Myriad’s BRCA1 claims – take 2

As previously noted, the High Court has unanimously ruled that Myriad’s 3 claims for isolated nucleic acids for the BRCA1 gene that codes for specific mutations and polymorphisms are invalid.[1]

Claim 1 was:

An isolated nucleic acid coding for a mutant or polymorphic BRCA1 polypeptide, said nucleic acid containing in comparison to the BRCA1 polypeptide encoding sequence set forth in SEQ.ID No:1 one or more mutations or polymorphisms selected from the mutations set forth in Tables 12, 12A and 14 and the polymorphisms set forth in Tables 18 and 19.

Claims 2 and 3 were subsidiary claims for narrower formulations.

The sole issue in the case was whether claims 1 to 3 of Myriad’s patent were a “manner of manufacture” within the meaning of s 18(1)(a) of the Patents Act – what the American’s refer to as subject matter or patentable subject matter. There was no challenge to the novelty or inventive step of the claim – the basis on which the corresponding patent was rejected in Europe.

There was also no challenge to claims 4 – 30, which Gordon J at [191] and [257] characterised as applications of the isolated gene sequences to various purposes such as a probe (claim 4), vectors (claims 5 – 7), methods of producing mutant or polymorphic BRCA1 polypeptides (claims 8 – 9), preparations and uses of polypeptides (claims 10 – 16) and methods of diagnosis (claims 17 – 30).

Previously, this question fell to be determined according to the principles declared in the “watershed” NRDC case. All 3 sets of reasons acknowledged the continued relevance of that decision, but appear to have qualified its teaching in potentially far-reaching ways.

French CJ, Kiefel, Bell and Keane JJ

The majority judgment was delivered by French CJ, Kiefel, Bell and Keane JJ.

A narrow approach

At one level (one might hope the right level), their Honours’ judgment can be seen as focusing very specifically on the singular nature of Myriad’s claim. Thus, at [6], their Honours said:

Despite the formulation of the claimed invention as a class of product, its substance is information embodied in arrangements of nucleotides. The information is not “made” by human action. It is discerned. That feature of the claims raises a question about how they fit within the concept of a “manner of manufacture”. As appears from s 6 of the Statute of Monopolies, an invention is something which involves “making”. It must reside in something. It may be a product. It may be a process. It may be an outcome which can be characterised, in the language of NRDC, as an “artificially created state of affairs”. Whatever it is, it must be something brought about by human action. ….

In their Honours’ conception, that was not the case here. The judgment continues at [6]:

The requirement, in each claim, that the sequence in the isolate bear specified mutations or polymorphisms raises the same problem in a particular way. Satisfaction of that integer depends upon a characteristic of the human being from whom the nucleic acid is isolated, a characteristic which is not shared by all human beings. It has nothing to do with the person who isolates the nucleic acid bearing the mutant sequence.

That is, nothing was “made”. Rather, the gene sequence with the relevant mutation(s) and/or polymorphism(s) was made in the individual from whom the genetic material had been extracted. “All” that Myriad did was whittle that genetic material down to identify whether or not the relevant mutation or polymorphism was present.[2]

Further, at [8]:

…. The size of the class of the products as defined is large. No upper limit was suggested in argument. The boundaries of the class are not defined by a limiting range of chemical formulae. There is a real risk that the chilling effect of the claims, on the use of any isolation process in relation to the BRCA1 gene, would lead to the creation of an exorbitant and unwarranted de facto monopoly on all methods of isolating nucleic acids containing the sequences coding for the BRCA1 protein. The infringement of the formal monopoly would not be ascertainable until the mutations and polymorphisms were detected. Such a result would be at odds with the purposes of the patent system.[3]

One might wonder how one works out whether or not the “monopoly” that would arise would be “exorbitant and unwarranted”. The size of the class claimed seems problematic, the “chilling effect” also might be thought something that flows from the grant of any patent. Why for example would that be any more of a problem than for the patents granted originally over compounds such as omeprazole or rosuvastating or any number of other drugs?

