Telstra Corporation Limited v Amazon.com, Inc

Case •

[2011] APO 28

•

9 May 2011

IP AUSTRALIA

AUSTRALIAN PATENT OFFICE

Telstra Corporation Limited v Amazon.com, Inc. 2011 APO 28

Patent Application:                   762175

Title:Method and system for placing a purchase order via a communications network

Patent Applicant:  Amazon.com, Inc.

Opponent:  Telstra Corporation Limited

Delegate:  Ed Knock

Decision Date:  9 May 2011

Hearing Date:  9 and 10 February 2011, in Canberra

Catchwords:  PATENTS – opposition to grant – ecommerce ordering system -construction of claims – meaning of “single action” - whether claims comply with section 40 -  claims held to be clear - novelty and inventive step – whether claims novel in light of prior documents and use –  lack of novelty of claims 1, 4 to 7, 32 and 35 to 38  established on whole of contents  basis - whether claims lack an inventive step – state of the common general knowledge – lack of an inventive step of claims 1, 2 and 4 to 61 established

Representation:  Patent applicant:      Ben Fitzpatrick of counsel, assisted by Ross McFarlane and Adrian Crooks of Phillips Ormonde Fitzpatrick, Melbourne

Opponent:Bruce Caine SC, assisted by Duncan Longstaff of Blake Dawson, Melbourne, and Eric Braun of EMB Legal

IP AUSTRALIA

AUSTRALIAN PATENT OFFICE

Patent Application:                   762175

Title:   Method and system for placing a purchase order via a communications network

Patent Applicant:  Amazon.com, Inc.

Date of Decision:  9 May 2011

DECISION

Opposition succeeds.  Applicant has 60 days to propose amendments.  Costs awarded against Amazon.com, Inc.

REASONS FOR DECISION

BACKGROUND

  1. Application 762175 was filed under the provisions of the Patent Cooperation Treaty on 10 September 1998 as application PCT/US1998/018926.  Australia was among its designations, and it was allocated Australian application number 94779/98.  It claimed priority from United States patent applications 08/928951 and 09/046503 filed on 12 September 1997 and 23 March 1998, respectively.  International publication of the PCT application took place on 18 March 1999, the application being accorded the International Publication Number WO 99/13424.  After having undergone international preliminary examination under the PCT the application entered the national phase of processing in Australia on 23 March 2000.  The application was advertised accepted on 19 June 2003 and given the six-figure number 762175.

  1. A notice of opposition to application 762175 was filed on 19 September 2003 by Telstra Corporation Limited (Telstra), followed by a statement of grounds and particulars on 22 December 2003.  The filing and service of evidence in this matter was relatively uneventful, save for numerous requests for extensions of time to serve evidence, plus several requests to adduce further evidence (all granted).  An amendment of the statement of grounds and particulars was also made. 

  2. An interesting historical note to this case (albeit not relevant to the determination of this matter) is that some family equivalents of this application filed in foreign jurisdictions have attracted a degree of public interest. The subject matter of the application has come to be commonly referred to as “the Amazon.com ‘one click’ ordering system”, and the such-like.  One measure of the interest is that a bounty of $US10,000 was offered By BountyQuest Corp to anyone bringing to light any hitherto unknown items of prior art that would anticipate the present invention.

    THE SPECIFICATION

  3. The specification is titled “Method and System for Placing a Purchase Order via a Communications Network”, and begins by stating that:

“the present invention relates to a computer method and system for placing an order and, more particularly, to a method and system for ordering items over the Internet”.

  1. It is made explicit subsequently in the specification that the invention is not limited to an Internet environment.  The specification then gives a basic outline of how the World Wide Web (WWW) functions, explaining such things as an HTTP request and an HTML document. In all of this it must be kept in mind that this specification dates from 1997 and so reflects the state of knowledge in the art at that time.

  1. Even at that time, the possibilities for utilizing the Internet for electronic commerce were recognised.  However, according to the specification, it was felt at the time that a barrier to the take up of electronic commerce was the need for the purchaser to transmit sensitive information (such as a credit card number) over the Internet where “the information could be intercepted by an unscrupulous person at an intermediate system”.  A solution of sorts to this problem was seen to lie in encryption, but even this was not failsafe as it was always possible to decrypt such sensitive information.

  1. The specification then goes on to describe the prior art “shopping cart” model of electronic purchasing.  This mimics the conventional shopping cart approach to shopping, where the purchaser loads up a shopping cart (or shopping trolley in the Australian idiom) with selected purchases, and then checks them out in a batch.  Such checking out of purchases under the electronic system is said to involve providing information such as billing and shipment information to the vendor.  In some shopping cart models each item purchased is checked out as it is selected.  But whatever system of checking out is employed, clearly if only one item is being purchased there is likely to be a number of steps which must be taken to consummate a purchase.  The considerable effort involved is, according to the evidence, known as “the cognitive load”.  This prior art model also suffers the disadvantage of frequent transmission of sensitive information over the Internet, increasing the likelihood of interception and decryption.

  1. To overcome the deficiencies in the prior art the present invention proposes a system whereby upon the display in a client system of information about an item for purchase, a single action (exemplified by a mouse click or a key stroke) at the client system resulting in the sending of a request to a server system, is all that is required to accomplish the ordering of an item.

  1. The specification contains 141 claims, nine of which are independent.  There is a matching consistory statement for each independent claim.  Claim 1 is the broadest of the claims, and reads:

    “1.         A method for ordering an item using a client system, the method comprising:

    displaying information identifying the item and displaying an indication of a single action that is to be performed to order the identified item: and

    in response to the indicated single action being performed, sending to a server system a request to order the identified item.”

  2. At the hearing a substantial amount of Mr Fitzpatrick’s attention was focussed on claim 62.  It reads:

“62.     A method in a client system for ordering an item, the method comprising:
           receiving from a server system a client identifier of the client system;
           persistently storing the client identifier at the client system;
           when an item is to be ordered,
  displaying information identifying the item and displaying an indication of a single action that is to be performed to order the identified item; and

in response to the single action being performed, sending to the server system a request to order the identified item along with the client identifier, the client identifier identifying account information previously supplied by a user of the client system wherein the user does not need to log in to the server system when ordering the item; and

when account information is to be changed,

coordinating the log in of the user to the server system;
receiving updated account information; and
sending the updated account information to the server system;

whereby the user does not need to log in to the server system when ordering the item, but needs to log in to the server system when changing previously supplied account information.”

