5.6.8.6 Computer Implemented Inventions, Mere Schemes, and Business Methods

Date Published

"A Matter of Substance"

Under Australian law, there are no specific exclusions for software or methods that are implemented as computer software or a related product. However, such inventions 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 5.6.8.4 Discoveries, Ideas, Scientific Theories, Schemes and Plans).

Cases involving no manner of manufacture

Merely “putting” software into a computer would not, by itself, meet the requirements for manner of manufacture. Consideration can be had of 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 put the method into practice, or for example whether: the computer is integral to the invention in that a method embodied in the software solves a technical problem within the computer; whether the invention solves a technical problem outside the computer (possibly in different fields of technology that have their own technical problems); or the invention results in an improvement or adaptation.   

The Full Court in Aristocrat Technologies Pty Ltd v Commissioner of Patents [2025] FCAFC 131 (Aristocrat ‘25) (referring to the High Court allowing reasons in Aristocrat Technologies Pty Ltd v Commissioner of Patents [2022] HCA 29 (Aristocrat ’22) made clear that there is a body of Federal Court consideration of matters that constitute an abstract idea manipulated on a computer and thus not being for a manner of manufacture.  They noted:

“…the result in each of the Full Court decision was correct, in that each of them merely involved the use of a machine to manipulate an abstract idea rather than involving the implementation of the idea on a machine to produce an artificial state of affairs and useful result.  Those Full Court decisions concern: (a) the scheme for protecting assets from unsecured judgment creditors considered in Grant; (b) the scheme for constructing data concerning a non-capitalisation weighted portfolio of assets considered in Research Affiliates; (c) the scheme for assessing the competency or qualification of people in accordance with recognised standards considered in RPL Central; (d) the method and apparatus for displaying information to provide business intelligence considered in Encompass; and (e) the marketing scheme considered in Rokt. The same observation applies to the use of the GPS-enabled mobile devices for dealing with risk management information considered in Repipe Pty Ltd v Commissioner of Patents [2021] FCAFC 223; (2021) 164 IPR 1 (Perram, Nicholas and Burley JJ), and the improved logistics method considered in Dei Gratia Pty Ltd v Commissioner of Patents [2024] FCA 1145 (Rofe J).”

The Full Court in Aristocrat ‘25 also noted (at [132]) that assessing an invention according to the above principles is in keeping with prior authorities on manner of manufacture, including Grant, RPL Central, Research Affiliates, Encompass, Rokt, Repipe and Dei Gratia Pty Ltd v Commissioner of Patents [2024] FCA 1145. Consequently, determining whether an invention is an abstract idea which is manipulated on a computer or an abstract idea implemented on a computer to produce an artificial state of affairs and useful result is best understood as being commensurate with assessing the substance of the invention as per existing case law prior to Aristocrat ‘25. That is, examiners may assess an invention according to Aristocrat ‘25 by utilising principles from established principles prior to this decision.

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 schemes 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”. As was noted in Repipe Pty Ltd v Commissioner of Patents (2021) FCAFC 223 (Repipe), if the invention was "not directed to any technological problem and the method of implementation does not involve any improvement in computer technology or any unusual or unconventional technical method or effect", the invention was not patentable subject matter. 

Specifically in the Encompass matter, an expanded Full Court of the Federal Court emphasised that the criterion of an “artificial state of affairs and useful result” was not necessarily sufficient for patentability or an exhaustive expression of the relevant principles. The Court in Encompass [83]-[98] discussed at length the decision in Myriad and made clear that the mere presence of a physical effect in an invention directed towards a computer implemented scheme was insufficient to confer patentability. 

Examiners should seek to draw analogy of the claims they are considering with this body of Federal Court precedent when objecting under the ground of manner of manufacture. 

