Simulations Based on Technical Principles Not Sufficient for Solving a Technical Problem
In G 1/19 (Simulation) the Enlarged Board of the Boards of Appeal held that whether a computer implemented simulation of a technical system or process solves a technical problem by producing a technical effect that goes beyond the simulation’s implementation on a computer needs to be determined on a case-by-case basis.
The referral to the Enlarged Board was made from Boards of Appeal February 2019 decision T 489-14 Pedestrian simulation – Connor, and concerns an application for a computer-implemented method for simulating movement of a pedestrian crowd through a modelled environment or building structure. The main purpose of the simulation being to give feedback on the efficiency of pedestrian flows for such environments or structures. The Board of Appeal referred the following questions regarding the assessment of inventive step for computer implemented simulations:
- In the assessment of inventive step, can the computer-implemented simulation of a technical system or process solve a technical problem by producing a technical effect which goes beyond the simulation's implementation on a computer, if the computer-implemented simulation is claimed as such?
- [2A] If the answer to the first question is yes, what are the relevant criteria for assessing whether a computer-implemented simulation claimed as such solves a technical problem? [2B] In particular, is it a sufficient condition that the simulation is based, at least in part, on technical principles underlying the simulated system or process?
- What are the answers to the first and second questions if the computer-implemented simulation is claimed as part of a design process, in particular for verifying a design?
As previously reported, the President of the EPO submitted comments regarding the referred questions in August 2019. The President answered question 1 in the affirmative and for question 2 found it to be a sufficient condition that the simulation method reflects, at least in part, technical principles underlying the simulated system or process, in which case question 3 does not need answering.
The Enlarged Board readily admitted questions 1 and 3 as answering those questions would ensure uniform application of the law or clarify a point of law. However, as shown above, they split question 2 into questions 2A and 2B, and declined to admit question 2A, whether in relation to computer implemented simulations or more generally for computer implemented processes. They considered it is not possible to provide an exhaustive list of criteria for assessing whether a computer implemented process solves a technical problem by producing a result that goes beyond the implementation of a process on a computer. Given the removal of question 2A the Enlarged Board reworded and admitted question 2B as follows:
2B. For the assessment of whether a computer-implemented simulation claimed as such solves a technical problem, is it a sufficient condition that the simulation is based, at least in part, on technical principles underlying the simulated system or process?
The Enlarged Board considered a computer implemented simulation as such to be a simulation process comprising only numerical input and output without interaction with external physical reality. The Enlarged Board noted that somewhat by design ‘technical’ is not defined in the EPC as its scope can change over time. The lack of a definition does not matter for the problem-solution approach utilised in the EPC, which focuses on how a claimed invention makes a technical contribution – whatever its field of application, rather than whether a field of activity is technical in nature. Consequently, the Enlarged Board answered question 1 in the affirmative as no group of computer-implemented inventions can be a priori excluded from patent protection and simulations can solve technical problems, even when its output has no direct link to physical reality.
In answering question 2B the Enlarged Board noted various principles that assist in delimiting technical subject matter for inventive step purposes. It noted:
- no subject matter or activity having technical character falls within the exclusions to patentability;
- non-technical features are features that on their own or as such fall within the exclusions to patentability;
- the problem to be solved must be a technical problem and only technical inventions are patentable. However, non-technical features can be taken into account in the assessment of inventive step if they contribute to the problem to be solved through their interaction with the technical subject matter of the claim;
- while the use of a computer is considered to provide technical subject matter for the purposes of patent eligibility, the use of a standard computer does not provide sufficient technical subject matter for inventive step purposes;
- a technical step within a computer-implemented process may or may not contribute to the problem solved by the invention.
- a claimed invention needs to be technical over the whole scope of the claims, not just some embodiments;
- technical effects supporting an inventive step can occur within a computer-implemented process;
- a technical effect on a physical entity is not a necessary condition in order for a claim to have technical character;
- while virtual technical effects can reflect real-world properties, it remains mere data which can be used in many different ways and would be unlikely to be technical over the whole scope of the claims unless limited to specific technical uses or functions;.
