27 September, 2019
Encompass Corporation Pty Ltd v Infotrack Pty Ltd [2019] FCAFC 161
What you need to know
- An enlarged five-judge bench of the Full Federal Court has concluded that a computer-implemented invention for displaying information regarding entities was not patentable subject matter.
- If a claimed method, as a matter of substance, merely require[s] generic computer implementation of an abstract idea then it is unlikely the invention will be directed to a manner of manufacture (i.e. patentable subject matter).
- While the profession and industry had hoped that the Encompass decision would clarify the boundary between patentable computer-implemented inventions and abstract ideas, the Full Court declined to do so in this decision.
Background
Encompass Corporation Pty Ltd (Encompass) is the registered proprietor of two innovation patents (Australian Innovation Patents 2014101164 and 2014101413). The patents disclose a method and apparatus for displaying information relating to one or more entities (being "individuals, corporations, businesses, trusts, or any other party involved in a business or other commercial environment"), so as to provide business intelligence.
SAI Global Property Division Pty Ltd (SAI Global), is the exclusive licensee of the patents in Australia.
Encompass and SAI Global commenced proceedings in the Federal Court of Australia against the respondent, InfoTrack Pty Ltd (InfoTrack). Encompass and SAI Global alleged that InfoTrack infringed the patents by making a computer platform called "Reveal" available from its portal (www.infotrack.com.au).
InfoTrack admitted its computer platform would infringe the patents if they were valid. However, InfoTrack claimed the patents were invalid on a number of grounds. Most relevantly,
InfoTrack alleged that the invention was not a manner of new manufacture and as such not patentable subject matter.
First instance decision
At first instance, Justice Perram concluded that the invention claimed in the patents did not satisfy the "manner of manufacture" test. In particular, the invention did not result in any improvement in the functionality of the computer nor the computer itself.
The claimed method resulted in the computer being used to do something it had not been used to do before. However, it was determined that the method was merely a combination of three other methods, none of which was new. Therefore, his Honour was not persuaded that the method resulted in "an improvement in the computer". As such, his Honour found the invention was not a manner of manufacture within the meaning of section 6 of the Statute of Monopolies.
Enlarged Bench of the Full Court
Encompass' primary argument on appeal was that Justice Perram erred in directing his attention to whether the alleged invention resulted in "an improvement in the computer".
The expanded five-judge bench of the Full Federal Court (Allsop CJ, Kenny, Besanko, Nicholas and Yates JJ) disagreed. Their Honours commented that "an improvement in the computer" (being a reference to a statement made by the Full Court in Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150 (Research Affiliates)) was simply a tool to distinguish between unpatentable subject matter (such as schemes, abstract ideas and intellectual information) and subject matter that might possibly be patentable.
Importantly, the Full Court emphasised that if the claims, as a matter of substance, "merely require[s] generic computer implementation" of an otherwise abstract idea, then the claimed invention cannot be a manner of manufacture. In this way, the Full Court contextualised the primary judge's approach to assessing whether the claimed invention was patentable subject matter. The Full Court soundly rejected the suggestion that either Research Affiliates or Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177 (RPL Central) was wrongly decided.
The Full Court accepted that consideration of other grounds of patentability might have intruded into the primary judge's consideration of whether the claimed method and apparatus were directed to a manner of manufacture (at [112]). Their Honours' comments make clear that this was not appropriate. However, the fact that such matters were considered as part of the manner of manufacture analysis did not result in any error in the primary judge's ultimate conclusion.
Conclusion
Encompass has been a long-awaited decision by the profession and industry with hopes that this judgment would set out clearly the boundary between an abstract idea and a computer-implemented invention. However, the Full Court expressly declined to provide this guidance commenting that the appeal did not raise any significant question of principle.
As a result, the law surrounding the manner of manufacture test in the context of computer-implemented inventions remains largely unchanged.
Notwithstanding this, the decision does make clear that if the claimed invention, as a matter of substance, "merely requires generic computer implementation" of an abstract idea then it will likely fail the manner of manufacture test.
For further information, please contact:
Nina Fitzgerald, Partner, Ashurst
nina.fitzgerald@ashurst.com
