Australia: Computer says yes? Recent guidance on the patentability of computer implemented method claims

Last Updated: 25 October 2013
Article by Richard Hoad and James Neil

Key Points:

An invention is likely to be patentable if the computer's involvement is inextricably linked with the invention itself, and the specification contains significant detail about how the method is to be implemented by a computer.

While a method or formula alone may be nothing more than an abstract idea which will not constitute patentable subject matter, where that method is implemented using a computer, the invention may be patentable.

However, the extent to which a computer needs to be involved in a claimed method for it to be patentable is a somewhat unsettled question in Australia.

The Federal Court has recently provided useful guidance regarding the "manner of manufacture" requirement for patentability, particularly as it applies to computer implemented method claims (RPL Central v Commissioner of Patents [2013] FCA 871).

"Manner of manufacture" and schemes or formulć

To be patentable, a claimed invention must be "a manner of manufacture within the meaning of section 6 of the Statute of Monopolies" (Patents Act 1990 (Cth), section 18(1)(a)). The Statute of Monopolies was passed in 1623, so courts have had to stretch the meaning of this phrase to keep up with technological developments.

In Australia, a claimed invention can constitute patentable subject matter as a "manner of manufacture" if it:

  • involves human intervention, in the sense that the invention involves a mode or manner of achieving an end result which is artificially created; and
  • has industrial applicability, in the sense that it relates to a state of affairs of utility in a field of economic endeavour (National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252).

Accordingly, intellectual information in and of itself which does not have some kind of artificially created physical effect (for example, a mathematical formula, abstract idea, scientific principle or method of calculation) will not constitute patentable subject matter. Similarly, an invention for the betterment of the fine arts, as opposed to the useful arts, will not be patentable; neither will a mere plan or a scheme (such as a plan for the efficient conduct of a business or pure "business method"). The effect of including a computer in such a method was the central issue before the court in RPL Central.

The patent issues in RPL Central

The patent in suit in the RPL Central case was an "innovation patent". An innovation patent is a second tier of patent protection, similar to the utility model which operates in countries such as Germany, which has a shorter term of protection and a lower inventiveness threshold. Australian Innovation Patent No. 2009100601 claimed (in general terms) an invention relating to "the assessment of the competency or qualifications of individuals with respect to recognised standards".

Claim 1 of the Patent related to a method of gathering evidence for the purpose of assessing an individual's competency relative to a recognised qualification standard, which involved:

  1. retrieving relevant data from a remotely located server via the internet;
  2. generating questions for a user based on this data and presenting them to the user;
  3. the user answering the questions on their computer; and
  4. transferring those responses to an assessment server.

Claims 2 to 4 were dependent on (ie. narrower than) claim 1, and claim 5 related to a physical system capable of implementing the method claimed in claim 1.

The Commissioner of Patents had accepted that the claims were novel and involved an innovative step, but found that they did not constitute a manner of manufacture, and were merely a method for carrying out a particular aspect of business. The Commissioner made submissions along similar lines in the appeal to the Federal Court. However, Justice Middleton did not accept those submissions, finding that the invention recorded in the Patent was a patentable manner of manufacture.

Fine arts vs useful arts

Justice Middleton rejected the Commissioner's submission "that the invention belongs to the fine arts rather than the useful arts, or that it does not have utility in practical affairs". He held that the invention produces a useful result by overcoming difficulties involved in seeking out relevant education providers, and enables the recognition of prior learning.

For the same reasons, he concluded that the invention recorded in the Patent "can be said to be of an industrial, commercial or trading character".

"Product" and "physically observable effect"

Justice Middleton also found that the invention was for a "product", as defined in the authorities, as it "gives rise to a physical phenomenon in which a new and useful effect may be observed, in the sense of a concrete effect or phenomenon or manifestation or transformation". The physical change in question was the transfer of information, which results in a physical manipulation of data via the computers.

How central is the computer's role – and does that matter?

At the core of the Commissioner's case were four arguments about the role of the computer in the claimed invention. In particular, the Commissioner argued that:

  • if the requirement of physical effect is satisfied merely by the operation of the method on a computer, "many previously unpatentable business, commercial and financial schemes and plans will become patentable subject matter";
  • even if the invention had a physical effect, that effect was not sufficiently "significant" or "central" to the operation of the invention to enable it to meet the manner of manufacture standard;
  • the computer was not an essential part of the invention - its functions could be performed by other means, and hence the claimed invention was merely a method for performing an aspect of business; and
  • the invention does not involve steps which are "foreign to the normal use of computers".

Justice Middleton rejected these submissions. In doing so, he said that there is no requirement in Australia for the role of the computer in an invention to be substantial or central to it, and even if there were, the computer in question here was "a substantial, central or integral part of each claim": "the involvement of the computer in the invention is described in these claims in such a manner that it is inextricably linked with the invention itself". He also emphasised the importance of separating the manner of manufacture inquiry from the issues of novelty and inventive step (or, in the case of an innovation patent, innovative step). Simply because something is obvious does not mean it is not a manner of manufacture.

The Research Affiliates case – a different view on patentability of computer implemented method claims

After judgment was reserved in RPL Central, Justice Emmett delivered his reasons in Research Affiliates LLC v Commissioner of Patents [2013] FCA 71.

He held that a patent with somewhat similar claims to those at issue in RPL Central failed to meet the manner of manufacture threshold because what was generated by the relevant computer-implemented method was "nothing more than a set of data [and is] simply information; it is a set of numbers. It is no more a manner of manufacture than a bank balance".

Justice Middleton distinguished Justice Emmett's decision on the basis that the specification of the patent in RPL Central contained greater detail on the way the computer was to be used in the claimed method than the patent in Research Affiliates. Accordingly, he was able to conclude diplomatically: "I need not say anything further as to the correctness of the actual decision in Research Affiliates".

Implications for computer implemented method claims in Australia

The decisions in both RPL Central and Research Affiliates have been appealed to the Full Federal Court, with the appeal in Research Affiliates being heard next month. Interestingly, one of the judges hearing the appeal in Research Affiliates is none other than Justice Middleton.

Determining whether an alleged invention constitutes patentable subject matter is more an intuitive and qualitative process based on the high-level principles set down in the authorities, rather than an application of strict rules. Nonetheless, until those appeals are disposed of, it would seem that claims are more likely to constitute patentable subject matter if they:

  • place great emphasis on the involvement of the computer in the working of the invention;
  • involve a method which is "inextricably linked" to a computer; and
  • are supported by a specification which describes (in significant detail) how the computer is to work as part of the claimed method.

No doubt the proprietors of patents which claim computer implemented methods will be closely watching the appeals in these two cases – as will we.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

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