Monday, October 31, 2011

Council extends heritage precinct

mainstnorth.jpgA Combined Wairarapa Planning Committee recently adopted a proposal to extend Greytown’s Historic Heritage Precinct.

Greytown’s Main Street boasts many original colonial buildings housing trendy cafes, boutiques, art galleries and antique shops.  Its heritage charm is a real drawcard for visitors and a source of pride for locals.

Only a small part of Greytown’s Main Street has protection as a Historic Heritage Precinct.  In an earlier post I talked about a proposal to extend the precinct a block north and a block south.  On 23 September 2011 the Committee heard from four submitters who generally support the proposal, and one who opposes the proposal entirely.  The Greytown Community Heritage Trust, of which I am chair, was one of the four submitters in favour.

In a decision dated 13 October 2011 The Committee resolved to adopt Plan Change No 4 – Greytown Historic Heritage Precinct Extension.  The decision will now be publicly notified.  The plan change will be effective from the date of public notification.

I think it’s appropriate to acknowledge the foresight of those who originally made submissions on the Wairarapa Combined District Plan back in August 2006.  And the three Councils who have taken those submissions on board.

Tuesday, October 11, 2011

Halliburton Energy hits pay dirt

In Re Halliburton Energy Services Inc [2011] EWHC 2508 (Pat) (05 October 2011) we see the English High Court address the misconception that computer-implemented inventions are by definition excluded from patent protection.  We see analysis of the commonly used exclusions that an invention of this nature is a mental act, a mathematical method and/or a computer program as such.

The UK IPO’s wide construction of the “mental act” exclusion is highlighted as flawed.  We can expect to see a revised Practice Note issue shortly.

The patent application

This case arose from an appeal from the Comptroller-General of Patents relating to the patentability of computer-implemented inventions.  There were actually four patent applications involved.  The Court dealt with UK Patent application 0523735.9 as representative of all four.

The patent application was filed on 22 November 2005 and published as GB 2420433 A on 24 May 2006.  The invention is concerned with improving the design of roller cone drill bits for drilling oil wells.  The point is to increase their drilling efficiency and their operational life. The invention uses a computer simulation of the interaction of the drill bit with the material being drilled to optimise various design features of the drill bits. The use of computer simulation reduces or eliminates extensive field testing.

Statutory exclusions

Sub-sections (1) and (2) of section 1 of the UK Patents Act 1977 provide as follows:

1.—(1) A patent may be granted only for an invention in respect of which the following conditions are satisfied, that is to say—
(a) the invention is new;
(b) it involves an inventive step;
(c) it is capable of industrial application;
(d) the grant of a patent for it is not excluded by subsections (2) and (3) or section 4A below;
and references in this Act to a patentable invention shall be construed accordingly.

(2) It is hereby declared that the following (among other things) are not inventions for the purposes of this Act, that is to say, anything which consists of—
(a) a discovery, scientific theory or mathematical method;
(b) a literary, dramatic, musical or artistic work or any other aesthetic creation whatsoever;
(c) a scheme, rule or method for performing a mental act, playing a game, or doing business, or a program for a computer;
(d) the presentation of information;
but the foregoing provision shall prevent anything from being treated as an invention for the purposes of this Act only to the extent that a patent or application for a patent relates to that thing as such.

Programs for computers

The Court noted that computer programs (as such) are excluded by s1(2)(c) and the equivalent EPC provisions.  However, it was observed that, as proved in Symbian v Comptroller [2009] RPC 1:
’[a]n invention which makes a contribution to the art which is technical in nature … is patentable even if it is implemented entirely on a computer and even if the way it works is entirely as a result of a computer program operating on that computer. 
Thus when confronted by an invention which is implemented in computer software, the mere fact that it works that way does not normally answer the question of patentability.  The question is decided by considering what task it is that the program (or the programmed computer) actually performs.  A computer programmed to perform a task which makes a contribution to the art which is technical in nature, is a patentable invention and may be claimed as such … 
If the task the system performs itself falls within the excluded matter and there is no more to it, then the invention is not patentable … Clear examples are from the cases involving computers programmed to operate a method of doing business, such as a securities trading system or a method of setting up a company … 
… [T]he law has resolutely sought to hold the line at excluding [business methods] from patents. That means that some apparently technical effects do not always count. So a computer programmed to be a better computer is patentable (Symbian) but … the fact that the method of doing business may be an improvement on previous methods is immaterial because the business method exclusion is generic. 
… Put in other language, when the task carried out by the computer program is not itself something within the excluded categories then it is likely that the technical contribution has been revealed and thus the invention is patentable.’
Scheme, rule or method for performing a mental act

The Court observed that there are essentially two possible interpretations of this exclusion, a wide one and a narrow one.

