Format of this paper
The Advisory Council on Intellectual Property is conducting a review of what types of subject matters should be able to be patented in Australia and whether the law is meeting the country's needs. This Issues Paper aims to provoke discussion on the topic and to identify some of the main issues. So as to best address the long history and complexity of the topic, this paper has been organised into the following parts:
- Executive summary - A summary of the paper and the main issues identified.
- Introduction - An outline of ACIP, the reasons for the review and the review process.
- Objective of the patent system - A discussion of the key economic objectives of the system.
- Ethical and other constraints on the patent system - A discussion of the main constraints on the system.
- Overview of the Australian patent system - A summary of the main features of the patent system in Australia.
- Patentable subject matter 1623 - 1959 - A brief history of the law on patentable subject matter up until the landmark Australian High Court decision National Research Development Corporation v Commissioner of Patents in 1959.
- Patentable subject matter 1959 - today - A summary of current Australian law and practice on patentable subject matter.
- International treaties - Australia's obligations regarding patentable subject matter under key treaties.
- Australian reviews of patentable subject matter
Previous Australian reviews which have considered patentable subject matter and their outcomes.
- Overseas law and practice
A summary of the how other countries deal with patentable subject matter.
- Issues and questions
A bringing together of all the previous sections to identify some of the main issues regarding patentable subject matter. ACIP seeks answers to the questions posed in this section and welcomes any other comments.
Further details on international treaties.
1 Executive summary
In recent years a variety of concerns have been raised about the sorts of things that can be patented. In Australia the main legal test of whether an invention is patentable subject matter is whether it is a 'manner of manufacture'. The three main issues with this test are:
- its breadth and whether patents are being allowed in subject matters where they hinder innovation, investment and public access to new technologies;
- whether it is too flexible and unpredictable, and
- whether its structure and wording is confusing.
In its broad ranging 2004 review of gene patenting and human health Report 99 Genes and ingenuity, the Australian Law Reform Commission (ALRC) recognised the value of a flexible test for patentable subject matter, but found that the manner of manufacture test was ambiguous and obscure. In particular, the meaning of the criterion that an invention not be 'generally inconvenient' and the test for the usefulness of an invention were not clear. The ALRC recommended that the manner of manufacture test be reviewed.
The Minister for Innovation, Industry, Science and Research has requested that the Advisory Council on Intellectual Property (ACIP) conduct a review of patentable subject matter, including the appropriateness and adequacy of the 'manner of manufacture' test as the threshold requirement for patentable subject matter under Australian law, and the historical requirement that an invention must not be 'generally inconvenient'.
ACIP has released this Issues Paper to provoke discussion of the issues.
Objective of the patent system
The patent system has an economic objective. The system aims to benefit society through optimising innovation and public access to new technologies. In areas where the norm of free competition would result in free riding by competitors and less reason to invest in new technologies, innovation is encouraged by providing innovators with the exclusive rights to their inventions. Only those inventions which satisfy certain thresholds of merit are considered to warrant such rights. Patentable subject matter is the first and most fundamental threshold.
Ethical and other constraints on the patent system
Ethically, the patent system should not conflict with wider social and legal standards. Also, the publication of an invention should not compromise national security. These constraints are also implemented through the test for patentable subject matter.
History of patentable subject matter
The Australian test for patentable subject matter dates back to 1623 UK legislation, the Statute of Monopolies. This statute was designed to encourage the introduction of beneficial new industries to the realm by outlawing monopolies except where certain conditions were met. Section 6 provided that patents may be granted for any manner of new manufacture which was not contrary to law, mischievous to the state or generally inconvenient. Over the years the courts came to consider a manner of new manufacture to be of purely mechanical or chemical utility and that it is, or produces, a physical object. However, due to the complexity of the subject the courts struggled to apply a consistent approach and developed a number of historical categories of unpatentable subject matter as a practical way of dealing with the issue. 'Generally inconvenient' was typically used as a ground to deny patents for insubstantial subject matter such as obvious uses of known devices.
Current Australian law
In the landmark 1959 Australian High Court decision National Research Development Corporation v Commissioner of Patents (NRDC) decision, the test for manner of manufacture was recast as a succinct set of traditional principles adaptable to new fields of innovation. This led to an expansion in what is considered patentable subject matter, such as living organisms, genetic materials, computer software and methods of treating humans. However, there are still limits to patentable subject matter. The 2006 decision Grant v Commissioner of Patents interpreted the approach in NRDC to mean that a subject must involve a physical phenomenon or transformation in order to be patentable. The court found that a business method which does not involve any physical apparatus is not patentable.
The Patents Act 1990 continued a historical trend of introducing new legislative provisions for specific aspects of Section 6 of the Statute of Monopolies. To be patentable, a subject must be an 'invention', a manner of manufacture as defined in the Statute of Monopolies, novel, inventive and useful, in that it meets its promise. Human beings, subject matters that are contrary to law, certain foods and medicines and certain uses of a person's name are specifically excluded or may be refused. It is not clear whether, to be an 'invention', a subject matter must pass a separate threshold requirement of newness. The latest judicial guidance on the principle of general inconvenience is that it is for Parliament, not the courts, to decide issues of ethics and social policy.
International treaties such as the World Trade Organisation Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and the Australia-United States Free Trade Agreement (AUSFTA) require that Australia's current and future patent laws:
- help promote technological innovation and the transfer of technology, to the advantage of society;
- provide patents for inventions in all fields of technology (including plants and animals), provided they are new, inventive and capable of industrial application, and
- are developed with the aim of to reducing differences between Australia and other countries, particularly the US.
However, inventions which would threaten ordre public or morality and methods of treating humans and animals may be excluded from patents.
Australian reviews of manner of manufacture
Two major reviews of Australian patent law in 1984 and 2000 considered the issue of patentable subject matter. These recommended retaining the manner of manufacture test due to its adaptiveness and flexibility, and not to introduce specific inclusions or exclusions. A 2003 review of the patenting of business systems found that, while it appeared desirable to exclude such systems from patentability if they are not in a field of technology, the significance of the issue did not warrant the fundamental changes to Australian law that would be required. The 2004 ALRC review of gene patenting and human health is discussed above.
Overseas law and practice
All major jurisdictions have different laws on patentable subject matter. Europe provides a model of a proscriptive approach to the test, in which specific subjects are legislated as not patentable. This can provide more certainty for specific subject matters, but can lead to extensive debate over the meaning of particular terms and excluded subject matters being successfully patented through clever claim drafting. This approach may also be less able to adapt to new technologies. The US provides an approximate model for no patentable subject matter test at all, due to the wide scope of subject matters that are allowed. This may provide simplicity in one respect, but may lead to the patenting of unsuitable subject matters and unnecessary burdens on society. New Zealand continues to use the concept of 'manner of manufacture', and is thinking of modifying its law to be even closer to that of Australia.
ACIP considers the following to be some of the main issues concerning the test for patentable subject matter:
Objective of the system
- Economic objectives of limiting patentable subject matter - are current rationales appropriate?
- Effect of inherent patentability test - what are the consequences of limiting or expanding patentable subject matter?
Ethical constraints of the system
- Can limits on patentable subject matter be justified on ethical grounds?
Current Australian law
- Content and structure of current Australian law - are these appropriate?
- Other issues with current Australian law, such as the value of the existing body of case law, general inconvenience, archaic language and threshold inventiveness.
- International harmonisation and compliance of current Australian law.
Preferred system of patentable subject matter
- Preferred patentable subject matter - what subject matter should be patentable?
- Legislative structure - what system would be appropriate?
ACIP requests that written responses to the questions in the paper and any other comments be submitted by 19 September 2008.
2.1 Advisory Council on Intellectual Property
The Advisory Council on Intellectual Property (ACIP) is an independent body appointed by the Australian Government to provide advice to the Minister for Innovation, Industry, Science and Research and IP Australia on matters of IP policy and administration. The Council has been requested to take a broad, strategic view of the role of intellectual property and its contribution to the development of Australian industry. Members of the Council are drawn from business and manufacturing sectors, the patent attorney and legal professions, government, the tertiary and research sectors, and technology and commercialisation groups.
IP Australia is the federal agency responsible for administering the patent, trade mark, design and plant breeder's rights systems.
2.2 Background to the review
In recent years a variety of concerns have been raised about the sorts of things that can be patented. In Australia the main legal test of whether an invention is patentable subject matter is whether it is a 'manner of manufacture'. The three main issues with this test are:
- its breadth and whether it allows patents in unsuitable subject matters;
- whether it is too flexible and unpredictable, and
- whether its structure and wording is confusing.
The primary area of concern has been that patents are being granted which hinder innovation, investment and public access to new technologies, rather than promote such activities. Areas of concern include software, business methods, medical treatments and biological and genetic materials. Some consider that the drivers of innovation in software and business mean that patents in these areas simply impose costly barriers without providing further incentives to developers1 . The patenting of methods of medical treatment has been seen as restricting access to the best available medical care2 . It has been argued that biological and genetic materials should not be patented because the power this gives patent owners is out of proportion with the contribution they provide to society, or that it is immoral for some to have a degree of 'ownership' over other life forms3 .
In its broad ranging 2004 review of gene patenting and human health Report 99 Genes and ingenuity, the Australian Law Reform Commission (ALRC) considered the issue of what sort of subject matter should be patentable. Some submissions to the ALRC supported a review of the manner of manufacture test. These submissions considered the test to be inadequate because it:
- allowed patents to be granted for discoveries;
- did not explicitly consider the public interest;
- was obscure and vague.
The ALRC found that a new approach to the patentability of genetic materials was not warranted at this stage in the development of the patent system. However, it considered that the manner of manufacture test was obscure and difficult to understand. The ALRC also found that it was unclear whether the test had the ability to consider social and ethical issues according to the traditional principle that an invention not be "generally inconvenient". The ALRC believed that an independent review should be undertaken by a body such as the Intellectual Property Research Institute of Australia (IPRIA) or ACIP:
Such a review should focus particularly on the generally inconvenient requirement, including the extent to which this requirement has been invoked by patent examiners and in challenges to patent rights, and whether there are alternative and preferable ways to formulate a threshold requirement for patentable subject matter. Any reform of the manner of manufacture test should take into account the recommendations of this Inquiry, including those relating to the requirement of usefulness (see Recommendations 6-3 and 6-4).
The ALRC made the following recommendation:
Recommendation 6-2. The responsible Minister should initiate an independent review of the appropriateness and adequacy of the 'manner of manufacture' test as the threshold requirement for patentable subject matter under Australian law, with a particular focus on the requirement that an invention must not be 'generally inconvenient'.
Recommendations 6-3 and 6-4 relate to the criterion of 'usefulness'. Currently this is a test of whether an invention fulfils its promise and it is not specifically assessed by IP Australia. However, the concept of utility is assessed as part of the manner of manufacture test. The ALRC recommended that IP Australia examine and report on the usefulness of an invention as a separate requirement, and that such use must be specific, substantial and credible. This is discussed in more detail in Part 9.6.
2.3 Terms of Reference
Due to the high degree of overlap between 'manner of manufacture' and other criteria for patentability, in order to be effective the scope of the review should be broadened to encompass 'patentable subject matter'. As a consequence, the Minister for Innovation, Industry, Science and Research has requested ACIP to:
inquire, report and make recommendations to the Australian Government on patentable subject matter. The review will include the appropriateness and adequacy of the 'manner of manufacture' test as the threshold requirement for patentable subject matter under Australian law, and the historical requirement that an invention must not be 'generally inconvenient'.
2.4 Submissions to this review
ACIP invites any interested parties to make a written submission in response to this Issues Paper. In particular, ACIP seeks responses to Questions 1-12 contained in Part 11. However, the purpose of the paper is to provoke discussion and any other relevant comments are very welcome. Where possible, submissions in electronic format are preferred.
Submissions should be sent to:
Advisory Council on Intellectual Property
PO Box 200
WODEN ACT 2606
Telephone: 02 6283 2148
The closing date for submissions is 19 September 2008.
Please note that, unless clearly requested otherwise, written comments submitted to ACIP will be made publicly available. Any submissions marked as in confidence will be strictly treated as such.
Once all written submissions have been considered, ACIP may conduct round table or one-on-one discussions with interested parties. ACIP would appreciate those making submissions to indicate whether they would be interested in participating in any such discussions and provide contact details.
3 Objective of the patent system
3.1 Economic rationale
According to Article 7 of the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), the objective of patent rights is to promote technological innovation and the dissemination of technology to the mutual advantage of producers and users in a manner conducive to social and economic welfare. In most cases such objectives are considered to be best achieved through free competition. The 2000 report of the Intellectual Property and Competition Review (IPCR) summarised the reason for this as follows:
Competition is the process of rivals striving for an advantage. In the supply of goods and services, it involves the efforts of producers, acting independently, to secure sales and profits at the expense of rivals. To this end, producers in competitive markets constantly seek to be more favourably positioned than their rivals in terms of the prices they offer, the range, quality and innovative nature of the goods and services they provide, and their reputation as suppliers. As a result, consumers benefit with better, more affordable products, and the increased efficiency achieved through competition expands the income available to society as a whole.
Experience and analysis has repeatedly shown that while there are costs associated with competition, it promotes economic growth and helps achieve and maintain high living standards more surely and consistently than alternative approaches to controlling the allocation of scarce resources. As a result, there is a well-justified presumption in favour of competition, and creating and maintaining competitive markets is an important objective of economic policy. 4
Free competition has therefore become the assumed rule for most markets. Patents are an exception to the rule of free competition. According to standard economic theory, the primary purpose of a patent is to provide the patent owner with an exclusive right or monopoly over the invention for a limited period of time. The purpose of the monopoly is to allow the patentee to generate monopoly profits, and thereby to reward the inventor and provide an incentive for research and development, with subsequent economic and social benefits. An incentive is required for research and development because the knowledge embodied in an invention has "public good" characteristics. This means that an invention may be the subject of "free riding"5 (i.e. unauthorised competitive use) by others, which results in the inventor not obtaining the full benefit of the invention. This, in turn, will lead to under-creation of inventions, to the detriment of society as a whole.
To avoid this outcome, patents are made available for inventions that satisfy certain thresholds of merit. Current thresholds include patentable subject matter (industrial applicability), novelty, inventiveness and sufficiency of description. Patentable subject matter - the question of whether an innovation is one of those subject matters which is eligible for patent protection - is the most fundamental threshold. Only if this is satisfied do the other thresholds need to be considered.
Despite meeting these thresholds, patents still incur costs associated with the monopolistic behaviour of the patent owner. These include restricted access to and higher prices for the invention for end users. Access is also restricted for competitors, leading to fewer improvements on the invention 6 .
Another purpose of a patent is to make knowledge about the invention available to the public. This is central to the quid pro quo bargain of the system, and is in contrast to other forms of protection for inventions, such as trade secrets. In return for the exclusive rights to the invention, the patent owner must disclose in the patent specification details about how it works sufficient to enable another skilled in the field to recreate it. This enables others to freely use the invention once the patent term has expired, ensuring longer term benefits to society 7 . It also allows others to experiment on the invention during the patent term, thereby encouraging further innovation. However, the degree of experimentation allowed varies considerably between jurisdictions, which directly affects the benefits to society of disclosure of the invention.8
The fine arts is an example of an area which is not considered to be subject to free riding by competitors and therefore not in need of patent protection. This is mainly because appropriate protection is available for the arts through the copyright and industrial design systems. Some consider computer software to be another example of a field in which patent protection is not necessary to encourage innovation, due to the nature of the industry 9. Some empirical evidence has been cited in support of this 10 .
The above rationale for the patent system is essentially economic and based on providing an incentive to innovate and disseminating knowledge of such innovations. Criticisms of this rationale include11:
- other social forces and government programs have a greater impact on technological progress and benefits to society;
- resources are diverted from the most socially beneficial areas to the most profitable ones;
- social benefits are neutral overall due to there being significant discouragement to innovate due to the risk of infringing others' patents;
- not all fields of innovation require equal encouragement;
- publication of an invention has little benefit, as information on how most inventions work becomes public knowledge in any case due to the difficulties of maintaining secrecy. There is also evidence that firms rate networks and relationships with customers and suppliers as better sources for learning about new technologies than publications such as patents 12 .
The two main alternative rationales for the patent system are 13 :
- "the rights of man". According to this rationale, there is nothing more personal or exclusive than a person's own ideas. Therefore, individuals have a natural property right to their ideas and to the sole exploitation of them. Early European patent law was based on this approach. The preamble to 1791 French patent law stated:
[T]hat every novel idea whose realization or development can become useful to society belongs primarily to him who conceived it, and that it would be a violation of the rights of man in their very essence if an industrial invention were not regarded as the property of its creator.
- Fair reward. According to this rationale, inventors deserve a reward that is in proportion to the effort they have expended or the usefulness of their invention to society. As this reward cannot be guaranteed by reliance on normal market forces, in the interests of fairness the state should intervene and provide a temporary monopoly for the invention. Such a system would be more likely to provide a reward that is in proportion to the contribution made than providing direct monetary grants, for example. This rationale was a basis for United Kingdom patent law in the 18th and 19th centuries.
Both of these alternatives have a range of arguments for and against them. A key issue for patentable subject matter is whether the current rationale is the most appropriate.
3.3 Summary of Part 3
- The objective of the patent system is currently an economic one;
- The patent system is the exception to the rule of free competition. Patents should only be made available where they benefit society as a whole;
- Benefits to society are achieved through patents only being granted for those innovations which satisfy certain criteria, with patentable subject matter being the first and most fundamental threshold;
- It is arguable whether the current economic rationale for the patent system is appropriate.
4 Ethical and other constraints on the patent system
4.1 National security
As discussed in Part 3.1, one of the objectives of the patent system is to publish information about inventions of sufficient detail to enable others to understand and recreate them. One of the constraints on many patent systems around the world has been that publication must not occur where it would compromise national security 14 . Examples include details of military systems, nuclear related technology, bombs and other weapons of mass destruction. While a government may wish to encourage the controlled development of such technologies for its own defence purposes, widespread publication of such information has the potential to threaten the security of the nation and the safety of its citizens.
