The Productivity Commission publicly released their
Inquiry Report on Intellectual Property Arrangements on 20 December
2016. The Report examines Australia's Intellectual Property
(IP) system in detail, and makes recommendations to improve its
operation. The full Inquiry Report can be found
There is no doubt that computer technology has increasingly
become important in day-to-day activities of individuals as well as
businesses over the years. In light of the growing importance of
such technology, and recent legal decisions, the Report, in Chapter
9, looks at the patentability of business methods and software.
Thankfully for many of our start up and established information
technology clients, there are no plans or suggestions to take any
substantive action to legislate against software patents. This is
contrary to some of the fears held at earlier stages in the review
process, and it is likely that submissions made to the draft Report
have been somewhat persuasive.
However, one key point raised in the Report is that future
grants of software patents should be monitored by IP Australia,
with the data collected used to assess whether further software
patent reform is needed. The Report indicates that early evidence
suggests that the more recent approach taken by IP Australia to
assess patentability of computer implemented inventions in light of
the decisions made in RPL Central and Research Affiliates
is narrowing the scope of patent protection. It is surprising that
IP Australia would be tasked with such monitoring, as one might
suggest that they are not directly involved at the "business
end" of intellectual property strategy matters.
The recommendations and findings of the Productivity Commission
in relation to business method patents and software patents is that
raising the inventive step, requiring technical features in patent
claims, and the inclusion of an objects clause would better balance
the patent rights of software innovators and users. This perhaps
misses the point of the patent system as a business tool for
assisting in commercialisation of technology, instead favouring a
commercially ignorant view of patents as being rewards for
While the Productivity Commission acknowledges that there are a
number of instances where software clearly warrants patent
protection, the Commission considers several factors in relation to
the effectiveness and efficiency of software patents. In
particular, the Report considers whether software patents are
actually needed to encourage additional innovation. In this regard,
the Productivity Commission is of the view that patent protection,
in general, is not critical for encouraging software innovation as
the life span of software products is relatively short. Only lip
service is given to the crucial point that patents are often
necessary from a commercial standpoint in the context of seeking
capital investment; the Commission essentially avoids that point by
commenting that a better quality patent system may serve to provide
a better indication to potential inventors as opposed to a weak
patent which could be a less effective indication.
As mentioned above, the Productivity Commission has not
suggested any substantive changes to the current position in
Australia in relation to computer implemented inventions,
suggesting that they are generally happy with the current state of
play (although one might suggest that their apparent understanding
of the status quo might be misguided, given the extent to which
attorneys, examiners and applicants are struggling to understand
the actual bounds of patentable subject matter). Accordingly, at
this stage, we do not foresee any major changes in relation to the
Patent Office practice in handling business method patents and
software patents as a result of the Report; such changes are
however inevitable due to other driving factors.
Shelston IP will continue to keep at the forefront of patentable
subject matter debates, and keep clients well-advised as to
strategies best suited to establishing commercially sensible
protection over their technologies.
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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