Streamline Strata Finance Pty Ltd
[2016] APO 84
•1 December 2016
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Streamline Strata Finance Pty Ltd [2016] APO 84
Patent:2015101668
Title:A computer enabled loan facility and a system for automating a loan facility
Patentee: Streamline Strata Finance Pty Ltd
Delegate: Ed Knock
Decision Date: 1 December 2016
Hearing Date: 10 October 2016, in Canberra
Catchwords: PATENTS – Examiner’s Objections – manner of manufacture – computer-enabled business method – automated procedure for approving a loan facility – whether computer being used for well-known and understood function – no patentable subject matter disclosed in the specification – innovation patent revoked
Representation: Patent attorneys for the patentee: Joe Seisdedos, assisted by Caitlin Gallacher, AJ Park IP Pty Ltd
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent:2015101668
Title:A computer enabled loan facility and a system for automating a loan facility
Patentee: Streamline Strata Finance Pty Ltd
Date of Decision: 1 December 2016
DECISION
The claimed invention is not a manner of manufacture. Moreover there is no subject matter disclosed by the patent which could be the subject of a valid claim. I revoke the innovation patent 2015101668. This decision can be appealed to the Federal Court under section 101F(4).
REASONS FOR DECISION
Background
1. Innovation patent application 2015101668 was filed on 13 November 2015 by Streamline Strata Finance Pty Ltd (the patentee). No priority was claimed from any earlier application. An innovation patent was granted on the application on 3 December 2015.
2. The patentee requested examination of the patent on 10 December 2015, and a first examination report was issued on 19 January 2016. The only objection raised in this report was that the invention defined by the claims was not in respect of a manner of manufacture within the meaning of section 18(1)(a) of the Patents Act 1990. This report was responded to with submissions by the patentee on 5 February 2016, whereupon a second report was issued maintaining the previous manner of manufacture objection. In response to this second report the patentee filed a response on 1 April 2016 which consisted of both submissions and proposed amendments to the description and claims. The examiner subsequently issued a third report on 29 April 2016 which continued to maintain the manner of manufacture objection against the claims as proposed to be amended.
3. As a result of the third report the patentee requested a hearing on the matter, and a hearing duly took place on 10 October 2016. As well as their oral submissions, the patentee’s patent attorney filed written submissions prior to the hearing. An amended version of those written submissions, consisting mainly of unsubstantial corrections, was provided at the hearing. Some minor explanatory submissions following up a matter raised at the hearing were also subsequently filed on 25 October 2016. No evidence was filed.
The Specification
4. The subject matter of this patent is a computer–enabled system for granting a loan facility to what is known in New South Wales as a strata-title owner’s corporation. (Slightly different nomenclature to “strata-title” - such as “unit-title” - is sometimes used in other jurisdictions within Australia and outside Australia.) Such corporations are commonly referred to as a “body corporate” and are normally run by a committee elected from among the strata-title owners making up the body corporate. The “strata-title” form of title is employed in situations where a single building has a plurality of owners, with each owner having title over a separate portion of the building. The building will also normally have common areas, which are the collective responsibility of the body corporate.
5. To enable the body corporate to fulfil its responsibilities as stipulated by the legislation establishing strata-titles, it is normal practice for the body corporate to levy each member of the body corporate a financial contribution of an amount determined by the body corporate. The levy is used to pay for the day-to-day running of the property, but as well it has in the past been considered prudent standard practice for a component of the levy to be allocated to go into a “sinking fund” to ensure that money is available in case of foreseen or unforeseen eventualities affecting the common areas over a long cycle, such as painting, replacement of carpets or accidental damage not covered by insurance. These sinking funds historically have been placed in such places as risk-free, but low-interest rate, bank accounts or trust funds.
6. Prudent though such past practices are, particularly looked at through modern eyes they can also be seen as an inefficient use of capital. Therefore the present invention proposes that a system be made available whereby instead of the body corporate establishing a sinking fund, the body corporate could instead access a line of credit (up to a fixed limit) whenever the need arose to access funds (while presumably incurring charges as a consequence). The proposed system thus bears some resemblance to the credit card systems (especially, perhaps, the “virtual credit card” variety) which are in such widespread use these days.
