Telstra's opposition to Amazon's Australian "˜1-click' patent

Date: 2011-05-13
Author: Stuart Irvine

The patents and patent applications directed to Amazon’s ‘1-click’1 online shopping concept have attracted substantial controversy around the world, in particular in the context of the patentability of business process and software patents. The ‘1-click’ concept allows customers to make online purchases with a single click, with the payment information needed to complete the purchase previously provided by the user.

In Australia, the grant of Amazon’s application (AU 762175)2 was opposed by Telstra Corporation Limited (Telstra). The opposition was primarily on the grounds that the claimed invention was not novel and lacked an inventive step in light of a number of prior art documents, including one of Telstra’s own patents. The patent application claims a method for ordering an item in response to a single action performed to order the item.

The Delegate of the Commissioner of Patents (Delegate) focused the hearing on three main issues.

Construction

Firstly, the construction of the term ‘a single action’ was considered, both with reference to the clarity of the claims and as being pivotal to the questions of novelty and inventive step. The opponent argued that the claimed ‘single action’ was unclear, and did not necessarily mean ‘only a single action’ (the wording used in corresponding US patent 5,960,411). The Delegate referred to the principles of construction as laid out in Décor Corp Pty Ltd v Dart Industries Inc (1988) 13 IPR 385, and with reference to the specification and dictionary definitions came to the conclusion that the claimed ‘single action’ does mean ‘only a single action’.

In this construction heavy reliance was placed on the description that ‘…the single action generally refers to a single event received by a client system that indicates to place the order.’ In light of this passage, the Delegate goes on to say that despite (semantically) being two actions, an action such as the double click of a mouse button would ‘clearly fall within the scope of ‘a single action’ as that term is to be understood in the claims’.

Novelty

Secondly, novelty was considered in view of the prior art documents put forward by Telstra. The Delegate referred to the ‘reverse infringement test’ for novelty, where infringement occurs when each and every essential feature of a claim is disclosed in the alleged anticipating document. Under the construction of the claims adopted, the Delegate found that 10 of the 141 claims did lack novelty in view of Telstra’s own patent.

Inventive step

Thirdly, inventive step was considered. Notably, because the application was filed before 1 April 2002, combining two or more unrelated prior art documents or acts to establish lack of an inventive step was not possible. Consequently common general knowledge figured prominently in the case put forward by Telstra and evidence from experts in the field was extensive from both sides.

The Delegate referred to a number of approaches for determining whether the claims were obvious or not, advocating the problem–solution approach whilst being mindful of its limitations – particularly with respect to combination or simple inventions.3 Under this approach the Delegate found that the use of an identifier (such as a ‘cookie’) as defined by claims 3 and 62 to 141 was in fact inventive. This is despite the finding that cookies were, in their own right, common general knowledge at the priority date.

On this finding, 60 of the 141 claims which do not include the identifier feature were found to be invalid.

As would be expected Amazon has been provided with an opportunity to propose amendments to the application to address the Delegate’s findings, which seems likely to be done by incorporation of the allowed feature into all claims.

Perhaps what the outcome of this case emphasises is how important it is to bear in mind the common general knowledge and state of the art at the time a specification was filed. The wide-spread scepticism about how this kind of software implementation could possibly be patented is, arguably, based on the opinion that this solution must have been obvious given e-commerce, storing a computer’s details on a server, and the use of cookies were all known at the time. However, it was 1997, and as noted by the Delegate (quoting Alphapharm4), the danger of using hindsight is particularly acute where an invention relates to a combination of integers, some or all of which are known. Arguably, the danger of falling prey to hindsight is even greater when the invention under consideration relates to fast moving technology and dates back a number of years. The inventiveness of the ‘1-click’ concept, as with any invention, must be assessed at its priority date, and whether or not it would have been an obvious solution very shortly thereafter is irrelevant.

If desired, Telstra and/or Amazon have until around the end of May 2011 to appeal the Delegate’s decision. In addition, a divisional application filed by Amazon is currently pending.

This article was written by Stuart Irvine, Senior Associate, Freehills Patent Attorneys.

Endnotes

  1. Telstra Corporation Limited v Amazon.com, Inc. 2011 APO 28 (9 May 2011)
  2. Amazon’s application AU 762175 
  3. Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [2007] HCA 21 
  4. H Lundbeck A/S v Alphapharm Pty Ltd [2009] FCAFC 70 (11 June 2009)