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A high profile appeal to the Full Court of the Federal Court of Australia about the patentability of computer software inventions could reset the bar on the manner of manufacture test in Australia.

The case is so significant that it has drawn in the Institute of Patent and Trade Mark Attorneys of Australia (IPTA) and the Commissioner of Patents, who have both taken the rare move of filing applications to intervene in the appeal brought by Encompass Corporation Pty Ltd (Encompass) and SAI Global Property Division Pty Ltd (SAI Global).

The appeal by Encompass and SAI Global is of the judgment of Perram J in Encompass v InfoTrack (2018) 130 IPR 387.

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.

This is an issue that the Court and IP Australia patent examiners have considered on numerous occasions in the past.  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 concerns Australian Patent Numbers 2014101164 and 2014101413 being two innovation patents both titled ‘Information Displaying Method and Apparatus’.

The genesis of the action was the patent infringement proceedings filed in 2015 by Encompass and SAI Global against InfoTrack.  Encompass and SAI Global alleged that InfoTrack infringed upon the patents within its REVEAL data visualisation tool.

While InfoTrack ultimately admitted that their REVEAL tool infringed upon the two patents, it filed a cross-claim challenging the validity of the two patents.  The result of that cross-claim is Justice Perram’s 29 March 2018 judgment.

The Perram J Judgment

While InfoTrack submitted numerous reasons why the two patents are invalid, Perram J honed in on one in particular, which in His Honour’s opinion invalidated the two patents on its own.  This reason is the claim that the two patents do not pass the manner of manufacture test.

Manner of Manufacture

A manner of manufacture is one of four main criteria for an invention to be patentable. The concept flows from the Statute of Monopolies 1623 (UK) (Statute of Monopolies) and is seen as having a great degree of fluidity which is intended to allow the judiciary to interpret the test in context.

The manner of manufacture test is primarily directed toward the subject matter of the invention in considering whether or not the invention is the kind of thing for which patents may be granted. Such an ambiguous definition has seen the test for what kind of things for which patents can be granted change over time as the world has seen various advances in science, technology, and commerce.

Ultimately, as reflected in the case of National Research Development Corporation v Commission of Patents (1959) 102 CLR 252 (The NRDC Case), an interpretation must be made of section 6 of the Statute of Monopolies to determine if the subject matter of the invention is the kind of thing for what a patent can be granted.

The Patents at Hand

Perram J said of the two patents that:

In any event, it is difficult to see how a person could use the method and apparatus disclosed in the Patents to do something with a computer which could not already be done. An improvement in the computer does not result. For that reason I do not think that the Patents involve a manner of manufacture and they are accordingly invalid.

Accordingly, Perram J didn’t consider the patents involve a manner of manufacture because the invention doesn’t achieve anything that couldn’t be achieved on a computer already. His Honour sees the two patents as a process incorporating a combination of three existing inventions, but not as a patentable invention in itself.

As a result, His Honour declared that InfoTrack was entitled to succeed, thereby invalidating the two patents and providing a right for InfoTrack to seek orders for the patents to be revoked.

The Appeal

Encompass filed a Notice of Appeal on 3 May 2018 and the Full Court of the Federal Court of Australia is set to hear the appeal on  8 November 2018.

Interveners

What is particularly notable about this case is that the Institute of Patent and Trade Mark Attorneys of Australia and the Commissioner of Patents have both taken the rare step of seeking leave to intervene in the case.

The Institute of Patent and Trade Mark Attorneys of Australia (IPTA) is the peak professional body representing Australian patent and trade mark attorneys while  the Commissioner of Patents is responsible for the granting of patents by IP Australia.  When both IPTA and the Commissioner of Patents take the extraordinary step of seeking to intervene in court proceedings, it is best to pay close attention.

The decision whether to accept IPTA’s and the Commissioner of Patent’s applications to intervene in the proceedings has been stood over until the first day of the appeal.  IPTA has served written submissions on the question of manner of manufacture within the meaning of s 18(1)(a) of the Patents Act 1990 (Cth) that it will seek to rely upon in the event that its intervention is granted.

Key Issues to be Tried

The key issue to be tried is  whether the patents’ subject matter describes a manner of manufacture within the meaning of s 18(1)(a) of the Patents Act which is ultimately a consideration of s 6 of the Statute of Monopolies.

The NRDC Case makes it apparent that the definition of a manner of manufacture is intentionally not settled so that the Court has the freedom to make an interpretation with due consideration to the context of the case and today’s contemporary Australian society.

The consequence of an unsuccessful appeal has the capability to affect those who seek to file patent applications for inventions related to computer software. The result could mean that computer software patents go the way of Australian business method patents and almost disappear into obscurity.

We will be following this case and reporting to you on the outcome, which we hope will provide a definitive statement on how systems based 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 was written Mark Metzeling, Special Counsel and Mitchell Willocks, Law Graduate – Commercial.