7. Just as with credit cards, before being provided with a line of credit the customer in the present case (the body corporate) has to go through a vetting procedure. With the present system that vetting procedure involves two stages, the first of which, in broad terms, is referred to as an “authentication data” retrieval stage and the second is referred to as a “value information” retrieval stage. Not unexpectedly, given the field in which this invention resides, each of the stages of the vetting procedure has a real estate flavour about them. The purpose of the authentication stage is, as the patentee put it in its written submissions, “to know who the client is, and correspondingly be able to contact the client to seek payment”. The value information stage seeks to place a value on the real estate property by accessing at least one relevant database to obtain that information, or at least enough information for the system to be able to estimate algorithmically the value of the property. This valuation is then used to set the credit limit which will be extended to the body corporate, the specification exemplifying 10% of valuation as an appropriate credit limit.
8. As well as the business scheme outlined above, the invention is said to reside in an “automated” system for carrying out the business method outlined in the previous paragraphs. It emerges from the specification that this automation is achieved by employing a computer system to implement the scheme, with a nil requirement for human intervention. Of course, there still needs to be human involvement by the body corporate in initiating the procedure for obtaining a line of credit and in inputting the requisite information necessary for the procedure to advance. This is achieved by means of a representative of the body corporate making a remote user connection to a device input module. Although not relevant to the issue under consideration, it should perhaps be mentioned that the specification does allow that human intervention may be required where, for example, jurisdictional requirements demand it. Thus the invention as defined by the claims includes a number of elements of a computing system to enable the following procedure to occur:
·Applying for a loan facility;
·Approving the loan facility by authenticating the application and verifying the value of the property concerned;
·Activating the loan facility.
9. The specification of the innovation patent concludes with the maximum permissible five claims. Only claim 1 is independent. The claims as currently proposed read as follows:
“1. A computer-enabled loan facility system for autonomously authenticating, verifying and approving a loan facility to a strata owners' corporation comprising a computing system located on a network and capable of communicating with at least two other computing device [sic], the computing system being in communication with or including a device input module configured to receive a loan facility request from a remote user, the device input module being arranged to provide the loan facility request to a server associated with the computing system, the server being arranged to query at least one remote data store located on another server to retrieve authentication data relevant to the loan facility request and compare the retrieved data to the loan facility request to authenticate the loan facility request; and a data aggregator located on the server, the data aggregator being configured to receive and aggregate information from the at least one remote data store or one or more additional data stores, to retrieve value information relevant to the value of the property, such that the loan facility request is processed and approved by the server if a threshold condition is met based on the value information gathered by the data aggregator; and a funding module located on one of the server and the another server, arranged to interact with a financial institution server to provide an automated, computer-enabled draw down facility to fund the loan facility for the property owners' corporation once the loan facility request is approved.
2. A loan facility in accordance with claim 1, wherein the input module is a portal arranged to interact with a user.
3. A loan facility in accordance with claim 1 or claim 2, wherein the input module interacts with the user by providing one or more electronic documents.
4. A loan facility in accordance with any one of claims 1 to 3, wherein the loan facility request invokes a document generation framework arranged to provide the user with the one or more electronic documents utilised as part of the loan facility request.
5. A loan facility in accordance with any one of claims 1 to 4, wherein the one or more data stores comprise identification information.”
Applicable law
10. The statute applying to this matter is the Patents Act 1990 as amended by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012. Of particular note in this regard is that section 101E for the issuing of a certificate of examination requires the Commissioner to be satisfied on the balance of probabilities that the requirements of the Act specified in
subsection (1) are met. These requirements include relevant provisions of section 40 and
section 18, and more specifically for the purposes of this decision, paragraph (a) of subsection (1) of section 18.
