Computer Implemented Inventions, Schemes and Business Methods

Date Published

Under Australian law, there are no specific exclusions for software or methods that are implemented as computer software or a related product.  However, they are only patentable if what is claimed “as a matter of substance” meets the requirements for a manner of manufacture and in particular is not a mere scheme, abstract idea or mere information (see Discoveries, Ideas, Scientific Theories, Schemes and Plans).

Merely “putting” software into a computer would not, by itself, meet the requirements for manner of manufacture. Consideration has to be had to the questions asked in Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177 (RPL) to determine whether the computer is merely a tool to implement the method, or whether the computer is integral to the invention in that the method embodied in the software solves a technical problem within or outside the computer, or results in an improvement in the functioning of the computer.

In Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150 (Research Affiliates), RPL, Encompass Corporation Pty Ltd v InfoTrack Pty Ltd [2019] FCAFC 161 (Encompass) and Commissioner of Patents v Rokt Pty Ltd [2020] FCAFC 86 (Rokt), the Full Federal Court considered computer implemented business methods and found that the presence of computing hardware or processing steps within a claimed method or system was insufficient to confer patentability.  The Court identified a distinction “between the employment of an abstract idea or law of nature and the idea or law itself” and “between technological innovation which is patentable and a business innovation which is not”.  From those decisions and other relevant authorities, examiners should determine the substance as discussed in Legal Principles.

There are a number of considerations that may be relevant to whether a generic computer related invention is in substance a manner of manufacture. These considerations, appearing in Grant, Research Affiliates and RPL, were summarised in Aristocrat Technologies Australia Pty Limited [2016] APO 49 at [35] and include:

  • whether the contribution of the claimed invention is technical in nature.
  • whether the invention solves a technical problem within the computer or outside the computer or whether it results in an improvement in the functioning of the computer, irrespective of the data being processed.
  • whether the claimed method merely requires generic computer implementation.
  • whether the computer is merely an intermediary or tool for performing the method while adding nothing of substance to the idea.
  • whether the ingenuity in the invention is in a physical phenomenon in which an artificial effect can be observed rather than in the scheme itself.
  • whether the alleged invention lies in the way the method or scheme is carried out in a computer.
  • whether the alleged invention lies in more than the generation, presentation or arrangement of intellectual information.

When determining the substance of a computer implemented invention, it is not legitimate to only consider whether the individual integers of the computer system are part of the state of the art. The entire computer system must also be considered. Another way of approaching this issue is to ask whether, objectively considered, ingenuity lies in technical features of the invention in order to elevate an otherwise unpatentable invention to a patentable invention. See for example:

“The specification makes it apparent that any inventive step arises in the [scheme].: Research Affiliates at [118]

“…simply putting a [scheme] into a computer is not patentable unless there is an invention in the way in which the computer carries out the [scheme]”. RPL at [107]

The fact that a claimed method can only be implemented in a computing environment, does not mean it is for a manner of manufacture. For example, a scheme is not a manner of manufacture simply because the application and utility of the scheme is limited to the internet. Similarly, the limitation of the claims to other technological environments may not alter the fact that what is claimed is a scheme or abstract idea. For example, a method of extracting oil from a well characterised by a computer implemented algorithm to allocate pumping resources according to customer demand is in substance a scheme, even if notionally tied to a technical activity. Conversely, a method of extracting oil from a well characterised by a computer implemented algorithm that uses historical values of density, flow rates and the like to adjust the pump’s operation so that it operates more efficiently would likely be in substance a method of extracting oil and not a scheme.

When the invention in substance lies in the application of computer technology (for example a technical solution to a technical problem) or in an improvement in computer technology, it will generally be considered patent eligible, subject to other requirements. For example, a claim directed to computer processing apparatus for assembling text in Chinese language characters using a non-Chinese keyboard  (CCOM v Jiejing 28 IPR 481; (1994) AIPC 91-079) and the production of an improved curve image by computer (International Business Machines Corporation v Commissioner of Patents (1991) 33 FCR 218) have been held to be patentable.

Computer related inventions may be claimed in different forms.  For example:

  • a processing apparatus characterised by its method of operation;
  • software or programs in a machine readable form causing a computer to operate in a particular way;
  • a computer, when programmed with code (source or executable) to operate in a particular way; and
  • a computer implemented method.

Often computer-implemented inventions are defined by functional features; that is, by the action that is being carried out by a piece of computer equipment. Just because functional terminology is used in defining an invention does not mean the claimed invention is not a manner of manufacture. It is important to remember that the invention needs to be assessed as a matter of substance and the form of the claims does not influence this assessment. A claim which functionally defines an invention may be for a manner of manufacture where the functions create a technical effect.

See also - Games and Gaming Machines.

Specific Purpose Device or Machine of Particular Construction

Aristocrat Technologies Australia Pty Limited v Commissioner of Patents [2020] FCA 778 (Aristocrat ‘20) has formulated a two-stage analysis at [91] such that:

  1. The initial question is whether the claimed invention is for a mere scheme or business method of the type that is not the proper subject matter of a grant of letters patent and…
  2. If the above question is answered in affirmative, the subsequent inquiry becomes whether the computer-implemented method is one where invention lay in the computerisation of the method.

The first question is answered as a matter of substance and not merely form. If the subject matter of the claim is a machine of particular construction, it is in substance not a scheme and it is unnecessary to proceed to the second question.

Arising from the reasoning of Aristocrat ’20, a machine of particular construction (specific-purpose device) is characterised by being:

  • a machine/device having a sole purpose; and
  • specifically designed/constructed to carry out that purpose.