  1. Claim 62 introduces into the broad form of the invention defined by claim 1 certain features which are described in the body of the specification as being optional features.  The “client identifiers” of claim 62 are, in preferred form, so-called “cookies”, which at the priority date of the claims were only a fairly recent development (early 1995 according to the evidence).  The capacity for “account information” to be held on the server system, as is defined in claim 62, is also an optional feature, as is the defined mechanism to change such information.

  1. Other features the specification describes as merely preferred include the ability of the server system to combine various single-action orders made at similar times into a multiple-item order.  A further enhancement of this is to batch orders that have similar shipping dates.  Also described is a method of giving gifts in which the user of the client system, as gift giver, stipulates a delivery address and/or contact details for the recipient of the gift.

    GROUNDS OF OPPOSITION

  2. The grounds of opposition in their ultimate form were from those available under subsections 59(b) and 59(c) of the Patents Act, that is, firstly, the invention as claimed is not a patentable invention as it does not comply with subsections 18(1)(a) or (b), and, secondly, the specification filed in respect of the complete application does not comply with subsection 40(2) and 40(3). At the hearing the opponent indicated that it would not be pursuing the subsection 18(1)(a) ground (manner of manufacture).

  1. The particulars for the grounds of novelty and inventive step cited twenty prior art documents (and four instances of associated prior use) in respect of both grounds.  However, only some of these were relied upon at the hearing.  Several other documents were cited for the purpose of establishing the common general knowledge, and one of these was subsequently elevated to being a novelty citation at a later stage of the opposition proceedings.

  1. The main issue raised by the opponent in relation to section 40 concerned the scope and meaning of the expression “single action”.  This is indeed pivotal to this matter.  The resolution of this matter is relatively straightforward in terms of what is required to be done.  It requires the claims be construed as to their scope, and then a determination be made as to whether the prior art falls within the scope of the claims as construed, and whether the prior art and/or common general knowledge is such that the claimed invention does not involve an inventive step.

    THE EVIDENCE

  2. The evidence totals 38 statutory declarations by 20 different declarants (split fairly evenly between the parties), citing numerous prior art documents of both the patent variety and non-patent literature variety and which are annexed to the declarations.   However at the hearing Mr Caine indicated that the opponent would only be relying on five of the items of prior art to support its ground of lack of novelty.

  1. Three of these items of prior art were also used to argue lack of inventive step, and were supplemented in this regard by three documents about cookies published by their originator, Netscape.  Because this application was filed before 1 April 2002, lack of an inventive step can only be established on the basis of the common general knowledge in the art, or the common general knowledge considered together with prior art information made publicly available in a single document or through doing a single act, or made publicly available in two or more related documents or through doing two or more related acts.  That is, it was not available to the opponent to combine two or more unrelated documents or acts to establish lack of an inventive step.  Hence common general knowledge figured prominently in the case put forward by the opponent in regard to lack of inventive step.  Not unexpectedly, evidence from experts in the field as to the state of the common general knowledge in the art at the priority date of the claims was extensive from both sides.

  1. More details of what is contained in the evidence, where relevant, will be given later in the decision.

    SUBMISSIONS

  2. After dealing briefly with the background to the opposition and the evidentiary principles relevant to the present matter, Mr Caine provided a broad overview of the common general knowledge relating to electronic ordering systems before proceeding to analyse the present specification.

  1. In relation to the specification’s detailing of the prior art, Mr Caine commented:

“The specification therefore incorrectly suggests that a single-item-at-a-time ordering format, as distinct from a shopping cart, did not exist (or was not part of common general knowledge) before the priority date.  In fact, as shown by Telstra’s evidence, this ordering format was used and formed part of common general knowledge before the priority date.”

  1. Mr Caine then moved onto the detailed description of the drawings (the preferred embodiment), which commences with a more detailed overview of the invention, worded without reference to the drawings, than had been provided in the preamble to the specification.  Mr Caine observed at this point that the temporal relationship between the “single action” required to be taken and the displays, interactions or other steps are not defined in the claims or the body of the specification. He also noted that this more detailed overview did not mention any facility for the user to change their specific information in the server system, and that this risked there being erroneous orders.  However, if this facility was to be provided, then, according to Mr Caine, “it would not be a system which involves ’only’ a single action after display of an item.” Mr Caine referred to a number of other features of the preferred embodiment of the invention, then concluded:

“The above matters teach that the embodiments illustrated in Figures 1A - 1C do not involve a method in which, after display of an item,  the user need only take a single action (i.e. click the “single action ordering button”), to effect the purchase of an item.  Rather, there are numerous other actions required of the purchaser for all orders (i.e. reviewing displayed partial information), and further interactions that will be required (i.e. verifying and/or changing displayed partial information) before certain orders will be finalised.”

  1. At this stage in his submissions Mr Caine did not dwell too long on the claims, noting the claiming scheme and noting that none of the claims uses the words “only a single action” (my emphasis).  Later in his submissions Mr Caine was to return to this latter issue in the course of making submissions on the way the claims should be construed.

  1. Mr Caine’s next submission was that the person skilled in the art (PSA) for this specification would be a person or team of people working in the field of client-server systems and electronic commerce, and typically, on the evidence, actual teams have included a person with technical expertise in electronic ordering systems (such as a web developer/information technology expert), and commercial personnel familiar with the merchant’s products, its objectives for the ordering system, and the likely preferences of its actual and potential customers.  I understood Mr Fitzpatrick to be of similar mind on this, and I agree it seems to be a reasonable formulation of the PSA.

  1. Having thus identified the PSA, Mr Caine returned to the issue of the common general knowledge.  He asserted that the PSA would have, among other things:

  • searched the Internet for websites of merchants operating electronic commerce systems and sellers of such systems
  • read technical “white papers” by purveyors of such systems
  • read specialist magazines dealing with IT, ordering systems, the Internet and/or web development
  • spoken with clients for such systems
  • spoken with software developers, web developers and business personnel working in or interested in the field of Internet commerce, at conferences, and/or using Internet chat rooms.

Mr Caine was able to refer to parts of the evidence in support of this assertion.

