Peter Szabo and Associates Pty Ltd - [2005] APO 24

ABSTRACTS OF DECISIONS
DECISION OF A DEPUTY COMMISSIONER OF PATENTS
Application : Innovation Patent No. 2004100848 in the name of Peter Szabo and Associates Pty Ltd

Title: Home Equity Release Plan

Action: Examiner’s objections in certification.

Decision: Issued 5 May 2005
Abstract

The invention relates to a ‘reverse mortgage’, where (typically) an aged person part-sells an interest in their home in return for a cash deposit, with settlement occurring after death. In the usual reverse mortgage arrangement, the financier may make an excessive profit in the event of early death. The invention ameliorates this by providing for a rebate in these circumstances, and provides some mathematical expressions for determining the amount of the rebate. The examiner objected that the invention was not for a manner of manufacture. There was no objection to lack of novelty, or lack of innovative step

For determining whether an invention is a manner of manufacture, 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?”

The purpose of s.6 of the statute of Monopolies was to encourage development in the fields of science and technology. To be a manner of manufacture an invention must contain some material element that relates to science or technology. This might occur as a result of the application of a discovery of a law of nature, or a principle of science. It might be by way of creation of a new device, chemical entity, electromagnetic field or other entity, or related processes. Or it might make use of some device or entity for some purpose. Failing this, such an invention cannot be the proper subject of letters patent according to the principles which have been developed for the application of s.6 of the Statute of Monopolies.

The distinction between the fine arts and the useful arts as discussed in the NRDC and Virginia-Carolina decisions is whether or not the invention involves the application or use of science and/or technology in a material manner.

Mathematical expressions or algorithms may represent properties of the universe in which we live, properties of the number system, or agreed arrangements between people. The important issue is not the presence of an algorithm or formula per se. Rather it is – what does the formula represent?

It may be conceded that the alleged invention addresses a practical need in the affairs of people – and indeed creates a more equitable outcome compared to the prior art. It may also be conceded that the alleged invention meets the criteria of novelty and innovative step. But this is not enough. The criterion that an invention must be for a manner of manufacture is a real criterion additional to that of novelty and innovative step. The invention must be for “a proper subject of letters patent according to the principles which have been developed for the application of s.6 of the Statute of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2005] APO 24
Decision Date: 5 May 2005

CaseChat Overview and Summary

This case involved a dispute over an innovation patent application for a 'Home Equity Release Plan' in the name of Peter Szabo and Associates Pty Ltd. The examiner raised objections to the certification of the patent, arguing that the invention did not constitute a manner of manufacture under section 6 of the Statute of Monopolies. The key legal issue was whether the invention met the requirements for being a manner of manufacture. The Deputy Commissioner of Patents examined the nature of the invention and the use of mathematical expressions in the claims. The Commissioner held that the invention did not involve any material application of science or technology and was merely a contractual agreement between parties based on mathematical expressions. The invention did not meet the requirement of being a manner of manufacture as it did not involve any significant application of science or technology. The Deputy Commissioner revoked the innovation patent. The final order was that the innovation patent was revoked due to the invention not being a proper subject of letters patent as it did not involve a manner of manufacture.

Orders