not the applied arts, and was accordingly outside the statutory definition of invention has been extended to cover additional articles e.g., cinematographic films and gramophone records, which differ only in the means whereby information is conveyed to the brain. Even where such information is of importance in describing or defining an operation to be performed on some apparatus it cannot be regarded as part of the performance itself and qualify as a manner of manufacture. If, however the marks as such are described to operate through appropriate means automatically to fulfil a commercial purpose, whether the means are mechanical, optical or electrical, they can properly be regarded as an integral part of a manner of manufacture and as such fit subject matter for patent claims.”

35.A number of the cases conveniently listed in Szabo at [38] further demonstrate that the mere operation of a method on or with physical things or producing changes in physical things, for example the application of ink to paper or the digging of utility conduits beside a roadway, has not been held sufficient for patentability. Rather something more is required such as, in relation to the “ticket cases”, a mechanical purpose in the arrangement of information. In this regard in Re Cooper’s Application for a Patent (1901) 19 RPC 53 at [54] not only is it clear that a mere scheme or plan is not patentable but that “the subject … must be one which results in a material product of some substantial character”. A printed sheet, or its equivalent, distinguished only by the arrangement of information relating to the scheme was not considered sufficient.

36.In Grant the Court clearly was stating a view that without a physical effect in the sense of a “concrete effect or phenomenon or manifestation or transformation” a claimed method could not be considered to be within the realms of patentability but, as I have indicated, I do not take it to suggest that patentability is merely determined on the presence of a physical effect. Rather it clearly must be an effect of such substance or quality that the method considered as a whole is “proper subject of letters patent according to the principles which have been developed for the application of s. 6 of the Statute of Monopolies".

37.The decisions in Grant and Catuity both referenced US law and in Bilski I note the Supreme Court confirmed that in the US the “the prohibition against patenting abstract ideas cannot be circumvented by attempting to limit the use of the formula to a particular technological environment” or adding “insignificant post-solution activity” (Diehr at 191-192). It was said in that decision:

“To hold otherwise would allow a competent draftsman to evade the recognized limitations on the type of subject matter eligible for patent protection. On the other hand, when a claim containing a mathematical formula implements or applies that formula in a structure or process which, when considered as a whole, is performing a function which the patent laws were designed to protect (e. g., transforming or reducing an article to a different state or thing), then the claim satisfies the requirements of 101.”

38.Insignificant post-solution activity has been taken to include steps such as the inputting, storage or displaying of data. I take from this aspect of US law however only confirmation of the unremarkable conclusion that one must consider whether the subject matter of a claim considered as a whole falls within the scope of patentable subject matter and that this cannot be achieved merely by pointing to some physical effect or transformation that, while present in the claimed method, does not alter its fundamental character. In applying the decision in Grant I therefore consider that the “concrete effect or phenomenon or manifestation or transformation” referred to must be one that is significant both in that it is concrete but also that it is central to the purpose or operation of the claimed process or otherwise arises from the combination of steps of the method in a substantial way. Consequently while the step of building a house involves a concrete physical effect it is peripheral to the method of acquiring a house and indeed could hardly be said to characterise the subject matter of the method such that it is considered an artificially created state of affairs. I consider the same to apply to a business scheme implemented in some part by computer and do not believe the patentability of such a method can arise solely from the fact that, in a general sense, it is implemented in or with the assistance of a computer or utilises some part a computer or other physical device in a incidental way.   

39.According to the applicant the useful physical effect produced by the current method is an “electronically fillable checklist”. In that case the method could also be argued to result in a transformation in the memory state of a computer and in the view of the applicant step g) of the claimed method, that is, entry of the information collected in steps a) to f) into an electronically fillable checklist is analogous to the step of “writing of new information to a Behaviour file” in Catuity. It was also said that step h) “policing compliance with the deadlines for the completion of the sub-steps through the production of reminders” is equivalent to “the printing of [a] coupon” but as indicated above, at least in relation to claim 1, that step is not limited to implementation in a computer or necessarily involves any physical step.  