  1. He then listed ten “key elements of common general knowledge” which I summarise as follows:

    • the display of order information on the Internet in the form of Web pages using HTML
    • the use of a client system to select information or send instructions or requests to the server system, by use of the various means exemplified in the specification, such as a “mouse click” on a display
    • the use of manual log-in or automatic log-in using cookies to establish the identity of a client system
    • auto log involving entry of user information, use of a code or connection number of a device, or use of a cookie
    • the use of a cookie to retrieve and use stored customer information
    • the use of a “single-item-at-a-time” ordering format
    • the use of a “shopping cart” type format
    • the combination of a single-item-at-a-time format with a shopping cart type format
    • the option of using a pre-order confirmation process
    • the display of full or partial purchaser information for review and/or modification by a customer.

  1. According to Mr Caine, in relation to each of the above elements, one or more of Amazon’s witnesses appear to admit that the items formed part of common general knowledge before the priority date.  He noted that, apart from cookies, HTML and use of a “mouse click” on a display, the elements are not unique features of WWW ordering systems, and were features of ordering systems in existence before the establishment of the WWW in the 1990s.

  1. He then discussed a number of these, including the original “DA Direct” system which used AARNet (a precursor of the Internet which primarily connected universities), and the Telstra electronic ordering system called “Supply Net”.  Following this, he moved onto discussing electronic ordering using the WWW, and outlined a number of these systems which had been referred to in the evidence.  These were:  the DA Direct (WWW) system, a development of the original AARNet version, the Telstra SureLink system, the Open Market “OM-Transact” system, the Camtech InterPay system, the Green Grocer system, the Harris Technologies system, a system disclosed in an article in an online journal called Dr Dobbs Journal, the Web Basket Ordering System and the DigiCash/Ecash system. There then followed extensive submissions on the extent to which single-item-at-a-time ordering, shopping carts, display of partial information, cookies and pre-order confirmation were known in the prior art.

  1. Next, Mr Caine discussed “cookies”.  A “cookie” is a piece of text stored on a user’s computer by their web browser.  As explained by Mr Caine, a cookie is initially created when a web browser (client system) visits a web server, which sends an instruction to the browser to write a cookie that is then placed into the client system’s storage.  A cookie is referred to as being stored with some “persistence” at the client system, since it will remain there until its expiration date or deletion by the client system.  When the web browser requests a web page from the server, the browser can transmit the cookie to the web server along with the request for the page.  The server then uses data in the cookie to identify or remember something about the user and retrieve that information, for example, information about a previous transaction.

  1. At this point, Mr Caine returned to the construction of the term “single action”.  He stated, in part:

    “The terms [a single action] do not mean that after the initial display of a particular item, there is only “a single action” required to complete an order for an item,”

He seemed to base this interpretation on the fact that the specification showed certain purported embodiments of the invention where actions were permitted to occur after the initial display but before the so-called “single action”.  More pertinently, he went on to say:

“Most of the independent claims ... also do not state that the single action is displayed simultaneously with, or along with, the display of information identifying the item...

  1. This supports Telstra’s construction of “single action” because it means that these two displays may not appear together, such that, following display of an item, a user may need to take a step to access or be presented with the indication of the “single action” to be performed to request an order for an item, and perhaps another display of information identifying the item.  Even where the display of the item and the display of a “single action” are together, this does not preclude other actions being taken at the time of display and prior to selecting the single action.”

  1. As already mentioned, the opponent confined itself to five instances of prior art in challenging the novelty of the claims.  These were:

    • The Digicash ecash system, which was discussed in several documents in the evidence
    • The Open Market Technical White Paper OM-TransactTM: Technical Overview
    • The Dr Dobbs Journal on-line article entitled “Implementing a Web-Shopping Cart”
    • Australian Patent No. 730431 (19173/97), generally referred to as the “Telstra  ‘Click Call’ Patent”
    • Japanese Patent Hei9-179912, generally referred to as the Hitachi Patent (and probably more correctly referred to as publication number 09-179912).

  2. On inventive step, having set out the legal principles involved, Mr Caine gave his assessment of the problem to be solved by this invention as being to reduce:

  • the user “interactions” or “overheads” for the ordering of a single item; and
  • the amount of sensitive information transmitted over the Internet (or other network) when ordering a single item, as compared to the described prior art.

  1. He submitted that the invention in broad form was obvious and lacked an inventive step on the basis of the common general knowledge alone, or common general knowledge considered with the following documents mentioned previously in relation to novelty:

    • The Digicash ecash system, which was discussed in several documents in the evidence
    • The Open Market Technical White Paper OM-TransactTM: Technical Overview
    • The Dr Dobbs Journal on-line article entitled “Implementing a Web-Shopping Cart”.

  2. Furthermore, he submitted that it would have been obvious to implement an ordering process with the following design consideration in mind “as each of these would meet the obligations referred to in the Background section of the specification.”

    • Single item ordering
    • Storing and re-using purchaser information
    • Eliminating pre-order confirmation
    • Combining orders
    • Cancelling orders

  3. Mr Fitzpatrick began his submissions by giving an outline of the content of the specification and the background of the invention, focussing particularly on the phrase “single action”.   He contended that it was permissible to refer to passages in the description for an understanding of what constituted a single action, and cited two passages from the description which he said should be taken into account when attaching a scope to the phrase as used in the claim.

  1. After traversing various aspects of the  law applying to expert evidence, construction of specifications, novelty and so forth, Mr Fitzpatrick addressed the five instances of prior art which the opponent had raised in relation to the novelty of the claims in suit.  In each case he identified features of the claims which were not present in the citations.

  1. On inventive step, Mr Fitzpatrick firstly noted that a mere scintilla of inventiveness is sufficient (Meyers Taylor Pty Ltd v Vicarr Industries Ltd (1977) 137 CLR 228). He followed this by mentioning a few of the many cases that have warned of the dangers of ex post facto analysis.  Next, he said that the correct test was the reformulation of the so-called “Cripps test” which states that in order to establish that there is a lack of an inventive step it must be shown that the PSA would have been directly led to as a matter of course to try the invention as claimed in the reasonable expectation of success.  Finally, he went over the requirements that must be met by combination inventions in order to involve an inventive step.  This is all settled law, and it appeared to be in accord with the views expressed by Mr Caine in his submissions.

  1. Likewise, the principles applying to common general knowledge are well-established.  However, not unexpectedly, Mr Fitzpatrick took a narrower view of the extent of the common general knowledge that had been proven on the evidence.  Mr Fitzpatrick concluded his submissions on common general knowledge with:

“The opponent has therefore manifestly failed to discharge its evidentiary burden in establishing common general knowledge.” 