- measurement calculations about a physical object have technical character since they are based on interactions with physical reality at the outset;
- the physical system or process to be simulated is not part of the simulation and is generally available as prior art;
- depending on a claim’s wording a simulation needn’t accurately match physical reality in order to produce a technical effect that contributes to a claim’s technical character, although an undue burden objection may arise if it doesn’t;
- the simulation of a technical system requires the translation of the system into models and algorithms, which is non-technical information that will only be taken into account for assessing inventive step if it contributes to any technical effect achieved by the claimed simulation invention.
Taking account of these principles in answering question 2B the Enlarged Board held it is not a sufficient condition that the simulation is based, at least in part, on technical principles underlying the simulated system or process. In particular, the technical principles that are present may not contribute to a technical solution to the relevant technical problem that the invention claims to solve. The Enlarged Board further held that neither is it a necessary condition, since a simulated system or process based on non-technical principles cannot be categorically excluded from having technical character. Consequently it needs to be determined on a case-by-case basis.
In regards to question 3 the Enlarged Board held that the answers to the first and second questions is no different if the computer-implemented simulation is claimed as part of a design process.
Public Interest No Longer Routinely Considered When Patent Proceedings Withdrawn
IPONZ has updated its patents hearings practice in the event that the opponent / applicant for revocation withdraws the opposition / revocation.
Oppositions or revocation actions can be withdrawn by the instituting party any time after their filing up until the appointed Assistant Commissioner issues their decision. Up until the change of practice when the opponent or applicant for revocation withdrew after filing prior art documents an Assistant Commissioner would still issue a decision in the public interest that considered the relevance of the prior art documents to the relevant application / patent. The UK Patents Appeal Tribunal case General Motors Corporation (Turney & Barr’s) Application  RPC 659 is usually cited in support of that practice, although as noted in that case the practice of the application / patent being considered in the public interest after the instituting party withdraws goes back to the early 1900’s.
Going forward, where an opposition or revocation action, whether under the Patents Act 2013 or the Patents Act 1953, is withdrawn the Hearings Office will close off the opposition and IPONZ will incorporate any amendments proposed by the patent applicant into the application. As previously noted, amendments proposed by the patent applicant / patentee during proceedings must be made unconditionally as otherwise there would be too much uncertainty for third parties and any risk with proposing amendments belongs with the patent applicant / patentee.
While prior art filed during a subsequently withdrawn opposition or revocation action will no longer be routinely considered in the public interest, the Commissioner retains discretion to either direct the application / patent to be re-examined or require an Assistant Commissioner to make a decision in the public interest. If that discretion is not exercised, then the patent application will proceed to grant.
The availability of re-examination, whether between acceptance and grant or post-grant, is given as a justification for no longer requiring an Assistant Commissioner to consider asserted prior art in the public interest following withdrawal by the party that provided that prior art. However, it is more likely a streamlining measure that will hopefully allow the Hearings Office to clear some of the backlog in patents hearings.
Forthcoming PCT Fee Changes for Australia and New Zealand
Effective from 1st May 2021 the International Filing fees will change for Australia and New Zealand. The table below gives the changes in the equivalent amounts in AUD and NZD: (PCT Newsletter; 2021/3)
PCT Intl Filing Fees Intl Filing Fee / Fee per sheet over 30 / PCT-EASY Reduction (Varies according to electronic format)
Current Fee (AUD) 2,023 / 23 / 304 – 456
Fee from 01/05/2021 1,860 / 21 / 280 – 420
Current Fee (NZD) 2,188 / 25 / 329 – 493
Fee from 01/05/2021 2,025 / 23 / 305 – 457
Effective from 1st May 2021 the NZD equivalent amount for an International Search carried out by the EPO will change as indicated below. (PCT Newsletter; 2021/3)
ISA (Currency = NZD) Intl Search Fee (Current) / Intl Search Fee (01/05/2021)
EPO 3,150 / 2,942
Effective from 1st May 2021 the Handling fee for an International Examination carried out by IP Australia will change as indicated below. (PCT Newsletter; 2021/3)
IPEA (Currency) IPEA Handling Fee (Current) / IPEA Handling Fee (1/05/2021)
IP Australia (AUD) 304 / 280
Reeling in the Doctrine of Equivalents
In Olaf Sööt Design LLC v Daktronics Inc 2020-1009, 2020-1034 one of the Court of Appeal for the Federal Circuit (CAFC) Judges expressed concern about the misuse of the doctrine of equivalents and sought to reaffirm the primacy of the claims in determining the scope of a patent’s monopoly.