40.Despite what is submitted by the applicant, it is however clear that the substance of the claimed method is a scheme to encourage the completion of certain commercialisation assessments within a specified period that relates to time limits present in the patent system. To the extent that this is facilitated by a computer implemented updateable checklist, its utility lies in the information it holds and conveys to a commercialisation agent about the commercialisation steps a) – g) and particularly whether they have been completed within the specified timeframe of 30 months from the earliest priority date. It seems to me that what is claimed is quite different to the case in Catuity. There the method involved substantial interactions between a smart card and point of sale equipment involving the collection and processing of information with the result of the processing step, that is, new information, written to the smart card memory and used to selectively print a coupon based on information in the Behaviour file.

41.Here unlike Catuity the physical effect identified is in my view peripheral and subordinate to the substance of the claimed method which is a scheme for the commercialisation of inventions. There is no substantive effect produced through the operation of the computer which holds the “electronically fillable checklist” and such an effect does not arise from a synergistic interaction in the operation of the method on the computer or other physical elements. Indeed the collection and presentation of information appears to have no physical consequence other than would arise in the computer with standard software in normal use. Computers and the internet are now as ubiquitous as paper and the postal service as means of collecting, displaying and disseminating information and their use as elements in a business scheme without something more, some substantial physical effect produced in the operation of the method, does not in my view and within the terms of NRDC result in an “artificial state of affairs” any more than were those actions to be taken on paper and therefore in my view the invention claimed in claim 1 does not constitute a manner of manufacture.

42.To the extent that certain of the dependant claims more directly restrict the operation of the method to a computer or computer program, I do not believe that those general limitations substantially change the nature of the subject matter claimed. They simply allow the information referred to in the method to be collected, transmitted or accessed in routine ways. More significantly, the applicant’s submissions would point to the production of reminders (step h) as implying, when implemented in a computer, the production or involvement of a substantial effect. That is, processing information about whether commercialisation steps had been completed together with information relating to deadlines, to produce a reminder. This might, for example result in a notice being presented on a computer screen. While I have considered this distinction carefully, I do not find that this changes the position substantially over that which applies to the use of a computer implemented updateable checklist.

43.The authorities make it clear that in many circumstances a method including the processing of information and the production of a substantive effect in or through a computer or peripheral, if novel and not obvious, will result in patentable subject matter. However the achieving of such an effect in a computer, whether the production of reminders or otherwise, is not the substance of the present method. The policing of compliance and production of reminders while significant in the operation of the applicant’s scheme is, as a physical effect produced in a computer, quite trivial to such an extent that the means of achieving that effect is not specifically described in the specification. In my view the subject matter of the present claims is, when considered as a whole, a scheme for the commercialisation of inventions involving commercialisation steps and policing deadlines wherein the holding of information in an updateable form and production of reminders in a machine is merely a matter of convenience and does not result in a substantive effect that can be correctly considered to result in patentable subject matter. I find therefore that the method as claimed in all claims does not comply with section 18(1)(a).

44.Looked at another way I also find that the claimed method is also not a patentable invention because it merely represents the new use of a known product (a computer with standard software) with known properties for which its known properties makes it suitable (Commissioner of Patents v Microcell Ltd [1958] HCA 58).

Obviousness

45.Under section 7(2) an invention is taken to involve an inventive step when compared to the prior art base unless it would have been obvious to a person skilled in the relevant art in the light of the common general knowledge within Australia either when considered alone or together with information made publicly available anywhere in the world. Section 7(3) restricts the information to that which could be reasonably expected to have been ascertained, understood and regarded as relevant by the skilled person.

