07.28.10

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‘Harmonisation’ Tricks Down Under; TechInsights Explains How to ‘Cheat’ and Patent Software

Posted in Australia, Patents at 4:59 pm by Dr. Roy Schestowitz

Australia on globe

Summary: South Pacific patent laws and how loopholes are made to allow software patents through “physical” appendages or “transformations”

OVER in Australia it oughtn’t be hard to patent software, but Australia is one of the very few countries which permit monopolising algorithms. Based on Patent Baristas, “Australian Patent Office Refines Test for Patentability of Business Methods” and this applies to software too:

Prior to the subject decision, the governing precedent was Grant v Commissioner of Patents [2006] FCAFC 120 (“Grant”). Grant stood for the proposition that a method must produce “a physical effect in the sense of a concrete effect or phenomenon or manifestation or transformation”. Grant went on to say that a change in the state or memory of a computer may be a “physical effect”.

Patentors of software can use the “embedded” trick in New Zealand following some changes which were not exactly ideal, but there are still claims of disparity between Australian and Kiwi patent laws.

Australia and New Zealand may be close geographically and culturally, but when it comes to patent protection, their paths have started to diverge. When talking to clients, whether in Australia or elsewhere, I usually mention the possibility that they could also pursue patent protection in New Zealand. In those discussions, it often becomes clear that the client assumes the patent provisions of the two countries are, by and large, synonymous. This is not so. While harmonisation of the IP laws of these South Pacific cousins continues to be the subject of much discussion on both sides of the Tasman, the reality of achieving this seems (sadly) increasingly unlikely in the context of recent developments.

Notice the use of the word “harmonisation”; in such cases, the more dominant force usually imposes its laws upon the subordinate one. This trick was being called the same thing — namely “harmonisation” — when American software patents lobbyists were trying to legalise software patents in Europe [1, 2].

One post-Bilski analysis that we missed last month came from TechInsights and it helped explain the tricks for patenting software. To quote the opening:

For over a decade the fundamental intellectual property rights of an innovation implemented in software have been held ransom as the appeals on the case, “Bilski et al. v. Kappos …” worked their way through the system to the Supreme Court. Prior to the Supreme Court’s recent ruling, software and process patents were on very shaky ground due to the assertion by a lower court that a claimed process is only patent-eligible if it is tied to a particular machine or apparatus, or it transforms a particular article into a different state or thing.

The Supreme Court’s June 28th, 2010, decision on the Bilski case was an affirmation of the viability of patent protection for innovation implemented in software. However, uncertainty still exists as a clear test for patentable subject matter was not established. The Bilski patent was found to claim an abstract idea and as such was determined not to be patentable. Demonstrating the tangible nature of a patented innovation will likely be a key to successfully defending patent rights in the software space.

It sure seems like these tests for physical attributes and transformation are what eventually defines/determines many countries’ policy on patents. As such (pun intended), policy regarding software patents is not a binary condition and it’s important to recognise the familiar loopholes which are used to permit software patents.

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