Christie, Andrew; Syme, Serena --- "Patents for Algorithms in Australia" [1998] SydLawRw 23; (1998) 20 (4) Sydney Law Review 517
[*] Andrew Christie, BSc LLB (Hons) Melb, LLM Lond, PhD Cantab; Associate Professor, Law School, University of Melbourne. Serena Syme, BSc LLB (Hons) Melb, Masters Student, John F Kennedy School of Government, Harvard University. The authors acknowledge with gratitude the valuable research assistance of Nicholas Blackmore. 1 Aharonian, G, “1997 US Software Patent Statistics – Feb to Jul.” Internet Patent News Service [email subscription service: patents@world.std.com]. This commentator has estimated that by the year 2000 there will be approximately 80000 software patents in force in the US. For details of the number of software-related patents granted in the US in the period 1970–1991, see Lennon, M J, “United States Patent Rights in the Financial Services Software”, (1994) 10 Computer Law and Practice 17. 2 See Webber, D, “Intellectual Property in Internet Software”, in Fitzgerald, A, Fitzgerald, B, Cook, P and Cifuentes, C (eds), Going Digital – Legal Issues for Electronic Commerce, Multimedia and the Internet (1998). 3 Charles, D, “Rights and Wrongs of Software”, New Scientist, (1990) 34 at 38. 4 United States Patent and Trademark Office, Public Hearing on Use of the Patent System to Protect Software-Related Inventions, before the United States Patent and Trademark Office, San Jose California, 26–7 Jan 1994 (“Public Hearing”). 5 Evidence for this can be found throughout the Transcript of the Public Hearing.
[6] Recent cases in the US in favour of software-related patents include In re Lowry 32 F.3d 1579 (Fed. Cir. 1994), In re Warmerdam [1994] USCAFED 719; 33 F.3d 1354 (Fed. Cir. 1994), In re Alappat [1994] USCAFED 665; 33 F.3d 1526 (Fed. Cir. 1994), In re Beauregard [1995] USCAFED 610; 35 USPQ 2d 1383 (Fed. Cir. 1995). The two most recent Australian decisions upholding the inherent patentability of software-related inventions are IBM v Smith, Commissioner of Patents [1991] FCA 625; (1992) 22 IPR 417 and CCOM v Jiejing (1994) 28 IPR 481, both of which are discussed below in Section 3.2.
[7] See USPTO, Examination Guidelines for Computer-Related Inventions, of February 28, 1996, published in 61 Federal Register 7478 (and available at http://www.uspto.gov/web/offices/com/ hearings/software/analysis/computer.html); and s8.1 of the Australian Patent Office Manual of Practice and Procedure, as amended in March 1994.
[8] Report of 21 October 1994, on the conference “Legal Protection for Software-Related Innovation”, convened by the UK Patent Office.
[9] The Patents Act 1977 (UK), s1(2)(c) provides that a claim to “a program for a computer program” as such is not patentable.
[10] See eg, Merrill Lynch’s Application [1989] RPC 561, Gale’s Patent Application [1991] RPC 305, Wang Laboratories Inc’s Application (1991) RPC 463, and Fujitsu Limited’s Application [1997] InfoTLR 119.
[11] See ss2.2 and 2.3, below.
[12] See s3, below.
[13] These issues will be examined in s4, below.
[14] See s5.
[15] See ss6 and 7.
[16] It was derived from the word “algorism”, named for a mathematician known for his work on algebra with Arab numerals.
[17] Note that the descriptive term “algorithm” may not be so common in some of these fields.
[18] In Re Iwahashi [1989] USCAFED 628; 888 F.2d 1370, 1374 (CAFC 1989).
[19] The first four of these elements are taken from Knuth’s oft-quoted definition: Knuth, D, The Art of Computer Programming: Fundamental Algorithms (2nd edn, 1973) at 4–6.
[20] Other relevant features of algorithms are speed and efficiency. While these may be crucial in some contexts, it would not be true to say that a high level of speed and efficiency is integral to all algorithms. Hence these features will not be included in this list of elements common to algorithms generally.
