Woodside Energy Limited v ExxonMobil Upstream Research Company

[2015] APO 6

IP AUSTRALIA

AUSTRALIAN PATENT OFFICE

Woodside Energy Limited v ExxonMobil Upstream Research Company [2015] APO 6

Patent Application:                2005262666

Title:Hydrocarbon fluid processing plant design

Patent Applicant:                   ExxonMobil Upstream Research Company

Opponent:  Woodside Energy Limited

Delegate:  Rhys Munzel

Decision Date:  20 February 2015

Hearing Date:  28 November 2014, in Canberra

Catchwords:  PATENTS – computer implemented methods of determining a cost optimised LNG plant design – LNG plants constructed and operated resulting from design – full description – novelty – inventive step – manner of manufacture – invention found to not involve a manner of manufacture – opposition successful – application refused

Representation:  Patent applicant: Watermark Patent and Trade Marks Attorneys

Opponent: Mr Andrew Fox, of counsel, assisted by Dr Marguerite Port, patent attorney of McCarthy Port Patent and Trade Mark Attorneys  

IP AUSTRALIA

AUSTRALIAN PATENT OFFICE

Patent Application:                2005262666

Title:Hydrocarbon fluid processing plant design

Patent Applicant:                   ExxonMobil Upstream Research Company

Date of Decision:                   20 February 2015

DECISION

The opposition succeeds on the grounds that claims 1-21 do not define a manner of manufacture. Subject to an appeal I refuse the application. I award costs according to Schedule 8 against Exxon-Mobil Upstream Research Company. 

REASONS FOR DECISION

Background

1. Patent application 2005262666 (“the application”) in the name of ExxonMobil Upstream Research Company (“Exxon”) was examined and accepted by the Commissioner, and subsequently opposed by Woodside Energy Limited (“Woodside”). Exxon requested examination of the application before 15 April 2013, which means that substantive amendments of the Patents Act 1990 (Cth) (“the Act”) brought about by the Intellectual Property Laws Amendment (Raising the Bar Act 2012 (Cth) (“the Raising the Bar Act”) to not apply to this opposition.

2. Woodside and Exxon each rely on expert evidence in the form of declarations.  Woodside’s evidence in support consisted of:

   • a first declaration by David Fletcher (“Fletcher 1”) dated 24 June 2011 (with exhibits DSF-1 to DSF-10);
   • a first declaration by Michael Johns (“Johns 1”) dated 13 February 2012 (with exhibits MLJ-1 to MLJ-7);

   ·first and second declarations by William Svrcek (“Svcek 1” and “Svrcek 2”) respectively dated 24 April 2012 (with exhibits WYS-1 to WYS-9) and 7 November 2012 (with exhibits WYS-10 to WYS-22).

3. Exxon’s evidence in answer consisted of:

   • first and second declarations by John Stone (“Stone 1” and “Stone 2”) respectively dated 24 May 2013 (with exhibits JBS-1 to JBS-6) and 13 October 2013; and

   ·A first declaration by Grant Jacobsen (“Jacobsen 1”) dated 27 May 2013 (with exhibit GBJ-1).

4. Woodside’s evidence in reply consisted of:

   ·a third declaration by David Fletcher (“Fletcher 3”) dated 2 January 2014.

5. David Fletcher’s second declaration (“Fletcher 2”) dated 4 December 2013, and exhibit “DFS-2” accompanying Fletcher 3, were determined by a delegate of the Commissioner to be evidence not “strictly in reply”. Those documents have been included as further evidence. Exxon provided evidence in response to the further evidence consisting of a third declaration by John Stone (“Stone 3”) dated 31 March 2014.

6. The hearing occurred on 28 November 2014. Andrew Fox and Marguerite Port attended on behalf of Woodside while Exxon relied on its written submissions.

   Previous opposition 2005264908

7. This is the second opposition I have heard between Woodside and Exxon. The previous opposition to application 2005264908, which related to the same technology field as the present application, resulted in my decision Woodside Energy Limited v ExxonMobil Upstream Research Company [2014] APO 53 (“my previous decision”). I will refer to my previous decision when appropriate.

   Onus

8. As I noted above substantive amendments brought about by the Raising the Bar Act do not apply to this opposition. The onus therefore rests with Woodside to clearly establish its case. In establishing that any ground of opposition succeeds, the Commissioner should be “clearly satisfied that the patent, if granted, would not be valid” (F. Hoffman-La Roche AG v New England Biolabs Inc [2000] FCA 283 at [67]).

   Grounds of opposition

9. In written summary of submissions Woodside relied on the following grounds of opposition:

   • Failure to describe the invention fully or provide a best method of performance.
   • Lack of novelty
   • Lack of an inventive step; and
   • Lack of a manner of manufacture.

10. At the hearing Woodside provided submissions only in relation to lack of a manner of manufacture and lack of an inventive step in light of prior art document D6 (as introduced below). Woodside relied on its written summary of submissions for other grounds and particulars.

    The nature of the invention

11. Before construing the specification, I note what Middleton J said in Eli Lilly and Company Limited v Apotex Pty Ltd [2013] FCA 214, 100 IPR 451 at [139]:

    “It is well settled that the Court should, from the outset, approach the task of patent construction with a generous measure of common sense. The Court must place itself in the position of a person skilled in the relevant art, being the subject matter of the patent. From this perspective, the patent is to be read as a whole, in the context of the specification and in light of the prevailing common general knowledge and state of the relevant art at the priority date.”

    Background to the invention

12. The specification is entitled “Hydrocarbon fluid processing plant design” and the field of the invention relates to methods of designing hydrocarbon processing plants, and methods of producing hydrocarbon fluids using hydrocarbon fluid processing plants. The invention is more specifically described as relating to methods of designing natural gas liquefaction plants (“LNG plants”) and methods of producing liquefied natural gas (“LNG”) using LNG plants (at paragraph [0002]).

13. The specification notes that large volumes of natural gas are located in remote areas of the world (at paragraph [0003]).  To reduce shipping costs the gas is commonly liquefied in an LNG plant (at paragraph [0004]). One traditional method of building an LNG plant is to build up a plant site in several parallel trains (at paragraph [0005]). Each train may comprise all the individual processing units or steps necessary to liquefy a stream of feed gas into LNG and send it into storage (at paragraph [0005]). Train size can depend heavily on the extent of the resource, technology and equipment used within the train, the available funds for investment in project development, and market conditions (at paragraph [0005]).

