Australia - Patent Protection for Business Methods

Newsletters and Bulletins / February 2002 / Australia

The Federal Court of Australia has in the case of Welcome Real-Time S.A. v. Catuity Inc. et al for the first time considered the patentability of business methods. The invention related to a method for the operation of smart cards in connection with trader's loyalty programs. The main claim was directed to

A method of processing coded information during a purchase or payment operation by a customer, holder of a card with a chip at a trader's in which the contents of the memory of the chip card are read and a coupon is or is not printed on the basis of the information arising from the contents of said memory characterized in that ... (algorithmic processing is carried out on the basis of the contents of certain files included in the memory of the chip to write new information into one of such files and) ... said coupon is or is not printed on the basis of said algorithmic processing.

As a defense to a charge of infringement, the defendants argued that such a claim did not define a patentable invention under the Australian Patent Statute. The Australian definition of an invention is that the invention must be a "manner of manufacture" as set out in the English Statute of Monopolies in 1623. The court noted that in National Research and Development Corporation v. Commissioner of Patents the High Court of Australia had stated that:

the point is that a process, to fall within the limits of patentability which the context of the Statute of Monopolies has satisfied, must be one that offers some advantage which is material in the sense that the process belongs to a useful art as distinct from a fine art - that its value to the country is in the field of economic endeavour.

This decision had been built upon by the Full Court in CCOM Pty Ltd. v. Jieing Pty Ltd, a case about a patent relating to a Chinese language word processor, where it had been stated,

The NRDC case ... requires 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.

Such an approach was according to the court consistent with that taken in the United States in State Street Bank v. Signature Financial Group (see our March 1999 Newsletter).

The court held that the method in the present case does produce an artificial state of affairs which is beneficial in the field of economic endeavor. Consequently it fell within the concept of being a manner of manufacture and was therefore patentable.

February 2002 Index

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