The case involves an appeal of a District Court decision in which Daktronics were denied a judgment as a matter of law (JMOL) motion after the jury had found that Daktronics device contained the disputed elements of a claim on a doctrine of equivalents basis and so infringed Olaf Sööt’s patent.
The patent concerns a theatre winch for moving scenery and lighting by winding and unwinding cables, which are attached to the scenery, around a hollow drum. The winch is configured such that the cables wind and unwind together without tangling and are maintained perpendicular to the drum which rotates in relation to a fixed screw, whereby the drum and a hollow hub move laterally such that they surround some of the screw. This configuration both gives some protection to the screw and reduces the overall length of the winch. Only claim 27 was in issue, the claim having integers (a) – (h), with the District Court jury having found that integers (b), (d), (e) and (h) were in Daktronics device on a doctrine of equivalents basis.
The unanimous decision delivered by Circuit Judge Proust firstly found that the District Court had erred in leaving it to the jury to resolve a fundamental dispute over claim scope as that is one of the Court’s roles. With integer (h) of claim 27 there was a dispute as to whether the hub is part of the drum given that in Daktronics device the hollow hub, but not the drum, can surround some of the screw during the winding motion. Integer (h) states:
(h) said hollow hub and hollow drum being sized such that the screw can move into the hollow hub to allow the hollow drum to receive the screw as the cable unwinds from or winds up on the drum as the object moves to its respective down or up position.
The jury found that the hub was part of the drum, and in its post-jury verdict denying Daktronics JMOL motion the District Court also found the hub to be part of the drum.
The CAFC reversed that claim construction, finding that the claim language treats the hub and drum as two separate components meaning that the hollow hub is not part of the hollow drum. While the movement of the screw into the hollow hub allows the hollow drum to receive the screw the CAFC found this to show that the hollow hub is facilitative with respect to the hollow drum but not that it is part of the hollow drum.
Olaf Sööt had sought to justify its construction by referring to integer (e) which recites “said drum having at a first end a hollow hub …”, however the CAFC found this to merely specify that the hollow hub is positioned at one end of the hollow drum. Further, while the specification notes that the hub and drum components can be welded together, the CAFC found this to be permissive rather than mandatory.
Given its finding that the hollow hub is not part of the hollow drum and given that with the Daktronic device the screw is not received by the hollow hub the CAFC concluded as a matter of law that the Daktronic device does not infringe under the doctrine of equivalents.
Circuit Judge Lourie delivered a concurring opinion in order to express concerns about how the doctrine of equivalents is being utilised. Judge Lourie emphasised that the doctrine of equivalents is an exception to the primary principle of literal infringement of the patents claims and should at most and only rarely be applied in relation to two integers of a claim, not four as occurred in the District Court. Equivalence requires meeting either the function-way-result test or the insubstantial difference test in a way that does not eliminate altogether the claimed element. Judge Lourie emphasised that applying these tests requires the exercise of common sense as there can be instances where something can satisfy the tests, yet clearly not be an equivalent. Further, where there are multiple claim elements that do not literally infringe, then that should indicate the patent’s claims have been invented around or otherwise avoided, which has publically desirable pro-competitive effects. Judge Lourie considered that taking the contrary view makes a mockery of the primary role of claims, which will cease to serve their intended purpose if the doctrine of equivalents is applied too liberally.
