Is Software Patentable in Australia?

A common question that we often hear is, “Is software patentable in Australia?” The answer depends on the nature of your invention. Most software is generic, relying on generic functions in general-purpose computers. In some cases, this generic software can be extremely complex, using intricate interrelationships between computing functions and basic component calculations. If this is the case, IP Australia may refuse to grant patent protection for your invention based on its “merely generic implementation”.

It is based on the substance of the invention

In Australia, a patent application for a computer program may be patented only if the software is based on a method or scheme that is implemented on standard hardware and software. The Australian Patent Office has made it clear that an invention must be based on a method or scheme that is implemented on a standard computer. Without this, the invention is deemed to lack patentable subject matter.

To be patentable in Australia, a software invention must be capable of being used in industrial processes. It cannot be a mathematical algorithm or an abstract intellectual concept. Australian judicial decisions illustrate the indeterminacy of software patents but still provide helpful insight for the software industry. The substance of the invention is the most important determining factor in deciding if a software product can be patented.

In the case of Rokt, the claimed invention relates to a method that allows a user to engage with an online offer. The expert testified that the engagement offer was the substance of the invention. Although this may seem like click bait, the application’s purpose was to solve a business problem. The use of computers was an integral part of the invention. The Full Court concluded that, while the claimed invention is not a patented method, it is still an inventive concept.

Recent computer-implemented inventions decisions have provided useful guidance for the prosecution of a patent application for computer-implemented software. Various computer-implemented inventions have failed the test of patentability due to a lack of technical detail. It is vital to provide adequate technical detail to demonstrate the inventive concept of computerisation. This guidance is a must-read for all patent practitioners.

It must be tied to a new form of hardware

The Supreme Court recently decided that abstract ideas can’t be patented, even when they’re tied to a new form of hardware. The court’s decision invalidated Alice trading patents in Australia and upheld a May 2013 ruling by the U.S. Court of Appeals for the Federal Circuit. However, it does not mean that software patents are forever barred.

For software to be patentable in Australia, it must meet strict criteria. It must not be previously used in secret, solve a problem in a new way, or be capable of achieving precise results. It also has to be detailed enough to provide a clear picture of the software’s components. If you’re not sure whether or not your software is patentable, get help from an experienced lawyer like LegalVision.

The Patents Act 1990 (Cth) does not attempt to define what constitutes software. It simply provides protection for ‘any’ method of manufacture. That means software is not a form of hardware in itself. The Patents Office in Munich tries to classify all technologies, and it doesn’t do a good job. But there’s a solution for this.

In contrast, in the United States, software patents cannot be patented unless tied to a new form of hardware. Australia and the United States have a Free Trade Agreement and this trend will continue. Some countries have a different interpretation of software patents and the US Federal Trade Commission have both expressed concerns about overly broad and trivial patents. This could lead to anti-competitive effects.

It must be directed to an “abstract idea”

There is a growing body of case law addressing whether software can be patented in Australia. In general, the patentability of computer software inventions depends on whether the underlying idea is a tangible thing, such as an algorithm or a data structure. However, the patentability of algorithms that embody non-tangible phenomena cannot be patented. Therefore, Australia’s patentability laws are still in flux.

While it is not directly an attack on software patents, the ruling should make it more difficult for a patent office to approve a software patent. Julie Samuels, executive director of tech entrepreneur trade group Engine Advocacy, says the decision makes software patents more difficult to defend. But it doesn’t stop there. “The Federal Circuit Court of Appeals’ decision is broad, and should only serve to make patents that are too broad more difficult to get approved,” she says.

In the recent past, the US patent office has issued updated guidelines for computer-implemented inventions. The guidelines in recent years have revealed that many computer-implemented inventions have been dismissed due to lack of technical detail. Lack of technical detail can make a computer-implemented invention ineligible for patent protection. It is therefore crucial to provide sufficient technical detail in your application to demonstrate the inventive concept of computerisation.

To be eligible for a software patent, an invention must be a method or computer program that produces an artificial state of affairs. This phrase has become the touchstone for determining whether a software invention should be patented in Australia. A decision by the Federal Court in 19914 relied on this broad approach, establishing that computer programs could not be excluded from patent protection. This opened the door to software patents in Australia.

An algorithm to create smoother computer graphics displays was ruled patentable in Australia. A 1991 case, IBM v Commissioner of Patents, concerned an algorithm for making computer graphics displays smoother. This decision addressed the concerns raised by prior art that claimed a non-tangible mathematical formula as patentable. Moreover, the court stated that claiming a computer feature that makes a computer work in a specific environment is a substantial contribution to the inventive concept.

It can be protected by divisional innovation patents

There are two different types of patents in the Australian patent system. Innovation patents are applied for to protect new inventions. These patents are also called “divisional innovation patents” because they are based on a previously filed patent. Innovation patents expire on August 25, 2021. In the meantime, applicants can file a standard patent application or a PCT application.

However, software often utilizes generic functions from general-purpose computers. While these functions are commonly used, they may also involve complex interrelationships of computing functions or even simple calculations of their component parts. If IP Australia decides that your invention is “merely generic”, it may reject it. Generally, a divisional innovation patent is an important tool in protecting your invention. Therefore, it is important to work with a qualified patent attorney to determine whether this approach is right for your business.

Another option is to seek abolition of software patents through legislation or through courts. It is unlikely that software patents will be abolished in the Australian patent system given the current political climate. However, abolition of software patents is highly likely to limit the negative impact of software patents. As a result, software patents are likely to hinder the development of new products and could even stop Open Source Software and global collaboration. In order to protect software innovations, governments must wake up to the implications of this approach.

However, while the abolition of the innovation patent system may have negative consequences for Australian SMEs, it should also be a great opportunity for Australian companies to consider other intellectual property rights. In particular, diversifying your portfolio by filing trade mark applications, industrial design applications, and utility models in other jurisdictions could improve your company’s position. You may also consider drafting and prosecution strategies for these rights in other jurisdictions.