26 Sep 2022
What is the current state of the law on the patentability of CIIs?

In total, there have been approximately 13 cases concerning the patentability of CIIs that have come before the Federal Court of Australia.[1] Of those cases, 8 concern appeals from first instance decisions, 8 are appeals of decisions from the Australian Patent Office (APO), 4 involve infringement and invalidity claims and 1 saw an appeal dismissed by the High Court.[2] In 4 of those cases, there was a finding (whether at first instance or on appeal) that the CII was patentable subject matter. This is in contrast to the many decisions concerning CIIs that have been handed down by the APO; in that forum, only 6 out of close to 50 decisions resulted in a finding that the CII was patentable. These statistics are, we suggest, the hallmark of an area in which we can expect further decisions before clients and practitioners get practical certainty. Even the latest High Court ruling on this subject resulted in a split 3:3 judgment, reflecting a broader issue of uncertainty as to when a CII will be the proper subject of a patent.   

Under Australian law, CIIs, like other inventions, are subject to the established requirements for a “patentable invention” under section 18 of the Patents Act 1990 (Cth). Cases in relation to CIIs have mainly focused on whether the invention as claimed is a “manner of manufacture” within the meaning of section 6 of the Statute of Monopolies, or patentable subject matter.

The concept of what is patentable subject matter under the manner of manufacture requirement is not limited to a finite number of categories of inventions. Instead, it is developed by the Australian courts on a case-by-case basis.[3] In order for a CII to be patentable, it must be an “artificially created state of affairs of economic significance,” such that it produces new and useful effects in a physical phenomenon and provides a material advantage or value in the field of economic endeavour.[4]

Many CIIs today involve business methods reduced to practice on a computing system. For example, a digital advertising method for linking consumers to targeted advertisements.[5] Such methods, schemes, abstract ideas, information or plans have traditionally been regarded by Australian courts as non-patentable subject matter, as they fall within the intellectual rather than the technical realm.[6] This principle extends to schemes and methods that are merely implemented on a well-known computer, which itself is not sufficient to render the subject matter patentable.[7] Therefore, a new idea implemented using old technology is simply not patentable.[8]

For a CII to be patentable in Australia, it must bring about a concrete, tangible or observable effect or result beyond the typical working of the generic computer that has its own economic utility.[9] Courts will consider whether the claim discloses any technical contribution to computer technology beyond the common general knowledge.[10] The computer must also be integral to the CII, rather than being a mere tool used for its well-known and understood functions, such that the invention lies in the computerisation aspect of the claimed invention, rather than the method or scheme aspect. So, where a CII provides a material advantage, contribution or improvement in the operation of, or effect of, the use of the computer, it is more likely to be patentable.

Not surprisingly, Australian courts have placed great emphasis on the drafting of the patent claim and specification when determining the patentability of CIIs.[11] Specificity in the drafting of the patent application, including sufficient technical detail as to the function, implementation and application of any hardware, computer functions or software used to carry out the invention and solve the technical problem, is highly recommended and broad, agnostic and permissive language should be avoided.

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Jackie O’Brien
+61 2 9330 8515

Dan Posker
Special Counsel
+61 3 8686 6464

Vicky Zhang
+61 3 8686 6311