[21] See the Appendix, at A.1 and A.2, where Euclid’s algorithm is expressed first in a form to be used by mathematicians, and then in a form preparatory to embodiment as a computer program.
[22] These may be ingredients, electrical pulse, materials or some other form of input.
[23] These outputs may be a number, a sign or a product, among others.
[24] See eg, the US and Australian cases, and the Australian Patent Office guidelines for examination, discussed in ss3.2 and 3.4, respectively, below.
[25] See eg, the minority judgment in Diamond, Commissioner of Patents and Trademarks v Diehr [1981] USSC 40; (1981) 450 US 175 at 219, where it was held that there should be “an unequivocal explanation that the term “algorithm”... is synonymous with the term “computer program.”
[26] This distinction is most clearly discussed in Foster, C, Algorithms, Abstraction and Implementation – Levels of Detail in Cognitive Science (1992) at 53–4.
[27] Other examples are recipes to be used by cooks, and algorithms to be used by mathematicians – see Appendix, A.1.
[28] Macmillan Dictionary of Information Technology (3rd edn, 1989) at 407 (definition of “program”).
[29] See Gottschalk v Benson [1972] USSC 223; (1972) 409 US 63 at 65: “[f]rom the generic formulation, programs may be developed as specific applications”.
[30] Appendix A.1.
[31] See Appendix, A.3 and A.4.
[32] See eg, the two different programs embodying Euclid’s algorithm set out in the Appendix, at A.3 and A.4.
[33] Patents Act 1952 (Cth), s6 (definition of “invention”).
[34] [1959] HCA 67; (1959) 102 CLR 252.
[35] Id at 269.
[36] Id at 271.
[37] Id at 269.
[38] Halsbury’s Statutes of England 17 (2nd edn, 1950) at 619.
[39] Id at 275.
[40] (1995) 132 ALR 117.
[41] Id at 122.
[42] Id at 121.
[43] NRDC [1959] HCA 67; (1959) 102 CLR 252 at 262.
[44] Ibid.
[45] Id at 122–123.
[46] Id at 122.
[47] See eg, Brennan, D, and Christie, A, “Patent Claims for Analogous Use and the Threshold Requirement of Inventiveness” (1997) 25 FL Rev 237.
[48] [1998] HCA 19; (1998) 40 IPR 243. In this case, the High Court held that in determining the threshold requirement of inventiveness under the Patents Act 1952 (Cth), reference could be made only to evidence of previous uses of the claimed subject matter that were disclosed in the specification. Evidence of previous uses of the claimed subject matter disclosed elsewhere than in the specification – in that case, in advertisements in trade publications – could not be taken into account in determining whether the threshold requirement of inventiveness was satisfied.
[49] See s4.2.
[50] [1991] FCA 625; (1992) 22 IPR 417.
[51] For a full discussion of this test, see Chisum, D, “The Patentability of Algorithms”, (1986) 47 U of Pittsburgh LR 959.
[52] In re Freeman 573 F.2d 1237 (CCPA 1978); In re Walter 618 F.2d 758 (CCPA 1980); In re Abele and Marshall 684 F.2d 902 (CCPA 1982).
[53] In re Freeman 573 F.2d 1237 (CCPA 1978) at 1245.
[54] [1991] FCA 625; (1992) 22 IPR 417 at 421.
[55] Id at 418.
[56] Id at 421.
[57] Id at 419.
[58] Id at 424.
[59] Id at 423.
[60] Id at 424.
[61] Id at 422–424.
[62] Id at 424.
[63] (1994) 28 IPR 481.
[64] The search and retrieval procedure was ordered and definite, taking a series of inputs by means of the keyboard, and eventually producing a graphic representation of the desired character. The search could be manually accomplished, was finite (a character will be produced at the end of a finite number of steps), and was capable of embodiment as a computer program. Thus the search and retrieval element of the invention was an algorithm.
[65] Ccom Pty Ltd v Jiejing Pty Ltd [1993] FCA 653; (1993) 27 IPR 577.
