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Is the war on software patents over?
Last year, while businesses across Australia were gearing up for the traditional December frenzy, one sector had already received an early Christmas present, writes Mills Oakley’s James Lawrence.
James Lawrence
The Federal Court of Australia handed the software industry a major victory on the the patentability of computer-implemented inventions. It is not yet clear whether IP Australia will appeal the decision, but either way we may be entering a new era of certainty for software innovation.
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But let’s go back to the start. This saga really began back in 2013, when a global e-commerce marketing technology company called ROKT sought a patent for a new digital advertising platform.
To do this, they needed to demonstrate that the platform solved a “technical problem”.
The Commissioner of Patents found that the platform solved only a “business problem”. The patent was ultimately denied. ROKT headed for the courts.
In a landmark ruling, Justice Robertson of the Federal Court unequivocally rejected the Commissioner’s previous decisions to deny ROKT’s patent. He found that ROKT’s innovative technology ‘solved not only a business problem but also a technical problem’ and ordered ROKT’s patent proceed to grant.
This decision was a major win not only for ROKT but for all Australian software innovators and start-ups who will now, through this decision, be given guidance as to how best to position themselves to protect their innovations.
For the past four years, IP Australia has taken an unsympathetic stance on software patents, declining protection for software innovation on the basis that they were “business innovations” rather than a “technical innovation”, the prerequisite for patent protection.
Now, that tide may have turned. The Federal Court’s ruling has elevated software innovation to the same level of protection long-afforded to hardware innovation.
In the wake of the court’s decision, ROKT CEO Bruce Buchanan delivered a scathing critique of IP Australia’s previous stance on software innovation, describing it as “wasting taxpayer dollars”. He added that the decision would force IP Australia to “do their job and look after Australian businesses building software”.
Indeed, this issue goes beyond a single company or a single industry. Our international competitiveness is at stake. Innovators need to scale their businesses and to do this, they need investment. In order to secure investment, they need protection and legal certainty for their IP.
December’s decision is a step forward in this journey. But we should all be mindful of either the stimulating or dampening effect that IP decisions can have on Australian business. IP is a critical part of most businesses. In this instance, as Bruce Buchanan has indicated, ROKT brought its case largely on principle. They were prepared to incur the costs of a trial to make a point. Next time, the “white knight” may not be forthcoming.
James Lawrence is a partner of Mills Oakley. He instructed ROKT in the Federal Court proceedings.
