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Archived updates for Tuesday, August 08, 2006

Australian Business Method Claims Require "Physical Effect"

Thanks to Bill Bennett for bringing the Australian Full Federal Court decision in Grant v Commissioner of Patents [2006] FCAFC 120 (18 July 2006) to our attention where the Full Federal Court concluded (at para 32) that patent claims for business methods require "physical effect:"

32 A physical effect in the sense of a concrete effect or phenomenon or manifestation or transformation is required. In NRDC, an artificial effect was physically created on the land. In Catuity and CCOM as in State Street and AT&T, there was a component that was physically affected or a change in state or information in a part of a machine. These can all be regarded as physical effects. By contrast, the alleged invention is a mere scheme, an abstract idea, mere intellectual information, which has never been held to be patentable, despite the existence of such schemes over many years of the development of the principles that apply to manner of manufacture. There is no physical consequence at all.
In Bennett's view,
It is noteworthy that the Full Federal Court expressly approved of earlier cases
where the methodology was implemented in a computer environment such that
performance of the patented method resulted in a "change of state or
information" in a part of the computer. It would seem clear that methods
which are implemented in a computer or other physical environment remain
patentable, and it is only those methods which exist only in an abstract or
intangible form which are excluded from patentability.
The Full Federal Court’s full decision can be reviewed at http://www.austlii.edu.au/au/cases/cth/FCAFC/2006/120.html
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