Following the concluded litigation battle between Aristocrat and the Commissioner of Patents, IP Australia has released a decision-making framework in determining whether a computer implemented invention (CII) constitutes patentable subject matter.
On the back of Aristocrat’s litigation victory over the Commissioner of Patents, IP Australia has updated its Patent Examiner’s Manual on the patentable subject matter eligibility of CIIs. The revision, primarily to Section 5.6.8.6 Computer Implemented Inventions, Mere Schemes, and Business Methods takes into account the jurisprudence adopted by the Full Federal Court decision in Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents [2025] FCAFC 131 (Aristocrat ’25), and later affirmed by the High Court’s refusal to consider the Commissioner’s Special Leave application in Commissioner of Patents v Aristocrat Technologies Australia Pty Ltd (S153-2025) [2026] HCADisp 15.
In its introduction to the revised chapter, IP Australia says:
Aristocrat ’25 has confirmed that a computer-implemented invention needs to be assessed as a matter of substance, that is, once it has been “properly characterised”, so as to determine whether it involves:
- an abstract idea which is manipulated on a computer – which is unpatentable; or
- an abstract idea which is implemented on a computer to produce an artificial state of affairs and a useful result – which is patentable.
The introductory section also mentions that the Full Court in Aristocrat ’25 warned that a claim to a CII is not necessarily unpatentable merely because it is possible to characterise the invention as involving the implementation of an idea in a computer using conventional computer technology for its well-known and well-understood functions.
In trying to reconcile the Aristocrat ’25 decision with existing Australian jurisprudence on CIIs (including NRDC, Myriad, IBM, CCOM, UbiPark, Hytera, Research Affiliates, RPL Central, Encompass, Rokt, Repipe), IP Australia updated its examination practice by including in its examination guidelines a decision-making framework.
The decision-making framework for determining patentable subject matter in a CII is broadly made of two parts: understanding the physical elements of the claimed invention and, if applicable, considering additional factors relevant to characterising the claimed invention.
Understanding the physical elements of the claimed invention
The decision-making framework states that it is important to first assess the nature of the physical elements that are present in the claim in the light of the common general knowledge (CGK), and consider whether the invention is to a known product or system that comprises a computer processor, or whether the physical elements define a new physical product or system in light of the CGK.
If the physical features describe a new physical product or system (not CGK), and the claim defines a new combination having the required interaction between integers (and not a mere collocation), then there will be patentable subject matter, and the additional factors relevant to characterising the claimed invention will not need to be considered. The example used by IP Australia as falling into this category includes a claim that involves a computer system that incorporates a new physical feature giving rise to a new computer as such will be patentable subject matter even where the claim includes method integers.
In contrast, if a claim is to software alone, then IP Australia expects it is likely to be defining something that can be run on a known computerised product or system (or at least include such use), and thus consideration of the additional factors relevant to characterising the claimed invention will be required. Similarly, where the physical features are standard features of a known (CGK) computer or computerised product/system, and those standard features include a computer processor, then there will also be a need to consider the additional factors relevant to characterising the claimed invention.
Factors relevant to characterising the claimed invention
The decision-making framework states that there are various factors that may be relevant to characterising the invention where standard features of a known computerised product or system are involved. These factors include:
- Whether the computerised product or system works in an improved or altered manner, noting that an invention is not patentable merely because a computer is programmed with a new method.
- Whether there is a relevant technical effect occurring outside a computerised product or system, or a technical problem is solved outside the computerised product or system.
- Whether a technical problem is solved with a computerised product or system.
- Even if a computer is essential for performing the invention (i.e. there is no practical “pen and paper” equivalent), that is not a sufficient factor to confer patentability; the computer must be more than an intermediary.
Example: performing business interactions using computing devices
IP Australia has released an example of how it might apply the decision-making framework to CIIs. The example used relates to the sharing of information between a customer and a merchant essentially using mobile phone technology:
A method of performing financial transactions, comprising:
receiving, by a processor, location information of a user from a user device;
determining, by the processor, a location of the user based on the location information;
determining, by the processor, whether one or more sellers are within a predetermined distance of the location of the user; and
communicating payment information of a selected seller from the one or more sellers to the user device if the selected seller is within the predetermined distance of the location of the user.
IP Australia notes that, in this example, the CII is generically claimed and the invention uses generic computer technology, i.e., the “processor” and “user device” are merely performing their usual independent function, there being no improved operation of relevance.
IP Australia also notes that the claim does not improve or alter the operation of a computer, nor does it address a technical problem. As a result, the invention is best characterised as a mere computer implemented business rule or scheme for determining when to share information.
In view of the reasoning applied above, it is apparent that IP Australia does not consider the CII in this example to constitute patentable subject matter.
Different but same?
In updating its guidelines, IP Australia on the one hand acknowledges that Aristocrat ’25 provides a warning that a claim to a CII is not necessarily unpatentable merely because it is possible to characterise the invention as involving the implementation of an idea in a computer using conventional computer technology for its well-known and well-understood functions.
On the other hand, the decision-making framework (in conjunction with its example) suggests that IP Australia may continue to take a similar approach as prior to Aristocrat ‘25. It remains to be seen what shift may be brought about by the update to the examination guidelines on the patentability of computer implemented inventions.
IP Australia seeking feedback
IP Australia is seeking feedback on these changes, stating: “Given the strong interest in this matter, this consultation process aims to ensure transparency and greater opportunities for stakeholders to provide feedback. All feedback will be considered and where appropriate inform future updates”. The consultation will close on 17 May 2026.
Stakeholders who are interested in this area are encouraged to review the update and provide feedback.