  1. As to the prior art documents the opponent had raised in relation to inventive step, Mr Fitzpatrick argued that the opponent had failed to advance evidence that these documents could reasonably be expected to have been “ascertained, understood and regarded as relevant” by the PSA before the priority date of the present claims.       

  1. In regard to the problem/solution approach, Mr Fitzpatrick echoed Mr Caine’s standpoint on the nature of the problem.  However Mr Fitzpatrick contended that the invention provided a counter intuitive solution to the security problem, and in particular it involved a utilisation of client identifiers in the form of cookies which had not previously been contemplated in the prior art. Furthermore, in relation to the cognitive load, as the shopping cart model was the prevailing
    e-commerce purchasing model:

    “It would not have occurred to a person skilled in the art to design an e-commerce system in which the placing of an order was achieved by performing a single action.”

  1. Mr Fitzpatrick thus concluded that the inventive step ground of opposition had not been established

  1. I will provide more details of the parties' submissions, where relevant, later in my decision.

    DECISION

  2. In proceedings such as these before the Commissioner the onus rests with the opponent to clearly establish its case in reaching a conclusion on any issue, and the standard of proof required is the civil standard of proof on the balance of probabilities (see, for example, Dunlop Holding's Ltd.'s Application [1979] RPC 523). As a tribunal, I am entitled to act on any material which is "logically probative" (T. A. Miller Ltd. v The Minister for Housing and Local Government and Another (1968) 1 WLR 992). In F. Hoffman-La Roche AG v New England Biolabs Inc [2000] FCA 283 Emmett J of the Federal Court found that in opposition proceedings the Court (and by implication the Commissioner of Patents in her role as a tribunal) should be "clearly satisfied that the patent, if granted, would not be valid". Where questions of fact such as obviousness and existence of invention are involved, "the grant should not be refused unless it has been clearly shown that the grounds of opposition have been clearly made out" (Montecatini v Eastman Kodak (1971) 45 ALJR 593).

  1. In respect to the standard of proof required in these proceedings, both parties cited Austal Ships v Stena Rederi Aktiebolag (2005) 66 IPR 420 at the hearing, wherein it was stated:

  1. “I can accept that a lower standard may apply to proof of evidence such as whether a document has been published or, indeed, whether a prior art vessel was well-known. I do not accept that it properly applies to the factual question that itself is the test for obviousness or lack of inventive step. Where the factual question is itself the legal test, as set out in s 7(3) of the Act, it seems to me that it should be determined at the higher standard. That means that where there are two opposing expert views that are conclusive on obviousness, both presented bona fide by witnesses of accepted expertise, unless one set of views can be rejected on proper grounds, the legal burden to establish a ground of opposition is not discharged; the court cannot be practically certain that obviousness or lack of inventive step is established.”

  1. Mr Caine submitted that this meant that the content of common general knowledge in Australia is to be established on the balance of probabilities, and I accept that this is the correct approach.  

  1. In regard to expert evidence on obviousness/inventive step, the comments of Lord Tomlin in British Celanese Ltd v  Courtaulds Ltd House of Lords (1935) 52 RPC 171 at 196 are of relevance:

"The area of the territory in which cases of this kind an expert witness may legitimately move is not doubtful.  He is entitled to give evidence as to the state of the art at any given time.  He is entitled to explain the meaning of any technical terms used in the art.  He is entitled to say whether in his opinion that which is described in the specification on a given hypothesis as to its meaning is capable of being carried into effect by a skilled worker.  He is entitled to weigh what at a given time to him as skilled in the art a given piece of apparatus or a given sentence on any given hypothesis as to its meaning would have taught or suggested to him.  He is entitled to say whether in his opinion a particular operation in connexion with the art could be carried out and generally to give any explanation required as to facts of a scientific kind. 

He is not entitled to say nor is Counsel entitled to ask him what the Specification means, nor does the question become any more admissible if it takes the form of asking him what it means to him as an engineer or as a chemist.  Nor is he entitled to say whether any given step or alteration is obvious, that being a question for the Court."

Section 40      

Clarity and construction of the claims

  1. Construction of claims is a matter for the Court (and, once again, by implication the Commissioner of Patents in her role as a tribunal): Minnesota Mining & Manufacturing Co v Tyco Electronics Pty Ltd [2001] FCA 1359; (2002) 53 IPR 32 at [92]. In Décor Corp Pty Ltd v Dart Industries Inc (1988) 13 IPR 385, Sheppard J reviewed the authorities and set out ten principles of construction:

1. The claims define the invention which is the subject of the patent. These must be construed according to their terms upon ordinary principles. Any purely verbal or grammatical question that can be answered according to ordinary rules for the construction of written documents is to be resolved accordingly.

2. It is not legitimate to confine the scope of the claims by reference to limitations which may be found in the body of the specification but are not expressly or by proper inference reproduced in the claims themselves. To put it another way, it is not legitimate to narrow or expand the boundaries of monopoly as fixed by the words of a claim by adding to those words glosses drawn from other parts of the specification.

3. Nevertheless, in approaching the task of construction, one must read the specification as a whole.

4. In some cases the meaning of the words used in the claims may be qualified or defined by what is said in the body of the specification.
5. If a claim be clear, it is not to be made obscure because obscurities can be found in particular sentences in other parts of the document. But if an expression is not clear or is ambiguous, it is permissible to resort to the body of the specification to define or clarify the meaning of words used in the claim.


6. A patent specification should be given a purposive construction rather than a purely literal one.

7. In construing the specification, the court is not construing a written instrument operating inter partes, but a public instrument which must define a monopoly in such a way that it is not reasonably capable of being misunderstood.

8. The body, apart from the preamble, is there to instruct those skilled in the art concerned in the carrying out of the invention; provided it is comprehensible to, and does not mislead, a skilled reader, the language used is seldom of importance.

9. Nevertheless, the claims, since they define the monopoly, will be scrutinised with as much care as is used in construing other documents defining a legal right.

10. If it is impossible to ascertain what the invention is from a fair reading of the specification as a whole, it will be invalid. But the specification must be construed in the light of the common knowledge in the art before the priority date.