Section 18 of the Patents Act 1990 provides that:
(1)Subject to subsection (2), an invention is a patentable invention for the purposes of a standard patent if the invention, so far as claimed in any claim:
(a) is a manner of manufacture within the meaning of section 6 of the Statute of Monopolies; …
As to what constitutes a manner of manufacture within the meaning of section 6 of the statute of monopolies, the decision of the High Court in National Research Development Corporation v Commissioner of Patents [1959] HCA 67, (1959) 102 CLR 252 [NRDC], is considered authoritative in this regard. The invention being addressed in that decision involved a process for eradicating weed from a stretch of land by means of a selective herbicide. At page 275 the court stated:
“The point is that a process, to fall within the limits of patentability which the context of the Statute of Monopolies has supplied, must be one that offers some advantage which is material, in the sense that the process belongs to a useful art as distinct from a fine art… that its value to the country is in the field of economic endeavour”.
13. In similar vein, when discussing the “vendible product” proposition put forward by Morton J in Re G.E.C’s Application (1942) 60 RPC 1, the High Court in NRDC upheld the validity of a patent for the use of previously unknown properties of a known chemical to effect a new purpose. At page 277 it said:
“The effect produced by the appellant’s method exhibits the two essential qualities upon which ‘product’ and ‘vendible’ seem designed to insist. It is a ‘product’ because it consists in an artificially created state of affairs, discernible by observing over a period the growth of weeds and crops respectively on sown land on which the method has been put into practice. And the significance of the product is economic; for it provides a remarkable advantage … for one of the most elemental activities by which man has served his material needs, the cultivation of the soil for the production of its fruits.”
However in D’Arcy v Myriad Genetics Inc [2015] HCA 35 [Myriad], the High Court noted the difficulty in that specific case, related to the patentability of an isolated nucleic acid coding for a mutant or polymorphic polypeptide, of engaging with the criterion of “an artificially created state of affairs”. At [91]:
“Engaging with that criterion in this case places the question of patentability in too narrow a frame. It invites debates about the application of categories such as ‘products of nature’ versus ‘artificially created products’ which may be distracting from the central issue, that is whether an essential integer of the claims, the genetic information, takes them outside the category of that which can be ‘made’.”
Further in Myriad, an emphasis on considering the substance of the claimed invention over the form of the claims is apparent. At [94]:
“Although it may be said in a formal sense that the invention as claimed, referring to isolated nucleic acids, embodies a product created by human action, that is not sufficient to support its characterisation as a manner of manufacture. The substance of the invention as claimed and the considerations flowing from its substance militate against that characterisation.”
In Grant v Commissioner of Patents [2006] FCAFC 120 [Grant], the Full Court of the Federal Court affirmed at [14] that business, commercial and financial schemes as such have never been considered patentable. Moreover at [16], the Full Federal Court stated as follows:
“Patents have also been refused for methods of calculation, theoretical schemes, including business schemes and abstract plans, such as:
· systems for arrangement of known things, such as a plan relating to the layout of houses in a row or terrace so as to prevent overlooking (Re ESP’s Application (1944) 62 RPC 87);
· an arrangement of buoys for navigational purposes (Re W’s Application (1914) 31 RPC 141);
· a system of business even though its implementation involved the use of a printed envelope with a particular arrangement of words (Re Johnson’s Application for a Patent (1901) 19 RPC 56 at 56); and
· a method of preventing the fraudulent re-use of sales book dockets and books used in that connection (Re Brown (1899) 5 ALR 81).”
It went on to say at [47] that it has long been accepted that “intellectual information”, a mathematical algorithm, mere working directions and a scheme without effect are not patentable.
The court in Grant 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. 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 [Welcome Real-time SA v Catuity Inc [2001] FCA 445] at [125]–[126]”
but went on to find at [30] that Mr Grant’s method:
“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.”
