Rokt on the ropes – Full Federal Court says computer-implemented invention is not patentable

In a significant new decision, the Full Federal Court has reversed the decision of the Federal Court and held that Rokt’s computer-implemented digital advertising system and method is not patentable. 

While the Rokt decision will no doubt be disappointing for software innovators, it does leave the door open for computer-implemented business methods or schemes to be patentable subject matter provided the ingenuity of the claimed invention and technical contribution or effect lies in the computerisation.

Rokt:

• provides useful guidance on how to characterise a computer-implemented invention and determine whether it constitutes patentable subject matter under Australia’s “manner of manufacture” test;
• provides some clarity regarding the role of expert evidence and prior art in that exercise; and
• is broadly consistent with recent decisions of the Full Federal Court in Research Affiliates ^[1], RPL Central ^[2] and Encompass ^[3] and the Federal Court in Repipe ^[4].

Rokt has recently been applied by the Federal Court in Aristocrat^[5] where the Court held that an invention for an electronic gaming machine which involves a combination of computer software, hardware and firmware together with physical parts was a patentable invention.

Early Decisions of Patent Office and Federal Court

Rokt applied for a patent titled "A Digital Advertising System and Method", a computer-implemented system and method for linking web users to online advertising.  It combines various elements to provide a "dynamic, context-based advertising system" whereby users are presented with an intermediate "engagement offer" while on a website, selected based on their previous interactions on the website (described by the Full Federal Court as “click bait”).  If the engagement offer is accepted by the user (e.g. by positively clicking on the offer), targeted advertising messages unrelated to the engagement offer are selected and presented to the user.  Advertisements are thereby presented to users who are more likely to engage with them than traditional methods of digital advertising. 

The Patent Office decided that the patent application should not proceed to grant as the substance of the invention was merely business innovation.  Rokt successfully appealed the decision to the Federal Court with Justice Robertson concluding that the invention claimed by Rokt was patentable. See our article on the decision of the primary judge, Justice Robertson.

Justice Robertson relied heavily on the evidence of Rokt’s expert witness in characterising the substance of the claimed invention, reasoning that the resolution of the appeal from the Patent Office lay "largely in the realm of facts".^[6]

The Commissioner of Patents sought and obtained leave to appeal the decision to the Full Federal Court.

Characterising an invention is fundamentally a matter for the Court

Overturning the trial judge's decision, the Full Court uncontroversially held that the claimed invention needed to be construed by the Court in light of the specification to arrive at a characterisation of the invention and determine whether or not it is patentable subject matter.  The Full Court held that the primary judge erred in characterising the problem as one that lay in the realm of fact and in accepting and adopting the evidence of Rokt’s expert as determinative of whether the claimed invention was in fact a manner of manufacture. 

The Full Court confirmed that in arriving at a characterisation of the invention, there is no rigid rule or formula to be applied and each claimed invention must be considered on its merits.

Limited role of expert evidence in characterising the substance of the invention claimed

The Full Court clarified that the role of expert evidence in assisting the Court to construe the specification and consider the question of manner of manufacture is quite limited.  In relation to the former, it is "to place the Court in the position of the person acquainted with the surrounding circumstances as to the state of the art and manufacture as at the priority date".^[7]This usually involves assisting the Court as to the meaning of words that are terms of art, or explaining technical concepts relevant to understanding the invention as described and claimed.  As to the latter, it is a matter for the Court, not an expert witness, to determine whether the invention constitutes a manner of manufacture based on the Court’s construction of the specification.

Limited role of prior art in assessing whether the invention is a manner of manufacture

While the Full Court acknowledged that the patent specification needs to be construed in light of the prior art, the use of prior art, which in the present case was common general knowledge only, is limited to use to the extent necessary to inform the construction of the specification.  Whilst this is seemingly uncontroversial, IP Australia’s Patent Manual of Practice & Procedure at Section 2.9.2.2 provided for a more expansive use of the prior art by an examiner assessing whether the invention is a manner of manufacture.  The Manual has been updated following the decision. 

Two step approach of the Full Court

The initial question addressed by the Court was whether the claimed invention was a mere scheme or business method. It was not in dispute that mere schemes or business methods are not patentable. The Court confirmed that the characterisation of the invention is a matter of substance, not merely of claim form.^[8]The Court held that the invention was, in substance, a marketing scheme involving the use of a computer.

