The Australian Patent Office has recently updated its guidelines for determining whether subject matter is patentable. Unfortunately for patent applicant, the Office’s new policy has taken further steps towards limiting patentability of computer implemented inventions. This is directly at odds with a recent resolution by the International Association for the Protection of Intellectual Property (AIPPI) favoring patent-eligibility of computer software inventions.
The Australian Patent Office is now enforcing an unusual approach whereby the “substance” of a claim is determined by reference to the contribution an invention makes to an “examiner’s understanding of the common general knowledge and prior art”. This is based upon a UK decision in Aerotel, and the Australian Manual of Practice and Procedure (the “Examination Manual”) has been updated to note:
A useful way of approaching this issue in the context of computer related inventions, particularly when dealing with claims involving physical system architecture, is to consider which features of the claim confer novelty over the prior art. For example, where the system architecture is known apart from the particular program that is operating, the substance of the claim will generally be the program and not the system. … If the system includes conventional computer hardware used in its normal way, it is unlikely that the conventional hardware forms part of the substance.
This, in combination with other Examination Manual updates, makes it clear that the process for determining whether a claim defines eligible subject matter necessitates: (i) consideration of the prior art; and (ii) determination of the contribution of the invention over the prior art. This is directly at odds with AIPPI’s resolution, which holds that:
Eligibility of a Computer Implemented Invention for patent protection should not depend on the prior art or any assessment of novelty or inventive step.
The Australian Patent Office’s position is, even more troublingly, seemingly at odds with Australia’s leading High Court precedent on subject matter eligibility in NRDC:
The point is that a process, to fall within the limits of patentability which the context of the Statute of Monopolies has supplied, must be one that offers some advantage which is material, in the sense that the process belongs to a useful art as distinct from a fine art … that its value to the country is in the field of economic endeavour. …
It has thus been appreciated that, although an inventor may use no newly devised mechanism, nor produce a new substance, none the less he may, by providing some new and useful effect, appropriate for himself a patent monopoly in such improved result by covering the mode or manner by means of which his result is secured.
The Examination Manual updates restrict patentability based on a “European style” requirement for technicality in inventive step. That is not currently, and has never been, the law in Australia.
The Australian Patent Office’s justification for using the UK decision in Aerotel as a basis for assessment of Australian Patent Applications is highly problematic from a jurisprudential standpoint; the Australian Courts have at no stage provided any indication that the principles in Aerotel constitute good law in Australia. In particular:
- In Research Affiliates, the Aerotel case was mentioned only in the context of discussing a number of decisions in foreign jurisdictions, and was not mentioned even once in the Court’s actual application of principles.
- In RPL, Aerotel was only mentioned in the context of a summary of matters discussed in Research Affiliates.
It seems that that the policy makers in the Australian Patent Office are cognizant of the highly controversial nature of their new Aerotel-based approach, and accordingly provide a “justification” of sorts for their position. However, that justification again ignores Australian precedent, and refers to a UK House of Lords decision from 1958 (predating, and superseded by, the Australian High Court decision in NRDC).
The approach to assessing the substance of the invention as guided by Aerotel, whereby the substance of the invention is considered to be the alleged or actual contribution to the prior art, resonates with Virginia-Carolina Chemical Corp’s Application  RPC at page 37, lines 11-13, where Lloyd-Jacob J stated:
“In considering whether or not an application discloses a patentable invention, it is proper that attention should be directed to the alleged contribution to the art rather than the form of the words tentatively put forward as defining the invention.”
This is no justification at all. The Australian Patent Office appears to be cherry-picking foreign decisions as a means to create new legal tests for Australian Patents. It is our view that common sense should prevail in relation to what is and is not patentable, starting with a return to the Australian High Court’s clear guidance in NRDC, a decision that has stood for over 70 years as the highest authority on subject matter in Australia, and which sets out an “economic significance”-based test for assessing patentability in Australia, far away from the UK’s “how technical is the contribution” approach.
The Australian Patent Office’s position is arguably counterproductive to encouraging innovation in Australia, leaving hundreds of Australian technology startups unable to secure patent protection for their innovations, and vulnerable to their technologies being copied into redundancy by larger overseas players. This runs the risk of jeopardizing Government innovation support policies, by causing investors to shy away from funding Australian technology startups due to the a perceived lack of robust available intellectual property rights caused by the Australian Patent Office’s seemingly policy-driven push against software patents.