[66] Id at 594.
[67] Note that one of the elements common to algorithms is effectiveness; that is, algorithms are manually calculable by definition. Because all algorithms should be able to be undertaken as a mental process, Cooper J’s reasoning implies that all algorithms should be excluded from patent protection.
[68] (1994) 28 IPR 481 at 507.
[69] The Court held that the same principles apply to the interpretation of this phrase in the Patents Act 1990 (Cth) as to this phrase in the Patents Act 1952 (Cth), which was the legislation considered in NRDC (1994) 28 IPR 481 at 510.
[70] (1994) 28 IPR 481 at 511.
[71] Id at 514.
[72] Australian Patent Office, Manual of Practice and Procedure.
[73] Id at 8.1.18.1.
[74] Id at 8.1.18.3.
[75] Id at 8.1.18.4.
[76] Id at 8.1.18.5.
[77] Id at 8.1.18.4.
[78] Id at 8.1.18.6.
[79] Id at 8.1.18.1: this arises directly from Burchett J’s comments in IBM on commercial application.
[80] [1959] HCA 67; (1959) 102 CLR 252 at 275.
[81] [1991] FCA 625; (1992) 22 IPR 417 at 423.
[82] Further support for this view is provided by the dicta of Delegate of the Commissioner of Patents Tolhurst in A Couple ’A Cowboys Pty Ltd v Ward [1995] APO 12; (1995) 31 IPR 45 at 58.
[83] [1993] FCA 653; (1993) 27 IPR 577 at 594.
[84] (1994) 28 IPR 481 at 514. The Full Court held that the invention came within a relevant field of economic endeavour.
[85] See the decision of the Delegate of the Commissioner of Patents in the IBM case, discussed in [1991] FCA 625; (1992) 22 IPR 417.
[86] As the role of a patent is to grant a set of exclusive rights to commercially exploit an invention, it would be surprising, and indeed pointless, for a properly-advised applicant to go through the expensive patent application process in relation to a product or process that clearly did not have any commercial potential.
[87] See s2.2, above.
[88] See s2.3, above.
[89] Guidelines, 8.1.18.4. A mathematical algorithm which results in more efficient operation of a computer will be patentable, as will an algorithm producing an improved result in some commercial area, such as computer graphics: Guidelines, 8.1.18.5.
[90] Id at 8.1.18.6.
[91] It might be considered that this is an adoption of the approach of “mingling” novelty and patentable subject matter that was taken in the US Supreme Court case Parker v Flook [1978] USSC 129; (1978) 437 US 584 at 592, but that was subsequently rejected by the US Supreme Court in Diamond v Diehr [1981] USSC 40; (1981) 450 US 175 at 188–9. For the introduction of a similar principle into patent law under the European Patent Convention 1973, see the case of IBM/Language Simplification (T38/ 86) [1990] OJ EPO 384, [1990] EPOR 606. This statement might also be seen as prefiguring the “threshold requirement of inventiveness” principle later espoused by the High Court in the Philips case.
[92] [1972] USSC 223; 409 US 63 (1972).
[93] [1991] FCA 625; (1992) 22 IPR 417, 419.
[94] (1980) 205 USPQ 397.
[95] Id at 407 (emphasis added).
[96] This feature of a numerical solution would presumably cover those algorithms which display their mathematical result in graphical or pictorial form.
[97] Guidelines at 8.1.18.6.
[98] See eg, Gottschalk v Benson [1972] USSC 223; 409 US 63 (1972) at 67, Re Trovato [1994] USCAFED 1242; 33 USPQ 2d 1194 (CAFC 1994), and USPTO Examination Guidelines IV.B.2(c); EPC, art. 52(2)(a) and (c), Wang Laboratories Inc’s Application (1991) RPC 463, and Fujitsu Limited’s Application [1997] InfoTLR 119.
