patentable subject matter

Patentable subject matter reform

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IP Australia has issued an Issues Paper on the proposed amendments to the Patents Act:

(1) to insert an “objects” clause; and

(2) to exclude from patentable subject matter inventions which it would be “offensive” to commercially exploit.

These plans arise out of a recommendations made by ACIP which the Government announced it accepted. The consultation now is on the wording to implement those policies.

An objects clause

The consultation paper proposes 2 alternative “objects” clauses:

Option 1

…. the purpose of the legislation as being to provide an environment that promotes Australia’s national interest and enhances the well-being of Australians by balancing the competing interests of patent rights holders, the users of technology, and Australian society as a whole.

Option 2

the purpose of the patent system is to provide an environment that enhances the well-being of Australians by promoting innovation and the dissemination of technology and by balancing the competing interests of patent applicants and patent owners, the users of technology, and Australian society as a whole.

Now, one could very well wonder what possible help either of these statements might give a court if they were enacted. The consultation paper even notes that the Parliamentary Draftsman is rather ambivalent about the value of objects clauses in general:

Some objects provisions give a general understanding of the purpose of the legislation…Other objects provisions set out the general aim or principles that help the reader to interpret the detailed provisions of the legislation.

The first option is what ACIP proposed. ACIP considered its proposal a simplified version of the Objects identified in art. 7 of TRIPS:

The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.

The consultation paper thought that Option 1 does not sufficiently recognise the economic and social welfare concerns of patent law and did not sufficiently recognise the interests of patent applicants as well as patent owners (formerly known in Olde English as patentees). As the consultation paper explains:

The economic goals of the patent system are to promote economic growth, trade and investment by encouraging innovation and the dissemination of knowledge and technology.

The patent system encourages innovation by giving patentees a period of market exclusivity in which to recoup their development costs through commercialisation of their inventions. In exchange, patentees are required to disclose the details of their inventions to the public. The patent system contributes to social welfare by providing Australians with access to new technologies and developments that otherwise would not have occurred and that improve our quality of life (for example new pharmaceuticals and medical technologies and improvements to safety and waste management technologies).

However, the patent system will only meet its economic goals if the positive effects of the patent system in stimulating investment in innovation and providing society with access to new technology are balanced against the potential negative effects of patents restricting access to follow-on innovation and increasing costs, and so restricting supply of new patented technologies.

This is better, at least the first 2 paragraphs (if one bears in mind that economists – to the extent they accept the role of patents – think of the market exclusivity as providing an incentive rather than a “reward”). The third paragraph is rather more ambivalent.The danger the third paragraph raises is that it could be used as a basis for excluding something from patentability because someone might use the patent to raise prices or the other evils identified. But, while there are some provisions in the Patents Act that address, or attempt to deal with, these issues, in many respects they seem more properly the territory of (take a deep breath) competition law.

Offensive commercial exploitation

What the consultation proposes is a new exclusion to be added to s 18:

…  for an invention the commercial exploitation which would be wholly offensive to the ordinary reasonable and fully informed member of the Australian public.

Wholly offensive?

Apparently, the test of the ordinary reasonable and fully informed member of the Australian public is intended to ensure that the exclusion is “applied in a consistent, predictable and neutral manner”. However, it is also proposed to assist the Commissioner by explicitly empowering the Commissioner  in his or her discretion to seek “non-binding” advice on ethical matters.

What seems to trigger the exclusion commercial exploitation in an wholly offensive way rather than at the specific subject matter itself. At what point is the appropriateness of the commercial exploitation determined? Will it be enough that the invention could be exploited in an wholly offensive way? The BRCA controversy erupted when Myriad announced it was going to start charging licence fees for its products. Would the ordinary, reasonable and fully informed Australian have considered its patent wholly offensive before that announcement? This rather suggests that the problem falls within the second type issue identified by ACIP: about how the patent is used, are better dealt with through Crown Use and other compulsory licence arrangements.

 

If you have views you want to inflict, they should be submitted by 27 September 2013.

Find the issues paper here.

Patentable subject matter reform Read More »

A business method patent (not yet)

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RPL applied for an innovation patent of a method entitled ‘Method and System for Automated Collection of Evidence of Skills and Knowledge’.

The applied for innovation relates to a method for people to obtain recognition for their prior learning. Apparently, there are some 35,000 qualifications and 34,000 units in the vocational educational and training sector in Australia. Hence it can be difficult for people to identify a particular qualification which they have qualified for as there is no single point of access to the system. The applied for innovation claimed methods for using technology, particularly the internet, to automate the process of identifying relevant criteria and applying for the relevant recognition.

