The importance of the computer

By Clinton Priddle

The Federal Court of Australia recently handed down a long awaited decision considering the patentability of computer implemented business methods in Research Affiliates LLC v Commissioner of Patents (‘Research Affiliates’).  Research Affiliates is the first Federal Court decision considering the patentability of computer implemented business methods in detail in almost seven years.  Unfortunately, however, the decision does not appear to provide significant clarity with respect to the patentability of business method patents in Australia.

The alleged invention of Research Affiliates relates to investment of securities such as shares, stocks and bonds, and, in particular to the construction and use of passive portfolios and indexes.  In short, the outcome is an “index”, which can be the basis for purchasing assets to be held in a portfolio.

Emmet J found that the generation of the index, as claimed, did not comprise patentable subject matter.  In particular, Emmet J stated that the generation of the index “could readily have been carried out manually” and that the use of the computer is “no more than the modern equivalent of writing down the index on pieces of paper”.

In our opinion, the decision of Emmet J provides little guidance with regard to what is considered patentable subject matter in Australia.  It appears that the court placed a large focus upon the outcome of the claimed method, rather than on the steps of the method, which is in clear contrast to earlier case law.  Furthermore, Emmet J explicitly considered the writing of particular information on a smart card to be in “stark contrast” to the present invention.  However, no reasoning was provided for this statement and, arguably, the distinction between writing information to a smart card and writing information to any other type of memory is not clearly defined.

The Applicant has filed an application for leave to appeal the decision to the Full Federal Court, and we are also awaiting the outcome of a further federal court appeal regarding patentable subject matter in RPL Central Pty Ltd v Myall Australia Pty Ltd.  Until such further decisions issue, we recommend explicitly emphasising the importance of the computer, together with details of a computer implementation, for all new patent applications in Australia relating to business methods.