A Full Court of Australia’s Federal Court has handed down its appeal decision in Research Affiliates LLC v Commissioner of Patents1.
While there was anticipation that the decision would provide general guidance on the patentability of computer implemented/software inventions in Australia, the reach of the decision is considerably narrower.
This article was first published in the November/December 2014 issue of The Patent Lawyer Magazine
Question: The specific question addressed by the Court was:
... whether computer implementation of an otherwise unpatentable business scheme is sufficient to make the claimed method properly the subject of letters patent2.
The Court’s answer to this question was, in a joint judgement, no.
The Court adopted an approach of not only looking at the integers of the claim, but also at the substance of the invention disclosed in the patent application. In particular, the Court read the disclosure of the specification as indicating that any inventive step resides in the creation of an index, and as this is a “scheme” it is not patentable subject matter.
The approach of the Court necessarily involved putting to one side claimed features. The features put aside included the computer implementation, despite explicitly recognising this to be an essential integer of the claimed process3. This may represent a new approach in Australia, with specific application to software inventions.
Even under this new approach, however, many computer implemented inventions will remain patentable. In the decision the Court sought to contrast the unpatentable Research Affiliates invention with patentable inventions (including business scheme inventions) that create an improvement in the computer, or that are so closely tied to the computer that the computer is integral with the invention.
The decision does appear to provide some guidance on how to draft a specification for a software invention. That said, the application of the test (particularly by the Australian Patent Office) will likely involve considerable further debate.
Research Affiliates is the applicant of Australian patent application 20052132934 and its divisional 2010236045.5 Both applications were refused by the Patent Office on the ground that the claimed inventions were not a manner of manufacture – i.e. not patentable subject matter6.
The decisions of the Patent Office were appealed to the Federal Court, where they were upheld by Justice Emmett.7 Research Affiliates appealed to the Full Federal Court.
The Federal Court proceeded on the basis that it was only necessary to consider claim 1 of application AU 2010236045.8 In general, the claim is directed to a computer implemented method involving accessing data and processing that data in order to generate an index.
Research Affiliates submitted that the index generated by the claimed invention is usable “to generate and maintain a portfolio of assets or … in benchmarking an investment portfolio manager.”9
The Full Federal Court reached the “inexorable conclusion”10 that the claim in question does not define a patentable method.
The crux of the matter appears to be the Court’s finding that the substance of the Research Affiliates invention lies in the content of the data generated (i.e. the index) and not in the computer implementation:
… The specification makes it apparent that any inventive step arises in the creation of the index as information and as a scheme. There is no suggestion in the specification or the claims that any part of the inventive step lies in the computer implementation.11
At several points in the decision the Court noted the lack of disclosure of the computer implementation in the specification. Examples of the Court’s comments in this regard are as follows:
[W]hat is missing from the title of the invention, the described field of the invention and the detailed description of the invention is any reference to a computer, even though the claims limit the method of the invention to one that is computer-implemented.12
In accordance with an exemplary embodiment of the invention, it is stated that an analyst may use a computer system to generate an index. … Apart from Fig 3, each of the figures is described in the specification by reference to the methodology employed by the analyst.13
Aside from the method being one that is ‘computer-implemented’, there is nothing in the character of the steps comprising the generation of the securities portfolio index that relates the method to any particular hardware or software implementation.
The computer that may be utilised is described in general terms, without an indication that any unusual technical effect is utilised. Although the specification states that “[t]hese computer program products may provide software to computer systems” and that “[t]he invention may be directed to such computer program products”, little further specificity is provided.14
The Court used this lack of disclosure to support its approach of putting aside the features of the claims relating to computer implementation.
In contrast, the Court appears to endorse the approach taken by Justice Middleton in the RPL Central case.15 In RPL (generalising) a computer implemented questionnaire was considered to be a patentable invention. The Court in Research Affiliates summarised Justice Middleton’s reasoning as to why the RPL invention was patentable as:
… while the invention was primarily concerned with the gathering of information relevant to the assessment of an individual’s competency relative to a recognised qualification standard, an objective of the invention was to facilitate improvements in the overall RPL process, by means of a use of, and configuration of, the assessment server.16
The dividing line between the two cases is not entirely clear and deciding on what side of the line future inventions lie will likely involve considerable debate.
Australian patent legislation provides that the relevant consideration for subject matter eligibility is the invention so far as claimed in any claim.17 Despite this, the Court acknowledged it was putting aside essential features of the claims:
The computer-implementation is an essential integer of the claimed process. That is, of course, important. It is of particular importance in the assessment of, for example, novelty and infringement. However, 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.18
The approach has some parallels to the approaches adopted in both the US and the UK.
In the recent Alice Corporation Pty Ltd v CLS Bank International decision, the US Supreme Court adopted an approach of looking beyond the claims to determine whether an underlying invention relates to an abstract idea.
