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Update on Patentable Subject Matter in Australia

Since our last update on the patentable subject matter issue in 2022, we have had a somewhat unsatisfying “decision” from the High Court on the issue of patentable subject matter in Australia and continuing frustrations for patent applicants appearing before IP Australia.

We have continued to monitor the outcomes of hearings before IP Australia relating to issues of manner of manufacture. Unfortunately, patent applicants have not fared any better in the intervening period since the Aristocrat High Court decision.

At the end of 2022, shortly after the High Court handed down its split decision in Aristocrat Technologies Pty Ltd [2022] HCA 29 (Aristocrat 22), patent applicants had a roughly 1 in 10 chance of success (that was 3 wins from 29 hearings) if they were challenging a finding of a lack of manner of manufacture by a patent examiner at IP Australia. By the end of 2023, that rate of success had been halved with less than 5% (or 1 out of 22 cases) successfully overturning an objection that an application was not directed to patentable subject matter. To say the outcomes for patent applicants taking these matters to a hearing were dire is an understatement.

2022 saw the greatest number of patentable subject matter hearings being decided with a total of 29 decisions being handed down. In 2023, this dropped slightly to 22 decisions. Challenges were brought by applicants across the spectrum, including big players like Apple, PayPal, Accenture, The Coca-Cola Company, Mastercard and Visa, all of whom were unsuccessful with the exception of Apple who managed to scrape through with some dependent claims.

This analysis obviously only takes into account those matters that went before IP Australia following disputes during examination and does not capture the numerous applications in the broad “computer implemented invention” space that proceeded to be granted as a patent. There is no assertion that what IP Australia is doing is necessarily wrong. Rather, I think this area of the law remains unclear to both IP Australia and patent applications with hearings that included manner of manufacture as a significant issue accounting for a third of all the patent hearings at IP Australia from 2021 to 2023 and either the Court or the Government need to step in. There is simply no other area of patent law that has not legislatively changed since the revision of the Patents Act in 1990 that is as consistently contentious as the patentable subject matter issue over the last decade and it is unreasonable to expect us to continue to tolerate the uncertainty.

With the reconsidered decision of Burley J in Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents, as directed by the Full Federal Court all the way back in 2021, to be handed down this Friday 8 March 2024, we hope that there will soon be some better guiding principles on this issue.