The wide construction is that a method is "a scheme, rule or method for performing a mental act" if it is capable of being performed mentally.  Regardless of whether, as claimed, it is in fact performed mentally. Read this way the exclusion excludes methods of the type performed mentally regardless of how they are claimed.

The narrow construction is that the exclusion only excludes acts carried out mentally. On the narrow construction a claim to a calculation carried out on a computer could never be caught by the mental act exclusion because the claim does not encompass carrying out the calculation mentally. The fact that calculations in general are the kinds of thing which are capable of being performed as mental acts is irrelevant.

The Court reviewed earlier precedents and concluded that the balance of authority in England is in favour of the narrow approach to the mental act exclusion.

It was observed that the correct scope of the mental act exclusion is a narrow one. Its purpose is to make sure that patent claims cannot be performed by purely mental means and that is all. The exclusion will not apply if there are appropriate non-mental limitations in the claim.

It was also observed that the approach proposed to mental acts of the current UK Practice Note is wrong in law and should not be followed.  Paragraph 8 assumes a wide construction and states that “in future examiners will object to the computerisation of what would have been a pure mental act if done without the aid of a computer as both a mental act and a computer program as such”.

The Aerotel test

The Court then applied what it referred to as the modern approach to dealing with the exclusions from patentability laid down by the Court of Appeal in Aerotel v Telco / Macrossan's Application [2007] RPC 7.

Properly construe the claim

The claim was found to be limited to a simulation process carried out on a computer.  Although the claim in this case could be better drafted, it is in fact a claim to a computer implemented method.

Identify the actual contribution

The contribution was found to be a computer implemented method of designing drill bits.

Ask whether it falls solely within the excluded subject matter

Approached on the correct, narrow basis, it was found that the mental act exclusion is irrelevant in this case. The claimed method cannot be performed by purely mental means.  Put another way, the contribution is a computer implemented method and as such cannot fall within the mental act exclusion.

The Court then asked ‘Is it more than a computer program as such? The answer is plainly yes. It is a method of designing a drill bit. Such methods are not excluded from patentability by Art 52/s1(2) and the contribution does not fall solely within the excluded territory.’

Drill bit design was found to be not a business method, nor a scheme for playing a game nor a scheme for performing a mental act.

The Court further observed that, although obviously some mathematics is involved, the contribution is not solely a mathematical method either (on top of being a computer program) because the data on which the mathematics is performed has been specified in the claim in such a way as to represent something concrete (a drill bit design etc.).

Check whether the contribution is actually technical in nature

It was observed that designing drill bits is obviously a highly technical process, capable of being applied industrially. Drill bit designers are highly skilled engineers. The detailed problems to be solved with wear and ability to cut rock and so on are technical problems with technical solutions. Accordingly finding a better way of designing drilling bits in general is itself a technical problem.

The invention was found to be a better way of carrying that out. Moreover the detailed way in which this method works - the use of finite element analysis - is also highly technical.

Further steps

The Court allowed the appeal and remitted all four cases to the Comptroller for further processing.

Photo courtesy of author Nicholas Vinacco under Creative Commons licence.

Thursday, October 6, 2011

Iowa Lottery misses the jackpot

[326/365]  Lottery Money
In Iowa Lottery [2010] APO 25 (21 October 2010) we see an unsuccessful attempt to secure patent protection in Australia for aspects of a lottery game.  We also see further use of the new “substantial effect” test for method claims that use a computer or other physical device.

The patent application

Iowa Lottery (the applicant) filed patent application 2007240153 as a divisional application on 6 December 2007.  The application related to lottery games and more particularly lotto type games.

There were three independent claims in the claim set under consideration.  These were claim 1 directed to a prize pool, claim 3 directed to a method of paying prizes and claim 12 to a method of managing a prize pool.

