UbiPark Pty Ltd v TMA Capital Australia Pty Ltd (No 2) [2023] FCA 885

Intellectual Property
Tom Cordiner Headshot
M Marcus
C Cunliffe 2
Surkis Amy Headshot

Patents – unjustified threats – patent for a system, method and computer program for controlling access to a car park – manner of manufacture

TMA Capital owns a patent titled “system, method and computer program for an access control system”. It asserted UbiPark infringed the patent by providing a system to allow access to a car park using an app on a smartphone. UbiPark was having none of that, and sued TMA Capital for groundless threats of patent infringement over letters of demand sent to 4 customers of UbiPark (and to UbiPark itself). TMA doubled down and cross-claimed for infringement. UbiPark rounded out the fight by amending its claim to assert the patent was invalid.

Justice Moshinsky found that UbiPark had not infringed the patent and, consequentially, that TMA Capital had made groundless threats of patent infringement. But UbiPark failed to convince the Judge that the patent was invalid or that TMA Capital’s related entities were joint tortfeasors in the groundless threats.

So, what is in this case for patent lawyers? Well, those who have been watching the slow and painful demise of computer implemented inventions as patentable subject matter and observed the title of the patent in this case, will no doubt be intrigued to learn how a claim to software survived a manner of manufacture challenge. Other than that tasty morsel, this case is a prime example of the Court’s prerogative to set out upon its own patent claim construction journey, not following the path set by experts from either side. Finally, this case gives another example where the “ordinary meaning” of words in a claim drive a construction which renders a dependent claim otiose, rather than the dependent claim giving those words a broader meaning.

Infringement of TMA Capital’s patent by UbiPark came down to, as it often does, a series of claim construction issues that were debated by the two opposing experts and the parties. Without descending into the detail, we make two observations.

First, Justice Moshinsky repeated the long-standing principle of claim construction that “an expert witness cannot assist the court with the meaning of an ordinary English word (or phrase) unless it has a special or unusual meaning within an area of technology”. While it is a principle which appears to be more honoured in its breach than not, his Honour adopted it with apparent gusto.

In this case, the experts, both of whom were eminently qualified in the relevant field and accepted by his Honour as doing their best to assist the Court, gave detailed evidence regarding claim construction where the language under debate comprised words having their ordinary meaning. On one particular construction issue, his Honour observed that, while “the construction that I have adopted does not correspond with the views of either expert, it is not necessary that I accept the opinions of one or other expert, or even both experts”. It also appears that UbiPark put forward the construction adopted by his Honour, and if that is right, it took a position contrary to its own expert (or at least one expressed by its expert during cross-examination).

Second, his Honour felt compelled to construe an integer of claim 1 in a particular way because of what he considered to be the ordinary meaning of the phrase in that integer, notwithstanding the “strong contra-indicators” arising from the body of the specification, and the fact that a dependent claim appeared to drive a contrary meaning.

The integer in question required a mobile communication device (a smartphone), in response to certain (car park) entry criteria being satisfied, generate and transfer, to a communication system, a request to allow entry into a restricted area (car park). TMA Capital asserted that this integer is satisfied both where the entry request is transferred automatically (that is, without any user interaction with a smartphone) and in circumstances where there is user interaction with a smartphone (for example, a user tapping on a button on the smartphone’s screen).

Justice Moshinsky considered that the ordinary meaning of “in response to” in the integer in question dictated that there be a “direct relationship between: (a) satisfaction of the one or more entry criteria referred to … ; and (b) the generation and transfer of the entry request”, and did not contemplate a user engaging in an intervening step. As noted above, his Honour accepted that the body of the specification had numerous examples of the invention including human intervention, but those examples did not sway him.

