Status Update on Australian Business Method and Software Patent Applications

Waiting for Publication of Full Federal Court Decision in RPL Central Pty Ltd v Commissioner of Patents.

In a year that has seen important judicial decisions in Australia on a range of controversial IP topics the law of the land regarding patents for software and business methods, as of 28 October 2015, remains unchanged since last year’s decision of the Full Federal Court in Research Affiliates LLC v Commissioner of Patents[i].  That means that patents for software and business methods continue to be granted by the Australian Patent Office, particularly where a good argument can be made that the claimed invention is “inextricably linked” to a computer.  A companion decision, an appeal from the decision of a single judge of the Federal Court in RPL Central Pty Ltd v Commissioner of Patents[ii], remains as yet undecided by the Full Federal Court.  Below is a brief summary of the current law as established by the Research Affiliates decision. 

The Full Federal Court in Research Affiliates ruled that the Appellant’s claimed computer implemented method for generating an index for use in securities trading was unpatentable as an abstract idea.  The Court held that “[t]he claimed method in this case clearly involves what may well be an inventive idea, but it is an abstract idea.  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. Rather, it is apparent that the scheme is merely implemented in a computer and a standard computer at that. It is no part of the claimed method that there is an improvement in what might broadly be called ‘computer technology’.”[iii]

In Australia, to include patentable subject matter, a claimed invention must be a “manner of manufacture” under s 18(1)(a) of the Patents Act 1990 (Cth). The primary issue in Research Affiliates was “whether computer implementation of an otherwise unpatentable business scheme is sufficient to make the claimed method properly the subject of letters patent”[iv].  The court held that it was not.

Research Affiliates LLC was the assignee of Australian patent application no. 2005213293 and its related child application no 2010236045 (the Divisional Application), both entitled “Valuation Indifferent Non-Capitalization Weighted Index and Portfolio”.   The case focused on the Divisional Application, where claim 1 read as follows:

A computer-implemented method for generating an index, the method including steps of:

• accessing data relating to a plurality of assets;
• processing the data thereby to identify a selection of the assets for inclusion in the index based on an objective measure of scale other than share price, market capitalization and any combination thereof;
• accessing a weighting function configured to weight the selected assets;
• applying the weighting function, thereby to assign to each of the selected assets a respective weighting, wherein the weighting:
  • (i) is based on an objective measure of scale other than share price, market capitalization and any combination thereof; and
  • (ii) is not based on market capitalization weighting, equal weighting, share price weighting and any combination thereof;
• thereby to generate the index.

The Court assessed the invention in Research Affiliates as follows:

“The summary of the invention, as set out in the specification as a first aspect of invention, is that it provides a method of constructing data indicative of a non-capitalisation weighted portfolio of assets, the method being implemented in a computer system and comprising a series of steps commencing with the receipt in the computer system of data gathered in regard to a plurality of assets. Other aspects of the invention provide a system for constructing a non-capitalisation weighted portfolio of assets and a computer-implemented non-capitalisation weighted portfolio of assets construction system. In each case, a computer is used to receive the data and to provide ‘weighting means’ for weighting each of the plurality of assets.”[v]

After reviewing details of the specification, the court then stated that “although the summary of the invention and the exemplary embodiments do make reference to computers, it is to be noted that what 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.”[vi]

Next, the Court reviewed the decision of the primary judge and Australian authority on claims to computer-implemented methods.  An important aspect of the decision here concerned the Court’s reference to the single judge Federal Court decision RPL Central Pty Ltd v Commissioner of Patents.[vii]  The innovation patent application involved in the RPL Central case is titled “Method and System for Automated Collection of Evidence of Skills and Knowledge”, and its Claim 1 concerns a method of gathering evidence for the purpose of assessing an individual’s competency relative to a recognised qualification standard, which includes the following steps:

• a computer retrieving via the internet from a remotely-located server a plurality of assessable criteria associated with the recognised qualification standard, said criteria including one or more elements of competency, each of which is associated with one or more performance criteria;
• the computer processing the plurality of assessable criteria to generate automatically a corresponding plurality of questions relating to the competency of an individual to satisfy each of the elements of competency and performance criteria associated with the recognised qualification standard;
• an assessment server presenting the automatically-generated questions via the internet to a computer of an individual requiring assessment; and
• receiving from the individual via their computer a series of responses to the automatically-generated questions, the responses including evidence of the individual’s skills, knowledge and experience in relation to each of the elements of competency and performance criteria, wherein at least one said response includes the individual specifying one or more files on their computer which are transferred to the assessment server.

In RPL Central Judge Middleton held that the above claim did include patentable subject matter, and in the Research Affiliates decision the Full Federal Court seemed to strongly support Judge Middleton’s reasoning, stating:  “Justice Middleton summarised the invention in RPL Central at [139] as one that enabled the retrieval of relevant data from a remotely located server via the internet and the generation of questions for, and presentation of questions to, the user based on this data. The effect of the process was experienced by the individual user on a computer. The user’s responses were transferred to the assessment server. Importantly, ‘the involvement of the computer in the invention is described in these claims in such a manner that it is inextricably linked with the invention itself’. In [172], his Honour said that the specification and the claims provided significant information about the invention which was to be implemented by means of the computer and that the computer was ‘integral’ to the invention there claimed. His Honour distinguished it from the primary judgment in the present case on that basis.”[viii]

Finally, in applying the law to the claims of the Research Affiliates’ patent application, the Court emphasised the incidental nature of the computer concerning the invention of Research Affiliates:  “It is apparent from the description in the specification that the computer is simply the means whereby the analyst accesses data to generate an index. The work in generating the index and weighting is described in terms of the work of the analyst rather than as some technical generation by the computer. Indeed, while the specification states that the invention may be used for investment management or investment portfolio benchmarking, the exemplary embodiment makes it clear that it may be, but is not necessarily, implemented on a computer.”[ix]

The Court then concluded that “In the context of the claim, the significance lies in the content of the data rather than any specific effect generated by the computer. 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.”[x]

In summary, although the Court in Research Affiliates found that the claims lacked patentable subject matter, even though they recited the use of a computer, the Court otherwise provided strong support to the patentability of computer implemented inventions.  By giving clear recognition and support to the decision of Judge Middleton in RPL Central, the Court maintained the law that where a computer is “inextricably linked with the invention itself”, then claims to business methods and software are and remain patentable in Australia.