Cases involving a manner of manufacture

The Full Court in Aristocrat ’25 contrasted matters such as RPL and Rokt with matters found to be patentable as falling under the category of an idea implemented on a computer to produce an artificial state of affairs and useful result.  They pointed to:

“…the curve drawing algorithm held to be a manner of manufacture in International Business Machines Corporation v Commissioner of Patents (1991) 33 FCR 218 at 226 (Burchett J) applied a formula to produce an artificial state of affairs of economic utility, namely the desired and improved curve image. To like effect, the invention held to be patentable in CCOM used a particular method of characterisation of Chinese character strokes which was applied to an apparatus in such a way that the operation of a keyboard would enable the selection, through a computer, of the appropriate Chinese characters used for word processing, which, as mentioned earlier, was found to produce an artificially created state of affairs of utility in the field of economic endeavour (at 295, per Spender, Gummow and Heerey JJ). Similarly, the claim held to be patentable which was considered in UbiPark Pty Ltd v TMA Capital Australia Pty Ltd (No 2) [2023] FCA 885; (2023) 177 IPR 254 at [203]-[207] (Moshinsky J), related to a communications system, computer program and smartphone configured to determine signal strengths of entry and exit signals to control a user’s entry to and exit from a restricted area, which was found to constitute an abstract idea implemented on a computer to produce an artificial state of affairs and a useful result, namely the opening of the entry and exit barriers to allow vehicles to pass. A similar conclusion applies to the method of scanning used in a Time Division Multiple Access system in digital mobile radios to reduce the time required for completing scan operations, considered in Motorola Solutions Inc v Hytera Communications Corporation Ltd (Liability) [2022] FCA 1585; (2022) 172 IPR 221 at [354]–[359] (Perram J), although the actual reasoning in that case simply applied the proposed alternative analysis in the majority decision, as did the Full Court on appeal (Hytera Communications Corporation Ltd v Motorola Solutions Inc [2024] FCAFC 168 at [414] - [416] (Beach, O’Bryan and Rofe JJ)), there being no argument to the contrary.

The Full Court in Aristocrat ‘25 also elaborated on the patentability of an electronic gaming machine comprising various physical features by noting that the claimed invention before them was not best characterised as a game played on well known computer technology, but was the operation of a feature game reliant on the function and display of configurable symbols in relation to the feature game, and the integration of those elements in an interdependent player interface and game controller. In this regard, the court found that the claimed invention was directed to more than mere computer implementation in the form of the manipulation of an abstract idea.  They added that:

“…the configurable symbols and the feature games require implementation in the EGM, and in the operation of the EGM, they interact with, and are entirely dependent upon, other integers of the claim, especially the physical integers, and therefore are inextricably connected with the player interface.”

Where a game is played on such a machine with interdependent physical features then patentability may be found. This is to be contrasted with a game merely played on a generic computer system.

Things to consider

An examiner may reason by analogy of the claimed invention they are considering with either of the two sets of claims discussed above. For an invention to be patentable, there must be more than an abstract idea, mere scheme or mere intellectual information. From the various decisions discussed above, there are a number of factors that remain available to assist the decision-making process and thus can be considered in seeking to determine whether an invention is patentable. They include:

  • whether the contribution of the claimed invention is technical in nature; 

  • whether the invention solves a technical problem within a computer or outside a computer;

  • whether the invention results in improvement in the functioning of a computer, irrespective of the data being processed;

  • whether the application of the method produces a practical and useful result;

  • whether the invention produces an artificial state of affairs;

  • whether there is an interdependence of physical features (beyond a generic computer) which enable the invention to work;

  • whether it can be broadly described as an improvement in or adaptation to computer technology;

  • whether the method 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 there is ingenuity in the way in which a computer is utilised;

  • whether the invention involves steps that are foreign to the normal use of computers; and

  • whether the invention lies in 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 paragraph 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 paragraph 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.

When the invention in substance lies in an improvement in a technical field outside of a computer (for example a technical solution to a technical problem), in an improvement in, or adaptation to computer technology, it will generally be considered patent eligible, subject to other requirements (see IBM and CCOM referenced above).

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 5.6.8.7 - Games and Gaming Machines.

Example: Performing Business Interactions Using Computing Devices

Often a claim is directed towards aspects of business interactions and transactions performed with the use of standard or well-known 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 and the invention merely uses generic computer technology. Here, the “processor” and “user device” are merely performing their usual independent function, there being no improved operation of the relevant technology nor any identifiably interacting physical features.

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 merely manipulated on a standard computer. As a result, the substance of the claim is directed to a mere computer implemented 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.

Further 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.  