Perhaps of even more interest was the fact that a dependent claim adds a requirement that the smartphone of claim 1 is configured “to automatically transfer at least one of the entry request and the exit request without user interaction”. As his Honour accepted, the “clear implication is that claims 1 to 9 are not limited to the automatic transfer of an entry request and exit request; otherwise, claim 10 would add nothing. This strongly suggests that some form of user interaction is within the scope of claims 1 to 9.” That is, his Honour accepted that the construction he preferred would also render a dependent claim otiose:

“I acknowledge that this construction appears to produce redundancy in respect of claim 10 (in relation to redundancy, see Davies v Lazer Safe Pty Ltd [2019] FCAFC 65 at [65]-[66] per Greenwood, White and Burley JJ). However, in my opinion, the matters referred to in the preceding paragraph are so strong that they outweigh that consideration. Further, I acknowledge that this construction is inconsistent with the views of the experts as set out above. While I have had regard to their views, ultimately the issue of construction is for the Court to determine."

The authors note that another approach could have been to conclude that the words “in response to” did not have their ordinary meaning but had a broader meaning, by reason of the dependent claim and the context given by the body of the specification. It will be interesting to see what a Full Court makes of this question should the matter go on appeal.

Ultimately, his Honour’s construction of the claims meant that UbiPark did not infringe any claim of TMA Capital’s patent.

Groundless threats and joint tortfeasorship
Given that TMA Capital had accepted that it had made threats of patent infringement against UbiPark by sending various letters of demand to UbiPark and customers, the non-infringement finding meant that UbiPark had established that TMA Capital had made unjustifiable threats of patent infringement proceedings within the meaning of sections 128 and 129 of the Patents Act. His Honour was inclined to grant declaratory and injunctive relief against TMA Capital and hear any trial on damages arising from the threats should the matter not resolve.

UbiPark also claimed that two related parties of TMA Capital, TMA Technology and Zipby, were joint tortfeasors with TMA Capital in the making of groundless threats of patent infringement. The letter of demand to UbiPark was expressed to be written on behalf of all three companies. The letters of demand to customers were expressed in terms that they were sent on behalf of TMA Capital alone, but they did refer, in the subject line, to TMA Capital, “TMA Tech” and Zipby.

As to the letters of demand to customers, Justice Moshinsky considered the reference in the subject-line to “TMA Tech” and Zipby to be insufficient to indicate that the letters were being sent on behalf of TMA Technology and Zipby. His Honour held that the relevant conduct (the sending of the letters) was not carried out by TMA Technology and Zipby. His Honour specifically noted that the “fact that the companies were part of the same corporate group, and stood to benefit from the letters, is insufficient to link TMA Technology and Zipby with the sending of the letters.”

The authors note that a party may be sufficiently involved in the sending of a letter of demand to be considered a joint tortfeasor in any wrong arising from that sending, without being named on the letter. Accordingly, the authors assume that the only evidence supporting the involvement of TMA Technology and Zipby in the sending of the letters was their mention in the subject line of the letters of demand and their corporate relationship to TMA Capital. Having said that, given that relationship and the apparent benefit TMA Technology and Zipby stood to gain from the letter, it is not clear what more would have been required to establish joint tortfeasorship. That is especially so given TMA Technology and Zipby were parties to the proceeding, suing UbiPark for misleading and deceptive conduct which was predicated on UbiPark’s system infringing the patent.

As to the letter of demand to UbiPark, the letter made clear that TMA Capital was threatening patent infringement, but TMA Technology and Zipby were threatening a claim based on contravention of the Australian Consumer Law. Accordingly, the latter two companies were held not to be involved in the threat of patent infringement proceedings.

Manner of Manufacture for a software claim
With all the excitement over recent times regarding the (un)patentability of computer implemented inventions, it is unsurprising that UbiPark contended that the claimed invention failed to involve a manner of manufacture as required by section 18 of the Patents Act.

His Honour addressed the recent High Court split decision on computer implemented inventions in Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents [2022] HCA 29; 274 CLR 115 (Aristocrat) at [21] per Kiefel CJ, Gageler and Keane JJ, and separately per Gordon, Edelman and Steward JJ. He dealt with the split by identifying that all six judges affirmed the correctness of the series of Full Court decisions dealing with computer-implemented inventions including Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150; 227 FCR 378 (Research Affiliates); Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177; 238 FCR 27 (RPL); and Encompass Corporation Pty Ltd v Infotrack Pty Ltd [2019] FCAFC 161; 372 ALR 646 (Encompass).