Moreover, the problem of infringement loomed very large. No-one could know in advance whether or not what they were doing would infringe. It would depend on whether a relevant mutation or polymorphism was present in the individual from whom the genetic material was extracted. One might say, of course, that one would not be at risk of infringing unless one was looking for the BRCA1 sequence. One might also say, at least up until today, that there was no bar to patenting omeprazole or rosuvastatin or any other chemical substance just because one had found a specific use for it such as treating disease A when, after the compound had been discovered, someone else might be precluded from investigating its use, surprisingly, to treat disease B.[4]

The problem seems particularly to come back to the nature of the claim as being tosomething generated in an individual naturally and independently of any action by the patentee.

Wider ramifications

French CJ, Kiefel, Bell and Keane JJ did not just declare that claims 1 to 3 were not patentable subject matter. Their Honours went on to explain the principles that should be applied in future.

First, their Honours accepted at [18] that the NRDC test was still the appropriate question:

“Is this 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?”

As I tell my patents class students, that provides us with an awful lot of guidance! Their Honours continued:

That question is to be answered according to a common law methodology under the rubric of “manner of manufacture” as developed through the cases, but consistently with “a widening conception of the notion [which] has been a characteristic of the growth of patent law.” That widening conception is a necessary feature of the development of patent law in the 20th and 21st centuries as scientific discoveries inspire new technologies which may fall on or outside the boundaries of patentability set by the case law which predated their emergence.

So far, still so good; particularly the recognition of the need for the concept to continue developing.

The “common law methodology” is further explained in [5] – [7] and troubled French CJ in Apotex v Sanofi. The first point appears to be, if the claim falls within an existing recognised class of patentable subject matter, it is a manner of manufacture. If it is a new class, however, “policy factors informed by the purpose of the Act and considerations of coherence in the law” need to be considered. Moreover, there are limits in judicial law-making “inherent in common law methodology”:

Where an affirmative application of the concept is likely to result in the creation of important rights as against the world, to involve far-reaching questions of public policy and to affect the balance of important conflicting interests, the question must be asked whether that application is best left for legislative determination. The patentability of nucleotide sequences derived from human DNA is in that category. The inherent patentability of the invention as claimed would powerfully imply patentability of any claim for an isolated nucleic acid coding for a specified polypeptide.

Notwithstanding 50+ years of the Courts successfully applying the NRDC formula, this High Court is plainly very uncomfortable with that role.

For those 50+ years since NRDC, we had been thinking there were 2 (or 3) requirements for patentable subject matter:

  1. Whether the invention as claimed is for a product made, or a process producing an outcome as a result of human action; and
  2. Whether the invention as claimed has economic utility.[5]

French CJ, Kiefel, Bell and Keane JJ confirmed that requirements 1 and 2 are still necessary. As foreshadowed in paragraph [6], however, their Honours said that requirements 1 and 2, while necessary, are not in themselves sufficient.[6] Other factors must be taken into account. At [28], their Honours laid out four further considerations:

  1. Whether patentability would be consistent with the purposes of the Act and, in particular:
    1. whether the invention as claimed, if patentable under s 18(1)(a), could give rise to a large new field of monopoly protection with potentially negative effects on innovation;
    2. whether the invention as claimed, if patentable under s 18(1)(a), could, because of the content of the claims, have a chilling effect on activities beyond those formally the subject of the exclusive rights granted to the patentee;
    3. whether to accord patentability to the invention as claimed would involve the court in assessing important and conflicting public and private interests and purposes.
  2. Whether to accord patentability to the invention as claimed would enhance or detract from the coherence of the law relating to inherent patentability.
  3. Relevantly to Australia’s place in the international community of nations:
    1. Australia’s obligations under international law;
    2. the patent laws of other countries.
  4. Whether to accord patentability to the class of invention as claimed would involve law-making of a kind which should be done by the legislature.