46.The law on inventive step was reviewed in Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [2007] HCA 21. The general principles involved were set out at [52] as follows:

“... as a basic premise, obviousness and inventiveness are antitheses and the question is always “is the step taken over the prior art an ‘obvious step’ or an ‘inventive step’”? An inventive step is often an issue “borne out by the evidence of the experts”. A “scintilla of invention” remains sufficient in Australian law to support the validity of a patent. In R D Werner Lockhart J stated that there must be “some difficulty overcome, some barrier crossed”. This is consonant with older authorities in the United Kingdom which recognised that some inventiveness was required to distinguish patentable advances over the prior art from advances which “any fool” could devise. It also accords with the requirement in the United States that for an invention to be “non-obvious” it must be “beyond the skill of the calling”.” (references omitted)

Priority Date

47.The present application was filed as divisional application. If it claims an invention that is fairly based on matter disclosed in the parent application, the relevant priority date is provided by regulations 3.12(1)(c) and (2C). It will be the date that would have been the date had the claim been included in the parent specification. Given the differences between the present application and the parent I have some doubts as to whether the relevant priority date, for at least some of the claims, is the filing date of the parent application 16 April 2008 or the filing date of the present application 27 March 2009. It however does not appear to have a significant bearing on the outcome of this matter so therefore, for current purposes, I will simply proceed on the assumption that the relevant priority date for all claims is 16 April 2008.

The person skilled in the relevant art

48.The question of inventiveness is to be determined through the eyes of the person skilled in the relevant art. As observed in Catnic Components Ltd v Hill & Smith Ltd [1982] RPC 183 at 242, the person skilled in the art is “likely to have a practical interest in the subject matter of [the] invention”. The authorities also recognise that while the skilled person against whose efforts the claimed invention is to be tested may be assumed to be well-versed in the relevant art, such a person must be taken to be non-inventive (see, for example, Minnesota Mining & Manufacturing Co v Beiersdorf (Aust) Pty Ltd [1980] HCA 9; 144 CLR 253 at 293).

49.It is also well established that the hypothetical person may be considered as a team of persons with the requisite skills in the field of the invention (Pfizer Overseas Pharmaceuticals v Eli Lilly and Co [2005] FCAFC 224 at [288]). In the present case and in light of the problem said to be addressed I consider the person skilled in the art to be a person skilled in the field of invention commercialisation working with a person skilled in the operation and development of tools for business administration, including software tools.

Common general knowledge

50.Common general knowledge consists of the background knowledge and experience that is available to all in the relevant art (Minnesota Mining at [292]). The applicant has conceded that the commercialisation steps included in the claimed method are, at a high level, common knowledge among commercialisation agents. I also do not believe that the applicant seriously contests that the development of electronically fillable forms in any guise apparent from the claims, including through a specific application or a web implementation, was anything more than routine and well known at the earliest possible priority date. Nevertheless I considered any person skilled in general administration and certainly developers of business tools, would at the earliest possible priority date have been aware of many means of compiling information, developing schedules and plans and issuing reminders to assist in the successful and timely completion of projects such as the commercialisation of an invention. These would include the use of standard applications such as word processors and spreadsheet or specialist software tools for project management.

51.I would expect that a commercialisation agent would be aware of these possibilities in a general sense, even if not able to implement them without the assistance of a relevant expert. They would also be generally aware of the use of software tools to conduct and record audits of intellectual property in companies and the software used by patent attorneys to manage patent applications including storing information about those rights and the generation of reminders to do things necessary for the obtaining of patents. An example would be reminders concerning the need to enter the “national phase” within the 30 month period referred to in the claims.

52.Also relevant in my view is that at the priority date a commercialisation agent would have knowledge that the packaging of advisory services within a program or methodology, whether or not implemented in software, could be an effective commercial strategy, as was the use of the internet in promoting such packaged services. This is apparent from information that the declarants indicate is the common knowledge of a person in Australia skilled in the art of commercialisation including a) literature available from the Australian Institute of Commercialisation, b) literature available from university commercialisation bodies and c) commercialisation hand books and texts. In relation to the first of these categories, web archives (web.archive.org) suggest a broad range of resources were available from the Institute’s website before the priority date including papers and reports on commercialisation strategies. The website at that time also relevantly included an on-line aid called Ideas2market which included modules of information relating to commercialisation accessed by an innovator answering certain questions. For example the question “Do you understand how a customer would actually use this product or service?” leads to a paragraph of information relevant to that issue. In relation to standard texts on commercialisation activities I have also consulted Intellectual Property Commercialisation – A Business Managers Companion, Paul McGinness, LexisNexis Butterworths Australia 2003 which I note is cited in the recommended reading for a number of university courses in this field.

