The future of software patents in Australia

The Institute of Patent and Trade Mark Attorneys of Australia (IPTA), the representative body for Australian patent attorneys, has filed an application to the Federal Court to have input to an Appeal which is likely to set the future direction of software patents in Australia.

The Appeal, against a decision of a single judge of the Federal Court (Encompass Corporation Pty Ltd v InfoTrack Pty Ltd [2018] FCA 421), is scheduled to be heard on 8-9 November 2018.

The IPTA Council decided to take this action after learning that the Commissioner of Patents had been granted permission to intervene in the Appeal as an interested party.  A primary issue under consideration is the question of “manner of manufacture” (patentable subject matter) as it relates to computer-implemented inventions (software).

IPTA had become increasingly concerned by the current approach being adopted by IP Australia (which includes the Patent Office), and lower Courts, in relation to the assessment of patentability of inventions based on software.  Many inventions which satisfy novelty and inventive step requirements are being rejected outright by IP Australia, even when they are considered patentable in Europe (which has historically provided only limited protected for software inventions).

The patent system is intended to incentivise innovation by providing an exclusive right to exploit a patented invention for a defined period.  These monopoly rights thus help patent owners minimise the commercial risk involved in their R&D investment.

However, the level of uncertainty created by recent Patent Office decisions has made it almost impossible for patent attorneys to advise clients involved in software-focused technologies, such as fintech, with any level of confidence.

This Appeal is to be heard before an expanded panel of five judges of the Federal Court, including the Chief Justice, rather than the usual three Judges.  It will therefore be binding on all Australian Courts (and the Patent Office) other than the High Court.  The decision is therefore likely to form an important precedent that will influence this area of the law for many years to come.

It is hoped that by having direct input to the Appeal, IPTA will be able to encourage the Court to provide greater certainty for future patent applicants.

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