Is software patentable in Australia?
- Steve Davey
- Dec 10, 2019
- 4 min read
Updated: Oct 13
The short answer is that the Australian Patents Office will grant patents for software that has a technical purpose which is connected with hardware, but not for pure software for a purely business purpose (that is, an app). This is because business schemes are not patentable per se.
The law for computer-implemented inventions (CIIs) has been the subject of significant uncertainty, but the Full Federal Court’s 2025 decision in Aristocrat provides much-needed clarity by rejecting a prior, overly restrictive test.
The Foundational Test: NRDC v Commissioner of Patents
The threshold test for an invention to be patentable was explained by the High Court in National Research Development Corporation v Commissioner of Patents
1959
HCA 67 (a.k.a. ‘NRDC’). This case basically defined an invention as being ‘an artificially created state of affairs’ whose value lies ‘in the field of economic endeavour’.
Software should technically fulfil this criteria. However, the application of this rule to software inventions has some subtle sub-criteria which the Patent Office uses to dismiss applications for inventions which it deems to have little merit.
The Examiner’s View: Schemes vs. Technical Effects
The Patent Examiner's Manual reflects the core principle that the inquiry must look to the substance of the invention.
The Manual states that "the limitation of the claims to a technological environment may not alter the fact that what is claimed is a scheme or abstract idea". For example, a method of extracting oil from a well characterised by a computer implemented scheme to allocate pumping resources according to customer demand is still a scheme, even if notionally tied to a technical activity.
Examples of software held to be patentable include: a computer processing apparatus for assembling text in Chinese language characters using a non-Chinese keyboard (CCOM v Jiejing) and the production of an improved curve image by computer (International Business Machines Corporation v Commissioner of Patents).
Key Precedents: Unpatentable Schemes
The following cases illustrate inventions rejected as being mere abstract ideas or schemes using a generic computer as an intermediary.
Grant v Commissioner of Patents
2006
FCAFC 120: Confirmed that ‘pure’ business methods are not patentable by refusing a patent for a scheme for asset protection via specified legal and financial transactions.
Research Affiliates LLC v Commissioner of Patents
2014
FCAFC 150: Upheld the rejection of a patent application for software involving the creation of an index for trading securities, primarily on the grounds of lack of patentable subject matter (though the claims were noted as obscure).
Invention Pathways Pty Ltd
2010
APO 10: Involved a software package that automatically calculated a timeline for commercialising an invention, implemented essentially via an Excel spreadsheet. The scheme was deemed unpatentable.
Commissioner of Patents v RPL Central Pty Ltd
2015
FCAFC 177: Rejected claims for a computer-implemented method for assessing competency. The Full Court characterised the alleged invention as a mere scheme or idea implemented on a generic computer, using standard software and hardware.
Encompass Corporation Pty Ltd v InfoTrack Pty Ltd
2019
FCAFC 161: The Full Court dismissed an appeal, finding the software (which conducted multi-database searches and generated network representations) was not eligible subject matter because it failed to describe an invention more specific than a general scheme suitable for computer-implementation.
Repipe Pty Ltd v Commissioner of Patents
2019
FCA 1956: Revoked innovation patents for a plumbing safety app, concluding that the claims were a mere scheme that could be implemented using unidentified software, adding nothing of "meaningful technical content".
Amadeus S.A.S.
2022
APO 76 & The Regents of The University of California
2022
APO 77: Both cases were rejected because the invention's substance was characterised as an administrative business scheme (flight itinerary undo/redo) or a mere scheme for enhancing cognition, not addressing an identifiable technical problem.
The New Standard: Aristocrat’s Course Correction (2025)
The case of Commissioner of Patents v Aristocrat Technologies Australia Pty Ltd has provided the decisive and most recent clarification of the law.
The High Court's split decision in 2022 led to confusion, and the subsequent Federal Court proceedings (Aristocrat FCA 2024 ) were constrained by the initial, restrictive Full Federal Court ruling.
However, in Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents
2025
FCAFC 131, a newly constituted Full Federal Court reversed course. It decisively rejected the use of the rigid "advance in computer technology" test.
The Court's refined test for computer-implemented abstract ideas is now focused on the outcome:
Abstract ideas merely manipulated on a computer: Not patentable.
Abstract ideas implemented on a computer to produce an artificial state of affairs and a useful result: Potentially patentable.
The Court adopted the "allowing reasons" from the High Court case, finding that the claims for the Electronic Gaming Machine (EGM) were patentable because they constituted a combination claim concerned with an altered EGM that produced an artificial state of affairs and a useful result. The configurable symbols and feature games were inextricably connected with the machine's interface and controller.
Key Takeaways from the 2025 Decision:
No "Advance in Computer Technology" Required: The invention need not improve the computer technology itself. The implementation can use conventional hardware and software.
Characterization of the Whole: The assessment must be based on a holistic characterization of the invention as a matter of substance, taking into account all the claimed elements, including the conventional ones. This strengthens the approach taken in the earlier Rokt case, which focused on the net effect of the combination.
Technical Contribution Still Necessary: The invention must still provide a "technical contribution" by achieving a concrete, functional, or observable effect—it just doesn't need to be an improvement in the computer itself.
Summary for Patent Practice
While Artificial Intelligence software may be patentable if it achieves this technical effect, the fundamental rules remain:
Unpatentable: A computer acting merely as an "intermediary" that adds nothing to the substance of the idea is not a patentable invention.
Patentable: The invention must provide a "technical contribution", and that contribution must lie in the computerisation and result in an artificial state of affairs and a useful result.
The Aristocrat [2025] decision ensures that Australian patent eligibility is focused on utility and technical effect, rather than being restricted to only those inventions that advance the field of computer science. This is a significant, positive shift for patenting CIIs in Australia.
Comments