53.The applicant has principally contested and provides evidence from Mr Hurlock and Mr Hone to the effect that the common general knowledge of commercialisation agents in Australia would not have included a detailed knowledge of the Paris Convention or the Patent Cooperation Treaty and that a commercialisation agent would not have considered that commercialisation should take place within 30 months from the relevant priority date. I do not accept this proposition. The most widely recognised benefit of the PCT system is that a single international filing has the effect of a national filing in every PCT member state and that the cost of proceeding in each jurisdiction (entering the “national phase”), as one must do in each jurisdiction separately, is deferred by at least 30 months. This period is provided explicitly by Articles 22 and 39 of the Treaty.

54.In promoting the benefits of the treaty to users of the patent system, I am aware from direct involvement that it is usual to emphasise that this period is useful in deferring the high cost of patenting while deciding whether the commercial viability of the invention is such as to justify the very significant expense of obtaining patents and, if so, in which jurisdictions. An example of the information provided to users of the system in Australia before the priority date is given in IP Australia’s publication “International Patent Application Kit” which among other benefits states “the PCT system gives you extra time to reassess the value of the invention and its export potential before committing to high costs”. I am aware also that the period is indeed used for this purpose by many users of the patent system noting that the cost of obtaining patents in even a relatively small number of jurisdictions can amount to several hundred thousand dollars.

55.Despite the evidence of the inventors I find it much more likely than not that this basic benefit of the PCT system would be known to any competent advisor on the commercialisation of inventions. As indicated above the declarants say commercialisation of an invention within 30 months from the priority date would not be appreciated. I take this to mean completion of all commercialisation tasks but, even if I were to accept this view, it is not strictly what is claimed. Here there are six specific commercialisation steps and I have significant doubt that commercialisation agents or their clients would consider them to amount to commercialisation of an invention. Nevertheless I consider only that a skilled commercialisation agent would understand that of as much of the assessment of the potential of an invention as is possible should be completed before costly decisions are made concerning entry to the “national phase” in a number of jurisdictions.

Prior art information

56.The examiner has maintained objections based on two prior patent documents:

D2: US 2003/0149588 A1 (JOAO) 7 August 2003
D3: US 2003/0101073 A1 (VOCK) 29 May 2003

57.D2 relates to apparatus and a method for providing information for protecting an invention or new idea. Essentially a system is described which requires answers to questions about an invention including about commercialisation to be entered in a computer and stored in a data base. Some of the uses of the information suggested include for protecting, marketing and/or commercialising intellectual property. Paragraph 8 of the description states that:

“The apparatus and method of the present invention can also be utilised to provide information regarding commercialisation strategies and/or activities, information regarding licensing and/or sale strategies and/or activities, and/or information for creating a business or business relationships for commercialising, the invention.”

58.Otherwise, while extremely broad ranging in relation to the type of information stored and its uses, it does not specifically disclose each of the commercialisation steps currently claimed, the production of an electronically fillable checklist, or that commercialisation steps should have a completion deadline within 30 months from the earliest priority date of a relevant patent application.

59.D3 also concerns a system in which information about an invention or pending patent application can be collected on a computer system but focuses on collecting information about persons that may be interested in the invention. A particular use is to collect from those persons information about prior art which can inform commercialisation or submissions required by a patent office.

60.The evidence of the declarants is that commercialisation agents do not routinely conduct patent searches. It is then submitted that it follows that this prior art would not have been ascertained by the relevant skilled person. Furthermore the applicant argues that once evidence has been provided in a matter such as this, the Commissioner has no option but to accept that evidence save that she obtain equivalent expert evidence which contradicts it.

