Australia: Software patents in Australia: challenging times ahead

Last Updated: 22 December 2015
Article by Jack Redfern and Matthew Ward

The full Federal Court has introduced new and unexpected requirements for patentability of inventions in the information technology space in Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177.,

In essence, the RPL decision boils down to the following statements of principle:

"A technological innovation is patentable; a business innovation is not"; and

"Simply putting a business method or scheme into a computer is not patentable unless there is an invention in the way in which the computer carries out the scheme or method."

Accordingly, it is fair to surmise that Full Court's position as follows: (i) where the underlying substance of an invention is "technological" in nature, there should be no question as to subject matter eligibility; and (ii) where that underlying substance is "business related", it is necessary to show a degree of invention in the manner by which computer implementation is achieved.

This convolution of subject matter eligibility and inventiveness has not previously been apparent in Australian law, and is reminiscent of the European position (where consideration of technical character forms part of inventive step analysis).  The decision leads to a degree of uncertainty in terms of: how and where to draw the line between "technological" and "business" innovations; and the appropriate principles to apply when assessing whether technological implementation of a business innovation involves a sufficient degree of invention beyond the abstract concept itself.  Additional guidance from the Courts would be helpful in this regard – it would be indeed unfortunate if the Patent Office were to use this decision as a means to reject a wide range of patent applications based on over-zealous "business innovation" categorisations and/or an expansive view of what might be considered to "generic use of a computer".

The Full Court's analysis, in this instance, involved abstracting the claimed invention into its most basic underlying concepts, and considering whether there is any ingenuity in applying those concepts to a computer environment.  Their observation was as follows:

'RPL Central does not claim any invention or ingenuity in any program or operation of a computer, or implementation by a computer to operate the method. Accordingly, the ingenuity of the inventors must be in the steps of the method itself. The method does utilise the speed and processing power and ability of a computer but there is no suggestion that this is other than a standard operation of generic computers with generic software to perform a business method.

The Full Court took it upon itself to consider the inventiveness of various individual aspects of the computer implementation in this case, including a searching step (in respect of which the Court concluded that "such searching, for example using Google, is an ordinary use of a computer") and the conversion of personalised information into questions (where the Court was concerned that the computer "is not functioning in the nature of an adviser or an artificial intelligence" and that the "limited role of the computer" related to "a series of prepared words to be prepended to the user information, to turn the statement into a question").

The approach of the Court in characterising the degree of "invention" in computer implementation seems to involve an unconventional approach to handling questions of fact.  In that regard, based on the Court's reasoning, questions of Manner of Manufacture are now inextricably tied to questions of inventiveness.  However, the Court felt it appropriate to consider issues of inventiveness without any reference to evidence, for instance evidence of what a person skilled in the art would have considered obvious as of the priority date of the application.  Surely, the same or similar principles for assessing inventiveness in the traditional manner should apply in this new context.  If the law in Australia is indeed going to shift to a place where Manner of Manufacture considerations are guided by determination of whether the implementation of a concept is in itself "inventive", then there should be a need to consider evidence as to the common general knowledge and position of a hypothetical the skilled addressee.  As a matter of basic principle, it is not the place of the Court to make its own uninformed determinations of fact, such as determinations as to what would have been "generic" in computer technology as of the priority date of the application, particularly given the glare of hindsight and the rate at which computer technology continues to advance.

The precise manner by which "invention in implementation" for business innovations will be assessed in practice remains a mystery.  One might suggest that an appropriate approach could be to consider, in the case of an invention in the "business space", whether the claimed manner of computer implementation is either: (i) a generic approach that would be realised simply by routine steps; or (ii) a particular one of multiple possible avenues of computer implementation, with the claimed avenue having particular (and potentially inventive) advantages over others.  From a practical standpoint, it will be necessary to await new examination directions from the Patent Office.  We will, of course, promptly advise our clients once the guidelines are issued.

It is possible that RPL will be appealed to the High Court, with any application for leave to appeal due to be filed early in the New Year. .  There are arguments to suggest that, even if the High Court were to agree with the general principles set out by the Federal Court (and there is no guarantee they would, given potential for reluctance to convolute subject matter eligibility and inventiveness), the Judges might be reluctant to find against RPL .  In particular, the High Court might be concerned by the absence of evidence upon which to base determinations of fact in relation to what indeed constitutes an invention in terms of computer implementation, as opposed to generic use of a computer.

In the interim, we are concerned that the decision in RPL provides the Patent Office with too much scope to refuse patent applications in the information technology space. We are eagerly awaiting any practice guidelines that the Office may issue in response to the Court's decision to further inform the recommendations we will make in respect of individual matters. In any event, there will likely be a need in a greater number of patent applications to refine and refocus the prosecution strategy to more clearly emphasize the technological features of the inventions and their implementation. There will also be a need to ensure specification drafting practices for newly prepared patent specifications are effective in: (i) conveying the technological nature of inventions; and/or (ii) establishing invention not only in underlying concepts, but also in the manner of computer-implementation of those concepts.

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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Matthew Ward
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