The UK context is different to the Australian and US contexts in that the UK legislation explicitly excludes programs for computers per se from patentability. Under this regime the UK Courts have adopted an approach of identifying the inventor’s contribution to human knowledge and asking whether that contribution resides in subject matter that is excluded from patent protection.
Despite the absence of any explicit exclusion to the patentability of software in Australian law, the Court in Research Affiliates suggests that the UK approach of looking for a technical contribution is valid in Australia. The Court’s reasoning in this regard is that the requirement for a technical contribution falls under the umbrella of the requirement for an “artificial effect”:
It must of course be remembered that these [the UK] decisions were made in the context of a statutory exclusion and that what is excluded from patentability is, relevantly, a business method “as such”. However, it is apparent that applying a test of a “technical contribution” has similar flexibility and, in this area of technology can be useful in an analysis of an “artificial effect”.19
The requirement for an artificial effect comes from Australia’s High Court decision in the NRDC case.20 An analysis that involves looking for the technical contribution of the invention is, however, arguably new to Australia and not what was suggested in NRDC.
In NRDC the High Court stated:
There may indeed be a discovery without invention - either because the discovery is of some piece of abstract information without any suggestion of a practical application of it to a useful end, or because its application lies outside the realm of "manufacture". But where a person finds out that a useful result may be produced by doing something which has not been done by that procedure before, his claim for a patent is not validly answered by telling him that although there was ingenuity in his discovery that the materials used in the process would produce the useful result no ingenuity was involved in showing how the discovery, once it had been made, might be applied.21
In NRDC the Australian High Court considered a method of eradicating weeds using a substance that was known, but that was not previously known for the claimed use. Arguably, the real contribution the inventor made to human knowledge in the NRDC case was the discovery of new properties of the existing substance. A discovery itself, however, is not patentable subject matter. What made the discovery patentable was the application – eradicating weeds from a crop area by applying the substance. In NRDC the application to the crop area conferred patentability despite the fact that (arguably) once the herbicidal properties of the substance were known the “application” was entirely routine.
Based on the Full Court’s reasoning in Research Affiliates, however, it now appears that the approach of NRDC is to be applied differently to inventions where a discovery is applied through non-inventive programming of a computer.
The Federal Court’s comments on the disclosure of the patent specification indicate ways a patent drafter can try and strengthen a patent directed to a computer implemented invention. At the very least it appears that patent applications to computer implemented inventions should be drafted so that:
Whether this will make a difference to the final outcome remains to be determined, but the Court’s apparently favourable reference to the RPL decision22 gives some cause for optimism.
Adopting an approach of identifying the technical contribution of an invention appears to present a new development in Australian law with respect to computer implemented inventions. The approach appears to have some similarities to the UK approach, despite the different legislative backdrops.
The decision provides some guidance on what aspects of a computer implemented invention may be patentable, which should be useful to those drafting specifications for filing into Australia.
Despite this, the Research Affiliates decision does not provide a bright line test and a significant level of uncertainty remains. There will likely be ongoing debate as to what is required for a computer to be an integral and essential part of an invention so as to confer patentability. Also, if the issue comes to be considered by the High Court, it will be interesting to see whether the High Court views the "technical contribution approach as being consistent with the principles established in its previous decisions.
1 Research Affiliates LLC v Commissioner of Patents  FCAFC 150
2 Research Affiliates LLC v Commissioner of Patents  FCAFC 150, at 1
3 Research Affiliates LLC v Commissioner of Patents  FCAFC 150, at 117
4 AU 2005213293 specification as filed: here
5 AU 2010236045 specification as filed: here
6 Research Affiliates, LLC  APO 31 (17 December 2010) (re AU 2005213293): here
Research Affiliates, LLC  APO 101 (5 December 2011) (re AU 2010236045): here
7 Research Affiliates LLC v Commissioner of Patents  FCA 71: here
8 Research Affiliates LLC v Commissioner of Patents  FCA 71 at 27
9 Research Affiliates LLC v Commissioner of Patents  FCA 71 at 64
10 Research Affiliates LLC v Commissioner of Patents  FCAFC 150, at 102
11 Research Affiliates LLC v Commissioner of Patents  FCAFC 150, at 118
12 Research Affiliates LLC v Commissioner of Patents  FCAFC 150, at 67
13 Research Affiliates LLC v Commissioner of Patents  FCAFC 150, at 68
14 Research Affiliates LLC v Commissioner of Patents  FCAFC 150, at 108
15 RPL Central v Commissioner of Patents  FCA 871
16 Research Affiliates LLC v Commissioner of Patents  FCAFC 150, at 96
17 Patents Act 1990, s18(1)(a)
18 Research Affiliates LLC v Commissioner of Patents  FCAFC 150, at 117
19 Research Affiliates LLC v Commissioner of Patents  FCAFC 150, at 36
20 National Research Development Corporation v Commissioner of Patents 102 CLR 252
21 National Research Development Corporation v Commissioner of Patents  102 CLR 252, at 264
22 Research Affiliates LLC v Commissioner of Patents  FCAFC 150, at 98-100