In Australia, the publication of an invention may be forbidden on the grounds of national security through the application of a Prohibition Order - see Part 7.1.4. Imposing a Prohibition Order necessarily involves prohibiting the grant of a patent on the invention, as a secret patent cannot be enforced in the normal way. However, secret patent applications can be of value to certain applicants, as they can assist in securing sales and licensing within particular industries and may become of more normal value if the prohibition order is lifted. In Australia, less than 10 new Prohibition Orders are imposed each year.
In relation to patentable subject matter, ACIP is not aware of any significant concern over Prohibition Orders in Australia.
Tied to the objective of creating and disseminating new technologies in ways that are beneficial to producers, users and social welfare, is the issue of ethics. Ideally, the patent system should aim to do no harm, ethically as well as economically. One ethical principle which dates back to the very beginning of the patent system is that illegal activities are excluded from patents 15 . It may seem incongruous for the State to encourage innovation in activities it has clearly outlawed.
The Australian Patents Act 1990 has a general provision prohibiting patents for inventions that are contrary to law. In Australia and the United Kingdom, in practice it has been relatively rare for illegality to be a ground for refusing a patent. One example has been a patent refused for an explosive safe designed to kill or injure a burglar 16 . In a 2004 IP Australia hearing decision, a method of producing a hybrid embryo using inter-species nuclear transplantation techniques was refused because it was considered to be in breach of the Prohibition of Human Cloning Act 2002 17 . The importance of this law is such that the Patents Act 1990 has a specific provision stating that human beings and biological processes for their generation are not patentable.
While there have been cases of patents for illegal activities being refused, to date the granting of a patent has not been a guarantee that an invention meets all other legal requirements and may be freely practiced. For example, it has typically not been the role of patent offices to assess whether an invention meets all the necessary industrial and safety standards. It is arguable how comprehensive the patent office should be in assessing legality.
Illegal activities are not necessarily synonymous with immoral ones. Legislation may not exist regarding some clearly immoral activities, and the illegality of some activities may be outdated as many in society come to consider them quite moral. It has been a tradition of the system that patents should not be granted for clearly immoral inventions, or where they would have immoral consequences, because this would be seen as encouraging objectionable activities. This principle has been reflected in various foreign and Australian patent laws 18 .
Patents for medically treating people involve both economic and moral issues, particularly for developing countries 19 . While such patents may encourage the development of better health technologies, they are considered by some to be immoral because they believe they restrict public access to such technologies. In particular, patents for methods of medically treating humans have been considered unethical by some because they believe they inhibit medical practitioners in their duty to provide the best possible care for a patient 20 . Such methods were considered unpatentable in Australia for many years.
As mentioned in Part 2.2, the patenting of biological materials has raised issues of morality. Some objections to patents on human and animal life are:
- they threaten the autonomy of the person or animal, in that a person is seen to acquire control over another's body or our common heritage;
- some things should be outside and free of the property system;
- it is hubris or even heresy to claim ownership over the creations of God;
- such patents encourage interference with nature, which may lead to the devaluation of animal life and the suffering of laboratory animals, and to a decline in genetic diversity 21.
For example, in Europe, a patent was initially refused for a mouse which had been genetically engineered to be more susceptible to developing cancer and so assist in finding a cure. However, on appeal the patent was granted as it was considered that the suffering of the animal was outweighed by the potential benefits to humans 22 . At present, patents are being sought in the emerging field of synthetic organisms, or human-made species. Some argue that such patents are contrary to public morality and safety 23.
A recent report to the EPO on workload issues noted that "the role of the patent system (in ethical and moral issues) is limited as a patent does not imply an official approval of the innovation, but only grants an exclusive right vis-&-vis competitors. Whether the invention may be exploited at all is dependent on laws and regulations outside the patent field."24 The ALRC also recommended that social and ethical concerns be addressed through direct regulation of the use or exploitation of inventions rather than by exclusions from patentability.25
It is therefore arguable whether morality is an appropriate constraint for the patent system and, if it is, how it should be assessed.
4.4 Summary of Part 4
- National security is a constraint on the patent system. According to this, patents should not be granted or published where this would compromise the security of the nation and the safety of the public.
- Ethics has been a long standing constraint on the patent system. According to this, patents should not conflict with wider social and legal standards;
- Ethical issues are currently assessed under the criterion of patentable subject matter, with specific provisions for the generation of human beings and inventions that are contrary to law.
- A key issue is the extent to which ethics should be a consideration of the patent system.
5 Overview of the Australian patent system
The Australian patent system is administered by IP Australia, a federal government agency within the Department of Innovation, Industry, Science and Research. To obtain a patent a formal application must be lodged with IP Australia and fees paid. Applications may be lodged directly with IP Australia or through an international system under the Patent Cooperation Treaty.
Patent specifications are legal and technical documents which must describe in detail how the invention works. Specifications must also end in one or more statements called 'claims' which carefully define the exact scope of protection sought. The claims are a critical part of the patent. Patent applications are usually drafted and prosecuted by IP professionals such as patent attorneys.
A granted patent provides the owner with the exclusive right to use the invention. However, patents may be re-examined by IP Australia or challenged through the courts, and the grant of a patent does not guarantee that the invention complies with all Australian laws and standards. Patent owners are responsible for enforcing their own patents.
Two types of patent are available in Australia - standard and innovation patents. In addition, new varieties of plants may be protected by a form of intellectual property called Plant Breeder's Rights. Those rights are discussed here because plants are excluded from protection under the Innovation Patent although not under the Standard Patent (see Section 7.1.2).
5.1 Standard patent
The standard patent is for higher level inventions and may be maintained for up to 20 years - 25 years for some pharmaceuticals. The standard patent must comply with international agreements and standards. Currently around 24 000 applications for standard patents are lodged with IP Australia each year. Around 10-15% of these are from Australian organisations or individuals, the rest from residents of other countries. The current top five fields of technology are pharmaceuticals and cosmetics, medical engineering, organic fine chemicals, consumer goods and equipment and analysis, measurement and control systems.
Patent applications are published around 18 months after the first date they were lodged with a patent office (the 'priority date'). This enables competitors to be aware that rights are being sought and to plan accordingly. After a period of time and on payment of a fee IP Australia examines each application against the relevant criteria, the principal ones being 'manner of manufacture', novelty and inventive step. This assessment is based on the information in the specification, the priority date and all other information in the field published anywhere in the world (the 'prior art'). If IP Australia considers that the application does not meet all of the criteria, the applicant has 21 months in which to make changes or argue their case.
If IP Australia considers that the criteria for grant of the patent has been met, it accepts and re-publishes the application. Third parties then have three months in which to lodge an opposition to the grant of the patent. If no oppositions are received (as in around 98% of cases), the patent is granted. Any oppositions are heard by IP Australia and a decision issued. Around 80% of all applications lodged are granted. Patents and patent applications may be re-examined, however, patentable subject matter is not one of the grounds that can be considered. The next avenue for challenging the subject matter of a patent is the courts. Patent owners must pay annual renewal fees to maintain their patent, otherwise it lapses and may be freely used by the public. The average lifespan of a patent varies according to the field of technology but is typically around nine years.
5.2 Innovation patent
The innovation patent replaced the petty patent system in 2001. As a supplementary, second-tier form of protection the innovation patent is not subject to international agreements. It is a quicker, cheaper system designed for lower level inventions with shorter life spans and may be maintained for up to eight years. Currently around 1100 innovation applications are lodged with IP Australia each year, around 85% of those from Australians. The current top fields of technology are consumer goods and equipment, civil engineering and mining, transport and information technology.
IP Australia grants and publishes innovation patents soon after filing, providing they meet basic formality requirements. However, if the patent owner wishes to enforce the innovation patent, it must first be substantially examined against the criteria by IP Australia for an extra fee. Third parties may also request this. The optional examination system is designed to reduce unnecessary costs to users. Around 20% of innovation patent applicants request examination. The principal criteria to be met are manner of manufacture, novelty and innovative step. Innovative step is a lower threshold than the inventive step test for standard patents. If IP Australia considers that the application does not meet all of the criteria, the applicant has 6 months in which to make changes or argue their case.
If IP Australia considers that the application meets the criteria the innovation patent is certified and may then be enforced. Around 13% of all innovation patents are certified. Annual renewal fees are required to maintain an innovation patent. At any time after certification, third parties may lodge an opposition to an innovation patent.
5.3 Plant Breeder's Rights
Plant Breeder's Rights (PBR) are exclusive commercial rights to a registered variety of plant. The rights are a form of intellectual property, like patents, and are administered under the Plant Breeder's Rights Act 1994.26 Under this legislation, varieties of plants (including transgenic plants), fungi and algae are eligible for protection. For a plant breeder to be granted PBR in any variety, the variety has to meet the criteria of newness, distinctiveness, uniformity, and stability. In tree and vine varieties, PBR continues for 25 years from the date of granting, and in all other varieties, for 20 years from the date of granting. IP Australia receives about 360 applications for PBR per year and grants around 254 rights per year on average. About 45% of these are from Australian organisations or individuals.
In Australia it is possible to have PBR and patent protection in relation to the same variety. 27 Although the Australian High Court has ruled that PBR has the essential characteristics of a patent 28 , there are some practical differences in the type of protection afforded. Patents tend to protect a process or components of a variety, such as gene technology or gene sequences, whereas PBR protects the end product, that is, the plant variety as a whole and includes a number of exceptions to infringement.
5.4 Summary of Part 5
- Patent specifications are legal and technical documents which must describe in detail how an invention works.
- The exact scope of protection awarded by a patent is carefully defined by the claims at the end of the specification.
- Two types of patent are available in Australia. Standard patents are for higher level inventions and may last for up to 20 years (25 for some pharmaceuticals). Innovation patents are for lower level inventions and may last for up to eight years.
6 Patentable subject matter 1623 - 1959
This section provides a brief overview of the evolution of Australian law on patentable subject matter from the Statute of Monopolies in 1623 to the High Court decision National Research Development Corporation v Commissioner of Patents (NRDC) in 1959.
6.1 Statute of Monopolies 162329
From as early as the 15th century, the English Crown granted monopoly rights to produce specific goods or provide specific services by issuing Letters Patent. The objective of this practice was to stimulate the local economy and encourage the creation of new industries. However, such patents were conditional on whether they would cause inconveniences, such as being for devices that would put local manual labourers out of work. At this time patents were only valid for entire trades or devices, as only these were considered to show sufficient industry or inventiveness on the part of the inventor to justify the privileges conferred by a patent. A mere addition to a trade or device was not patentable because it was not considered sufficiently new to the realm.
Due to perceived abuse of this power by Elizabeth I and James I, in 1623 the Statute of Monopolies was passed by Parliament to ensure that only those patents that would be beneficial to the State were granted. It did so by prohibiting the grant of monopolies by the State, other than those monopolies identified in section 6. This section set out the conditions that must be satisfied for the grant of a patent. Section 6 stated:
Provided also, and be it declared and enacted that any declaration before mentioned shall not extend to any letters patent, and grants of privilege for the term of 14 years or under hereafter to be made of the sole working or making of any manner of new manufactures within this Realm to the true and first inventor and inventors of such manufactures which others at the time of making such letters patent and grants shall not use so as also they be not contrary to the law nor mischievous to the State by raising prices of commodities at home or hurt of trade, or generally inconvenient, the said fourteen years to be accounted from the date of the first letters patent or grant of such privilege hereafter to be made, but that the same shall be of such force as they should if this Act had never been made, and of none other.
Thus, a monopoly would be of benefit provided it was:
- only for a limited term30;
- for a 'manufacture' that is 'new';
- provided to the true first inventor, and
- not contrary to law, mischievous to the State nor generally inconvenient.
6.2 Legislation and case law 1624 - 1882
6.2.1 Patentable subject matter
During this period the UK courts were generally taking a pragmatic rather than theoretical view of what subject matters could be patented. Rather than determining and adhering to a single set of principles, the courts:
- reacted and adapted to the types of inventions for which patents were sought;
- rationalised previous decisions and
- considered the practical impact of individual grants on sections of the public.
The type of subject matter for which patents were sought had been changing from entire trades and devices to technical improvements on existing products and processes. The courts responded to this, considerably softening the requirement for 'newness' and viewing a patentable invention as an abstract concept of changing scope. By the mid 1800s, in general any tangible manifestation of a new and inventive principle was considered patentable. The following types of innovation were patentable, as long as they offered the public something of substance:
- new products and processes;
- improvements to existing products and processes;
- new uses of existing products and processes;
- combinations of known products.
However, different approaches continued for some major categories. For example, 'analogous uses' became a category of inventions considered inherently unpatentable. These were improvements to existing processes or devices which replaced a particular element with another element, the properties of which were already known. Such inventions were considered to be inherently unpatentable because the 'abstract principle' of the replacement element was already known31 . By contrast, for combinations of two or more elements the focus was on whether the physical form was new and useful, rather than whether the underlying principles of the elements were new32 . Consequently, whether an invention was classified as a combination or a use was critical in whether it would be considered inherently patentable.
Definition of invention
In the Patents Act 1852, the word "invention" was used to denote what subject matter could be patented, and the first express definition of "invention" was introduced:
any manner of new manufacture the subject of Letters Patent and Grant of Privilege within the meaning of [s.6 of the Statute of Monopolies].
The consequence of this was the beginning of a more formalistic approach to patentability, focused on the classification of individual subject matters matters as a 'manner of new manufacture', the protection of which would not be 'generally inconvenient'.
Prior to 1852, it appears that the phrase "mischievous to the State by raising prices of commodities at home or hurt of trade, or generally inconvenient" in Section 6 of the Statute of Monopolies was little used as an explicit ground for refusal. Rather it served to remind the courts of the original purpose of the law in limiting abusive patents. However, from 1852 the courts were increasingly willing to consider the impact of individual grants on sections of the public. Consequently the courts often objected to patents for insubstantial subject matter, particularly 'analogous uses', on the grounds that it would be 'generally inconvenient' to deny public use of such subject matters 33 .
The use of the 'general inconvenience' proviso as a wider, policy-based restriction to the scope of inherent patentability was suggested in an 1875 decision regarding instructions for improving a method of purifying coal gas. In this case the judge said "[n]o one has a right to prevent a workman from using care to keep his tools in the most efficient stat[or] to prevent a manufacturer from cleansing his vessels and throwing away the useless contents whenever he likes..."34 .
6.2.2 Novelty and inventiveness
The concept of a manner of 'new' manufacture continued to encompass the modern concepts of novelty and inventiveness. However, by the mid 1800s the test for novelty had changed from whether the invention had been previously worked in the realm to whether it had been previously disclosed in the realm.
6.2.3 1865 review of UK patent law
For many years government Law Officers had been liberal in granting patents, and the courts had tended to accept the sort of patents that had been granted before, regardless of broader policy. Consequently concerns were voiced about a "multiplicity of monopolies" for (amongst other things) "alleged inventions of a trivial character" and their "(obstruction of) the progress and improvement of arts and manufactures". These concerns lead to the first extensive review of the UK patent system in 1865. The review found that the system was failing and causing significant harm:
The majority of witnesses...decidedly affirm the existence of practical inconvenience from the multiplicity of Patents. It is clear that Patents are granted for matters which can hardly be considered as coming within the definition in the Statute of Monopolies, of "a new manufacture". It is in evidence that the existence of these monopolies embarrasses the trade of a considerable class of persons, artisans, small tradesmen, and others, who cannot afford to face the expense of litigation, however weak the case against them may seem to be; and a still stronger case is made out as to the existence of what may be called obstructive Patents, and as to the inconvenience caused thereby to manufacturers directly, and through them to the public.35
The report made several recommendations, including:
- the novelty of inventions be carefully assessed before patents are granted;
- there should be provision for appeal and
- scientific assessors assist judges in assessing the validity of patents.
The review lead to the modernisation of the UK patent system in 1883.
6.3 Legislation 1883 - 1959
6.3.1 Patents, Designs and Trade Marks Act 1883 (UK)
The 1883 Act was the first modern patent legislation in the UK. It introduced examination of applications to ensure inventions were adequately described. The definition of "invention" was changed to be:
any manner of new manufacture...within section six of the Statute of Monopolies [including] an alleged invention.
The 1883 Act also introduced the first clear distinction between an invention and novelty, requiring decision makers to consider patentable subject matter as a discrete concept.36 A new provision also enabled the Comptroller to "refuse to grant a patent for an invention...of which the use would, in his opinion, be contrary to law or morality"37. These were the beginnings of the trend to divide the different aspects of the Statute of Monopolies into separate tests.
6.3.2 Australian Patents Act 1903
Prior to the Australian Patents Act 1903, patents in Australia were administered under separate State Acts. The 1903 Act was largely based on the 1883 and 1902 UK Acts and received only minor amendments until 1952.
Australian law also began the process of dividing out the different aspects of the Statute of Monopolies. Following the UK lead, in order to be patentable an invention had to satisfy the separate criteria of being an invention (defined as in the 1883 UK Act above) and novel. Whether an invention was inventive was considered under the concept of manner of new manufacture. An invention could also be refused under section 118 for being contrary to law or morality.
6.3.3 UK Acts 1902 - 1949
During the first half of the 20th century the UK Acts became more specific about different aspects of inherent patentability.
