Patentable Subject Matter Uncertainty Reigns Supreme for IP Australia


In yet another hearing conducted by IP Australia on the issue of whether an application contained any patentable subject, it was found that application no. 2019261672 to Accenture Global Solutions Limited for a Cryptologic Coordinated Symmetric Conditional Key Release did not, in fact, include any material that would provide for a claim that defines an invention that is a manner of manufacture.

While such a decision is not surprising in the wake of the decisions that have shaped and reshaped the law of what defines a manner of manufacture in Australia, this decision, along with the 19 other decisions issued by IP Australia that were critically based on the question of patentable subject matter, paints an incredibly grim picture for applicants and highlights a seemingly widening disconnect between what applicants believe is patentable subject matter and what IP Australia believes is patentable subject matter.

From these 20 decisions, which are split fairly evenly across both Australian and international applicants, only 1 reversed the Examiner’s objection that the claims did not define a manner of manufacture. Unfortunately, the subject matter under review in that particular decision (waste management using biologic inoculants amongst other things) is something of an anomaly compared to that under review in the other 19 decisions (which almost exclusively related to computer implemented inventions) where it was ultimately found that there was no patentable subject matter to be found anywhere in the specifications. This represents a staggering 95% rate of rejection when an applicant faces IP Australia battling an objection that the claimed invention does not define a manner of manufacture. These numbers aren’t limited just to the first 7 months of 2022. In 2021, there were 19 hearings to resolve a dispute over a manner of manufacture objection. In that year, 3 applicants were successful in overturning the objection. In four matters, the claims were deemed to lack patentable subject matter but the applicant (the same applicant on all four matters) was given the opportunity to make amendments with a view to overcoming the objections. Of those four applications, 1 was refused earlier this year following a further hearing, and the other three failed to gain acceptance. Three divisional applications were filed to maintain rights in the claimed inventions, two of which never proceeded to acceptance, and the other is the subject of an ongoing debate over whether claims define a manner of manufacture (surprise, surprise). As you can probably deduce, that left 12 applications that were outright refused for lacking patentable subject matter.

The same story has been repeated year on year with little resolution as to what constitutes a manner of manufacture. In 2020, there were 11 hearings with 5 successful applicants. In 2019, there were 6 hearings with only 2 successful applicants and in 2018, there were 19 hearings with a single successful applicant emerging with a granted patent.

For those not keeping score, this gives us a grand total of 63 applications out of 75 that were deemed to be for an invention that is not a manner of manufacture over a nearly five year period.

I think it is also worth noting that of the 75 cases I reviewed, only two cases (InfoTrack Pty Limited v Encompass Corporation Pty Ltd [2019] APO 48 (31 October 2019) and ACN 004 552 363 Pty Ltd v ICM Airport Technics Australia Pty Ltd [2020] APO 3 (21 January 2020)) involved an opposition between two private parties. Every other matter resulted from a dispute between an Examiner at IP Australia and the applicant. Now, there are clearly two ways you can analyse this data. The lack of oppositions with manner of manufacture as a key ground of opposition is interesting. Firstly, you could surmise that IP Australia is the ultimate gatekeeper and not letting any “bad” patents through and that is why they are far and away the most prominent opponent, as it were, to the grant of a patent once a manner of manufacture objection has been raised during examination. An alternative theory suggests that IP Australia are the only ones who think this is an issue that needs to be addressed and therefore feel they need to be the most prominent activists, both during examination and before the Federal Courts, to ensure the problem is resolved.  

Patents are not an inexpensive endeavour so I would find it difficult to believe that this many applicants are filing these applications just to see if they can sneak something through. Rather, I suspect that the inventors and/or applicants saw commercial importance in these inventions and felt it necessary to try to protect their intellectual property. In many of these cases, it is not in dispute that the claimed inventions have utility, novelty and involve an inventive step yet no patent can issue. If such great importance, and no doubt, significant research time and funds, is being placed on securing protection for these inventions then what is the reason, policy based or otherwise, for IP Australia’s seemingly vehement opposition to not allowing these applicants to proceed to grant as patents? Ultimately, this has created uncertainty across the board for applying the test for manner of manufacture, especially for computer implemented inventions, with decisions from IP Australia having been overturned numerous times by the Federal Court only for an expanded panel of the Federal Court to the reverse the decision again in an appeal exclusively at the Commissioner’s behest.

We can only hope that this uncertainty will soon be resolved by the High Court which heard an appeal to the Full Federal Court decision in Commissioner of Patents v Aristocrat Technologies Australia Pty Ltd [2021] FCAFC 202 (19 November 2021) earlier this year in June.

Jeremy Moller
written by Jeremy Moller, Principal