Consideration
96 A claimed invention must be examined to ascertain whether it is in substance a scheme or plan or whether it can broadly be described as an improvement in computer technology. The basis for the analysis starts with the fact that a business method, or mere scheme, is not, per se, patentable. The fact that it is a scheme or business method does not exclude it from properly being the subject of letters patent, but it must be more than that. There must be more than an abstract idea; it must involve the creation of an artificial state of affairs where the computer is integral to the invention, rather than a mere tool in which the invention is performed. Where the claimed invention is to a computerised business method, the invention must lie in that computerisation. It is not a patentable invention simply to "put" a business method "into" a computer to implement the business method using the computer for its well- known and understood functions.
97 Is the mere implementation of an abstract idea in a well-known machine sufficient to render patentable subject matter? Is the artificial effect that arises, because information is stored in RAM and there is communication over the Internet or wifi, sufficient? Does any physical effect give rise to a manner of manufacture? Are the mere presence of an artificial effect and economic utility, without more, sufficient to determine manner of manufacture?
98 It is not a question of stating precise guidelines but of deciding, in each case, whether the claimed invention, as a matter of substance not form, is properly the subject of a patent.
99 To reiterate some of the matters discussed in Research Affiliates:
It is necessary to ascertain whether the contribution to the claimed invention is technical in nature. In Aerotel Ltd v Telco Holdings Ltd; Macrossan's Application [2007] 1 All ER 225, the subject matter was an interactive system whereby questions were asked, the answers incorporated in a draft and, depending on some particular answers, further questions were asked. It was held that, apart from the fact of running a computer program, there was nothing technical about the contribution and the method was for the business of advising upon and creating appropriate company documents.
One consideration is whether the invention solves a "technical" problem within the computer or outside the computer, or whether it results in an improvement in the functioning of the computer, irrespective of the data being processed.
Does the claimed method merely require generic computer implementation?
Is the computer merely the intermediary, configured to carry out the method using a computer readable medium containing program code for performing the method, but adding nothing to the substance of the idea? In Alice Corporation, the method was for exchanging financial obligations in which the computer was used to create records, track multiple transactions and issue simultaneous instructions. The majority in the Supreme Court of the United States concluded that the use of the computer added nothing to the substance of the abstract idea of reducing settlement risk in exchanging financial obligations.
100 Relevantly, the Full Court in Research Affiliates said (at [94]) that the distinction to be drawn was between the employment of an abstract idea or law of nature and the idea or law itself and that there is a distinction between a technological innovation which is patentable and a business innovation which is not. Their Honours repeated an observation from Grant (at [29]) '[a] product of a method is something in which a new and useful effect may be observed. For claimed computer programs, the courts looked to the application of the program to produce a practical and useful result, so that more than "intellectual information" was involved.' A technological innovation is patentable; a business innovation is not, although a business method may be the subject of letters patent. However, '[a] method that is in the nature of directions for use does not constitute an invention or a manner of manufacture in the absence of some previously unrecognised property of an aspect of the method' (Research Affiliates at [95]).
101 The Full Court in Research Affiliates, at [104], drew a distinction 'between, on the one hand, a method involving components of a computer or machine and an application of an inventive method where part of the invention is the application and operation of the method in a physical device and, on the other, an abstract, intangible situation which is a mere scheme, an abstract idea and mere intellectual information'. Their Honours cited the words of Lourie J of the United States Court of Appeal for the Federal Circuit in Bancorp, where his Honour said that '[a]t its most basic … a "computer" is "an automatic electronic device for performing mathematical or logical operations"… solving a problem by doing arithmetic as a person would do it by head and hand'. Their Honours emphasised a further comment by Lourie J, that to be patentable, 'a computer must be integral to the claimed invention, facilitating the process in a way that a person making calculations or computations could not'.
102 In Research Affiliates, looking at the claimed method as a matter of substance, the Full Court concluded that, in that case, the computer was merely the means by which the analyst accessed data to generate an index, that being the work of the analyst rather than a technical generation by the computer. There was no suggestion of the utilisation of an unusual technical effect. The inventors made changes to the computer program to cause the program to gather and process data and perform data manipulations and calculations, including macros to manipulate and refine data. Such use of algorithms was not "foreign" to the normal use of computers.
103 There, the invention described in the specification was directed to the index itself and was a method of implementing a scheme which happens to use a computer to effect that implementation (Research Affiliates at [115]). There was no technical contribution to the invention or artificial effect of the invention by reason of the intervention of the inventors; the ingenuity was in the scheme not in the physical phenomenon in which the effect may be observed and which has the requisite economic utility or artificial effect.