In the 1919 Act, a new provision deemed chemicals, food and medicines to be unpatentable, except when produced by new processes38. A later addition to this provision was that, for food or medicines, mere admixtures resulting only in the known properties of the ingredients were not patentable processes39. Although it didn't relate directly to patentable subject matter, another new provision emphasised the view that some subject matters needed to be treated differently. This enabled licences to be granted for using patented inventions to prepare food or medicine. The terms of the licence had to balance how desirable it was to make the food or medicine available to the public at the lowest possible price against giving the inventor due reward40. This provision was later amended to include surgical and curative devices.41
In 1932 the grounds for revoking a patent were defined to include manner of new manufacture, newness, inventiveness, usefulness, contrary to law and food and medicines. In 1949 a provision was introduced enabling patent applications to be refused for being contrary to natural laws, contrary to law or morality, a food or medicine which is a mixture of known ingredients possessing only the aggregate of the known properties of the ingredients, or a process of mere admixture42.
6.3.4 Australian Patents Act 1952
Since 1903 the Australian legislation had not kept up with the substantive changes in UK legislation. The 1952 Act was created out of the reviews by the Knowles and Dean Committees - see Parts 9.1 and 9.2. Under the 1952 Act, an application for a patent had to be in respect of:
a manner of new manufacture the subject of letters patent and grant of privilege within section 6 of the Statute of Monopolies. 43
one invention only44.
The definition of "invention" remained unchanged, i.e. defined in the above terms with the addition of "and includes an alleged invention".
The 1952 Act followed the UK lead in becoming more specific about the different concepts contained within s.6 of the Statute of Monopolies. Patent examiners were still restricted to considering inventiveness under invention / manner of new manufacture. However, lack of inventiveness (obviousness) was a separate ground for revocation, along with not being an "invention" and lack of usefulness45. Applications could be refused on the grounds that the invention was contrary to law, a food or medicine which was a mere mixture of known ingredients, or a process of producing such a substance by mere admixture46. Applications could also be refused and publication restricted on the grounds of national security47.
A relevant issue is whether the process of separating out the manner of manufacture test into specific provisions has had value and should be continued further.
6.4 Case law 1883 - 1959
During the late 19th and early 20th centuries patents were increasingly sought for information-based and agricultural products and processes, rather than the mechanical and chemical subject matters of previous centuries. The court cases from around the turn of the century involved increased attempts to come to grips with the language of the legislation and the common law principles regarding patentable subject matter. The main characteristics of this period were:
- rationalising existing common law principles in terms of the language of the legislation;
- holding to the notion that a manner of new manufacture is of purely mechanical or chemical utility and that it is, or produces, a physical object;
- continuing to consider inventiveness as part of manner of new manufacture, including confirmation that a patent should be refused for not being an 'invention' when on the face of the specification it is no more than a new use of a known product48 ;
- justifying the common law exclusions for analogous uses and other derivative subject matter with considerations of "public convenience"; and
- continuing to consider innovations according to historical categories.
6.4.1 Historical categories
Historical categories of subject matters persisted due to the size and complexity of the concept of patentable subject matter. This made it difficult for decision makers to look beyond the patchwork of rules and precedents which had developed for specific subject matters, and to consider the issue according to common general principles. By the mid-20th century, some of the traditional categories of inherently unpatentable subject matter that had been developed were49:
- Discoveries, ideas and theories;
- Laws of nature;
- Fine arts (solely aesthetic creations such as music and the visual arts);
- Schemes, plans and methods of doing business50;
- Mathematical algorithms with no practical implementation;
- Printed matter characterised solely by the content of the information51 ;
- Methods of treating humans52;
- Living organisms;
- Agricultural and other processes not producing or treating a man-made object53;
- Analogous uses54;
- Methods of testing, observation and measurement55 ;
- Mere 'working directions' for the operation of a known product or apparatus56 ;
- Mere collocations, kits, packages and board games of known integers57 ;
- Foods or medicines that merely exhibit the known properties of the ingredients.
With hindsight, it can be seen that many of these apparently disparate categories were considered unpatentable for similar reasons. By grouping these historical categories together into a small number of fundamental reasons for finding a subject matter unpatentable, it is possible to gain a clearer picture of the thinking of the courts and so help identify the main principles to be considered in this review. There are a number of ways of doing this and perhaps all involve some degree of approximation. The following four reasons are one possible approach:
1. Lack of practical utility
Patents were only considered to be appropriate for subjects that achieved something practical and functional. Several traditional categories were considered unpatentable because they were too abstract and lacked a practical application. Such subjects instead lay in the intellectual , academic and artistic realms. For example, the discovery of a new material or law of nature was not sufficient to warrant a patent - a practical use had to be identified. For printed matter to be patentable there must have been some material advantage in the presentation - merely aesthetic value was not sufficient58. For schemes and plans to be patentable a detailed way of carrying them out had to be provided59.
Some categories were considered unpatentable because they were thought to be essentially non-economic endeavours, in that they did not belong to the world of trade and were not driven by the pursuit of economic returns. Such subjects were not considered to be suitable for patents. One reason methods of treating human beings was considered unpatentable was that the medical field was considered to be altruistic and non-economic in character. Patents work by preventing new ideas from being freely used by others, and this was thought to be at odds with a medical practitioner's duty to provide the best possible care. In the beginning of the patent system, the fine arts were considered unpatentable because they were not seen as economically significant. Manufactured goods were considered to be the source for economic growth and social benefits60. During the period 1883 to 1959 in Australia and the UK, more aspects of the fine arts began to be recognised as economically significant, however these gained protection through copyright rather than patent law.
3. Non man-made
The concept of 'manner of manufacture' was understood by the courts to have an everyday meaning - the production or treatment of a man made device. Several categories were considered unpatentable essentially because they failed to do this in some way. Natural phenomena and living organisms such as plants, animals and people were examples of this, even when created or treated by humans. However, in 1943 a court formulated a test for assessing the patentability of processes which became known as Morton's Rules61 . These rules led to a broadening of what subject matters were considered patentable. Examples include an area where a fire has been extinguished62 , an electrical oscillation63 and a fog-free atmosphere64 .
4. Lack of novelty and inventiveness
Several categories were considered unpatentable because they did not meet the 'novel' or 'inventive' aspect of the manner of manufacture test. Using known things in obvious ways or to produce predictable results continued to be considered unsuitable subject matter for a patent, as there was no distinct test for 'inventiveness'65. As discussed in Part 6.2.1, analogous uses are improvements to existing processes or devices which replace a particular element with another element, the properties of which were already known. Similarly, 'mere working directions' are instructions for manipulating known produces or processes which involve no inventive ingenuity. Together such categories helped to form a very large body of manner of manufacture law.
Table 1 attempts to identify the fundamental basis or bases for each historical category being considered unpatentable:
Table 1 -Fundamental bases for historical categories being considered unpatentable
Lack of practical utility
Non man- made
Lack of novelty & inventiveness
Discoveries, ideas &
Laws of nature
Schemes, plans &
methods of doing business
Mathematical algorithms with no
characterised solely by the content
Methods of treating
Agricultural & other
processes not producing/treating a man made object
Methods of testing,
directions for operating a known product or process
kits & packages of known integers
Foods or medicines
that merely exhibit known properties of the ingredients
An important issue is that, while the body of case law on the manner of manufacture test is often inconsistent and piecemeal in nature, it is extensive and the guidance it provides in determining current law may provide a strong argument for retaining the test.
6.4.2 General inconvenience
During the period 1883-1958, the s.6 phrase "mischievous to the State, by raising prices of commodities at home, or hurt of trade, or generally inconvenient" continued to focus decision makers' attention on the courts' traditional role in restricting patents to subject matters of sufficient novelty, inventiveness and usefulness to warrant the restrictions that patents entail66 . The courts considered that it would be mischievous to the State to grant patents for subject matters which did not meet these standards. 'General inconvenience' in particular continued to be used as justification for refusing patents for analogous uses and other derivative subject matter, rather than being a category of unpatentable subject matter in itself67.
Given that the concept of general inconvenience has for much of its history been concerned with the problems caused by insubstantial subject matter, it is arguable whether it can and should be broadened to encompass other issues.
6.5 Summary of Part 6
- Section 6 of the Statute of Monopolies provided patents for any manner of new manufacture which was not contrary to law, mischievous to the state or generally inconvenient;
- Early courts considered the practical impact of individual grants on the public, but due to the complexity of patentable subject matter struggled to apply a consistent approach;
- 'Generally inconvenient' was typically used as a ground to deny patents for insubstantial subject matter such as analogous uses of a known thing. Given this history, it is arguable whether this aspect of patentable subject matter can and should be broadened to encompass other issues.
- During this period a manner of new manufacture was thought to be of purely mechanical or chemical utility and that it is, or produces, a physical object;
- Patent Acts continued to refer to s.6 of the Statute of Monopolies, but over time more aspects of it were specifically written into the legislation. One issue is whether this process should be continued and the manner of manufacture test separated out into even more criteria.
- Decision makers used a number of historical categories of unpatentable subject matter as a practical way of dealing with the issue. These categories can appear to be quite disparate. However, regrouping them shows that patentable subject matter at the end of this period perhaps comprised only four fundamental criteria - practical utility, economic, man-made and novel/inventive.
- The existing body of case law on 'manner of manufacture' for this period is extensive and demonstrates that the test is able to adapt to new technologies, yet it is also inconsistent and piecemeal to some degree. An important issue is whether case law provides more assistance in determining current law on patentable subject matter than it does problems.
7 Patentable subject matter 1959 - today
This section summarises the evolution of Australian law on patentable subject matter from the 1959 High Court decision National Research Development Corporation v Commissioner of Patents (NRDC) to today.
The Patents Act 1990 was developed in response to the 1984 report Patents, Innovation & Competition in Australia by the Industrial Property Advisory Committee (IPAC) - see Part 9.3. Major issues include whether the legislation meets the objectives of the patent system, is appropriately structured and is sufficiently clear to users of the system.
7.1.1 Criteria for grant of patent
This section sets out the basic criteria for grant of a standard patent:
(1) Subject to subsection (2), an invention is a patentable invention for the purposes of a standard patent if the invention, so far as claimed in any claim:
- is a manner of manufacture within the meaning of section 6 of the Statute of Monopolies; and
- when compared with the prior art base as it existed before the priority date of that claim: (i) is novel; and (ii) involves an inventive step; and
- (c) is useful; and
- (d) was not secretly used in the patent area before the priority date of that claim by, or on behalf of, or with the authority of, the patentee or nominated person or the patentee's or nominated person's predecessor in title to the invention.
Subsection 18(1A) sets out similar criteria for innovation patents.
The Schedule 1 Dictionary defines "invention" as under the 1903 and 1952 Acts:
any manner of new manufacture the subject of letters patent and grant of privilege within section 6 of the Statute of Monopolies, and includes an alleged invention.
Manner of manufacture
An objective of the 1990 Act was to separate out novelty and inventive step from the manner of manufacture criteria, leaving behind the concept of patentable subject matter/inherent patentability. S.18(1)(a) refers to 'manner of manufacture' instead of 'manner of new manufacture' as used in previous Acts. The Explanatory Memorandum to the 1990 Act elaborated as follows (emphasis added):
31. An "invention" is defined in Schedule 1 by reference to the expression "manner of new manufacture" in section 6 of the Imperial Act known as the Statute of Monopolies. The requirement in paragraph 18(1)(a) that an invention, in order to the patentable, must be a "manner of manufacture" invokes a long line of UK and Australian court decisions. It means little more than that an invention must belong to the useful arts rather than the fine arts. The Government accepted the Industrial Property Advisory Committee's recommendation that this flexible threshold test of patentability be retained in preference to adopting a more inflexible codified definition (emphasis added).
The text in bold appears to be taken from the 1984 IPAC report mentioned above.
Although usefulness is a condition of validity of a patent, it is not a criterion assessed by IP Australia before acceptance. Its meaning is quite limited - see Part 7.2.6. The more comprehensive assessment of whether an invention has sufficient economic utility is part of the manner of manufacture criterion.
7.1.2 Exclusions from patentability
Subsection 18(2) excludes human beings from patentable subject matter:
(2) Human beings, and the biological processes for their generation, are not patentable inventions.
The reason for this exclusion is ethical. In the Second Reading Speech for the Patents Bill 1990, the Government stated that the Bill took into account certain concerns expressed in the Senate on the issue of the patentability of human beings68 . These concerns related to the ethics of patenting life forms, particularly humans, and community standards on the issue69 . Various proposed amendments to address these issues culminated in s18(2).
Plants and animals
Subsections 18(3) and (4) exclude plants and animals from the innovation patent:
(3) For the purposes of an innovation patent, plants and animals, and the biological processes for the generation of plants and animals, are not patentable inventions.
(4) Subsection (3) does not apply if the invention is a microbiological process or a product of such a process.
The reason for this exclusion is to avoid the innovation patent interfering with Plant Breeder's Rights (PBRs) and the absence of a clear need for protection for lower level animal inventions70 .
7.1.3 Discretionary refusal of patents
Contrary to law, foods and medicines and person's names
Section 50 sets out certain circumstances under which a standard application may be refused, similar to that under the 1952 Act. No such provision applies to innovation patents:
(1) The Commissioner may refuse to accept a request and specification relating to a standard patent, or to grant a standard patent:
- (a) for an invention the use of which would be contrary to law; or
- (b) on the ground that the specification claims as an invention: (i) a substance that is capable of being used as food or medicine (whether for human beings or animals and whether for internal or external use) and is a mere mixture of known ingredients; or (ii) a process of producing such a substance by mere admixture.
(2) The Commissioner may refuse to accept a specification relating to a standard patent containing a claim that includes the name of a person as the name, or part of the name, of the invention so far as claimed in that claim.
7.1.4 Prohibition orders
As outlined in Part 4.1, a Prohibition Order may be placed on a patent application. This prohibits or restricts the publication or communication of the subject matter of the invention and prevents a patent being granted, until the order is actively removed. Such orders can arise from two provisions of the Patents Act:
In the interests of the defence of the Commonwealth
s.173 (1) Subject to any directions of the Minister, the Commissioner may, if it appears to the Commissioner to be necessary or expedient to do so in the interests of the defence of the Commonwealth, by written order:
- (a) prohibit or restrict the publication of information about the subject-matter of an application for a patent (including an international application); or
- (b) prohibit or restrict access to a micro-organism deposited for the purposes of section 4171 with a prescribed depositary institution situation in Australia.
(2) A person must not contravene a prohibition order except in accordance with the written consent of the Commissioner.
Penalty: imprisonment for 2 years.
Nuclear "associated technology"
If the Director of Safeguards in the Department of Foreign Affairs and Trade determines that a patent application contains information that is "associated technology"72 under s.4(1) of the Nuclear Non-Proliferation (Safeguards) Act, the Commissioner may be required to place a Prohibition Order on the application:
s.152 (1) Where the Director issues a certificate under section 147 in relation to an application, the Director may give written notice to the Commissioner of any prohibitions or restrictions on the publication or communication of the information in the specification, or in a relevant abstract, that the Director considers appropriate.
(2) On receiving a notice, the Commissioner must take such steps as are necessary or expedient to give effect to it.
(3) Without limiting the generality of subsection (2), the Commissioner may, by written order, prohibit or restrict the publication or communication of information about the subject-matter of the application, whether generally or in relation to a particular person or class of persons.
(4) A person must not, except in accordance with the written consent of the Commissioner, publish or communicate information in contravention of an order.
Penalty: Imprisonment for 2 years.
7.1.5 Increase in legislative provisions
With the 1990 Act, the number of legislative provisions relating to patentable subject matter increased again.
7.2 Case law
7.2.1 NRDC v Commissioner of Patents
In 1959 the High Court of Australia made a landmark decision in National Research Development Corporation v Commissioner of Patents (NRDC). The alleged invention was a method of using known chemicals to treat soil in order to control weeds without adversely affecting crops. This decision dramatically altered the way the manner of manufacture test was viewed, and significantly broadened its scope. NRDC considered two main issues:
- whether the method claimed was, on the face of the specification, for nothing more than an analogous use of the known chemical, and therefore no further consideration of patentability needed to be made - see Part 7.2.3 below;
- whether the method claimed was an invention recognised within the breadth of the concept developed under s.6 of the Statute of Monopolies.
On the second issue of "pure" patentable subject matter, NRDC found that it was wrong to focus on whether something is a 'manufacture'. This term was merely the name for the category of patentable subject matter, and was not designed to impose limitations through definitions, nor to preclude new ways of doing things from patent protection. Instead, NRDC taught that the correct question to ask is:
"is this a proper subject of letters patent according to the principles which have been developed for the application of s.6 of the State of Monopolies?"
NRDC emphasised that Morton's Rules regarding a 'vendible product' (see Part 6.4.1 - Non man-made) were merely a useful guide rather than hard and fast rules. The point was, for a process to be a manner of manufacture, it must:
- belong to a useful art as distinct from a fine art - that is, its value to the country must be in a field of economic endeavour, and
- produce a physical phenomenon in which the effect of the process may be observed.
The process of eradicating weeds in question in NRDC was determined to be a manner of manufacture because it had economic significance and resulted in "an artificially created state of affairs", discernable by observing the growth of weeds and crops over a period of time.
Expansion of patentable subject matter after NRDC
NRDC led to a complete rethinking of the historical categories of unpatentable subject matter and even the four fundamental reasons suggested in Part 6.4.1. The flexibility of the NRDC test led to a range of pre-existing and newly emerging technologies being determined to be patentable subject matters. For example:
- Methods of treating humans. In 1972 a court found that the treatment of humans may be an economic field suitable for patents. A cosmetic process for improving or changing the appearance of the human body which had a commercial application was found to be patentable subject matter73. In 1994 the medical treatment of humans was determined to be patentable, provided it had commercial application74.
- Living organisms. In a 1976 decision, living organisms were determined to be patentable provided they were not in a naturally occurring state and they had improved or altered useful properties, and not merely changed morphological characteristics which had no effect on the working of the organism75 . Subsequent Patent Office practice has been that naturally occurring organisms which have been isolated and cultivated and have some new use are patentable.
- Genetic materials. In a 1995 decision it was made clear that a purified and isolated DNA sequence satisfied the NRDC concept of an "artificially created state of affairs"76.
