Friday 26 April 2024

Conquest Planning: Estoppel & res judicata

There has been some excitement over the past few months among the very niche community of UK patent attorneys specialising in AI, following the High Court judgment of Emotional Perception. I wrote about the case here and it was also written about in a slightly more approving way by one of my work colleagues. It was inevitable while the judgment still stood (an appeal is currently pending with a hearing at the Court of Appeal scheduled for May 2024) that attempts would be made to get applications relating to AI through the UK IPO that would previously have been considered unpatentable, particularly given the change in practice in light of the judgment. At least one such attempt has been made, which has resulted in the decision last month in the case of Conquest Planning Inc. (BL O/0259/24). 

The application, GB2311361.6, was a divisional of an earlier UK application that was a national phase entry of PCT application PCT/CA2020/050275. The abstract on the cover page of the published PCT application is probably enough for the reader to have a good guess as to where this, originally Canadian, application was going to go in Europe. This described the invention as "a financial planning system that comprises a Strategic Advice Manager (SAM) module that utilizes an artificial intelligence (AI) module to automate and optimize the financial planning decision-making process". Unsurprisingly, in decision BL O/988/23 from 24 October 2023, the application was refused because the hearing officer found the claimed invention to be a tool for recommending financial plans in which an AI module was used. This related entirely to an administrative process that was computer-implemented but made no improvements to a computer in a technical sense. This resulted in the invention being found to be excluded under section 1(2) for being a method for doing business and a program for a computer as such. The fact that the invention made use of a computer program did not impart any technical contribution, following the usual reasoning from Aerotel/Macrossan and AT&T/CVON

Probably expecting this negative result, the applicant had already arranged for a divisional to be filed in July 2023. This application then faced similar objections from the examiner and eventually (although rather more quickly this time, due to the compliance period coming up) came before a hearing officer after the examiner decided that the claims on file as of 8 December 2023 were not patentable for essentially the same reasons as were already provided in the earlier decision. By that time, however, the Emotional Perception judgment had come out, so the applicant ran the argument before the hearing officer that, because the application related to AI, the change in practice should be taken into account. A question then was whether the applicant was trying to have a second go at getting the same invention patented. The issue to be considered was what bearing the previous decision had on the divisional application. The hearing officer noted that, in a previous decision BL O/033/09 (Rajesh Kapur), the principle of estoppel was found to apply to ensure that litigation was final and could not be subsequently fought all over again. The Patents Hearing Manual notes at points 1.96 and 1.97:

"Estoppel by record (doctrine of res judicata) applies where a relevant judgment (and that includes a decision of a tribunal such as the comptroller) has already been given. The judgment stands forever, as between the parties unless it is modified by the normal course of appeal (in which case the modified judgment stands in its place). For example, in an infringement action (Poulton v Adjustable Cover & Boiler Block co (1908) 25 RPC 529 the plaintiff was awarded damages which were ordered to be assessed and paid by the defendant in due course. However, before the damages had been paid, the defendant caused the patent to be revoked on the basis of new evidence. Accordingly, he argued that he need no longer pay the original damages since the patent must, at the time of the first action, have been invalid. He was however held to the terms of the first decision. This judgment although old remains good law - see Coflexip SA v Stolt Offshore MS Ltd (No 2) [2004] EWCA Civ 213, [2004] FSR 34, discussed below with regard to abuse of legal process. See also Unilin Beheer BV v Berry Floor NV and Others [2007] EWCA Civ 364 in which it was decided that a later finding of invalidity of an EP(UK) patent in an EPO opposition would not disturb a finding in the UK Courts that the patent was valid and infringed as between the parties in the UK action, so that any damages must still be paid.
There are two types of estoppel by record. The first is "cause of action" estoppel where the same cause of action lies in a final judgment (cf the example given above). The second is issue estoppel which, per Lord Denning in Fidelitas Shipping Co Ltd's v vlo Exportchleb [1966] 1 QB 630 at p640, applies where, within one cause of action, there are several issues raised which are necessary for the determination of the whole case. Once an issue has been raised and distinctly determined (even if the question was in fact not the subject of any dispute or argument) then as a general rule neither party can be allowed to fight that issue all over again. But not always - cf, for example, Rose Bro's (Gainsborough) Ltds Appln [1960] RPC 247 and Hodgkinson & Corby Ltd & anr v Wards Mobility Services Ltd [1997] FSR 178. Cinpres Gas Injection Limited v Melea Limited [2008] EWCA Civ 9 contains a discussion of the difference between cause of action and issue estoppel - see paragraphs 66 to 77. Estoppel was not established in that case, the judgment holding that there had been perjury by a witness closely identified with one of the parties; (see paragraphs 105 to 107), and adoption of the fraud by the party itself; (paragraphs 108 - 120)."