14. Figure 1 of the specification is now reproduced, which I consider represent stages typically forming part of an LNG plant (discussed at paragraphs [0033]-[0047]):

15. In the exemplified LNG plant feed gas from a natural gas field first passes through a slug catcher 30 to handle the flow of gas from the gas field. The buffered gas flow passes (in this case via gas preheater 32) to an acid gas removal contactor 33 to remove acid gas impurities such as carbon dioxide and hydrogen sulphide. Water is also removed from the natural gas in the dehydration unit 33. Heavier hydrocarbons such as ethane are removed from the dehydrated natural gas in the deethaniser 36. Those heavier hydrocarbons are processed in the fractionator 40 to recover liquid petroleum gas (“LPG”), potentially for sale. The natural gas exiting the deethaniser 36 passes to the liquefaction unit 37 where cryogenic heat exchangers liquefy the natural gas. Helium and nitrogen are removed from the LNG in the nitrogen rejection and helium recovery unit 39. The LNG is then ready for transport.

16. According to the specification a hydrocarbon fluid processing plant is usually designed using a process simulation model where the design engineer picks what he or she believes to be the highest cost equipment type and he attempts to minimise the capacity of the selected highest cost equipment type (at paragraph [0006]). For example, in an LNG plant, the design engineer might select refrigerant compressor horsepower as the process variable to minimise in the process simulation modelling process in order to minimise the size and cost of the refrigerant compressors (forming part of the liquefaction unit) or the cost of any other equipment types into the process simulation modelling process (at paragraph [0006]).

    Object of the invention

17. The specification notes that increased demand for LNG has placed an increased emphasis on cost, design and schedule efficiency of new gas liquefaction projects to reduce the cost of delivered gas (at paragraph [007]). Improvements in cost, design and schedule efficiency can help mitigate the substantial commercial risk associated with large LNG development projects (at paragraph [0007]).

    The invention described

18. The invention is described in three embodiments (at paragraphs [0008]-[0010]) that reproduce the three independent claims of the specification (which I discuss below). The embodiments all broadly speaking relate to a design methodology that provides cost information on proposed hydrocarbon fluid processing steps run at varying conditions, capacities, and/or with different equipment configurations. The information derived may be used in the design of an LNG plant, which may in turn be constructed and operated (at paragraph [0062]). The design methodology incorporates a number of steps as set out in Fig. 2 of the specification, which I now reproduce:

19. In step 1 a designer provides a “process unit configuration” for one or more “processing units” of an LNG plant. A process unit configuration is defined as a flow scheme that includes the arrangement of equipment and fluid flow paths for a process unit and may include operating conditions and constraints (at paragraph [0017]). The term “process unit” is provided a definition that I paraphrase to mean a grouping of equipment that completes or supports completion of a “process step” (at paragraph [0018]). A process step is defined as a step wherein the state of a material is altered such as its temperature, pressure or composition – at paragraph [0018]). A process unit configuration may be graphically represented as shown in Fig. 4 of the specification (and reproduced below), which depicts an acid gas removal unit (at paragraph [0050]) comprising: heat exchangers 12, 18 and 19, solvent contactor 13, flash drum 15, pump 23 and fluid streams 11, 14, 16, 17 and 20.  

20. In step 2 “cost to capacity relationships” for the plurality of equipment types included in the one or more processing units is determined (for example the equipment depicted in the acid gas removal unit of Fig. 4). A “cost to capacity relationship” is defined as any relationship of the cost of a piece or pieces of equipment related to the capacity of such equipment (at paragraphs [0019] and [0051]). These relationships may be obtained from data comparing the cost of an equipment type to its capacity and may take the form of a function, e.g. a linear or non-linear equation (at paragraph [0019]).

21. In step 3 a “process simulation model” is run to obtain a “process simulation” for the process unit configuration.  A “process simulation model” is defined as any mathematical modelling program used for simulating the processing of hydrocarbon fluids a hydrocarbon fluid processing plant. Disclosed commercially available models include: Hysys, Aspen and Chemcad (at paragraph [0021]). A “process simulation” is defined as the simulated case developed by the process simulation model (at paragraph [0022]). A process simulation may include information such as: required capacity for an equipment type; temperature, pressure and flow rate of fluid streams; and utilities requirements (at paragraph [0019]).

22. In step 4 a cost measure for the simulation comprising an equipment cost measure is obtained by comparing the estimated capacity of the plurality of equipment types to their respective cost to capacity relationships. A “cost measure” is defined as any manner of representing a cost that would be incurred if a process unit were actually constructed and/or operated (at paragraph [0024]). An “equipment cost measure” is defined as a measure representing the cost of one or more of: designing, procuring, delivering, constructing, installing and/or operating one or more equipment types (at paragraph [0025]). In one example the estimated cost of a shell and tube heat exchanger may be obtained upon estimating its required surface area (at paragraphs [0052] and [0053]).

23. In step 5 a process variable within the process simulation model is altered. According to the specification a process variable is defined as “any process variable that can be altered in any process simulation model” (at paragraph [0028]). Provided examples include (at paragraph [0028]): the temperature, pressure, flow rate or composition of a fluid stream; the area or duty of a heat exchanger, the horsepower of a compressor, the size of a process vessel, and the identity of an equipment type. One or more variables may be altered (see paragraph [0060]). As I noted above the process simulation model is defined as the modelling program for simulating processing of hydrocarbon fluids. I consider that the term “alter” requires the prior existence of a value within the process simulation model to make different. I therefore purposively construe step 5 to define that a value for a variable obtained or used by the process simulation model in obtaining the previous simulation is altered as a precondition to re-running the process simulation model and obtaining the next process simulation.

24. In step 6 steps 3 to 5 are repeated a number of times. This step provides cost measures for the different process simulations obtained when repeatedly altering one or more process variables and re-running the process simulation model (see paragraph [0060]). Such steps allow a designer to: select a single process variable and iteratively alter the selected process variable to determine the lowest or optimised value for the cost measure for the selected process variable. The method may also be used to determine the lowest or optimised value for the cost measure of a plurality of process variables. After determining process variable values corresponding to the lowest or optimised value for the cost measure the variables may be set to obtain a cost optimised process simulation, which may be in turn used to indicate the capacity of the equipment types that correspond to the lowest cost process simulation (at paragraph [0060]).  