Hytera Communications Corporation Ltd v Motorola Solutions Inc [2024] FCAFC 168

The patent in question relates to Time Division Multiple Access (TDMA) technology which allows a frequency band within the radio frequency spectrum to be divided into timeslots so that more than one person can use the same channel.  The patents seek to address a problem of scanning time required to find activity of interest; by transmitting information from a base radio to a subscriber unit wherein the first information indicates certain activity is present, this information being compared to information prestored in the subscriber unit.  If there is a match in these two pieces of information, then the subscriber unit locks onto the channel of interest.  The Full Court referred to primary judge’s findings as follows:

“The primary judge found that the 355 patent improved the way a particular class of computers, being base stations and subscriber units, scan frequencies. His Honour reasoned that the problem of the scanning speed is a problem of computer programming and is relevantly indistinguishable to the problem in IBM of curve drawing on computers. Curve drawing on computers required the use of processing-expensive floating point arithmetic. This kind of floating point arithmetic was expensive in terms of system resources. The solution in that case, being the deployment of an algorithm which removed the need to use floating point arithmetic, resulted in an improvement in computer technology. His Honour said that the same was true in the context before him.

His Honour said that the problem which existed was the problem of how to improve scanning times in a TDMA system. The solution was the use of an activity indicating first information which could permit the abolition of the null ID and therefore permit compression of ID information in the second information. His Honour said that these are conceptually indistinguishable and that the 355 patent is plainly an improvement in computer technology.”

And concluded that:

“The 355 patent at its broadest discloses a method for improving scanning time. That is a manner of manufacture. It is not an abstract idea. The patent discloses and the relevant claims embody a technical means, utilising the structure of data frames by which communications are carried in a digital communications device, by which scanning time can be improved.”

The invention is thus aligned with the invention in the IBM case above, being in the way that the computer/technology is improved and not in the mere use of technology. 

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.

Example Patent Office Hearing Decisions

Bio-rad Laboratories, Inc. (2018) APO 24 (Patentable Subject Matter)

In this decision it was confirmed that in circumstances where the technical problem solved lies outside of a computer, decisions involving computer-implemented schemes may not be particularly instructive in determining patentability. Research Affiliates and RPL are examples of inventions directed to computer-implemented business methods and in those cases, there is a need for the substance of the invention to lie in the computerisation for patentability to be present. Bio-Rad clarifies that in the circumstances where the material effect of an invention lies outside the computer, it is not necessary to separately consider any technical improvement to computer technology.

In Bio-Rad, the substance of the invention was not merely a scheme for a quality control strategy. The substance of the invention was a method that determined an optimal quality control strategy that reduced the number of tests that needed to be carried out and thereby reduced the number of reference samples that were used. The claimed substance was considered to provide a material/technical effect of reduced material use.

Facebook, Inc. (2020) APO 19 (Patentable Subject Matter)

This decision relates to the idea of addressing technical problems in the architecture of computer programs.  In this decision, the delegate identified a business problem being the need to measure an advertising conversion event however the Delegate also noted that in mobile devices, native applications can be “sandboxed” and thus cannot access the cookies of other applications.  When advertising applications this presents a problem as one application which communicates to an online system cannot determine if a user has downloaded another application as a result of an advertisement. The delegate noted that the state of the art does appear to not involve the step of downloading a set of instructions that includes instructions to write into a shared memory and another application accessing that shared memory and sending information back to an online system along with user data.

The delegate concluded that sandboxing of native applications is a technical limitation faced by application developers and found that the manner in which the shared memory is accessed represents a technical improvement in the functioning of the device.

Apple, Inc. (2022) APO 83 (Patentable Subject Matter)

This matter relates to graphical user interfaces which use biometric sensors as input to manipulate these user interfaces.  Claim 1 was found by the delegate to be directed towards the redaction of electronic documents being viewed on an electronic device with a display and a biometric sensor.  In the claimed invention first and second information items of the document that are being viewed on the display are redacted in a manner so that only identifying information of both the information items is displayed while the content information of both the information items are hidden from view, and while viewing the redacted document the user can unhide and view the content information of both information items simply by authenticating their credentials using the biometric sensor of the device.  He found this a mere scheme for revealing redacted information subsequent authentication. 