There have been two recent decisions of the Full Court of the Federal Court on the patentability of computer-enabled business method inventions. These are Commissioner of Patents v RPL Central Pty Ltd (2015) 328 ALR 458; (2015) 115 IPR 461 [RPL Central] and Research Affiliates LLC v Commissioner of Patents (2014) 227 FCR 378 [Research Affiliates]. Relevant considerations for patentability of such inventions distilled from those decisions were surveyed in Aristocrat Technologies Australia Pty Limited [2016] APO 49 [Aristocrat]. The delegate of the Commissioner in that case stated at [35]:
“I conclude that it is relevant to consider a range of matters. Without seeking to be exhaustive, these include:
·there must be more than an abstract idea, mere scheme or mere intellectual information;
·is the contribution of the claimed invention technical in nature;
·does the invention solve a technical problem within the computer or outside the computer;
·does the invention result in improvement in the functioning of the computer, irrespective of the data being processed;
·does the application of the method produce a practical and useful result;
·can it be broadly described as an improvement in computer technology;
·does the method merely require generic computer implementation;
·is the computer merely an intermediary or tool for performing the method while adding nothing of substance to the idea;
·is there ingenuity in the way in which the computer is utilised;
·does the invention involve steps that are foreign to the normal use of computers; and
·does the invention lie in the generation, presentation or arrangement of intellectual information.”
In Research Affiliates the Full Court indicated the proper pathway to be taken in matters such as these. It stated:
“115. The High Court (in NRDC at 277) spoke in terms of a separate result achieved by the claimed method that has its own economic utility consisting in the improvement. By this reasoning, the High Court directed attention to the subject matter to which the claimed method was directed, which needed to exhibit the required characteristics of a manner of manufacture to be patentable. Here, that subject matter is truly the scheme, the idea, the index. As set out in the specification it may be, and in the claimed method it is, implemented in a computer, but the ingenuity of the inventors, the end result of which is the invention, is directed to the idea, which is not patentable. That method does not have an artificial effect falling squarely within the true concept of what must be produced by a process if it is to be held patentable (NRDC at 277).
116. The approach to be taken to deciding whether a claimed method or product is properly the subject of letters patent must be flexible and must allow for new technologies presently unknown. The principles should be applied irrespective of the area of human endeavour and invention under consideration. However, that is not to say that any and every claimed method or process is properly the subject of a patent. Examples of exceptions have been identified, such as abstract ideas and mere schemes. There is no formula to be mechanically applied. It is a question of understanding what has been the work of, the output of, and the result of, human ingenuity, and to apply the principles that have been developed and explained so well in NRDC.
117. In the context of the claim, the significance lies in the content of the data rather than any specific effect generated by the computer. The computer-implementation is an essential integer of the claimed process. That is, of course, important. It is of particular importance in the assessment of, for example, novelty and infringement. However, in examining whether a claimed invention is properly the subject of letters patent, it is necessary to look not only at the integers of that claimed invention but also at the substance of that invention.
118. The claimed method in this case clearly involves what may well be an inventive idea, but it is an abstract idea. The specification makes it apparent that any inventive step arises in the creation of the index as information and as a scheme. There is no suggestion in the specification or the claims that any part of the inventive step lies in the computer implementation. Rather, it is apparent that the scheme is merely implemented in a computer and a standard computer at that. It is no part of the claimed method that there is an improvement in what might broadly be called ‘computer technology’.”
Finally, in the most recent decision in this area the Full Court of the Federal Court considered a computer implemented method and system for automatic collection of evidence of skills and knowledge in RPL Central, and concluded that the claimed invention was to a scheme or a business method that was not properly the subject of letter patents. In its decision the Full Court made several observations pertinent to the present matter. It was observed at [96]:
“A claimed invention must be examined to ascertain whether it is in substance a scheme or plan or whether it can broadly be described as an improvement in computer technology. The basis for the analysis starts with the fact that a business method, or mere scheme, is not, per se, patentable. The fact that it is a scheme or business method does not exclude it from properly being the subject of letters patent, but it must be more than that.”
And further:
“Where the claimed invention is to a computerised business method, the invention must lie in that computerisation. It is not a patentable invention simply to ‘put’ a business method ‘into’ a computer to implement the business method using the computer for its well-known and understood functions.”
Examiner’s objection
Since the specification was proposed to be amended after the second examiner’s report, the only report on the claims in their currently proposed state is the third report. It reads:
“In your response, you state that in the presently claimed invention, there are at least three elements to the claimed invention that are ‘technical’ in nature:
a. Authenticating the party that has applied for the loan facility (which is a technical problem, as it involves verifying the identity of a party when there is no human person who can perform the step of ‘identifying’ the party);
b. Verifying that the party who has applied for the loan facility is capable of servicing (i.e. paying back) the loan facility (again, a technical problem, since such calculations have involved, traditionally, a certain level of subjectivity and are based on understanding a range of factors regarding the party, hence the traditional need for a human person to make such a decision); and
c. Undertaking the final step of approving the loan facility – that is, making a decision about whether the party will or will not receive the loan facility.