    Construing the invention claimed

25. The correct approach to the construction of claims was discussed by Bennett J in H Lundbeck A/S v Alphapharm Pty Ltd [2009] FCAFC 70, 81 IPR 228 at [118] – [120]:

    "Words in a claim should be read through the eyes of the skilled addressee in the context in which they appear. Words used in a specification are to be given the meaning which the person skilled in the art would attach to them, having regard to his or her own general knowledge and to what is disclosed in the body of the specification …  while the claims define the monopoly claimed in the words of the patentee's choosing, the specification should be read as a whole  …  it is not permissible to read into a claim an additional integer or limitation to vary or qualify the claim by reference to the body of the specification …  terms in the claim which are unclear may be defined or clarified by reference to the body of the specification".

26. The specification ends with 21 claims. Claims 1, 16 and 19 are independent claims while claims 20 and 21 are omnibus claims relying on reference to the written description. Claim 1 is reproduced below:

    “A method of designing a liquefied natural gas (LNG) liquefaction plant, comprising:

    A.providing a process unit configuration for one or more processing units included in a LNG liquefaction plant;

    B.determining a cost to capacity relationship for a plurality of equipment types included in said one or more processing units;

    C.running a process simulation model to obtain a process simulation for said process unit configuration, said process simulation including an estimated capacity of said plurality of equipment types;

    D.determining a cost measure for said process simulation, said cost measure including an equipment cost measure determined using said estimated capacity of said plurality of equipment types and said cost to capacity relationships;

    E.altering a process variable in said process simulation model; and

    F.repeating steps C through E a plurality of times.”

27. Steps A-F of claim 1 reproduce steps 1-6 of the methodology I discussed above. Claim 13 relates to a method of producing a hydrocarbon fluid product from an LNG plant, wherein the LNG plant is designed at least partially using steps a to f which are identical to steps A to F of claim 1. Claim 19 relates to a tangible media including a set of instructions readable by a computer and is reproduced as follows:

    “A tangible media including a set of instructions readable by a computer, said set of instructions comprising:

    A.a process configuration module suitable for inputting a process unit configuration for one or more processing units included in a liquefied natural gas (LNG) liquefaction plant;

    B.a register module suitable for storing cost to capacity relationships for a plurality of equipment types included in said one or more processing units;

    C.a process simulation model suitable for obtaining a process simulation for the process unit configuration, said process simulation suitable for estimating the capacity of said plurality of equipment types;

    D.a cost calculation module suitable for determining a cost measure for said process simulation, said cost measure including an equipment cost measure determined using said estimated capacity of said plurality of equipment types and said cost to capacity relationships;

    E.a process variable interfacing module suitable for allowing alteration of a process variable of said process simulation model;

    F.a repetition module suitable for repeating modules C through E a plurality of times; and

    G.an output module suitable for producing a data display.”

28. Claim 19 differs in scope from that of claims 1 and 13 in that is relates to software provided on tangible media suitable for implementing the design methodology. The software in short must be capable of repeatedly or iteratively running simulations of a process unit configuration within an LNG plant to provide cost measures for each simulation based on estimated capacities of process equipment, wherein a process variable is altered in each repetition or iteration. In its written submissions Woodside described steps (A) to (G) of claim 19 as “in essentially the same form as the steps in independent claims 1 and 16” (at [52]) and “nothing more than the mere implementation of the ‘method of designing’ claims via a ‘set of instructions’ which are ‘readable by a computer’ (at [72]). This is not strictly true. Claim 19 does not require the implementation of the method of claim 1. It instead involves software which possesses the capacity to implement the method of claim 1. Further, it requires a “repetition module” that I construe to allow for automatic repetition of design steps. In the design methodology itself I see no limitation preventing a designer manually altering a variable and re-running the simulation model for each repetition.

29. Omnibus claims 20 and 21 respectively define a method of designing an LNG plant, and a method of producing a hydrocarbon product, as described with reference to the written description. I noted previously that the invention is described in three embodiments which provide identical wording to the three independent claims. Reviewing the description as a whole I take claim 20 to have a similar scope to claim 1 and claim 21 to have a similar scope to 16.

    Full description

1. Woodside submitted that the specification failed to:

   • describe the invention fully; and
   • describe the best method known to the applicant of performing the invention.

2. Woodside found support for these submissions in the evidence of Dr Fletcher. Dr Fletcher noted (Fletcher 2 at [57]) that the application lacked detailed examples, in particular relating to how the process simulation incorporates the costs and the simulation design concepts for more than one equipment type, or how the alleged optimisation step is completed.

3. As set out in Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd [2001] HCA 8 at [25]; (2001) 207 CLR 1 at 17 the test for full description is whether:

   “the disclosure enable[s] the addressee of the specification to produce something within each claim without new inventions or additions or prolonged study of matters presenting initial difficulty.”

4. While Dr Fletcher notes that he found the application to lack detailed examples, he provides no evidence clearly establishing that he would not be able produce something within each claim without new invention or additions or prolonged study. Woodside have not established that any claim lacks full description.

5. The requirement for a best method supplements the requirement to describe the invention fully (Apotex Pty Ltd v Les Laboratoires Servier [2013] FCA 1426, at paragraph [164]). The best method need not be identified as such in the complete specification (Pfizer Overseas Pharmaceuticals v Eli Lilly & Co (2005) 68 IPR 1 at 77 [374]). In Firebelt Pty Ltd v Brambles Australia Ltd (2000) 51 IPR 531 at 544 [51]-[53], Spender, Drummond and Mansfield JJ stated:

   “The requirement of s 40(2) of the Act is that the patentee is required to give the best information in his power as to how to carry out the invention. That requirement is ordinarily satisfied by including in the specification a detailed description of one or more preferred embodiments of the invention offered, with reference to drawings of specific mechanisms or structure or examples of specific process conditions or chemical formulations, depending on the field of the invention and the nature of the invention to be conveyed. It is necessary to have regard to what is the invention claimed…”

6. In my previous decision I noted that, where the nature of an invention related to broader principles of LNG plant design, it is perhaps preferable but not strictly necessary to provide information in the way of worked examples detailing matters such as flow rates, capacities, efficiencies, and costs. What is important is that the best method of performing the invention according to its nature is disclosed. The nature of the invention relates to a methodology used to determine a cost optimum LNG plant design. Woodside have not established that Exxon omitted or otherwise did not provide its best information in relation to this methodology.

   Novelty

7. In its written submissions Woodside alleged that all claims of the application lack novelty in view of:

   D6      WO 2001/008054 A2 (RAYTHEON COMPANY) 1 February 2001

   D16 Omori, H, et al., ‘A New Tool – Efficient and Accurate for LNG Plant Design and Debottlenecking’ (2001) LNG Conference 13, PS2-4.1-PS2-4.145; and          

   D17     Aspen Plus® 11.1 User Manual.

