In the first published Australian Patent Office (APO) decision following Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents [2025] FCAFC 131 (Aristocrat 25), the Patent Office has provided useful guidance on how it will apply its framework to distinguish between patentable and unpatentable subject matter.
Background
The assessment of subject matter eligibility of computer implemented inventions (CIIs) was clarified in Aristocrat 25. For more detailed background on the Aristocrat 25 decision, see here.
The Patent Manual of Practice and Procedure (the Manual) was updated to reflect Aristocrat 25 and then further updated following a public consultation process.
The updated Manual provides a framework for distinguishing between patentable and unpatentable CIIs. As part of that framework, the Manual uses the term “new” when characterising claims to distinguish from common general knowledge (CGK) computer products and systems. Importantly, this use of “new” forms part of the characterisation exercise and is not a separate novelty assessment.
Where such “new” (non-CGK) physical features are claimed, the Manual provides a more straightforward pathway to establishing patentability. Otherwise, additional factors are considered as part of the overall characterisation of the invention.
For our comments on the updates to the Manual see here (the initial update) and here (the further update following the public consultation).
While Aristocrat 25 and the updates to Manual appeared generally favourable for CIIs, uncertainty remains as to how the new framework will be applied in practice.
In CQMS Pty Ltd v Joy Global Surface Mining Inc [2026] APO 19 (18 August 2026) (the APO decision), we have the first published Patent Office decision that applies this framework.
The APO decision
The APO decision concerns an opposition to the grant of Australian patent application AU 2018203749 (the application).
The application relates to systems and methods for predicting the need to replace components of mining machinery, such as ground-engaging tools (GETs) used on excavator buckets. Some, but not all, claims included a wear detection device for detecting the current wear of a component.
The opposition raised numerous grounds, including novelty, inventive step, clarity, sufficiency, utility and manner of manufacture. This article focuses only on manner of manufacturer (i.e., patentable subject matter eligibility).
Applying the principles from Aristocrat 25, and the framework of the updated Manual, the APO decision found that independent claim 1 did not define patentable subject matter, whereas independent claim 14 did.
It was found that “that the correct characterisation of claim 1, as a matter of substance, is a computerised decision matrix, which determines a replacement recommendation based on a consideration of a plurality of relevant costs, being downtime costs, material costs, and operational costs.” This was considered an unpatentable manipulation of an abstract idea on a computer.
In contrast, claim 14 was found to be “directed to a method of using a new wear detection device to collect data about the current dimension of the component. It is proper patentable subject matter.” Use of the word “new” here is as part of the claim characterisation exercise as discussed above, rather than a finding on novelty.
The differing outcomes for these claims provide a useful illustration of how the Patent Office is currently approaching patentable subject matter for CIIs.
| Not patentable subject matter | Patentable subject matter |
|---|---|
|
Claim 1: A system for predicting replacement of a component of a mining machine, the system comprising: an electronic processor configured to determine a wear rate of the component based on a current dimension of the component and historical dimensions of the component, determine a replacement cost for the component, wherein determining the replacement cost includes determining a cost of downtime for replacing the component based on a time for replacing the component and a downtime cost for the mining machine during the time for replacing the component, a material cost in replacing the component, and an operating cost of the mining machine associated with not replacing the component; determine a replacement recommendation for the component based on the wear rate, the replacement cost, and discard criteria; and output the replacement recommendation. |
Claim 14: A method for predicting replacement of a component included in a mining machine, the method comprising: receiving, with an electronic processor, data collected by a wear detection device representing a current dimension of the component; comparing, with the electronic processor, the current dimension of the component to discard criteria, the discard criteria including a discard dimension of the component; in response to the current dimension of the component being less than the discard dimension of the component, discarding the component; and in response to the current dimension of the component being greater than the discard dimension of the component, determining, with the electronic processor, a virtual measurement for the component at a future time, comparing, with the electronic processor, the virtual measurement for the component to the discard dimension, and in response to the virtual measurement for the component being less than the discard dimension, adding, with the electronic processor, the component to used pool of components. |
An important factor in the reasoning appeared to relate to claim 14’s use of a “wear detection device” to collect data about the current dimension of the component. Consistent with this approach, dependent claims 2-5, which added a wear detection device to claim 1, were also found to define patentable subject matter.
The “wear detection device” was considered to be a new, non-CGK physical integer, the use of which was sufficient to support patentability.
There is, however, some nuance and tension in the reasoning. It was considered that the “wear detection device must be an electronic sensor of some type”, but that “it is not just a sensor, it is a device defined by its operation in collecting data representing the current length of the component.” While appropriate sensor technologies existed and may have been available, the evidence did not establish that they had been applied in the way required by the invention. On that basis, claim 14 was considered to involve a method of using a non-CGK wear detection device to collect data representing the current dimension of component(s).
At the same time, the APO decision acknowledges that the “sensor in question may be an essentially off-the-shelf device.” Nevertheless, it was considered that the wear detection device, the collected data, the processor, and the software elements operate in an interdependent interaction to perform the claimed method. Accordingly, even if it were wrong to categorise the wear detection device as “new”, claim 14 would still be patentable because it is analogous to the invention considered in Aristocrat 25, or in the language of the Manual’s framework, the interoperation of the wear detection device with the software features produces a new system with altered functionality of detecting the current dimension.
In other words, it appears that claim 14’s inclusion of the wear detection device provided claim 14 with eligibility in two ways:
- The wear detection device was considered to be the use of a new (non-CGK) physical integer, which leads to the claim being patentable subject matter under the first pathway described by the Manual;
- Even had the wear detection device not resulted in a finding of eligibility under the first pathway, the interoperation of the wear detection device with the software features nevertheless was considered to provide altered functionality (which leads to a finding of eligibility when the “additional factors” are considered).
Key takeaways
The APO decision confirms that it is important to first correctly characterise the invention as a matter of substance, and to then answer whether the invention so characterised is proper subject matter. The proper characterisation must have full consideration of the physical features without undue weight on the inventive aspects over the non-inventive aspects of the invention.
Although fact-specific and only a single data point, the different treatment of claims 1 and 14 provides a useful illustration of the types of features the Patent Office may find favourable when assessing subject matter eligibility for CIIs. This is, of course, particularly true where an invention relates to the implementation of sensor technologies to measure the physical world.
Uncertainty still remains regarding when an “essentially off-the-shelf device” or existing “appropriate sensor technologies” may be regarded as a “new, non-CGK physical integer” by virtue of its configuration or implementation, without trespassing into considerations of novelty and inventive step.
Encouragingly for applicants though, the APO decision indicates that patentable subject matter may still be found even where the physical integers are not new, provided the interoperation with software features produces a system with altered functionality.
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