61.The applicant on this point referred me to the recent decision in Delnorth Pty Ltd v Dura-Post (Aust) Pty Ltd (Administrator Appointed) [2010] FCA 465 where at [13] Justice Foster stated:

“in circumstances such as the present where there is an appeal from a decision of the Commissioner of Patents to refuse to grant a patent application but no-one tenders any evidence at the hearing of the appeal in support of any ground of opposition to the grant of the patent or otherwise seeks to oppose the appeal, there is no ground of opposition to the grant of the patent application that the Court can uphold.”

62.That case concerned an appeal of the determination of an opposition under section 59 in which the opponent (a company in administration) was found to have formally withdrawn its opposition, no evidence had been served in the proceedings and the Commissioner did not exercise her right to appear and be heard. This is in no way analogous to the present case nor supports the contention that the Commissioner cannot uphold an objection other than on the basis of evidence that would be admissible in Court. The Commissioner is simply not subject to the formal rules of evidence or the Evidence Act (see Commissioner of Patents v Sherman [2008] FCAFC 182).

63.The position of the Commissioner in relation to evidence has been considered by a full bench of the Federal Court in Commissioner of Patents v Emperor Sports Pty Ltd [2006] FCAFC 26 where the Court stated:

“23 Senior counsel for the Commissioner submitted that the Commissioner can draw legitimate inferences from the material available to her. He said that his Honour erred in referring to a perceived need for the Commissioner to act only on "evidence". In support of this argument senior counsel said that the stages of re-examination and report (ss 97 and 98), like the stages of initial examination and report (s 45) and acceptance (s 49), involved essentially an inquisitorial procedure. This was in contrast to the stages of opposition before grant (ss 59 and 60) and revocation by the Court after grant (s 138), both of which involved an adversarial procedure.

24 It is not necessary to explore the suggested inquisitorial/adversarial dichotomy because we accept the basic proposition put. The Commissioner is an administrative decision-maker equipped with technical expertise. Subject to the rules of natural justice both common law and statutory (see e.g. s 101(2)), he or she is entitled to make use of that expertise, and draw inferences that may be rationally drawn from technical knowledge, including how skilled persons of various descriptions may act in their respective occupations: R v Milk Board; Ex parte Tomkins [1944] VLR 187 at 197, Kalil v Bray [1977] 1 NSWLR 256 at 261, R v Industrial Appeals Court; ex parte Maher [1978] VR 126 at 142, Rodriguez v Telstra Corporation Ltd [2002] FCA 30; (2002) 66 ALD 579 at 585, Tisdall v Health Insurance Commission [2002] FCA 97 at [103]. On an appeal by way of hearing de novo the judge would not be a person credited with technical expertise of his or her own. In such event the judge may be able to take into account conclusions of the Commissioner based on his or her expertise, subject of course to the rights of other parties to call rebutting or supporting evidence.”

and

“32 In considering who is the appropriate skilled person, and what such person might be reasonably expected to do when faced with the problem in hand, sometimes, indeed often, evidence may not be necessary. In many instances the answers will be obvious to the parties, the Commissioner and the Court. In high technology areas for example it will usually be assumed that the relevant skilled person will be familiar with the major professional or academic journals and could reasonably be expected to consult them. No evidence is required.”

64.The Court at [33] citing Minnesota Mining also observed that:

“Nevertheless the statement confirms that when identification of the relevant prior art is in dispute it is necessary to have either evidence or, which amounts to the same thing, reliance by an administrative decision-maker of expertise appropriate to the office.”

65.Thus it is clear that the Commissioner can rely on information available to her other than formal evidence but this is not to say that she can do so without reference to evidence that may be filed by the applicant. Section 49 requires that the Commissioner is satisfied that the inventive step and novelty requirements of section 18(1)(b) are met. This, in contrast to other grounds of objection, indicates an assessment on the balance of probabilities. Hence in considering a question of obviousness, evidence provided by the inventors may be of significant weight and possibly determinative. It however may be insufficient to outweigh other material available to the Commissioner whether that arises from information or expertise at her disposal or in declaratory form.