  1. Turning now to claim 1 of the opposed application, at the hearing much attention focussed on the scope and meaning of the expression “single action”: it was said to be unclear, it was said to include within its scope more than one action, and there was some discussion that perhaps the word “only” should be present to qualify it.  The last assertion seems to be founded upon the existence of the word “only” as a qualification of “single action” in the “more detailed overview of the invention” (as referred to above).  It may also have something to do with the fact that it was apparently a patentee-initiated amendment during re-examination proceedings in the United States.

  1. The Macquarie Dictionary lists twenty- two meanings for “action”, of which I think the second one best fits the present context: something done; an act; deed.  However even armed with this dictionary definition, the word “action” still has a quality of vagueness about it which is underlined by the use of the word “something” in the definition.  It is known from the specification that the invention relates to a computer system and method, so it relates to some action within the area of computing, but that still does not dispel the vagueness. In the circumstances I think it reasonable to expect a skilled addressee of the specification would be compelled to turn to the description for guidance as to the proper scope of this term, and having done so the person, having already noted that a click of a mouse button had already been exemplified as a “single action”, would note this passage in the description:

“Also, various different single actions can be used to effect the placement of an order.  For example, a voice command may be spoken by the purchaser, a key may be depressed by the purchaser, a button on a television remote control may be depressed by the purchaser, or selection using any pointing device may be effected by the purchaser.  Although a single action may be preceded by multiple physical movements of the purchaser (e.g. moving a mouse so that a mouse pointer is over a button), the single action generally refers to a single event received by a client system that indicates to place the order.”

  1. In my view the insight provided by this passage -  in itself, but also when it is read in the context of the specification as whole - gives a clear enough understanding to the addressee of the claims of what would, or would not, infringe the claims.  For example, if a double mouse click is the required event to indicate to place the order, then on a semantic view this involves two actions.  However, such an action would clearly fall within the scope of “a single action” as that term is to be understood in the claims.  That does not mean to say, of course, that puzzles at the edge of the claim will not possibly occur, but that such puzzles should be given little weight if they “would not, as a practical matter, cause difficulty for the skilled addressee or manufacturer wishing to satisfy himself that what he proposes to do will not infringe the patent" (Glaverbel SA v British Coal Corp [1994] RPC 443 at 495).

  1. Were “only” to be inserted before “single action” in the claims, I do not consider that it would cause any limitation to the claims.  A “single action” is, as a matter of logic, only a single action, and its redundant use may even introduce a lack of clarity into the claims.

  1. The method of claim 1 has two “displaying” steps: these are the displaying of information identifying an item and displaying an indication of a single action that is to be performed.  Within the scope of the claim these two displaying steps can occur simultaneously, or they can occur spaced apart in time.  That is clear both from the wording used, but also from the fact that it is not until an appended claim - claim 21 - that the displays are defined as occurring simultaneously, and thus (employing a minor rule of construction) claim 1 includes both possibilities within its scope.  Moreover, there is no limitation in the claim to the effect that, where the displaying steps occur spaced apart, they are required to be contiguous steps.  Therefore I concur with the opponent that the method of claim 1 permits there to be one or more additional actions between the displaying of information identifying an item and displaying an indication of a single action which alone will effect ordering.  And this is consistent with the fact that the preferred embodiments include such additional actions.

  1. However the opponent has asserted that one such additional action could be to access or be presented with the indication of the “single action” required to be performed to send a request to a server to order an item.  I do not agree with this.  The former type of action would be an intrinsic part of the ordering process, and thus the ordering process would involve at least two actions, which is contrary to the notion of an ordering method that merely requires a single action.  The latter type of action would not, in my view, constitute an action as that term is to be understood in the present specification.

    I observe that non-simultaneous display could be achieved without such an additional action by use of a so-called dynamic web page.

  1. There is another aspect of the claim that at first glance appears ambiguous, and that is the entire expression: “a single action that is to be performed to order the identified item”.  This could mean “a single action amongst any number of actions that are needed to be performed to order the identified item”.  Or it could mean “a single action that is to be performed which of itself will be all that is needed to order the identified item.”  However, I believe that this ambiguity is in fact resolved by the next integer of the claim, which defines that in response to the indicated single action being performed, a request to order the identified item is sent to the server system.  I take this to mean that no other action is required to order the identified item.

  2. It is consistent with the clear reading of the specification that the inventive concept involves a method and system which makes available to a user functionality enabling ordering to be effected by a single action upon the display of an indication as to the single action which needs to be performed - which is also what the claim appears to provide.  As we know from the specification and claims, that ordering is effected by a “request to order”  “in response to the single action being performed” being sent to the server.  Of course, it is up to the user when and whether they avail themselves of the single action functionality, and if there is other functionality which shows, for example, billing information or shipping information, and the user disregards that information, then it will be at the user’s peril if they still proceed with one click ordering before correcting the information.

  1. There is one other term that occurs in claim 1 and other claims that I believe it is necessary for me to place a construction on, and that is “order” or “ordering”.  The Macquarie Dictionary altogether lists 61 meanings for this term.  The one most relevant to the present context is: “to direct to be made, supplied or furnished”.  This is consistent with the phrase used in the claim “request to order” (emphasis added).  Notably, if the plain meaning of the verb “to order” is adopted (as I believe is the correct approach) there is no element of on-line payment or shipping or the existence or provision of account details among the features of claim 1.  Clearly, Amazon’s particular ecommerce business model does have these features, but they are not inherent to ecommerce systems, as is evidenced by the existence of other systems such as “click and collect” systems, many of which do not involve payment until the ordered goods are collected.  In this light claim 1 includes within its scope any server-client computer system where, upon there being sourced from the server by the client a display of an item, a single action in relation to a second display is sufficient (one imagines clicking a “yes” or “OK” button) to cause a request to be sent to the server that item be made, furnished or supplied.

  1. At the hearing the opponent raised a few other minor issues of clarity.  These involved situations where terms such as “the information”, “the indications” and “the displaying” were used in some appended claims where there had been previous references to multiple different ones of these.  It seems to me to be clear that all of the previous references are encompassed, but in any case if such an interpretation results in an absurdity then another minor rule of construction - that which says “reject the absurd” (Stanway Oyster Cylinders (1996) 66 FCR 577 at 582-583) - will resolve the situation.

  1. In light of the foregoing, I find that the specification satisfies the requirements of sub-sections 40(2) and 40(3) of the Patents Act 1990.