Claim 1 claimed:

1. A method of gathering evidence relevant to an assessment of an individual’s competency relative to a recognised qualification standard, including the steps of:

  • a computer retrieving via the Internet from a remotely-located server a plurality of assessable criteria associated with the recognised qualification standard, said criteria including one or more elements of competency, each of which is associated with one or more performance criteria;
  • the computer processing the plurality of assessable criteria to generate automatically a corresponding plurality of questions relating to the competency of an individual to satisfy each of the elements of competency and performance criteria associated with the recognised qualification standard;
  • an assessment server presenting the automatically-generated questions via the Internet to a computer of an individual requiring assessment; and
  • receiving from the individual via said individual’s computer a series of responses to the automatically generated questions, the responses including evidence of the individual’s skills, knowledge and/or experience in relation to each of the elements of competency and performance criteria,
  • wherein at least one said response includes the individual specifying one or more files stored on the individual’s computer, which are transferred to the assessment server.
Myall opposed alleging lack of novelty based on prior use. The applicant didn’t even need to file evidence to defend this allegation which failed on the evidence submitted by the opponent.
However, it appears that the delegate hearing the opposition raised the objection that the innovation claimed was not a manner of manufacture (see [62]).
The delegate noted (at [45]) that the Full Federal Court’s decision in Grant had qualified NRDC so that a manner of manufacture required
‘an artificial state of affairs, in the sense of a concrete, tangible, physical, or observable effect’
and
A physical effect in the sense of a concrete effect or phenomenon or manifestation or transformation is required.
This had been further explained by the Deputy Commissioner in Invention Pathways:
I do not take [Grant] to suggest that patentability is merely determined on the presence of a physical effect. Rather it clearly must be an effect of such substance or quality that the method considered as a whole is “proper subject of letters patent according to the principles which have been developed for the application of s. 6 of the Statute of Monopolies”.
Accordingly, the Deputy Commissioner considered:
… the “concrete effect or phenomenon or manifestation or transformation” referred to must be one that is 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. Consequently while the step of building a house involves a concrete physical effect it is peripheral to the method of acquiring a house and indeed could hardly be said to characterise the subject matter of the method such that it is considered an artificially created state of affairs. I consider the same to apply to a business scheme implemented in some part by computer and do not believe the patentability of such a method can arise solely from the fact that, in a general sense, it is implemented in or with the assistance of a computer or utilises some part a computer or other physical device in a incidental way.
In this case, the delegate considered at [54]:
54. It is clear that the claim relates to gathering information where the internet is used for transmitting and receiving data, and a computer is used for data retrieval, processing, presentation and storage of information in a well known manner. The process of automatically generating questions based on assessable criteria, as stated in the description, includes applying a question template into which the text of the relevant assessable criteria may be merged. In a simple form, a question may be generated from the criteria by prepending the text such as ‘How can you show evidence that’.
and so found at [55]:
55. The claimed invention defines a method for gathering information where the data retrieval, processing and storage of information appear to have no physical effect other than that would arise in the computer with standard software in conventional use. Furthermore, there is no substantial effect or transformation in generating the questions by concatenating text matters. While the internet and the computer facilitate the operation of the claimed method by retrieving, generating and conveying information, they are not central to the purpose of the claimed invention. [So unlike the loyalty card in Welcome-Catuity], the claimed invention simply monopolises a scheme where the internet and the computer are used for mere convenience for operating the scheme.
Accordingly, the delegate rejected the application in that form. However, at [59], the delegate considered there could nonetheless be patentable subject matter:
the description of the opposed patent contemplates generating the questions automatically based upon the identification of particular keywords within the assessable criteria, and upon additional contextual information obtained from Evidence Guides, Range Statements and Employability Skills associated with Qualifications and Units of Competency without requiring human intervention.
and so allowed 60 days for amendments to be brought in (the delegate also flagged a potential fair basing problem for the proposed amendment).
Myall Australia Pty Ltd v RPL Central Pty Ltd [2011] APO 48 (link to be provided when available)
Lid dip: Patentology

			

		
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Patentable subject matter in Australia
		

			
			
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The Minister has released ACIP’s report into what should be patentable subject matter under Australian law.