- Mathematical algorithms. In 1981 mathematical algorithms were determined to be patentable subject matter provided they are implemented in a useful way77. An algorithm dealing with mathematical symbols and variables with no apparent purpose is not patentable. However, the algorithm must result in some form of physical transformation - see business methods below.
- Computer software. This was first deemed patentable in 199178 . A 1994 decision79 emphasised that the NRDC approach provided the basic law on patentability of any invention, reformulating the test as "a mode or manner of achieving an end result which is an artificially created state of affairs of utility in the field of economic endeavour".
- Business methods. After NRDC and the above reformulation, there was uncertainty over whether business methods were patentable, and the degree of practical implementation that was required to satisfy the broad concept "an artificially created state of affairs". In 2001 the courts considered that business methods should not be automatically excluded from patentability, but instead should be subject to the same requirements as any other process80. The most recent authority on business methods is Grant v Commissioner of Patents - see Part 7.2.2 below.
A major issue is whether the principles of the NRDC decision meet the appropriate objectives and constraints of the patent system and are being applied correctly by the courts and IP Australia.
7.2.2 Grant v Commissioner of Patents
In 2005 the Federal Court found that a 'pure' business method for protecting assets from creditors using trusts and loans without the use of any apparatus was not a manner of manufacture. The court stated that the purpose of patents was to provide a net economic benefit to the country as a whole, and the claimed invention was determined to merely advance private interests at the expense of the community81.
This decision was appealed to the full court in Grant v Commissioner of Patents (2006). The full court did not believe it was in a position to determine the balance between social cost and public benefit, and that Parliament had already made that judgement by rewarding innovation with a limited monopoly. Instead the court found that the invention was not patentable subject matter because it did not produce an "artificial state of affairs" (from NRDC) as it did not involve any sort of physical phenomenon or transformation. The alleged invention was found to be a mere scheme, an abstract idea, mere intellectual information, which has never been held to be patentable in Australia. Also, the invention resided in the field of law, which although economically important was not considered to have sufficient "industrial, commercial or trading character" as taught by NRDC to be suitable for patent protection. The court found that whether the invention was a "business method" was immaterial.
Some commentators believe this decision has provided appropriate clarity to the patentability of potentially non-technical fields such as business methods82 . Others believe the Grant decision to be an inappropriate application of NRDC83 and that it has once again cast doubt on the patentability of computer algorithms84.
7.2.3 'Threshold' inventiveness
As referred to in Part 6.3.4, under the Patents Act 1952 inventiveness continued to be considered as part of the manner of new manufacture criterion. Although there was a separate test for inventiveness, the test was limited and was not considered during examination. Court decisions under this Act and the 1903 Act found that a patent application may be refused without reference to any other literature if, "on the face" of the specification, the invention claimed was merely an analogous use and therefore not a manner of new manufacture85.
As outlined in Part 7.1.1, the Patents Act 1990 added a distinct test for inventiveness and s.18(1)(a) refers to 'manner of manufacture' instead of 'manner of new manufacture' in an attempt to separate out inventiveness from patentable subject matter. In NV Philips Gloeilampenfabriken v Mirabella International Pty Ltd (1992) (Philips v Mirabella), the High Court considered whether a compact fluorescent lamp was a patentable subject within the meaning of s.6 of the Statute of Monopolies. The court determined that 'manner of manufacture' still effectively has the same meaning as 'manner of new manufacture' because of the Schedule 1 Dictionary definition of 'invention'. To be an 'invention' a subject matter had to pass a threshold requirement of exhibiting, on the face of the specification, sufficient qualities to be a proper subject of letters patent according to traditional principles. These qualities included a fundamental level of inventiveness. Only then need the subject matter be tested against the criteria of 18(1)(a), (b), (c) and (d) and the prior art.
The most recent guidance on this issue is the High Court decision Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (Lockwood v Doric) (2007) concerning deadlocks. The court said that the power to refuse an application because, "on its face", the invention is not a manner of new manufacture, has sometimes been misunderstood. There is no separate ground of invalidity or a discrete "threshold" test. A court is entitled to consider any information in a patent specification as part of the evidence to be considered on the issue of obviousness, however such information will not necessarily be conclusive on the issue and the judge must still weigh all the evidence.
From Lockwood v Doric it is not clear whether the threshold test articulated in Philips v Mirabella still stands. Some commentators have said that the decision has appropriately made it more difficult to revoke a patent on the grounds of non-inventiveness86. The Philips v Mirabella decision meant there was effectively two tests for both novelty and inventiveness - one based only on the information in the specification and the other based on what is known from the prior art. Some argued that the threshold test was necessary because the tests based on the prior art are too narrow and difficult to sustain, and so do not eliminate all undeserving patents. The main argument against the test is that combining novelty and inventive step with the manner of manufacture test unnecessarily complicates understanding and administration of patent law. 87 Also, it was in an applicant's interest to disclose less about the prior art in their specification in order to reduce the likelihood of this information being used against them88.
An important issue is therefore whether a threshold of inventiveness still exists and the appropriateness of this.
7.2.4 General inconvenience
In previous periods the main focus of general inconvenience had been the problems caused to society of patents for insubstantial inventions such as analogous uses. From 1959 to 1994, considerations of general inconvenience moved the concept more towards the social effect of patents in particular fields, whether for substantial inventions or not. For example:
- In Rolls-Royce Ltd's. Application (1963), the court found that a method of operating an aircraft so as to reduce noise levels during take-off was not within the useful arts. However, the court also found that the invention would be "mischievous to the State by being generally inconvenient" because "the responsibility of a pilot of an aircraft in flight carrying scores of passengers is already sufficiently onerous without adding to his burden the task of avoiding infringement of a statutory monopoly in the operation of his standard engine controls unless the justification for grant is reasonably manifest.";
- In Hiller's Application (1969), the court found that the claimed method (for distributing subterranean utilities) was not within the useful arts, and that it would also place an "unfair and unreasonable" burden on those responsible for providing gas, electricity, water etc for residential properties;
- In Bernhard Joos v Commissioner of Patents (1972) the court found that medical treatments could be argued to be "generally inconvenient" on public policy grounds, but that the cosmetic method at hand was not in this class and therefore patentable.
This trend changed with the 1994 decision Anaesthetic Supplies Pty Ltd v Rescare Ltd (Rescare), in which the medical treatment of humans was determined to be patentable provided it had commercial application89. The court decided that it was not generally inconvenient for a method and device of treating snoring sickness to be granted patent protection, and that it is for Parliament, not the courts or the Patent Office, to decide whether matters of ethics and social policy are to have any impact on what is patentable. It was noted that in the 1990 Act, Parliament chose to exclude human beings and processes for their generation from patents, but chose not to exclude the treatment of humans. However, the minority judgement in Rescare found that granting a patent for a method of medical treatment would be "generally inconvenient" within the public policy proviso of section 6 of the Statute of Monopolies.
In 1998 in Bristol Myers Squibb Co v F H Faulding & Co Ltd, a method of administering a cancer drug was found to be generally inconvenient for public policy reasons, but this decision was overturned on appeal.
A major issue for this review is whether the concept of general inconvenience should be removed, revitalised or replaced with another concept.
7.2.5 "Alleged invention"
The meaning of the phrase "an alleged invention" in the definition of "invention" has been interpreted by the courts as simply meaning that:
- a patent application can proceed in accordance with the Act without the application first having to establish that it is for an invention, ie a manner of new manufacture, and
- the Commissioner is not bound by the applicant's allegation that it is for a manner of manufacture, or that the manner of manufacture is new. This is in contrast to previous years when patents were granted without a careful assessment being made90.
The criteria of 'usefulness' in s18(1)(c) has been found by the courts to be equivalent to the previous ground of invalidity in common and statute law of lack of utility. That is, an invention lacks usefulness if it does not fulfil its promise91.
7.2.7 Human beings
The Australian Patent Office decision Fertilitescentrum AB and Luminis Pty Ltd's application (2004) provides guidance on what constitutes a 'human being' and 'biological processes for their generation' according to s.18(2):
- a human being is any entity that might reasonably claim the status of a human being, including a fertilised ovum and all its manifestations;
- biological processes for their generation include those applied from fertilisation to birth - so long as the process directly relates to the generation of the human being.
This approach was reinforced in the Australian Patent Office decision Woo-Suk Hwang's application (2004).
7.2.8 Contrary to law
Some guidance on the meaning of "contrary to law" is provided in Official Rulings 1923, where it was said that an invention 'contrary to law' may be either:
- one the primary use of which would be a criminal act, punishable as a crime or misdemeanour. These would always be refused protection. Or,
- one the use of which would be an offence by reason of its being prohibited under by-laws or regulations made for police and administrative purposes. In these cases the nature and possible uses of the invention and the exact terms of the prohibition would have to be considered in each case.
Where an invention could be used for both lawful and unlawful purposes, the patent may not necessarily be invalid92.
7.2.9 Frequency of decisions relating to patentable subject matter
How often patents are found invalid on the grounds of patentable subject matter may reflect how the test is being applied in practice. Due to the nature of the litigation process, the percentage of Australian court decisions relating to patent validity which considered the issue of manner of manufacture cannot be readily gauged. In any event, ACIP is only aware of limited similar data being available for the US93 and UK94 .
However, of those Australian court decisions which found some or all of the litigated claims of a patent to be invalid, around 6% did so on the grounds of manner of manufacture. The most common grounds for invalidity were novelty (47%), obviousness (35%) and fair basis (29%)95 . This 6% compares with 0.7% in the US96. Possible explanations for the differences between Australia and the US include:
- IP Australia is not quite as rigorous as the USPTO in applying the test for patentable subject matter, letting more through to the courts;
- the Australian courts apply the test for patentable subject matter a little more rigorously than the US courts;
- the US test for patentable subject matter is of such a low threshold that few fields are not patentable.
7.3 Current IP Australia practice
- 7.3.1 Application process
A Supervising Examiner (section leader) must check all objections on the grounds of patentable subject matter that a patent examiner believes should be maintained at the third adverse report to the applicant. In difficult cases the Supervising Examiner would seek advice from an Assistant General Manager97. Where IP Australia maintains a refusal to grant a patent, the patent application will lapse unless the applicant seeks a hearing. At a hearing further evidence and argument may be submitted98.
It appears that only a very small percentage of patent applications assessed by IP Australia are objected to on the grounds of lack of patentable subject matter. Information technology is a field where a higher percentage of objections are taken, as this is where most business methods are categorised. Although accurate figures are not available, it is estimated that less than 5% of applications in the IT field are objected to on these grounds99. ACIP has not been able to identify similar figures for other jurisdictions and so an international comparison is not possible.
Most objections regarding patentable subject matter are satisfactorily resolved before the third report stage. Only a small percentage are considered by an Assistant General Manager, and hearing decisions on the issue are rare. Each year IP Australia issues around 30 substantive decisions on oppositions to the grant of a patent. Of these, challenges on the grounds of not meeting the threshold level of inventiveness (see Part 7.2.3) are common, but usually dismissed. Challenges on the grounds of not being a manner of manufacture are very rare100. Again, similar figures for other jurisdictions have not been identified.
An issue for this review is whether the current process and personnel for assessing patentable subject matter are appropriate.
7.3.2 Manner of manufacture
The Australian Patent Office Manual of Practice and Procedures - Volume 2 National (the Manual) discusses patentable subject matter according to the historical categories outlined in Part 6.4.1. However, the principles set out in NRDC (see Part 7.2.1) provide the basis for determining what constitutes a manner of manufacture in all fields. In general, a manner of manufacture is a new product or process for which a practical, technical application has been identified. Some examples of how this principle is applied in practice are as follows:
An article which only involves an aesthetic effect is not a patentable subject matter, but if the article also has a technical feature, it may be. An example is a tyre tread. A process or means for creating an aesthetic affect may comprise a technical innovation and so be patentable101.
Theories and laws of nature
A genuinely new principle or law of nature is a patentable subject matter when coupled to a general method of manufacture. However, claims to the application of a principle must not be so extensive so as to amount to any method of solving a particular problem 102 .
Provided that a practical application has been identified, the following subjects are examples of patentable subject matters 103 :
- a microorganism, protein, enatiomer or antibiotic in its isolated form;
- a recombinant, isolated or purified gene;
- a gene per se, provided the claim does not include within its scope the native chromosome of which the gene forms part.
Computer processes of economic utility, source code and executable code are patentable subject matters104.
In line with the Grant decision (see Part 7.2.2), a method that results in a useful, physical phenomenon or effect is a patentable subject matter. Methods that claim a technical solution or technical advantage generally satisfy these criteria, such as computerised accounting, monitoring, reporting or analysis systems. The technological implementation satisfies the 'physical effect' requirement provided that the implementation is directly involved in the operation of the method. The use of a computer to merely record information is unlikely to be patentable105.
The Manual106 states that circumstances which give rise to an objection of not being a manner of manufacture, or border on doing so, will also give rise to an objection of a lack of inventive step. Thus patent examiners should always consider the possibility of objecting on the basis of inventive step in tandem with, or as an alternative to, an objection based on patentable subject matter. This practice reflects the historical cross-over of the tests.
7.3.4 General inconvenience
In light of the Rescare decision (see Part 7.2.4), the Manual107 states that arguments based solely on matters of ethics or social policy are not relevant in deciding whether particular subject matter is patentable. These matters are considered to be distinct from the law relating to the subject matter of a patent, in particular, the law relating to manner of manufacture.
The Manual states that 'generally inconvenient' has not been relied on as the primary basis upon which to invalidate a patent in any reported cases. Due to a lack of clear guidance as to when an invention may or may not be regarded as 'generally inconvenient', patent examiners should refrain from objecting to patent applications on this ground. Where general inconvenience might appear to be an issue, patent examiners should consider whether the appropriate objection is really one of novelty or that the invention does not lie in the technical realm.
7.3.5 Human beings
The Manual108 states that the following subjects are generally excluded under s.18(2):
- Fertilised human ova and equivalents, zygotes, blastocysts, embryos, fetuses and totipotent human cells;
- methods of in vitro fertilisation, sperm injection, cloning, growing fertilised ova, introducing transgenes and donor genetic cytoplasmic material into fertilised ova, and methods of obtaining embryonic stem cells which include making an embryo.
Subjects considered to be generally allowed under s.18(2) include processes for:
- cryopreservation of gametes;
- preimplantation genetic analysis of gametes, and
- determining the developmental progress or viability of a fertilised ovum, blastocyst or embryo, by analysis of culture or incubation media.
The Manual notes that inventions which contravene s.18(2) regarding humans beings may also breach the Prohibition of Human Cloning Act (2002) and/or the Research Involving Human Embryos Act (2002), and so also be contrary to law. If a patent examiner is unclear whether an invention constitutes a human being or a biological process for the generation of a human being, and whether such a being or process is also contrary to law, the examiner must refer the matter to their Supervising Examiner, who should then discuss the matter with an Assistant General Manager.
7.3.6 Contrary to law
The Manual 109 states that s.50(1)(a) regarding inventions that are contrary to law is a discretionary power which should only be applied in the clearest circumstance where an unlawful use and no lawful use of the invention has been described. This provision is understood to cover statute law, including regulations and ordinances, and case law. Where an objection of contrary to law is disputed by the applicant and the patent examiner considers it should be maintained, the case should be referred to the Supervising Examiner. Objections in these grounds are very rare.
7.3.7 Foods or medicines
The Manual 110 notes that a "mere" mixture under s.50(1)(b) is one which exhibits only the aggregate of the known properties of the ingredients. Where an objection is taken on these grounds, in most cases an objection for lack novelty and/or inventiveness would also apply. Where an objection is disputed by the applicant and the patent examiner considers that it should be maintained, the case should be referred to the Supervising Examiner. Objections on these grounds are rare.
7.3.8 Person's name
The Manual provides no guidance on s.50(2) regarding the name of a person as part of the name of an invention. Objections on these grounds are extremely rare.
7.3.9 Prohibition orders
Applications that arrive via 'safe-hand'111 under international arrangements are automatically made the subject of a Prohibition Order. All other patent applications are reviewed by appropriately classified IP Australia staff to see whether a prohibition order may be necessary and advice sought from the Department of Defence as needed. Examination of an application upon which there is a Prohibition Order is undertaken in accordance with a security classification of Secret and may proceed up to the acceptance of the application.
Only around ten Prohibition Orders are imposed each year, half of which are not maintained under advice from the Department of Defence. Almost all are on applications filed by defence industry applicants. The great majority of orders are issued under s.173 ("defence of the Commonwealth"). IP Australia conducts occasional audits to see whether orders can be removed, particularly on applications for which the 20 year term would have expired112.
7.4 Summary of Part 7
- In the NRDC decision, the test for manner of manufacture was recast as a succinct set of traditional principles adaptable to new fields of innovation, leading to an expansion in what is considered patentable subject matter. An important issue is whether these principles meet the desired objectives of the patent system and are being applied correctly;
- There are still limits to patentable subject matter. The recent decision Grant v Commissioner of Patents interpreted the approach in NRDC to mean that a subject must involve a physical phenomenon or transformation in order to be patentable. It is arguable whether this is appropriate;
- It is not clear whether there is a separate threshold requirement of newness that an invention must exhibit before it needs to be tested against manner of manufacture, novelty and inventiveness. This may need to be resolved;
- The Patents Act 1990 continued the trend of introducing new legislative provisions for specific aspects of s.6 of the Statute of Monopolies, including inventive step. To be patentable, a subject must be:
- an invention (which may involve a threshold of newness),
- a manner of manufacture
- inventive, and
- useful, in that it meets its promise.
- Specific exclusions exist for:
- human beings;
- subject matters that are contrary to law;
- certain foods and medicines and
- certain uses of a person's name.
- Prohibition Orders which prevent a patent being granted may be imposed on inventions where publication would compromise national security.
- It is arguable whether the above structure is the clearest and most appropriate way of implementing the test for patentable subject matter.