8. The general test for lack of novelty is the reverse infringement test.  The classic formulation of this test was given by Aickin J in Meyers Taylor Pty Ltd v Vicarr Industries Ltd [1977] HCA 19 at [20], 137 CLR 228 at 235:

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

9. This test is satisfied if the alleged anticipation discloses all the essential features of the invention as claimed (see Nicaro Holdings Pty Ltd v Martin Engineering Co (1990) 91 ALR 513 at 517). Australian courts have often cited, with approval, the words of the UK Court of Appeal in The General Tire & Rubber Company v The Firestone Tyre and Rubber Company Limited [1972] RPC 457 at 485 – 486 (“General Tire”):

   "If the prior inventor's publication contains a clear description of, or clear instructions to do or make, something that would infringe the patentee’s claim if carried out after the grant of the patentee's patent, the patentee's claim will have been shown to lack the necessary novelty, that is to say, it will have been anticipated.  The prior inventor, however, and the patentee may have approached the same device from different starting points and may for this reason, or it may be for other reasons, have so described their devices that it cannot be immediately discerned from a reading of the language which they have respectively used that they have discovered in truth the same device; but if carrying out the directions contained in the prior inventor's publication will inevitably result in something being made or done which, if the patentee's patent were valid, would constitute an infringement of the patentee's claim, this circumstance demonstrates that the patentee's claim has in fact been anticipated."

   D6

10. D6 is a patent document disclosing a computerized system for designing a manufacturing process system having a plurality of process units (at abstract). The sort of manufacturing processes contemplated by D6 include: refineries, petrochemical plants, and chemical plants (at page 2 lines 1-6). The examples provided in D6 relate to the production of syncrude and gas to liquid processing (at page 5 line 28 to page 6 line 5; page 9 lines 9 and 10; page 9 lines 29-30). The computerized system is intended to provide an “optimal” design for the process system (at abstract). D6 notes (at page 2 lines 18-23):

    “as the number of processing steps required increases, the complexity in designing an economical process increases dramatically. For example, a number of alternative series of steps may be used to produce the same result, and a determination of which series of steps is the most economical is desirable.”

11. The computerized system disclosed by D6 includes a “linear program model” and a “linear program engine” (at pages 4-6). The linear program model forms a plurality of linear equations describing constraints on the manufacturing system (at page 4 lines 11-14). A user interface allows automatic and manual communication with the linear program model to provide information on system constraints and derive the linear equations (at page 12 lines 1-8). The linear program engine solves these equations for a preferred solution, which is communicated as an output to the user interface (at page 12 lines 9-25). The preferred solution may be an integrated route interconnecting processing steps, including interactions between the processes and different technologies that maximises a desired criteria, such as internal rate of return (at page 11 lines 2-9). 

12. Input information provided by the linear program model may include: feed and product description and prices, constraints, process sub-models, capital investment cost curves, and unique modelling techniques (at page 12 lines 23-30). Unique modelling techniques include: intermediate product pricing, energy integration, utility balances and integration, linear and nonlinear mathematical models to calculate yields and properties, estimation of capital and operating costs inclusive of inflation, and calculation of major economic parameters for project evaluation (at page 13 lines 6-14).

13. Part of the output information is a block flow diagram which includes a distribution of all streams going through the processing units (at page 17 lines 17-25). Flow rates and processing unit capacities are displayed with the block flow diagram (at page 17 lines 24-25).  Another part of the output information is a “capacity utilisation / total investment cost” window which provides information related to capacity utilisation and total investment cost for each processing unit (at page 17 line 26 to page 18 line 4). An economic analysis window provides an estimated total investment cost for the designed processing complex, the operating costs and revenue, and the project’s internal rate of return (at page 18 lines 19-24). The cost of processing equipment is determined using investment cost curve data stored in the linear program model. Page 43 lines 1-14 of D6 are now reproduced:

    “The cost curves thus generated are stored in linear program model 125. When linear program model 125 is executed, linear program engine 122 will create configurations for selecting optimal processing route (sic). Linear program engine 122 will then determine the normal operating flow rate, XUN1, for each of the processing step (sic). It then looks-up in the cost curve and estimate (sic) the capital charge coefficient, YUN1, (CC Coeff.) for each of the units. This factor will then multiply the operating flow rate (sic) to determine the total capital charge for a unit. The total capital charges of all the units are summed to get the grand total capital charge. These costs are used in the LP objective function to determine the optimal processing route.”

14. The term “configuration” or “configurations” when otherwise used in D6, is used invariably to refer to “process” or “processing” configurations (at page 5 lines 18-27, page 11 lines 7-9, page 16 lines 20-22, page 30 lines 13-15; page 32 lines 18-20; page 46 lines 11-18 and 26-28). Page 5 lines 18-27 in particular states (my emphasis added):

    “Embodiments of the invention provide numerous technical advantages. For example, in one embodiment of the invention, a system is provided that allows rapid evaluations of a number of alternative process configurations. Because of this rapid evaluation, additional alternative scenarios can be considered. Further evaluations are performed with significant savings in man-hours and project costs. According to the same embodiment, competing technologies for various process steps may be evaluated and compared.”

    Reviewing the specification as a whole I take use of the term “configuration” as relating to a configuration of processing units and flow paths.

15. D6 in summary discloses a computerized process for selecting an economically optimized chemical process wherein:

    • a linear program model is developed describing physical and economic constraints on the process
    • the linear program model provides the constraints as a series of linear equations to the linear program engine;
    • the linear program engine develops process configurations for evaluation which include stream flow rates and process units capacities
    • the linear program engine estimates the cost of processing units, based on capacity, and sums together the costs to obtain the grand total capital charge for each configuration
    • this information is used to determine the optimal processing route based on a desired objective, such as internal rate of return.

16. The difficulty with this disclosure is that it is not clear to me how the linear program engine develops process configurations. It is not clear to me that the linear program engine develops one configuration including flow rates and capacities, then alters a variable value, and then resultantly develops a further configuration. It may be that this is inherent to the system as would be understood by an expert in linear program optimisation. However Woodside has provided no evidence to clearly establish this to be the case. Without such evidence it is at least plausible to me that each configuration is developed from a blank sheet.  In addition, while D6 discloses a computerized system for designing: refineries, petrochemical plants, and chemical plants it does not clearly and unmistakably disclose a method of designing an LNG plant or a linear program model that is necessarily capable of modelling an LNG plant without user adaptation. All claims are novel in view of D6.

