Jumbo Interactive Ltd & New South Wales Lotteries Corp v Elot, Inc - [2013] APO 28

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Jumbo Interactive Ltd & New South Wales Lotteries Corp v Elot, Inc. [2013] APO 28

Patent Application: 2007221934

Title:A system and a method for operating on-line state lottery games

Patent Applicant:  Elot, Inc.
Opponent 1:  Jumbo Interactive Ltd
Opponent 2:  New South Wales Lotteries Corp
Delegate:  Greg Powell
Decision Date:  18 April 2013
Hearing Date:  26 March 2013
Catchwords:  PATENTS - final determination of an opposition under section 59 -whether amendments overcome the deficiencies in the opposed claims - the claims are not directed to a manner of manufacture - deficiencies not overcome - application refused - costs awarded against the applicant

Representation: Patent applicant: Carl Harrap, patent attorney of Freehills Patent & Trade Mark Attorneys, Sydney
Opponent 1: Dr Bradley Postma, patent attorney of Cullens, Brisbane
Opponent 2: No representative at hearing. Written submissions provided by Fisher Adams Kelly, Brisbane

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2007221934

Title:A system and a method for operating on-line state lottery games

Patent Applicant: Elot, Inc.
Date of Decision: 18 April 2013
DECISION
Patent application 2007221934 is refused.
Costs awarded against Elot, Inc.
REASONS FOR DECISION
BACKGROUND

