Australian Software company “Rokt” by Patent Decision: Federal Court says computer-implemented invention is not patentable

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Commissioner of Patents v Rokt Pte Ltd [2020] FCAFC 86 (21 May 2020)

In yet another in a recent series of Australian Federal Court decisions on patent eligibility of computer implemented inventions the saga of Rokt Pte Ltd’s patent application for a digital advertising invention has taken another dramatic turn.  

InCommissioner of Patents v Rokt Pte Ltd [2020] FCAFC 86 (21 May 2020) the Full Federal Court overturned the decision of Justice Robertson at first instance who himself had overturned a previous decision of the Australian Patent Office by concluding that the invention was suitable subject matter for patent protection.

Rokt applied for a patent in 2013 for an invention entitled "A Digital Advertising System and Method", which was essentially an approach to presenting targeted advertising to users online based on interaction with a so‑called “engagement offer”.  This involved delivering to a user’s computer a program or “widget script” in conjunction with other online content which gathered data on the user’s engagement with the content.  The program used the data to determine when to insert an “engagement offer” in the online content and if the user interacted with the offer targeted advertising would be presented to the user.

Recent History of Computer Implemented Inventions in the Federal Court

The invention resides in the notoriously grey area of computer implemented inventions in the area of business and commerce.  The Rokt decision follows hot on the heels of another decision of the Full Federal Court in Encompass Corporation Pty Ltd v Info Track Pty Ltd [2019] FCAFC 161 (13 September 2019) which itself was an appeal of a decision of Justice Perram at first instance to invalidate a patent for a computer implemented method for collecting, aggregating and displaying information relating to legal entities such as land ownership, association with corporate entities, police records, or the like for the purposes of “business intelligence”.

In rejecting the appeal the Full Court in Encompass affirmed the proposition that where the invention relates to otherwise ineligible subject matter such as a business method, scheme, or abstract idea,it is not enough to simply disclose and to claim generic computer implementation.  The invention must have as an essential feature some explicit instruction as to how the computer is programmed or configured technically to perform the method.

The Full Court in Rokt

The three Justices of the Full Court in Rokt basically reinforced the notion that seeking patent protection for a computer implemented invention in superficially abstract areas such as advertising and commerce is fraught.  Great care must be exhibited in drafting the patent specification to ensure that technical features or components of the method or system are adequately described and defined as essential features in the claims.

Inventors should err on the side of narrower claims to specific elements of computer implementation and if the is more than one possible implementation then these should be described and claimed individually.  Where the implementation is completely generic or can be achieved in so many ways that only a generic claim would cover all possibilities then it might simply be that effective patent protection is practically unavailable. Otherwise, the inventor may need to settle for narrower protection for a specific implementation.

What is subject matter eligibility? Why does it matter?

Subsection 18(1)(a) of the Patents Act 1990 requires that to be valid subject matter for a patent an invention must be a “manner of manufacture”.  This is an ancient concept derived from English law and sets out the bounds of eligible subject matter.  The scope of the concept has evolved over time to include public policy considerations.  Exclusions include mere discoveries, ideas, scientific theories, schemes, plans and mathematical algorithms as well as products of nature such as naturally occurring human genetic material.

For computer implemented methods, if they involve nothing more than mere information or a scheme or an abstract idea implemented in a generic way in a computer then the invention will not be eligible for patent protection.

Rokt’s Patent Application Initially Rejected by the Patent Office

The Australian Patent Office originally rejected Rokt’s patent application on grounds that the invention related to an online advertising method or scheme and did not involve any improvement to, or ingenuity in the use of, the functions of a computer.  In Rokt Pte Ltd [2016] APO 66 (11 October 2016) a Delegate of the Commissioner of Patents concluded that the invention was just an advertising methodology that amounts to no more than a mere scheme.  The Delegate rejected the proposition that the innovation resided in the way in which computers are utilised as much as the invention relates to what the computer is doing.

Appeal to the Federal Court at First Instance

Undaunted, Rokt appealed to the Federal Court and in December 2018 they were rewarded with a decision in their favour.  Justice Robertson accepted Rokt’s expert evidence on the nature of the alleged invention and agreed with Rokt’s submission that the invention was a “technological innovation” and as such was suitable subject matter for letters patent.

In considering Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177 (11 December 2015) Justice Robertson noted that the inventionuter-implemented “recognition of prior learning” method involving collecting and processing information to assess an individual's competency relative to various qualifications was a mere scheme and not eligible for patent protection.

Justice Robertson contrasted Rokt’s invention with the invention in RPL in that:

the use of computers was integral, rather than incidental, to the invention in the sense that there is an invention in the way in which the computer carries out the business scheme”

Rokt made arguments that in contrast to the situation in RPL, Rokt’s method could not be operated without a computer and the use of a computer was integral to carrying out the invention.  Furthermore, the invention involved steps foreign to the normal use of computers as it drew together different streams of information and put them together and worked with them in a way that was new and had not been done before.  

His honour observed on the assessment of such inventions that:

“there is no formula to be mechanically applied, and that it is necessary to understand where the inventiveness or ingenuity is said to lie. A mere business innovation is insufficient and a business method or scheme is not, per se, a proper subject for letters patent. Nor are abstract ideas. The issue is whether there is a technological innovation. Where, as here, the claimed invention is to a computerised business method, the invention must lie in the computerisation and it is not enough simply to put a business method into a computer. The search is for an improvement in computer technology.”

In deciding in favour of Rokt that the invention was eligible for patent protection, his honour concluded

“the substance of the invention was to introduce a dynamic, context-based advertising system, introducing a distinction between an engagement offer, without a direct advertising benefit, and an advertisement designed to lead directly to the sale of the product. This was an improvement in computer technology…” (at 203)

Appeal to the Full Federal Court

Not to be outdone, the Commissioner of Patents appealed to the Full Federal Court and in its decision in Commissioner of Patents v Rokt Pte Ltd [2020] FCAFC 86 (21 May 2020) the tables were turned once again on the hapless Rokt.  