The new, additional factors 1, 2 and 4 above were described as the most important in the balancing process the inquiry envisaged by their Honours.[7]

Having regard to these considerations, French CJ, Kiefel, Bell and Keane JJ declared at [94]:

Although it may be said in a formal sense that the invention as claimed, referring to isolated nucleic acids, embodies a product created by human action, that is not sufficient to support its characterisation as a manner of manufacture. The substance of the invention as claimed and the considerations flowing from its substance militate against that characterisation. To include it within the scope of a “manner of manufacture” involves an extension of that concept, which is not appropriate for judicial determination. Further, to include this class of claim within that concept would not contribute to coherence in the law as was the case in Apotex. Nor do Australia’s international obligations and the differently framed patent laws of other jurisdictions, which were referred to earlier in these reasons, support the conclusion that this class of claim should fall within the concept.

The “substance of the invention” and the considerations flowing

In the decision of the Full Federal Court under appeal, it had been pointed out that isolated DNA was in fact man made – it didn’t occur in nature. French CJ, Kiefel, Bell and Keane JJ, however, considered that was to elevate form over substance. So at [90], their Honours accepted a submission from the appellant:

“Myriad’s claims are simply not expressed in terms of chemical composition, nor do they rely in any way on the chemical changes that result from the isolation of a particular section of DNA. Instead, the claims understandably focus on the genetic information encoded in the BRCA1 and BRCA2 genes.”

That characterisation, so far as it emphasises the focus of the claims on genetic information, is applicable to the claims in this case and, contrary to the view of the Full Court, should be accepted.

At [93], their Honours then emphasised:

When proper regard is paid to their emphasis on genetic information, the subject matter of the claims lies at the boundaries of the concept of “manner of manufacture”. That it does lie at the boundaries is further evidenced by the odd consequence that if the claims are properly the subject of a patent, the patent could be infringed without the infringer being aware of that fact. That consequence coupled with the very large, indeed unquantified size of the relevant class of isolated nucleic acids, all of which bear the requisite information, raises the risk of a chilling effect upon legitimate innovative activity outside the formal boundaries of the monopoly and risks creating a penumbral de facto monopoly impeding the activities of legitimate improvers and inventors.

The characterisation of the claims as “information”[8] has some affinity for Gordon J’s approach, discussed briefly below, ruling that the claims were to a mere discovery rather than invention. As discussed above under A narrow approach, this seems to flow from the singular nature of the claims in suit with the consequent uncertainties, particularly for infringement.

An extension of the concept

How do you tell that Myriad’s claim involved an extension of the concept of manufacture?

It is true that no court in Australia had ruled on the patentability of isolated gene sequences until the Myriad litigation. However, the Patent Office has been granting patents for ‘man made’ microbes since 1976 and for isolated genetic material since 1995. The legislative history showed that Parliament rejected an attempt to exclude genetic material from patentable subject matter when passing the 1990 Act. A further attempt to exclude human genetic material was rejected in the Senate in 2011. Two inquiries by Government agencies in the 2000s had also endorsed the status quo and recommended against exclusion. Indeed, the Government of the day had publicly announced its acceptance of the ALRC’s recommendation not to exclude isolated genetic materials from patentability. French CJ, Kiefel, Bell and Keane JJ said at [37]:[9]

This Court is not concerned in this appeal with “gene patenting” generally, but with whether the invention as claimed in Claims 1 to 3 falls within established applications of the concept of manner of manufacture. If it does not, then the question is one of inclusion not exclusion. The legislative history cannot be read as impliedly mandating the patentability of claims for inventions relating to isolated nucleic acids coding for particular polypeptides. The legislative history does not assist the Court in answering the question posed in this appeal.

Contribute to coherence

[Apotex][apotex] had (more or less) upheld the status of methods of medical treatment as patentable subject matter. That contributed to coherence because there was no rational basis to distinguish between patenting medical products and patenting methods of treatment.

