Patents for AI in Australia are growing. AI assistants, AI video generators, AI meeting assistants, AI automation tools, AI research tools, AI writing tools, and others are mainstream. Common to all of these is software that can automate a process that would usually require human involvement.
This sets AI apart from other forms of patentable subject matter, such as machinery, chemicals and the processes for forming them, and pharmaceutical products and their uses. Software, per se, can be protected by copyright that subsists at the time of creation. Thus, patents for AI in Australia could result in the owner having overlapping IP protection. Legislators are not predisposed to enhancing exclusionary rights in this way.
In Australia, the Patents Act 1990 defines an “invention” as “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”. Section 18(1)(a) of the Act sets out that “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.”
The wording “section 6 of the Statute of Monopolies” refers to the Statute of Monopolies 1624, which was passed by the Parliament of England under King James I.
The grant of patents for AI in Australia are governed to a large extent by our Manner of Manufacture requirements. IP Australia has published an interesting history of Manner of Manufacture that is available here: 5.6.8.20 Annex A – History of Manner of Manufacture | IPA Manuals. The old British cases listed there set out several useful principles that should be kept in mind when considering patent protection. A fundamental aspect of patent law is that “a patent for the mere use of a known contrivance, without any additional ingenuity in overcoming fresh difficulties, is bad and cannot be supported.” This is relevant because many software products, including AI tools, are repurposed modules. For example, it will be difficult to comply with the Manner of Manufacture requirement if the AI tool differs from an existing AI tool only insofar as the data input.
Australian legislation does not deal specifically with software products. In contrast, Article 52(2) of the European Patent Convention (EPC) explicitly excludes “programs for computers” as such. Australia offers the advantage of a body of legal precedent that has evolved to deal with the mutable field of software, particularly AI. Similarly, in the United States 35 U.S.C. 101 sets out that: “(W)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 therefor, subject to the conditions and requirements of this title”.
A key decision in Australia was the High Court decision of National Research Development Corporation v Commissioner of Patents [1959] HCA 67 (“NRDC”). NRDC introduced concepts such as the need for the effect of the inventor’s method to result in “an artificially created state of affairs” and a “vendible product”.
The majority in D’Arcy v Myriad Genetics Inc (2015) HCA 35 (“Myriad”) confirmed that the question is whether the invention is proper subject matter according to the principles that have been developed by the courts for the application of section 6 of the Statute of Monopolies.
A broad process followed by the authorities and distilled out of Myriad, Research Affiliates LLC v Commissioner of Patents (2014) FCAFC 150 , and others includes identifying the substance of the invention. The invention is proper subject matter if its substance lies within the developed principles of what constitutes a patentable invention. Thus, the assessment of whether an AI tool or software product is proper subject matter involves defining the invention and then determining whether, “as a matter of substance”, the invention, so defined, meets the Manner of Manufacture requirements. In Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177, the court set out four questions to ask of the substance of the invention:
- Is its contribution technical in nature?
- Does it solve a “technical problem within the computer or outside the computer, or does it result in an improvement in the functioning of the computer, irrespective of the data being processed?
- Is it more than merely generic computer implementation?
- Is it more than merely the intermediary, configured to carry out the method using a computer-readable medium containing program code for performing the method, but adding nothing to the substance of the idea?
The grant of AI patents in Australia requires a positive answer to those four questions.
In support of point 1, the court referred to Aerotel Ltd v Telco Holdings Ltd; Macrossan’s Application [2006] EWCA Civ 1371, a European decision, where it was held that there was nothing technical about advising upon and creating appropriate company documents.
In support of point 4, the court referred to Alice Corporation Pty Ltd v CLS Bank International 134 SCt 2347 (2014), where the Supreme Court of the United States deemed that a method for exchanging financial obligations in which the computer was used to create records, track multiple transactions and issue simultaneous instructions added nothing to the substance of the abstract idea of reducing settlement risk in exchanging financial obligations.
An analysis of subject matter requirements in the U.S. goes beyond the scope of this article. However, it can be said that that there is some alignment between Australia and U.S. when it comes to assessing whether an AI tool would form proper subject matter for a patent. The Federal Register has published: “2024 Guidance Update on Patent Subject Matter Eligibility, Including on Artificial Intelligence”. This is a significant document and is recommended reading for inventors that are considering patent protection for an AI tool.
The USPTO has published a document setting out examples of inventions that have been assessed for compliance with subject matter requirements. This is a useful resource because assessment of proper subject matter often involves a consideration of analogous examples that have been tested by the authorities.
Key to the grant of AI patents in Australia is the question of whether the invention makes a “technical contribution” to a field of technology. This is fundamental to the raison d’être of the patent system, in which an inventor(s) is rewarded with a monopoly in an invention if the state determines that the inventor(s) has made a technical contribution to that field of technology. In the field of AI, a starting point would be to ask whether the invention improves how a computer works when executing the AI.
This article is written by Barry Eagar. Contact us for assistance with your AI-related invention.