- The latest judicial guidance on the principle of general inconvenience is that it is for Parliament, not the courts, to decide issues of ethics and social policy. An important issue is whether this approach is suitable and the degree to which ethics should form part of the test for patentable subject matter;
- Patent examiners assess patentable subject matter as part of the normal process of assessing a patent application. Only a small percentage of applications are objected to the grounds of patentable subject matter and these usually checked by a Supervising Examiner or Assistant General Manager.
8 International treaties
Australia is a signatory to a number of international treaties relating to IP rights. The most important of these is the World Trade Organisation Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which provides minimum standards of IP protection. Member states are free to determine the appropriate method of implementing the minimum provisions of TRIPS within their own legal systems and practices.
8.1.1 Objectives and principles
Article 7 mandates that the protection and enforcement of intellectual property rights should help promote technological innovation and the transfer and dissemination of technology, to the mutual advantage of producers and users and in a manner conducive to social and economic welfare.
Article 8 provides that members may adopt measures which are necessary to address issues such as protecting public health, promoting vital industry sectors and enabling the international transfer of technology, provided they are consistent with TRIPS.
These articles enable Members to ensure that intellectual property rights benefit the public through a balancing of interests. This is particularly relevant for developing countries who only own a tiny percentage of the world's IP rights. As the users of technologies produced abroad, such countries can incur the restrictions of an IP rights system but few of its benefits 113 .
8.1.2 Patentable subject matter
Article 27 sets out the requirements regarding patentable subject matter, mandating that patents shall be available for inventions in all fields of technology, provided that they are new, inventive and capable of industrial application. However, the following may be excluded:
- inventions which would threaten ordre public 114 or morality 115 , including human, animal or plant life or health or the environment;
- diagnostic, therapeutic or surgical methods of treating humans or animals;
- plants and animals other than micro-organisms, and essentially biological processes for their production116 .
These exclusions are consistent with the principle that the purpose of patents is to serve the public interest. Before TRIPS a number of countries did not permit patent protection for these types of inventions. The exceptions for ordre public, morality and methods of treatment are predominantly based on long established traditions in European patent law. Micro-organisms were not allowed to be excluded due to the key role they play in the development of new drugs by the pharmaceutical industry, an industry which heavily depends on patents for viability117.
The requirement to provide patents for pharmaceutical and agricultural chemical products is a sensitive issue for some countries, resulting in some temporary allowances 118 .
The TRIPS Agreement requires a review of Article 27.3(b) regarding the exclusion for plant and animals 119 . The current focus of the review is the relationship between the TRIPS Agreement and the UN Convention on Biological Diversity, and the protection of traditional knowledge and folklore 120 .
The full texts of Articles 7, 8 and 27 are in Appendix 12.1.
Few judgements by a WTO dispute tribunal relate to Article 27 and so there is little guidance on its interpretation. In Canada - Patent Protection of Pharmaceutical Products 121 , one of the issues was whether s.55.2(1) of the Canadian Patent Act breached the Article 27 requirement that patent rights be made available without discrimination as to the field of technology. Section 55.2(1) provided that it was not an infringement to make, construct, use or sell a patented invention solely to acquire regulatory approval to exploit the invention. The Panel found that the section was not discriminatory, as its effects were not limited to the pharmaceutical industry.
It is not clear whether Article 27.1 requires that patents must be available for claims to products per se, i.e., without restriction to a specific utility. Some commentators state that the availability of such claims is required under TRIPS, particularly in light of Article 70.8 122 , and an example may be recent changes made to India's patent laws in order to achieve TRIPS compliance 123 . Others believe that TRIPS provides members with the freedom to determine the form and limitations of allowable claims, including "use-bound" claims, provided there is no discrimination based on the field of technology124 . While Article 27 requires that patents be available for products and processes, it appears that uses 'as such' do not fall within the process category. Members are free to decide whether to allow claims for the uses of known things, including for therapeutic use, and 'Swiss' type claims 125 for the use of a product 126 .
8.1.4 Australia's compliance with TRIPS
Current and future Australian patent law must be compliant with TRIPS. As summarised in Part 7.4, the main features of Australian law on patentable subject matter are:
- to be patentable, subject matter must be:
- an invention, which may involve a threshold of newness;
- a manner of manufacture (perhaps including not generally inconvenient);
- inventive and
- useful, in that it meets its promise;
- Specific exclusions and grounds for refusal exist for:
- human beings and the biological processes for their generation;
- certain foods and medicines, and
- certain uses of a person's name.
Current Australian law would be compliant if the above derogations from patentability are within the scope of Article 27 as follows:
- General inconvenience, human beings, contrary to law and claims to people's names fall within the scope of Article 27.2 regarding the protection of ordre public, morality or human life;
- food or medicines fall within the scope of Article 27.1 regarding newness and inventiveness.
The Australian United States Free Trade Agreement mostly mirrors the TRIPS provisions. The main differences are:
- plants and animals, and essentially biological processes for their generation, may not be excluded from patentability, and
- each party must endeavour to reduce differences in law and practice between their respective systems and shall participate in international patent harmonisation efforts.
The full text of the relevant Articles is in Appendix 12.2.
Some guidance is available on the extent to which the second point governs the Australian Government's decisions regarding reform of the patent system. The guide to the agreement produced by the Australian Department of Foreign Affairs and Trade (DFAT) merely states that this point provides for cooperation and best endeavours to reduce certain differences in the patent laws and practices of Australia and the US and in international fora, which will benefit users of each system127. However, a DFAT Fact Sheet states that the intellectual property chapter of the agreement:
Harmonises our intellectual property laws more closely with the largest intellectual property market in the world, which is recognised as a global leader in innovation and creative products. At the same time it allows Australia considerable flexibility to implement the Agreement in a way that reflects the interests of our domestic interest groups and Australia's legal and regulatory environment128.
Similarly, former IP Australia Director General Ian Heath made the following public comments 129 :
These Articles simply reflect the current Australian commitment to greater harmonisation in the global IP system and our practice of pursuing this agenda in international discussions... They are 'best endeavours' clauses that encourage harmonisation of laws and practices - they do not require harmonisation and certainly do not require Australia to adopt US practices against our wishes. These provisions can equally be used to encourage the US to harmonise with Australian systems in areas where their practices differ from ours and those of other countries... From IP Australia's point of view, we will continue to work as we are - participating in international discussions, with a view to continuing to provide a system that works best in the Australian context.
Despite this, the AUSFTA may provide more reason to harmonise with the USA than with any other major jurisdiction.
8.3 General issues
Although there is no obvious reason to think that Australia's current laws are not compliant with international agreements, this may be contended. Compliance relates not only to explicit inclusions and exclusions for patentable subject matter, but whether these meet the overriding objectives and principles of the system.
Any changes to Australian law must also be compliant with international agreements, although it is arguable whether there is sufficient flexibility to allow a system best suited to the Australian context. The lack of clear judicial guidance on allowable patentable subject matter, including the exclusions based on ethics, may make it more difficult to ensure any changes are compliant. This would relate to any changes to the concept of general inconvenience.
8.4 Summary of Part 8
- International treaties require that Australia's current and future patent laws:
- help promote technological innovation and the transfer of technology, to the advantage of society;
- provide patents for inventions in all fields of technology (including plants and animals), provided they are new, inventive and capable of industrial application, and
- are developed with the aim of to reducing differences between Australia and other countries, particularly the US.
It is arguable that such requirements provide Australia with the flexibility to provide the most appropriate laws for the local economic and ethical environment.
- Inventions which would be contrary to ordre public or morality and methods of treating humans and animals may be excluded from patents.
- There is little judicial guidance on what "in all fields of technology", ordre public and morality encompass. This may make it more difficult to ensure the international compliance of any changes to the law.
9 Australian reviews of manner of manufacture
9.1 Knowles Committee
In 1939 the Knowles Committee presented its Report of the Committee appointed by the Attorney-General of the Commonwealth to consider what alterations are desirable in the Patent Law of the Commonwealth. The committee recommended extensive alterations to Australian patent law, while aiming to adhere where possible to British law.
The Committee did not discuss inherent patentability in general and did not comment on the definition of invention, for which no amendment from the 1903 Act was recommended.
Under the 1903 Act, patents could be revoked on every ground for which a patent might at common law be repealed. The Committee recommended the adoption of the1932 UK Act approach of attempting to define exhaustively these grounds, including concepts such as usefulness and contrary to law 130 . The Committee also recommended that a provision be introduced which enabled applications to be refused for inventions that are contrary to law or morality.131
A bill to give effect to the recommendation of the Knowles Committee was introduced into Parliament, but the outbreak of World War II prevented its enactment. This Bill was reconsidered by the Dean Committee in 1952.
9.2 Dean Committee
In 1952 the Dean Committee presented its Report of the Committee appointed by the Attorney-General of the Commonwealth to consider what Alterations are desirable to the Patent Law of the Commonwealth. The Committee recommended that Australian patent law catch up with UK law and that the correspondence between the two be as close as possible132.
The Dean Committee agreed with most of the recommendations of the Knowles Committee. Again there was no general discussion of inherent patentability. On the issue of revocation it recommended a provision closely following the UK 1932 Act provision, but not including the condition relating to foods or medicines. Without any explanation133, but in line with s.10(1) of the UK Act of 1949, the Committee recommended that the grounds for refusal of an application be expanded to include food or medicines or mere admixtures134.
Most of the recommendations of the Knowles and Dean Committees were adopted in the 1952 Act.
9.3 Industrial Property Advisory Committee
The Industrial Property Advisory Committee (IPAC) conducted a broad review of patent law in its 1984 report Patents, Innovation & Competition in Australia, which led to the introduction of the Patents Act 1990. On the issue of patentable subject matter, IPAC said:
[The manner of new manufacture] concept involves 3 primary tests: the invention must be new, inventive (not obvious) and capable of industrial application. The requirements of novelty and invention are the subject of express grounds of invalidity under section 100 of the Patents Act and are discussed below in Section 7. The industrial capability requirement arises from the reference to section 6 of the Statute of Monopolies and the words "manner of ... manufacture". This concept involves little more than that an invention must belong to the useful arts rather than the fine arts.
IPAC found that it had insufficient evidence to recommend legislating for or against the patenting of specific fields such as software, systems of doing business, chemicals and pharmaceuticals. It concluded:
...it has often been suggested that the reference to "manner of manufacture" as the touchstone of patentability should be replaced by an explicit statement of what is and what is not patentable. For example, codified definition was substituted in the UK Patents Act for the former reference to manner of manufacture to bring that legislation into line with the European Patent Convention. We consider that the existing concept operates quite satisfactorily. It has the advantage of being underpinned by an extensive body of decided case law which facilitates its application in particular circumstances. At the same time it has, in the past, exhibited a capacity to respond to new developments. To replace it with a codification would be likely to produce far more problems, with attendant costs, than it would solve.
Recommendation 12. We recommend that the present threshold test for patentability by reference to s 6 of the Statute of Monopolies and to the expression "manner of new manufacture" be retained, without specific legislative inclusion or exclusions.
The Government accepted this recommendation.
One of the issues for the current review may be whether the concept of manner of manufacture does indeed mean little more than "an invention must belong to the useful arts rather than the fine arts".
9.4 Intellectual Property and Competition Review Committee
In its report Review of Intellectual Property Legislation under the Competition Principles Agreement (2000), the Intellectual Property and Competition Review Committee (IPCRC) considered the use of codified lists of patentable subject matter in jurisdictions such as the European Patent Office:
As a general matter, the Committee accepts that reliance on an open-textured standard, such as that currently used to define the bounds of 'manner of manufacture', can impose costs as compared to a more prescriptive approach based on the detailed formulation of ex ante rules. In particular, ex ante rules can reduce uncertainty as to eligibility, and hence may reduce the need for scrutiny in individual circumstances.
However, it is also clear, both from general principle and from the European experience, that formulating such ex ante rules entails high direct costs. Even more importantly, they can create significant error costs associated with the under or over-inclusiveness of the rules. These errors can have substantial consequences for efficiency and competition, since under-inclusiveness may erode the incentive for innovation (and as a result for the uniquely effective form of competition that innovation provides), while over-inclusiveness may grant exclusive privileges where they are not warranted.
Subsequently, the IPCRC made a similar recommendation to that of IPAC:
The Committee believes that Australia has on the whole benefited from the adaptiveness and flexibility that has characterised the 'manner of manufacture' test. As a result, we recommend that this test be retained.
However, the IPCRC considered that it has not always been clear how the important requirement to demonstrate a defined use for an invention has been imposed, due to the crossovers between 'usefulness' under s. 18(1)(c), 'sufficiency' under s. 40 and the 'utility' component of manner of manufacture:
In summary, the Committee believes that mere discoveries - that is, the identification and specification of the nature, structure and properties of existing matter and its interaction - should continue to be excluded from the class of patentable subject matter... We do not believe that this should be ensured through industry or technology specific statutory provisions; rather, the general principle underpinning the scope of patentability should be sufficiently clear to guide administrative practice and judicial decision in a way that ensures this outcome.
...The Committee recommends that the Patent Office ensure in its examination practice that the use described in the specification is specific, substantial and credible to a person skilled in the art.
The Government accepted this recommendation, and IP Australia took measures to ensure that these factors were assessed during examination.
9.5 Advisory Council on Intellectual Property
Patenting of business systems
In its 2003 report A review of the patenting of business systems, the Advisory Council on Intellectual Property (ACIP) noted that Australia is obliged under TRIPS to provide patents for inventions that are "in a field of technology". Due to a lack of relevant court decisions, ACIP considered that it was possible that patents for business systems that are not in a field of technology may be granted under the current interpretation of the manner of manufacture test. As little evidence was presented to ACIP that patents were required in this field in order to encourage innovation and investment, various ways in which such business systems could be excluded from patentability were considered:
One way would be to introduce as a criterion of patentability a requirement that an invention have a 'technical effect'. This would bring Australian patent law closer to patent law in Europe, yet move away from the law in Japan and the US. Another way would be to introduce as a criterion of patentability a requirement that an invention be in a 'field of technology'. This would make Australian patent law share the limitations in TRIPS. Alternatively, the legislature could introduce a specific exclusion for business systems that are not within a field of technology.
However, ACIP considered that such measures would involve significant changes to Australian patent law, possibly involving high transaction costs and high levels of uncertainty. These included unforeseen impacts on other fields of invention and uncertainty over how specific terms would be interpreted. As business system patents did not appear to be of major economic significance at the time, ACIP found that removing them from patentable subject matter was not justified at that time.
Therefore, an issue for the current review is that, as the test for patentable subject matter is so fundamental to patent law, changes to the test have the potential to be far reaching and have uncertain consequences.
The Government accepted ACIP's recommendation that no changes be made to Australian legislation regarding patentable subject matter, but noted the ALRC's recommendation to review the test more generally.
Exclusion of plants and animals from innovation patents
ACIP have also reviewed the existing exclusion of plant and animal subject matter from innovation patents.135 In its 2004 report, ACIP concluded that the case for removing the innovation patent exclusions for plants and animals, and for biological processes for their generation, had not been made out.
ACIP noted that the Plant Breeder's Rights (PBR) system provided protection for plant varieties and included several exceptions to infringement that were not available under the patent system. ACIP believed that there was the potential for significant overlap of subject matter that may be protected by both the innovation patent and PBR systems. Introducing innovation patent protection without including specific exceptions for uses would be likely to impose significant costs on industry. Including such exceptions would reduce many of the advantages for breeders of having innovation patent protection.
Australia has no low-level system of protection for animals and processes for their generation. ACIP said that there may be a need in the future for innovation patent protection for animals, due to an increase in the development of genetically modified organisms, a potentially more costly form of breeding. However, ACIP considered that at present the existing systems appear adequate, and there is insufficient reason for change. ACIP noted that their decision in no way implied a need for similar exclusions under the standard patent system.
ACIP recommended that the current exclusions from the innovation patent of plants and animals and biological processes for their generation should be maintained. The Government accepted these recommendations.
9.6 Australian Law Reform Commission
As outlined in the Introduction, the ALRC considered the issue of what sort of subject matter should be patentable as part of its broad review of gene patenting and human health Report 99 Genes and ingenuity. Some submissions to the ALRC supported a review of the manner of manufacture test.
The ALRC concluded:
Although one cannot deny the legitimacy of patenting processes for isolating and purifying naturally occurring materials, or the legitimacy of patenting of new chemical substances that are the product of human ingenuity, there are attractive arguments for the view that such materials should not have been treated as patentable subject matter.
However, the time for taking this approach... has long since passed. For decades, naturally occurring chemicals have been regarded by patent offices in many jurisdictions as patentable subject matter, when they are isolated and purified. This principle has been applied by analogy to biological materials, including genetic sequences, on the basis that they are 'merely' complex organic compounds. This development was certainly not foreseen when the modern patent system was established, and a different approach might have been available when the issue first arose for consideration.136
The ALRC found that a new approach to the patentability of genetic materials was not warranted at this stage in the development of the patent system. However, the ALRC considered that there were problems with the manner of manufacture test:
The ALRC is a law reform body whose statutory functions are to bring the law into line with current conditions, remove defects in the law, simplify the law, adopt more effective methods for administering the law, and provide improved access to justice. From this perspective, it is indeed odd that the key concept of 'manner of manufacture' depends on a provision in a 380 year old English statute that has long been repealed in the jurisdiction in which it was enacted; and that the relevant section of the statute is not reproduced in Australian legislation.
