Generation of Tax Interview not Patentable.


On 22 September 2018, I posted on a decision by the delegate of the Commissioner of Patents in which the delegate refused a patent application. The delegate found that the generation of a tax interview was not patentable.

It appears that the applicant, HRB Innovations, Inc. has had another bite at the cherry in HRB Innovations, Inc. [2019] APO 30. Here, the patent application is a divisional application of the application in the earlier matter. It is common practice for practitioners to file a divisional application from a parent application that becomes vulnerable. This simple procedure can offer applicants some backup in case the parent is refused. However, the divisional application cannot claim the benefit of the priority date of the parent if the claims of the divisional application are not supported by the matter disclosed in the parent application. In this case, HRB Innovations was again trying to protect the generation of a tax interview.

In October 2018, an examination report issued on the divisional application. In that report, the examiner found that the generation of a tax interview was not patentable subject matter. The applicant requested to be heard. The applicant also filed a statement of proposed amendments to the description and claims of the specification.

In the first decision, the delegate found that the claims of the parent application were not for a manner of manufacture. Moreover, the delegate concluded that there was nothing of substance in the specification, as a whole, which would overcome this finding [paragraph 48]. Thus, the delegate held that, assuming the proposed amendments comply with the requirement of the Patents Act, the “first decision remains highly persuasive to the present claims, as proposed to be amended.” [paragraph 17]

The delegate compared the claims of the current application to those of the parent application in an investigation into the differences between the “substance of the invention” of the respective applications. It would be reasonable to assume that if the difference covered a technical contribution to the art then the current application could be held to cover patentable subject matter.

The delegate identified three substantive differences between the parent and current applications [paragraph 31]:

  1. The “cluster analysis” in claim 1 of the current application is more detailed. That is, the “application of cluster analysis to the tax data generates a plurality of clusters, wherein each cluster is based on an identified plurality of previously prepared tax returns sharing one or more indicator variables.
  2. Claim 1 of the current application defines the storing of prototypes for tax returns and the corresponding indicator variables.
  3. The system of claim 1 of the current application results in the generation of a simplified tax interview based on a plurality of portions of a full tax interview. The plurality of portions are selected based on a prototype identified by a classifier. On the other hand, claim 1 of the parent application defines the presentation of a portion of the full tax interview.

According to the delegate, these aspects do not relate to “any enhancement of computer functionality, either amongst devices individually or collectively. That is, there is no improvement evident in the computer technology as such. Alternatively, there is no technical contribution evident to the art.” [paragraph 36]

In submissions, the applicant attempted to draw an analogy between the invention of the current application and the example of patentable subject matter described by IP Australia. On that page, IP Australia describes an “improved user interface”. A user moves a cursor with a mouse over designated areas of a screen to select items rather than clicking. The improvement is a technical benefit because it allows actions to be completed in a more efficient manner without clicks. In the current claims, however, the “alleged improvement, regarding the interface, is merely in the presentation of information. That is, the improvement lies in the user merely being presented with less of a tax interview than a full tax interview. There is no reduced, or more efficient, technical activity arising from the user interface in this case.” [paragraph 38]

The applicant also attempted to draw an analogy with the invention described in Rokt Pte Ltd v Commissioner of Patents, [2018] FCA 1988 (“Rokt”).  The applicant submitted that the relevant subject matter of Rokt involved ingenuity in computer operation to determine when and what to display so that users were not shown advertisements indiscriminately. However, the delegate pointed out that Rokt went further. As set out by the delegate: “In preferring the evidence of Professor Verspoor in Rokt, Robertson J stated, at [203], that there was an improvement in computer technology that involved a new layer of engagement offers and the insertion of a widget, or computer program code, into publisher content to serve the engagement offer. Moreover, upon the widget in the client device determining an acceptance of the engagement offer by the user, a selected advertising message was presented to the user. Furthermore, Robertson J noted, at [205], that the invention “provided a single platform in which user engagement data could be coupled with transactional data and user context data to provide a personalised ranking of engagement offers to the user”. In this regard, it was found that there was a technical solution provided by this platform or, alternatively, that a business problem was translated into a technical one. No such decided improvement in computer technology or technical activity is evident in the present independent claims.” [paragraph 39]

The delegate concluded that the claimed invention is not for a manner of manufacture and there was nothing in the body of the specification that could overcome this finding.

Again and again, the authorities have set down that there needs to be a contribution to the field and the contribution needs to be technical in nature. In this case, the discussion focused on the word “technical”. It can be rather confounding to understand what is meant by an enhancement in computer functionality. But it appears that some unique code executed by the computer so that the computer performs a function that is not commonplace would likely impart the necessary technicality of the contribution. For example, in Rokt, the inclusion of the computer program code that served the engagement offer imparted that technicality. In the present case, the code merely presented information in a conventional manner.

Software innovators need to remember that a software product or “app” may be highly unique and have significant commercial potential. But if the associated code is not making a technical contribution, then it is unlikely that the product could be the subject of a granted patent.

Please contact us if you are considering a patent application for a business-based software product.