Business Method Patents in Australia: Mere Computer Implementation Not Enough

Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150

On 10 November 2014, the Australian Full Federal Court (Court) held that a method of creating an index of securities using a standard computer was a ‘scheme’, and, hence, not a patentable invention.

The Court applied the Australian High Court test from National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252 that a patentable invention must produce an “artificially created state of affairs”. The Court said that this test is not satisfied by mechanistic application of artificiality or physical effect, but by understanding the claimed invention as a matter of substance not form.The Court viewed the claimed invention in this case as not having any ‘artificial effect’ other than the implementation of a scheme, which happened to use a computer for that implementation. Although the claims required computer implementation, the significance lay in the content of the data rather than any specific effect generated by the computer.

In substance, the Court viewed the claimed method as clearly involving an abstract idea. Any inventive step arose in the creation of the index as information and as a scheme. There was no suggestion that any inventive step lay in the computer implementation. Rather, the claimed method was a scheme merely implemented in a standard computer. No part of the claimed method involved an improvement in what might broadly be called ‘computer technology’.  

Before reaching its decision, the Court reviewed the patentability of computer-implemented business methods in other jurisdictions. The Court noted that its decision was consistent with the reasoning in the line of cases culminating in HTC Europe Co Ltd v Apple Inc [2013] RPC 30 in the United Kingdom, and in Alice Corporation Pty Ltd v CLS Bank International 134 S Ct 2347 (2014) in the United States.

Consistent with the position in the United States and Europe, this decision clarifies that computer-implemented business methods are patentable in Australia if, in substance, they produce an ‘artificial effect’ that goes beyond mere implementation of an abstract idea or scheme in a generic computer.