The Full Bench of the Federal Court of Australia dismissed the appeal in Encompass Corporation Pty Ltd v. InfoTrack Pty Ltd (2019)[1], thus confirming that merely implementing an abstract idea or business method on a computer does not make the invention patentable.
This landmark ruling reiterated the prevailing jurisprudence under Australian law and provided further clarification, though not definitively, on the patentability of computer-implemented inventions (CIIs).
Encompass Corporation and its licensee, SAI Global Property Division, owned two patents in respect of a method and apparatus for generating and displaying information related to entities, exemplified as, individuals, trusts, corporations, businesses, etc., involved in a business or other commercial environment, so as to provide ‘business intelligence’ on a computer.
The invention enabled users to identify and access relevant information across various repositories using a number of federated search mechanisms and to aggregate the results of those searches. Further, the disclosures also exemplified a process for displaying information relating to one or more entities.
Encompass sued InfoTrack Pty Ltd for infringement of its patents. In its defence, InfoTrack admitted infringement, but asserted that the patents in question lacked innovative step. Further, they contended that the claimed inventions were not a “manner of manufacture”, which is the statutory threshold for patentability under the Patents Act, 1990.
The court of first instance ruled that despite satisfying novelty and innovative step requirements, the Encompass invention failed the manner of manufacture test. The court further noted that the patents only implemented an abstract idea using generic computer technology, but without improving the operation of the computer itself.
Hence, it was concluded that the invention was essentially automated business method, not a technological innovation. Encompass appealed against the decision.
The appeal was heard by a five-judge full bench of the federal court, which unanimously dismissed the appeal; it confirmed the trial court’s verdict that the claimed invention was not directed to patentable subject matter.
Relying on earlier authorities such as Research Affiliates LLC v. Commissioner of Patents [2014][2] and Commissioner of Patents v. RPL Central Pty Ltd [2015][3], the Court reaffirmed that while for patentability, inventions must produce ‘artificially created state of affairs’ and have economic utility, or be ‘vendible’, these attributes alone are insufficient.
The decisive inquiry for patentability of CIIs is whether the invention is a mere scheme implemented using standard computer functions, or whether there is ingenuity in the computerisation itself that makes the computer operate in a new or improved way.
The court held that the Encompass claims were “instructions to apply an abstract idea using generic computer technology.” The court reasoned that the "substance" of the Encompass CII was a mere scheme or abstract idea, not a technical invention. No particular software, algorithm, or hardware configuration formed an essential feature of the claimed invention.
Further, the specification was drafted broadly and was non-specific as to implementation. Hence, the invention was not more than the application of a business scheme by means of a conventional computer.
The court ruled that the invention, a method for displaying business intelligence, was an "unpatentable abstract idea" implemented by "generic software" and did not add an inventive technical contribution. It ruled that, although the claims might improve the user experience by enabling efficient visualisation of data, this was not equivalent to improving the computer’s functioning.
The Full Federal Court confirmed that the claimed invention — an information visualisation and search method — was not a patentable manner of manufacture because it merely implemented an abstract idea using a generic computer. The simple use of a computer to carry out a business scheme is not patentable
.jpg)
Further, the court found the claims of the patents were not a "manner of manufacture" and hence non-patentable. The judges declined to articulate a rigid “test” for assessing patentability of CIIs; instead, they opined that each case must be evaluated contextually by examining the substance rather than the form of the invention.
The decision underscores the high threshold for patentability of CIIs in Australia. Generic computerisation, unspecified programming details, or the delegation of technical implementation to the user generally indicates non-patentability.
For patent drafters and applicants, the decision highlights the need to describe and claim specific technical features that reflect how the computer has been adapted, modified, or improved by the invention. Patents that merely state a business method executed by a computer are unlikely to succeed.
The precise boundary between an unpatentable abstract scheme and a genuinely inventive computer-based method remains unsettled. Besides, for CIIs to be patentable in Australia, the inventive substance must reside in the computerisation itself, not merely in using a computer to perform an otherwise unpatentable scheme.
At Blaze Ventures, we have qualified professionals and elaborate processes for helping enterprises and inventors ensure ‘patentability’ of computer-implemented and technical data processing ideas, innovations and inventions.
_____
[1] [2019] FCAFC 161
[2] [2014] FCAFC 150
[3] [2015] FCAFC 177
