Repipe Pty Ltd v Commissioner of Patents [2022] HCATrans 84 (5 May 2022)

Last Updated: 10 May 2022

[2022] HCATrans 084

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Perth No P1 of 2022

B e t w e e n -

REPIPE PTY LTD

Applicant

and

COMMISSIONER OF PATENTS

Respondent

Application for special leave to appeal

KEANE J
GORDON J
STEWARD J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA BY VIDEO CONNECTION

ON THURSDAY, 5 MAY 2022, AT 1.30 PM

Copyright in the High Court of Australia

KEANE J: In accordance with the Court’s protocol when sitting remotely, I will announce the appearances of the parties.

MR A.R. LANG, SC appears with MS E.R. DOYLE‑MARKWICK for the applicant. (instructed by Provan Legal)

MR C. DIMITRIADIS, SC appears with MS M.J. EVETTS for the respondent. (instructed by Australian Government Solicitor)

KEANE J: Yes, Mr Lang.

MR LANG: Thank you, your Honour. Special leave should be granted in this case because of the importance of the central issue in our proposed appeal and that is whether a patent claim which includes a combination of computer‑implemented functions must constitute a so‑called advance in computer technology in order to qualify as patent‑eligible subject matter.

The issue has arisen frequently in the Federal Court case law which is indicative of substantial investment in Australia in patents for digital inventions, whether by small enterprises such as ours in the workplace safety field or by larger corporations, most notably, Aristocrat in the gaming industry.

I mention Aristocrat because it has an appeal to be heard by this Court on 9 and 10 June. In short, special leave should be granted in this case for the same reason it was granted on the papers in Aristocrat. The central question of principle in the two cases, as I have just expressed it, is precisely the same. Two of the members of the Full Court in this case – Justices Perram and Nicholas – were members of the Full Court in Aristocrat and decided this case, based on the same approach to the principles which is erroneous for the same reasons.

KEANE J: Is not a problem with that submission that in this case there are concurrent findings of fact – both by the primary judge and in the Full Court – that the supposed invention was generic computing technology for well‑known and well‑understood functions and, therefore, not an advance in computer technology at all?

MR LANG: The difficulty with that proposition is that it may be accepted in fact that each of the individual features of the claim involve things which, broadly speaking, computers were known to do. But the difficulty with that is that that does not make it patent‑ineligible subject matter. So, the question is a pure question of principle – all of the findings of fact made by the primary judge and referred to by the judges on the Full Court may be accepted it is a pure question of characterisation and principle. I will come to that in due course.

But I was going to mention that the other issue of importance on this application is the question of competence of the appeal. That question is whether an appeal to this Court from the refusal of the Full Court to grant leave to appeal is incompetent by reason of section 33(4B) of the Federal Court of Australia Act. The answer to that is that section 33(4B) only applies to judgments of the Federal Court in the exercise of its appellate jurisdiction and refusal to grant leave to appeal is not a judgment in the exercise of appellate jurisdiction.

That proposition can be expressed concisely but there is some nuance to the authorities in this respect and because our written application is necessarily condensed I propose to address the key authorities in a little more detail subject to ‑ ‑ ‑

KEANE J: Well, apropos of that, one can appreciate your seeking to make a virtue of necessity in arguing that there is an actual special leave point in the question of whether the application is even competent, but if there is no strength in your substantive application because, for example, the outcome of your proposed appeal is essentially a matter of fact, then the preliminary question.....like an academic exercise. So, you should perhaps not lose your focus on the substantive question.

MR LANG: Thank you, your Honour, I will go directly to that. Before I do, perhaps, may I make reference to the decision of this court in Victoria v Australian Building and Construction Employees’ and Builders’ Labourers’ Federation [1982] HCA 31; (1982) 152 CLR 25 at 141, just in relation to this question of competency. The question of competency is complex and one thing the Court may do is grant special leave and I accept that I need to get special leave on that substantive point, manner of manufacture, without prejudice to the right of the respondent to challenge the competency of the appeal on the appeal itself.

Turning then to the question of substance, the manner of manufacture issue, and the central error made by the courts below is to fail to apply the correct principles for determining patent‑eligible subject matter identified by this Court in D’Arcy v Myriad Genetics and instead to substitute an incorrect test directed to the wrong question.

