In a recent decision of the Federal Court of Australia, RPL Central Pty Ltd v Commissioner of Patents (RPL Central)1, Justice Middleton confirmed that computer-implemented business methods have been and continue to be patentable in Australia. Justice Middleton rejected all of the Commissioner of Patent's arguments.
IP Australia has granted patents for computer-implemented inventions for several decades. However, a policy change at IP Australia post-Bilski resulted in a series of hearing decisions in which IP Australia rejected the patentability of computer-implemented inventions and introduced significant uncertainty.
In one of these hearing decisions, Myall Australia opposed the certification of RPL Central's innovation patent2. The sole ground initially pleaded by the opponent (Myall Australia) was that the claimed invention lacked novelty. However, a few weeks before the hearing, the delegate of the Commissioner of Patents asked the parties to prepare submissions on a further possible ground not raised by the opponent-whether the claims related to a 'manner of manufacture' (patent-eligible subject matter). The opponent was successful, but only on the ground first raised by the delegate3.
RPL Central (RPL) appealed the Commissioner's decision to the Federal Court of Australia.
RPL Central's invention
RPL's invention relates to a method and system for recognition of prior learning (RPL) for identifying qualifications that individuals may be entitled to.
The invention recognises the need for an automated tool that can facilitate the centralised collection of assessment information from individuals, and provide improved access to RPL processes independently of the particular organisation that is chosen to issue a corresponding qualification. Embodiments of the invention facilitate improvements in existing RPL processes by enabling the automated generation of a user interface to perform the administrative work necessary to gather from a prospective candidate evidence which is relevant to any qualification or unit offered across a wide range of training organisations.
The patent specification4 has five claims-independent, computer-implemented method claim one, dependent method claims two to four, and independent system claim five.
Method of manufacture
In Australia, it is a requirement for patentability that the claims relate to a 'manner of manufacture'.
In RPL Central, Justice Middleton reviewed a wide range of decisions on manner of manufacture, including NRDC5 and Grant6.
In NRDC, the invention related to a new method of eradicating weeds from crops by applying a known herbicide.
In finding the claims allowable, the High Court of Australia said the two essential qualities required for a claimed invention to be a manner of manufacture are that the invention:
- consists in an artificially created state of affairs
- has economic significance or economic utility.
Prior to NRDC, working directions and methods historically fell outside the concept of manner of manufacture.
In Grant, the invention related to a method comprising a series of steps for protecting assets. Significantly, the claims did not recite hardware. The Full Court of the Federal Court of Australia said it followed that the claims did not relate to a manner of manufacture, drawing the distinction between mere intellectual information and a method that affected the operation of an apparatus in a physical form. The court said that a physical effect, in the sense of a concrete effect or transformation, is required. For example, that effect may be a component that is physically affected or a change in state or information in a part of a machine.
Justice Middleton said the Full Court's comments in Grant, although not forming part of the ratio in Grant, were a useful summary of the way in which the manner of manufacture requirement may apply to computer programs.
Court's analysis in RPL Central
In RPL Central, Justice Middleton held the claimed method and system satisfied the NRDC criteria, as further explained by the Full Court in Grant, and so related to a manner of manufacture.
Justice Middleton found the claims resulted in an artificially created state of affairs in which a new and useful effect may be observed. Justice Middleton confirmed the observed 'thing' does not need to be an article. It may be any physical phenomenon in which the effect may be observed. In RPL Central, the method defined by claim one and the system defined by claim five require or involve a computer-generated process. Each step involves computer implementation and the transfer and transformation of data. For example, the retrieval from a remotely-located server by the computer via the internet in claim one results in the creation of a physical effect by the writing of data in that computer.
As to the other NRDC criteria, Justice Middleton also found the claims solved a problem in a field of economic endeavour, being the educational sector of the economy.
The Commissioner argued the physical effect required by the manner of manufacture analysis, 'as properly understood' from the binding Australian decisions, must be significant in that it is concrete and central to the purpose or implementation of the claimed invention. The Commissioner said the claimed computer implementation is merely a common mechanism to carry out the method in a more convenient way, and all that would be left is a method for performing an aspect of a business if the computer aspects of the claims were stripped away.
Justice Middleton rejected the submission that any of the binding Australian decisions imported a requirement for a significant, concrete and central effect. Even if such an effect was required, Justice Middleton said that requirement would be satisfied in RPL Central. Justice Middleton accepted a computer is a substantial, central and integral part of each of RPL's claims. Justice Middleton also said it is irrelevant that the claimed invention does not involve steps which are foreign to the normal use of computers.
Justice Middleton briefly mentioned some of the recent US decisions (Bilski, Cybersource, CLS Bank v Alice) that the Commissioner sought to rely on. Justice Middleton said these decisions 'provide intellectual stimulus and ideas for consideration', but at best are 'merely persuasive'. In view of the differences that exist between Australian and US law, he did not think he needed to analyse these decisions in detail.
Finally, for the removal of any doubt, Justice Middleton concluded his analysis by confirming that claims directed towards computer-implemented business methods have been and continue to be patentable in Australia.
After reaching his decision, Justice Middleton discussed the apparently conflicting decision of Justice Emmett of the Federal Court of Australia in Research Affiliates LLC v Commissioner of Patents (Research Affiliates)7 on the patentability of a similar computer-implemented invention. Research Affiliates was an appeal against two other IP Australia hearing decisions. The Research Affiliates decision issued earlier in 2013.
The invention(s) in Research Affiliates relate to the construction and use of passive portfolios and indexes for investments in securities. The two applications considered include method, system and machine readable medium claims.
Justice Emmett found the claims do not relate to a manner of manufacture. Justice Emmett criticised the proposition that any computer-implemented scheme would be patentable, merely by reason of the fact that it happens to be implemented by a computer, saying the implementation of the method by means of a computer was no more than the modern equivalent of writing down the indexes on pieces of paper. Justice Emmett said that aspect of computer implementation is nothing more than the use of a computer for a purpose for which it is suitable.
However, the Research Affiliates decision was puzzling because it confused the manner of manufacture requirement (subject matter eligibility) with other requirements for patentability, such as sufficiency and inventive step.
Justice Middleton made it clear in RPL Central that he was not saying anything about the correctness of the decision in Research Affiliates, instead distinguishing RPL Central by pointing out that the specification and claims in RPL Central provide significant information about how the invention is implemented by means of computer, and that the computer is integral to the claimed invention.
Justice Middleton's reluctance to comment directly is because the Research Affiliates decision has been appealed to the Full Court. Justice Middleton is one of a panel of three justices of the Federal Court who will hear the appeal in November 2013. The Full Court's decision will likely issue in early 2014.
The RPL Central decision sends a clear message to IP Australia that computer-implemented business methods have been and continue to be patentable in Australia. RPL Central also casts serious doubt on the correctness of the earlier Research Affiliates decision that is now on appeal.
At least for the time being, however, Australian patent applicants may still need to address the Research Affiliates decision that appears to say subject matter eligibility is based on the description rather than the claims. Applicants for patents for computer-implemented inventions in Australia should therefore endeavour to include as much detail as is reasonable on the implementation of the invention in the description. The RPL Central specification may provide a useful starting point when determining the level of the detail required.
1RPL Central Pty Ltd v Commissioner of Patents  FCA 871.
2Myall Australia Pty Ltd v RPL Central Pty Ltd  APO 48 (12 July 2011).
4Australian innovation patent 2009100601.
5NRDC  HCA 67.
6Grant  FCAFC 120.
7Research Affiliates LLC v Commissioner of Patents  FCA 329.