Grant of a patent for application 2007221934 in the name of Elot, Inc (‘Elot’) was opposed by Jumbo Interactive Ltd (‘Jumbo’) and New South Wales Lotteries Corp (‘NSWLC’). Following a hearing on 28 October 2011, I issued a decision upholding the opposition on the ground that the claimed invention did not define a manner of manufacture (see Jumbo Interactive Ltd & New South Wales Lotteries Corp v Elot, Inc. [2011] APO 82.
In line with the opportunity I afforded them, Elot filed amendments to the specification under section 104. These amendments were allowed on 13 August 2012 and this matter was set for hearing for a final determination.
Mr Harrap, for Elot, appeared at the hearing in Canberra and Dr Postma, for Jumbo, appeared by phone. NSWLC specifically indicated that they did not wish to be heard in the final determination of this matter but, despite this, provided written submissions for my consideration. Elot’s submissions at the hearing relied in part on comments on the proposed amendments filed on 3 January 2012.
DECISION
The earlier decision is final and determined all the relevant issues that were capable of determination at the time (R v Smith; Ex parte Mole Engineering Pty Ltd [1981] HCA 25; (1981) 147 CLR 340 at 348-349). In the earlier decision, I found that the claimed invention was not a manner of manufacture. The only issue to be decided in this final determination is whether Elot’s amendments as set out above overcome this deficiency.
The amendments
Elot’s amendments made changes to the claims. The amended claims (with changes indicated) are:
“1. ~~A system~~ Computer processing apparatus for facilitating governmental lottery play over an electronic network, the computer processing apparatus comprising:
an agent server and a database in said agent server, the agent server comprising program means and processing means to give effect to the agent server’s functions,
wherein the agent server is configured and connected via said electronic network
for receiving player and ticket information, including subscription play information, transmitted from a plurality of player terminals,
for transmitting said ticket information to a governmental lottery administrator, ~~and~~
for receiving serial numbers issued by said governmental lottery administrator in association with each lottery ticket;, and
wherein the agent server is further configured
~~a database in said agent server~~ for storing said player and ticket information and said serial numbers in the database associated with each lottery ticket; ~~and~~
for receiving lottery draw results, and
for accessing player and ticket information stored in the database to identify winning tickets based on received lottery draw results,
wherein the computer processing apparatus further comprises
a subscription play unit, configured for monitoring subscription play of the same lottery numbers for a specified number of draws.
2.The ~~system~~ computer processing apparatus of claim 1, ~~further including~~ wherein said program means and processing means of the agent server also implement ~~a screening unit in said agent server, having~~, the screening unit comprising criteria required by the governmental lottery administrator pre-stored therein, ~~for~~ the screening unit verifying, based on the received player information, that each player satisfies said criteria prior to performing the function of transmitting said ticket information to said governmental lottery administrator.
3.The ~~system~~ computer processing apparatus of claim 1 or 2, wherein said subscription play unit includes means for notifying the player prior to or at the expiration of the specified number of draws that play is to end or has ended.
4.A ~~system~~ computer processing apparatus according to anyone of claims 1 to 3, substantially as described herein with reference to any of the figures and/or examples.”
Elot also made changes to the description. Specifically they provided more information under the heading of “Background”. Elot indicated that this extra information was to support placing the invention in context, given that I had said in my earlier decision (at [4]):
“The specification contains no discussion of the prior art or what problems the prior art suffered from. It simply provides the broad statement on the field of the invention before launching straight into a discussion of the invention. As such the context in which the invention appears is difficult to determine.”
Do the Claims now Define a Manner of Manufacture?
Despite the well considered submissions of Mr Harrap for Elot, I remain of the opinion that the claims do not define a manner of manufacture.
The submissions made by Mr Harrap were essentially to the proposition that the claims as amended are directed to a new device and not to an abstract system. Mr Harrap made the point that the new background added to the specification should lead to the conclusion that the invention was for a new agent server. Specifically, the device was something that was to be located between the player terminal and the governmental lottery server. It was a device which facilitated lottery play. It did not play the lottery itself or implement a lottery playing scheme.
Mr Harrap referred me to the decision of National Research Development Corporation v Commissioner of Patents 102 CLR 252 (NRDC) noting that, while it was correct to refuse an application for nothing but a claim for a new use for an old substance, an application that required a new method of using the substance or a new adaptation of the substance to serve the new purpose was permissible.
While Mr Harrap agreed that use of a computer in an invention for mere storage or retrieval of data would not make an otherwise non-patentable invention a manner of manufacture, he submitted that this was not the case for the computer processing apparatus of the claims. The applicant submitted that the invention now relates to a device that is connected in a certain way so as to provide a communication interface between player terminals and the governmental lottery administrator.
In my opinion, the new material added to the background does not change what I found in my earlier decision, which was:
“Claim 1 is essentially directed to lottery playing scheme in which certain particular pieces of information are collected and stored in a database in an environment of purchasing a lottery ticket. While the collection and storage of the particular information mentioned in the claim may not, on the basis of the evidence supplied, have been disclosed previously or considered an obvious thing to do, it is, nevertheless, simply information which is characterised solely by its content. It goes no further than that. Information has never been considered sufficient for patentability unless its presentation provides some material advantage (see for example Re Cooper’s Application for a Patent (1901) 19 RPC 53 and Re Virginia-Carolina Chemical Corporation's Application (1958) RPC 35).”
To my mind, replacing the “system” with a “computer processing apparatus” which has an associated “database” and “program” does not alter my earlier finding. The operations done previously by the “system” are now, in the amended claims, being done by the “computer apparatus”. While I was unsure in my earlier decision whether there was any manner of manufacture disclosed in the application, I do not think the amendments show that there was.
While the claims are now directed to a computer processing apparatus, the computer itself does not require a new method of use. It is used to do what computers have generally done – retrieve data, store data, possibly manipulate data and compare data. Moreover, there is no new adaptation to the computer. It is a general purpose computer which is used to implement the scheme using the features that already exist in the computer. As per NRDC, this is not what characterises a manner of manufacture. Any effect produced in the computer is simply one of information. It lacks the qualities of the useful effects discussed in International Business Machines Corporation v Commissioner of Patents [1991] FCA 625, 105 ALR 388. Moreover, the recent decision in Research Affiliates LLC v Commissioner of Patents [2013] FCA 71 reinforces my opinion. Where, as in the situation in Research Affiliates, the product of the present invention is essentially information, such arrangements which produce information have not been held to be manners of manufacture (see my finding above and Research Affiliates at [22]). Moreover, Research Affiliates confirms that:
“The implementation of the method of the claimed invention by means of a computer … is no more than the modern equivalent of writing down … on pieces of paper. On the face of the Specification, there is no patentable invention in the fact that the claimed method is implemented by means of a computer.”
The implementation on a computer of a scheme of buying lottery tickets and telling ticket holders that they have won is what is being defined in the present application. I cannot see a patentable difference between the “system” of the previous claims and the “computer apparatus” of the amended claims. In the present case they are essentially the same thing. The amendments added no patentable subject matter. To find that the computer is patentable but the system is not would effectively mean re-opening my earlier decision on the patentability of the system. It is not open to me to do that.
Mr Harrap sought to press his point by referring to the decisions in CCOM Pty Ltd v Jiejing Pty Ltd [1994] FCA 1168 (1994) 28 IPR 481 (Full Court decision) and Neurizon Pty Ltd v LTH Consulting and Marketing Services Pty Ltd [2002] FCA 1547 which found computer implemented inventions to be manners of manufacture.
With respect to the Neurizon decision, paragraphs [95] to [101] discuss manner of manufacture and find that, it that particular case, that a specific method of awarding a prize, a system for performing that method and a gaming machine performing the method were manners of manufacture. Mr Harrap sought to draw the connection that, as the present claims are to a programmed computer, a manner of manufacture exists. However, the finding given in Neurizon was:
“… that the patent in suit may fail for some other reason, but it cannot be said that on its face, there is no manner of manufacture” (my emphasis)