Addressing each of these in turn, firstly regarding the element of ‘Authenticating the party that has applied for the loan facility’, what is claimed is merely a comparison of data retrieved from a remote (not necessarily a 3rd party) data store and data received in the loan facility request. The mere comparison of two pieces of data is not considered ‘technical’ in nature. In the words used in your response it's considered to be ‘based on a simplistic formula’.
Secondly, regarding the element of ‘verifying that the party who has applied for the loan facility is capable of serving the loan’ is not claimed so whether or not it is ‘technical’ in nature is not relevant.
Thirdly, regarding the element of ‘approving the loan facility’, what is claimed is ‘the loan facility request is processed and approved by the server if a threshold condition is met based on the value information’. Given the threshold condition (see description page 11) can be as simple as the loan value is less than a % of the property value this is merely a comparison (‘based on a simplistic formula’) and not considered ‘technical’ in nature.
These features are merely a collection of business rules implemented on a computer as was stated in Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177 at [96], where it states:
‘There must be more than an abstract idea; it must involve the creation of an artificial state of affairs where the computer is integral to the invention, rather than a mere tool in which the invention is performed. Where the claimed invention is to a computerised business method, the invention must lie in that computerisation. It is not a patentable invention simply to “put” a business method “into” a computer to implement the business method using the computer for its well-known and understood functions.’
The improvement in the computer is not the substance of the current invention, it is merely a tool in which the invention is performed, and the computer is used for its well-known and understood functions of gaining efficiency through automation of manual processes. With respect to the current application, the computer is used to automate the business rules involved in applying for and getting approval for a loan facility. This view appears to be supported by your previous response, which states in paragraph 2:
‘the loan funding is made simpler and easier for both the end recipient of the loan, and also the loan provider, by removing manual processing and human intervention’
and goes on in paragraph 3 to say:
‘To put it in the terms expressed in the Research Affiliates decision, the invention is directed to improvements in the provision of funds to a customer (in the embodiment described, a strata owner's corporation) without the need for manual intervention.’
You state in paragraph 7 the invention is a ‘system that addresses three fundamental technical problems in the finance industry (when applied to a particular type of financial product) - namely how to authenticate a party, how to verify that a party is capable of servicing a loan and how to approve a loan, all without any human intervention.’ When a similar loan facility is applied for without the use of a computer these ‘technical problems’ still exist and there are business rules to deal with them. The current invention is the computerisation of these business rules.
It is clear in the claims that the steps are to be performed by the computer; however, it is not sufficient to meet the requirement of manner of manufacture that the computer be an essential feature of the invention as claimed (see para [117] of RA decision). RA and RPL decisions make clear that it is the substance of an invention that must be directed to patentable subject matter and that an (abstract) business scheme that is merely implemented in a computer, no matter how essential to the claimed invention that implementation may be, is not a manner of manufacture (see para [118] of RA decision & [111] of RPL decision). It is clear from the description that the invention for which protection is sought is concerned with a standard computer implementing business rules to allow a user to apply for and getting approval for a loan facility.
The objection concerning manner of manufacture against all claims is maintained.”
Patentee’s written submissions
The written submissions commence by reviewing the case law on manner of manufacture, from NRDC onwards to the present time. That review follows accepted orthodoxy, apart from the notable omission of any reference to Grant.
Next the submissions discuss the background and nature of the present invention. Extra detail is given in regard to the background of the invention, but does not make a significant contribution to the resolution of this matter. As to the nature of the invention, the thrust of those submissions is to accentuate the computing system characteristics of the invention compared with the business method characteristics of the invention, as exemplified by the following passage from the submissions:
“In particular, claim 1, which is the broadest independent claim and which most broadly characterises the invention, claims a series of modules (which may be implemented in software, hardware, or a combination thereof), which interoperate to provide a technical solution to a series of technical problems posed by the automation of a strata loan facility.”
