RPL Central case provides some clues as to patentability of business methods

Article  \  17 Dec 2015

It's just over a year since the Full Court of the Federal Court of Australia handed down Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150. The Court found that a method to create a securities index by means of a computer was not a patentable invention. The Court has now refused another business method invention in Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177[1].

We are left with no clear test on the patentability of business methods. However we can take comfort from the fact that business methods are not automatically excluded from patentability. We do have a few clues as to when a business method might be patentable.

Overview of the invention

The invention before the Court related to assessing the competency or qualification of individuals with respect to recognised standards. There is a requirement within the Australian Vocational Education and Training (VET) sector to evaluate the existing skills, knowledge, and/or experience of an individual. This Recognition of Prior Learning (RPL) is used to assess suitability for enrolment, satisfaction of requirements, and/or exemption for a particular course of study.

A general-purpose computer retrieved assessable criteria for a recognised qualification standard via the Internet. The assessable criteria included elements of competency and performance criteria. These elements were converted into a series of user-friendly questions. The intention was to guide an individual through the information gathering process and store the individual's responses and documentation in a database for providing to a relevant training organisation.

Manner of manufacture

There are a few requirements that a patentable invention must satisfy. One of these requirements is that it must be a 'manner of manufacture'. Mere schemes or plans do not normally qualify for patent protection as they are considered to be outside the definition of manner of manufacture. So what would transform an otherwise unpatentable scheme or plan into a patentable invention? This is not a new question. Nor is it a question that is unique to Australia.

The Court observed that there must be more than an abstract idea. It must involve the creation of an artificial state of affairs. The computer must be integral to the invention, rather than a mere tool in which the invention is performed. Where the claimed invention involves a computerised business method, the invention must lie in that computerisation. It is not enough to simply 'put' a business method 'into' a computer to implement the business method using the computer for its well-known and understood functions.

Inventor ingenuity

It was accepted that the invention could not be carried out without the use of a computer. However this alone cannot render the claimed invention patentable if it involves simply the speed of processing and the creation of information for which computers are routinely used. What is required is some ingenuity in the way in which the computer is utilised.

So what did the computer bring to the scheme? The Court observed that the computer in this case was not using an algorithm to process information entered by the user. It was not retrieving information from the Internet in response to a user's question. It was not functioning in the nature of an advisor or using artificial intelligence.

All it was doing, according to the Court, was generating questions from statements by adding a series of prepared words. This apparently did not include any steps that are outside the normal use of a computer. The ingenuity of the inventors was found to be in the steps of the method itself rather than in any aspect of computer implementation.

The way forward

Rather than stating precise guidelines, the Court found that the RPL invention involved an unpatentable scheme or business method. Apparently it is a matter of deciding on a case by case basis whether a claimed invention, as a matter of substance not form, is proper subject matter for a patent.

So how do we know whether a new invention is patentable? We know that we need to look at both the claims and the description. We need to look at whether the invention solves a technical problem within the computer or outside the computer. Alternatively the invention might result in an improvement in the functioning of the computer, irrespective of the data being processed.

Australian examiners will be looking for satisfaction of one or more of the following signposts:

  • whether the claim steps define normal use of computers
  • whether the method creates an improvement in the computer
  • whether any unusual technical effect is utilised
  • whether any part of the innovative or inventive step lies in the computer implementation, or
  • whether the invention is a new use for the computer.

The Court has made it clear that business methods are not automatically excluded from patentability. And the Commissioner of Patents has given us some clues as to which business methods might be patentable. We can take some comfort from that.

[1] The respondent RPL Central Pty Ltd has until 8 January 2016 to apply for leave to appeal the decision to the High Court of Australia.