As a result, the hearing officer found that the applicant was prevented from asserting that the claimed invention was outside of the exclusions from patentability if the scope of those exclusions remained unchanged. Did the Emotional Perception judgment change the scope of the exclusions though? The judge had found that a system for recommending data files using an artificial neural network (ANN) was not excluded as a computer program. The claimed invention in this case involved the step of training an artificial intelligence to develop a financial plan, which the applicant argued was sufficient to determine the question of patentability in their favour. The hearing officer, however, found that this did not relate to a trained ANN or to the training of a ANN but instead to a generic AI. It could not therefore be said to engage the exclusions raised in Emotional Perception. Given the identical facts and identical law, the previous decision must be followed. The application was therefore refused. 

The lesson here then is that, although there may have been a change in practice in light of Emotional Perception, the effect while the judgment stands is likely to be very limited, being specific to the question of whether an ANN can be considered to be a computer program as such. If the claimed invention does not relate specifically to an ANN, the change in practice is not going to be of much use. Another point to note is that the other exclusions, in particular that relating to business methods, will still apply, so even if the computer program exclusion is avoided there may be others that can still prevent a patent being granted. 

Friday 26 January 2024

If you like this ...

I was hoping that someone else would by now have critically analysed the recent High Court judgment in Emotional Perception AI Ltd [2023] EWHC 2948 (Ch), which issued on 21 November 2023, but it appears that nobody has yet. There has been a recent article in the CIPA Journal, but the less said about that the better. Even the IPKat has said nothing about it so far, which is a pity. It appears therefore to fall to me to do the necessary explanation and (to give the game away somewhat) point out that the judgment is a definite outlier and is not in line with higher level case law, including several judgments from the Court of Appeal, nor is it in line with case law at the EPO. There have been several articles published that have, rather excitedly, announced the judgment as some kind of breakthrough for AI inventions because it finds, in effect, that a trained artificial neural network (ANN) is not a program for a computer under section 1(2) of the Patents Act 1977. This is, of course, in reality complete nonsense. As a consequence, the reasoning goes, this will result in AI inventions now being much more patentable than they were before. The UK IPO have even changed their practice to instruct their examiners that, as from 29 November 2023, objections should not even be raised to inventions involving an ANN for excluded subject matter. This is great news for inventors working in the field of AI who want patent protection (which may not be all of them), and also great news for their patent attorneys. I, however, am not so sure it will work out well in the longer run, and suspect this will be a temporary aberration, although I may of course be wrong.

I have been following case law on patentability in the UK and at the EPO for the past 17 years or so, coincidentally starting roughly around the time of the Court of Appeal judgment in Aerotel/Macrossan [2006] EWCA Civ 1371, which issued while I was sitting my UK Finals in 2006. Looking at my IPKat posts from around that time (see here for example), there was much discussion in the follow-up to Aerotel about whether the 4-step test was actually in line with the EPO, which instead applied the problem-solution approach according to Comvik (T 641/00). After a bit of disagreement about the validity of computer program claims (see here), the issues in the UK appeared to settle. Although the tests applied at the UK IPO and the EPO are very different, the core issues are essentially the same, which is whether there is a 'technical effect' (which I wrote about in 2013 here). I have revisited this several times in the intervening years, most recently when writing a chapter for the IPKat's 20th anniversary book. Although there has been some tinkering around the edges, the general principles have not really changed for at least 10 years and, for better or worse, have been applied with reasonable consistency by the UK IPO. These principles can be found in any of the numerous decisions that have come from UK IPO hearing officers, which I have had the dubious pleasure of reviewing for the CIPA journal for the past 17 years. You may even have read one or two of my reviews, although I suspect very few people do.

Firstly, according to Aerotel/Macrossan, the way to deal with 'excluded matter' under section 1(2) (i.e. things that are not inventions for the purposes of the Act), was to: 

i) properly construe the claim; 

ii) identify the contribution (which may be the actual or alleged contribution, depending on whether a search has been performed); 

iii) ask whether the contribution falls solely within excluded matter; and 

iv) if step iii) hasn't already covered it, check whether the contribution is actually technical. 

