In Rokt Pte Ltd v Commissioner of Patents [2018] FCA 1988 (Rokt v Commissioner), the Federal Court has found that a computer-implemented invention is patentable subject matter.
Generally, Internet users have become wary and cynical of advertising on the websites that they visit. Mouse clicks are a rare commodity. Advertisers and their fellow stakeholders impart significant value to any technology that can extend user engagement with a website.
Rokt Pte Ltd (“Rokt”) is a “digital referral marketing company” that “matches engaged consumers with recommendations, empowering them to choose the brands they invite in to their lives” (Bloomberg).
Rokt applied for a patent on 13 March 2013 (with a priority date of 12 December 2012). The patent application number was 2013201494. The title was “A Digital Advertising System and Method”. The Australian patent register reveals an interesting history. The application was accepted on 3 July 2013. Grant of the patent was opposed by one Malcolm Treanor by Notice of Opposition filed on 7 August 2013. The opposition was withdrawn on 1 April 2015. Section 97(1) of the Patents Act 1990 allows the Commissioner to re-examine an accepted application that has not been granted. The delegate of the Commissioner held that there were grounds to re-examine. The delegate decided that the application should not proceed to grant (Rokt Pte Ltd [2017] APO 34 ). The delegate held, inter alia, that claim 1 of the application did not disclose a manner of manufacture (S18(1)(a) Patents Act 1990).
Rokt v Commissioner is an appeal against that decision.
Rokt relied on affidavits and oral evidence of Professor Karin Verspoor (“Verspoor”). The Commissioner relied on affidavits of Mr Scott Ries (“Ries”). Ries did not give oral evidence.
Verspoor was a Professor in the School of Computing and Informational Systems at the University of Melbourne. She specialised in computational, algorithmic and programmatic methods for analysis of natural language text and other digitally represented data. Ries specialised in internet advertising techniques, strategies, advertising formats, systems, databases, hardware and software. He worked with companies since 2006 developing his knowledge and experience.
Verspoor considered the following questions in her first affidavit:
- What is the “substance” of the invention? In other words, what specifically lies at the heart of the invention?
- Does the invention solve a technical problem?
- Is the use of a computer (or computers) integral to carrying out the invention, or could the invention be carried out in the absence of a computer (or computers)?
- Does the invention involve steps that are foreign to the normal use of computers (as at December 2012)?
Verspoor provided an interpretation of each of the elements or integers of claim 1. This was so that she could arrive at the “substance” of the invention as required by a response to the first question. Verspoor held that claim 1 described a method for presenting an advertisement to a consumer. An “intermediate engagement offer” was presented to the consumer. The purpose of the offer was to engage the consumer and to take the consumer on a “journey”. The journey would end with the presentation of the advertisement to the consumer. The method included gathering “engagement data”. The engagement data was used to determine the timing and form of an engagement offer. A ranking algorithm ranked multiple engagement offers when relevant. The ranking was dynamic. The algorithm used the engagement data and other data gathered from the consumer’s browsing history. The data included performance metrics based on previous interactions of the consumer with the engagement offers. The data also included revenue metrics recorded from past interactions with corresponding engagement offers. The engagement offer had a non-advertising nature.
Responding to (1), Verspoor distinguished between an “engagement offer” and an “advertisement”. The intermediate engagement offer is designed to capture a user’s attention. It is not an advertisement. The user can receive an advertisement if the user takes up the offer. The invention involved four stakeholders. These were the users, the publishers, the advertisers and the operator of the advertising system. The invention was able to use data derived from target consumers as well as other consumers interacting with the system. Engagement and revenue scores were calculated using that data. The invention introduced a novel architecture for the advertising system. It involved the insertion of a “widget” into publisher content to serve an engagement offer to the user. A data-based scoring algorithm to decide what engagement offers to serve was an important improvement to existing computer-based advertising. Verspoor was not aware of any similar methods of computer-based advertising models as at December 2012.
Responding to (2), Verspoor deposed that the invention addressed a key technical problem. The technical problem was to provide a single platform in which user engagement data could be coupled with transactional data and user context data to provide personalised ranking of engagement offers to the user. The technical problem was solved by introducing a tracking database and an objects database. A ranking engine and an engagement engine accessed and manipulated the data to rank and select engagement offers.
Responding to (3), Verspoor deposed that it was not feasible to store and manipulate large amounts of data without a computer. The data was tracking data collected from real-time interactions with digital devices. The data was manipulated for context-sensitive decision-making.