66.In any event the inventors’ evidence misses the key point. It is not whether or not in general commercialisation experts conduct patent searches as part of their work but whether they would have when faced with and seeking to solve the particular problem the invention is said to address. Commercialisation agents I presume rarely invent and develop their own inventions but, in the event they do, I have very little doubt that they would conduct a review of the prior art including patent documentation. This is because the importance of prior art searching in relation to both the development and patenting of an invention is so well recognised that a commercialisation agent would not fail to do what they would be obliged to advise their clients to do, or have done for them by a skilled searcher.  IP Australia certainly has promoted this use of patent information in Australia for many years, for example in the IP Toolbox product that was provided to many Australian businesses and business advisors from 2001.

67.Accordingly I believe the prior art above referred to by the examiner would have been ascertained by the relevant skilled person.

Consideration of obviousness

68.The problem apparently addressed by the claimed invention is how to ensure clients of commercialisation agents can achieve timely completion of the commercialisation process taking into account the “relatively restricted timeframe to file intellectual property rights (particularly patents) in overseas countries”. It is predicated on a realisation that under the PCT there is an advantage in having commercialisation steps undertaken before the end of 30 months after the priority date of a relevant patent application. As indicated above I consider that this advantage was known and therefore do not find that an inventive step lies in the identification of the problem addressed here.

69.In considering that problem early in April 2008, I believe the hypothetical commercialisation agent in possession of the common knowledge and prior art indicated above would have looked to best practice project management methodologies and their knowledge of innovations in service delivery. Therefore they would have considered in conjunction with a person skilled in that field, a range of on-line and computer based tools designed to provide for project documentation and time management of complex tasks. These invariably would have included software tools which allow guided entry and sharing of relevant project information, establishment of timelines and due dates and creation of reminders. The commercialisation agent would also be aware of the significance of the 30 month PCT period and would have recognised the advantage of completing as much as is possible of the evaluation of the invention within that period. Consequently they would have realised that this fundamental feature of the international patent system should be addressed in the timeline for commercialising an invention when using or providing a tool to encourage timely completion of the commercialisation process.

70.Furthermore, for a commercialisation agent advising on the commercialisation of an invention it would have been routine to customise the commercialisation considerations required for a particular invention and to ensure those steps were included in the overall timeline for commercialisation. Steps c)-f) listed in the claim are acknowledged as common general knowledge and are merely some of several considerations that would be open to the commercialisation agent when considering a particular invention. Some inventions would require all steps to be carried out and others a smaller subset. In using one or more tools that readily suggest themselves, the commercialisation agent would have inputted information relating to the required steps in an updateable form and would have ensured that information was used to create reminders to encourage the prompt completion of the relevant tasks within the period before the substantive costs of entering the national phase were encountered.

71.On this basis, I find that a hypothetical skilled person in solving the problem would be led as a matter of routine to the claimed invention. I do not consider that, on the balance of probabilities, any of the claims reflect an inventive step based on common general knowledge alone. However if there is doubt concerning this I believe the prior art identified by the examiner would have been understood and regarded as relevant to the extent that it demonstrates systems which in some way support the commercialisation of patents and therefore could be applied usefully in addressing the fundamental business problem identified in the specification.

Conclusion

72.I have found that there are lawful grounds for objection to the present patent application. In particular I find that the grounds of lack of inventive step and failure to claim a manner of manufacture raised by the examiner are valid.

73.Were this a matter solely of a lack of inventive step I would have been minded to allow the applicant a further the opportunity to identify subject matter, if any, that might be claimed in compliance with s 18(1)(b) and s 102 and to address a number of apparent s 40 issues. However, since I have also found that the claimed subject matter is not a manner of manufacture and I consider that no patentable subject matter is disclosed in the specification, such an opportunity would not serve any useful purpose.

74.Consequently pursuant to subsection 49(2) of the Act I refuse patent application 2009201212.

P M Spann
Deputy Commissioner of Patents