Here, arguable, the nature of the claim as already discussed means it is impossible to assess the risks of infringement in advance. That presumably does not promote coherence. Their Honours also focused on the broad range of what was claimed and the potential impacts on future researchers. As already discussed, it may be difficult to distinguish those aspects from claims to other chemical compounds.

Gageler and Nettle JJ

Given the length of this post already, I shall only comment briefly on the remaining judgments.

Like French CJ, Kiefel, Bell and Keane JJ, Gageler and Nettle JJ considered at [125] that “an artificial state of affairs” and “economic utility” were necessary requirements for patentable subject matter, but not sufficient.

Also like French CJ, Kiefel, Bell and Keane JJ, Gageler and Nettle JJ stated at [144] that the question of patentable subject matter must be looked at as a matter of substance rather than form.

Invoking Microcell and Philips v Mirabella, their Honours considered at [133] that patentable subject matter involved a threshold inquiry of “inventiveness”.

Products of nature therefore did not qualify as at [136] they lacked the necessary quality of inventiveness. Gageler and Nettle JJ considered that Myriad’s claims were properly characterised as merely claims to products of nature.

Earlier at [128], Gageler and Nettle JJ had said:

Regardless, however, of the amount of labour involved or the differences between the product and the raw natural material from which it is derived, it is necessary that the inventive concept be seen to make a contribution to the essential difference between the product and nature.

Then, at [134], their Honours said:

Here, the essence of claim 1 is the correlation between the incidence of cancer and the presence of the specified mutations and polymorphisms in the mutated BRCA1 gene. Such ingenuity as that entails consists in the idea of examining an isolated fragment of a patient’s naturally occurring DNA constituted of the BRCA1 gene for the presence or absence of the specified mutations and polymorphisms. The subject matter of the claim does not make any contribution to the inclusion of the specified mutations and polymorphisms in the mutated BRCA1 gene. Their presence or absence in or from it is the result of the isolated BRCA1 gene being part of the naturally occurring DNA from which the sequence is isolated. To adopt and adapt the reasoning in NV Philips’ Gloeilampenfabrieken Application, it is “the inevitable result of that which is inherent in the [DNA]”.[10]

Like the reasons of French CJ, Kiefel, Bell and Keane JJ, this passage emphasises that Myriad did not itself make, or cause to be made, the relevant material. Rather, it was generated in the human body independently of any action by Myriad.

Thus, Gageler and Nettle JJ said at [139]:

…. the BRCA1 gene is not patentable as such because it is a naturally occurring phenomenon which lacks the quality of inventiveness necessary to qualify as a manner of new manufacture.

Gordon J

Gordon J at [222] – [225] specifically rejected D’Arcy’s argument that “naturally occurring things, or products or phenomena or principles of nature are excluded as a proper subject matter of a patent.” These were too vague, malleable and imprecise to be useful tools.

Instead, her Honour focused on the role isolation of the nucleic acid played: it simply allowed identification of the presence, or absence, of naturally occurring mutations or polymorphisms. Gordon J then advanced five reasons why the claims did not qualify as patentable subject matter:

  1. The claim is to multiple products, not a single product: [231]-[239];
  2. Although Myriad claims a class of chemical compounds as a product, it cannot delineate the bounds of its claim by reference to chemical composition: [240]-[243];
  3. Myriad did not create, make or alter the characteristic, the code: [244]-[249];
  4. There is no idea, concept or principle embodied in a manner of new manufacture: [250]-[258]; and
  5. The claim is too broad: [259]-[264].

Points 1, 2 and 5 focus on the sheer number and variety of compounds or sequences which were embraced. So at [241] and [242], her Honour recorded that Myriad could not identify the boundaries of the claims:

…. it is not possible for Myriad to record all of the various chemical compounds (or products) that might be produced by isolating an individual’s nucleic acid. For example, as Myriad accepted during argument, the claim is to an “extremely wide number” of chemical compounds where the compound formulae would vary according to the number of sequences extracted but the compound would nevertheless contain one or more of the specific mutations or polymorphisms.