Responding to (4), Verspoor deposed that monitoring interaction with the engagement offer and an advertisement was a new and innovative use of a computer as at December 2012. So was choosing an advertisement based on the interaction.
Ries described targeted and non-targeted advertising. In targeted advertising, the advertisement was selected for display based on some level of analysis of viewer engagement data. Ries described the use of cookies and other tools that were used for obtaining and interpreting the viewer engagement data. For example, Ries described the use of demand side platforms that were configured so that the advertisement was displayed at a point in time or activity in the user’s interaction with the website. According to Ries, it was very common for websites to invite users to opt in to an emailing list by ticking a box while making an online purchase. Ries also set out that the hardware and software modules described in the patent application were standard components as at December 2012. Also, the techniques for gathering the engagement data described in the patent application were well known and widely used in Internet advertising before December 2012.
Responding to Ries, Verspoor deposed that Ries had no direct technical experience with the implementation of large-scale software systems. This was apparent from Ries’s evidence. Rather, he was a user of such systems. She disagreed with Ries’s interpretation of “engagement data”. The context was “an offer intended to engage”, which appears not to have been understood by Ries. She also pointed out that the timing for delivering subsequent advertising to the user was different to an “opt in” for email or future advertisements.
Verspoor deposed that computers are not just hardware. They were a combination of hardware and software. So, the modification of a computer by software so that the computer performs a different function or set of functions was an improvement in the computer. Thus, the computer-implemented invention described an improvement in computer technology.
According to Robertson J, there was copious reference to the authorities in the submissions of the parties (there is a useful summary provided by the Respondent in paragraph 189). But the resolution lay largely in the realm of facts. Both sides agreed that the matter had to be addressed as a matter of substance. There is no formula to be mechanically applied. It is necessary to understand where the inventiveness or ingenuity is said to lie. A mere business innovation is insufficient. A business method or scheme is not, per se, proper subject matter. The issue is whether there is technological innovation. The claimed invention is a computerised business method. Thus, the invention must lie in that computerisation. It is not enough to “put a business method into a computer.”
It is notable that Ries was not available for cross-examination. His written opinions were not able to be elucidated or tested. Verspoor’s qualifications were more impressive and relevant than Ries’s.
The level of detail of the submissions and the claimed significance of any distinctions constituted the difference between the applicant’s and respondent’s approaches. The respondent focused on issues of separate or discrete differences or distinctions rather than on the claim or claims as a whole and as a matter of substance. The respondent’s focus on similarities tended to lose sight of the combination of techniques or components that led to innovation.
The technical problem was providing 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. The technical solution lay in the tracking database, the objects database and the design of the ranking and engagement engines. The engines accessed and manipulated the data in the two databases to rank and select engagement offers. The ranking engine optimised the personalised output for the consumer. The ranking engine implemented a ranking algorithm that ranked the retrieved object by a combination of an engagement score and a revenue score.
There was a business problem. That was to attract the attention of the user and have the user choose to interact with the advertiser. But this problem was translated into a technical problem of how to utilise computer technology to address the business problem. The use of computers was integral, rather than incidental, in the sense that there is an invention in the way the computer carries out the business scheme. The following were all new and innovative uses of computers:
- Conceptualising and implementing an engagement offer.
- Using a widget to monitor continuously the user’s interaction with the website to determine when to display the engagement offer.
- Using a widget to monitor the user’s interaction with the engagement offer and offering a choice to engage with, or skip, the engagement offer.
- Monitoring the user’s interaction with an advertisement to determine which subsequent advertisement to show.
A database, client-server architecture, running of a JavaScript program on a publisher’s website and the creation of a ranking engine were each known as at December 2012. But the combination of these components, coupled with algorithms making use of background data for personalisation and ranking was a new combination of new and previously existing components and a new use of computer technology. Thus, the Court found the computer-implemented invention patentable subject matter.
The Commissioner has filed an appeal to the Full Federal Court of Australia. That decision will likely turn on whether there is enough technical depth in the patent application to support Verspoor’s contention that the claims describe a method which is technical in substance. In this writer’s view, that is by no means clear. Prior to December 2012, it was a commercial problem to engage consumers in a way other than by direct advertising. Verspoor conceded that the various components of the method are individually well-known. She also conceded that it was not necessary for the specification to describe the various algorithms in any detail, because they were known at December 2012. Robertson J was clearly influenced by the quality of the evidence adduced on behalf of Rokt. That was largely due to the quality of Verspoor as an expert and to her testimony. It remains to be seen whether the Full Federal Court will also be so influenced by the documents on record.