Secondly, in considering whether a computer program makes a technical contribution, the later decision in AT&T/CVON, which was supported and slightly amended by the Court of Appeal judgment in HTC v Apple [2013] EWCA Civ 451, set out the following five 'signposts', any one of which may indicate the presence of a technical contribution according to step iv) of the Aerotel test:

i. Whether the claimed technical effect has a technical effect on a process which is carried on outside the computer. 

ii. Whether the claimed technical effect operates at the level of the architecture of the computer; that is to say whether the effect is produced irrespective of the data being processed or the applications being run. 

iii. Whether the claimed technical effect results in the computer being made to operate in a new way. 

iv. Whether the program makes the computer a better computer in the sense of running more efficiently and effectively as a computer. 

v. Whether the perceived problem is overcome by the claimed invention as opposed to merely being circumvented.

It is worth noting at this point that, although Kitchin LJ stated, "these are useful signposts [...] But that does not mean to say they will be determinative in every case", in practice at the UK IPO, rightly or wrongly, these signposts have been determinative in every case where they have been applied. There has not been a single case where the signposts have been used and yet the invention has still been found to have a technical contribution. I would certainly have noticed and pointed it out with great excitement if there had been. To at least a first approximation therefore, if the contribution in a computer-implemented invention is not found to be within at least one of the signposts, it is not patentable.

With that all established, a computer-implemented method in a patent application such as the one put forward by Emotional Perception AI Limited (previously known as Mashtraxx Limited), would be expected to face a difficult time in getting granted. The application itself related to a method of training and implementing an ANN to identify a pair of similar data files, a particular example being music files. In simple terms, the claimed invention was about matching data files based on closeness of written descriptions and of the data itself. The actual claimed invention is a classic example of technical obfuscation, with the latest version of claim 1 reading as follows:

The IPO examiner objected that the claimed invention was not patentable because it related to a mathematical method and a computer program as such, objecting that the contribution made by the claimed invention (leaving aside clarity and sufficiency issues with claim 1) was to software for training an ANN to identify similar files by extracting measurable signal qualities from two files, assembling a multidimensional feature vector for each file based on these qualities, determining the distance between the two vectors and adjusting the ANN's weights to provide a measure of similarity between the files. In effect, the invention (in my words, not the examiner's) was about analysing music files to provide an output of the type "if you like this, then you might also like this". The examiner found that this did not solve a technical problem, and especially not a technical problem within a computer. The invention was computer-implemented, but used conventional hardware that was programmed to perform a non-technical function. It was not directed to a process outside of the computer, nor did it form part of the internal workings of the computer. In conclusion, the examiner found that the invention was "directed to an excluded process and there is nothing more to it" (examination report 13/10/21, page 10/11). 

After reaching this impasse with the examiner, the applicant then went for a hearing before the (very experienced) hearing officer Phil Thorpe. Among the arguments run by the applicant, one involved a comparison with the seminal EPO Board of Appeal decision from 1986 of Vicom (T 208/84), which decided that an image processing algorithm could be technical because the output was an improved image, which was considered to be technical. The hearing officer did not, however, consider that the comparison was a good one, because in this case there was no change to the data files, but only an output that provided an indication of a pair of semantically similar files. The claimed invention, in the hearing officer's view, did not therefore define a technical process and the contribution was found to relate wholly to a computer program as such, resulting in the application being refused. 

At that point, I would expect any normal applicant to give up and take the loss, given the very low hit rate of getting computer-implemented inventions facing excluded matter objections granted at the UK IPO. In this case, however, the applicant and their attorney did not give up and instead took the matter to appeal before Sir Anthony Mann in the High Court. Although obviously a highly experienced legal mind, Sir Anthony has not come to my attention at all previously in the area of patent cases, let alone the highly specialised area of patentability of computer-implemented inventions. As it turns out, this is I think one of the key problems with the judgment. 

Sir Anthony first set out how he understood the invention, which he considered could be envisaged as a 'black box' "which is capable of being trained as how to process an input, learning by that training process, holding that learning within itself and then processing that input in a way derived from that training and learning" (paragraph 3). He then described the claimed invention as being an improved system for providing media file recommendations to an end user, particularly for music files, the advantage of which was to offer suggestions of similar music in terms of human perception and emotion by passing music through a trained ANN. Claim 1, which had been (rather confusingly) amended from the above claim 1 to a "system for providing semantically relevant file recommendations" was defined by Sir Anthony as "a product by process claim", while another independent claim defined a corresponding method, both defining the steps of training the ANN and providing an output of relevant files. My initial problem at this point is that claim 1 as presented in the judgment (see here) is not really a product by process claim, but is a system defined by its features of operation, which is not in line with how a typical product by process claim is defined (see for example the EPO Guidelines F-IV 4.12). 