When the UK Supreme Court extended the patentee’s scope of protection by allowing for a doctrine of equivalents in its Activis UK Ltd v Eli Lilly and Co  UKSC 48 decision it also placed it as an exception to the rule of “normal” interpretation - which the Court of Appeal in Icescape Ltd v Ice-World International BV  EWCA 2219 at  subsequently clarified means a purposive interpretation. It is only after establishing that there is no "literal" infringement in accordance with the three reformulated Improver questions that the Supreme Court’s three stage test for infringement by way of immaterial difference is applied. Namely:
- Notwithstanding that it is not within the literal meaning of the relevant claim(s) of the patent, does the variant achieve substantially the same result in substantially the same way as the invention, i.e. the inventive concept revealed by the patent?
- Would it be obvious to the person skilled in the art, reading the patent at the priority date, but knowing that the variant achieves substantially the same result as the invention, that it does so in substantially the same way as the invention?
- Would such a reader of the patent have concluded that the patentee nonetheless intended that strict compliance with the literal meaning of the relevant claim(s) of the patent was an essential requirement of the invention?
While not specifically addressed in the Supreme Court’s decision the above questions contemplate a single variant and would be consistent with Judge Lourie’s disdain for finding infringement where there are multiple variants. Also, the above questions seek to give effect to the proviso in Article 1 of the Protocol on Interpretation of Article 69 (EPC 1973 or 2000) that the claims should not serve only as a guideline, which is consistent with the limited ambit that Judge Lourie considers is available under the doctrine of equivalents. Nonetheless, as in the USA, the UK Supreme Court found that there is a place for the doctrine of equivalents and that it should have played a role since the introduction of the Protocol on Interpretation of Article 69.
2. Trade Marks
Should Unregistered Marks Have a Special Circumstances Exception for Non-Use?
As a common law country New Zealand's trade mark legislation favours use over registration. However, the privileges available for unregistered marks appear vulnerable to non-use due to circumstances outside the control of the owner.
New Zealand’s trade mark legislation has recognised prior user rights for continuously used unregistered trade marks since being provided for in section 94 of the Patents, Designs and Trade Marks Act 1911. Under the various re-enactments of that provision such continuously used unregistered trade marks cannot infringe a subsequently registered later used mark covering the same or similar goods and can themselves become registered despite the same or a confusingly similar later used mark having been registered by a third-party.
However, whereas registered marks can have a period of non-use – currently 3-years under the Trade Marks Act 2002, but previously 5-years under the Trade Marks Act 1953 – without being removed from the register, unregistered trade marks need to be continuously used in order to retain the above mentioned privileges. Obviously the ‘continuously used’ proviso has some flexibility built in given that closure of a business for say two or three weeks over the Christmas – New Year period would not prevent a claim to continuous use. Although it would be judged on a case-by-case basis, the period of non-use that an unregistered mark can have before it loses its claim to continuous use will be considerably less than 3-years.
Crucially, the continuously used proviso for unregistered marks has no special circumstances exception as applies for registered trade marks. Under section 66(2) non-use due to special circumstances that are outside the control of the owner of the trade mark will prevent the registration being revoked for non-use.
The special circumstances criterion is not easily satisfied, given that it needs to be due to circumstances outside the control of the owner. Yet, it is easier to satisfy under the current Act as the Trade Marks Act 1953 required the non-use to be due to special circumstances in the trade and not to any intention not to use or to abandon the trade mark. The ‘in the trade’ proviso was recognised by the then Ministry of Commerce as being hard to satisfy back in 1991 as their proposed recommendation for the reform of the Trade Marks Act 1953 stated:
At present non-use of a trade mark cannot be relied upon to support the removal of the trade mark if the non-use is due to special circumstances in the trade. The Ministry considers that it is appropriate to widen the scope of the defence to allow the Commissioner to take into account any special circumstances outside the control of the registered proprietor. This is in line with international trends and would also absorb the present defence relating to warfare.