The ALRC recognises the value of maintaining a threshold test for patentable subject matter that is flexible and capable of adapting to developments in technology as they arise. However, it is apparent that the terms of s 6 of the Statute of Monopolies 1623 are ambiguous and obscure. In some circumstances, the case law that has evolved around the meaning of this provision offers no further clarification. For example, the grant of letters patent under s 6 does not extend to any manner of manufacture that is 'generally inconvenient'. Australian courts and IP Australia have been reluctant to rely on this proviso to deny patent protection to particular inventions. However, it has been suggested that the generally inconvenient proviso could provide a basis for excluding inventions from patentability on ethical or social grounds. The circumstances in which this might be justified are, however, unknown. In addition, ...while the usefulness of an invention is an aspect of the manner of manufacture test and relevant to the disclosure requirements, the way in which the requirements interact in practice is unclear.
The ALRC believed that the degree of analysis and consultation required in a review of the manner of manufacture test was beyond the scope of its inquiry, therefore an independent review should be undertaken by a body such as the Intellectual Property Research Institute of Australia (IPRIA) or ACIP:
Such a review should focus particularly on the generally inconvenient requirement, including the extent to which this requirement has been invoked by patent examiners and in challenges to patent rights, and whether there are alternative and preferable ways to formulate a threshold requirement for patentable subject matter.
The ALRC made the following recommendation:
Recommendation 6-2. The responsible Minister should initiate an independent review of the appropriateness and adequacy of the 'manner of manufacture' test as the threshold requirement for patentable subject matter under Australian law, with a particular focus on the requirement that an invention must not be 'generally inconvenient'.
The ALRC suggested that any reform take into account its recommendations 6-3 and 6-4 relating to the test for 'usefulness'. These recommend that:
- IP Australia examine and report on the usefulness of an invention as a separate requirement;
- such use must be specific, substantial and credible;
- the Commissioner must be satisfied on the balance of probabilities that the usefulness requirement is met;
- lack of usefulness is included as a grounds for opposition to a patent, and
- guidelines be developed to assist examiners in applying this test.
As outlined above, the ALRC considered that the 'generally inconvenient' proviso included in the manner of manufacture requirement arguably provides a limited basis for considering social and ethical issues. However, it found that there was no compelling case for expanding the circumstances under patent law for considering social and ethical issues, and that these were addressed most effectively through direct regulation of the development or use of patented inventions.137
From the ALRC and other reviews it is clear that some major issues are:
- whether it is better to have a flexible test for patentable subject matter or a more proscriptive test involving inclusions and/or exclusions for specific subjects;
- whether the manner of manufacture test is "ambiguous and obscure" to users of the system, and the uncertain role of 'general inconvenience'.
- whether a separate test for utility needs to be in the legislation rather than just an office practice.
9.7 Summary of Part 9
- Two major reviews of Australian patent law in 1984 and 2000 considered the issue of patentable subject matter. These recommended retaining the manner of manufacture test due to its adaptiveness and flexibility, and not to introduce specific inclusions or exclusions. The relative merits of such options may still be debated.
- A 2003 review of the patenting of business systems found that, while it appeared desirable to exclude such systems from patentability if they are not in a field of technology, the significance of the issue did not warrant the fundamental changes to Australian law that would be required. This highlights that any changes to the test for patentable subject matter could have far reaching consequences.
- A 2004 review of the exclusion from the innovation patent of plants and animals and biological processes for their generation found the exclusion should be maintained. Where a proposal to restrict competition lacks clear benefits, the status quo should be maintained.
- The 2004 ALRC review of gene patenting and human health found that, while there were good arguments against the patenting of genetic materials, the time to address this issue had long passed. The ALRC recognised the value of a flexible test for patentable subject matter, but found that the manner of manufacture test was ambiguous and obscure. In particular, the ALRC found that the meaning of the criterion that an invention not be 'generally inconvenient' and the test for the usefulness of an invention were not clear. The ALRC recommended there be a review of the appropriateness and adequacy of the manner of manufacture test. This raises such questions as whether the complete text of Section 6 of the Statute of Monopolies should be in the Patents Act, the manner of manufacture test rephrased using modern terminology and the concepts of general inconvenience and usefulness further clarified.
10 Overseas law and practice
This section provides information on potential options for harmonisation and lessons for Australia - what to aim for and what to avoid. The Trilateral patent offices - of the US, Europe and Japan - are the world's most important jurisdictions, and New Zealand is a country comparable to Australia.
More generally, in a comparison of the laws of all Member States, the World Intellectual Property Organization (WIPO)138 commented on subject matter coverage:
One of the differences is that in the majority of the countries, the concept of invention includes some form of technical character or technical idea. Therefore, business methods as such and financial methods as such are not patentable subject matter in most countries. In other countries, technicality is not a requirement for patentable subject matter. Further, in some countries, the term "invention" is defined in the law, while in others, the scope of the term "invention" needs to be extracted from a non-exhaustive list of subject matter.
10.1 Europe and the UK
The European Patent Convention (EPC) provides for the granting of European patents for the 32 contracting States. The EPC uses a proscriptive structure for patentable subject matter and is more restrictive in what subject matters are allowed than most other major jurisdictions.
Article 52 states that European patents are granted for any inventions which are susceptible of industrial application, are new and involve an inventive step. Invention is not defined in the legislation. The following subject matters are listed as being not regarded as inventions and therefore not eligible for patents:
- discoveries, scientific theories and mathematical methods;
- aesthetic creations;
- schemes, rules and methods for performing mental acts, playing games or doing business, and programs for computers;
- presentations of information.
Methods for treatment of the human or animal body by surgery or therapy, and diagnostic methods practised on the human or animal body, are listed as inventions which are not susceptible of industrial application. In addition, Article 53 states that the following are excluded from patents 139:
- inventions the publication or exploitation of which would be contrary to "ordre public" or morality. An example is a process for cloning humans;
- non-microbiological plant or animal varieties, or essentially biological processes for the production of plants and animals 140 .
A traditional principle of the European system is that a subject must have a "technical character" (rather than say, a purely commercial or mathematical character) and have a "technical effect" in order to be considered an invention. The above subject matters are not considered to have such a character.
The European approach of legislating which specific subject matters are not patentable, rather than relying on a more general concept such as "invention", may provide more clarity and certainty over the boundaries of patentability. It may also provide a mechanism for excluding those fields which are economically unsuitable for patents, despite meeting all the other criteria.
Common criticisms of the European approach are that it is less able to adapt to new fields of innovation and results in overly technical and artificial distinctions 141 . It has been argued that the mixture of rule-based and standard-based law fails to provide a coherent definition of subject matter with a consistent theoretical basis, resulting in unnecessary uncertainty 142 . The concept of technical character has been described as "extremely opaque" 143 . Concerns have been raised over the inconsistency of decisions of the EPO Board of Appeal on patentability 144 . It has also been argued that the inflexibility of the system has resulted in the EPO accepting claims drafted in a unique format to work around those laws that are generally considered to be ill-conceived 145 . This includes fields such as computer software and methods of medical treatment.
The US legislation differs from that of most other jurisdictions in its brevity and lack of specific exclusions from patentability. Section 101 of the United States Code Title 35 - Patents states that:
Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefore, subject to the conditions and requirements of this title.
Invention is defined to mean "invention or discovery", and process to mean "process, art, or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material."
According to the USPTO Manual of Patent Examining Procedure, the US courts have, at least until recently, interpreted the above laws to mean that anything which is merely an abstract idea, law of nature or natural phenomena is not patentable. Practical applications of such subject matters are however patentable, meaning that a physical object must somehow be transformed or a "useful, concrete and tangible result" produced.
For some time, the US has generally granted patents for a wider range of subject matters than have other major jurisdictions. For example, plants and animals, methods of medical treatment, software and business methods have all been allowable provided they produce a useful, concrete and tangible result146.
The relative simplicity of the US provisions for patentable subject matter and lack of exclusions for specific subject matters may have enabled the patent system to focus on the fundamental principles of the system rather than on the boundaries of different categories, and to more easily adapt to emerging fields of technology.
A criticism of the US approach has been that there are insufficient boundaries placed on patentable subject matter, leading to subject matters unsuitable for patenting being allowed. Traditional, conservative approaches to patentability may have an underappreciated wisdom by preventing patents from intruding upon laws of nature and human liberty. Such approaches should only be deviated from where there is clear evidence this is required147 . However, it may be that US law is more rigorous than other jurisdictions in other key respects, such as novelty and inventive step. This may negate the problems of having virtually no patentable subject matter test.
Two recent US court decisions appear to have departed from the above approach and imposed further restrictions on what sorts of subject are patentable. In one case the Federal Circuit found that, in order to be patentable, a business method must not only produce a useful, concrete or tangible result, but also require a specific type of machine to implement it or change materials to a different state. If this is not met, the method is merely a "mental process"148 . In the second case, the Federal Circuit found that an electronic watermark was not patentable because an electrical signal did not fall within the four types of inventions - process, machine, manufacture of composition of matter. In particular, a signal per se is not a "manufacture" because it is transitory and non-tangible149
. Some commentators believe these decisions are part of a wider, continuing trend to narrow the scope of patentable subject matter 150.
Australian law on patentable subject matter is probably closer to that of the US than that of other major jurisdictions.
Japanese law is similar in some respects to US law in that the legislative provisions for patentability are quite succinct. To be patentable a subject must be an "invention which is industrially applicable". Invention is defined as "the highly advanced creation of technical ideas utilizing the laws of nature".
The only statutory exclusion is in section 32, which states that "any invention that is liable to contravene public order, morality or public health shall not be patented".
In practice, however, Japanese law is similar to European law. The Examination Guidelines for Patent and Utility Model provide extensive guidance on the interpretation of the two main criteria above. The following subject matters are not considered to satisfy the definition of invention:
- a law of nature as such;
- mere discoveries and not creations;
- those contrary to a law of nature;
- those in which a law of nature is not utilized;
- those regarded as not technical ideas;
- those for which it is clearly impossible to solve the problem to be solved by any means presented in the claim.
The following are considered to be industrially inapplicable inventions:
- methods for treatment of the human body by surgery or therapy and diagnostic methods practiced on the human body;
- commercially inapplicable inventions;
- practically inapplicable inventions.
Software is deemed to be an "invention" when "information processing by the software is concretely realized by using hardware resources". Biological subject matters are patentable if their utility is described or can be inferred.
As in Europe, under Japanese law it appears that the difference between an industrially applicable and inapplicable invention in the medical field can be subtle and highly dependent on the method of claiming.
10.4 New Zealand
New Zealand continues to use the concept of "manner of manufacture" as the test for patentable subject matter. According to the Patent Act 1953, every complete application must relate to an "invention", where invention is defined as:
Any manner of new manufacture the subject of letter patents and grant of privilege within section 6 of the Statute of Monopolies and any new method or process of testing applicable to the improvement or control of manufacture; and includes an alleged invention.
Novelty is dealt with under s.13. Inventiveness is not a separate ground for objection or refusal, similar to Australia's 1952 Act
"Contrary to morality" is a ground for refusal under s.17(1). A patent may be revoked for not being novel, inventive, useful or for an "invention".
The IPONZ guide Patent Protection summarises the above criteria by saying that, to be patentable, an invention must be:
- Industrially applicable, ie able to be made or used in some kind of industry,
- Novel, and
A large body of law has developed over what constitutes a manner of new manufacture, much of it based on Australian court decisions such as NRDC. However, there have been some significant divergences. Methods of treatment of humans by surgery or therapy and diagnostic methods performed directly on the human body are not patentable subject matter. One of the rationales for this is to not restrain the provision of medical treatment. IPONZ guidelines provide many examples of those methods which are considered to involve therapy or surgery and those which are not.
There has been some debate in recent New Zealand court decisions over whether all of section 6 of the Statute of Monopolies, including the "generally inconvenient" aspect, still forms part of New Zealand law and whether it was within the meaning of "invention". The latest interpretation is that an exclusion from patentability due to general inconvenience may still hold.
In August 2000 the New Zealand Government agreed to a major review of the 1953 Act to take account of the social and technological changes since it was passed. Stage three of the review considered patentability issues such as the Act's definition of invention and its ability to deal with new technologies, and the ethical and cultural considerations surrounding the patenting of inventions involving living organisms, genetic material and traditional knowledge.
Following a consultation stage, in December 2004 the Government released a Draft Patents Bill which followed the Australian Patents Act 1990 in some respects. Public submissions regarding the Draft Bill closed in March 2005. The Bill is currently being redrafted in light of those submissions. Arguments have been made for and against using Australia as a model. It is worth noting that the Australian and New Zealand governments have an ongoing programme to coordinate and align Australian and New Zealand intellectual property laws and practices in order to lower costs and improve services for businesses operating in the trans-Tasman economic market151 .
10.5 General issues
While there may be significant advantages in Australia harmonising its law on patentable subject matter with a major jurisdiction, it may be difficult to decide which practice to follow.
The European approach can provide certainty for specific subject matters, but can lead to extensive debate over the meaning of particular terms and the minor details of inventions, and particular kinds of claim construction becoming acceptable as the way to work around ill-conceived law. This approach may also be less able to adapt to new technologies. The US approach may provide simplicity in one respect, but may lead to patents which are economically not warranted and place unnecessary burdens on society. Current Australian law is probably more similar to US law than European law. Japanese law appears to provide simplicity, however in practice the patentability of certain subjects appears to depend heavily on the manner in which claims are expressed.
Any changes to Australian laws on patentable subject matter may need to take into account current efforts to align Australian and New Zealand intellectual property laws.
10.6 Summary of Part 10
- All major jurisdictions have different laws on patentable subject matter.
- Ethical concerns are explicitly stated in some foreign systems.
- Europe provides a model of a proscriptive approach to the test. This can provide more certainty for specific subject matters, but may lead to extensive debate over minor details, have less ability to adapt to new technologies and able to be worked around.
- At least until recently, the US has provided an approximate model for no patentable subject matter test at all, due to the wide scope of subject matters that have been allowed. This may provide simplicity in one respect, but may lead to the patenting of unsuitable subject matters and placing unnecessary burdens on society.
- The relatively simple legislation of Japan appears to be implemented in very particular ways, resulting in laws similar to those in Europe.
- New Zealand continues to use the concept of 'manner of manufacture', and is thinking of modifying its law to be even closer to that of Australia. Any changes to Australian law may need to be closely coordinated with the New Zealand government.
11 Issues and questions
This section distils from the previous parts of the paper what ACIP believes are the main issues regarding patentable subject matter. ACIP would appreciate written responses to the following questions, plus any supporting data or information, and comments on any other issues deemed relevant.
11.1 Objective of the test
The objective of the test for patentable subject matter is a crucial issue, as it directly determines the content and structure of the test. As discussed in Part 3, the current economic rationale for placing limits on patentable subject matter is to limit protection to those areas where it is known that free riding by competitors occurs and causes financial injury to inventors. For example, the fine arts have traditionally been seen as not suffering from a significant degree of free riding, and so have been excluded from patentable subject matter, because they are already protected by copyright and industrial design rights.
Similarly, there may be some areas in the 'useful' arts where free riding is not injurious because factors such as being first to market and branding are more important than investment costs, and so innovation would continue to occur without the incentive of exclusive rights. Granting patents in such fields would hinder innovation overall by imposing the costs of exclusive rights on the market without providing any of the benefits. It has been argued that business methods and software may be such areas, and as discussed in Part 10.1, are excluded from patentability in Europe to some degree.
As it has been considered impractical to assess whether each individual innovation would be subject to injurious free riding, a generalised approach has been taken and broad fields of innovation have been classified as non-patentable subject matter. In this way the test for patentable subject matter acts as a crude on/off switch for entire fields. Again, specific exclusions in jurisdictions such as Europe are an example of this.
Patents are exceptions to the assumed norm of free competition, so arguably it is better to err by providing too little patent protection than too much. Providing too much protection, and thereby stifling markets without producing an increase in innovation, could be assumed to be more damaging than providing too little protection, which results in not achieving the highest possible level of innovation, but maintains all the benefits of free competition.
Question 1 - Economic objectives of limiting patentable subject matter (Part 3)
Can placing limits on inherently patentable subject matter be justified on economic grounds?
Should the subject matter of each individual invention be assessed to determine whether a patent is necessary to encourage innovation, or should such an assessment be done for entire fields of technology?
Question 2 - Economic effect of inherent patentability test.
What would be the consequences on innovation of imposing or removing limits on patentable subject matter? Are you aware of any empirical data on such consequences?
11.2 Ethical and other constraints of the test
The ethical constraints of the test also directly determine its content and structure. The test for patentable subject matter has historically included the issue of ethics. For example, since the Statute of Monopolies there has been a principle of not granting patents for innovations that are obviously contrary to other laws, in order to provide no encouragement for them. However, to date this principle has been limited to only those cases where there would have been an obvious breach of the law. A more detailed assessment of compliance with other Australia laws and standards is feasible, although an increase in resources and costs may be necessary.
The test for patentable subject matter has also included scope for patents to be refused for immoral inventions, as not all such activities are necessarily outlawed. As outlined in Part 4.3, many countries consider it immoral (as well as uneconomic) to grant patents for medical treatments, and some consider it immoral to grant patents for genetic and biological materials - the very building blocks of life.
However, as discussed in Part 7.2.4, in recent years ethics has become a less prevalent consideration in Australian patent law. The courts have stated that it is for Parliament, not the courts or the Patent Office, to decide on such matters. At present, ethical objections appear to be limited to the exclusions for human beings and processes for their generation, inventions that are contrary to law and patent claims which include a person's name.
As outlined in Part 4.1, the grant of a patent for an invention may be prohibited in the situation where publication of its details would compromise national security.
Question 3 - Ethical reasons for limiting patentable subject matter (Part 4)
Can placing limits on inherently patentable subject matter be justified on ethical grounds? Is it appropriate for legislation to predetermine ethical limitations on patentable subject matter, or is it more appropriate for courts to determine such limitations on a case-by-case basis?
Is patent law an appropriate avenue for dealing with ethical issues? If not, what is an appropriate avenue?
Question 4 - Ethical effect of inherent patentability test.
What would be the ethical consequences of imposing or removing limits on patentable subject matter? Are you aware of any examples of such consequences?
Question 5 - Other reasons for limiting patentable subject matter.