My next problem with the judgment is Sir Anthony then going on to "assume for the moment that the ANN itself is a hardware system (as opposed to a software emulation)" (paragraph 8). Why this assumption is made is completely beyond me. There is no justification for it from the application, nor is there any sensible reason why the ANN would be assumed to be hardware. In the Court of Appeal judgment of Gale's Application [1991] RPC 305, which is supposed to be in line with the current Aerotel test, Aldous LJ found that putting instructions on hardware did not make an invention patentable. The invention in that case related to a new way of calculating a square root on a computer. Aldous LJ found that "if Mr. Gale's discovery or method or program were embodied in a floppy disc (software) neither the disc nor a computer into whose RAM that programs had been inserted could be patented, it must, in my view, follows that the silicon chip with its circuitry embodying the program (hardware) cannot be patented either" (para 332). Simply switching from software to hardware did not therefore, based on this reasoning, make an invention patentable if it did the same thing. Sir Anthony, however (who did not appear to be aware of this judgment as he made no reference to it, nor was it pointed out to him by the UK IPO) managed to change the argument about whether the invention in this case was patentable by arbitrarily assuming that the ANN was implemented on hardware and entirely ignoring the valid line of reasoning that this should make no difference. 

The next problem I have with the judgment is another apparent misunderstanding by Sir Anthony, apparently led by the applicant's representatives, where he came to the view that the ANN training model was not programmed to include all its detailed logical steps but adjusted itself through training to produce a model which satisfied the training objective. This led him to ask the question of where the computer program was that was said to engage the exclusion. This resulted in a confused bit of reasoning about where the program would be in the case of a hardware ANN (which had already been wrongly assumed), with the UK IPO's representative implausibly conceding that "there would in that case be no program to which the exclusion applies" (para 43). This inevitably resulted in Sir Anthony, having been well and truly led up the garden path by the applicant's attorney and the IPO's problematic representation, that there was in fact no computer program because the ANN was not operating on a set of program instructions at all but "was emulating a piece of hardware which had physical nodes and layers, and was no more operating or applying a program than a hardware system was". It becomes very difficult at this point to take the judgment seriously any more because the reasoning is so preposterous and wrong that anything further is bound to be wrong. And so it turned out to be, with Sir Anthony concluding that the ANN in substance operated at a different level from the underlying software on the computer and operated in the same way as a hardware ANN, resulting in the emulated ANN not being a program for a computer and therefore not excluded. 

Although it should not be necessary to point out to anyone reading this with any knowledge of computers at all, the single major flaw in the reasoning of this judgment is that the ANN, whether in hardware or software, would in actual fact be defined by software in the form of computer code defining connections and weights of the ANN and how it operates. It should go without saying that computer software does not need to be written by a human being for it to be a computer program. Indeed, all computer software in the form it is ultimately used, i.e. object code, is not human readable at all but is a string of 1s and 0s that is only readable by a computer. It is still, however, a program for a computer within the meaning of section 1(2) or of Article 52(2) EPC. How the computer program is generated, whether this is by compilation of human-written source code or the result of a training process (or, in this case, a combination of both), is not relevant to whether it is considered a program for a computer. It is also not relevant, according at least to Gale's Application, whether the program is implemented on hardware instead of software. Both are defined by code that defines how hardware operates, either by programming a general purpose piece of hardware or by defining a specific arrangement created or burned into circuit form in hardware.

As if the judgment wasn't wrong enough at that point, Sir Anthony then went on to decide whether there would be a technical effect to the invention, having nevertheless already decided that it wasn't excluded. After going through some of the usual case law on the subject, including the somewhat dubious decision in Protecting Kids, Sir Anthony went on to agree with the applicant that "moving data outside the computer system in the form of the file that is transferred [...] provides an external (outside world) effect". This is, of course, entirely out of line with all existing case law on the subject, both in the UK and at the EPO. Sir Anthony nevertheless went on to find that there was a technical effect in providing an (entirely unchanged) file selection to a user as an output of the claimed invention, and allowed the appeal. 

At this point, the only comment I have to add is the following: