Still not cool

In my last post I covered the Cool 123 decision in which a well known marketing technique combined with an SMS platform was found not to be a patentable invention.  A year later, Cool 123 unsuccessfully appealed the earlier decision to the High Court.  This is reported as Cool 123 Limited v Vodafone New Zealand Limited and Ors HC WN CIV 2006-485-698 [29 August 2007].

This is the first time ever that a New Zealand Court has considered the patentability of a business method.  While there is no prohibition against the patenting of business methods, this one was rejected on obviousness.

It was common ground that there was no new technology involved.  Advertising involving invitations to consumers to initiate a response were well known.  Inviting response by telephone was well known.  Text messaging was a newer phenomenon but had been around for several years.  There had been a rapid increase in the use of text messaging in 1999 just before the priority date of the claims.


Obviousness

Cool 123’s basic case on appeal was that it had lost on obviousness because of hindsight reasoning and because the Hearing Officer failed to understand the inventive concept.

Counsel for the appellant argued that:

“obviousness may be assessed only against documents proved to have been located by a diligent searcher who does not have knowledge of the claims or invention, but who has located the documents whilst seeking to obtain information that would be helpful in finding a solution to the particular problem or situation presented.”

The Judge disagreed.  France J observed that:

“obviousness, at this [opposition] stage, is to be assessed against the same pool of documents that were considered for prior publication …  It is difficult to see how else one can read the [novelty and obviousness] provisions.  Mr Henry submitted that one has to graft upon the plain wording of [the obviousness provision] a second level of ‘sieving’, such reduction to be achieved by the diligent searcher test.  That would be a considerable gloss to place upon [the opposition provisions].”

The Judge was equally dismissive of the suggestion that the Hearing Officer had earlier failed to understand the inventive concept.  In his view:

“the difficulty for the applicant was not that the alleged [inventive] step was not recognised, it was that it was not accepted to be [inventive], and the evidence supported such a conclusion.”

Not an invention

The Judge noted that it was accepted in the Ruling under appeal that a business method could be the subject of a patent application.

However in this case he had earlier noted that “the case for obviousness seems overwhelming”.  A finding of obviousness would have been available just on the common knowledge without needing to get into what other documents the unimaginative addressee might consider.

The question of whether there was an invention here largely reflected the same disputes underlying the question of obviousness.

The Judge agreed that the alleged invention was a mere scheme or plan, citing with approval the observations of the Hearing Officer that:

“[o]ne must, I think, be careful in equating ‘a new use for an old substance’ to ‘a new use for an old technology’. However, in the present case this is, as I see it, a valid argument. As discussed above under both Prior publication and Obviousness, all the features of the system claimed, including SMS technology and its properties, were individually known and it seems to me that it cannot be an ‘invention’ or ‘manner of new manufacture’ to replace the previously conventional means (telephone, email, or post) by the known SMS technology whose known properties or characteristics make it suitable for this use.”

Further steps

The appeal was declined.  Each aspect of the Hearing Officer’s ruling was confirmed.

Photo courtesy of author plenty.r. under Creative Commons licence.