As has been seen, changes in chemical composition are not limited to variation in the number of nucleotides. So, although the claimed product is a chemical compound, Myriad did not and cannot delineate the bounds of the class of compounds by reference to the chemical composition of the class of the claimed product. Instead, Myriad sought to delineate the boundaries of the claim by reference to what it described as the “characteristics identified within the claim” – the specific mutations and polymorphisms, represented by the code.

I am not sure why delineation by class of compound would be any more precise than the method chosen by Myriad – if you know, please leave a comment.

Under point 5, her Honour also pointed out the concern that no-one could know in advance whether they infringed or not and, if the role of the claim, is to identify the boundaries of the monopoly, that does rather cause a problem.

Under point 4, Gordon J referred to the nature of invention as discussed in the Hickton Patent Syndicate case:

In my opinion, invention may lie in the idea, and it may lie in the way in which it is carried out, and it may lie in the combination of the two; but if there is invention in the idea plus the way of carrying it out, then it is good subject-matter for Letters Patent. (Gordon J’s emphasis)

Her Honour considered that claims 1 to 3 failed to qualify because they did not carry out Myriad’s discovery that certain mutations or polymorphisms indicated increased risk of breast cancer. Gordon J said:

[254] Here, having located the BRCA1 gene and identified its nucleic acid sequence, Myriad’s idea, concept or principle is that specific mutations or polymorphisms in that sequence suggest a predisposition to breast cancer and ovarian cancer.

[255] How then is that idea carried out in claim 1? It is not. It is not and could not be carried out – as claim 1 suggests – by creating a product comprising isolated nucleic acid from a patient which contains the identified characteristic in any one of its many forms. As has been seen, Myriad does not claim the methods by which it isolates the nucleic acid or the methods by which it identifies the sequence of the patient’s nucleic acid. Myriad does not claim the characteristic. Claim 1 is not a claim to the idea, concept or principle.

Gordon J contrasted these claims to claim 4 which used the discovery to create a probe to test for the presence or absence of mutations. That was an invention. So analysed, claims 1 to 3 might be seen to be ‘mere’ discoveries’ rather than an application or now to offend against the enablement and sufficiency requirements.

Some other scary thoughts

First, it is not entirely clear from the decision whether cDNA is patentable subject matter as the US Supreme Court accepted. French CJ, Kiefel, Bell and Keane JJ said at [73]:

Nor, as previously noted, are the claims subject to any process?based limitation involving the breaking up and physical stitching together of the sequences comprising the isolated nucleic acids which are the products the subject of the claims. The “conceptual” stitching together, which may be regarded as the ordered compilation of information defining the relevant sequence, falls outside the claims entirely. The claims encompass molecules comprising isolated nucleic acids containing coding nucleotides arranged in the same sequence as appears in the DNA from which they were derived, whether or not introns and other non-coding sections have been removed from the relevant stretch of that DNA.

That might leave room for debate that cDNA could qualify. Also, the exclusion of introns or other “non-conding regions” might ameliorate the “chilling effects”. Gageler and Nettle JJ, however, at [116] characterised the claims as claiming “the uninterrupted sequence of nucleotides without introns”, i.e., cDNA. According to Gordon J at [283], the parties agreed that, if the claims were not patentable subject matter, they would not be saved where they extended to cDNA.

Philips v Mirabella!

Dr Patentology has called Philips the second worst ever patent judgment by the High Court. No argument from me. Turns out, we’re both wrong. At least 6 judges of the current High Court consider it good law[11] and appear to use it as their touchstone of patent principles.

I would say we need legislative reform but, as the Angel of Lake said, “Before you choose your wish son You better think first ….”

D’Arcy v Myriad Genetics Inc [2015] HCA 35


  1. According to Gordon J at [205] a “mutation” is a variation in a gene sequence “private to an individual or that indiviual’s immediate family.” In contrast, at [207] a “polymorphism is a genetic variant which has arisen in a distant common ancestor and is therefore not unique to an individual or that individual’s immediate family. Forty per cent of women in the general female population have one or more polymorphisms in the BRCA1 gene that are not found in the remaining 60 per cent of the population.”  ?
  2. Gageler and Nettle JJ also focused on this point at e.g. [162]. See also Gordon J at [248].  ?
  3. Citing Cornish, Llewellyn and Aplin for the final conclusion.  ?
  4. Of course, these days, s 119C would probably provide one with a defence to infringement, at least for the research into the possible use.  ?
  5. In fact, the Full Federal Court in Grant has told us there is a the third requirement: a physical transformation of something. Arguably, that was not in issue in Myriad as the isolated gene sequence was physically different to the unisolated genetic material in the human body to an extent.  ?
  6. Insofar as the claim falls within existing concepts of “manner of maufacture” as it has been developed through the cases, their Honours said at [28] requirements 1 and 2 “will also ordinarily be sufficient.” (emphasis supplied)  ?
  7. The survey of foreign laws didn’t really help as it was only the USA following the US Supreme Court’s Myriad decision that appears to have ruled out patent protection for isolated genetic material.  ?
  8. Optimistically hoping it was the claim to “information” rather than just genetic information which was important.  ?
  9. Gageler and Nettle JJ took a similar position at [171]. Nicholas J reviewed the legislative history at [113] – [123] in Cancer Voices.  ?
  10. A different Philips case, which their Honours read as endorsed by NRDC: (1954) 71 RPC 192 at 194, quoted in NRDC (1959) 102 CLR 252 at 279.  ?
  11. In addition to Gageler and Nettle JJ, see French CJ, Kiefel, Bell and Keane JJ at [12].  ?

Patenting computer programs or business methods in Australia

At the end of August, Middleton J overturned the Commissioner’s refusal to grant an innovation patent for RPL’s computerised method entitled ‘Method and System for Automated Collection of Evidence of Skills and Knowledge’. Instead, his Honour held that the method was a manner of manufacture and, novelty and inventive step having been satisfied, patentable.

What the claimed invention was

In essence, the claimed invention allowed a user to access a single point of entry (for example, over the internet using his or her browser), retrieve information about particular qualifications, which was presented in the form of questions to the user, then provide answers and supporting documentation (still for example over the internet), which was then processed by a relevant certifying institution and, if the relevant criteria were satisfied, the relevant qualification would be awarded or, if not, the user could be presented with information about what further steps needed to be undertaken to satisfy the necessary criteria.[1]

This bald summary hardly does justice to what was involved. For example, there are a large number of registered training organisations or TAFEs (RTOs). Collectively, they offer some 3,500 different qualifications and some 34,000 Units of Competency. Any individual RTO therefore offered only a very small set of qualifications or units. RPL’s method, first, circumvented the need for an individual user to identify which RTO was appropriate as RPL’s method retrieved all the necessary information from online databases. Then, RPL’s method converted the criteria into a form of questions which the user could answer. So, to take an example from the judgment, the element of competency required for a particular unit relating to aged care:

demonstrate an understanding of the structure and profile of the aged care sector

became:

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?

and a particular performance criterion associated with that:

all work reflects an understanding of the key issues facing older people and their carers

was converted in RPL’s method to:

How can you show evidence that all work reflects an understanding of the key issues facing older people and their carers?[2]

for enabling individuals to get their competency or qualifications recognised under the nationally accredited Unit of Competency scheme.

The specification identified the advantages flowing from this method with its single point of contact:[3]

Individuals are provided with a service which simplifies the identification of relevant Units of Competency, and the gathering of associated assessment information to enable [recognition of prior learning] to be performed. Training organisations are relieved of much of the administrative cost associated with performing [recognition of prior learning]. By the time the training organisation is contacted, the relevant Unit of Competency has already been identified, and required information associated with each of the assessable criteria has already been gathered and packaged in a form enabling an efficient assessment in relation to the [recognition of prior learning] process.

