The Full Federal Court (FFC) handed down its long-awaited Research Affiliates appeal decision 1 on 10 November. The FFC held that the claims of Research Affiliates' patent application (directed to a method and system for generating an index of assets such as stocks) do not constitute patentable subject matter because they are directed to an “abstract idea”. Although the claims required computer implementation, the FFC said that "the significance [of the invention] lies in the content of the data, rather than any specific effect generated by the computer", and "there is no suggestion… that any part of the inventive step lies in the computer implementation."

NRDC relied upon, but insufficient

Referring to the celebrated High Court decision in “NRDC” 2, being the leading authority for assessing whether or not an invention constitutes patentable subject matter, the FFC said that the requirement for “an artificially created state of affairs of economic significance was part of the High Court’s reasoning, but did not represent a sufficient or exhaustive statement of the circumstances in which a claimed invention is patentable.”

Assessment of patentable subject matter involves the description and inventiveness

The FFC said: “In examining whether a claimed invention is properly the subject of letters patent, it is necessary to look not only at the integers of that claimed invention but also at the substance of that invention… It is a question of understanding what has been the work of, the output of, and the result of, human ingenuity …. Here, that subject matter is truly the scheme, the idea, the index… The specification makes it apparent that any inventive step arises in the creation of the index as information and as a scheme.” Thus an assessment of inventiveness can now form part of the assessment of patentable subject matter.

Research Affiliates: not the end of software patents in Australia

Although certain aspects of this decision may give cause for concern to owners of patents relating to financial or business methods, as with the previous Federal Court decision 3, it seems clear that a central issue in the decision remains an almost complete absence of technical detail in the Research Affiliates patent application, which primarily describes the method as could be performed manually using pencil and paper.

RPL Central approved

Significantly, the FFC referred, apparently approvingly, to the recent RPL central decision 4 which upheld the patentability of a computer implemented method on the basis that, in that case, “the involvement of the computer in the invention … is inextricably linked with the invention itself.”

Research Affiliates:  consequences for software patents

It can be concluded that, as the law stands at present, mere computer implementation is insufficient to transform an otherwise unpatentable scheme or abstract method into patentable subject matter. However, if the claims and detailed description specify technical features in such a way that they are inextricable from the invention, then the claims should be considered to constitute patentable subject matter. Clearly, this decision has important implications for drafting patent applications relating to computer implemented methods or software patents.