[99] See eg, Re Schrader [1994] USCAFED 373; 22 F.3d 290 (CAFC 1994), State Street Bank & Trust Co v Signature Financial Group Inc 38 USPQ2d 1530 (D.Mass 1995) and USPTO Examination Guidelines IV.B.1(c) and IV.B.2(c); EPC, art. 52(2)(c), and Merrill Lynch’s Application [1989] RPC 561.
[100] See eg, Gottschalk v Benson [1972] USSC 223; 409 US 63 (1972) at 67; EPC, art. 52(2)(a).
[101] Ccom v Jiejing (1994) 28 IPR 481 at 511.
[102] Ibid.
[103] [1991] FCA 625; (1992) 22 IPR 417 at 423.
[104] Section 3.4.1, above.
[105] Patents Act 1990 (Cth), s18(1)(b)(i).
[106] Id at s18(1)(b)(ii).
[107] Id at s18(1)(c).
[108] Id at s40(2)(a).
[109] Id at ss7(1) and 18(1)(b).
[110] Garfinkel, S, “Patently Absurd”, Wired On-line July 1994 [http://www.wired.com/wired/2.07/ features/patents.html)].
[111] Ibid.
[112] According to Commissioner Lehman: “There are many concepts which have been done which are what I call folklore. They are out there, and people know about them, but we can’t find any written documentation”: Ibid.
[113] The conclusion of the US Supreme Court in Gottschalk v Benson [1972] USSC 223; 409 US 63 (1972) that a mathematical algorithm was inherently unpatentable seemed strongly influenced by the fact that “reliable searches would not be feasible or economic because of the tremendous volume of prior art ... [w]ithout this search the patenting of programs would be tantamount to mere registration” at 72.
[114] Ron Laurie, “Transatlantic Update on Patent Protection of Software-Related Inventions”, a paper presented to the International Federation of Computer Law Associations Conference in Bath, England, 17 June 1994, at 3.
[115] Robert Sabath, Transcript of the Public Hearing, 21.
[116] Patents Act 1990 (Cth), s7(2).
[117] Per Aickin J in Meyers Taylor Pty Ltd v Vicarr Industries Ltd [1977] HCA 19; (1977) 137 CLR 228.
[118] Johns-Manville Corp’s Patent [1967] RPC 479.
[119] Patents Act 1990 (Cth), ss7(2).
[120] [1980] HCA 9; (1980) 29 ALR 29.
[121] Appendix, A.1.
[122] IBM v Commissioner of Patents [1991] FCA 625; (1992) 22 IPR 417.
[123] Ccom Pty Ltd v Jiejing Pty Ltd (1994) 28 IPR 481.
[124] In IBM, it was not a ground on which the examiner had rejected the claim. In Ccom, this ground was abandoned at trial.
[125] Patents Act 1990 (Cth), s18(1)(c).
[126] See eg, Rehm v Websters Security Systems (International) Pty Ltd (1988) 11 IPR 289.
[127] Patents Act 1990 (Cth), s40(2)(a).
[128] Because of the inherent complexity of living matter, it is not possible to fully disclose an invention of a genetically engineered life form merely by written description. It is for this reason that patent law has developed a system whereby lodgement of a patented microorganism with a recognised depository centre will satisfy the requirement of sufficient disclosure of that microorganism. For a description and critique of that system, see Crespi, R S, “The Microorganism Deposit System in European Patent Law – An Appraisal of Current Proposals”, (1993) 24 Int’l Review of Indust Property and Copyright L 1.
[129] This is so even though they may be expressed in mathematical language – see Appendix, A.1.
[130] (1993) OJ EPO 295.
[131] The issue is touched upon in Burk, D, “Patents in Cyberspace: Territoriality and Infringement on Global Computer Networks”, (1993) 68 Tul LR 1, but the focus there is largely on the implications of extraterritorial infringement rather than on infringement per se.
[132] Patents Act 1990 (Cth), s13(1).
[133] Schedule 1 definition of “exploit”.
[134] See the discussion of the algorithm as a “back-bone” in Section 2.3, above.
[135] Patents Act 1990 (Cth), s13(1) and Schedule 1 definition of exploit.