We have set out the correct starting point, which is paragraph 28 of Myriad, which states that there are two factors derived from the NRDC decision, which are necessary conditions and.....in the case of new categories of inventions falling outside the existing case law, sufficient conditions for patent‑eligible subject matter.

First is whether the claimed invention is for a process producing an outcome of human action, and the second is whether it has economic utility. Those principles are apt because the test for subject matter is simply directed to the question whether the claimed invention is the kind of thing for which a patent is available, in particular in the language of this Court in NRDC, does it belong to the useful arts, rather than the fine arts, not whether it is new, innovative or inventive.

Now, both we and the Commissioner are at one in emphasising that those criteria must be applied as a matter of substance and the Myriad decision also identifies the criterion by which the substance proclaimed is to be determined, namely, those aspects of the claim which give it its economic utility.

So, in the case of Myriad, it was information existing in a naturally occurring gene, which gave the invention its practical utility. That was patent ineligible, because that information was not human made. In the case of inventions which include a combination of computer‑implemented functions, the question is whether it is those computer‑implemented functions which give the invention its practical economic utility rather than having some other aspects of the claim.

Now, in the present case, Justice Perram in the Full Court did not apply those criteria, and we know this was intentional, because his Honour had just held in the recent decision in Aristocrat that one should not apply the general principles of patentability to computer‑implemented inventions. There, at paragraphs 26 and 27 of that decision, his Honour said that for computer‑implemented inventions one should instead ask the question:

can the invention claimed broadly be described as an advance in computer technology?

Turning to the decision of Justice Perram in the Full Court below, his Honour applied that question, the Aristocrat question, and not the general principles of patentability required by Myriad. What we see from his Honour’s judgment is first, if one applies the correct principles – that is the Myriad factors – the claimed invention is patent eligible, and that is the short answer to your Honour Justice Keane’s question – is this not a question of fact? One will see, based on Justice Perram’s own characterisation of the invention, that the Myriad factors are satisfied ‑ ‑ ‑

KEANE J: Mr Lang, if one looks at paragraph 7 of the reasons of Justice Perram at page 93 of the application book, his Honour refers to the decision of the Full Court on appeal from Justice Burley’s decision in Aristocrat and says:

However, even if this had not occurred, the correctness of Burley J’s conclusion does not arise on this application for leave to appeal. There is no analogy between the patent in that case and the patent in this case. The devices in this case are all standard mobile devices and servers. Regardless of whether one thinks that an electronic gaming machine on which a feature game is implemented constitutes a particular physical apparatus or, instead, a generic computer‑implemented invention, it is clear that the present invention is nothing more than some mobile devices connected to a server configured to behave in a particular way.

MR LANG: Yes, your Honour, and what his Honour did not say there – and this was the error his Honour made – was his Honour did not address the Myriad criteria. Rather, what his Honour was addressing was the correctness of Justice Burley’s conclusion. That question does not arise on this application. We rely on the factors set out by this Court in Myriad for patent eligibility and what his Honour was not saying there was that if you apply those factors, we are patent-ineligible.

One sees, in particular, at paragraph 4 from his Honour’s own characterisation of the invention, that the application of those factors make this invention patent‑eligible. If your Honours turn to paragraph 4 of the decision of Justice Perram, his Honour says:

The invention thus consists of the use of the features of GPS‑enabled mobile devices to communicate with a central server which handles information in a particular way.

In paragraph 7, as your Honour Justice Keane noted, he says:

configured to behave in a particular way.

So, pausing there, that ‑ ‑ ‑

GORDON J: The problem, Mr Lang – I am sorry to interrupt - is the next sentence, which you need to read on, I think. His Honour says he has:

no difficulty in accepting that the invention is useful and represents a clever use of mobile devices and a server –

but he just does not see it as, in effect, satisfying, he says:

an advance in computer technology -

which, you say, is the argument in Aristocrat, but:

it does not constitute patentable subject matter –

and then quotes at length from those authorities which are not in issue.

