Computer Software Inventions Patentability Case Divides the Legal Fraternity

The Full Court of the Federal Court of Australia (FCAFC) recently heard submissions from the parties in Encompass Corporation Pty Ltd ACN 140 556 896 & Anor v InfoTrack Pty Ltd ACN 092 724 251, which is set to be a landmark determination of the patentability of computer software inventions.

The appeal by Encompass and SAI Global is of the judgement of Justice Perram in Encompass v InfoTrack (2018) 130 IPR 387. The case concerns Australian Patent Numbers 2014101164 and 2014101413 being two innovation patents both titled ‘Information Displaying Method and Apparatus’.

The issue chiefly at hand is the test for manner of manufacture as applied to computer software inventions when considering the patentability of such an invention.

The importance of this case is that an unsuccessful appeal could mean that the threshold to meet the manner of manufacture test to establish the patentability of an invention could drastically increase for all patents, but especially for systems-based patents.

The case is receiving much attention amongst intellectual property practitioners because of the participation of both IP Australia and the Institute of Patent and Trade Mark Attorneys of Australia (IPTA).

Submissions by the Appellants

Counsel for the Appellants, David Shavin, QC, put to the Court that it would be more appropriate to take a more ”nuanced” view of the patentability of computer software inventions. Mr Shavin stated that “one either says that we’re not going to have patentability of software, which is the Commissioner’s view, or we have a more nuanced version”.

Essentially, the Appellants argue that the trial judge failed to consider how the invention’s steps when put together produced an outcome greater than the sum of its parts (due to the innovation).  In doing so, the Appellants claim that Justice Perram made a methodological error by simply considering the individual components of the invention in finding that the same result could be achieved using a combination of existing inventions.

The Appellants argue that the inventions can achieve something with a computer that was not possible before, even if a “cast of thousands” were to attempt to replicate the result using existing methodologies.

Submissions by the Respondent

Counsel for the Respondent, Sophie Goddard, SC, submitted that the two innovation patents ”merely described the ordinary use of a computer to implement an abstract business method”.  The Respondent put to the Court that while the inventions are “a wonderful abstract idea”, they are not patentable as they contain ”very basic information” and fail to specifically consider and provide the technological means or methods behind how the inventions are to be used in practice.

Submissions by IP Australia

Counsel for IP Australia, Christian Dimitriadis, SC, put to the Court that a computer software invention was only patentable if programmed with ”some ingenuity”.

In response to a question from Justice Nicholas regarding ”invention ingenuity”, Mr Dimitriadis said that ”if there is some ingenuity in the way in which the business method has been put into effect in the computer … then it may be regarded as patentable subject matter”.

In essence, IP Australia put to the Court that there must be a high enough threshold to be met for a computer software invention to be patentable.  IP Australia is not new to this discussion as it has been advocating for a higher threshold for some time.  It is this case that has the ability to cement IP Australia’s position on a higher threshold for computer software invention patentability.

IP Australia has previously revoked four Aristocrat Technologies Australia gaming patents on the grounds that the patent as applied for doesn’t constitute a  manner of manufacture, which Aristocrat has appealed.  The case at hand may well foreshadow the outcome of Aristocrat’s appeal. Some would say that 2018 has been a year of computer software invention patent litigation, which will only come to an end when our judicial system brings much-needed clarity to the subject.

Submissions by IPTA

Counsel for IPTA, Neil Murray, SC, was not permitted to make oral submissions on behalf of IPTA, as the Court reserved its decision as to whether to permit IPTA to intervene in the case until the final judgment.  The Court is to rely on IPTA’s written submissions if it is permitted to intervene in the case.

Next Steps

At the conclusion of the hearing, judgement was reserved and it is expected it will be handed down in approximately March 2019.  Stay tuned as we will report to you on the outcome, which we anticipate will provide a definitive statement on how computer software invention patents will be treated going forward.  If you would like to find out more about how we can help you protect your computer software invention or intellectual property protection strategy in general, please contact us.

This article serves as an update to our previous article titled ‘Computer Software Inventions Patentability Case Has Got IPTA’s Patents in a Bunch’, which considered the key topics to be tried before the FCAFC.

This article was written by Mark Metzeling, Special Counsel and Mitchell Willocks, Law Graduate – Commercial.