Arguably the situation brought about by the Covid-19 pandemic highlights the need for the provision allowing non-infringement and registration privileges for continuously prior used unregistered trade marks to specifically include a special circumstances exception for non-use due to circumstances outside the control of the owner. Currently, the absence of such a provision would make it hard for a Judge to exercise discretion in favour of the owner of an unregistered mark who was unable to use it due to circumstances outside their control. The presence of the special circumstances exception in section 66(2) would arguably imply that the legislature deliberately chose not to have a special circumstances exception for unregistered marks. Arguably that default interpretation needs to be countered by specific legislative change. Much of the case law regarding special circumstances would readily apply allowing reasonable certainty around what might qualify as a special circumstance. The period of allowable non-use would need to be determined on a case-by-case basis. New Zealand is not alone in not having such an exception. I am not aware of any countries that do. Notably, from a New Zealand perspective, influential jurisdictions such as Australia, Singapore and the United Kingdom do not.
While the current situation gives yet another reason for registering trade marks, it seems that legislative change is justifiable.
US Appeals Court Finds Redbubble Online Marketplace Potentially Directly Infringing
In The Ohio State University v Redbubble Inc 19-3388 the Court of Appeal for the Sixth Circuit (CA6C) found that Redbubble’s online marketplace more than merely facilitated infringement of Ohio State University (OSU) trademarks and so reversed and remanded the District Court’s summary judgment of non-infringement.
Redbubble is an Australian based platform that allows independent artists to upload images of their works onto Redbubble’s interface which allows consumers to scroll through and select any that they want printed on items such as apparel, wall art, cushions and duvet covers etc. Once an order is placed Redbubble informs the relevant artist along with independent third parties who manufacture and ship the product to the consumer. Under this model Redbubble never designs, manufactures, handles or takes title to any product shown on its website, but it provides care instructions and helps market the products, handles customer service duties such as returns and its logo appears on shipped packages. Redbubble’s user agreement states that trademark holders, and not Redbubble, bear the burden of monitoring and redressing trademark violations. In order for an offending listing to be removed Redbubble requires URLs or other identifying information, not merely copies of the images used.
The District Court held that OSU’s trademarked images had not been ‘used’ by Redbubble in operating its business model because it only acted as a transactional intermediary between buyers, sellers, manufacturers, and shippers, and so classed Redbubble amongst passive e-commerce facilitators such as eBay and Amazon.
OSU argued that Redbubble acted less like a hands-off intermediary and more like a business that makes knock-offs and directly infringed as the operation of its online marketplace amounts to use in commerce without authorisation from the owner. In its appeal OSU also argued that Redbubble is vicariously liable for trademark infringement on the basis that the vendors that operate on its platform act as Redbubble agents.
The CA6C firstly dismissed the vicarious liability action on the basis that OSU had not raised that ground prior to the appeal, agreeing with Redbubble that OSU had both forfeited and waived that ground.
Moving on to direct infringement the CA6C considered it useful to think in terms of a spectrum of infringement ranging from those who design and place infringing marks on goods or affirmatively used the mark to those such as eBay and Amazon who merely facilitate sales for independent vendors. Given that products ordered on Redbubble’s website only come into being when ordered through Redbubble, and are delivered in Redbubble packaging with Redbubble tags, the CA6C found that the District Court erred in affirmatively placing Redbubble on the passive end of the liability spectrum. The CA6C considered Redbubble’s degree of control and involvement pointed towards it working with third-party sellers to create new Redbubble products, not to sell the artists’ products, and so reversed the District Court’s decision. However, given its finding that the record below lacks sufficient development of the facts to affirmatively decide this issue, the CA6C remanded the case back to the District Court for additional fact-finding regarding how Redbubble operates.