Other than economics, ethics and national security, can placing limits on inherently patentable subject matter be justified on any other grounds?
11.3 Content and structure of the test
This section explores the main issue of this review - the content of the test for patentable subject matter. That is, what should be in and out according to the objectives of the system and Australia's international obligations. Different legislative structures are appropriate for different types of content.
11.3.1 Current Australian law
Current Australian patent law involves several important issues:
A. Combination of flexible and proscriptive tests
Different elements of the Australian test for patentable subject matter are implemented in different ways:
- most elements are currently incorporated in the flexible concept of manner of manufacture and its evolving case law (eg. fine arts v useful arts, discovery v invention with utility);
- some elements are proscribed in legislation (eg. human beings, contrary to law, mere admixtures of food and medicine, applications containing a person's name).
It may be argued that this mix of approaches hinders the objectives of the system from being clearly and properly implemented. Removing the provision for mere admixtures of food and medicine may help simplify administration of the law, as it is based on the concept of inventiveness and does not appear to warrant its own provision. Strong arguments may exist for maintaining the specific exclusions for human beings, inventions that are contrary to law and applications containing a person's name, as these are based on broader policy objectives rather than novelty, inventive step, usefulness etc.
B. Value of existing body of case law
The current principles of patentable subject matter as set out in NRDC may or may not meet the objectives of the test. It is another question whether they have been understood and followed correctly in subsequent decisions by IP Australia and the courts.
C. General inconvenience, mischievous to the state and hurt of trade.
These elements of the manner of manufacture test appear to be dormant and not reflected in recent case law or practice. They may need to be removed, revitalised or replaced with another concept. It is arguable that the concept of general inconvenience has through history dealt with both economic and ethical concerns 152 . There may be a role for this in the future.
D. Archaic language
As discussed in Part 9.6, the manner of manufacture test employs arguably archaic language unsuited to what it means today. These characteristics may impede all users of the system from properly understanding and correctly applying the objectives of the test.
E. Threshold of inventiveness
It is unclear whether the threshold of inventiveness established in Philips v Mirabella still stands - see Part 7.2.3. It is questionable whether such a threshold meets the objectives of the system. If it does, it may need to be reinstated through legislation. If it doesn't, its removal may also need to be ensured through legislation. Some options for achieving this are:
- modifying the definition of invention so that it no longer refers to a manner of manufacture in any form, but merely means the subject of a patent application 153 ;
- removing the definition of invention;
- replacing the concept of manner of manufacture in the Act with a new concept that purely relates to inherently patentable subject matter.
F. Threshold of utility
The ALRC found that utility was not sufficiently covered by the manner of manufacture test and recommended that a separate, more stringent test be introduced - see Part 9.6.
G. Scope of rights awarded
For example, patents are currently granted for chemical compounds and genetic materials without restriction on the utility identified by the inventor. This can result in the inventor becoming the gate keeper for all new uses identified for that material for up to 25 years. It has been argued that this provides a reward to the inventor far in excess of that required to encourage such innovation and so places unnecessary costs on society. A counter argument is that it is standard practice around the world to grant patents without restriction on the utility identified by the inventor 154 .
H. Requirement for grant
At present patentable subject matter is a requirement for grant of a patent and so every patent application is assessed for this by patent examiners. This may not be an ideal approach because, while the great majority of patent applications clearly concern patentable subject matters, those that don't can be complex to decide. Patent examiners may not have the necessary resources to do this satisfactorily at this stage of the process, and so it may be better to have patentable subject matter assessed on an as-needs basis by another body, such as an expert panel, either pre- or post grant. Usefulness (as opposed to utility) is an example of a criterion that is currently not assessed during the examination process, but is still a requirement for a patent to be valid - see s18(1)(c) in Part 7.1.1. There may be a case for introducing new grounds for re-examination and revocation by the Commissioner.
Question 6 - Content and structure of current Australian law (Part 7)
Does the content of current Australian law meet the objectives of the system? Are decision makers focusing on the appropriate principles?
Is the legislative structure of current law appropriate for the content?
Is the current law clear to decision makers and users of the system? Does the content or structure of the current test cause you any significant problems?
Question 7- Issues with current Australian law
Do you have any comments on issues A to H identified in Part 11.3.1?
- - combination of flexible and proscriptive tests
- - value of existing body of case law
- - general inconvenience, mischievous to the state and hurt of trade
- - archaic language
- - threshold of inventiveness
- - threshold of utility
- - scope of rights awarded
- - requirement for grant
11.3.2 International issues
Harmonisation and best practice
What constitutes patentable subject matter varies significantly between jurisdictions. Patent owners, their competitors and IP professionals who have experience in a range of jurisdictions may have strong views on which tests have the most appropriate content and structure and whether any should be adopted by Australia. Australia has the following main options:
- aiming for world's best practice with a unique system;
- harmonising to some degree with a foreign system of best practice, or
- harmonising to some degree with a foreign system that may not be best practice, but is a crucial market.
There are obvious benefits to users and society in Australia aiming to achieving world's best practice, either through a unique system or following a foreign system. However, there is also an argument for harmonising Australia patent laws with those of another major jurisdiction such as the US or Europe, regardless of the actual content of those laws. It is an increasingly global market place, and the costs of patenting are higher for applicants seeking patents in multiple jurisdictions when the laws of those jurisdictions significantly differ. This is because patent specifications and prosecutions have to be customised for each one. The aim of harmonisation is to reduce costs for such applicants, and so increase public access to new technologies 155 . For example, if Australia were to harmonise its law on patentable subject matter with that of the US, processing costs could be reduced for all applicants seeking patents in both the US and Australia. The trade and investment benefits for Australia, and for Australian applicants seeking US patents, may outweigh any costs in adopting an imperfect system.
Overriding all economic, ethical and harmonisation concerns is need for the test for patentable subject matter to be compliant with Australia's international obligations, principally the TRIPS Agreement - see Part 8.1. For example, were Australia to make genetic materials unpatentable unless the rights are restricted to the utility identified by the inventor, there may be a strong case that it was in breach of TRIPS and therefore subject to adverse reactions by the international community. Similarly, were Australia to make plants and animals unpatentable, it would be in breach of the AUSFTA - see Part 8.2.
Question 8 - International integration
Is it more important to achieve best practice or to harmonise with a major jurisdiction? Are any jurisdictions preferable over others?
Question 9 - International compliance of current Australian law
Is current Australian law compliant with our international obligations?
11.3.3 Broad alternatives
Once the objectives of the patent system and Australia's international constraints are determined, the next question is what types of subject matters should be patentable according to these. The following are some broad alternatives for the content and legislative structure of the test:
1. All subject matters are patentable
If there are no valid economic, ethical or other reasons for placing limits on inherently patentable subject matter, then logically there should be no subject matter test at all. Such a system would be implemented by removing all legislative provisions relating to patentable subject matter. Criteria such as novelty and inventiveness would be relied on to sift out unworthy inventions, and other legislation used to prevent undesirable activities. The US may be the closest example of such a system, due to the broad scope of subject matters that have, at least until recently, been patentable there.
2. A narrow or definable range of subject matters is patentable
If the norm of free competition is considered to be paramount, and/or the range of patentable subject matters is determined to be relatively narrow or easily defined, then one option is a test where the onus is on applicants to prove that the subject of their invention is entitled to a patent. Such a test could be implemented using prescriptive statute law which identifies those subject matters which are patentable, ie a white list. ACIP is unaware of any examples of such a system.
3. All subject matters, except for a narrow or definable range, are patentable
If the range of patentable subject matters is determined to be broad but those subject matters which are not patentable can be defined, then one option is a test where the Government or third parties have to prove that the subject of an invention is not entitled to a patent. An appropriate structure for such a test may be proscriptive statute law which identifies those subject matters which are not patentable, ie a black list. The European Patent Convention is an example of such a system.
4. A wide range of subject matters that are difficult to define is patentable
If there are valid reasons for placing limits, but it is difficult to identify those subject matters which should be patentable and those which should not, then one option is a general test expressed in broad terms. Such a test can adapt to specific circumstances and emerging fields of innovation, and contrasts with the more prescriptive approach of options 2 and 3. It has been repeatedly asserted 156 that a flexible approach is a better way of applying the intent of the legislation to individual cases and adapting to new fields of innovation. The cost of this approach is increased unpredictability and potential for rogue decisions.
The appropriate structure for a flexible test may be a carefully chosen phrase or paragraph which captures the main underlying principles to be applied. An example is the current Australian test of "manner of manufacture", which is predominantly based on a large and evolving body of case law on the interpretation of this concept. However, the Australian test also incorporates some elements of option 3 above, through having a limited number of exclusions. The TRIPS requirement that patents be available "in all fields of technology" is another example of a flexible concept, but more strongly combined with option 3 than the Australian test is.
Question 10 - Preferred patentable subject matter
According to what you believe are the appropriate objectives and constraints of the patent system, what sorts of subject matters do you think should be inherently patentable and what should not?
Would your preferred content be compliant with Australia's international obligations?
Question 11 - Legislative structure
What sort of legislative structure would be appropriate to achieve your preferred content identified in Question 10? Are any foreign structures preferred?
In principle, when should statutory provisions excluding specific subject matters be used? Should such provisions be expanded, such as by including the exceptions from patentability allowed under TRIPS?
Do you have any other comments?
The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.
1. Members may, in formulating or amending their laws and regulations, adopt measures necessary to protect public health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development, provided that such measures are consistent with the provisions of this Agreement.
2. Appropriate measures, provided that they are consistent with the provisions of this Agreement, may be needed to prevent the abuse of intellectual property rights by right holders or the resort to practices which unreasonably restrain trade or adversely affect the international transfer of technology.
1. Subject to the provisions of paragraphs 2 and 3, patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve and inventive step and are capable of industrial application. Subject to paragraph 4 of Article 65, paragraph 8 of Article 70 and paragraph 3 of this Article 157 , patents shall be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced.
2. Members may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law.
3. Members may also exclude from patentability:
(a) diagnostic, therapeutic and surgical methods for the treatment of humans or animals;
(b) plants and animals other than micro-organisms, and essentially biological processes for the production of plants and animals other than non-biological and microbiological processes. However, Members shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof. The provisions of this subparagraph shall be reviewed four years after the date of entry into force of the WTO Agreement.
Article 17.9: Patents
1. Each Party shall make patents available for any invention, whether a product or process, in all fields of technology, provided that the invention is new, involves an inventive step, and is capable of industrial application. The Parties confirm that patents shall be available for any new uses or methods of using a known product. For the purposes of this Article, a Party may treat the terms "inventive step" and "capable of industrial application" as synonymous with the terms "non-obvious" and "useful", respectively.
2. Each Party may only exclude from patentability:
- (a) inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal, or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by law; and
- (b) diagnostic, therapeutic, and surgical methods for the treatment of humans and animals.
14. Each Party shall endeavour to reduce differences in law and practice between their respective systems, including in respect of differences in determining the rights to an invention, the prior art effect of applications for patents, and the division of an application containing multiple inventions. In addition, each Party shall endeavour to participate in international patent harmonisation efforts, including the WIPO fora addressing reform and development of the international patent system.
1 For example, Gonzalez, A.G., The software patent debate, Journal of Intellectual Property Law & Practice, Vol. 1 No.3, February 2006, pp.196-206; Graham, Neil E., Panelists debate whether patent law helps or hinders innovation, World Communications Regulation Report, January 2006, pp.25-27.
2 For example, Pila, Justine, Methods of medical treatment within Australia and United Kingdom patent laws, University of New South Wales Law Journal, Vol. 24 No. 2, 2001, pp.420-461.
3 For example, Coulter Sen, J.R., Patents Bill 1990: Second Reading, Senate Hansard p1910, 22 August 1990; White, Adrian, The ethics: gene patenting and human health, Australian Intellectual Property Journal, Vol. 15 No. 1, February 2004, pp.6-17.
4 Intellectual Property & Competition Review, Final Report (2000) p.5, ipaustralia.gov.au/about/ipcr.shtml.
5'free riding' refers to the action or practice of benefiting (or seeking to benefit) in some way from theeffort, sacrifice, financial outlay, etc., of others, without making a similar contribution. "free-riding, n." OED Online, June 2008, Oxford University Press, http://dictionary.oed.com/cgi/entry/00314298.
6 For an overview of the theory on the design of patent protection, see Lampe, R. and Niblett, A., The Economics of Patent Design: A Select Survey, Intellectual Property Research Institute of Australia, Working Paper No. 06/03.
7 For example, see Fromer, Jeanne C., Invigorating the Disclosure Function of the Patent System, NYU Law School, Public Law Research Paper Series, 2 March 2007. Available at http://ssrn.com/abstract=967560
8 Dent, C. et al., Research Use of Patented Knowledge: A Review, OECD Directorate for Science,Technology and Industry (STI), STI Working Paper 2006/2.
9 Zekos, Georgios I, Software patenting, Journal of World Intellectual Property, Vol. 9 No. 4, June 2006, pp.426-444.
10 Bessen, James and Hunt, Robert M., An empirical look at software patents, Working Paper No. 03-17/R, Federal Reserve Bank of Philadelphia, March 2004; Bessen, James and Maskin, Eric, Sequential Innovation, Patents and Imitation, Working Paper 00-01, 2000, Massachusetts Institute of Technology, Department of Economics,http://www.researchoninnovation.org/patent.pdf.
11 Fisher, Matthew, Classical economics and philosophy of the patent system, Intellectual Property Quarterly, No.1, 2005, pp. 1-26; Sterckx, Sigrid, The ethics of patenting - uneasy justifications, Drahos, Pater (ed.) Death of patents, Witney, UK: Lawtext, 2005, pp. 175-211; Kieff, F. Scott, Property rights and property rules for commercializing inventions, Minnesota Law Review, Vol. 85,2001, pp. 697-754.
12 Jensen, P.H. and Webster, E., Managing knowledge flows through appropriation and learning strategies, Intellectual Property Research Institute of Australia, Working Paper No. 6/06. pp. 9-10.
13 Fisher, Matthew, Classical economics and philosophy of the patent system, Intellectual PropertyQuarterly, No.1, 2005, pp. 1-26. For an example of more specific theories, see Mazzoleni, Roberto and Nelson, Richard R., The benefits and costs of strong patent protection: a contribution to the current debate, Research Policy Vol. 27 No. 3 (1998) pp. 273-284.
14 For example, the United Kingdom Patents Act 1977 s.22 and 23 and United States Code Title 35 - Patents s.181.
15 See Part 6.1.
16 Australian Patent Office Manual of Practice and Procedures - Volume 2 National, 2.9.6.
17 Woo-Suk Hwang (2004). Section 20 of the Prohibition of Human Cloning Act 2002 >prohibits the intentional creation of a chimeric embryo using human material.
18For example, see Parts 6.3.1, 6.3.2 and 8.1.2.
19 For example, Sampath, Padmashree Gehl, India's product patent protection regime: less or more of"Pills for the Poor",Journal of World Intellectual Property, Vol. 9 No. 5, September 2006, pp. 694-726. See also Campaign for Access to Essential Medicines at
20 For example, Feros, Anna, Patentability of methods of medical treatment, European Intellectual Property Review, Vol.23 No.2, February 2001, pp. 79-85; O Mitnovetski and D Nicol, Are patents for methods of medical treatment contrary to the ordre public and morality or "generally inconvenient"?,Journal of Medical Ethics, Vol 30, 2004, pp 470-475.
21 For example, The ethics of patenting DNA - a discussion paper, Nuffield Council on Bioethics, July 2002 Chapter 3; Animal Patents: The Legal, Economic and Social Issues. Ed. W.H.Lesser, Macmillan Publishers Ltd, 1989 New York. E.S; Boyle, J., Enclosing the genome: what squabbles over genetic patents could teach us, Advances in Genetics, Vol. 50, 2003, pp. 97-124.
22 EPO Technical Board of Appeal, Harvard-Onco-Mouse (1990) and (1992). After many years of opposition proceedings, in 2005 the Board of Appeal upheld the patent, albeit with claims restricted to rodents. The original claims encompassed mammals which would not be used for testing, and so were considered contrary to morality.
23 ETC Group, Patenting Pandora's Bug: Goodbye Dolly�Hello, Synthia!, News Release 7 June 2007, Kaiser, Jocelyn, Attempt topatent artificial organism draws protest, Science, Vol. 316 Iss. 5831, 15 June 2007, pp.1557
24 Future Workload. A study prepared by The Board 28 (Board of the Administrative Council set up under Article 28 EPC), November 2007.
25 ALRC Report 99 Genes and Ingenuity, June 2004 pp181-183.
27 Plants and animals are not patentable subject matter for an innovation patent, but may be the subject of a standard patent.
28Grain Pool of Western Australia v Commonwealth  HCA 14. The High Court ruled that thePlant Breeder's Rights Act 1994 was valid under s 51(xviii) of the Constitution as PBR has the same essential characteristics as a patent for an invention.
29 Parts of this chapter are adapted from Pila, Justine, Inherent patentability in Anglo-Australian law: a history (2003) 14 AIPJ 109 - 166.
30 The term of 14 years was apparently arrived at by summing two seven year apprenticeship terms. Once the patent owner had trained two cohorts of apprentices, the invention could be freely used by all skilled in the field. This emphasises that importing new skills was a focus of the system. Brennan,David J., The evolution of English patent claims as property definers, Intellectual Property Quarterly,Issue 4, 2005, pp. 362-399. See 363.
31 Losh v Hague (1838), Kay v Marshall (1939), Harwood v Great Northern Railway Co. (1860).
32 Crane v Price(1842).
33 For example, in Orsom v Clarke (1862) the judge stated that to permit a patent for a mere improvement in the performance of a known operation would extend the protection granted by patents to a "most inconvenient degree"; In Rushton v Crawley (1870) a patent for a method of manufacturing artificial hair was found invalid due to the importance of ensuring the public is not hampered by patents for frivolous articles.
