IP Australia "Rokt": Federal Court says computer-implemented invention is patentable – Commissioner appeals

By Natalie Shoolman, Julie Wong
21 Feb 2019
The Rokt decision provides comfort for software innovators and tech start-ups seeking patent-protection for computer-implemented inventions.

In a victory for tech start-up Rokt, the Federal Court of Australia has found that Rokt's computer-implemented invention is patentable subject matter, overturning the decision of the Delegate of the Commissioner of Patents.  For businesses, this is a welcome development and means that innovation in software design, and not just hardware, may be protected by patents.

The decision in Rokt Pte Ltd v Commissioner of Patents [2018] FCA 1988 challenges IP Australia's practice in assessing, and indeed rejecting as patent-eligible subject matter, what it classifies as computer-implemented "business innovation".  However, the Commissioner has filed an application seeking leave to appeal the decision.

How a tech-marketing start-up "Rokt" the boat

In 2013, 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 combined various elements to provide a "dynamic, context-based advertising system" whereby users were presented with an intermediate "engagement offer" while on a website, selected based on their previous interactions on the website. If the engagement offer was accepted by the user (eg. by positively clicking on the offer), targeted advertising messages unrelated to the engagement offer were then selected and presented to the user.  Advertisements were thereby presented to users who were more likely to engage with them than traditional methods of digital advertising.

The patent application was the subject of various amendments and re-examinations in the period 2013 to 2017.  On 11 July 2017, the Delegate of the Commissioner of Patents decided that the patent application should not proceed to grant as the substance of the invention was not patentable.  Rokt successfully appealed the decision in the Federal Court.  As the decision of the Delegate of the Commissioner of Patents was overturned, the Rokt patent application will proceed to grant.

Why Rokt's computer implemented invention is patentable

Justice Robertson agreed with the parties that:

  • patent-eligibility should be addressed as a matter of substance;
  • there is no formula to be mechanistically applied; and
  • it is necessary to understand where the inventiveness or ingenuity is said to lie. While a business method per se is not a proper subject for a patent, computerised business methods may be patentable provided the invention lies in the computerisation – there must be an improvement in computer technology, a technological innovation.

    putting a business method into a computer is insufficient. For example, in Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177, the Full Federal Court held that RPL Central's computer-implemented method of gathering evidence to assess an individual's competency relative to a qualification standard was an unpatentable scheme. This is because the computer was viewed as a mere tool in which the invention was performed, a scheme "put into" a computer. The claimed invention did not lie in the computerisation itself.

Justice Robertson warned against considering the discrete elements of the claimed invention rather than considering the claimed invention as a whole.  He was critical of the Commissioner's focus on whether each element of Rokt's claimed invention was already known in isolation at the priority date as an approach for assessing patentable subject matter under the Australian "manner of manufacture" test.  Rather, the correct approach is to consider the "combination of techniques or components" which may have been used in an "innovative and previously unknown way".  

Using this approach, his Honour found that the substance of the invention was a "dynamic, context based advertising system, introducing a distinction between an engagement offer, without direct advertising benefit, and an advertisement designed to lead directly to the sale of a product" with its "intermediate engagement offer" being the key feature of the invention that provided an alternative digital advertising technique to previous systems. This was an improvement in computer technology as:

  • The invention solves a "technical problem" with a "technical solution"

    The business problem of attracting a user's attention and having the user choose to interact with the advertiser was translated into the technical problem of how to use computer technology to address this business problem.  The invention solved not only a business problem but a technical problem via a technical solution including, the introduction of a tracking database and objects database, designing an engagement engine to access and manipulate data to rank and select engagement offers and implementing a ranking algorithm. 

  • The computer is not merely an intermediary but is "integral" to the invention

    Unlike RPL Central where the computer was simply configured to carry out the method using a computer readable medium containing program code, there is an invention in the way that the computer carries out Rokt's business scheme. Notably, only a computer or computers could store, manage and manipulate data at the magnitude and speed that was required to implement the method. 

  • The invention includes steps which are "foreign" to the normal use of computers
    Finally, Rokt's invention brought together new and known elements to form a working combination that had not been previously achieved and used in computers as at the priority date. The distinction between engagement offers and general advertising, coupled with data ranking algorithms and methods of manipulating streams of data in real time, was a new use of computer technology.

Reliance on expert evidence

In finding that Rokt's computer-implemented invention was patent-eligible subject matter, his Honour relied significantly upon expert evidence, particularly as to the state of the prior art.  Applicants who face similar objections from the Patent Office should therefore consider submitting compelling expert evidence before the Patent Office and the Court outlining the substance of the invention against the state of the prior art and the technical problem and technical solution of the invention.  This is despite the fact that the test for patent-eligible subject matter is supposed to be a question of law.

A more certain future for computer-implemented inventions?

The Rokt decision provides comfort for software innovators and tech start-ups seeking patent-protection for computer-implemented inventions.  However, IP Australia has applied for leave to appeal the decision. 

Judgment of the expanded five-judge bench of the Full Federal Court is also pending in the appeal from Encompass Corporation Pty Ltd v InfoTrack Pty Ltd [ 2018] FCA 421. The Encompass case is concerned with similar issues and will hopefully clarify the law, including the role (if any) of prior art in assessing whether computer-implemented- inventions constitute patent-eligible subject matter, later this year.  The decision of the Full Federal Court in Encompass may therefore change the approach for assessing the patentability of computer-implemented inventions from that adopted by the Federal Court in Rokt.  

So while the Rokt decision provides some clarity, hopefully we will have more certainty in 2019!

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.