Computer implemented business methods – routine patent cases for the Australian courts?

A Full Court of the Federal Court of Australia appeared to suggest that patent cases involving claimed inventions for computer implemented business methods can be determined using an established framework and such cases are no longer at the cutting edge of patentability – that mantle has been assumed by gene technology. The case in point is Commissioner of Patents v RPL Central [2015] FCAFC 177.

For a prospective student, navigating the Australian vocational education system can be complex. There are thousands of courses on offer, and several privately operated training organisations stand accused of unscrupulous sales tactics with a view to recruiting students ill equipped to undertake study in order to receive payment from the government in consideration of tuition fees. In the last couple of months alone the ACCC has commenced proceedings against two private colleges (claims summarised here and here), the Australian Skills Quality Authority has published a less than flattering “Targeted audit of VET-FEE HELP providers” and the federal parliament has enacted reforms to the funding scheme in an attempt to prevent some of the more egregious conduct that appears to have been engaged in at the expense of taxpayers.

An Australian company, RPL Central, had identified difficulties faced by prospective students in determining their eligibility to enrol in vocational courses and developed some software to assist students and training organisations to assess the level of prior learning undertaken by students. RPL Central applied for an innovation patent entitled “Method and System for Automated Collection of Evidence of Skills and Knowledge”. That application was filed in mid 2009. After an examiner decided to accept the application, it was opposed. A delegate of the Commissioner for Patents heard the opposition and decided that the application should not proceed to grant on the basis that the claimed invention was not a “manner of manufacture” and, therefore, not proper patentable subject matter. RPL Central appealed successfully to a single judge of the Federal Court of Australia (Justice Middleton). Justice Middleton’s decision was handed down in 2013. We discussed it in this earlier post.

The Commissioner applied for leave to appeal against Justice Middleton’s decision, but the hearing of that application was deferred until May 2015 to allow a similar case involving a computer implemented business method, Research Affiliates, to be heard and decided by the Full Court (see here for a summary of the Full Court’s decision in Research Affiliates). The Full Court’s decision in the appeal by the Commissioner against Justice Middleton’s 2013 decision in the RPL Central case was determined on 11 December 2015 (last week) but the court’s reasons have only just been made generally available.

Not surprisingly, the Full Court in RPL Central applied the principles adopted in Research Affiliates (noting that those principles were not available to the delegate nor Justice Middleton at the time of his decision). That was bad news for RPL Central, because it meant that the Full Court held that “the claimed invention is to a scheme or a business method that is not properly the subject of letters patent” (at [113]).

In Research Affiliates the Full Court had decided that:

  • a claimed invention that involves simply the speed of processing and the creation of information for which computers are routinely used is still a claim to the business method itself; and
  • a computer-implemented business method can be patentable where the invention lies in the way in which the method is carried out in the computer. This necessitates some ingenuity in the way in which the computer is utilised

In RPL Central, the Full Court considered the manner in which a computer was utilised in the claimed invention and concluded that what was involved was no more than a standard operation of generic computers with generic software to implement a business method.

The Full Court gave a number of examples of how RPL Central’s software converted a prior learning requirement into a question for the user: the requirement “demonstrate an understanding of the structure and profile of the aged care sector” became the question “generally speaking and based upon your prior experience and education, how do you feel you can demonstrate an understanding of the structure and profile of the aged care sector?” The Full Court characterised this as a kind of processing that fell within the normal use of a computer, as opposed to utilisation involving ingenuity.

The Full Court also went out of their way to distinguish this case from the recent High Court case on the patentability of an isolated gene which the High Court observed was “on the boundaries of the judicial development” of the concept of patentable subject matter. Rather, this Full Court believes that there is a workable framework with which to assess the patentability of computer implemented business methods, stating that “[t]his case does not involve a new class of claim involving a significant extension of the concept of manner of manufacture” (at [119]).

In my view, opinions may legitimately differ on this perspective. It seems to me that, given the increased focus by businesses on digital disruption, there will be many further opportunities for the courts to develop the contours of the law on patentability of computer implemented business methods. The principles established by Research Affiliates are not necessarily easy to apply, and they will inevitably be refined case by case.

Whether or not you think about this process as more or less ‘business as usual’ for the courts or pushing the boundaries, the Full Court’s decision is in line with a general trend of raising the bar before giving patent monopolies to claimed inventions involving computerised business methods.

The case is also an example of how long contested patent litigation can take – the application was filed in mid 2009. RPL Central has until early January 2016 to decide whether or not to file an application to the High Court of Australia for special leave to appeal. If that application is filed, seven years from filing could easily elapse before RPL Central has certainty about the patentability of their claimed invention. In the field of digital technology, the useful economic life of many inventions is shorter than this period.