[136] [1981] USSC 40; 450 US 175 (1981).
[137] (1992) 25 IPR 119.
[138] According to Gummow J, this fact was “no objection of itself to validity” of the process, but it did limit the scope of exclusive rights provided by a patent for the process: (1992) 25 IPR 119 at 153. This aspect of the decision was not addressed on appeal: (1994) 28 IPR 383.
[139] The relevant circumstances might include supply that was accompanied by a positive inducement to perform acts which would infringe, or supply where there was no reasonably conceivable use of the goods other than an infringing use.
[140] See the report that was the stimulus for the Patents Act 1990 (Cth): Intellectual Property Advisory Committee, Patents, Innovation and Competition in Australia, 1984, 66–68.
[141] An alternative approach, to the same end result, would be to permit subsidiary claims to the algorithm as embodied in a computer-executable program encoded in some storage medium (eg, a computer floppy disk). According to one commentator, this is precisely what the USPTO Examination Guidelines permit – with the effect that acts of infringement of the algorithm patent extend to persons who make or sell a computer program which embodies the algorithm: Stern, R, “The New USPTO Software Guidelines: Opportunities and Pitfalls” [1996] 4 Comp Tel LR 135 at 135–136.
[142] See eg, the justification given by the Australian Parliament in relation to the Patents Act, as set out in Hansard, House of Representatives, 16 October 1990, 2948 (second reading speech for the Patents Bill 1990).
[143] See eg, Intellectual Property Advisory Committee, Patents, Innovation and Competition in Australia, 1984; Higgins, W, “The Case for Software Patent Protection” (1992) 14 Hastings Comm Ent’t LJ 315 at 319.
[144] Davidson, D, “Protecting Computer Software : A Comprehensive Analysis” [1983] Ariz State LJ 611 at 660.
[145] League for Programming Freedom, “Against Software Patents” (1992) 14 Hastings Comm Ent’t LJ 297 at 304–305.
[146] The life cycle of the average software product seems to be around 2 to 3 years: “Software Patents: Law of the Jungle”, The Economist, 18 August 1990 at 59.
[147] According to Jerry Fiddler, CEO Wind River Systems: “It is not unusual for a program to be a million lines long and consist of many subroutines and functions. Algorithms and ideas are embodied in each of those components and in combinations of them”: Transcript of the Public Hearing at 46.
[148] Such as by enabling people to transport or manufacture objects, perform manual tasks more efficiently, travel faster, and so forth.
[149] Consider spreadsheets, which allow people to carry out complex and often repetitive calculations much more swiftly.
[150] Mr Jerry Fiddler, CEO Wind River Systems, Transcript of the Public Hearing at 46.
[151] There is considerable debate as to whether copyright is the appropriate form of protection for software, and it is not within the scope of this paper to explore that complex question. For an argument to the effect that copyright is not the appropriate regime for protecting software, see Christie, A, “Designing Appropriate Protection for Computer Programs” [1994] 11 Euro Intell Prop R 486.
[152] League for Programming Freedom, “Against Software Patents” (1992) 14 Hastings Comm Ent’t LJ 297, 304–305.
[153] Only 148 of 6142 software patents issued were to companies whose predominant activity is software development – and 53 of these were issued to Apple Computer, which has a substantial hardware business as well: Aharonian, G, “1995 US Software Patent Statistics” Internet Patent News Service [email subscription service: patents@world.std.com].
[154] Heimbecher, R, “Proposed Prior Art Legislation For Computer Program Patent Applications” (1990) 13 Hastings Comm Ent’t LJ 57 at 69–70.
[155] For instance, a programmer developing a word processing program may use a number of algorithms which are merely incidental to the operation of the program (such as sorting or searching algorithms), and a relevant patent might be difficult to find because it exists outside the word-processing prior art.
[156] One independent American programmer stated that the problem of discovering whether there is “anything out there at all that does what this [program] does is extremely difficult to solve and ... intractable for software in general”: Neil Brown, Transcript of the Public Hearing at 39.