    Novelty

    Law

  1. The test for determining whether the invention lacks novelty is the "reverse infringement test" as set out in Meyers Taylor Pty Ltd v Vicarr Industries Ltd (supra) at 235 where Aickin J stated:

"The basic test for anticipation or want of novelty is the same as that for infringement and generally one can properly ask whether the alleged anticipation would, if the patent were valid, constitute an infringement."

  1. Infringement occurs when "each and every one of the essential features" of the claim has been disclosed by the alleged anticipation: see Rodi and Wienenberger AG v Henry Showell Ltd [1969] RPC 367 at 391.

  1. In the course of his submissions Mr Caine drew my attention to the recent case of Apotex Pty Ltd v  Sanofi-Aventis [2009] FCAFC 134 dealing with claims to a chemical product, and in particular the second dotpoint of the following passage setting out the principles apposite to determining novelty:

“From the consideration in [ H Lundbeck v AlphapharmPty Ltd (2009) 177 FCR 151], the following is apposite to the consideration of anticipation by the prior art patents in this case:

• Where the prior publication discloses exactly what is claimed, there is anticipation (Lundbeck at [180]).
• There is anticipation if the skilled addressee would add missing information to what is disclosed in the prior art as a matter of course and without the application of inventive ingenuity or undue experimentation (at [181]). A disclosure is sufficient if it enables the skilled addressee, in the ordinary course and without invention, to add what is missing in the prior publication to obtain the claimed invention (at [183]).
• If the prior art discloses the very subject matter of the invention, the person skilled in the art is assumed to be willing to make trial and error experiments to get it to work (at [189]). If the disclosure is of an invention which, if performed, would infringe the patent, there is anticipation.
• The question is whether the disclosure is sufficient to enable the skilled addressee to perceive, understand and, where appropriate, apply the prior disclosure necessarily, but within the ordinary limits of trial and error, to obtain the invention (at [190]).”

  1. The opponent relies upon five instances of prior art to establish its ground of lack of novelty.  I will deal with each in turn.

  1. The Digicash ecash system

The applicant has contended that there is insufficient evidence of the public availability of this system.  I disagree.  There seems to be ample corroborated evidence coming from three declarants that this system was in the public domain before the priority date of the claims.

  1. However, I do not see this system as being an anticipation of the claims.  The Digicash ecash software product involves a trilateral arrangement between a purchaser, a merchant and an ecash provider (a role which may be fulfilled by a bank, for example).  The purchaser orders a product from a merchant and then authorises payment from the “electronic purse” or “digital wallet” (as it sometimes called) controlled by the ecash provider.  The initial click on a “buy me” button to initiate an order with a merchant must be followed with further mouse clicks authorising payment from the electronic purse in order to complete the order.  Clearly more than a “single action” is required to effect the order, and thus the Digicash ecash system lies outside the scope of the claims. The claims are novel in light of this citation.

  1. The Open Market Technical White Paper OM-TransactTM: Technical Overview

    As with the Digicash system, the OM-Transact system does not allow the option of a single action to effect an order.  In what is in basic form a two stage process, in order to effect an order a user must firstly click on the displayed image of the item to be purchased (called a Digital Offer, or DO).  The user then receives an order form identifying items upon which a DO has been made, and then the user must click on a “yes” button against any item they wish to purchase in order to effect the order.  This prior art document therefore does not anticipate the present claims.

  1. The Dr Dobbs Journal on-line article entitled “Implementing a Web-Shopping Cart”

    This on-line article shows a publication date of September 1996, that is, before the priority date of the present claims.  As best can be gleaned from the document in evidence, which does not appear to include some figures which are referenced in the text (which, it seems from the text, may be screen-shots), the ordering process can only be effected through several mouse clicks, which start with calling up a page which allows the purchaser to review the contents of the shopping cart and then proceed to completing what appears to be a rather complex form.  There does not appear to be any displayed indication of a single action option that may be taken to effect the ordering, and more than one single action is required to effect ordering. The claims are novel in light of this citation.

  1. Australian patent application 19173/97

This document was published after the priority date of the claims, but it has an earlier priority date and therefore is prior art for novelty purposes under the “whole of contents” provisions of the Patents Act.

  1. At the hearing the applicant drew attention to the fact that only the “B-level” publication was in evidence.  The opponent requested that it be allowed to introduce into the evidence the “A-level” publication, and I allowed that request.

  1. As stated by the opponent in its written submissions:

“This disclosure is an automated system to connect two parties A and B by telephone.  The invention enables the B Party number, which is included in a directory, to be searched and displayed along with a displayed indication of a link to be selected to cause the call to be completed.  The system may be implemented using telecommunications infrastructure, including the Internet and an interactive computer of the A Party that displays and executes actions on Web (HTML) using a web browser.  When the call connection link is selected, the telecommunications number of B is displayed with an indication “Auto Connect” of the action to take to place the call.”

The “item” of claim 1 being ordered in this case is a telephone connection and call.

  1. However, the applicant asserted that the A Party needs to take further actions after clicking on the “Auto Connect” button to complete the ordering process.  It drew my attention to the following passage in patent application 19173/97:

“A connection with the highlighted party 47 can then be requested by clicking on the hypertext “Auto Connect” 49 which invokes the call completion script 40.

... The call completion scripts or codes 40 are attached to the call completion hypertext links of the call completion page 38 and are executed when the WWW client 16 selects one of the links.  Further web pages may then be forwarded to the client 16 for user interaction.  These are form based pages that the user needs to complete to provide identification and charging information, such as a Telecard number (i.e. calling card number) and PIN, and the A party’s telephone number.”

  1. However, this passage goes on to say:

“Alternatively prior arrangements may be made to authorise the A and/or B parties and the cost of the call directed to one or both of the parties.”

In the mode of operation where prior arrangements are made for payment, it would seem that a single ordering action is all that is required to effect the order.  In all other aspects 19173/97 would appear to read onto claims 1, 4 to 7, 32 and 35 to 38 and would infringe those claims.  Therefore I find that claims 1, 4 to 7, 32 and 35 to 38 are not novel in light of 19173/97.

  1. Hitachi Patent

    This patent discloses an ecommerce system based essentially on the shopping cart model.  Once a selection has been made of one or more items for purchase, then ordering is effected by two actions: firstly, clicking on a button labelled “Order” will result in the displaying of all the items for which an indication has been given of an intention to purchase; and, secondly, clicking on another button labelled “Set” (which it appears is the “Enter” key).  There is no possibility of by-passing either of these actions.  Thus more than a “single action” is required to effect the order, and the claims are novel in light of this citation.