In the joint decision of Justices Rares, Nicholas and Burley,the Full Court overturned the decision of Justice Robertson at first instance in finding the invention to be ineligible. The Full Court heard submissions from the Commissioner of Patents that despite the use of a computer and internet connectivity to implement the scheme, the invention claimed is no more than an instruction to apply an abstract idea or scheme, using generic computer technology. Furthermore, the recognised authority in RPL Central is that inventions involving a mere scheme or abstract idea using generic computer implementation are not eligible for patent protection.

In an interesting quote, having canvassed the content of the specification as a whole, their honours noted that:

“It may be seen from the generality of this description that no aspect of the system configuration, or the component parts of the system, rises above the most general level of abstraction.”

Rokt argued in reply that the Commissioner’s arguments oversimplify the invention.  They argued that the invention is for a method and system of digital advertising wherein the method starts by downloading program code (a widget) to a user when he or she has access to a website, and running it on their browsing device.  The widget gathers certain data stored in the user’s device, including data about the user and about what the user is doing while browsing the website.  It then sends engagement data over the internet in real time to an advertising system which runs an algorithm to determine when to display an “engagement offer” and what particular offer to display on the user device. The widget then records if the user interacts with the “engagement offer” and another algorithm determines which advertisements should then be displayed.

Nevertheless, the Full Court criticised the primary judge’s approach to assessing subject matter eligibility.  In particular, they objected to the identification of the “substance of the invention” as being a question of fact, to be answered by reference to expert evidence, as opposed to a question of law to be determined by the court. The Full Court observed:

“The correct characterisation of the invention is a matter of law, based on the construction of the specification that may, where appropriate, be assisted by the evidence of experts... it is apparent from a consideration of the specification as a whole that the invention disclosed and claimed is to a scheme to induce consumers to respond more favourably to advertising content displayed to a consumer on a screen… the engagement offer differs from traditional digital advertisements in that its primary function is not to sell a particular product or service, but instead is a mechanism for encouraging the consumer to initially engage with the advertisement system in a positive sense. The proper question is whether that scheme has simply been put into effect using computer technology”. (at 93)

In response to Rokt’s submission that as the invention could only be implemented with a computer, this supports a conclusion that the invention is eligible subject matter, the Full Court stated:

“However, the question is not simply whether the claimed invention could not be implemented other than by the use of computers. That fact of itself is not sufficient, as the Full Court in Encompass observed at [91]. A claimed method that is unpatentable does not change its legal character merely because the method is implemented by the instrumentality of a computer”. (at 99)

The Full Court found that the claims were no more than an instruction to apply the abstract idea, being the steps of the method, using what it characterised as “generic computer technology”.  They observed:

“In this regard in our view nothing about the way that the specification describes the computer hardware or software indicates that either is any more than a vehicle for implementing the scheme, using computers for their ordinary purposes." (at 109)

“The specification does no more than describe the architecture of the hardware in a most general sense… the marketing scheme that involves the use of the engagement offer is simply implemented by the instrumentality of computer hardware and software. It is true to say that the specification on its face represents a solution to the marketing problem caused by insufficient engagement with targeted online advertising, but these factors suggest that the scheme whereby that is achieved does not involve the use of computer technology other than as a vehicle to implement the scheme”. (at 110)

In its decision, the Full Court observed that:

“In the present case, the claim amounts to an instruction to carry out the marketing scheme.The level of abstraction at which it is expressed demonstrates that it does no more than provide a list of steps to be implemented using computer technology for its well-known and understood functions. Nothing in the specification suggests otherwise. This may be seen from the instructions explained as steps S1a to S10a in the specification (see [26] above). They comprise a list of general instructions to write software. Even if the scheme is new and ingenious, it is not made patentable merely because it can or must be implemented using computer technology. Rather, the language of the specification and the broad statements of steps required to be taken in claim 1 do no more than locate the scheme in computer technology, using its well-known and understood functions. The position is not distinguishable from that in Encompass. In our respectful view,the learned primary judge erred in finding otherwise.” (at 115).

The decision therefore rests on the conclusion that the invention as described and claimed in the specification related solely to the method in the sense of it being an abstract idea for presenting advertising to consumers.  The specification, and importantly the claim itself, did not present an invention in how the invention was to be implemented in a computer and there was no improvement in the operation of the computer itself.  

In the Full Court’s view, their conclusion was supported by the suggestion in the specification that how to go about implementing the method in a computer was unimportant and could be achieved by any means.  In other words, any non-inventive worker could determine for themselves how to implement the invention which supports a conclusion that the invention did not relate to an improvement in computer technology.

Guidance for Inventors and Patent Applicants

The decisions of the Full Federal Court in Encompass Corporation Pty Ltd v Info Track Pty Ltd [2019] FCAFC 161 (13 September 2019) and now in Commissioner of Patents v Rokt Pte Ltd [2020] FCAFC 86 (21 May 2020) emphasise that when drafting patent specifications for computer implemented inventions there must be adequate disclosure and claiming of features of technical implementation.  

If the invention relates to a computer implemented method that solves a business or commercial problem and the method involves “processing”, “selection”,“determining” or some other algorithmic function, the patent eligibility would be assisted by describing how the algorithmic function is carried out.  For example, if there is a mathematical or statistical algorithm involved then this should be adequately described and claimed in the patent specification.  Not only this, the patent should emphasise such features to ensure they are given due consideration and cannot be dismissed as simply “generic computer implementation”.

For more information on patents for computer implemented inventions then please get in touch with Daniel.

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