Australian computer implemented invention crashes – 22 December 2015
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To be validly patented in Australia, an invention must be a “manner of manufacture”. This is the Australian version of the “patentable subject matter” requirement in other jurisdictions. Following common law principles, the substance of the requirement has evolved well beyond anything derivable from the words themselves. This of course creates uncertainty in the face of which it is unsurprising that dispute has arisen.
In 2013 we reported on the two apparently inconsistent decisions of the Federal Court  in connection with the inherent patentability of computer implementations of inherently unpatentable business methods here. In one of these decisions (RPL Central ), the invention was held to be patentable. Much weight was given to the way the invention was described (as opposed to the substance of what was claimed) and to various superficial aspects of the patent’s drafting.
Since then each of those decisions has been the subject of a respective appeal to the Full Federal Court . The Full Federal Court has held both inventions to be inherently unpatentable, and in doing so has laid down guidance that makes clear that the mere use of routine computing functions is not sufficient to render a mere scheme patentable:
“A claimed invention must be examined to ascertain whether it is in substance a scheme or plan or whether it can broadly be described as an improvement in computer technology. The basis for the analysis starts with the fact that a business method, or mere scheme, is not, per se, patentable. The fact that it is a scheme or business method does not exclude it from properly being the subject of letters patent, but it must be more than that. There must be more than an abstract idea; it must involve the creation of an artificial state of affairs where the computer is integral to the invention, rather than a mere tool in which the invention is performed. Where the claimed invention is to a computerised business method, the invention must lie in that computerisation. It is not a patentable invention simply to “put” a business method “into” a computer to implement the business method using the computer for its well-known and understood functions”  (our emphasis).
Whilst this expression of principle will no doubt assist practitioners and decision makers, as is now customary in connection with Australian patentable subject matter, the Court made clear that there is no precise verbal formula:
“It is not a question of stating precise guidelines but of deciding, in each case, whether the claimed invention, as a matter of substance not form, is properly the subject of a patent”  (our emphasis).
This harks back to the High Court’s  comments back in 1959:
“…It is therefore a mistake, and a mistake likely to lead to an incorrect conclusion, to treat the question whether a given process or product is within the definition as if that question could be restated in the form: ‘Is this a manner (or kind) of manufacture?’ It is a mistake which tends to limit one’s thinking by reference to the idea of making tangible goods by hand or by machine, because ‘manufacture’ as a word of everyday speech generally conveys that idea. The right question is: ‘Is this a proper subject of letters patent according to the principles which have been developed for the application of s. 6 of the Statute of Monopolies?'” 
The Court’s emphasis on substance  will no doubt be taken by the Australian Patent Office (the Office) as licence to look beyond the claim wording to what it regards as the substance of the invention. Indeed the Office (or more formally the Commissioner of Patents) was a party to both of the recent appeals, arguing for unpatentability in each case. In its submissions the Office:
“warns against a situation where a patentee can, by careful drafting, “draft itself” into a manner of manufacture where none is present”. 
Therefore minor claim amendments are unlikely to be of assistance once the Office has formed the view that the invention is in substance not a manner of manufacture.
Does this mean that software is not patentable in Australia? No.
Most software is patentable in Australia
The foregoing discussion must be understood as being confined to the specific facts, i.e. to inventions entailing the use of routine computing functions to implement inherently unpatentable business methods. Software that implements inherently patentable methods (e.g. that controls production equipment to operate in a non-obvious manner to produce better product) is likely to be patentable. Likewise software inventions to which the computer is integral will remain patentable – e.g. apps that take advantage of a mobile phone’s sensors to new technical effect will remain patentable.
Further controversy likely
In the absence of ‘precise guidelines’, the manner of manufacture requirement will no doubt continue to be contentious. We foreshadow further argument as to what constitutes the substance of the invention and the extent to which this can be varied by the wording of the claims and the specification more generally. It also remains to be seen how an Australian court will treat a novel use of routine computing functions to implement a method that is itself a manner of manufacture but not novel. The latter point may particularly come to the fore in the context of innovation patents for which there is no explicit non-obviousness requirement.
 The court of first instance for Australian patent matters
 The court of first appeal for Australian patent matters
 Commissioner of Patents v RPL Central Pty Ltd  FCAFC 177, at paragraph 96
 Commissioner of Patents v RPL Central Pty Ltd  FCAFC 177, at paragraph 98
 Australia’s most authoritative court; the court of final appeal for Australian patent matters
 And similar emphasis given in (for example) D’Arcy v Myriad Genetics Inc  HCA 35 (7 October 2015)
 Commissioner of Patents v RPL Central Pty Ltd  FCAFC 177, at paragraph 81