MR LANG: Those authorities, your Honour, are in issue. We say they are wrong, and Aristocrat also says they are wrong, for precisely the same reasons. But returning to those first two sentences and then the next one that your Honour Justice Gordon has highlighted, our argument is this. The first sentence relates to the first Myriad criterion, and his Honour gives that a tick, that is:

GPS‑enabled mobile devices to communicate with a central server –

That is the outcome of human action, or an artificially‑created state of affairs. The second sentence gives a tick to the second Myriad criterion, that is, his Honour accepts that the invention disclosed is “useful”, that is, it has economic utility. Then his Honour’s reason for considering that the invention:

does not constitute patentable subject matter –

is what happens in the rest of that sentence, or the next sentence:

I am unable to see how it constitutes an advance in computer technology.

So, his Honour, having accepted matters which would satisfy the Myriad criteria, then puts them to one side and puts forward a different criterion, namely an advance in computer technology, as the reason why this invention fails. Now, the reason why those matters indicate that the Myriad criteria are satisfied, and satisfied in substance, is because it is the artificially‑created, or computer‑implemented aspects of the claim which give it its economic utility.

What is useful about the claimed invention is that the worker can be assigned by a server located remotely and in real time to a job which is determined to be within her authority, be provided by the server with a dynamic risk document to her portable computing device, can interact with that document so as to address those risks, and then upload it to the remote server so that she can proceed to commence the work immediately.

GORDON J: I think my problem, Mr Lang, is – and I may have mis‑expressed myself – it is the sentence which reads it is no more than:

a deployment of existing computer technology for a useful purpose -

in 4, which then gets explained in 7, where his Honour says listen, this is just to be - in a sense they are all just:

standard mobile devices and servers.

MR LANG: Yes, your Honour.

GORDON J: This is nothing more than taking what is existing equipment and connecting them to an existing server.

MR LANG: When his Honour says:

Rather, it is a deployment of existing computer technology for a useful purpose –

it is apparent that what his Honour means by this is that, considered individually, the functions required to be performed by the claims were, in his Honour’s view, broadly of a kind which computers were known to perform – though nobody suggests – neither his Honour nor the Commissioner – that the specific functions had been performed before – nor that they had been performed in combination. That appeals to the vice of this test. It is contrary to the fundamental principle developed by this Court in relation to the novelty inventive step and innovative step requirements that one can have a patent for a new combination of known features.

The underlying error is that the advance in computer technology test is wrongly directed to the question of advance over the prior art, rather than the question of subject matter. In that fundamental respect, the Full Court is in conflict with the earlier Full Court in CCOM – which held that it is a systematic error to ask, for the purposes of subject matter, whether there is anything new or unconventional in computer use – that is at 291 of CCOM.

The other Full Court decisions referred to there by his Honour are also – to the extent that they are in conflict with the principle in CCOM – wrong. As I have submitted, Aristocrat has challenged them for this reason in its submissions on its appeal.

Your Honours, then dealing with this question that Justice Perram continues to address in relation to the so‑called generic nature of the hardware, Justice Perram then sought to distinguish the present case from the one in Aristocrat on the basis that Aristocrat involved a particular physical apparatus – being an electronic gaming machine. The present cases involves standard service and smart phones. The answer to that is the one given by Justice Perram himself in Aristocrat at paragraphs 35 to 38, namely, that it is no bar to patent eligibility that an invention may use standard computer hardware – citing CCOM and IBM. So, his Honour said at paragraph 35 of Aristocrat:

In that regard, we do not with respect find especially helpful concepts such as ‘generic computer technology’ or ‘generic software’ (invoked in this appeal by the Commissioner) because it is unclear to us what they actually mean.

This is Justice Perram himself.

That said, the terminology has been used by this Court in some of its decisions-

and RPL and Encompass are referred to:

The difficulties with them are as follows: A computer is a device which carries out instructions stored in memory and returns a result. Software is a set of instructions stored in some form of memory, often but not always transitory. If ‘generic’ is intended in the case of a computer to suggest that the computer belongs to a particular class of computer (i.e. a personal computer –

or a smart phone:

it is difficult to discern how it advances debates.

Then His Honour referred in paragraphs 36 and 37 to the decisions of CCOM which involved a standard computer and IBM which also involved a standard computer to say that having a standard computer is no bar to the eligibility for a patent.