Why this constituted a (patentable) manner of manufacture

Middleton J noted at [127] that the test for “manner of manufacture” laid down in NRDC, CCOM and Grant required that the claimed invention result in an artificially created state of affairs in which a new and useful effect may be observed. This had to be of utility in practical affairs or be of an industrial, commercial or trading character and belong to the useful arts, not the fine arts, so that its value lay in a field of economic endeavour.

These criteria were satisfied. The results of the method were useful because at [129] it overcame difficulties involved in seeking out education providers and enabled recognition of prior learning. This was relevant to a field of economic endeavour: the education sector of the economy and thus had the necessary industrial, commercial or trading character.

While the information about RTOs and particular Units of Competency could be accessed individually in undifferentiated form over the internet, the method provided a single point of entry. In addition to the single point of entry:

[141] The computer programmed in accordance with the Patent further operates to process the retrieved information and to automatically generate data comprising an alternate means of presentation. This alternate means comprises a series of questions which can be presented to an individual user along with user interface elements which implement an online form suitable for the receipt of responses to those questions. An assessment server is programmed, again according to the teaching of the Patent, to present the form to the computer of an individual user, who preferably requires only conventional web browser software to access the assessment server via the internet. In particular, the form provides not only for user-entered responses, but also for upload of one or more files stored on the user’s computer which may comprise, for example, evidence of the user’s competency with regard to the recognised qualification standard. This access to an online form occurs as a result of the retrieval, processing and presentation steps being conducted according to the teaching of the Patent.

The various stages in this process each gave rise to the physical effect required under Grant in the various changes of state in the computer’s memory.[4] Grant itself of course involved no such transformation since it did not involve any use of any computer – just a scheme for the use of a trust.

The Commissioner had recognised that such a transformation did take place, but it was not sufficient. In a line of decisions beginning with Invention Pathways, the Commissioner had ruled that: [5]

the “concrete effect or phenomenon or manifestation or transformation” referred to must be one that is significant both in that it is concrete but also that it is central to the purpose or operation of the claimed process or otherwise arises from the combination of steps of the method in a substantial way. Consequently while the step of building a house involves a concrete physical effect it is peripheral to the method of acquiring a house and indeed could hardly be said to characterise the subject matter of the method such that it is considered an artificially created state of affairs. I consider the same to apply to a business scheme implemented in some part by computer and do not believe the patentability of such a method can arise solely from the fact that, in a general sense, it is implemented in or with the assistance of a computer or utilises some part a computer or other physical device in a incidental way.”

The Commissioner argued that the use of the computer here was not central to the method, being merely a “common mechanism to carry out the method in a convenient way.”

At [147], Middleton J rejected the Commissioner’s view that NRDC, CCOM and Grant required the requirement of substantiality or centrality of a physical effect in the sense the Commissioner contended for.

In addition, Middleton J rejected the Commissioner’s argument that the claimed invention could not be a manner of manufacture as it could be performed without the use of a computer. His Honour rejected this as a matter of principle at [157]: it was not an appropriate way to approach the assessment required under NRDC, CCOM and Grant. In any event, as a matter of fact, the magnitude of the task meant it wasn’t practicable without the use of a computer:

[158] … as a matter of fact I accept that the magnitude of the task performed by the invention (as previously described) and the express terms of the claims themselves mean that the computer is an essential part of the invention claimed, as it enables the method to be performed.

While his Honour accepted that US cases could be persuasive, he noted he was required to apply the tests developed under Australian law and did not find any assistance in the present context.[6]

At [171] – [172], Middleton J distinguished the recent rejection by Emmett J of Research Affiliates claims for a method of generating an index of securities and assets. In Middleton J’s view the central difference was that the specification in Research Affiliates “contained virtually no substantive detail about how the claimed method was to be implemented by a computer”.[7] In contrast, there was detailed information about these matters in RPL’s specification and the computer was central to the method’s working.