34 Patterson v The Gas Light and Coke Company (1875).
35 United Kingdom, Report of the Commissioners appointed to inquire into the Working of the Law relating to Letters Patent for Inventions (C 5974, 1865).
36 S.11 described the sole grounds for opposing a patent as (a) that the applicant was not the true and first inventor of the invention; or (b) that the invention had been previously published in the jurisdiction or so described in a specification accompanying a previous patent application.
39 1932 Act, s.38(1).
40 1919 Act, s.38(a)(2)
41 1949 Act, s.41(1).
47 S.55AA 'Special provisions relating to associated technology'.
49 Adapted from Manual of Practice and Procedures -Volume 2 National, Australian Patent Office, Part 2.9. Inventions which are otherwise contrary to law are not in this list as there has been little
48 Commissioner of Patents v Microcell(1959).judicial consideration of this category in Australia. Some guidance can be found in Official Rulings1923 C, (1923) 40 RPC Appendix iv.
50 Cooper's Application (1902).
51 Cooper's Application (1902), Fishburn's Application (1938), Virginia-Carolina Chemical Corp'sApplication (1958).
52 C & W's Application (1914), Maeder v Busch(1938).
53 Re Appliations for Patent by Rau GmbH (1935), Lenard's Application (1954), N V Philips's Application (1954), Goldshaft's Application (1957).
54 Losh v Hague(1838), Harwood v Great Northern Railway (1865), Gadd & Mason v The Mayor etc of Manchester (1892), British Liquid Air Co. Ltd v British Oxygen co. Ltd. (1909), B.A.'s Application (1915),L & G's Application (1941), G.E.C.'s Application (1943).
55 Hartridge's Application(1945).
56 Commissioner of Patents v Lee(1913).
57 Williams v Nye (1890),Official Ruling of the British Patent Office (1926) 63 RPC Appendix A,British Celanese Ltd. v. Courtaulds Ltd.(1935), Palmer v Dunlop Perdriau Rubber Co Ltd (1937),Cobianchi's Application(1953).
58 Moore Business Forms Application(1979).
59 Hickton's Patent Syndicate v Patents And Machine Improvements Co. Ltd.(1909).
60 For example, see Schaafsma, Paul E., An economic overview of patents, Journal of the Patent andTrademark Office Society 79, April 1997, pp. 241-257.
61 G.E.C.'s Application (1943). A process was considered to be a manner of manufacture if it:
(a) resulted in the production of some vendible product, or
(b) improved or restored to its former condition a vendible product, or
(c) had the effect of preserving from deterioration some vendible product to which it is applied.
62 Cementation Co. Ltd.'s Application (1945).
63 Rantzen's Application 1947).
64 Elton and Leda Chemicals Ltd.'s Application (1957).
65 Elias v Grosesend Tinplate Company(1890), Gadd v The Mayor, &c, of Manchester (1892),Cropper v Smith (1884).
66 For example, Elias v Grovesend Tinplate Company (1890) - "It is very singular that the Statute of James says nothing whatever about utility, but utility has been engrafted into it because of the words to which I have called attention, that is to say, it has been found by experience to be mischievous to the State to grant patents which are not useful as well as new"; Thierry v Riekmann (1895) "It is�of the highest importance that trade and commerce should not be fettered by monopolies not protected by the patent law"; Wood v Raphael (1896) "To uphold such a patent as this would unduly hamper the trade of this country".
67 For example, Cropper v Smith (1884) "It would be a most serious matter for trade in modern times if a familiar arrangement which was common to other classes of machines could be patented in its application to a new and analogous purpose"; Gadd v The Mayor, &c, of Manchester (1892) in which patents for the adaptation of an old contrivance to a new purpose that presents no difficulties to persons skilled in the art were described as "intolerable nuisances" and as "mischievous to the State".
68 Crean The Hon, S., Patents Bill 1990: Second Reading Speech, House Hansard p.2565, 10 October 1990.
69 For example, Coulter Sen, J.R., Patents Bill 1990: Second Reading, Senate Hansard p 1910, 22 August 1990.
70 Advisory Council on Intellectual Property, Should plant and animal subject matter be excluded from protection by the innovation patent? November 2004. It has been considered that a significant proportion of plant varieties eligible for a PBR would also be eligible for the innovation patent.Innovation patents lack many of the checks and balances of PBRs, and so for plants would provide excessive rights for owners. Although there is no PBR-type system for animals, the status quo of free competition has been retained due the absence of a clear need for innovation patent protection for animals.
71 s.41 requires full disclosure of the invention, which for a micro-organism may mean the deposit of a sample.
72 "Associated technology" is any document that contains information that is not lawfully available to the public and is primarily applicable to the enrichment of nuclear material, reprocessing of irradiatednuclear material, production of heavy water or nuclear weapons, or nuclear information that is declared by the Minister to be such.
73 Bernhard Joos v Commissioner of Patents(1972).
74 Anaesthetic Supplies Pty Ltd v Rescare Ltd (1994), Bristol-Meyers Squibb Company v FH Faulding & Co Ltd (2000).
75 Ranks Hovis McDougall Ltd's Application (1976).
76 Kiren-Amgen Inc v Board of Regents of University of Washington (1995).
77 Diamond, Commissioner of Patents and Trademarks v Diehr and Lutton (1981).
78 International Business Machines Corporate v The Commissioner (1991).
79 CCOM v Jeijing (1994).
80 Welcome Real-Time SA v Catuity Inc (2001).
81 Grant v Commissioner of Patents (2005).
82 Berggren, Scott, Grant brings clarity to business method patents, Managing Intellectual Property, Issue Australia 2nd ed. IP Focus 2006, November 2006, pp. 52-54
83 Rothnie, W., So what exactly is patentable subject matter?
84 Treloar, P., Business methods decision causes confusion
85 Commissioner of Patents v Microcell Ltd (1958) and NRDC (1959).
86 Blows, Justin, The High Court shifts on inventive step, Australian Intellectual Property Law Bulletin, Vol. 20 No.3, July 2007, pp.34-36; Ollier, Peter, Patent invalidation gets harder in Australia, MIP Week, 29 May 2007; Drummond, Matthew, Inventors get backing for patent battle, Australian Financial Review, 20 July 2006.
87 For example, see Lawson, Charles, Evolution of "inventive step"-like elements in Australian patent laws, Australian Intellectual Property Journal Vol. 18 No. 3, August 2007, pp 130-148
88Padbury, Mary, Inventiveness apart from novelty and inventive step - the High Court's decisions on manner of manufacture in Philips and Ramset, Australian Intellectual Property Journal Vol.9,November 1998, pp 173-175.
89 Anaesthetic Supplies Pty Ltd v Rescare Ltd (1994), Bristol-Meyers Squibb Company v FH Faulding & Co Ltd (2000).
90 Commissioner of Patents v Microcell Ltd (1959), Advanced Building Systems Pty Ltd and Anor v Ramset Fasteners (Aust) Pty Ltd (1998).
91 Manual of Practice and Procedures -Volume 2 National, Australian Patent Office, Part 2.9.4. See Martin Engineering Co v Trison Holdings Pty Ltd (1989).
92 Pessers and Moody v Haydon & Co (1909).
93 Allison, John R. and Lemley, Mark A., Empirical evidence on the validity of litigated patents, American Intellectual Property Law Association Quarterly Journal, Vol. 26, 1998, pp 185. This found that 0.3% of US patent cases considered patentable subject matter.
94 Jenkins, Neil, Patents Update, Bird & Bird, April 2006, pp 26-33. See also Harris, Gordon, Trends in U.K. patent litigation: The age of reason?, European Intellectual Property Review, Vol. 21 Issue 5, May 1999, pp 258.
95 Weatherall, Kimberlee G. and Jensen, Paul H.,An empirical investigation into patent enforcement in Australian courts,Federal Law Review, Vol.33, No.2, 2005, pp 278. Note that this data covered the period immediately after thePhillips v Mirabella decision and so the number of cases on patentable subject matter may be unusually high due to the controversial nature of this decision.
96 Allison, John R. and Lemley, Mark A., Empirical evidence on the validity of litigated patents, American Intellectual Property Law Association Quarterly Journal, Vol. 26, 1998, pp 185.
97 In September 2007, the position of Deputy Commissioner of Patents became known as Assistant General Manager of Patents and Plant Breeder's Rights.
98 Patent & Plant Breeder's Rights Examination & Hearings Group, IP Australia, 2007.
101 Australian Patent Office Manual of Practice and Procedures - Volume 2 National, Part 18.104.22.168.
102 Ibid, Part 22.214.171.124.
103 Ibid, Parts 126.96.36.199 and 188.8.131.52 and IP Australia, Australian patents for biological inventions, 2005, ipaustralia.gov.au/pdfs/patents/specific/biotech.pdf
104 Ibid, Parts 184.108.40.206 and 220.127.116.11 and IP Australia, Patents for computer related inventions, 2005, ipaustralia.gov.au/pdfs/patents/specific/computer.pdf
105 Ibid Part 18.104.22.168 and IP Australia, Patents for business methods, 2005, ipaustralia.gov.au/pdfs/patents/specific/schemes.pdf
106 Ibid, Part 22.214.171.124.
107 Ibid, Parts 126.96.36.199, 2.9.3.
108 Ibid, Part 2.9.5.
109 Ibid Parts 2.9.5, 2.9.6 and 2.9.7.
110 Ibid Part 2.9.7.
111. Safe-hand means a method of transferring an article in such a way that the article is in the care of authorised officers who are responsible for its carriage and safekeeping. Where an invention is subject to a security classification in a foreign country, the applicant may get approval from the relevant authority in their country to file a patent application in Australia under international arrangements. The application is filed with IP Australia via safe-hand, such as through suitably endorsed couriers.
112 Patent & Plant Breeder's Rights Examination & Hearings Group, IP Australia, 2007;Prohibition Orders under the Patents Act, IP Australia, November 2005; Patent Manual of Practice and Procedures - National, Chapter 2.13.13.
113 United Nations Conference on Trade and Development and the International Centre for Trade and Sustainable Development, Resource book on TRIPS and development, Cambridge University Press, New York, 2005, pp 118-125, http://www.iprsonline.org/unctadictsd/ResourceBookIndex.htm
114 The term ordre public is used in TRIPS as the concept is derived from French law and not easily translated into English. It encompasses the protection of public security, the physical integrity of individuals as part of society and the protection of the environment. However, there is no generally accepted definition and no reason for other Members to follow the European approach. Ibid, p 375 - 379.
115 Morality depends on the particular culture of a country or region and could include, for example, the religious beliefs of a particular Member. Ibid, p 379.
116 However, in the absence of patent protection for plant varieties, some form of protection must be through a sui generis system such as plant breeder's rights.
117 Adcock, Mike and Llewelyn, Margaret, TRIPS and the patentability of micro-organisms, Bio- Science Law Review, Vol. 4 No. 3, 2000-2001, pp 91-101.
118 Article 65 provides that a developing country Member may delay providing product patent protection in areas of technology not protectable in its territory on the date TRIPS comes in force until January 2005. The deadline for least-developed countries of the WTO to provide patent protection for pharmaceutical patents has been extended until 2016. Article 70.8 relates specifically to situations where a Member does not provide patent protection for pharmaceutical and agricultural chemical products as of 1 January 1995.
120 The proposals being discussed centre on making it a requirement, either through TRIPS or another mechanism, that a patent applicant disclose the country of origin of genetic resources and traditional knowledge used in an invention, evidence that they received prior informed consent and evidence of fair and equitable benefit sharing.
121 World Trade Organization panel report WT/DS114/R (2000).
122 For example, Phil Thorpe Study on the Implementation of the TRIPS Agreement by Developing Countries, p.17, Study Paper 7 for the UK Commission on Intellectual Property Rights report Integrating Intellectual Property Rights and Development Policy (2002).
123 Under India's Patents Act 1970 act a range of subject matters were not patentable, including product claims for pharmaceuticals. Under TRIPS, India deferred examining applications for pharmaceutical products until 1 January 2005. This has been implemented under the Patents (First Amendment) Act 1999 and Patents (Second Amendment) Act 2002.
124 Carlos Correa Integrating Public Health Concerns into Patent Legislation in Developing Countries, South Centre (2000), Part III.
125 Methods of medical treatment are excluded throughout Europe as a result of Article 52(4) EPC and New Zealand as a result of case law. 'Swiss' claims were developed as a means of claiming second or subsequent medical uses of known drugs in these jurisdictions. The typical form of a Swiss claim is "The use of (substance X) for the manufacture of a medicament for the therapeutic and/or prophylactic treatment of (medical condition Y)".
126 United Nations Conference on Trade and Development and the International Centre for Trade and Sustainable Development, Resource book on TRIPS and development, Cambridge University Press, New York, 2005, pp 356-358, http://www.iprsonline.org/unctadictsd/ResourceBookIndex.htm.
127 DFAT, Australia-United States Free Trade Agreement - Guide to the Agreement, March 2004, 8.3.
128 DFAT, Fact Sheet 8 Intellectual Property, http://www.dfat.gov.au/trade/negotiations/us_fta/outcomes/08_intellectua...
129 Heath, Ian,Examining the impact of the Australia - United States Free Trade Agreement (AUSFTA) on Intellectual Property, Keynote address at "Recent developments in protecting and commercialising intellectual property", Sydney, 10-11 August 2004. ipaustralia.gov.au/resources/news_new_archived_2004.shtml#32
130 Pg 17, para 97.
131 Pg 95.
132 pg 3.
133 Pg 17, para 86.
134 Pg 105, s.155.
135 Should plant and animal subject matter be excluded from protection by the innovation patent? Advisory Council on Intellectual Property, November 2004.
136 Report 99 Genes and Ingenuity, Australian Law Reform Commission (2004), Chapter 6.
137 Ibid Chapter 7.
138 Report on the International Patent System, SCP/12/3, World Intellectual Property Organization, Geneva, 15 April 2008, pp 64-65. Annex II lists the exclusions from patentable subject matter for a large number of member states.
139 These exclusions are based on the laws in many European countries at the time the Convention was being negotiated.
140 Rule 23 provides further details on what types of biological inventions are patentable.
141 For example, Intellectual Property and Competition Review Committee,Review of Intellectual Property Legislation under the Competition Principles Agreement, 2000, p148.
142 Mole, Peter, Economic, ethics and the subject-matter definition of EPC, The CIPA Journal, Vol. 32 No. 4, April 2003, pp. 196-203.
143 Pila, Justine, Dispute over the meaning of "invention" in Art.52(2) EPC - the patentability of computer-implemented inventions in Europe, IIC: International Review of Intellectual Property and Competition Law, Vol. 36 No. 2, 2005, pp.173-191.
144 The UK Court of Appeal recently took the unusual step of recommending that the EPO Enlarged Board consider a series of questions relating to the patentability of software and business methods, as it considered the decisions of the EPO Board of Appeal to be "mutually contradictory". See Aerotel Ltd v Telco Holdings Ltd v Ors Rev 1  RPC (Aerotel/Macrossan). The EPO President has decided against such as review. See http://www.ipo.gov.uk/patent/p-decisionmaking/p-law/p-law-notice/p-law- notice-subjectmatter/p-law-notice-subjectmatter-letter.htm
145 For example, Ketelaars, Maarten, Computer-implemented inventions put to the test Intellectual Property, Europe IP Focus 2005, pp. 77-78; Weyand, Joachim, Patenting computer programs: new challenges, IIC: International Review of Intellectual Property and Competition Law, Vol. 36 No. 6, September 2005, pp. 647-663; and Pila, Justine, Methods of Medical Treatment Within Australian and United Kingdom Patents Law, University of New South Wales Law Journal, 2001, Vol.24, No.2, para 69-72.
146 For example, see Oddi, A. Samuel, Regeneration in Amercian patent law: statutory subject matter, IDEA: the Journal of Law and Technology, Vol. 46 No.4, 2006, pp.491-560. See in particular 552-557.
147 For example, Andrews, Lori, When Patents Threaten Science, Science Vol.314, December 2006, p1395-1396; Cotter, Thomas F., A Burkean Perspective on Patent Eligibility, Research Paper No. 06- 68, University of Minnesota Law School; Lessig, Lawrence, Online Patents: Leave them pending, Wall Street Journal, New York, Mar 23, 2000, pA22.
148 In re Comiskey(CAFC 2006-1286).
149 In re Nuijten(CAFC 2006-1371).
150 Seidenberg, Steve, US courts swinging towards higher threshold for patentability, IP Watch, 4 October 2007.
151 IP Australia and New Zealand Ministry of Economic Development, Trans-Tasman economic market: Intellectual property co-ordination, Media release December 2004, ipaustralia.gov.au/pdfs/news/Media%20Release%20-%20IP%20NZ-AUS%20co- ordination%20v2.pdf
152 Patents for insubstantial inventions were considered generally inconvenient because the cost to society far outweighed any benefit in increased innovation. More recently, a patent for a method of operating an aircraft was generally inconvenient because the burden on pilots was considered too high
153 For example, see Blum, Jeremy, Why "Invention" Should be Removed from New Zealand Patent Law, Intellectual Property Forum, Issue 64, March 2006, p22-37.
154 See Part 8.6 and White, Alan W, Gene and Compound Per Se Claims: An Appropriate Reward?, TheCIPA Journal, February 2002, p.89 and March 2002, p 134. 155 For example, Sommer, Andrew R., Trouble on the Commons: A Lockean justification for patent law harmonization, Journal of the Patent and Trademark Office Society, Vol. 87 No. 2, February 2005, pp. 141-170.
156 For example, Patents, Innovation & Competition in Australia, Industrial Property Advisory Committee (1984), Review of Intellectual Property Legislation under the Competition Principles Agreement, Intellectual Property and Competition Review Committee (2000).
157 Relating to special arrangements for developing countries and pharmaceutical and agricultural products.