The Federal Court of Australia has handed down its eagerly
anticipated first instance decision in respect of Research
Affiliates LLC v Commissioner of Patents  FCA 71. This
decision was hoped to bring clarity to a relatively controversial
area of law, being the patentability of computer implemented
methods. However, for applicants and patentees in this space, the
decision tends to pose as many questions as it answers, and
certainly creates additional hurdles that need to be satisfied.
The claims upon which the decision focuses relate to a computer
implemented method for generating an index (for example an index of
shares upon which an investment strategy may be devised or
benchmarked). In general terms, the method involved gathering data
relating to a plurality of assets, and processing that data in a
particular manner to generate an index. The Australian Patent
Office had rejected the application as failing to satisfy the
requirement of being a "manner of manufacture", that is
of being the proper subject of letters patent under Australian law.
The Federal Court arrived at the same conclusion, although for
The Federal Court's reasoning introduces apparently new
concepts that might be considered when assessing the patentability
of subject matter. In this regard, the Court suggests a requirement
that computer implementation of a method should give rise to a
practical application in the improved use of computers:
"There is no practical application in the method of the
claimed invention for the improved use of computers. The effect of
the implementation of the method is not to improve the operation of
or effect of the use of the computer."
The Court went on to further cast doubt as to whether
information produced by the operation of a computer constitutes an
"artificially created state of affairs" (being a
significant requirement for patentability):
"The case propounded by Research Affiliates depends
upon the proposition that information of economic significance,
once entered into or produced by means of a computer, becomes an
economically valuable artificially created state of affairs, and
thus patentable. That proposition must be rejected."
Unfortunately, the Court did not provide substantive guidance as
to the positive requirements that should be satisfied for the
output of a method to be considered as an artificially created
state of affairs.
The decision also suggests that a method, however claimed, may
not be patentable if it could have been performed manually:
"The Specification asserts a patentable invention, not
in the use of a computer, but in the particular series of steps
that give rise to the generation of the index. Those steps could
have been carried out manually. The aspect of computer
implementation is nothing more than the use of a computer for a
purpose for which it is suitable. That does not confer
This suggests that positive claim elements can be disregarded
for the purposes of assessing whether a claim defines a manner of
manufacture, and may create substantial repercussions in other
areas of technology.
There are a number of issues in respect of which the decision is
generally silent, but which might have been of great interest to
various parties. In particular, the decision does not discuss
differences between "system claims" (i.e. claims directed
to specifically-configured computer systems) and method claims, and
implies that where a method claim fails, so do any corresponding
It is not clear at this stage whether the decision will be
appealed. In the meantime, it would be wise for patentees and
applicants to consider strategies for mitigating risks stemming
from the decision. Given the nature of the decision, there may be
challenges in devising such strategies for pending and issued
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.
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