    D16

17. D16 describes a method of designing LNG liquefaction plants using a then recently developed dynamic simulation program. The program solves the problem of oversizing equipment during design, which results from inclusion of design factors and margins on the equipment. D16 discloses that computer simulation software can be used to optimise a process scheme, such as by evaluating trade offs between compressor power and condenser areas. D16 notes that, given an economic objective function, a computer simulation can determine the optimum production from as built equipment. A simulation could also find a new optimum steady state operating point for the overall liquefaction process by optimising the mixed refrigerant composition and compressor operation for equipment changes. D16 concludes that computer process simulators using equation based methods have been useful in performing optimisation, parameter estimation runs and parametric sensitivity studies.

18. Reviewing the entirety of D16 I cannot find any clear direction to use the specific design methodology of the invention. While there is disclosure of optimisation using computer simulation there is no disclosure of a design process, or software necessarily capable of performing a design process involving steps A-F of the invention. All claims are novel in view of D16.

    D17

19. D17, as its title suggests, is a user manual for the software program Aspen Plus® 11.1. The manual is divided into three volumes. Volume 1 describes the Aspen Plus “user interface” and explains how to: create a simulation model, define a flow sheet and enter information such as component and steam data. Volume 2 explains how to use additional capabilities, such as: convergence and optimisation (at page xxvii). Chapter 19 of D17 explains about “External Fortran Subroutines” (at 19-16). It notes that Fortran is a customisation capability in Aspen Plus that allows users to write user models for sizing and costing (at 19-16). Chapter 22 of D17 explains the use of Equation Oriented (“EO”) run modes. It notes that “EO Optimization” may be used to manipulate a subset of simulation variables related to plant operating conditions to maximise profit or minimise cost (at 22-2).

20. D17 discloses the optimisation of processing conditions in existing plants. D17 also discloses that users can provide simulation models to size and cost equipment. However there is no clear disclosure in D17 of use of Aspen Plus® 11.1 to minimise costs in designing a new LNG plant processing unit configuration by repeatedly manipulating variables and costing the resultantly sized equipment based on cost to capacity relationships. All claims are novel in view of D17.

    Inventive step

21. Subsection 7(2) of the Act states that an invention is taken to involve an inventive step unless it would have been obvious to a person skilled in the art in the light of the common general knowledge, considered alone or together with the prior art. A document is prior art for this purpose if "a skilled person mentioned in subsection (2) could, before the priority date of the relevant claim, be reasonably expected to have ascertained, understood, regarded [the document] as relevant" (subsection 7(3)).  

22. The test for whether an invention is obvious is to ask whether it would have been a matter of routine to proceed to the claimed invention. In Wellcome Foundation Ltd v V.R. Laboratories (Aust.) Pty Ltd [1981] HCA 12 at [45], 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."

    The problem to be solved

23. In determining the problem or ‘starting point’ for considering inventive step, I am mindful of the words of the majority of the Full Court in AstraZeneca AB v Apotex Pty Ltd [2014] FCAFC 99 at [202]-[203] as follows:

    “If the problem addressed by a patent specification is itself common general knowledge, or if knowledge of the problem is s 7(3) information, then such knowledge or information will be attributed to the hypothetical person skilled in the art for the purpose of assessing obviousness. But if the problem cannot be attributed to the hypothetical person skilled in the art in either of these ways then it is not permissible to attribute a knowledge of the problem on the basis of the inventor’s “starting point” such as might be gleaned from a reading of the complete specification as a whole.”

24. Exxon in submissions identified the object of the invention to be a method of designing an LNG plant that reduces the overall cost of constructing and/or operating the plant (at [10]). There is no suggestion that this is not a problem the person skilled in the art would be readily aware of. 

    In light of the common general knowledge alone

25. I will begin by discussing relevant parts of the common general knowledge as provided under topic headings.

    Optimising plant design

26. Professor Johns’ evidence relied heavily on quotations from two textbooks:

    • Peters, M.S. et al.: “Plant Design and Economics for Chemical Engineers” (5^th Ed) (2003) (“Peters”); and
    • Sinnot, Coulson and Richardson’s Chemical Engineering, Volume 6: Chemical Engineering Design (1999) (“Sinnot”)

27. Professor Johns (Johns 1 at [52]) reproduced a passage found on page 358 of Peters:

    “In engineering process design, the criteria for optimality can ultimately be reduced to consideration of costs or profits. The factors affecting the economic performance of the design include the types of processing techniques used, processing equipment used, arrangement and sequencing of the processing equipment used in the design, and the actual physical parameters of the equipment. Of course, the operating conditions for the equipment are also of prime concern and importance. As the optimum for a process design is the most cost-effective selection, arrangement, sequencing of processing equipment and operating conditions for the design.”

28. I take from this passage that the skilled plant designer would, in determining an optimal process design, seek to select, arrange, and sequence processing equipment and operating conditions to minimise costs or optimise profits. Peters also provides (at page 8) a simple example of optimisation in relation to selecting an optimum pipe diameter for pumping fluid (reproduced in Johns 1 at [51]):

    “One typical example of an optimum economic design lies in determining the pipe plan to use when pumping a given amount of fluid from one point to another. Here the same result can be accomplished by using an infinite number of different pipe diameters. However an economic balance will show that one particular pipe diameter gives the least total cost. The total cost includes the cost for pumping the liquid, and the cost (i.e. fixed charges) for the installed piping system.”

    In this example the optimum pipe diameter for pumping the liquid is determined by considering both the costs of the pipe and the pumping costs at different diameters. I accept this basic understanding of plant design optimisation formed part of the common general knowledge for LNG plant designers. 

    Estimating equipment costs

29. Cost engineering modelling relied heavily on determining “cost curves” for various equipment types based on actual plant costs for past projects (Fletcher 3 at [58]). A few key factors which would affect purchased equipment cost include: market factors, component complexity, the price of steel, novelty of the equipment and quality of the work (Fletcher 3 at [58]). Factors which cost affect installed plant cost include site conditions and location, weather, labour quality and availability (Fletcher 3 at [58]). Costing of equipment was routinely done by one or more of (Svrcek 1 at [45]; Fletcher 3 at [104]):

    • Using publicly available plant cost estimation software known as ICARUS (which generated cost to capacity “cost curves” – Stone 2 at [27], WYS-8);
    • Relying on in-house cost to capacity information sourced from previous projects;
    • Sourcing cost to capacity information directly from equipment vendors; or
    • Researching published cost to capacity literature.

1. To determine a cost to capacity relationship it was common practice to regress cost data for different size pieces of equipment for an equipment type over a selected capacity range (Svrcek 2 at [62]). It was known that the relationship could take the form of a linear or non-linear equation (Svrcek 2 at [62], [63]).