Putting the handbrake on NRDC

The Delegate started off sensibly enough, referring to National Research and Development Corporation v Commissioner of Patents [1959] HCA 67; [1959] 102 CLR 252.  The Court summarised the requirement for patentability as “a mode or manner of achieving an end result which is an artificially created state of affairs of utility in the fields of economic endeavour”, as noted in CCOM Pty Ltd v Jiejing [1994] FCA 1168 at [128].

He observed that the Court in NRDC was itself dealing with a rather narrow approach that had been applied on the basis of what had become known as Morton's rules (G.E.C.'s Application (1943) 60 RPC 1).  Applicants have forgotten this apparently.

All the Court was saying, according to the Delegate, was that the “manner of manufacture” requirement should not be constrained, for example, by existing notions of science and technology.  However, there was no justification to expand the scope of patentable subject matter to fields that have never been patentable according to long standing principles.  The exclusion of designs, schemes and plans, said the Delegate, are examples of those principles.

Intellectual information

The Delegate referred to the decision of the Full Federal Court in Grant v Commissioner of Patents [2006] FCAFC 120.  In Grant the Court concluded:
“Whether the method is properly the subject of letters patent is assessed by applying the principles that have been developed for determining whether a method is a manner of manufacture, irrespective of the area of activity in which the method is to be applied. It has long been accepted that "intellectual information", a mathematical algorithm, mere working directions and a scheme without effect are not patentable. This claim is "intellectual information", mere working directions and a scheme. It is necessary that there be some "useful product", some physical phenomenon or effect resulting from the working of a method for it to be properly the subject of letters patent. That is missing in this case.”
He observed that the prize pool of claim 1 was merely information (ie the size of a potential future payment) generated in or reflective of the operation of the scheme defined in the claims.  Information, he said, even if represented in a physical way has never been considered sufficient for patentability save for some material advantage or mechanical effect in the arrangement of the information.

The applicant argued that claim 1 was directed to a product rather than a method.  However, the Delegate didn’t think that claiming a product produced by a scheme fundamentally alters the question of patentability of the scheme itself.

Financial transaction

The second group of claims, represented by claim 3, concerned a method of paying prizes.  The applicant argued that the requirement stated in Grant for a “concrete, tangible, physical or observable effect” was met by the payment of prizes.

On this point the Delegate observed that a financial transaction, or legal transfer of an asset, is not the sort of physical or observable effect that the Court in Grant was referring to.

Substantial effect

The last set of claims, represented by claim 12, was directed to a method of managing a prize pool.  Claim 12 included a computing device to allocate fees and prizes.  The applicant argued that the use of the computing device resulted in “a change in state or information in a part of a machine” and therefore reflected a “concrete transformation”.

The Delegate did not consider that the physical effect identified is one that is substantial or central to the operation of the claimed method.  This is a requirement of patentability because the Delegate in an earlier case said it was.

He referred to his own decision in Invention Pathways Pty Ltd [2010] APO 10.  He observed that he does not:
“believe there is any authority in Australian law for the proposition that the mere identification of a physical effect is sufficient for patentability.  It must in my view be an effect of such substance or quality that the method considered as a whole is [patentable subject matter] …  The subject matter of the present application is essentially a lottery game.  It does not in my view become patentable because it is operated in whole or part using a computer system in the normal or an unspecified way.  Rather some substantial effect or transformation must be present in the use of the computer or other physical device”.
Further steps

The Delegate rejected all claims, finding that none of them were directed to patentable subject matter.

Photo courtesy of author Lisa Brewster under Creative Commons licence.

Wednesday, October 5, 2011

Invention Pathways loses its way

Maze (미로)
In Invention Pathways Pty Ltd [2010] APO 10 (21 July 2010) we saw a Delegate of the Australia Patent Office refuse a patent application despite the claims including a data file maintained in data storage means.

A patentable invention requires a physical effect in the sense of a concrete effect or phenomenon or manifestation or transformation.

The physical effect, says the Delegate, must be central to the purpose or operation of the claimed process or otherwise arise from the combination of steps of the method in a substantial way.  The physical effect has to be more than peripheral and subordinate to the substance of the claimed invention.