His Honour also said in relation to the notion of generic software that that phrase was either meaningless, that is, there is no such thing as generic software – software is always required to perform specific functions. That of course resonates with the findings of the primary judge in this case, that this software could not be called generic software as its functions were too specific.

It either means something which has no fixed meaning – generic software – or it simply means software which performs ordinary or well‑understood functions of a computer. If it means that, his Honour Justice Perram said, then it is no different from the “advance in computer technology” test, that is, it says what an invention should not be in order to be patent‑eligible, rather than saying what it should be, but they are two sides of the same coin.

STEWARD J: Mr Lang, before we run out of time, can I return to the competency issue, just briefly?

MR LANG: Yes, your Honour.

STEWARD J: Could I ask, on your approach, is it the case that every application for leave under section 25 is always in the exercise of the original jurisdiction of the Federal Court?

MR LANG: It is not in the appellate jurisdiction. There are authorities to which I was going to take your Honours, which provide two possible alternatives, both of which are open to your Honours. One is that it is in the original jurisdiction, and the other is that it has its own discrete form of jurisdiction which is neither original nor appellate.

STEWARD J: So, when 33(4B), refers to the exercise of the appellate jurisdiction of the Federal Court giving a judgment in the form of a determination under section 25(2), that appears to be a contemplation that you can give application for leave to appeal in the appellate jurisdiction of the court?

MR LANG: It suggests that there is some work for that section to do – 33(4B)(a) – insofar as it refers to section 25(2), and on our approach it does have work to do. So, if your Honours turn, perhaps to section 25 of the Federal Court Act – we did provide that by email. If your Honours have that, subsection (2) refers to applications:

for leave or special leave to appeal –

in (a). Now, those occur prior to an appeal being commenced. Section 24 is the section which confers appellate jurisdiction, which refers only to appeals. So, that is not exercise of the appellate jurisdiction. Rather, it is a precondition for the exercise of appellate jurisdiction – likewise (b), but then (c) and (d) are applications which can be made once an appeal is commenced.

So, the High Court authorities say one does not have appeal or an appellate jurisdiction prior to the commencement of appeal, but once that happens then the appellate jurisdiction is being exercised, and paragraphs (c) and (d) provide examples of applications which could be made and therefore would be subject to the prohibition in 33(4B).

Your Honours, the authority that I just referred to there is SZNEV, which is an authority referred to by the Commissioner. If your Honours have that, in paragraph 2, it states:

An application for leave to appeal is not an exercise of original jurisdiction. It is, if anything, entertained as part of the appellate jurisdiction.

But then, it importantly goes on to say:

But as appears from the authority in this Court dealing with the nature of special leave applications, a leave application has its own distinctive character.

So, that indicates it is a special form of jurisdiction, neither original nor appellate – and that is made absolutely clear when one gets to paragraph 4 of that decision, which says, at the bottom there:

Without the grant of leave to institute such an appeal out of time, there was no appeal before the single Judge and no exercise by the Federal Court of appellate jurisdiction.

In that authority reference is made to the decision of this Court in United Mexican States v Cabal and also Collins v The Queen, which stand for the proposition that one does not have an appeal and therefore no appellate jurisdiction unless and until leave is granted. In particular in Cabal, what is referred to there is that powers exercised by the court which are necessary to effectuate an appeal and anterior to an appeal are powers exercised in the original jurisdiction not the appellate jurisdiction, so that provides the other alternative available, neither of which is the exercise of appellate jurisdiction for present purposes. May it please the Court.

KEANE J: Thanks, Mr Lang. The Court will adjourn briefly to consider the course it will take in this matter.

AT 1.51 PM SHORT ADJOURNMENT

UPON RESUMING AT 1.55 PM:

KEANE J: We need not trouble you, Mr Dimitriadis.

The appeal foreshadowed by this application would turn on a challenge to concurrent findings of fact by the courts below rather than an issue of legal principle. This is not an appropriate case for the grant of special leave to appeal. The application is dismissed with costs.

Adjourn the Court, please.

AT 1.55 PM THE MATTER WAS CONCLUDED