RELEVANT PRINCIPLES
27 It is necessary to identify the proper approach to answering the key question. Section 18(1A)(a) of the Patents Act provides as follows:
18 Patentable inventions
...
Patentable inventions for the purpose of an innovation patent
(1A) Subject to subsections (2) and (3), an invention is a patentable invention for the purposes of an innovation patent if the invention, so far as claimed in any claim:
(a) is a manner of manufacture within the meaning of section 6 of the Statute of Monopolies; and
…
28 Determining whether there is a manner of manufacture is a different inquiry from that involved in determining questions of novelty or assessing whether the claimed invention involves an innovative step when compared to prior art. Innovation patents, as these Patents are, do not require an inventive step.
29 In National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252, Dixon CJ, Kitto and Windeyer JJ relevantly held:
(1) First, the relevant inquiry is whether the invention in issue is 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 1623, 21 Jac 1 c 3 (at 269).
(2) Secondly, to be a manner of manufacture, a process must offer some material advantage of economic value. It must belong to a useful art as distinct from a fine art (at 275).
(3) Thirdly, the mode or manner by which an invention provides some new and useful effect, and thereby an improved result, may involve patentable subject-matter (at 276). The new and useful result must be observable in 'something'; however, that 'something' need not be an article; it may be 'any physical phenomenon in which the effect, be it creation or merely alteration, may be observed' (at 276).
30 In addressing the process the subject of the dispute before it, the Court in National Research answered the question it posed in the first query by reference to the two conclusions it reached, identified in the second and third queries. The Court observed the method the subject of the relevant claims had as its end result an artificial effect falling squarely within the true concept of what must be produced by a process if it is to be held patentable; the significance of the product was economic (at 277).
31 The Court in National Research also cautioned that any attempt to state the ambit of s 6 of the Statute of Monopolies by precisely defining 'manufacture' is likely to fail and, further, 'to attempt to place upon the idea the fetters of an exact verbal formula…would be unsound to the point of folly' (at 277).
32 Fifty-five years later, in D'Arcy v Myriad Genetics Inc (2015) 258 CLR 334, Gageler and Nettle JJ emphasised that the way in which a claim is drafted cannot transcend the reality of what is in suit. Monopolies are granted for inventions, not for the inventiveness of the drafting with which patent applicants choose to describe them. The matter must be looked at as a question of substance. Effect must be given to the true nature of the claim: Myriad per Gageler and Nettle JJ (at [144]); see also French CJ, Kiefel, Bell and Keane JJ (at [6], [87]-[88] and [94]) and Gordon J (at [255], in passing). An invention is to be understood as a matter of substance and not merely as a matter of form.
33 A mere scheme or plan is not patentable. However, an improvement in computer technology, including one that implements a method used in the conduct of business, is patentable. The business criterion for patentable subject matter is an artificially created state of affairs that has economic significance or utility, although this may not be sufficient in all circumstances. No special rules or exclusions apply to claims for functions performed by software. Claims to computer programs having 'the effect of controlling computers to operate in a particular way' may be patentable subject matter: Data Access Corporation v Powerflex Services Pty Ltd (1999) 202 CLR 1 per Gleeson CJ, McHugh, Gummow and Hayne JJ (at [20]). So the application of selected mathematical methods to computers to produce an improved curve image was held to be patentable in International Business Machines Corporation v Commissioner of Patents (1991) 33 FCR 218. A claim to software enabling the word processing of Chinese characters was held to be patentable in CCOM Pty Ltd v Jiejing Pty Ltd (1994) 51 FCR 260. A method for keeping track of rewards on loyalty cards was held to be patentable in Welcome Real-Time SA v Catuity Inc (2001) 113 FCR 110.
34 There is a difference between an unpatentable abstract idea, method or scheme for carrying on a business and a claim for a method and a device for use in businesses. For a business method to be patentable, it must produce a 'physical effect in the sense of a concrete effect or phenomenon or manifestation or transformation': Grant v Commissioner of Patents (2006) 154 FCR 62 per Heerey, Kiefel and Bennett JJ (at [26] and [32]). The physical effect can be embodied by electronic processes in a computer system, such that it may not necessarily need to be a piece of hardware.
35 Consideration of whether there is an improvement in this context, or of matters of invention or ingenuity, directs attention to the subject-matter of the invention as a matter of substance. It does not import into the manner of manufacture ground, considerations of novelty or of the inventive or innovative step: Research Affiliates LLC v Commissioner of Patents (2014) 227 FCR 378 per Kenny, Bennett and Nicholas JJ (at [111], citing CCOM (at 291)). Repipe also stresses that a patent's specification need not identify the inventive or innovative step. It is sufficient that the specification describes in a claim or a series of claims what is or are claimed to be the patentable subject matter: Winner v Ammar Holdings Pty Ltd (1993) 41 FCR 205 (at 217). The approach is not to compare the claim against the common general knowledge in the field of computer technology or against prior art in that field.
