Patents cannot be granted for purely intellectual ideas such as mathematical formulas, algorithms, and methods of calculation. For a time, computer software was thought to fall into this category, however, in the early nineties computer software patents began to come into force.
Under Australian law, there was not (and still is not) a codified position on computer software under patent legislation. One of the first cases allowing a software patent in Australia was IBM v Smith, Commissioner of Patents involving the use of a computer program to represent a curved image from set of control points. The Federal Court said that as ‘the application of the selected mathematical methods to computers’ is new it was inventive because it was said to ‘involve steps which are foreign to the normal use of computers’.
Later, in the leading case of CCOM Pty Ltd v Jiejing Pty Ltd, the Full Federal Court in applying the principles of NDRC v Commissioner of Patents  held that a claim for a computer program that uses keystrokes to assemble Chinese characters is patentable subject matter as it resulted in an artificially created state of affairs that had utility in field of economic endeavour. This test has been affirmed and applied in subsequent software patent cases.
There have been two recent software patent cases to hit the courts; The case of Research Affiliates LLC v Commissioner of Patents involved a computer-implemented method of generating an index of financial securities and the case of RPL Central Pty Ltd v Commissioner of Patents involved a patent for a method of gathering evidence for assessing a user’s competency for higher education based their input. In judgments hard to reconcile, the Research Affiliates patent was denied as a ‘mere scheme’ and the RPL Central patent was allowed because the ‘physical effect’ of the computer processing information.
In denying the patent, Justice Emmett in Research Affiliates felt that ‘there is a sharp contrast between a computer-generated curve, or a representation of Chinese characters, or the writing of particular information on a smart card, on the one hand, and the quite unspecified index, on the other’. He went on the say that the program involved ‘no more than the use of a computer for a purpose for which it is suitable’. On the other hand, in allowing the patent in RPL Central, Middleton J found that the ‘physical effect’ as required under Grant v Commissioner of Patents was satisfied because was ‘clearly a physical effect in this case’, namely, the computer implemented operations such as retrieving and processing information. At the time of writing, both decisions have been appealed to the Full Federal Court.
In summary, as it stands, there is no particular exemption deeming software unpatentable subject matter in Australia, and so long as the software meets the general requirements of patentability, it may be the subject of a patent grant. However, if the patent using the software is held to be a mere scheme or ‘no more than the use of a computer for a purpose for which it is suitable’, then it may be rejected.
 See Patents Act 1990 (Cth) s 18.
 IBM v Smith, Commissioner of Patents  FCA 625 (‘IBM’)
 Ibid, para 
 Bill Gates, ‘Challenges and Strategy Memo’, 16 May 1991
 CCOM Pty Ltd v Jiejing Pty Ltd (1994) 28 IPR 481
 National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252 (‘NRDC’).
RPL Central Pty Ltd v Commissioner of Patents  FCA 871; Welcome Real-Time SA v Catuity Inc  FCA 445; Research Affiliates LLC v Commissioner of Patents  FCA 71
 C Bodkin Patent Law in Australia, 2nd Edition (Thomson Lawbook Co. 2014), at para 
Research Affiliates LLC v Commissioner of Patents  FCA 71 (‘Research Affiliates’)
RPL Central Pty Ltd v Commissioner of Patents  FCA 871 (‘RPL Central’)
 Research Affiliates, at  (Emmett J)
Grant v Commissioner of Patents  FCAFC 120
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