The Australian Patents Act 1990 is silent on the patentability of computer-implemented inventions. Section 18(1) states that one of the requirements an invention must satisfy to be a patentable invention is that it must be a “manner of manufacture within the meaning of section 6 of the Statute of Monopolies”.
An Australian Court in International Business Machines Corporation v Commissioner of Patents  FCA 625; (1992) 22 IPR 417 held that a computer program was a new application of selected mathematical methods to computers. The techniques presented curve images in computer graphics displays. The Court held that there was nothing new about the mathematics of the invention. What was new was the application of the selected mathematical methods to computers and in particular to the production of the desired curve by the computer. The technique was said to involve steps that are foreign to the normal use of computers. The production of an improved curve image was held to be a commercially useful effect in computer graphics.
The Federal Court of Australia held that a smartcard-based trader loyalty program was patentable in Welcome Real-Time S A v Catuity Inc  FCA 445; (2001) 113 FCR 110. The Federal Court judge said:
“What is disclosed by the patent is not a business method… for example a manufacturer appointing wholesalers to deal with particular categories of retailers rather than all retailers in particular geographical areas…Rather, the patent is for a method and a device, involving components such as smartcards and POS terminals in a business…”.Heery J in this case distinguished between an abstract idea (such as a method of calculation or a method or scheme for carrying on business which is not patentable) and a practical operation of an abstract idea (such as a method and device for use in business which is patentable. His Honour drew a distinction between a technological innovation and a business innovation. A physically observable effect was not necessary but was present in this case.
In Grant v Commissioner of Patents  FCAFC 120 (18 July 2006) the Federal Court of Australia considered the patentability of a method to protect assets from unsecured judgment creditors. The claimed method involved establishing a trust, giving money to that trust, borrowing from the trust and the trustee securing the loan by taking a charge for the money over the asset. The Court found the claims not patentable.
The Court made it clear that it was not refusing the claims because they related to a business method. Patentability of claims needed to be considered by applying the principles that have been developed for determining whether a method is a manner of manufacture, irrespective of the area of activity in which the method is to be applied.
The Court observed that the patent:
“does not produce any artificial state of affairs, in the sense of a concrete, tangible, physical, or observable effect ... In Catuity and CCOM as in State Street and AT&T, there was a component that was physically affected or a change in state or information in a part of a machine. These can all be regarded as physical effects. By contrast, the alleged invention is a mere scheme, an abstract idea, mere intellectual information, which has never been held to be patentable, despite the existence of such schemes over many years of the development of the principles that apply to manner of manufacture. There is no physical consequence at all.”Patent office practice
The claims most commonly allowed in Australia include:
- method claims
- apparatus claims
- computer-readable medium software claims (Beauregard claims)
- data structure claims (Lowry claims).
In Invention Pathways Pty Ltd  APO 10 (21 July 2010) a method for commercialising inventions was refused despite the claims including a data file maintained in data storage means. The Delegate held that a patentable physical effect must be central to the purpose or operation of the claimed process or otherwise arise from the combination of steps of the method in a substantial way. The physical effect has to be more than peripheral and subordinate to the substance of the claimed invention.
Patent applications have since been refused in:
- Iowa Lottery  APO 25 (21 October 2010)
- Research Affiliates, LLC  APO 31 (17 December 2010)
- Myall Australia Pty Ltd v RPL Central Pty Ltd  APO 48 (12 July 2011)
- Discovery Holdings Limited  APO 56 (9 August 2011)
- Network Solutions, LLC  APO 65 (19 August 2011)
- Jumbo Interactive Ltd & New South Wales Lotteries Corp v Elot, Inc  APO 82 (28 October 2011)
Photo courtesy of author rosefirerising under Creative Commons licence.