Research Affiliates, LLC.
[2011] APO 101
•5 December 2011
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Research Affiliates, LLC. [2011] APO 101
Patent Application: 2010236045.
Title: Valuation Indifferent Non-Capitalization Weighted Index and Portfolio.
Patent Applicant: Research Affiliates, LLC.
Delegate: M. G. Kraefft
Decision Date: 5 December 2011
Hearing Date: Right to be heard waived - written submissions responsive to examiner’s reports
Catchwords: PATENTS – maintenance of examiner’s objection – alleged invention for generating an index of assets – whether a manner of manufacture – business method or system – application refused.
Representation: Applicant: Shelston IP.
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Innovation Patent: 2010236045.
Title: Valuation Indifferent Non-Capitalization Weighted Index and Portfolio.
Patent Applicant: Research Affiliates, LLC.
Decision Date: 5 December 2011
DECISION
Claims 1-30 are not for a manner of manufacture and consequently do not comply with subsection 18(1)(a) of the Patents Act.
There is also nothing of substance in the specification as a whole from which claims to patentable subject matter could be drafted.
The application is refused.
REASONS FOR DECISION
BACKGROUND
Robert D. Arnott filed patent application 2010236045 on 27 October 2010. As a result of an assignment, the application is now proceeding in the name of Research Affiliates, LLC (“Research Affiliates”).
The Patent Office has issued three examination reports during the examination stage. Throughout these reports, the examiner has maintained an objection that the claims of the application are not for a manner of manufacture. Research Affiliates has twice proposed amendments under Section 104 of the Patents Act to the description and claims during the examination stage. However the issue of whether the claims are for a manner of manufacture has remained unresolved.
Application 2010236045 is a divisional application of application 2005213293. The latter application has been refused. See my decision Research Affiliates, LLC [2010] APO 31. That decision is presently on appeal to the Federal Court.
In respect to application 2010236045, in a letter dated 6 October 2011, Research Affiliates notified the Commissioner that it did not wish to be heard on the remaining objection and, in the event that the objection was maintained, requested that the Commissioner exercise the power under Subsection 49(2) of the Patents Act to refuse the application. In the event of refusal, Research Affiliates also indicated in that letter that it intended to rely on its right to appeal to the Federal Court, presumably to join the present divisional application with the parent application 2005213293 already before the Federal Court.
SPECIFICATION
The specification of application 2010236045, as filed, describes the field and background of the alleged invention in essentially the same terms as in the parent application. See [4] and [5] of the Research Affiliates (supra) decision for a brief summary.
The alleged invention is described in the body of the specification in terms of consistory clauses reflecting the broadest claims as filed. The alleged invention pertains to a method or system for passive investing that is based on indexes which are built with metrics other than market capitalization weighting, share price weighting or equal weighting. Examples of the metrics used are various financial data of the company issuing securities such as book value, sales, revenue, earnings, earnings per share, income, income growth rate, dividends, dividends per share, and earnings before interest, tax, depreciation and amortization (“EBITDA”). Non-financial and non-market capitalization metrics can also be used for compiling an index. A described example of such a metric is an index of companies with chief executive officers (“CEOs”) having graduated from a particular university.
The specification as presently proposed to be amended ends with thirty claims. Aside from omnibus claims, the independent claims are claims 1 and 28. As currently proposed to be amended, they read as follows:-
1.A computer-implemented method for generating an index, the method including steps of:
(a)accessing data relating to a plurality of assets;
(b)processing the data thereby to indicate a selection of the assets for inclusion in the index based on an objective measure of scale other than share price, market capitalization and any combination thereof;
(c)accessing a weighting function configured to weight the selected assets;
(d)applying the weighting function, thereby to assign to each of the selected assets a respective weighting, wherein the weighting:
(i) is based on an objective measure of scale other than share price, market capitalization and any combination thereof; and
(ii)is not based on market capitalization weighting, equal weighting, share price weighting and any combination thereof,
thereby to generate the index.
28. A computer system including:
means for accessing data relating to a plurality of assets;
means for processing the data thereby to identify a selection of the assets for inclusion in an index based on an objective measure of scale other than share price, market capitalization and any combination thereof;
means for accessing a weighting function configured to weight the selected assets;
means for applying the weighting function, thereby to assign to each of the selected assets a respective weighting, wherein the weighting:(a) is based on an objective measure of scale other than share price, market capitalization and any combination thereof; and
(b) is not based on market capitalization weighting, equal weighting, share price weighting and any combination thereof.
.
Two other proposed claims covering other aspects of the alleged invention in broad terms should be mentioned. Claim 26 defines a computer system configured to perform a method of any one of claims 1 to 25. Claim 27 defines a machine readable medium carrying instructions which, when executed by a computing platform, causes the computing platform to perform a method of any one of claims 1 to 25.
DISCUSSION
The differences between the broadest claims of the parent application and the present divisional application are broadly tabulated as follows.
Area of difference
Parent application 2005213293 Divisional application 2010236045 Claimed result Constructing a non-capitalization weighted portfolio of assets Generating an index Action words Receiving data gathered in respect to a plurality of assets Accessing such data “
Receiving data to create data indicative of an index of assets Processing data to indicate a selection of assets for inclusion in the index “ Operating to weight selected assets Accessing and applying a weighting function Basis for selection of assets Objective measure of scale other than market capitalization and share price Additionally excludes any combination of market capitalization and share price as a measure of scale Weighting criteria Weighted other than on at least one of market capitalization, equal weighting or share price weighting Weighted other than on market capitalization, equal weighting, share price weighting and any combination thereof
The differences, noted above, are more semantic than of substance. The subject matter in both claim sets broadly relates to gathering data about assets, creating an index, or alternatively constructing a weighted portfolio of assets, based on a selection of assets which selection is based on similar measures of scale in each case, and applying similar weighting criteria to the selected assets.
In the parent case, I found the subject matter to contravene subsection 18(1)(a). That is, the subject matter was not for a manner of manufacture.
In the present divisional application the claimed result, as tabulated above, is the generation of an index. This in the context of the present application is, to my mind, in even greater contravention of subsection 18(1)(a) than the claimed result of the parent application, as tabulated above.
I conclude there is nothing in the claims of the present divisional application that would suggest a different conclusion be reached than was reached for the parent application. The claims of the present application contravene subsection 18(1)(a) for the same reasons as outlined in the parent case.
Furthermore the specification as a whole describes a passive investment scheme. There are some elements of computer apparatus and networks described and illustrated in the specification. On the other hand, there is nothing of substance beyond the operation of the scheme itself that gives rise to the requisite manner of manufacture under subsection 18(1)(a).
CONCLUSION
I conclude that all of claims 1-30 are not for a manner of manufacture and consequently do not comply with subsection 18(1)(a).
I also conclude there is nothing of substance in the specification as a whole from which claims to patentable subject matter could be drafted.
I refuse the application.
M. G. Kraefft
Delegate of the Commissioner of Patents
0