The submissions go on to critically analyse the approach taken by the examiner in his third report (supra, at [21]) in which he contended that the computer-implemented functions of authenticating, verifying and approving were non-technical, by virtue of being “simplistic” or involving “business rules”.
The submissions also note the alleged originality of the subject matter of the claim, stating:
“Therefore, in reviewing the present case, it can clearly be seen that no pre-existing manual process exists which reads onto the claimed invention, so the claimed invention cannot be simply characterised as the automation of a known manual process.
In addition, even if the delegate were to suggest that each individual feature of the claim in isolation were known (whether as a manual step or an automated step), the test for manner of manufacture is not whether each individual step in a multi-step claimed invention may be characterised as a manner of manufacture, but rather whether the claim as a whole, ‘in substance’ is a manner of manufacture. It is not correct to ‘pick apart’ a claim and analyse each step in isolation. The claim must be read as a whole.”
Then the submissions conclude by saying that:
“RPL Central does not stand for the proposition that a manually performable software process is prima facie not patentable. Rather, RPL Central stands for the proposition that an invention where a computer is merely used to perform calculations and is not producing a ‘physical effect’ (i.e. a real world effect) or is not solving a ‘technical problem’ cannot be seen as giving rise to patentable subject matter merely because the computer is involved and merely because the computer does it more efficiently than a manual process.
In the present case, it is clear that the claimed invention is not merely performing calculations nor is it an abstract idea with no tangible implementation. The invention is addressing technical problems that exist in the finance industry, the strata industry and also the computing/software industry.”
27. The underlining in the quote of the previous paragraph signifies something which was added into the version of the submissions which was provided at the hearing, being the only substantive change to the original. The submissions filed after the hearing were only a tabulation of the steps involved in each of the present system, the Research Affiliates system and the RPL Central system.
Hearing submissions
28. At the hearing Mr Seisdedos commenced by observing that RPL Central stands for two propositions:
·An abstract idea is not patentable.
·It is the substance of the invention rather than what is claimed on the surface which must be looked at.
He suggested that where the patentee “had run into some trouble” was because the embodiment of the invention is drafted towards obtaining a loan facility. The claimed invention however, according to Mr Seisdedos, deals with technical problems that arise when obtaining such a loan facility, in particular, the steps of, firstly, authenticating the background details of applicants for a line of credit and, secondly, verifying their creditworthiness. The technical problems were said to arise from making the authenticating and verifying steps autonomous, rather than the manual processes of the prior art. Mr Seisdedos observed that in both Research Affiliates and RPL Central the systems involved there did not perform an evaluation function. In Research Affiliates the index which was calculated did not lead to anything, whereas the present invention did. In RPL Central, the court said that the invention was not a manner of manufacture because there was no evaluation of inputs – the claimed computer system was not performing above what a computer normally does, that is, gathering of data, sifting of data, calculation of values, downloading of data, all of which are non-technical. In contrast the present invention actually uses gathered data in some way, and takes action.
However, Mr Seisdedos rejected any perception that the invention simply involved taking something that was previously done manually and then automating it. Rather, the business method idea to which the claimed invention was directed was new, but this was not what the patentee was relying on; rather it was the automating solution which automated the business method in an efficient way that constituted the patentable subject matter of the claimed invention. The defined invention turned the new idea into a physical embodiment – something tangible and usable in the market place which automates obtaining a loan facility different to everything else presently available. The invention involved making the automated system workable, that is, new in terms of how information is gathered and evaluated, and the way we take action based on that evaluation. The problem which is addressed by the present invention was in making the new idea – the business method – automated.
Mr Seisdedos furthermore remarked that the courts have always been at pains to say that business methods can be patentable if you look at the role the computer platform takes.
Mr Seisdedos also emphasised that the patentee does not want to lay claim to all types of loan facilities as falling within the scope of its claims. The whole rationale for making this invention was around certain problems in the strata-title industry. Previously there had never been a truly autonomous system of providing a line of credit. According to the present invention an extra step is taken by the automated system, being to actually grant a loan, rather than a human at the end approving it.