36 In Rokt Pte Ltd v Commissioner of Patents [2018] FCA 1988 (presently under appeal), Robertson J said (at [201]):
For example, both sides agreed that the matter had to be addressed as a matter of substance. I agree. I also accept that there is no formula to be mechanically applied, and that it is necessary to understand where the inventiveness or ingenuity is said to lie. A mere business innovation is insufficient and a business method or scheme is not, per se, a proper subject for letters patent. Nor are abstract ideas. The issue is whether there is a technological innovation. Where, as here, the claimed invention is to a computerised business method, the invention must lie in the computerisation and it is not enough simply to put a business method into a computer. The search is for an improvement in computer technology ...
37 Two key cases established that a method defined as a 'computer-implemented' method, but not otherwise specifically directed to computer technology, is not patentable: Commissioner of Patents v RPL Central Pty Limited (2015) 238 FCR 27 per Kenny, Bennett and Nicholas JJ (at [96] and [107]); Research Affiliates (at [115] and [118]-[119]). (Special leave to appeal the decision in RPL was refused on the basis that 'the Full Court was plainly correct'.) It has been held that mere implementation in a computer of any abstract idea or scheme is insufficient to give rise to an 'artificial effect' and therefore insufficient to constitute patentable subject matter: Research Affiliates (at [113]-[118]). Attention must be paid to the substance of the invention, such as where the method claimed is a scheme which is merely implemented in a computer. In that instance, there is no 'improvement in what might broadly be called "computer technology"': Research Affiliates (at [19]).
38 An invention will be patentable where 'part of the invention is the application and operation of the method in a physical device': RPL (at [101], citing Research Affiliates (at [104])). It will also be patentable where the invention involves the creation of an artificial state of affairs where the computer is integral to the invention or where the invention involves the use of a computer in a way that is itself claimed to be inventive, so that the invention lies in the computerisation or where there is some ingenuity in the way in which computer is utilised: RPL (at [104]).
39 The Commissioner contends, and I accept, that the following propositions emerge from RPL, Research Affiliates and the earlier authorities:
(1) The Court must decide, as matter of substance not form, whether the claimed invention is proper subject-matter for a patent: RPL (at [98]); Research Affiliates (at [107]). This requires consideration of both the claims and the body of the specification.
(2) The assessment is not done mechanically pursuant to precise guidelines: Research Affiliates (at [117]). It is a question of understanding what has been the work of, the output of, and the result of, human ingenuity and then applying the developed principles recognising that the claims are to a method and system comprising a combination of integers. It is necessary to understand where the inventiveness or ingenuity is said to lie: RPL (at [112]).
(3) A distinction exists between a technological innovation and a business innovation. The former is patentable, the latter is not. A business method or scheme is not, per se, a proper subject for letters patent, nor are abstract ideas, mere intellectual information or mere directions to implement a method using a computer: RPL (at [100]); Research Affiliates (at [101]).
(4) A computerised business method or scheme can, in some cases, be patentable. However, where the claimed invention is to a computerised business method, the invention must lie in that computerisation: RPL (at [96]). This requires some ingenuity in the way the computer is used: RPL (at [104]). It is not a patentable invention to simply put a business method into a computer to implement the business method using the computer for its well-known and understood functions: RPL (at [96]). For the Commissioner it is observed that there is an affinity between this approach and the proposition illustrated by Commissioner of Patents v Microcell Ltd (1959) 102 CLR 232, referred to in National Research (at 262) and in Myriad per Gageler and Nettle JJ (at [131]). The use of a known device for a new but analogous purpose, for which its known properties make it suitable, is not a proper subject of letters patent.
(5) An invention must be examined to ascertain whether it is, in substance, a scheme or whether it can broadly be described as an improvement in computer technology: RPL (at [96]). In conducting this analysis, it may be useful to consider:
whether the contribution is technical in nature: RPL (at [99]); Research Affiliates (at [114]);
whether the invention solves a technical problem within or outside the computer: RPL (at [99]); Research Affiliates (at [114]);
whether the invention results in an improvement in the functioning of the computer, regardless of the data being processed: RPL (at [99]); Research Affiliates (at [118]);
whether the invention requires generic computer implementation, as distinct from steps 'foreign' to the normal use of computers: RPL (at [99] and [102]); Research Affiliates (at [101]); and
whether the computer is merely an intermediary, configured to carry out the method using program code for performing the method, but adding nothing to the substance of the idea: RPL (at [99]).
(6) Where a business method or scheme cannot be implemented without using a computer that does not, of itself, provide patentability. The speed and power of computers make them a fast and efficient tool for businesses and few business processes today are performed without the use of a computer. Where a business method or scheme is implemented by using a computer to perform its ordinary functions, the claimed invention is still to the business method itself and, therefore, unpatentable. Similarly, the physical effects that computers generate by ordinary computational processes, such as displaying an object on a screen are not, of themselves, sufficient to render a computerised method or scheme patentable.
(7) It is insufficient when assessing a computer-implemented invention merely to ask whether the claimed invention satisfies the two limbs identified in National Research of:
(a) an artificially created state of affairs; and
(b) utility in the field of economic endeavour.