Australia: Software patents in Australia: Hope in a High Court appeal

Recently, we posted some commentary on a recent decision1 (the RPL decision) on software patents by the Full Court of the Federal Court of Australia (FCAFC). In short: the FCAFC set out new principles for determining patentability of computer-implemented inventions in Australia. This test, on our interpretation, involves an initial assessment of whether the substance of an invention is in the field of "technology" or "business"; for the latter category an additional step is applied to assess whether there is inventiveness in the way computers are used.

For the assistance of international readers, the RPL decision is reminiscent of both the European position (which requires an inventive contribution to be technical in nature), and the current US position (in that the claims are abstracted for the purpose of identifying underlying ineligible subject matter). However, noting that preceding Australian legislation case law lacks direct support for either of those positions, the FCACF's approach arguably involves a degree of "creative license" to achieve a degree of international consistency.

The RPL case has now been appealed to the High Court of Australia (HCA). This presents a particularly exciting opportunity for at least the following reasons:

  • The HCA is the ultimate appellate court.
  • The HCA has never considered the patentability of computer-implemented technologies; and
  • The main HCA precedent for considering subject matter eligibility dates back to the 1950s, and there is a possibility that the longstanding tests could be due for substantive modernisation.

Accordingly, the HCA would be free to move into new territory, and modernise the fundamental requirements for subject matter eligibility.

Now, there is no guarantee that the HCA will agree to hear the appeal. Procedurally, the Court will assess the merits of the appeal based on written submissions, and we anticipate a decision in the next month or so.

The parties to the appeal include the Commissioner of Patents, and the patent applicant whose application was initially refused by the Commissioner. Whereas the Commissioner of Patent's submissions on the issue of whether special leave to appeal to the HCA should be granted (unsurprisingly) try to downplay inherent problems of the RPL decision, the submissions lodged on behalf of the patent applicant point out three major errors made by the FCAFC, being:

  • Confusing a distinction between a claim directed to "mere information", and a claim directed towards a method of obtaining, presenting and processing information.
  • Characterising the invention as a "mere scheme", although the method does indeed give rise to a physical phenomenon in which a new and useful effect may be observed.
  • Expanding the test for subject matter eligibility to include an in-built requirement for inventiveness.

Of these, it is the third which perhaps is most alarming, as it seemingly provides a "backdoor" opportunity for patents to be attacked based on lack of inventiveness, but without the usual evidentiary hurdles associated with mounting an inventive step attack. In this regard, Australian Courts have developed comprehensive guidelines and evidentiary burdens for assessing inventive step, including a need for expert evidence to be furnished as to the state of the Common General Knowledge (being a body of knowledge against which inventiveness of to be assessed). In the RPL decision, there was no such evidence relied upon by the FCAFC. Nevertheless, in assessing subject matter eligibility, that Court held that inventiveness in computer implementation was a requirement, and made an uninformed assessment as to what is "inventive" as opposed to "routine" or "normal" operation of a computer. Accordingly, there is a concern that the threshold subject matter eligibility requirement could in future be used as a secondary tool to attack inventive step (but without the usual high evidentiary burdens).

Furthermore, although one might argue that the distinction between "technological inventions" and "business inventions" is useful in practice, there are reasons to question whether it is in any way supported in the preceding Australian Case Law. For instance, some practitioners are of the belief that the Full Court's position in the RPL decision is in fact an attempt to replicate something akin to the European position, whereby there is a "technicality" requirement built into inventive step requirements. Such a requirement has never been part of Australian law in the past.

As for whether the High Court will be swayed by the patent applicant's arguments, only time will tell. The High Court did recently grant leave in respect of the Myriad decision2, which relates to the socially popular topic of gene patenting. The appeal from the RPL decision arguably doesn't have the same level of public interest. However, it is of huge potential importance to countless start-ups and established software companies, and of national economic importance in light of the Australian Federal Government's "ideas boom" policies.

Shelston IP is has a depth of experience in Federal Court matters for computer-implemented inventions, and continues to follow the developments closely in this area of the law.


1 Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177.

2 D'Arcy v Myriad Genetics Inc [2015] HCA 35

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Shelston IP ranked one of Australia's leading Intellectual Property firms in 2015.

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