At the moment, s 18 defines a ‘patentable invention’ and the Dictionary in Sch. 1 defines and “invention” as:


“invention” means any manner of new manufacture the subject of letters patent and grant of privilege within section 6 of the Statute of Monopolies, and includes an alleged invention.


and, from NRDC (for example) :


Section 6 of the Statute of Monopolies provides that the declarations of invalidity contained in the preceding provisions of the Act “shall not extend to any letters patents and graunts of privilege . . . hereafter to be made of the sole working or makinge of any manner of new manufactures within this realme, to the true and first inventor and inventors of such manufactures, which others at the tyme of makinge such letters patents and graunts shall not use, soe as alsoe they be not contrary to the lawe or mischievous to the state by raisinge prices of comodities at home, or hurt of trade, or generallie inconvenient”


From the Key Points and recommendations:


We recommend changing the Patents Act 1990 to codify the principles of inherent patentability (as developed by the High Court in the NRDC case and in subsequent Australian court decisions). …


Consequently:




These reforms envisage amending the legislation by: 




    

  • replacing the words ‘is a patentable invention’ in subsections 18(1) and18(1A) with the words ‘is patentable’;
    • 

  • replacing the words ‘if the invention, so far as claimed in any claim’ in subsections 18(1) and 18(1A) with the words ‘if it’;
    • 

  • replacing the current words of paragraphs 18(1)(a) and 18(1A)(a) with the words ‘an artificially created state of affairs in the field of economic endeavour’;
    • 

  • changing the definition of ‘invention’ in Schedule 1 to be ‘the subject matter of any claim’; and
    • 

  • deleting the definition of ‘patentable invention’ in Schedule 1.
    • 





So far, so good. These proposals would keep the teleological approach adopted in NRDC that was (and is) so forward looking and which has served us so well. It looks like they would also do away with all the problems of the “threshold” requirement introduced by Phillips v Mirabella (the nature of the problem is laid out at paragraphs 19 to 27 of Bristol-Myers Squibb v Faulding).


Then, things start to get a bit hairy:


Because the principles of inherent patentability address only the economic goals of the patent system, we also recommend specific and general exclusions to address certain ethical concerns that may arise. The current specific exclusion preventing the patenting of human beings and biological processes for their generation should be retained. Instead of the general inconvenience proviso, a general exclusion would preclude the patenting of inventions the commercial exploitation of which would be wholly offensive to the ordinary reasonable and fully informed member of the Australian public. (my emphasis)


Now, I would be happy with the recommendation insofar as it gets rid of the “general inconvenient proviso” as no-one knows what it means, or is intended to mean. But to replace it with an exclusion of “something wholly offensive to the ordinary reasonable and fully informed member of the Australian public”? That will be “fun”.


In Bristol-Myers Squibb, Finkelstein J pointed out (especially at 140 to 142) that courts are not particularly happy hunting grounds for that type of inquiry; still less so, one might have thought, the Commissioner (whomever he or she might be). For example, in a different field, Lady Chatterley’s Lover was famously offensive, although apparently no more. Today, we have controversy over whether or not to fly some people at taxpayer’s expense to funerals (here vs here and here). Which side of that debate represents the ordinary reasonable and fully informed member …?


Meanwhile, the Senate’s Legal and Constitutional Affairs Committee is waiting (until 25 February 2011) for your submissions on the Patent Amendment (Human Genes and Biological Materials) Bill 2010, the private Senators’ bill (introduced by Senators Coonan, Heffernan, Siewert and Xenophon) to amend the Patents Act 1990 to prevent the patenting of human genes and biological materials existing in nature.


ACIP’s report.


ACIP’s press release.

			

		
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A new approach to business method patents Down Under?
		

			
			
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Patent Baristas has a guest post from Bill Bennett at Pizzeys on the Deputy Commissioner’s rejection of a patent application for (as described by the Deputy Commissioner):


“a method for commercialising inventions that includes the step of applying for patent protection. The specification indicates that the method 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. The latter is a reference to the practice in most jurisdictions of publishing patent applications 18 months after their earliest priority date.”


Claim 1 reproduced in the Deputy Commissioner’s decision reads:




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.


At the risk of seeming glib and/or flip, one might think this was a checklist for the commercialisation of “an invention”, where one of the items on the checklist includes applying for patent protection, and using a calendaring system to generate reminders so you don’t miss a deadline.


Wonder what business managers and patent managers have been using Excel, Outlook and any number of computerised database for until now?


Any how, Mr Bennett’s blog, focusing on the “electronically fillable” and “computer-implemented” wording in the claim, contends that the Deputy Commissioner has reinterpreted Grant (you remember: the asset protection method (formerly known as a trust) in light of the US Supreme Court’s ruling in Bilski so that the production of a physical effect will lead to a “manner of manufacture” only where the effect is:


of such substance or quality that the method considered as a whole is “proper subject of letters patent according to the principles which have been developed for the application of s. 6 of the Statute of Monopolies”.