Aristocrat ‘20 distinguished between (i) those computer implemented inventions which are designed with dedicated hardware to perform one specific purpose; and (ii) those which utilise generic, general-purpose computing devices to implement schemes, business rules, and the like.

i. Specific-purpose device: In Aristocrat ’20 Justice Burley identified that an invention which utilised a machine of particular construction which interacted with its software in a particular manner was, in substance, a specific-purpose device. In Aristocrat ’20 the invention was an electronic gaming machine (EGM) and it was determined that the specific software and hardware of the EGM, and their interaction formed the substance of that invention. While the hardware utilised was well-known in the art and the claimed EGM as a whole differed from other EGMs by the claimed product used to engage and entertain users of the EGM, the overall product was a particular device with new functionality.

It follows from ​​​​​​​Aristocrat ’20 that a specific-purpose device is a well-defined computing device that has been designed to only perform the specific functions defined by the claims. It will not be possible for the user of this device to customise it to perform other actions.

ii. General purpose computer systems: In contrast, Research Affiliates, RPL and Encompass relate to the implementation of particular schemes using a variety of different, general-purpose computing devices and configurations. These are general-purpose computing devices as other software may still run on them and the systems are customisable by the user.

Inventions that are directed to specific-purpose devices will, following Aristocrat ’20, generally be a Manner of Manufacture. Where the invention makes use of a generic, general-purpose computer system, then the established principles of Research Affiliates, RPL, Encompass and Rokt apply and the considerations presented at the beginning of this page will assist in determining if the invention is for a Manner of Manufacture.

Example: Performing Business Interactions Using Computing Devices

Often a claim is directed towards aspects of business interactions and transactions performed with the use of computing devices.  An example of a claim is provided below.  It relates to the sharing of information between a customer and a merchant essentially using mobile phone technology.

  1. A method of performing financial transactions, comprising:

receiving, by a processor, location information of a user from a user device;

determining, by the processor, a location of the user based on the location information;

determining, by the processor, whether one or more sellers are within a predetermined distance of the location of the user; and

communicating payment information of a selected seller from the one or more sellers to the user device if the selected seller is within the predetermined distance of the location of the user.

Performing electronic financial transactions on electronic devices, and performing these transactions on devices which could determine user locations is common general knowledge. Here, the “processor” and “user device” are merely performing their usual independent function, there being no improved operation of the relevant technology and no device of specific character. In considering and weighing up what is claimed, what the specification describes as the alleged invention, and what the common general knowledge is, the substance of the claim can be considered to be a determination of whether a seller is within a predetermined distance of a user and subsequently communicating payment information to the user if the seller is within a certain distance of the user. As a result, the substance of the claim is directed to a mere rule, or scheme, for determining when to share information. However, if the substance of the invention determined from the specification as a whole related to the way that the position was determined in that there was an improvement in the technology used to carry out the method, a claim directed to this subject matter would likely be patentable. As the claim above does not include this improvement, a support objection might be more appropriate in the circumstances.

Early Case Law Examples

International Business Machines Corporation v Commissioner of Patents (1991) 22 IPR 417

The use of a mathematical formula in a computer to produce an improved curve image was held to be patentable, since the production of the improved curve image is a commercially useful effect in computer graphics.  Specifically Burchett J found:

“Although there was nothing new about the mathematics of the invention what was new was the application of the selected mathematical methods to computer, and, in particular, to the production of the desired curve by the computer.  This involved steps which were foreign to the normal use of computers and, for that reason, were inventive.  A method of producing that by computer, which is novel and inventive, is entitled to the protection of the patent laws.”

The use of floating point arithmetic was common for processing such algorithms for generating curves (having problems of lack of speed and inaccuracy).  This invention however, claimed that calculations were performed without the use of floating point arithmetic.  At the time of the invention it was new and non-obvious to perform such mathematical algorithms in a computer, using something other than floating point arithmetic (more specifically, integer arithmetic).  This integer arithmetic, as described in the specification, comprised a particular way of performing calculations using components of a computer that changed the way a computer normally worked. It followed that the claim was directed to a process containing steps that was foreign to the normal use of computers.  

CCOM Pty Ltd v Jiejing Pty Ltd [1994] FCA 1168

The described apparatus in a broad sense consisted of conventional computer equipment including a database, a visual display and a keyboard. Generally, CCOM claimed an interface with a database that contained a data structure of Chinese language characters which encoded strokes by stroke type and in an order in which the strokes are written (if writing by hand).  The claim also defined software that presented the strokes on the display for the user.  The interface also provided a retrieval program and graphic representation of each character that enabled the user to select the character using the keyboard.  The overall outcome was an efficient way of retrieving Chinese characters.  Cooper J found that:

“The NRDC Case (102 CLR at 275-277) requires a mode or manner of achieving an end result which is an artificially created state of affairs of utility in the field of economic endeavour. In the present case, a relevant field of economic endeavour is the use of word processing to assemble text in Chinese language characters. The end result achieved is the retrieval of graphic representations of desired characters, for assembly of text. The mode or manner of obtaining this, which provides particular utility in achieving the end result, is the storage of data as to Chinese characters analysed by stroke-type categories, for search including ‘flagging’ (and ‘unflagging’) and selection by reference thereto.”

While the decision did not say it, an improved data structure that facilities the easier or improved finding of items in a computer implemented searching device has a material advantage.  It is not business administration, nor merely information.   

This decision makes it apparent that software related inventions can be patentable in Australia.