Mirror, Mirror on the wall, which consideration is the fairest of them all? – Dealing with Computer-Implemented Inventions

Nigel Pereira, Wadeson

The Patent Examiner’s Manual on Computer Implemented Inventions1 sets out a number of considerations to assist in determining whether a computer-implemented invention (CII) is in substance a manner of manufacture. These considerations are framed in light of RPL Central and Research Affiliates. These considerations however are not always treated equally.

Recent decisions from the Australian Patent Office (APO) in Bio-Rad Laboratories2 and BGC Partner, Inc.3:

  • suggest that the APO gives particular weight to the invention’s technical contribution consideration, and
  • emphasize the importance of the specification using definitive language to make clear that the CII solves a technical problem.

Bio-Rad Laboratories

In Bio-Rad Laboratories, the APO held Bio-Rad’s method of optimizing a quality control strategy for testing diagnostic devices to be a manner of manufacture.

The APO considered the substance of Bio-Rad’s invention to be a method for determining an optimal strategy which minimises the use of reference samples while meeting required performance targets to thereby achieve a material effect by minimising a number of reference samples used. The claims required the use of a computer to carry out the method steps.

Bio-Rad’s invention was found to provide an economic significance as it ‘enables the use of lesser number of reference samples and lesser number of tests in order to meet certain testing performance targets clearly leading to saving in time and costs’ [at 56]. The method was also found to provide a technical contribution because of the invention’s application in the technology of medical diagnostic devices and their testing [at 57].  The invention was accordingly held to be a manner of manufacture.

BGC Partners, Inc.

In BGC Partners, Inc., the APO held BGC’s method for automatically distributing a trading order over a range of prices was not a manner of manufacture. BGC’s specification described that, in the prior art, the trader’s computer could send multiple offers to a system which then generated a set of orders to pass to the exchange. That arrangement resulted in relatively high traffic between the trader’s computer and the system. The specification additionally described the risks of revenue losses and trade rejections in fast moving markets and the need to protect traders from latency in those trading systems.

The APO held the substance of BGC’s invention to be reconfiguring (or configuring) an order received form a trader into a number of different distribution orders to be sent to the trading exchanges. The configuration of orders allows the trader to avoid the tedious task of preparing and sending a series of bids and offers, and allowing the trader to minimise the trading risk.

During the examination stage, BGC argued that their invention related to reducing the volume of messages communicated over a network between various entities in a trading session, which as a result increases the efficiency of the system as a whole by limiting unnecessary data traffic.

Despite those arguments, the APO considered that the invention did not improve network latency, and considered that it was unclear how reducing the number message volume solved the latency issues [at 38]:

As such, while latency is something that affects electronic trading platforms (since every piece of technology has limitations), I take the present invention to be a scheme that, within the confines of the latency that already exists in the network, generates trading orders that minimise the risks that are associated with fast- (or slow-) moving markets given this latency. Minimising trading risks within the constraints and limitations of a network by using a set of rules is a business improvement. It is not, as the amended claim seeks to define, a scheme that improves the efficiency of a trading network as a whole (which could be seen as a technological improvement). Rather, it is a scheme directed to the placing of orders and subsequent tracking of price which results in using the existing network in way that reduces exposure to undesirable trading results. This improves the business outcome using the same network. It does not, as noted by the examiner, result in the network itself running better. While I do note, as quoted above, the specification states that there is a reduction is message volume communicated over the network, it is not clear to me at all, and the specification is unhelpfully silent and/or indefinite in its language, that this solves any latency issues within the network when trading. (original emphasis underlined; our emphasis in bold)

As a network and telecoms engineer, it is logical that the number of messages transmitted over a data network (the data traffic) affects the network latency (the time for data to travel across the network). Reducing the number of messages transmitted would reduce the network congestion and improve the overall latency.

This decision emphasizes the importance of having a clear description of the technical contribution provided by a CII. For BGC’s case, a graph showing the improvement in latency times in response to the number of messages transmitted over the network would have been useful to demonstrate a technical contribution. The decision also emphasizes the importance of using definitive language to make clear that the invention solves a technical problem.

What’s the difference?

On one hand, Bio-Rad’s method of reducing the number of test samples was held to be patentable because it provided the material effect of reducing the number of reference samples needed. The contribution of Bio-Rad’s method was the reduction of test samples needed, which is clearly technical.

On the other hand, BGC’s method of configuring orders to reduce the number of messages sent over a network was held to be unpatentable despite the applicant’s arguments that the reduction in message volume improved network latency. It seems that the APO could not clearly relate the reduction in message volume to the network latency and, as a result, could not see past the invention providing only business improvements.

The two decisions from the APO show that clearly identifying the substance of the invention and identifying the technical contribution can be helpful when dealing with CIIs and manner of manufacture. In addition, using definitive language to make clear that the invention solves a technical problem is also helpful.

 1 http://manuals.ipaustralia.gov.au/patents/Patent_Examiners_Manual.htm

2 Bio-Rad Laboratories, Inc. [2018] APO 24 (28 March 2018)

3 BGC Partners, Inc. [2018] APO 27 (23 April 2018)

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