Returning to the evaluation aspect of the invention in suit, Mr Seisdedos reiterated that this was the principal basis on which the patentee contended that the invention is a manner of manufacture. He made reference to the algorithm which controls the valuation of the property concerned and is described in broad outline in the specification description, and asserted that this is what the court in RPL Central said would be needed to take a software invention or a computer implemented invention beyond a mere business method. And similarly with Research Affiliates: one needs to look at the substance of the invention - the present invention is not an abstract idea, and it provides a technical solution.
Finally, with respect to the guidelines referred to in Aristocrat at [18], above, Mr Seisdedos commented that “most we are comfortable we have met” and reiterated that the invention was in the way the business method was implemented, and that while the patentee was “not hanging their hat on it”, the business method was also new.
Consideration
The examiner’s third report, in respect to this patent, states that “the mere comparison of two pieces of data is not considered ‘technical’ in nature”. Limited to just those words, that statement would seem to be correct. However, what needs to be taken account of is the fact that the claim goes on to further define that the data comparison is being performed by a computer, which alters the situation somewhat. When limited to that environment the “comparison” feature would seemingly constitute a “technical” feature, when viewed formalistically.
Following its assertion about the “comparison” feature being non-technical, the examination report then gives as the basis for this conclusion the fact that it is “simplistic”. Mr Seisdedos challenged this reasoning, and, in my view, with some justification. Whether or not a feature is “simplistic” does not appear to affect whether it is of a technical nature. Rather, what the report seems to be attempting to convey is that, in the computerised business method which is the subject of the invention, there is no meaningful contribution by the computer-implementation aspects of the invention to the overall invention. In other words, although the feature in question when computer-implemented may be considered to be technical in nature - that is, has a technical effect - it does not as a matter of substance make a technical contribution to the invention. This is clarified later in the report.
In RPL Central it was stated:
“Where the claimed invention is to a computerised business method, the invention must lie in that computerisation. It is not a patentable invention simply to ‘put’ a business method ‘into’ a computer to implement the business method using the computer for its well-known and understood function.”
Thus the question to be answered in the present matter is whether the facts of the case are such that it is true to say that the computer system of the present invention is being used “for its well-known and understood function?”
The invention defined by the claims is a computer-enabled system for implementing an autonomously functioning business scheme. The product of that business scheme is the value of the credit limit which the business scheme is devised to calculate, based on various inputs. In [8], above, I have summarised the business scheme as comprising the steps of, firstly, enabling an application for a loan facility to be made, followed by assessing the application for its authenticity and the value of the property involved, and then, if the assessment is favourable, approving the loan and activating the loan facility.
The computer-enablement aspect of the invention as defined by claim 1 embraces a number of alternative configurations for enabling the business scheme of the invention. At its most basic configuration as defined in claim 1 it simply comprises a server which is located on a network and which is further defined as having various functions and capabilities which are presumably software implemented, some of which involve communication with other servers, modules and data stores, and all of which are dedicated towards implementing the business scheme of the invention. Although the description of the specification elaborates a little upon the computing system of the invention per se beyond the generalities expressed in claim 1, such further detail as is provided in the description seems limited to commonplace devices - for instance, desktop computing devices, laptops, tablet computers, smart phones and Application Programming Interfaces – utilized in commonplace ways. Overall there would appear to be nothing remarkable in the computing expedients adopted to give effect to the business scheme of the invention, including the algorithm for valuing property which is described in broad outline in the specification.
One line of argument taken by the patentee was that although the business scheme it had devised could not be a manner of manufacture in itself, it was nonetheless new in its own right, and because of its special area of application (real estate) and the implicit asset-backing that provides, it had opened up opportunities for automation when computer-enabled. While Mr Seisdedos disavowed automation through computerisation, in itself, as conferring any manner of manufacture status upon the present invention, his argument was, as I understand it, that the devising of the new business scheme and the wish to automate it had led to the new computer-enabled system to implement it, and thus the invention lay in that computing system - which being of technical nature was consequently a manner of manufacture. Mr Seisdedos focussed in particular upon the valuation functionality of the invention, and the ability of the system to approve a line of credit without human intervention.