The patent application

Invention Pathways Pty Ltd (the applicant) filed patent application 2009201212 as a divisional application on 27 March 2009.

The patent application was directed to a method for commercialising inventions that includes the step of applying for patent protection.  The invention is intended to facilitate the uptake of commercialisation of inventions taking into account the restricted timeframe to file for intellectual property rights and the effect of automatic patent publication.  Claim 1 of the patent application read as follows:
1. An invention specific commercialization system to facilitate success of inventions, the system including the steps of:
a) applying for patent protection for the invention in a country which is party to the Paris Convention,
b) conducting a review of specific commercialization process required by the invention,
c) preparing a research and development plan, testing the business dynamics of the invention,
d) conducting prototype testing, developing a prototype cost/benefit analysis,
e) determining product positioning and packaging,
f) conducting a manufacturing checklist,
g) entry of the information collected in steps a) to f) into an electronically fillable checklist having a prescribed time limit for each step to form a commercial entry strategy (CES) with a number of sub-steps, the CES prepared on the basis that each of the sub-steps in the CES are to be completed by a corresponding deadline, all deadlines falling within 30 months from the earliest priority date of the patent application, the checklist being computer-implemented and stored in computer or human readable format in data storage means and associated with processing means to allow updating of the checklist; and
h) policing compliance with the deadlines for the completion of the sub-steps through the production of reminders based on the prescribed time limits in the checklist to ensure that all sub-steps are completed within the deadlines.
The applicant submitted that the ‘electronically fillable checklist’ was to be understood broadly and included, in addition to a specifically programmed software application, many other means by which a checklist could be created electronically.  This includes many common text editing, word processing or spreadsheet applications.

Computer related inventions patentable

The Delegate acknowledged that computer related inventions remain patentable in Australia.

The High Court in National Research Development Corporation v Commissioner of Patents ("NRDC case") [1959] HCA 67; (1959) 102 CLR 252 (16 December 1959) established a patentability requirement of ‘a mode or manner of achieving an end result which is an artificially created state of affairs of utility in the fields of economic endeavour’.

The NRDC decision ‘has since been applied in a number of cases that reflect the subsequent evolution of technology, particularly in the application of computers, and innovations in the service industries that have tested the distinction between the useful arts (having industrial or commercial or trading character) and the fine arts’.

The Delegate referred to CCOM Pty Ltd v Jiejing Pty Ltd [1994] FCA 1168; (1994) 122 ALR 417, (1994) AIPC 91-079 (1994) 51 FCR 260 (22 June 1994) in which apparatus for assembling text in Chinese language characters was held to be patentable.

In International Business Machines Corporation v Commissioner of Patents [1991] FCA 625; (1992) AIPC 90-853 (1991) 105 ALR 388, (1991) 22 IPR 417 (1991) 33 FCR 218 (13 December 1991) a method and apparatus for producing curves on a computer graphics display was found to be patentable.

In the full Federal Court decision of Grant v Commissioner of Patents [2006] FCAFC 120 (18 July 2006) the Court observed that ‘the fact that a method may be called a business method does not prevent it being properly the subject of letters patent’, referring to Welcome Real-Time SA v Catuity Inc [2001] FCA 445 (17 May 2001).

Physical effect

In Grant the Court found that a method of protecting an asset including steps of establishing a trust, making a gift to the trust, making a loan from the trust and securing the loan was not a manner of manufacture.  The Court observed that the method ‘does not produce any artificial state of affairs, in the sense of a concrete, tangible, physical, or observable effect’.

The Court observed that ‘a physical effect in the sense of a concrete effect or phenomenon or manifestation or transformation is required’.  NRDC involved a physical effect as an artificial effect was physically created on the land.  Welcome Real-Time and CCOM both involved a component that was physically affected or a change in state or information in a part of a machine.  In Welcome Real-Time there was not a physically observable end result in the sense of a tangible product, however the invention involved an application of an inventive method where part of the invention was the application and operation of the method in a physical device.

Coming back to the present case, the Delegate acknowledged the observation in Welcome Real-Time that a ‘physically observable effect’ was not necessarily required.

United States situation unsettled

The Delegate acknowledged that both Welcome Real-Time and Grant referred with approval to the reasoning of the US Courts on the analogous subject matter requirements of 35 USC 101.  For example, in State Street Bank Trust Co v Signature Financial Group Inc [1998] USCAFED 107; 149 F.3d 1368; 47 U.S.P.Q.2d 1596 (23 July 1998) the Court stated that:
‘Today, we hold that the transformation of data, representing discrete dollar amounts, by a machine through a series of mathematical calculations into a final share price, constitutes a practical application of a mathematical algorithm, formula, or calculation, because it produces "a useful, concrete and tangible result" - a final share price momentarily fixed for recording and reporting purposes and even accepted and relied upon by regulatory authorities and in subsequent trades.’
The Delegate noted that ‘the situation in the US has however been unsettled and is the subject of the recent decision of the US Supreme Court in Bilski v Kappos 561 U. S. ___ (2010) (Case No. 08-964)’.

I am not quite sure what the Delegate means by ‘unsettled’.  If he means that US law generally lacks stability or remains unresolved then it would seem odd for the Delegate to go on to adopt the reasoning in Bilski.

On the other hand, the Delegate may mean that the law prior to Bilski was settled but has somehow been changed radically by Bilski.  In that case we need to look at the subsequent instability appearing in post-Bilski cases in the US to assess whether or not the Delegate here was right in relying on Bilski so heavily.

A substantive effect

The Delegate referred again to Grant and observed that the Court in that case was considering a claimed business method in which no physical effect could be identified.  It is in this context, said the Delegate, that the Court imposed the requirement of ‘a physical effect in the sense of a concrete effect or phenomenon or manifestation or transformation’.

The Court, in the opinion of the Delegate, was not stating a new principle that ‘equates the requirement of an artificially created state of affairs merely with the identification of some physical effect in the application of the claimed method’.

He went on to comment that the mere operation of a method on or with physical things, or producing changes in physical things, has not been held sufficient for patentability in the past.  Something more is required.

He stated that Grant does not suggest that patentability is merely determined on the presence of a physical effect.  The physical effect, said the Delegate, must clearly be an effect of such substance or quality that the method considered as a whole is proper subject matter for a patent.

Insignificant post-solution activity

The Delegate made it clear that in his view insignificant post-solution activity is not an example of a substantive effect.

He noted that the Courts in Grant and Welcome Real-Time referenced US law.  If it was good enough for them it was good enough for him.  He referred to a passage in Bilski stating that ‘the prohibition against patenting abstract ideas cannot be circumvented by attempting to limit the use of the formula to a “particular technological environment” or adding “insignificant post-solution activity”.’

The inputting, storage or displaying of data, according to the Delegate, are examples of insignificant post-solution activity.

Central to the purpose

The Delegate referred again to Grant which required a physical effect in the sense of a concrete effect or phenomenon or manifestation or transformation.  He considered that the physical effect must be significant both in that it is concrete but also that it is central to the purpose or operation of the claimed process or otherwise arises from the combination of steps of the method in a substantial way.

He considered this would apply to a business scheme implemented in some part by computer.  He did not believe that the patentability of such a method can arise solely from the fact that it is implemented in or with the assistance of a computer or utilises some part of a computer or other physical device in an incidental way.

The Delegate found in this case that the physical effect identified was peripheral and subordinate to the substance of the claimed invention which really involves a scheme for the commercialisation of inventions.  There was no substantive effect produced through the operation of the computer which holds the ‘electronically fillable checklist’.  Such an effect does not arise from a synergistic interaction in the operation of the method on the computer or other physical elements.  The collection and presentation of information appeared to have no physical consequence other than would arise in the computer with standard software in normal use.

Further steps

The Delegate held that maintaining information in an editable form and the production of reminders in a machine were merely matters of convenience.  They did not result in a substantive effect that can be correctly considered to result in patentable subject matter.

He rejected all claims as failing to claim a manner of manufacture.

Photo courtesy of author Golbenge under Creative Commons licence.

Monday, October 3, 2011

Foot steps have inventive steps

Foot tattooed
In Foot Steps Orthotics Pty Limited v Foot Science International Limited [2011] NZIPOPAT 5 (11 April 2011) we see a patent application for an orthotic insert survive an obviousness and subject matter challenge.  We also see an acknowledgement that many patentable inventions are collocations of known parts.

