IPAB’s Yahoo Order: Analysis- II

This post continues from the last post analyzing the IPAB’s order on Yahoo’s patent application. In the last post, I had dealt with one of the prior art documents cited against Yahoo (D9-“Sullivan Article”). I had even disagreed with the IPAB’s logic on the issue of how novelty must be assessed.

In this post, I deal with (1) the other prior art document- D10, which is a set of responses on the applicant’s own website to FAQs relating to the invention, and (2) Section 3(k).

Anticipation- Section 32 of the Patents Act

The responses given to the FAQs, according to the Controller, described the invention in sufficient detail so as to anticipate the invention.

To this, the applicant’s response was that the information disclosed in the responses was not enough for a practitioner of the art to replicate or work the invention. Assuming that the information was sufficient, the alternative argument of the applicant was that it was entitled to protection under Section 32 of the Act, which exempts anticipation by public working which extends to a period of 12 months before the date of priority.

The above exemption is, however, restricted only to instances which may amount to use of the invention for “reasonable trial”.

My Thoughts

I am not sure if the reliance placed on Section 32 by the applicant was correct. I say so because Section 32 relates to anticipation by public working of the invention, but does not extend to plain and simple publication of information related to the invention.

This is clearly borne out from the wording of the provision since it refers to effecting working of the invention in public for the purpose of reasonable trial. The purpose underlying it is to exempt unavoidable public working of inventions which cannot be worked in private, let’s say a real-time trial of a turbine used in hydel power production. Therefore, for me, the applicant’s argument that the information in the responses to the FAQs too amounted to “anticipation by public working”, is legally untenable.

Provisions in Chapter VI, which deal with exemptions to anticipation, must be interpreted strictly since these are negative definitions as to what does not amount to anticipation. For instance, there’s a difference between saying that the number of arbitrators must be odd, and that the number of arbitrators must never be even. The second statement acts as a stronger/sterner caveat against appointing even number of arbitrators.

Similarly, when Section 34 states that other than instances covered by Sections 29-33, there are no other exceptions to anticipation, it requires us to interpret the windows provided under Sections 29-33 in a very restricted/limited fashion. Ergo, there is no scope for including publication of information related to an invention under Section 32 of the Act.

The Controller’s Reasoning

The Controller, instead of questioning the applicant’s very reliance on Section 32, adopted an approach based on priority date. His argument went something like this:

A. The information in the responses to the FAQs was available three months before the date of priority, which meant that the invention must have been worked prior to the information being disclosed in the responses.

B. The Controller then assumes that such working of the invention must be “much earlier” to the priority date, and hence beyond the 12-month period.

C. Consequently, protection could not be sought by the applicant under Section 32

Needless to state, the argument is vague for there is no basis for the Controller’s assumption that the invention must have been necessarily worked before the 12-month grace period. The IPAB too found this approach vague and set aside the finding of the Controller of this issue. This could have been avoided if the Controller had questioned the very basis of the applicant’s (flawed) reliance on Section 32 of the Act.

Section 3(k)

Here’s an opening observation by the IPAB on the issue:

“Finally we come to the ground of non-patentability under S. 3 (k). If the claimed subject matter is not an invention or if the invention is not patentable or if it is excluded by S.3 of the Act, then none of the other objections need to be considered. Only if the claimed subject matter is a patentable invention we need to look at anticipation, obviousness etc.”

On one hand the IPAB takes the above position, and on the other, with respect to the issue of novelty, the IPAB took the view that the Controller erred in excluding ineligible subject-matter from the claims before comparing it with prior art to assess novelty of the invention! (I had discussed this in my last post on the Order)

What exactly is the invention claimed by Yahoo?

“A tool enabling advertisers to target web search terms relevant to their business and to pinpoint the placement of their web site description within the search results provides a powerful advantage to businesses and others seeking to increase their web exposure.”

“The web site promoter first selects a search term comprising one or more keywords relevant to the content of the web site to be listed. The web site promoter influences the rank position for the search listing through an ongoing online competitive bidding process with other web site promoters. The bidding process occurs when an advertiser enters a new bid amount for an existing search listing or enters a bid amount for a new search listing. Preferably, the promoter’s bid is then processed in real time. This bid amount is compared with all other bid amounts from other promoters for the same search term, and generates new rank values for all search listings having that search term. The rank value determines the position where the promoter’s web site description will appear on the search results list page that is generated when the search term is entered into the query box on the search engine by a searcher. A higher bid will result in a higher rank value and a more advantageous placement, which is preferably near the beginning of the search results list page. Preferably, the quantity used in the competitive bidding process is a money amount that the web site promoter will pay to an owner of the Internet search engine each time the advertiser’s web site is referred by the search engine. Most preferably, this money amount will be deducted from an account balance that is retained in the promoter’s account for each time the promoter’s web site is referred by the search engine.”

The core of the invention deals with a method of connecting the keyword entered by a user with the results stored in the database of the search engine and deciding the placement of a search result relating to a particular website based on the bid placed by the owner of the website for successful “click-throughs” (clicks that translate to visits to the website itself). In short, ranking of a search result was based on the bid amount placed by the owner of a website.

Obviously, an algorithm connects these factors to decide the ranking of a search result. If so, should the invention be approached as an algorithm or a business method? I am inclined to see the application more as an algorithm, as opposed to a means of doing business. However, the IPAB chose to characterize the application as a business method, without clearly giving its reasons for doing so.

The IPAB cites excerpts from decisions from the US and the EPO which speak of the advisability or otherwise of grant of patents to business methods. However, there is no attempt on the part of the IPAB to define a business method, or at the very least, to explain why the application claimed constitutes a business method. The only reasons it offers are as follows:

“However, the above extracts from the European Patent Office order only show that the claimed invention is only a method of doing business which is, the advertisers pay for better placement and the bid is registered and the amount debited from the advertiser’s account according to the bid made. Even if we use the description employed by the learned counsel for the appellant that it is an auction combined with the Yellow Pages, all happening in real time it is still a method of doing business, by providing service to advertisers who want to have the prime place in the selected page and for which they bid and their account is debited accordingly. In doing so the service product seeks to place the facts (bid amount) or advertisement (information) in hierarchy based on the payments made. This is nothing but doing the advertisement business electronically. Even the technical advance that is claimed over the existing art is only an improvement in the method of doing business and S.3(k) is clear that business method cannot be patented, the fact that there is an advance has not improved the case.  Therefore, we affirm that this ground alone is sufficient to reject the present application.”

Concluding Thoughts

On the whole, the decision of the IPAB leaves much to be desired in terms of flow of logic and analytical rigour/sharpness. The Board seems to have proceeded on a visceral feel that since the application smelt like and appeared as a business method, it must obviously taste like one. This, the IPAB concludes without so much as attempting to taste and digest the invention.

This clearly shows that it is not enough to cite foreign precedents; what is important is the original application of principles set out in the precedents to the facts of a given case. 

This case presented the IPAB with a great opportunity to clarify several aspects of the law such as assessing novelty, import of Section 32 and distinguishing a business method from an algorithm. That opportunity appears to have been squandered...lets hope the standard of reasoning in our decisions evolves and elevates with passage of time.