The mention of a manner of manufacture being present on the face of the patent seems to me to be a finding following the reasoning set out in NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd [1995] HCA 15, (1995) 183 CLR 655 that an invention had to pass a “threshold of inventiveness”.
In my earlier decision, there were two points on which submissions for manner of manufacture were made:
(i)that the claimed invention lacked the necessary quality of inventiveness on the face of the specification (“threshold of inventiveness”); and
(ii)the claims were directed to a non-patentable method and the implementation via a computer did not make it a manner of manufacture as the computer was incidental to the method (“no physical effect or transformation”).
The court in Neurizon seems to be addressing itself to point (i) only.
I found in my earlier decision that:
“… on the face of the specification alone, I cannot find any lack of inventiveness. The application thus passes the “threshold of inventiveness” test as developed in the above cases”.
That is, I agree with the Neurizon decision in this aspect.
However, it was under point (ii) that I found a lack of manner of manufacture in my earlier decision. Neurizon seems to have nothing to say with respect to point (ii) of my earlier decision. Moreover, as I have already pointed out, replacing the “system” with “computer apparatus” has made no real difference to the claims.
With respect to point (ii), the findings by the Federal Court in Grant v Commissioner of Patents [2006] FCAFC 120 and Research Affiliates LLC v Commissioner of Patents [2013] FCA 71, as well as the decisions by the Commissioner in Invention Pathways Pty Ltd [2010] APO 10, Iowa Lottery [2010] APO 25 and Network Solutions, LLC [2011] APO 65, which make findings that invention which:
“[do] not produce any artificial state of affairs, in the sense of a concrete, tangible, physical, or observable effect” (Grant at [30])
are not manners of manufacture and that:
“[no] judicial authority provides a basis for finding that what would otherwise be considered a mere scheme or abstract plan is patentable solely because it involves, or results in the manipulation or change in, a physical thing. A physical thing characterised only by “intellectual information” clearly remains non-patentable subject matter” (Network Solutions at [15]),
are more relevant to the present considerations.
Mr Harrap was at pains to point out that the currently claimed invention was not merely replacing a person with a device carrying out the same operations. This was in contrast to what was said in Research Affiliates at [72]:
“The implementation of the method of the claimed invention by means of a computer, at the level articulated in claim 1, is no more than the modern equivalent of writing down the index on pieces of paper. On the face of the Specification, there is no patentable invention in the fact that the claimed method is implemented by means of a computer. The Specification asserts a patentable invention, not in the use of the computer, but in the particular series of steps that give rise to the generation of the index. Those steps could readily have been carried out manually. The aspect of computer implementation is nothing more than the use of a computer for a purpose for which it is suitable. That does not confer patentability”
Mr Harrap noted that, as the apparatus of the claims was required to be plugged into an electrical network, and that this function could obviously not be achieved by a person, it was not the same type of invention as covered by Research Affiliates. However, I think that misses the point of my earlier decision. My earlier decision was that the invention was, essentially, a scheme for buying tickets and the system (or, as it is now, the apparatus) for facilitating that scheme could not lend patentability. I think this is consistent with the conclusions in Research Affiliates.
Concerning the CCOM decision, Mr Harrap made reference to the fact that the court cited with approval International Business Machines Corporation’s Application [1980] FSR 564, which held that a standard computer programmed to calculate the selling price of shares was a manner of manufacture. Mr Harrap also submitted that there was an inconsistency between the court’s approval of this IBM case and the court’s decision in Research Affiliates (where a computer programmed to carry out other calculations was found to be not a manner of manufacture). Given this inconsistency, I was invited to follow the CCOM decision as it was the decision of the Full Court of the Federal Court, whereas Research Affiliates was a decision of a single judge.
However, given what is written in Research Affiliates, I do not think it could be said that there is an inconsistency. Emmett J in his decision makes reference to CCOM on numerous occasions and it is clear that he was well aware of what that decision contained and made his decision with that knowledge in his mind. Yet, in spite of what CCOM is alleged to stand for, Emmett J found that a computer programmed to produce information, is not a manner of manufacture. I cannot see any inconsistency. CCOM was not about the computer implementation of a scheme. It was an invention for a Chinese language word processor which involved the application of principles around analysing and classifying Chinese characters by stroke-type categories. CCOM maintained the underlying principle, developed from the Statute of Monopolies, that business, commercial and financial schemes, which are “intellectual information”, are not themselves properly the subject of letters patent.
In my earlier decision (see [113]) I found that a system characterised merely by the information it contains was not a manner of manufacture. It does not, as was said in Research Affiliates:
“improve the operation of or effect of the use of the computer”.
As I have already noted, replacing the “system” with a “computer processing apparatus” which has an associated “database” and “program” does not alter my position.
Mr Harrap also referred to the decision Aerotel v TelcoHolding Ltd and others, and Neal William Macrossan’s Application [2006] EWCA Civ 1371 from Europe which found that a new computer component in a system was patentable subject matter. The submission was to the effect that, noting that the claimed invention in the present application was a device located between a player terminal and the governmental lottery server, similar considerations as those in Aerotel would lead to the conclusion that what is claimed is a manner of manufacture. However, the Aerotel decision is in respect of Article 52(2) of the European Patent Convention.
The relevant parts of Article 52 state:
“(1)European patents shall be granted for any inventions, in all fields of technology, provided that they are new, involve an inventive step and are susceptible of industrial application.
(2)The following in particular shall not be regarded as inventions within the meaning of paragraph 1:
(a)discoveries, scientific theories and mathematical methods;
(b)aesthetic creations;
(c)schemes, rules and methods for performing mental acts, playing games or doing business, and programs for computers;
(d)presentations of information.”
The difference between this Article and the corresponding provision in Australian law (i.e. s.18) is large enough to make me extremely hesitant in applying any principles from the Aerotel decision to the present case. I do not think it can be considered very persuasive.
Moreover the Aerotel decision, as its title suggests, deals with two different applications. Of the claims that are presented in the decision, it is the claims of Mr Macrossan that are more similar to the claims of the present application. For reference, claim 1 of Mr Macrossan’s application was given as:
“A method for producing documents for use in the formation of a corporate entity using a data processing system,
the system comprising
a corporate entity creation service provider data processing apparatus including a data processor and data storage means associated with the processor;
remote client data processing apparatus;
and interactive communication means in communication with the data processor and the client data processing apparatus;
wherein the system
assists in the formation of a corporate entity in at least one answering session in which
the interactive communication means is configured to allow the data processor, configured in accordance with an application program running on the data processor, to communicate sets of one or more questions to the client data processing apparatus for presentation to a user attempting to form a corporate entity,
and allows the data processor to receive from the client data processing apparatus the user's answers to the questions and to store the answers in the data storage means;
the data processor, configured in accordance with the application program and using the interactive communication means, is arranged
to successively select and communicate a further set of one or more questions to the client data processing apparatus for presentation to the user,
to receive the user's answers thereto
and to store the answers in the data storage means,
and to repeat said selection and communication of further sets of one or more questions
until the data processor, configured in accordance with the application program, has received and stored enough answers to allow the data processor to determine the documents that are legally required for the formation of the corporate entity;
wherein the selection of at least some of said further sets of questions by the data processor is based on the received user's answers to one or more previous questions;
wherein the data processor, configured in accordance with the application program,
determines the documents that are legally required for the formation of the corporate entity
and generates said legally required document in an electronic form using at least some of the user's answers that have been stored in the data storage means
and wherein the data storage means includes a database structure having a plurality of user answer fields in which at least a selected one of the user's answers are stored;
and wherein a store of document templates is accessible by the data processor, and the data processor is configured by the application program to merge at least one selected document template corresponding to said legally required documents, with at least a subset of the stored user's answers to generate said legally required documents.”

While this claim is directed to a method, it defines the method in the sense of a “data processing system” (cf. “computer processing apparatus” of the present application) having certain features (i.e. a processor and storage means) which allow it to carry out certain functions. The Aerotel decision found that these claims were not directed to patentable subject matter. So, to that extent, my decision would appear to be consistent with Aerotel.
CONCLUSION
The invention as defined in the amended claims is not a manner of manufacture. I am of the opinion that there is nothing that could be added to the claims that would overcome this finding. I therefore make the final determination that patent application 2007221934 is refused.
COSTS
Dr Postma, at the start of the hearing, made the observation that the applicant has yet to pay the costs associated with my earlier decision, which were awarded in favour of Jumbo and NSWLC. However, apart from that point, Dr Postma simply submitted that costs should follow the event. Mr Harrap also made the submission that costs should follow the event.
Cost awards made in earlier decisions have nothing to do with the costs of this final determination. Their payment, or otherwise, is not a situation that the Commissioner can, or will, intervene in. In the present case, Elot has not been successful, and it is appropriate that costs follow the event. I award costs in accordance with Schedule 8 against Elot.
FINALLY – DIVISIONAL APPLICATION
The applicant filed divisional patent application 2012200030 on 3 January 2012. That divisional application discloses the same subject matter as the present application. While the option of filing divisional applications in the present circumstances is clearly permitted by the legislation, I share the concerns expressed in Network Solutions, LLC at [3], Christopher Gary Parmenter [2011] APO 26 at [71]- [72] and Discovery Holdings Limited [2011] APO 56 at [4]. In addition, given my conclusion above, and given the fact that the divisional is directed to the same, non-allowable subject matter as the present application, I cannot see how the applicant will be able to find anything to claim as a patentable invention in their divisional application.
GREG POWELL
Delegate of the Commissioner of Patents