Woodside Energy Limited v Exxon-Mobil Upstream Research Company [2014] APO 53

Implications of this Decision

This decision highlights the importance of drafting any claims to a “method of design” with the tests for manner of manufacture firmly in mind. There is no reason that a claim to a method of design should not be patentable provided that it can satisfy the manner of manufacture tests. 

The decision is a reminder to ensure a claimed method results in an output that extends beyond “intellectual information” and to ensure that the claim itself provides a method that is more than an algorithm or mere working directions to this “intellectual information”. 

These implications are not limited to claims that are directed to a method of design, but potentially to any claim which covers subject matter that has no clear “physical effect”. This highlights the need for careful consideration during drafting to ensure there are grounds to argue that the claim relates to some physical effect, and to include appropriate dependent claims to better define that physical effect. 

Background

Australian patent application 2005264908 was filed in the name of ExxonMobil Upstream Research Company (ExxonMobil). This application was accepted (allowed) on 3 February 2010 and subsequently opposed by Woodside Energy Limited (Woodside).

This application was broadly directed towards an Liquid Natural Gas (LNG) liquefaction plant, methods for producing LNG, methods for designing an LNG plant, and methods of operating an LNG plant.

Grant of the application was opposed on the basis that the claims lacked clarity, succinctness, fair basis, novelty, inventive step, and that the claims did not define a manner of manufacture.

Case summary

Much of the case revolved around standard tests to determine whether the claims of the patent application were novel and involved an inventive step over the prior art. However, there were a couple of interesting aspects of the decision regarding: (i) Woodside’s approach to arguing invalidity under Section 40 of the Patents Act (1990) concerning clarity, succinctness, and fair basis; and (ii) the Delegate’s comments in regard to whether certain claims defined a manner of manufacture (i.e. patentable subject matter).

(i)                  Clarity, Succinctness, and Fair Basis

Woodside adopted an unorthodox approach to arguing the clarity, succinctness, and fair basis objections. Woodside submitted that the claims lacked these features as there were inherent difficulties in ascertaining the nature of a single general inventive concept from a fair reading of the specification as a whole.

Essentially, this was an attempt by Woodside at an invalidity argument based on the claims defining several separate inventions (lack of “unity of invention” grounds) on the basis that and this lack of unity made it difficult to determine the scope of the claims.

This was an interesting approach as unity of invention is not a ground of invalidity that is available during opposition or revocation proceedings.

The Delegate of the Commissioner found that there was no legal requirement that the matter described in the specification or claims be limited or bound to a single inventive concept. The Delegate found that the claims did not lack clarity, succinctness, or fair basis when considered in light of the appropriate legal tests on claim construction, and further indicated that whether the description or claims related to a single inventive concept is not a requirement for clarity, succinctness, or fair basis.

(ii)                  Manner of manufacture

Woodside submitted that the claims directed to a method of designing a LNG liquefaction plant did not define a manner of manufacture as these claims related to a “mere scheme” or “plan”. The Delegate agreed citing Grant v Commissioner of Patents [2006] FCAFC 120 (Grant) in supporting the findings that the claims did not relate to a manner of manufacture.

As a side note: Grant concerned the patentability of a financial transaction method, specifically an asset protection method. However, regardless of the difference in subject matter, some of the key points to come out of Grant were: 

“It has long been accepted that "intellectual information", a mathematical algorithm, mere working directions and a scheme without effect are not patentable.”

-and- 

“It is necessary that there be some “useful product”, some physical phenomenon or effect resulting from the working of a method for it to be properly the subject of letters patent.”

It was the Delegate’s opinion that the these “design” claims related to “intellectual information” as the method of these claims results only in a design, which “may be achieved as simply as via drawing or thought”, and not in any “physical effect in the sense of a concrete effect or phenomenon or manifestation or transformation”. This view is generally consistent with Australian law in which an idea itself is not patentable subject matter. 

ExxonMobil argued that the claims related to an LNG plant, however the Delegate commented that this relationship was “not sufficiently direct as to involve any physical effect”. Therefore the fact that the claimed subject matter relates to an apparatus (in the field of engineering) does not itself provide a physical effect.

Topics:  Energy, Exxon Mobil, Oil & Gas, Patent Infringement, Patent Litigation, Patents

Published In: Civil Procedure Updates, Intellectual Property Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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