   Process simulation software

2. Known chemical process simulation software available to chemical engineers included: HYSYS, Aspen and Chemcad (the specification at [0021]; Johns 1 at [64]). According to page 166 of Sinnot (reproduced in Johns 1 at [65]), typical simulation software included (my emphasis added):

   a.   “A main executive program; which controls and keeps track of the flow-sheet calculations and the flow of information to and from the sub-routines.

   b.   A library of equipment performance sub-routines (modules); which simulate the equipment and enable the output streams to be calculated from the information in the inlet stream.

   c.   A databank of physical properties. To a large extent the utility of the sophisticated flow-sheeting program will depend on the comprehensiveness of the physical property databank. The collection of the physical property data required for the design of a particular process, and its transformation to a form suitable for a particular flow-sheeting program can be very time consuming.

   d.   Sub-programs for thermodynamic routines; such as the calculation of vapour-liquid equilibria and stream enthalpies.

   e.   Sub-programs and databanks for costing; the estimation of equipment capital costs and operating costs. Full simulation flow-sheeting programs enable the designer to consider alternative schemes, and the cost routines allow quick economic comparisons to be made. Some programs include optimisation routines. To make any sort of costing routine, the program must be capable of producing at least approximate equipment designs.”

3. In relation to process economics software Peters provides (at 215 – reproduced in Johns 1 at [69])

   “Process economics software has two basic functions: process equipment cost estimation; and process economics evaluation. The specification of process equipment for cost evaluation purposes can be by manual user selection of equipment from types available in the software, automatic integration with process simulators, or reading process simulations. Software that determines equipment automatically will often use simulation information such as material stream compositions, and actual equipment operation requirements to select and size the specific process equipment to fit the simulated equipment type. They also determine the required equipment construction materials using the simulation data.”

4. Peters also notes (at 215 – reproduced in Johns 1 at [70]):

   “There is an additional advantage to the speed, accuracy, and ease of use benefits inherent with economic evaluation software, and that is the ability to be integrated with process simulators under the control of optimisation software. This integration allows highly accurate, automated optimisation of processes.”  

5. Professor Johns therefore refers to two textbooks published prior to 2004 which disclose that process simulation software had integrated programs to cost equipment. Both textbooks also refer to automated optimisation of processes. In relation to specific examples of software having these types of capabilities Professor Svrcek, identified HYSYS.Economix (Svrcek 1 at [27]) and Aspen+ (Svrcek 2 at [77]).

6. HYSYS.Economix was marketed in 2002 as: providing an environment that can be readily used to either size and cost and entire flow-sheet or individual pieces of process simulation equipment (WYS-22). HYSYS.Economix was designed to unify process simulation, equipment selection and sizing and detailed capital evaluation operations to allow open interaction between process and project engineers during the design process (WYS-22). I discussed Aspen+ in relation to D17 above.

7. The evidence establishes that, within the broader realm of process plant design, simulation software was known which could provide capital cost estimates of equipment and could allow users to run process optimisation routines. It is not clearly stated that such optimisation routines could optimise overall equipment costs according to the design methodology of the invention.

8. I note the evidence on simulation software I have discussed was provided by Professors Johns and Svrcek, neither of whom has specific LNG plant design experience. I now discuss the evidence of Drs Fletcher and Stone, whom I acknowledge are experienced LNG plant designers, on how simulation software was used in LNG plant design.

   LNG plant design – the “scouting” or “conceptual” phase

9. According to the application, when optimising a plant design the design engineer might select refrigerant compressor horsepower as the process variable to minimise in the process simulation modelling process in order to minimise the size and cost of the refrigerant compressors. In other words, a single variable such as compressor horsepower was used as a proxy for total plant cost (Stone 2 at [45]). Upon determining an optimum configuration equipment design parameters from the simulation were handed over to a “cost group” (Stone 3 at [9]). This evidence is appears basically consistent with paragraphs [65]-[76] of Dr Fletcher’s second declaration, in which he states that costing occurs when a design is handed to a cost group. In his third declaration however, as Dr Fletcher elaborates (Fletcher 3 at [49]):

   “I agree that during the early or ‘scouting’ phase of the design of an LNG liquefaction plant, the actual size and cost of the compressor is not yet known and so the calculations are based on selecting refrigerant compressor horsepower. During the scouting phase, the design engineer relies on cost to capacity relationships (cost measures) determined using a factored cost which in turn is based on the actual installed casts of equipment types from previous projects. In my experience prior to June 2004, the use of these cost measures in combination with repeatedly altering process variables in process simulation models was generally sufficient during the scouting phase to assist in the design of LNG liquefaction plants.”

   With this passage I take Dr Fletcher to mean that cost to capacity relationships were used as a rough marker for selecting an optimised simulation during the scouting phase. The resulting optimised simulations were then more accurately costed by cost engineers.

10. The evidence of Drs Stone and Fletcher conflicts. Dr Stone considers plant design optimisation was performed using compressor horsepower as a proxy for estimated costs, and that actual costing was not performed until an optimised plant design was provided to costing team. Dr Fletcher considers that plant design optimisation was done using cost to capacity relationships as a rough guide before providing the optimised plant design to the costing team. Dr Fletcher’s approach seems to gain currency upon Dr Stone’s apparent acknowledgement that optimisation did not involve merely minimising compressor horsepower. Dr Stone states (Stone 1 at [5.1.5] – my emphasis added):

    “In standard LNG plant designs, one tries to have the most expensive component (usually the refrigerant compressor and main cryogenic heat exchanger) be the bottleneck for the train … In LNG designs there is a tradeoff between compressor power and cryogenic heat exchanger area. The more power supplied, the less area is needed and vice versa. The final design optimises this tradeoff.”

11. The trade-off Dr Stone refers to is economic and analogous to that of the optimum pipe diameter example I referred to above, and is the same trade-off as discussed in D16. Dr Stone does not provide any further information on how the trade-off is optimised. Dr Fletcher commented as follows (Fletcher 3 at [33]):

    “Prior to June 2004, process simulation software was in common use for the design of LNG liquefaction plants for the express purpose of assisting the design engineer to optimize the tradeoff that Dr Stone refers to here. It is exactly this kind of calculation that lends itself to process simulation so that the design engineer can alter a process variable (such as the cryogenic heat exchanger area) in the process simulation model, look at the effect of this change of compressor power and find an optimum solution taking into consideration the cost of power and the equipment cost of both the cryogenic heat exchanger and the compressors. Again, this was standard LNG liquefaction plant design procedure prior to June 2004.”