104 It is stated in the specification, and was accepted by the primary Judge, that the method could not be carried out without the use of a computer. This alone cannot render the claimed invention patentable if it involves simply the speed of processing and the creation of information for which computers are routinely used. In those circumstances, the claimed invention is still to the business method itself. A computer-implemented business method can be patentable where the invention lies in the way in which the method is carried out in the computer. This necessitates some ingenuity in the way in which the computer is utilised (Research Affiliates).
105 Care must be taken to consider the circumstances of the claimed invention, beyond the form of words used. In both IBM 2 and CCOM, the invention as claimed was patentable. However, the method in IBM 2 could have been characterised simply to involve "drawing a curve on a computer'; in CCOM, the claimed invention could have been characterised as "to convert a word into Chinese characters".
106 The Commissioner urges rejection of the concept that the test is whether a person could implement the scheme without a computer or not. The fact that a scheme could not be practically carried out by the user does not, she says, take it out of the category of a "mere" scheme. It is a question of what the computer "brings to the scheme". RPL Central characterises the invention as an improvement in the effect of the use of a computer by applying it, not merely to gather information but to solve a problem in the educational field. RPL Central says that this represents more than a "mere" scheme and is, indeed, a new use of a computer involving the new use of a computer to 'negotiate …the RPL maze'.
107 Simply putting a business method or scheme into a computer is not patentable unless there is an invention in the way in which the computer carries out the scheme or method. Is the fact that the scheme cannot practically be implemented without a computer, that is, that the computer is integral to the working of the scheme, sufficient to make it patentable? The answer is not straightforward because this is not a case where the computer simply processes the information entered by the user, for example by using an algorithm, or retrieves information from the Internet in response to a user's question.
108 The fact that the searching is of 34,000 Units of Competency registered in the Australian VET sector as pieces of information stored in the world wide web does not render the method patentable. Such searching, for example by using Google, is an ordinary use of a computer. The interrogation of retrieved information by the user does not necessarily constitute an invention. On the other hand, the fact that a computer has been programmed to carry out a process does not invalidate an invention because, if that were the case, no computer method, indeed no computer development would be patentable.
109 Turning to the characterisation of the invention of the Patent Application, the key aspect relied upon by RPL Central is the conversion of personalised information into questions, including asking for relevant attachments. The Commissioner says that this is simply an easily programmed conversion of information to a question by prepending relevant words. The computer is, in effect, operating as an intermediary in the user's quest for an evaluation of his or her competency for a particular course and entitlement to obtain a qualification without participating in that course. However, the computer does not evaluate the user's input to provide the answer. It is not functioning in the nature of an adviser or an artificial intelligence. Rather, the programming allows for a series of prepared words to be prepended to the user information, to turn the statement into a question. The limited role of the computer in the exchange between the user and the institution is clarified in the specification where it is stated that 'questions may be presented in a form suitable for "offline" completion, such as a printable electronic document (eg a PDF file), or in hard copy … . Responses may be provided by email, mail or in-person submission'.
110 RPL Central does not claim any invention or ingenuity in any program or operation of a computer, or implementation by a computer to operate the method. Accordingly, the ingenuity of the inventors must be in the steps of the method itself. The method does utilise the speed and processing power and ability of a computer but there is no suggestion that this is other than a standard operation of generic computers with generic software to implement a business method. This is the method of taking the information as to available criteria for Units of Competency and reframing those criteria into questions and presenting them to, and receiving the answers from, the user together with any documents that the user wishes to append. The reframing of the criteria into questions may be outside the generic use of a computer but the idea of presenting questions, by reframing the criteria, is that: an idea. It is not suggested that the implementation of this idea formed part of the invention. Indeed, no instruction as to such programming is provided in the specification other than the idea of turning the performance criteria provided by the NTIS into a question by prepending or otherwise inserting a form of words.
111 The problem may be one of confronting the "maze" of available information concerning the RPL of different Units of Competency in different institutions, but the solution to that problem, to be patentable, must involve more than the utilisation of the well-known search and processing functions of a computer, for example an invention in the way in which the computer is utilised.
