Australian Software Patents Limitations & Disclaimer

The law in relation to software patentability in Australia is constantly evolving due to changes in IP Australia policy and practice and Federal Court decisions. This leads to some complexities in determining patent eligibility in Australia, in some cases. Key factors influencing the patentability of software inventions include:

Focus on Substance, Not Form: Australian courts assess the "substance" of the invention, not solely its form in the patent claim. This means they delve deeper to understand the underlying concept.
Patentable vs. Non-Patentable Subject Matter: "Software" can encompass both patentable and non-patentable elements. The distinction hinges on the invention's "substance."
Patentable: Software with tangible, concrete effects that improve or alter a technical process are generally more likely to be held as patentable subject matter. This includes enhancements to the computer itself (e.g. data compression algorithms) or improved measurement/simulation of physical systems (e.g. novel sensor data interpretation).
Non-Patentable: Software that essentially implements abstract or business ideas, like business methods, using standard computer technology are more likely to be deemed non-patentable.

Why "Substance" Matters

Guidance from NRDC: The seminal Australian case National Research Development Corporation v Commissioner of Patents (1959) established that "manner of manufacture" is the key requirement for patentability. The courts have further interpreted this to require the invention to have a material effect or tangible outcome in the field of economic endeavor.
Focus on the Invention's Core: Therefore, the courts look beyond the mere form of the claims and instead examine what they believe to be the essence of the invention. They want to know what the invention does and the nature of the contribution it offers in the real world and whether that contribution is truly technical or not.

Relevant Case Law

Case law in Australia acts as a crucial tool to refine and adapt what might be regarded as the "substance test" over time. Here are some key decisions that have influenced IP Australia approach:

Grant v. Commissioner of Patents (1998): This case emphasized that a mere business scheme or a method, the steps of which could be performed manually, is not patentable simply because it's implemented using a computer.
CCOM Pty Ltd v Jiejing Pty Ltd (1994): Highlighted that patent protection cannot extend to abstract ideas or mental processes, even if performed on a computer.
Research Affiliates LLC v Commissioner of Patents (2014): Introduced the concept that a mere "implementation" of an abstract scheme on a generic computer would likely fail to meet the "manner of manufacture" requirement.
Commissioner of Patents v RPL Central (2015):: Further refined the distinction between abstract schemes and patentable technical improvements.
Rokt Pte Ltd v Commissioner of Patents (2020): Reaffirmed that computerized business methods or schemes are generally excluded, but patent protection may be possible if the invention produces a technical outcome.
Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents (2022): The implementation of a scheme or idea on a computer to create an artificial digital state of affairs should not be treated any differently from the implementation of a scheme or idea by any other machine to create an artificial physical state of affairs. In both cases, however, the implementation must do more than merely manipulate an abstract idea.

Examples

Patentable:

Novel data compression algorithm: This invention focuses on improving the efficiency of storing and transmitting data using unique computer algorithms, resulting in a tangible effect.
Software for optimizing traffic flow control: This software utilizes AI algorithms to analyze traffic patterns and suggest adjustments to traffic lights in real-time, leading to a concrete physical effect on traffic flow.
Image processing software with noise reduction capabilities: This software employs innovative algorithms to remove noise from digital images, offering a clear visual improvement, which is a tangible effect.
oftware for controlling a robotic arm with enhanced precision:S This software introduces novel algorithms for controlling a robotic arm, resulting in increased accuracy and precision in its movements, which is a physical effect.

It's important to note that these are just examples, and the patentability of a specific software invention ultimately depends on its unique characteristics.

Patentability Complex or Problematic:

Software for managing customer relationships (CRM): This software primarily automates business processes like customer data management and communication, which are considered an abstract idea (business method) and lack a tangible technical effect.
Software for online stock trading: This software facilitates the execution of stock trades but solely operates on existing financial processes and information, offering no novel technical contribution beyond the abstract idea of trading.
Software for social media platform algorithms: These algorithms often focus on user engagement, content ranking, or advertising display, which are abstract concepts related to content presentation and do not produce a concrete technical effect.
Software for online booking systems (e.g., restaurant reservations): This software simplifies the booking process but primarily automates an existing business practice, lacking a new technical solution or tangible effect.

Disclaimer

The lack of clarity between what IP Australia and the Australian Courts regard as patentable and non-patentable, in so far as software is concerned, makes it difficult to make an absolute determination of the outcome of a patent application in this field. Therefore, the successful grant of a patent for your invention cannot be guaranteed, even if the claims are found to be novel and inventive, and we disclaim any associated liability.The patent application process involves costs over time and depending on your strategy, these costs can be significant. Therefore, we strongly recommend carefully considering these potential risks prior to filing a software patent application.