RPL Central Pty Ltd v Commissioner of Patents [2013] FCA 871


  1. The terms of claim 1 are set out here.  ?
  2. Taken from [21] and [24] of the Reasons.  ?
  3. At [42] of the Reasons.  ?
  4. At [143] – [144].  ?
  5. Myall at [53].  ?
  6. While his Honour did not put it this way, that is perhaps unsurprising given the rather uncertain state of the US case law, e.g.  here and here.  ?
  7. An application for leave to appeal from Emmett J’s decision has been filed: NSD328/2013.  ?

A new approach to business method patents Down Under?

Patent Baristas has a guest post from Bill Bennett at Pizzeys on the Deputy Commissioner’s rejection of a patent application for (as described by the Deputy Commissioner):

“a method for commercialising inventions that includes the step of applying for patent protection. The specification indicates that the method is intended to facilitate the uptake of commercialisation of inventions taking into account the restricted timeframe to file for intellectual property rights and the effect of automatic patent publication. The latter is a reference to the practice in most jurisdictions of publishing patent applications 18 months after their earliest priority date.”

Claim 1 reproduced in the Deputy Commissioner’s decision reads:

1. An invention specific commercialization system to facilitate success of inventions, the system including the steps of:
a) applying for patent protection for the invention in a country which is party to the Paris Convention,
b) conducting a review of specific commercialization process required by the invention,
c) preparing a research and development plan, testing the business dynamics of the invention,
d) conducting prototype testing, developing a prototype cost/benefit analysis,
e) determining product positioning and packaging,
f) conducting a manufacturing checklist,
g) entry of the information collected in steps a) to f) into an electronically fillable checklist having a prescribed time limit for each step to form a commercial entry strategy (CES) with a number of sub-steps, the CES prepared on the basis that each of the sub-steps in the CES are to be completed by a corresponding deadline, all deadlines falling within 30 months from the earliest priority date of the patent application, the checklist being computer-implemented and stored in computer or human readable format in data storage means and associated with processing means to allow updating of the checklist; and
h) policing compliance with the deadlines for the completion of the sub-steps through the production of reminders based on the prescribed time limits in the checklist to ensure that all sub-steps are completed within the deadlines.

At the risk of seeming glib and/or flip, one might think this was a checklist for the commercialisation of “an invention”, where one of the items on the checklist includes applying for patent protection, and using a calendaring system to generate reminders so you don’t miss a deadline.

Wonder what business managers and patent managers have been using Excel, Outlook and any number of computerised database for until now?

Any how, Mr Bennett’s blog, focusing on the “electronically fillable” and “computer-implemented” wording in the claim, contends that the Deputy Commissioner has reinterpreted Grant (you remember: the asset protection method (formerly known as a trust) in light of the US Supreme Court’s ruling in Bilski so that the production of a physical effect will lead to a “manner of manufacture” only where the effect is:

of such substance or quality that the method considered as a whole is “proper subject of letters patent according to the principles which have been developed for the application of s. 6 of the Statute of Monopolies”.

(Do read Mr Bennett’s more detailed consideration.)
However, this seems to confer on the Commissioner a rather wide discretion. Was it really necessary?

Invention Pathways Pty Ltd [2010] APO 10

Business method patenting?

The US Federal Circuit (9 panel bench) has handed down its decision ruling that Bilski’s method of hedging risks in commodities trading was not patentable.

As summarised by Patently-O, the majority opinion substantially retreats from State Street.

a process claim [must be] tailored narrowly enough to encompass only a particular application of a fundamental principle rather than to pre-empt the principle itself. A claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.

Judge Newman would have found the invention patentable; Judge Rader would have rejected the patent, without the need to develop a new principle, on the grounds that all that was claimed was an abstract principle.

Read Patently-O’s summary, which also has a link to the decision itself.  Compare our Full Federal Court in Grant.