12. Dr Fletcher’s statement seems sensible in view of the common general knowledge. However, he makes it with the benefit of having seen the application and the nature of the present invention. Such being the case it would be preferable for his statement to be supported with corroborating evidence, such as some form of procedural documentation or a more detailed discussion listing, for example, the software routinely used by an LNG plant designer at the time. No such evidence is provided. Therefore, while I acknowledge there are concerns over Dr Stone’s independence in this matter (he was an employee of Exxon and was a colleague of the named inventor – Stone 1 at [1.1.2] and [6.1.1]) I not persuaded that I should discount his contrasting evidence in which cost to capacity relationships were not considered by an LNG plant designer during iterative optimisation.

13. The evidence does not clearly establish that the invention lacks an inventive step in view of the common general knowledge alone.

    In light of the prior art

14. In summary submissions (at [7]) Woodside relied on D6, D16, D17, as well as D1 (cited below) to establish the invention lacks an inventive step.

    D1Howell, A., et al., ‘Engineering to Business: Optimizing Asset Utilization through Process Engineering’ (2002) CEP Magazine 54.

    D1      

15. D1 discloses in a general sense a methodology for optimising asset utilisation that uses engineering modelling and simulation technology to link the business level with the physical asset (at page 54 column 2). D1 notes that in process simulation, synthesis, and economics analysis the driving force is lower capital expenditures, better design and an optimum trade-off between capital and capacity (at page 57 column 1). D1 notes that today, it is possible to conduct a complete decision analysis that incorporates various economic aspects of the business lifecycle in order to provide the rigour needed for proper evaluation of the large number of process design options and feasibility paths (at page 62 column 1).

16. While D1 hints at a number of aspects related to the claimed invention, such as the desire to lower capital expenditure using process simulation models, and use of economics to evaluate process design options, it does not any clear directions which would inevitably result in something falling within the scope of any claim. D1 does not refer to designing an LNG plant. More importantly it does not disclose or lead a skilled person toward the design methodology of the invention. I am not satisfied any claim lacks an inventive step in view of D1.

    D6

17. I discussed D6 for novelty purposes above. I noted there that above that is that it is not clear to me how the linear program engine develops process configurations. In particular, it is not clear to me that the linear program engine develops one configuration including flow rates and capacities, then alters a variable value, and then resultantly develops a further configuration. Further, Woodside have provided no evidence that the person skilled in the art would be led as a matter of routine to provide such an optimisation routine in view of D6. I am not satisfied that any claim lacks an inventive step in view of D6.

    D16

18. I discussed D16 for novelty purposes above. As I discussed, D16 discloses that computer simulation software may be used in relation to LNG plant design for optimisation, parameter estimation runs and parametric sensitivity studies. It also discloses that computer simulation software can be used to optimise processing conditions. Nevertheless D16 does not disclose the design methodology of the invention. Further, Woodside have provided no submissions which suggest or establish that the person skilled in the art would as a matter of routine have been led from the disclosure of D16 to the invention claimed.

    D17

19. I discussed D17 for novelty purposes above. Woodside have provided no evidence or submissions establishing that information provided in D17 would lead a designer as a matter of routine toward using Aspen Plus® 11.1 to minimise costs in designing a new LNG plant processing unit configuration by repeatedly manipulating variables and costing the resultantly sized equipment based on cost to capacity relationships. I am not satisfied that any claim lacks an inventive step in view of D17.

    Manner of Manufacture

20. Section 18(1)(a) requires that an invention must be a manner of manufacture within the meaning of section 6 of the Statute of Monopolies. As noted in National Research Development Corporation v Commissioner of Patents [1959] HCA 67 at [14], [25]; 102 CLR 252 at 269 (“NRDC”) the right question for determining whether an invention is a manner of manufacture is:

    “Is this a proper subject of letters patent according to the principles which have been developed for the application of s.6 of the Statute of Monopolies?”

21. In order to be held patentable, a claimed process must result in an artificially created state of affairs that offers a material advantage in the field of economic endeavour (NRDC [1959] HCA 67 at [22], [25]; 102 CLR at 275, 277). An artificially created state of affairs should be understood in the sense of a concrete, tangible, physical, or observable effect (Grant v Commissioner of Patents [2006] FCAFC 120 at [30]; 234 ALR 230 at 237). The process must offer a material advantage in the sense that it belongs to a useful art as distinct from a fine art and that its value to the country is in the field of economic endeavour (NRDC [1959] HCA 67 at [22]; 102 CLR at 275).

22. Woodside submitted that all claims of the specification are invalid for want of a manner of manufacture. Woodside firstly categorised claims 1-15 and 20 as “method of designing” claims. Woodside referred me to my earlier decision where I found that claims defining methods of designing an LNG plant lacked a manner of manufacture. Woodside submitted that comity requires that I likewise find claims 1-15 and 20 to lack a manner of manufacture. Woodside secondly categorised claims 16-18 and 21 as “method of producing” claims. Woodside submitted that, while the claims relate to a method of producing a hydrocarbon fuel, they are effectively directed to a “method of designing” and must likewise lack a manner of manufacture. Woodside thirdly categorised claim 19 as a claim for a “tangible media” which includes a set of instructions. Woodside submitted that the form of the subject matter claimed does not overcome the manner of manufacture objection made in respect of the method of designing claims. I will firstly consider the patentability of the “method of designing” and the “tangible media” claims (claims 1-15, 19 and 20).

    Do claims 1-15, 19 and 20 define a manner of manufacture?

23. I note a statement made in my earlier decision (at [0114]) to which Woodside referred in submissions:

    “Woodside submitted that the design claims (which I take to mean independent claims 2, 3, omnibus claims 79 and 80, and claims rightly appending to claims 2 or 3) lack a manner of manufacture as they relate to matter which is either a “mere scheme” or “plan”. Referring to Grant v Commissioner of Patents [2006] FCAFC 120 (“Grant”), a design per se constitutes no more than “intellectual information” and a method which results only in a design and not in any “physical effect in the sense of a concrete effect or phenomenon or manifestation or transformation” is not a manner of manufacture (Grant [2006] FCAFC 120, paragraphs [29]-[32]). While Exxon noted that the claims relate to an LNG plant, that relationship is not sufficiently direct as to involve any physical effect. Design, theoretically, may be achieved as simply as via drawing or thought.”

