Computer implementations of business methods patentable in Australia

Are business methods patentable?

December 18 2018 Whether business methods should be patentable, or not, is a controversial question around the world. The EPO generally says they are not, and the US has restricted patentability after the Alice decision.

In Australia such patents have been getting increasingly harder to get granted, but just last week the Federal Court overturned an earlier decision by the patent office, and held that such patents may be patentable.

The patent in question was Australian patent 2013201494, which claimed the concept of an advertising server monitoring engagement of a user with a website, inviting the user to engage further, and then based on the response, accept advertising on the website.

Take an offer.gif

The patent office had held that the invention was not patentable as

“there is a distinction between technological innovation which is patentable and business innovation which is not”, and the substance of the invention in this case amounts to business innovation.

And business innovations by themselves are not patentable in Australia.

The owner of the patent appealed this decision to the Australian Federal Court, which has jurisdiction over the patent office. The Federal Court held a hearing and concluded that

The invention solved not only a business problem but also a technical problem…..

This technical problem of providing this single platform was solved by introducing the tracking database and the objects database and designing the ranking engine and the engagement engine which accessed and manipulated the data in the two databases to rank and select engagement offers…

Storage and manipulation of data at the magnitude and speed that was required to implement the method could only be done on a computer or computers

The invention brought together some new elements and some known elements to form a working combination that had not previously been achieved and involved the use of computers in a way that was foreign to their normal use as at December 2012. [its priority date]

Because the patent was held to be technical (via the necessary use of a computer) and novel (and it was also held to be inventive), the court ruled that it met these requirements for patentability, and should be granted.

In the opinion of Ambercite, such a ruling is good for software companies, particularly as a lot of software is essentially the computer implementation of business methods - and such innovation can be just as valuable as more pure technical innovations .

How does this compare to the situation in the EU and the US?

As stated above, the patentability of business methods is contentious around the world. The European patent office assesses such applications based on whether the subject matter has a ‘technical character’…where one interpretation of ‘technical character’ is ‘further technical effect that goes beyond the normal physical interaction between the program and the computer.’

A further test is the inventive step requirement, where evidence of inventive step from experts in business methods is specifically excluded, as opposed to evidence from more technically oriented people.

The 2014 Alice judgement has had a major impact on this law in the US. The US Surpreme Court used this judgement to develop a two part test, where the first part tests if the patent claims something more than an abstract or general concept - in the second part, the invention is tested to see if it contains an inventive concept. As part of this test, ordinary and customary use of a computer to implement the invention is to be disregarded - so the use of a computer to implement a known business method is not patentable by itself.

The Alice decision has led to many business method and software related patents being rejected since then in the US - in the word of Judge Bryson of the US Federal Circuit when discussing why:

In short, such patents, although frequently dressed up in the argot of invention, simply describe a problem, announce purely functional steps that purport to solve the problem, and recite standard computer operations to perform some of those steps. The principal flaw in these patents is that they do not contain an "inventive concept" that solves practical problems and ensures that the patent is directed to something "significantly more than" the ineligible abstract idea itself….. As such, they represent little more than functional descriptions of objectives, rather than inventive solutions. ….. It is for those reasons that the Supreme Court has characterized such patents as claiming "abstract ideas" and has held that they are not directed to patentable subject matter.


Would the Australian patent being patentable in the US and Europe? This is perhaps more of a question for patent lawyers, but its US family member US20147164102 has been abandoned by its owner. A final rejection from the patent office dated 29 July 2015 listed a series of grounds for rejection - one of which was patentable subject matter.

But is it novel? An AI prior art search with Ambercite

The Australian federal court held that the patent was novel, at least in the light of the evidence provided. But is there more prior art out there?

Such a question can take hours to review in conventional searching, or a couple of minutes using the Ai based patent search engine Ambercite.

The search query is as simple as shown below.

The results of this query are found by clicking on the above image, or clicking the link below:

Show all top 50 results in fully interactive form

This search will show a combination of known and not cited ‘unknown’ prior art. If we presume that the known prior art was considered by the court in affirming patentability, we may instead to focus on unknown prior art.

This is found via a second link shown below

Show only unknown results

A number of these patents disclose the measurement of engagement of website users in relation to advertising, such as US patent US20120136714A1 for a User intent analysis engine, which discloses monitoring engagement with advertising. While not exactly the same, this patent publication and others on the list show what was known in December 2012.

A detailed review of these top 100 similar patents would be the logical next step, but we might leave this to opponents of the patent.

Mike Lloyd