Australian Patent Office hesitant in adopting latest Federal Court decision on business method patents

By Fraser Smith

By Fraser Smith – Contact Fraser for more information about applying for a business method patent.

Recently we reported on several interesting decisions from the Australian courts regarding the patentability of computer implemented methods, but it remained to be seen how the Australian Patent Office would adapt its practices in reaction to the decisions.  We have since received several examination reports from the Australian Patent Office regarding applications for such method patents, and the outcome is somewhat surprising.

Background

In recent years the Australian Patent Office has applied increasingly more stringent interpretations on what subject matter is considered patentable under Australia’s ‘manner of manufacture’ requirements.  In many cases the Australian Patent Office relied upon its own hearing decisions (e.g. Invention Pathways Pty Ltd [2010] APO 10 (21 July 2010)) to support its newfound stance.  This had adverse effects for certain patent applicants, most notably for those applying for software and business method related patent protection.

As has been widely reported, Research Affiliates, LLC (‘Research Affiliates’) and RPL Central Pty Ltd (‘RPL’) appealed their Patent Office decisions to the Australian Federal Court and have had mixed success.  In summary, Research Affiliates’ method of generating a stock market index was held not to be a manner of manufacture, and hence not patentable; whereas RPL’s method of gathering evidence for the purpose of assessing an individual’s competency using automatically generated questionnaires was found to meet the patentability requirements.

Australian Patent Office’s Reaction

Perhaps just as interesting as the decisions themselves, is the Patent Office’s reaction.  After the RPL decision, it was generally considered that the Patent Office would adopt some of the pro-patentee approaches recited therein.  But we have now received multiple examination reports, from different examination units, which have the following standard text:

“The application is not for a manner of manufacture …

 My objection is based on the law stated by the Federal Court in Research Affiliates LLC v Commissioner of Patents [2013] FCA 71.  I am also aware of the decision of the Federal Court in RPL Central Pty Ltd v Commissioner of Patents [2013] FCA 871, however, that decision has no greater legal authority than Research Affiliates.”

In other words, in some cases the Australian Patent Office is selectively relying upon the earlier Research Affiliates decision over the later RPL decision.  This practice is particularly noteworthy because Middleton J in the RPL decision specifically referred to the Research Affiliates decision and set out reasons why Research Affiliates can be distinguished from his RPL decision (see paragraphs 162-172 of RPL Central Pty Ltd v Commissioner of Patents [2013] FCA 871).

The Patent Office’s disregard for the RPL decision is apparent in its unabashed preference to rely upon the Research Affiliates decision and in fact the Commissioner of Patents has applied to appeal the RPL decision.  Interestingly, Research Affiliates is also appealing its decision.  The examination reports actually mention this very fact, stating that:

“The Commissioner is aware that both of these decisions are under appeal and, pending a decision of the Full Federal Court, examination will continue on the basis of current practice (ie the law as stated in Research Affiliates).  However, it is noted that there are a number of provisions of the Patents Act that may permit patent applicants to preserve their interests pending clarification of the law and use of these mechanisms should be considered.”

The last sentence is notable as the commentary did not clarify what “provisions” the Patent Office was referring to in order for a patent applicant to “preserve their interests”.  Telephone conversations with the Patent Office have since clarified that the provisions being referred to are simply the standard mechanisms for filing divisional applications to continue prosecution in a new application.

Unfortunately, due to the transitional provisions for the recently introduced ‘Raising the Bar’ (RTB) legislation, following this strategy would result in any pre-RTB application becoming a post-RTB application, which consequently results in the patent applicant having to comply with the higher RTB patentability requirements for divisional applications.

Conclusion and Recommendations

It appears that clarification of the manner of manufacture requirements in Australia is on the way, but currently the waters are as muddy as ever.  If a patent applicant has subject matter which may raise such an objection then we suggest delaying examination as long as possible in hope that the Full Court of the Federal Court will put an end to the uncertainty.

In the meantime, it appears that the Research Affiliates decision is the case which the Patent Office will rely upon, at least initially.  In this regard, we have had some success in arguing that the RPL decision should take precedence in cases where the facts support relying on the RPL decision instead of the Research Affiliates decision on the distinguishing basis provided by Middleton J.  However, not every application can be distinguished in that manner, and so the content of each application will need to be considered carefully.

While filing divisional applications may be a means to extend prosecution of a patent application, it not only increases costs but also exposes an application  to the more onerous requirements of the Raising the Bar legislation.