The difficulty I have with this line of reasoning is that once the business scheme is conceived, the devising of the new computer-enabled system for implementing it does not, so far as I am able to perceive, involve anything in the way of ingenuity. Given that automation by computerization is, in itself, more or less a universal desideratum these days, there would have been ample impetus to attempt to do so in the case of the present business scheme. The solution adopted by the patentee seems to merely utilize off-the-shelf components plus the accessing of appropriate readily available databases, albeit with the necessary implementation programming. Reflective of this is the number of alternative possibilities for the computer system which are embedded in claim 1, suggesting a sense of ordinariness about those possibilities.
Mr Seisdedos urged that a holistic view be taken of the system being claimed, and that it not be broken down into its components and each analysed individually. However I note that each of those components exists to enable a particular step in the business method of the invention to be performed and in doing so each would seem to be simply being used for its well-known and understood function, and tailored to that purpose. As a matter of logic, this also holds for the aggregation of the devices. With this invention, the business scheme it relates to is clearly the mortar which bonds the various “technical” components into a computer-enabled system, and thus the business scheme sits at the heart of the present invention. In my view this is clearly a case of a computer system being used for its well-known and understood function. There is no evident ingenuity in the way the computing devices are utilized. The claimed invention is thus in substance merely a business scheme which is implemented in a computer without the solution of a technical problem and is not an improvement in computer technology, and accordingly is not a manner of manufacture.
I will turn now to the reason put forward by the patentee as to why the present invention is distinguishable from those which were the subject of the Research Affiliates and RPL Central decisions, which was that the presently claimed invention performs an evaluation function. I note that that precise term does not actually occur in the claims, but I am satisfied that that term does correctly reflect the nature of the operation of the system which is defined by the claims. It is true that in RPL Central the court did make reference to the fact that the computer under consideration in that decision did not perform an evaluation function of the user’s competency, and it is true that in the present case assessing a value (the value of a property, or at least the owner’s equity in it) lies at the heart of the invention. However my reading of RPL Central is that evaluation (of competency) is referred to because that is what the scheme is about in that decision and it is the logical next step after a user provides responses to the questions. It is not meant to imply that evaluation grants automatic manner of manufacture status, or vice versa. Moreover, the term “evaluate” can have a wide range of meanings dependent on context, and need not necessarily carry a specific or complex connotation. It could, for example, just involve straightforward data analysis, as the present invention appears to reduce to.
As both RPL Central and Research Affiliates quoted with approval from Bancorp Services LLC v Sun Life Assurance Co of Canada (US) 687 F3d 1266 (Fed Cir 2012) “[a]t its most basic … a ‘computer’ is ‘an automatic electronic device for performing mathematical or logical operations’ … solving a problem by doing arithmetic as a person would do it by head and hand”. Also, in Research Affiliates the court stated that the inventors in that case had made changes to the computer program to cause the program to gather and process data and perform data manipulations and calculations, including macros to manipulate and refine data, and observed: “such use of algorithms was not foreign to the normal use of computers”. In my view processes and operations along these lines would be all that would be required to perform the “evaluation” function of the present invention, with this being generally regarded as being the normal use of computers.
Regarding the various “relevant considerations” from Aristocrat quoted at [18], above, I consider that, with the possible exception of the fifth of those considerations (which is about whether the application of the method produces a practical and useful result), none could be seen as being favourable to the case for the present invention being a manner of manufacture. That applies particularly to those points which are concerned with the overall role played by computers in the inventive concept. In the case of the first two of the considerations – whether there is more than an abstract idea, mere scheme or mere intellectual information, and whether the contribution of the claimed invention is technical in nature – these can only be met if a “form over substance” approach is taken, and the caveats contained in Research Affiliates and RPL Central regarding the quality of that technical contribution are ignored. The upshot is that the preponderance of the Aristocrat considerations is against the present invention being a manner of new manufacture.
Conclusion
I find that the claims of this innovation patent are not directed to a manner of manufacture. Furthermore the same applies to the remainder of the matter disclosed in the specification.
Accordingly I revoke the patent.
Ed Knock
Delegate of the Commissioner of Patents
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