His Honour discerned three matters that all six judges in Aristocrat appeared to agree on as principles for assessing whether a claimed invention involves a manner of manufacture:

“(a) in considering whether there is patentable subject matter, the court should focus on the substance of what is claimed, and not the form, and accordingly there is a need to first characterise the invention (at [73], [101]-[103]);

(b) schemes and plans that are not inherently patentable and which are merely implemented on a generic computer do not become patentable as a result (at [22], [24], [75]-[77], [121]-[122]); and

(c) patentable subject matter may result where there is something more than mere implementation, which may include an improvement in the operation of the computer (at [25], [27], [77], [122]).”

His Honour considered it of note that Kiefel CJ, Gageler and Keane JJ in Aristocrat had held that:

“In relation to computers and computer-related technology, it has been held in decisions of the Federal Court that a claimed invention will be a proper subject of letters patent if it has some ‘concrete, tangible, physical, or observable effect’, as distinct from ‘an abstract, intangible situation’ or ‘a mere scheme, an abstract idea [or] mere intellectual information’.”

His Honour focussed on the following from Gordon, Edelman and Steward JJ in Aristocrat (emphasis by Moshinsky J):

“Numerous examples can be given where the proper characterisation of the claim is one that merely involves the use of a machine to manipulate an abstract idea rather than involving the implementation of the idea on a machine to produce an artificial state of affairs and a useful result
… A better way of expressing the point in such cases, consistent with the ultimate single question of whether there is a manner of manufacture within s 6 of the Statute of Monopolies, would be to ask whether, properly characterised, the subject matter that is alleged to be patentable is: (i) an abstract idea which is manipulated on a computer; or (ii) an abstract idea which is implemented on a computer to produce an artificial state of affairs and a useful result. The artificial state of affairs and useful result may be a physical change in something, but it need not be. The artificial state of affairs may be an improvement in computer technology, but it need not be. It is enough that the artificial state of affairs and useful result are created by “the way in which the method is carried out in the computer.”

Claim 1 of TMA Capital’s patent is to a “system” which comprises a “communication system” and a “computer program executable by a mobile communication device associated with an entity” where the “mobile communication device is configured to” conduct a series of tasks which a typical smartphone appeared perfectly capable of performing. If that were not sufficiently stark, claim 11 of the patent is to a computer program per se.

Justice Moshinsky’s conclusion on the manner of manufacture ground was concise. His Honour found that:

“While at one level the claims comprise a series of instructions to be executed by a computer, the invention as claimed does have some ‘concrete, tangible, physical, or observable effect’ (Aristocrat at [25]), namely the opening of the entry barrier and the exit barrier. While this is not explicitly stated in claims 1, 11 and 16, it flows from the references to generating and transferring an entry request and exit request, read in the context of the specification as a whole. Similarly, and for the same reasons, the invention as claimed constitutes an abstract idea that is ‘implemented on a computer to produce an artificial state of affairs and a useful result’ (Aristocrat at [122]). The artificial state of affairs is the opening of the entry barrier and exit barrier. The useful result is that the user associated with a vehicle is granted entry into, and exit from, a restricted area.”

The authors note that the resolution of this question appeared to be driven by the level of abstraction the Court takes to determining what in substance is claimed. His Honour accepted that the claims did not in fact require any physical effect, but considered the claims in substance were directed to the opening of an entry and exit barrier to a restricted area. Even so, if the “invention” lies in a computer program simply operating standard computer equipment, in the manner it is suited to be used, to implement a series of instructions that result in the opening of a gate, one might see how Kiefel CJ, Gageler and Keane JJ could have come to a different view to his Honour. If this matter goes on appeal it will be interesting to see whether this manner of manufacture question is pursued.

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