The patent application

Foot Steps Orthotics Pty Limited (the applicant) filed New Zealand patent application 534105 on 15 January 2003.  The application claimed priority from an Australian provisional application filed on 16 January 2002.

Claim 1 of the patent reads as follows:
1.  An orthotic insert having a first and a second portion, said first and second portions being formed from heat mouldable ethyl vinyl acetate, said second portion adapted to provide support in the heel region of a person’s foot and being formed of a material of higher resistance to deformation than said first portion, wherein said insert is heat mouldable to conform to said person’s foot such that to fit said insert to said person’s foot said insert is heated until it softens sufficiently to permit an upper supporting surface of said insert to conform to said person’s foot to provide desired biomechanical support and then subsequently cooled, where upon cooling said upper supporting surface of said insert retains the shape to which it has conformed, and wherein said second portion has a substantially J-shaped configuration which extends partially around the periphery of said insert corresponding to said heel region and arch region of said person’s foot and a lateral section of said second portion extends above said upper supporting surface of said first portion to support said arch region of said person’s foot.
Foot Science International Limited (the opponent) unsuccessfully challenged the claims on the grounds that they were obvious in view of prior publication, obvious in view of prior use and that they did not relate to an invention.  It is this last ground that is worth discussing a little more.

Broadening of invention

The applicant argued that the definition of ‘invention’ has broadened over the years and referred to Hughes Aircraft Company [1995] NZIPOPAT 3 (3 May 1995) (see my blog post).  According to Hughes:
“...there has over the years been a progressive widening of the boundaries of subject matter which fall within the definition of ‘invention’ and that the Commissioner must give the benefit of any doubt as to patentability to the applicant.”
The applicant also highlighted a useful summary of relevant case law in George N Haddad v The Commissioner of Patents [2000] NZIPOPAT 8 (2 May 2000) (see my blog post), which states that the Hearing Officer in Hughes:
“...quoted with approval and applied the test cited in the Australian Patent Examiners’ Manual: Does the invention claimed involve the production of some commercially useful effect?”
The Hearing Officer noted that Hughes and Haddad relate to broadening the definition of invention to include subject matter that may have not comfortably fitted within the traditional interpretations of ‘manner of manufacture’.

The cases did not really relate to the matter of patentability of collocations vis-à-vis ‘mere’ collocations which is what the opponent had raised under this ground.

Mere collocation

The opponent pointed to 5 essential features of claim 1.  These are:

  1. a first and second portion.
  2. the second portion has a density greater than the first portion.
  3. the orthotic can be heated, moulded to a person’s foot, and it then retains its shape when cooled.
  4. the second portion is ‘J’-shaped to provide support around the heel and to the arch region.
  5. the second portion overlaps the first portion at the arch region.

The opponent said that all of these features were individually and severally known.  It said that each of these features formed part of the common general knowledge before the priority date.  It said that each of the features performs its own proper function in a predictable and known manner.  The features did not interrelate to produce a new or improved result.

The applicant referred to British Celanese Ltd v Courtaulds Ltd (1935) 52 RPC 171 at 193:
It is accepted as sound law that a mere placing side by side of old integers so that each performs its own proper function independently of any of the others is not a patentable combination, but that where the old integers when placed together have some working inter-relation producing a new or improved result then there is patentable subject-matter in the idea of the working inter-relation brought about by the collocation of the integers.

The applicant said there were three conditions to be satisfied for a combination to be patentable:

  1. The combination of known integers/components is a new combination.
  2. The new combination of known integers/components provides an improvement or enhancement over that of the sum of individual integers/components. In other words, the components of the combination need to have some working interrelationship.
  3. That it is not obvious to combine these known integers/components.

The Hearing Officer acknowledged that many [patentable] inventions are collocations of parts that are known in the art.

He concluded that the claims related to an invention.  He observed that it had not been shown to him that the combination was not new.  He said the applicant seemed to have created a novel orthotic which is simple in construction, easy to manufacture, and that can be easily fitted to a patient’s foot.  He had already found that the combination was not obvious.

Further steps

The Hearing Officer dismissed the opposition and ordered that the patent application proceed to issue.

Photo courtesy of author Marco Abis under Creative Commons licence.
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