112 Recognising that the claims are to a method and system comprising a combination of integers, it is necessary to understand where the inventiveness or ingenuity is said to lie. Turning to the integers of the invention as set out at [36] and [38] and summarised at [37] and [39] above, it is apparent that, other than the integers providing that the computer processes the criteria to generate corresponding questions and presents those questions to the user, the method does not include any steps that are outside the normal use of a computer. It is not suggested that the creation of the plurality of assessable criteria themselves form the basis of the claimed invention. They are present on the NTIS website from which they are retrieved. It is not suggested that the presentation of the questions or the processing of the user's responses involve ingenuity themselves or that this constitutes the requisite manner of manufacture.
113 We conclude that the claimed invention is to a scheme or a business method that is not properly the subject of letters patent.
114 The consideration of computer implemented methods is one that necessarily requires a consideration of the invention as claimed and as described in the specification. Research Affiliates provided a consideration of the principles to be applied. That decision was not available to the primary Judge or to the Delegate, who reached different conclusions.
115 In D'Arcy v Myriad Genetics Inc [2015] HCA 35; 325 ALR 100, the High Court recently elaborated the principles to be applied to "manner of manufacture", within the meaning of s 6 of the Statute of Monopolies, and as discussed in NRDC. We have reached our conclusion that the claims are not to patentable subject matter by applying the established principles as they relate to a computer-implemented business method. In contrast to D'Arcy, this is not a case where the subject matter of a claim lies 'on the boundaries of existing judicial development' of the concept of manner of manufacture: cf D'Arcy at [7] per French CJ, Kiefel, Bell and Keane JJ. Nor is this a case which imports an affirmative application of the Act to a new class of case.
116 As their Honours observed in D'Arcy (at [18]), the question whether a claim is as to patentable subject matter in accordance with the principles developed for the application of s 6 of the Statute of Monopolies is answered according to 'a common law methodology under the rubric of 'manner of manufacture', as exemplified by NRDC. In this context, their Honours emphasised (at [20]) that, while satisfaction of an 'artificially created state of affairs of economic significance' as stated in NRDC may 'suffice for a large number of cases in which there are no countervailing considerations', this terminology is not to be treated as a formula exhaustive of the concept of manner of manufacture, or a formula which alone captures the breadth of the ideas to which effect must be given. Similarly, Gageler and Nettle JJ noted (at [125]) that the holding in NRDC does not mean that an 'artificial state of affairs' and 'economic utility' are the only relevant considerations in this context. However, the majority and Gageler and Nettle JJ acknowledged the usefulness of such characterisation in appropriate circumstances.
117 Where we refer in these reasons to the terminology in NRDC, we do so to explain the qualities of the invention being considered, as was done in Research Affiliates and in CCOM Pty Ltd v Jiejing Pty Ltd (1994) 51 FCR 260 - as acknowledged in D'Arcy at [21] per French CJ, Kiefel, Bell and Keane JJ and by Gordon J at [273]. In this case, as in Research Affiliates, reference to the terminology used in NRDC is apposite, although, as we have explained, not conclusive of patentability.
118 As noted already, this case does not concern 'a new class of claim involv[ing] a significant new application or extension of the concept of "manner of manufacture"', attracting consideration of factors of the kind to which French CJ, Kiefel, Bell and Keane JJ referred in D'Arcy at [28], including 'factors connected directly or indirectly to the purpose of the Act'. Where a new class of claim involving a significant extension of the concept arose, their Honours stated that factors falling for consideration included whether if patentable, the invention as claimed 'could give rise to a large new field of monopoly protection with potentially negative effects on innovation', 'have a chilling effect on activities beyond those formally the subject of the [patent]', or 'involve the court in assessing important and conflicting public and private interests and purposes'. Other factors included the coherence of the law relating to patentability, Australia's obligations under international law and the patent law of other countries, and whether 'to accord patentability to the class of invention as claimed would involve law-making of a kind which should be done by the legislature': D'Arcy at [28] per French CJ, Kiefel, Bell and Keane JJ.
119 This case does not involve a new class of claim involving a significant extension of the concept of manner of manufacture. It is therefore unnecessary to examine any of these wide-ranging considerations. This is fortunate, because the Court does not have the bases for analyses of this kind. It was not submitted to us, nor was there any evidence, that a conclusion that the claims were to patentable subject matter would have a "chilling effect" on research, or otherwise enliven the factors to which their Honours referred in D'Arcy at [28] (although we note that the relevant patent laws of other countries were discussed in Research Affiliates).
120 For the reasons we have stated, the application for leave should be granted and the appeal allowed.
I certify that the preceding one hundred and twenty (120) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Kenny, Bennett and Nicholas.