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By guest blogger, Doug Calhoun

Throughout the debate on the patenting of software, a battle has been quietly percolating under the radar over a NZ patent application (NZ525001) that has touched upon just about every issue in the software patent debate. And the outcome has been a complete success for ACC and MoH. A patent application originally accepted by IPONZ has been comprehensively refused by a hearing officer after an opposition process that lasted almost six and a half years.

The link to the decision is here:

The original owner of the patent application was an American firm, Healthtrio Inc:

The invention of NZ 525001 is ‘a system for communicating health care data from a sender to a receiver’. After it had been examined and accepted by IPONZ in 2005, no less than three major players in healthcare (ACC, MoH and Southern Cross) and Telecom opposed the further step of granting a patent. Since then there have been two interim hearings and an appeal to the High Court before they finally got around to the substantive hearing and decision. Along the way Healthtrio dropped out, but its founder, Dr Hasan, continued to pursue the patent; on the other side Telecom and Southern Cross ceased active participation at an early stage. So in the end it was Dr Hasan against ACC and the Ministry of health.

And why did ACC and MoH oppose? The answer is found in paragraphs [266] to [268] of the decision. ACC had been using its ‘EMG system’ since June 2000. In paragraph [268] the decision refers to evidence that ‘the EMG system was widely used, with GPs, physiotherapists, ambulance services and hospitals all registered to communicate data with the EMG.’ They were worried that they might be sued for using a system they had developed before Healthtrio had filed its original patent application — and they were cross that Healthtrio had tried to patent something that they had already done.

They were more than vindicated. The only difference the hearing officer saw between the EMG system and the Healthtrio one was in the latter’s normalisation of information. But:

‘[271] Normalisation is well known from the common general knowledge and it would be a desired outcome that all information appears in a common form in a combined database that is to contain the accumulated data from existing independent databases. The invention claimed is obvious when the prior art is considered alongside the common general knowledge. It would be unfair on the skilled worker to give patent rights which would prevent that skilled worker from its previously enjoyed right to put information into a database and for the information in that databases to be put into a standardised form, something the skilled addressee would have been able to do without any exercise of inventiveness from their common general knowledge.’

The main ground upon which the hearing officer made his decision was that the ‘specification did not sufficiently and fairly describe the invention and the method by which it is to be performed’. (One theory of the basis for patents is the social contract theory — in return for granting a time limited exclusive exploitation right, the state receives a public disclosure of the invention. But if, as has happened here, the disclosure is not sufficient and fair, the patent applicant has not fulfilled its side of the bargain. So the state declines to grant a patent.)

Paragraphs [103] to [208] explain why. The hearing officer placed a great deal more weight on the evidence of the opponents’ expert witness, Dr David Parry, than on the evidence of the expert witnesses for Healthtrio.

‘[073] In conclusion, I agree with the opponents’ analyses of the experts, above, and I consider that little if any weight can be given to the evidence of Dr Desai, Mr Prib and Mr Cooper. The evidence of Dr Parry and Mr Bowden is very relevant, being from experts in the field, and especially experts in the field in New Zealand, New Zealand being ahead of other countries in this technical field, and I consider much weight can be placed on their evidence.’

Dr Parry gave evidence (paragraph [142]) that the term ‘normalise’ as used in the specification ‘could not … be understood by any reasonable person working in the informatics field based on their experience or knowledge … or on any information in the specification itself.’ He expressed similar concerns (in Paragraph [146]) about the meaning of the word ‘meaning’.

The hearing officer agreed.

The hearing officer noted in paragraphs [160] to [162] that the corresponding European application had also been refused for lack of clarity.

For trainspotters the decision can be downloaded from this link:

To complete the dissection of the Healthtrio application, the hearing officer also found that the invention claimed in claims 26 to 29 had been prior published in two separate earlier US patents; and that the invention claimed was ‘not an invention’.

The ‘not an invention’ finding was an extension of the obviousness finding, as opposed to a finding that the system was not a ‘manner of manufacture’ – which is at the heart of the debate on the patent exclusion of computer programs. The hearing officer’s conclusion was:

‘[275] As I see it, the invention claimed in claims 1 to 25 is a mere collocation of known steps and/or components, in particular the use of a known normalisation step and a known transliteration step in the transmission of data in a known network environment, and particularly in the creation of a common database containing all information contained in a number of existing databases. Each step or component performs its known function without any alteration or synergy. The claims represent mere collocations of known integers and therefore lack inventiveness and are thus unpatentable.

[277] It would be wrong to prevent others in the field from extracting data from several databases to create a single database containing all the information in one place using standard techniques within the common general knowledge of the skilled addressee, as I find to be the case in the claims under consideration.

[278] If one looks beyond the normal extraction of data from a known database into another database, at the ability for a system to automatically understand data in an unknown database and extract that information into another database, then there is mere speculation and a casting of the claims widely to catch future developments that fall within the vague claims. Applicants are only entitled to claim what they have themselves invented. In the present case there is no explanation as to how the system can automatically understand the meaning of data in unknown databases and extract that data into a set of fields in its own database.’

The lesson taught by this decision is that if someone is seeking a software related patent in New Zealand, and they have not done anything more than a rehash of what has gone before, there are tools available under the existing law to put a stop to them.

The process has taken six and a half years. One reason is that the opponents tried to shortcut the process to get a decision only on the issue that ultimately was the decider. But in the end both sides collected and filed extensive detailed evidence on all issues — and that takes time. And the hearing officer did a remarkable job of sifting through it all and producing a detailed but coherent 75 page decision within three months, including Christmas.

And we can all do a metaphorical haka over his finding that New Zealand is ahead of others in this technical field.

And speculate as to why the Australian equivalent patent (AU 2002211889) was granted with claims identical to those refused here; and the US equivalent (US 7,664,660), while containing many more qualifications in its main claim, still uses the terms ‘normalise’ and ‘meaning’ that were found to be meaningless here.

~ Doug Calhoun
IP Mentor