The patentability of computer implemented inventions in Australia has finally been clarified by the Federal Court. The decision in Research Affiliates1 provides valuable guidance on how to prepare patent applications for Australia and indeed what applications to pursue at all for computer implemented inventions.
The Research Affiliates decision upheld a refusal by the Patent Office to grant a patent on a computer implemented invention. The decision demonstrates that developing an innovative process for generating commercially useful information will not entitle the developer to a patent.
The Federal Court held that, in order for a computer implemented invention to be patentable, what is required is a physical effect, in the sense of a concrete effect or phenomenon or manifestation or transformation. Combining this with the decision to uphold the refusal by the Patent Office it may be concluded that the physical effect must be something more than using a known tool (i.e. a general purpose computer) to generate information.
Under Australian law, a claimed invention is patentable only if it results in an artificially created state of affairs that is of utility in practical affairs and thus of economic significance. For example, while a claim to a mathematical formula in the abstract may not be patentable, a process which uses the mathematical formula for producing particular effects may be. In addition, a patent will be refused if on the face of the specification all that is claimed is a new use of an old substance.
Research Affiliates claimed a computer-implemented method for generating an index which involved accessing and processing data sets, accessing the relevant weighting functions, and applying the weighting functions based on particular financial metrics. The index formed a data set regarding particular assets and weighting, and supported a passive investment scheme. No issue of lack of novelty or inventive step was raised, and the sole issue for determination was whether the claims defined patentable subject matter.
Research Affiliates argued that its computer-implemented method produced a physical result in the form of computer-generated file containing an index. Research Affiliates contended that its invention met the criteria for patentability because the index was ‘an artificially created state of affairs’ and was useful ‘in a field of economic endeavour’.
Justice Emmett of the Federal Court dismissed Research Affiliates’ arguments for the following reasons:
Using a computer to implement a scheme or method does not automatically confer patentability if the scheme or method itself is not patentable. Justice Emmett observed that use of a computer necessarily requires writing of information in the computer memory. However, information merely entered into or produced by a computer does not by itself result in an artificially created state of affairs, and, therefore, is not patentable.
This decision may be appealed to the Full Federal Court. We will provide any updates to this case as they occur.
1. Research Affiliates LLC v Commissioner of Patents  FCA 71