  1. Accordingly, I find that the claims 2, 3, 8 to 31, 33, 34 and 39 to 141 are novel, and I find that claims 1, 4 to 7, 32 and 35 to 38 are not novel in light of Australian Patent No. 730431 (19173/97) by Telstra.

    Inventive Step

    Law Relating to Inventive Step

  1. The effect of subsections 7(2) and 7(3) of the Patents Act, in the case of applications filed before 1 April 2002, is that a claimed invention will lack an inventive step if it is obvious in the light of:

(a)  common general knowledge; or

(b)  common general knowledge considered together with information in a single document or through doing a single act, provided that the document or act could reasonably be expected to have been ascertained, understood and regarded as relevant to work in the relevant art in the patent area by the person skilled in the art.

  1. So far as lack of inventive step in light of common general knowledge considered together with a single document is concerned, as a preliminary step it must be established whether the person skilled in the art could be reasonably expected to have ascertained, understood and regarded the document as relevant.

  1. While inventiveness requires more than novelty, even a "scintilla of inventiveness" is sufficient and a step, if otherwise inventive, does not lose its inventiveness because the idea, once conceived, is very simple to put into effect (Winner v Ammar Holdings Pty Ltd 25 IPR 273). The test is objective, so that it is irrelevant whether the invention was a matter of chance or the result of long experimentation and much effort (Winner v Ammar at 294).

Common General Knowledge

  1. As a precursor to any inventive step consideration, the state of the common general knowledge in the art has to be established.  The common general knowledge is the background knowledge attributable to the person skilled in the art.  A widely accepted definition of common general knowledge is that provided by Aickin J in Minnesota Mining and Manufacturing Company and Another v Beiersdorf (Australia) Limited 144 CLR 253 at 292:

    "The notion of common general knowledge itself involves the use of that which is known or used by those in the relevant trade.  It forms the background knowledge and experience which is available to all in the trade in considering the making of new products, or the making of improvements in old, and it must be treated as being used by an individual as a general body of knowledge."

  1. The state of the common general knowledge is a question of fact which must, in general, be determined on the basis of evidence from persons whose background enables them to testify authoritatively as to the common general knowledge in the particular art.  Indirect evidence such as widespread publication or admissions made in patent specifications may also serve to indicate something is common general knowledge.

Approach Used to Assess Inventive Step

  1. There are a number of approaches which the courts have used to assess inventive step.  In Wellcome Foundation Ltd v VR  Laboratories (Aust) Pty Ltd (1981) 148 CLR 262 at 286, Aickin J stated:

"The test is whether the hypothetical addressee faced with the same problem would have taken as a matter of routine whatever steps might have led from the prior art to the invention, whether they be the steps of the inventor or not."

  1. More recently, the High Court in Aktiebolaget Hassle v Alphapharm Pty Ltd 56 IPR 129 at 142-143 referred with approval to this approach and further held:

"That way of approaching the matter has an affinity with the reformulation of the ‘Cripps question’ by Graham J in Olin Mathieson Chemical Corporation v Biorex Laboratories Ltd [1970] RPC 157. This court had been referred to Olin in the argument in Wellcome Foundation.  Graham J had posed the question:

`Would the notional research group at the relevant date in all the circumstances directly be led as a matter of course to try [the claimed invention] in the expectation that it might well produce [the desired result]?'

That approach should be accepted."

  1. An approach commonly employed to determine inventive step is the so-called “problem-solution approach”.  Both parties seemed agreed that this was the appropriate methodology to apply in this case.  However, I will be mindful of the High Court’s comments in Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [2007] HCA 21 advising caution with the use of a “problem- solution approach”. The High Court observed:

“Such developments were considered and distinguished in Alphapharm [supra]. This Court rejected confining the question of obviousness to a "problem and solution" approach, particularly with a combination patent. This should not be misconstrued. The "problem and solution" approach may overcome the difficulties of an ex post facto analysis of an invention, which may be unhelpful in resolving the question of obviousness. However, it is worth repeating that the "problem and solution" approach may be particularly unfair to an inventor of a combination, or to an inventor of a simple solution, especially as a small amount of ingenuity can sustain a patent in Australia. Ingenuity may lie in an idea for overcoming a practical difficulty in circumstances where a difficulty with a product consisting of a known set of integers is common general knowledge.” (references omitted).

  1. An important consideration in this matter is also the impermissible use of hindsight.  The High Court in Alphapharm (supra) also warned against the misuse of hindsight noting that the danger of such misuse will be “particularly acute where what is claimed is a new and inventive combination for the interaction of integers, some or all of which are known”. In that regard, the court referred with approval to Lord Diplock’s comments in Technograph Printed Circuits Ltd v Mills & Rockley (Electronics) Ltd [1972] RPC 346 (at 362)]:

"Once an invention has been made it is generally possible to postulate a combination of steps by which the inventor might have arrived at the invention that he claims in his specification if he started from something that was already known. But it is only because the invention has been made and has proved successful that it is possible to postulate from what starting point and by what particular combination of steps the inventor could have arrived at his invention. It may be that taken in isolation none of the steps which it is now possible to postulate, if taken in isolation, appears to call for any inventive ingenuity. It is improbable that this reconstruction a posteriori represents the mental process by which the inventor in fact arrived at his invention, but, even if it were, inventive ingenuity lay in perceiving that the final result which it was the object of the inventor to achieve was attainable from the particular starting point and in his selection of the particular combination of steps which would lead to that result."

Inventive Step Determination in the Current Case

  1. As already stated, both parties had similar views as to the problem to be solved, no doubt because the specification did not seem to be open to interpretation in this regard.  Basically there were two aspects to the problem set out in the specification.  The first was the so-called cognitive load or cognitive overhead, which basically refers to the difficulty in navigating through the steps necessary to transact using ecommerce the more steps there are, and the second concerned the problems associated with sending sensitive information through insecure communication channels.  Both of these were said to be factors in consumer resistance and inertia.

  2. Mr Caine took a liberal view as to the amount of relevant common general knowledge in the art before the priority date.  Mr Fitzpatrick on the other hand took a restrictive view by disputing the existence of this common general knowledge on the basis that there was insufficient evidence to support the opponent’s view. 