Having characterised the invention as a marketing scheme, the second step was to consider whether the invention could be described as an improvement in computer technology: "whether the computer is a mere tool in which the invention is performed or whether the invention lies in the computerisation".^[9]The Full Court determined it was the former – it found that the specification described the computer hardware and software architecture in a general sense only; the computer technology was acting as merely a vehicle for the implementation of the marketing scheme in an online environment.^[10]And the claim in issue provided no content to suggest a different conclusion.  The claim was said to amount to an "instruction" as to how to carry out the marketing scheme, providing steps "to be implemented using computer technology for its well-known and understood functions".  The position was therefore not distinguishable from Encompass where the Full Court characterised the claimed invention as merely requiring “generic computer implementation”.^[11]

The Full Court stated that even if a marketing scheme is "new and ingenious", it is not patentable "merely because it can or must be implemented using computer technology".^[12]

What the future holds for computer-implemented inventions?

• Patents remain available for computer-implemented inventions

  There is really nothing new or surprising in Rokt. While affirming that in an appropriate case computer-implemented inventions may constitute patentable subject matter, the Full Court merely found that this invention did not qualify.

  In Australia, computer-implemented inventions are not excluded from patent eligibility.  For example, the Federal Court recently held that Aristocrat’s electronic gaming machine which involves a combination of software, hardware and firmware together with physical parts to produce a particular outcome in the form of gameplay does qualify as a manner of manufacture.  In that case, Aristocrat’s invention was characterised by the Court as a as a device of a specific character which provided a practical and useful result.  It was not a mere scheme and therefore the Court did not need to inquire whether the ingenuity of the claimed invention lay in the computerisation.^[13]

• Getting patent protection for computer-implemented methods or schemes is not easy

  If businesses are filing patents for business methods or schemes where the invention lies in the computerisation, sufficient technical detail will need to be included in the specification and claims describing how the invention improves or uses computer technology in a new way. This detail will be required to establish the invention is a manner of manufacture but may also be required to satisfy support and sufficiency requirements.

  The downside of including such technical detail may be that the scope of the invention is limited and easier to design around. But without such detail the invention is unlikely to be patentable.

  One only need look at the claimed inventions in Research Affiliates, RPL Central, Encompass, Repipe and now Rokt which have all been held to be computer-implemented business methods or schemes.  The cases have considered whether the contribution of the claimed invention is “technical in nature”, solves a “technical problem”, the computer is more than a mere intermediary, the computer is integral to the invention rather than a “mere tool in which the invention is performed”, there is an improvement in what might be called “computer technology” or whether it merely requires “generic computer implementation”.  In each case the invention has been held not to be patentable. In each case it was found that the hardware/ software was not characterised – there wasn’t an improvement in computer technology claimed at the hardware or software level. 

• Consider other options for protection – copyright, confidential information?
  If patent protection is unlikely to be available, tech innovators should explore whether other intellectual property rights may be able to be utilised to protect the invention, for example, copyright or the invention may be able to be protected as confidential information.

^[1] Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150; 227 FCR 378 ^{Back to article}

^[2] Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177; 238 FCR 27 (RPL Central)^{Back to article}

^[3] Encompass Corporation Pty Ltd v InfoTrack Pty Ltd [2019] FCAFC 161; 372 ALR 646 (Encompass)^{Back to article}

^[4] Repipe Pty Ltd v Commissioner of Patents [2019] FCA 1956; 148 IPR 164 ^{Back to article}

^[5] Aristocrat Technologies Australia Pty Limited v Commissioner of Patents [2020] FCA 778 (Artistocrat)^{Back to article}

^[6] Rokt Pte Ltd v Commissioner of Patents [2018] FCA 1988 at [200]^{Back to article}

^[7] Commissioner of Patents v Rokt Pte Ltd [2020] FCAFC 86 (Rokt 2) at [73]^{Back to article}

^[8] Rokt 2 at [69] citing Encompass at [80] and [81]^{Back to article}

^[9] Ibid at [108] citing RPL Central at [96]^{Back to article}

^[10] Ibid at [109]^{Back to article}

^[11] Ibid at [115]^{Back to article}

^[12] Ibid at [115]^{Back to article}

^[13] Aristocrat at [95] and [98]^{Back to article}

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