24. One significant difference between the identified claims of that application and those of the present application is that the present claims involve either a computer running a process simulation model or tangible media including computer readable instructions. Two recent Federal Court decisions considered the patentability of computer implemented methods:

    •Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150 (“Research Affiliates”); and

    •RPL Central Pty Ltd v Commissioner of Patents [2014] FCA 871 (“RPL”)

25. In RPL Middleton J found that a computer implemented method automatically converting extensive criteria relating to recognition of prior learning into a single entry question and answer format was a manner of manufacture. In Research Affiliates Kenny, Bennett and Nicholas JJ found that a computer implemented method of creating a securities index did not involve a manner of manufacture. Their honours distinguished their finding with that of Middleton J as the invention applied for by RPL involved a computer in a way that was “inextricably linked” with and “integral” to the invention itself (at paragraphs [98]-[100]) whereas the invention applied for by Research Affiliates involved the implementation of a scheme, which happened to use a computer to affect the implementation (at paragraph [112]). Reciting paragraphs [118] and [119] of Research Affiliates:

    “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 the claimed invention but also the substance of that invention.

    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’.”

26. It follows that where the substance of an invention relates to a scheme, an abstract idea, or mere intellectual information then the implementation of the invention on a computer does not give rise to an artificially created state of affairs (see also Research Affiliates, at [115]).

27. Exxon in submissions directed me to Re Halliburton Energy Services Inc [2012] RPC 12 (“Halliburton”) where Birss J found that a computer implemented method of designing a drill bit was patentable as it did not fall solely within the subject matter excluded from patentability listed in s 1(2) of the Patents Act 1977 (UK).  In Halliburton Birss J (at [63]) narrowly construed the exclusion against patenting a method of performing a mental act such that it would not apply if the claim included appropriate non-mental limitations (such as computer implemented steps). His honour then found that the invention in question was more than a computer program “as such”, in that it was a method of designing a drill bit, and that such methods were not excluded from patentability (at [71]). It follows from Halliburton that, under UK law, provided an invention involving computer software is directed to solving to a technical problem and is not directed to excluded subject matter such as a mathematical method or a method of doing business “as such”, it will be patentable.

1. In Research Affiliates their honours considered several UK judgments, in particular: Aerotel Ltd v Telco Holdings Limited; Re Macrossan’s Application [2007] 1 All ER 225; Symbian Ltd v Comptroller General of Patents [2009] RPC 1; and HTC Europe Co Ltd v Apple Inc [2013] RPC 20 and found that that these decisions, to the extent they are discussed in Research Affiliates, aligned with the Australian approach to patentability (at [59]). I note that their honours did not refer to Halliburton. Regardless, I find that the substance of the present invention is analogous to that considered in Research Affiliates. The methodology of the present invention does not provide new technical information. It provides abstract economic information on the cost of different equipment configurations. That information does not allow an LNG plant designer to improve on existing LNG processing in any technological or physical sense; it allows him or her to select an arrangement of known technologies on the basis of cost and profitability. In this respect I see little difference between an invention which provides economic information on which process equipment to select and install and an invention which provides economic information on which shares to buy.

2. The present specification does not allege that the invention relates to a new or improved use of a computer. It instead notes that computer simulations for designing of LNG plants were known and used and that computer simulations commercially available at the time included Hysys, Aspen and Chemcad. My discussion of the common general knowledge also demonstrates that simulation software performing cost estimation of equipment, and automated process optimisation was known in the broader field of plant design. I conclude that the substance of the present invention relates to information and a scheme and that the mere implementation of the invention on a computer does not give rise to an artificially created state of affairs. Claims 1-12, 19 and 20 define subject matter which does not involve a manner of manufacture.

   Do claims 13-18 and 21 define a manner of manufacture?

3. Claims 13-18 and 21 are directed to a constructed LNG plant or a method of operating a constructed LNG plant. The constructed LNG plant has been designed (at least in part) using the design methodology of the invention. I noted above that the computer implemented design methodology related to mere information and a scheme, which was not directed to a manner of manufacture. Woodside submits that it necessarily follows that the claimed LNG plant is also not a manner of manufacture.

4. In Celgene Corporation [2012] APO 12 (“Celgene”) the Commissioner considered whether a method of dispensing thalidomide, in which the prescription could only be filled after receiving a “prescription approval code”, could become a manner of manufacture if the patient were actually treated with thalidomide. In that decision the delegate (at [61]-[64]) applied principles similar to those set out in Research Affiliates to determine that the essence, or advantage, of the invention was directed to a sensible thing to do but not to a manner of manufacture, and that the addition of an explicit treatment step could not convert the method to a manner of manufacture. I consider the principles applied in Research Affiliates are not limited to computer implemented methods but more broadly apply to when the only artificial or patentable effect occurs through the mere implementation of a scheme. As an example, a property investment scheme would not necessarily become a manner of manufacture merely because a new house is built. Similarly a bicycle part purchasing scheme would not necessarily become a manner of manufacture merely because a bicycle is assembled using the purchased parts.

5. Regarding the  physical effect of the invention, Exxon submitted the following:

   The Opponent … contends that the specification does not describe the design of any new kind of plant equipment. On the contrary, a hydrocarbon fluid processing plant, such as an LNG liquefaction plant, designed following the method of claim 1 will be different to a hydrocarbon fluid processing plant designed by prior art methods because the relative capacities of each of the plurality of equipment types will be different and the plant will be more optimally designed for hydrocarbon production, a matter of significant economic utility. The Opponent further contends that the specification is silent as to how the design methodology of the alleged invention allows a processing unit or hydrocarbon fluid processing plant to be ‘constructed and operated more efficiently’. The Applicant submits that the results of the method of claim 1 provides a lower capital and/or operating cost for a plant and therefore the plant may be constructed and operated more efficiently.

6. In other words Exxon contends that the LNG plant produced according to the invention is physically different because the design method allows equipment to be selected and sized to lower the capital and/or operating costs of the plant. To me, however, the selection and sizing of known technologies according to economic considerations to provide an overall arrangement which costs less or is more profitable is, without more, in substance a scheme and the construction and operation of a plant according to a selected arrangement merely relates to the implementation of that scheme.

7. I consider that the subject matter of claims 13-18 and 21 do not relate to a manner of manufacture.     

   Conclusion

8. I conclude that claims 1-21 do not define a manner of manufacture as the invention in substance relates to mere information and a scheme. I cannot foresee any allowable amendment that could bring either the invention or a claim of the application into the realm of patentability. As such, subject to an appeal, I refuse the application.

   Costs

9. Woodside has been successful in the opposition. Generally costs should follow the event, and costs should be awarded against Exxon. I see no reason to depart from this approach. I will award costs against Exxon according to Schedule 8.

   Rhys Munzel
   Delegate of the Commissioner of Patents