Dependent claims were directed towards arrangements in which the biometric input controls the manner in which redacted information is revealed and also the locked condition of the device. In particular, additional claims defined that the unredacted version of the first and second information items is only displayed as long as the biometric sensor continues to detect the biometric input and once the biometric input ceases, the display reverts to the redacted version of the first and second information items.  The delegate found these features were a technical effect that was related to the means for viewing information.  As a matter substance, these features were found to add patentable subject matter.

The Regents of The University of California (2022) APO 77 (Not Patentable Subject Matter)

This matter relates to improving cognitive ability using a method implemented in a computer where a variety of information is shown, inputs are received from an individual, and an analysis is performed.  More specifically, a first step is that a first task of a certain difficulty is presented to an individual using the computing device. Data is obtained by the computer via an input of the individual’s response to this task. An interference is then placed to distract the individual from the first task, and a further response is received via input from the user to the first task in the presence of the distraction. In doing so, differential data is available to compare the individual’s abilities with and without distraction.  After receipt of inputs, the computer then analyses the individual’s performance by looking at the difference in the inputs. The process of presenting a task with and without interference in then iterated, seeking inputs again with and without interference wherein the difficulty of the task is adjusted on the basis of the earlier analysis and the task is presented with adjusted difficulty. Ultimately this process of iteration and adjusted difficulty can be used to generate an output that is indicative of cognitive ability.  The Deputy Commissioner found this not patentable in the following terms:

“While I acknowledge measurable effects on brain function by the present invention when embodied and implemented, I cannot agree that this lends sufficient force to satisfy the requirements of NRDC. There is no particular medical or physical condition targeted by the present invention, instead the invention seeks to determine and improve cognitive ability in the most general of senses. Alternatively worded, the invention improves the “intelligence” of an individual through focus on a particularly arranged challenge. This challenge is effective at enabling an individual to practice operating in the presence of distraction and to improve their skill in this area, but it does just that, improve the mental ability of a person. I cannot see how improving mental ability in the general sense provides for a material advantage in the useful as opposed to fine arts. A change in physical state of the brain on my reckoning, would be measurable for any number of human physical and intellectual pursuits once practiced to a sufficient degree. While it may be inventive to drive training and improvement on the basis of the described “interference cost”, I see it as purely a matter of intellect to practice your skills in the presence of designed interference. No particular physical or concrete phenomenon is identified in the present invention that is the target of the method, and contrary to the submission of the applicant I cannot distinguish the present invention from a scheme or plan of enhancing cognitive function such as by instructing the individual to learn a language, perform crossword puzzles, or to play sudoku to stall cognitive decline.”

PayPal, Inc. (2023) APO 54 (Not Patentable Subject Matter)

This matter relates to tailored recommendations for users of electronic devices in a consumer context.  The invention seeks to increase the chance of a user purchase or donation and create a system that provides recommendations that are tailored across different domains of interaction.  The invention uses a series of machine learning models to ultimately determine correlations between user information and cross-domain information and then uses a trained machine learning model to generate a more accurate total recommendation score.  The delegate concluded as follows:

“While it is clear, given the nature of the invention, that the presence of a computer is mandatory, it also seems to me that the computer, and the machine learning aspects of the invention, are used for their ordinary purposes to implement a scheme for providing recommendations for possible transactions between a user and an entity. As set out above, I cannot see anything unconventional or foreign in the use of the computing technology as described in the specification, and it is not apparent to me that the defined combination of existing machine learning techniques with specific data inputs can be considered a technical contribution. It follows that I conclude that the invention (as claimed in all of the claims) is in substance a scheme for providing tailored transaction recommendations to a user. It addresses a business problem (of providing more effective transaction recommendations to a user) and the innovation is a business innovation rather than a technical innovation.

Amended Reasons

Amended Reason Date Amended

Updated content.

Added note banner about page content being under review.

Case law examples updated to include content relating to Hytera Communications Corporation Ltd v Motorola Solutions Inc 2024 FCAFC 168 with additional minor amendments to subheading titles

Additional discussion added regarding various APO decisions in relation to MOM

Published for testing
Back to top