(Do read Mr Bennett’s more detailed consideration.)


However, this seems to confer on the Commissioner a rather wide discretion. Was it really necessary?


Invention Pathways Pty Ltd [2010] APO 10

			

		
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EU: patentability of stem cell
		

			
			
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Greenpeace’s attempts to have “stem cell” patents of Oliver Brüstle revoked moves to the European Court of Justice: The Budnesgerichtshof (German Federal Supreme Court) has referred to the ECJ several questions about the patentability of the use of stem cells to treat various neural diseases.


IPKat has details here, summarising the issues as :


The ECJ will now have to rule on the interpretation of “human embryo” in the sense of art. 6 Directive 98/44/EC. Is a stem cell derived from a blastocyst which has lost its ability to develop into a human still an embryo? If so, is a blastocyst a human embryo? If so, is purely therapeutic use of stem cells a “commercial or industrial purpose” in the sense of art. 6?


By way of comparison, section 18(2) of our Act baldly declares:


Human beings, and the biological processes for their generation, are not patentable inventions.


This provision was introduced at a late stage of the legislative process. Deputy Commissioner Herald had to try and work out its meaning in Fertilitescentrum AB and Luminis Pty Ltd’s Application [2004] APO 19 where he considered that:




36. It seems to me that of these three approaches, only the third approach provides a satisfactory interpretation of s.18(2). Accordingly, in my view the correct interpretation of s.18(2) is ascertained by recognising a human being as being in the process of generation (in either of the two ways I refer to in paragraph 31) from the time of the processes that create a fertilised ovum (or other processes that give rise to an equivalent entity) up until the time of birth.


37. The prohibition of `human beings’ in my view is a prohibition of patenting of any entity that might reasonably claim the status of a human being. Clearly a person that has been born is covered by this exclusion. But to the extent that there is a process of generation of a human being that lasts from fertilisation to birth, I consider that a fertilised ovum and all its subsequent manifestations are covered by this exclusion.




36. It seems to me that of these three approaches, only the third approach provides a satisfactory interpretation of s.18(2). Accordingly, in my view the correct interpretation of s.18(2) is ascertained by recognising a human being as being in the process of generation (in either of the two ways I refer to in paragraph 31) from the time of the processes that create a fertilised ovum (or other processes that give rise to an equivalent entity) up until the time of birth.


37. The prohibition of `human beings’ in my view is a prohibition of patenting of any entity that might reasonably claim the status of a human being. Clearly a person that has been born is covered by this exclusion. But to the extent that there is a process of generation of a human being that lasts from fertilisation to birth, I consider that a fertilised ovum and all its subsequent manifestations are covered by this exclusion.


In application of that ruling, the Examiner’s Manual indicates that the Commissioner’s policy with respect to stems cells is that:


it follows that human stem cells and human stem cell lines per se are patentable because these cells are not considered to be human beings or potential human beings within the meaning of s18(2).

			

		
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In re Bilski
		

			
			
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Patently-O has extracts from and links to transcripts of the oral argument before the US Supreme Court and some informed reportage.


Also, make sure you read Prof. John Duffy’s rebuttal of the charge that the Federal Circuit’s decision in State Street “opening the floodgates” to business method patents is a case of judicial activisim gone wild.


Then ask yourself, would the world really be a better place if we all adopted the European practice of banning the patenting of  business methods and computer programs “as such“?

			

		
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Patentable Subject Matter: ACIP options paper
		

			
			
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ACIP has published an Options Paper in connection with its review of “patentable subject matter”.


Press release here.


Options Paper here.


The options under consideration are too far reaching for a “sound bite”.


For example (from the Press Release)




“The test for patentable subject matter in Australia is linked to legislation introduced


in England in 1623 so it really does need addressing within the context of modern


research and business,”




“The test for patentable subject matter in Australia is linked to legislation introduced in England in 1623 so it really does need addressing within the context of modern research and business”.


Of course, the fact that this disparaged Jacobean test is perhaps the most  modern, flexible, telelogical concept on our statute book since the NRDC case (in 1959) could be overlooked.


Also (from the Press Release):




ACIP have also proposed possible safeguards to ensure public concerns are reflected in decisions to grant patents.


Submissions by Friday 13th (!) November 2009.

			

		
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