[157] While errors and omissions insurance to cover patent infringement is available in America, the cost in 1994 was US $50,000 per product, and this covered only inadvertent infringement: Tom Lopez, President Interactive Media Association, Transcript of the Public Hearing at 10.
[158] [1981] USSC 40; 450 US 175 at 217 (1981).
[159] Pursuant to art. 10(1) of the Agreement on Trade-Related Aspects of Intellectual Property Rights, being Annex 1C to the General Agreement on Tariffs and Trade of 1994, member States are obliged to protect computer programs as literary works under the Berne Convention for the Protection of Literary and Artistic Works. Australia is a party to this Agreement.
[160] A number of the delegates at the Public Hearing, including Jerry Baker, SVP Oracle Corporation, Transcript of the Public Hearing at 24, and Neil Brown, Independent Software Engineer, Transcript of the Public Hearing at 39, stated that copyright and trade secret protection are adequate.
[161] Section 6 Statute of Monopolies, Halsbury’s Statutes of England (2nd edn), Vol. 17 (1950) at 619.
[162] Bristol-Myers Squibb Co v FA Faulding & Co Ltd (Federal Court of Australia No. VG 109 of 1995) unreported judgment of 22 July 1998, in which Heerey J held, contrary to the obiter in Anaesthetic Supplies Pty Ltd v Rescare Ltd (1994) 28 IPR 383, that a method for treatment of illness in humans was inherently unpatentable as it is not a “manner of manufacture”. In Heerey J’s view, the existence of a patent over a potentially life-saving method of medical treatment would be generally inconvenient: judgment pages at 16–21.
[163] In Telefon A/B LM Ericsson’s Application [1975] FSR 49 at 54, the Supervising Examiner of the Australian Patent Office held that it was “generally inconvenient” to allow a monopoly over a set of instructions for operating a machine.
[164] See, for example, NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd (1995) 132 ALR 117; and Bristol-Myers Squibb Co v FA Faulding & Co Ltd (Federal Court of Australia No. VG 109 of 1995) unreported judgment of 22 July 1998 of Heerey J.
[165] More than 100 countries, including Australia and every other significant software producing nation, are a party to GATT. A renegotiation of aspects of the GATT, including in particular TRIPS, has been proposed for 2000.
[166] While it is not expressly stated that these are the only grounds of exception, this can be implied from the breadth and mandatory language of art. 27(1) and the limited nature of the exceptions allowed in arts 27(2) and (3).
[167] TRIPS, art. 27(2).
[168] TRIPS, art. 27(3).
[169] See NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd (1995) 132 ALR 117, and the discussion of it in Section 3.1, above. See also Bristol-Myers Squibb Co v FA Faulding & Co Ltd (Federal Court of Australia No. VG 109 of 1995) unreported judgment of 22 July 1998 of Heerey J.
[170] See ss4.1 and 4.2 above.
[171] See s4.1.1 above.
[172] See s4.1.2 above.
[173] See s4.2 above.
[174] See the Patentability Standards Discussion Paper, published by the Australian Patent Office on 5 February 1997 at 4–6.
[175] Id at 6.
[176] Patents Act 1990 (Cth), s67.
[177] Rapid development in the software industry means that the major benefits from the patent usually accrue within the first three or four years. At the Public Hearing, it was suggested that the term of protection be cut to three years: Jerry Baker, SVP of Oracle Corporation, Transcript of the Public Hearing at 24.
[178] TRIPS, art. 33.
[179] Since a renegotiation of aspects of the GATT, including in particular TRIPS, has been proposed for 2000, it is possible, in theory at least, that some of the provisions in TRIPS relating to patent protection might be altered in the future. One area in which alteration seems more feasible than many others is duration of protection.
[180] Patents Act 1990 (Cth), s133(2). Before making an order of a non-voluntary licence, the court must be satisfied that the applicant tried for a reasonable period to obtain a licence from the patentee, without success: s133(3A).
[181] Patents Act 1990 (Cth), s135(1)(a)(iv).