  1. Two items of common general knowledge cited by Mr Caine were these:

  • the display of order or item information, or instructions or user inputs, for Internet ordering systems in the form of Web pages using HTML code, and the use of a web browser by the customer to access and interact with such displays; and
  • the use of the following means by a client system or device to select information or send instructions or requests to the server system, clicking a mouse button over a pre-defined area of displayed information, a sound generated by the user, use of a television remote control, depressing a key on a key pad, using a pointing device, and selection of a displayed indication.

  1. Mr Caine drew attention to a number of systems in use before the priority date of the claims which had these features.  Moreover, I observe that each of the documents which were referred to above in the course of being cited for novelty purposes had these features.  Two of these were patent documents, and while I accept Mr Fitzpatrick’s point that the PSA would not be expected to have read these documents, or probably any of the other ones for that matter, the significance of these documents is that all employed the features above, and did so in manner which suggests that their use in that way is unremarkable and well known.

  1. Also, I note that the present specification itself states, in this context:

“A user, who is a potential purchaser, may browse through the catalog using a browser and select various items that are to be purchased.  When the user has completed selecting the items to be purchased, the server computer system then prompts the user for information to complete the ordering of the items.”

  1. This would appear to support the above two items being common general knowledge, particularly in light of these comments in Bristol-Meyers Squibb Co v F H Faulding & Co Ltd 46 IPR 553:

"If a patent application, lodged in Australia, refers to information derived from a number of prior publications referred to in the specification or, generally, to matters which are known, in our view the Court - or the Commissioner - would ordinarily proceed upon the basis that the knowledge thus described is, in the language of sec 7(2) of the 1990 Act, part of ‘the common general knowledge as it existed in the patent area’. In other words, what is disclosed in such terms may be taken as an admission to that effect."

  1. In my view the evidence establishes, on the balance of probabilities, that both the two items cited by Mr Caine are common general knowledge.

  1. Turning to claim 1 there appears to be nothing defined in this claim which is not merely common general knowledge, save for the feature relating to the “single action”.  But when one turns to the problem to be solved, it seems “very plain” (Aktiebolaget Hassle v Alphapharm Pty Ltd (supra)) and a matter of simple logic that one way to do this is to reduce the number of actions, with the ideal scenario being just one action.  Clearly this invention is simple in nature, but its obviousness does not derive from that.  There would seem to be practically no doubt that the PSA would have been directly led to the present solution to the problem, particularly bearing in mind that it is the job of PSAs in this technical field to think logically.  The fact that the invention had apparently not yet found expression in the systems of the day could well have a lot do with its obvious downsides, which are the storage of sensitive information on a server of a commercial organization and the fact that the use of client identifiers only allows the identification of the client terminal, and not the particular individual making the order.

  1. It follows that claim 1 is lacking an inventive step.

  1. However, the inventiveness of the particular manner in which that single action functionality is achieved seems to be a somewhat different story.  It seems to me that the use of cookies (or, more generally, server-provided client identifiers) for that purpose may involve an inventive step.  The evidence is that those in the art first became aware of cookies only a reasonably short time prior to the present priority date, in early 1995, but nonetheless the evidence is also that they had become common general knowledge by the priority date of the claims.  The evidence seems fairly clear cut in this regard, particularly from the opponent’s declarants, notwithstanding the passage of time between then and when the declarations were made and notwithstanding some slight equivocation on the part of some of the applicant’s declarants.  For example, one declarant for Amazon, Ms Swatman, states:

“I think software writers and systems designers in Australia in 1997 would have been well aware of how to implement client identifier/cookie functionality into an operable e-commerce system.” (emphasis added).

  1. However, that awareness of server-provided cookies appears to be confined to uses such as state maintenance, profile management and automatic log-ins.  There is no evidence to suggest that the use of client identifiers in their present fashion, and before the priority date of the present claims, was known at any level.  The closest that the evidence comes to suggesting this is an assertion made by Dr John Lockwood when commenting upon a passage in the Dr Dobbs article which reads:

“In a production system you could read this data from a registered database and not require users to input shipping and payment data each time.  This increases security.”

Dr Lockwood interprets this in the following way:

“This discloses to a person with basic knowledge of Internet ordering that a cookie can be used to eliminate all steps in which a user inputs and transmits order information over the Internet, as the information is automatically obtained for a given purchase from the merchant side database using the user id in the cookie.”

  1. However from a close perusal of the relevant texts, it appears that Dr Lockwood has drawn rather a long bow.  The text he cites, and the surrounding text (which is in a computer program listing), does not mention cookies as such.  The text contained in later listings does refer to cookies, but in respect to using a cookie to store a user id to fetch state data.  The inference Dr Lockwood draws, namely that the text he has cited discloses to a person with basic knowledge of Internet ordering that cookies could be used for the purpose stated in the text, seems to me to be an outcome of convenient ex post facto analysis rather than deriving from the words of the text themselves.

  1. It seems to me that the use to which server generated client identifiers are put in the present invention is both an elegant and inventive way of achieving one action ordering functionality.  Therefore I consider that any of the claims having this integer fulfil the requirement of subparagraph 18(1)(b)(ii) of involving an inventive step.  These are claims 3 and 62 to 141.

  1. The variety of other functionality of the ordering system described and claimed seems to me on the evidence to be well-known, and I do not see it of its own being capable of sustaining a patent.

  1. I find that claims 1, 2 and 4 to 61 lack an inventive step.

    CONCLUSION

  1. I have found that claims 1, 4 to 7, 32 and 35 to 38  lack novelty and that claims 1, 2 and 4 to 61 lack an inventive step in the light of prior art for the reasons detailed above.

100. As the specification clearly contains patentable subject matter, I allow the applicant 60 days from the date of this decision in which to propose suitable amendments to overcome the above findings.  If suitable amendments are not proposed within that time, I will refuse the application.

COSTS

101. In proceedings such as these it is usually the case that costs follow the event.  I see no reason to vary that approach on this occasion.  I therefore award costs against Amazon.com, Inc.

Ed Knock
Delegate of the Commissioner of Patents

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Cases Citing This Decision

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Cases Cited

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Meyers Taylor Pty Ltd v Vicarr Industries Ltd [1977] HCA 19
Meyers Taylor Pty Ltd v Vicarr Industries Ltd [1977] HCA 19
F.Hoffman-La Roche AG v New England Biolabs Inc [2000] FCA 283