You may have a great business idea, but that doesn’t mean you can obtain a patent to protect and monopolise it. Rather, it is the technological or technical innovation which expresses the idea and turns it into an invention, such as a product or system or method for achieving the invention, which you may be able to obtain a patent for, as the Full Court of the Federal Court of Australia found in its recent decision Watson v Commissioner of Patents [2020] FCAFC 56.


The recent decision of Greenwood, McKerracher and Yates JJ concerned an application for leave to appeal from Watson v Commissioner of Patents [2019] FCA 1015, where the primary judge dismissed an appeal from a decision of a delegate of the Commissioner of Patents revoking Mr Watson’s innovation patent on the basis that none of the claims were for a “manner of manufacture” and therefore, the patent was not a patentable invention under s 18(1A) of the Patents Act 1990 (Cth). The Full Court refused leave to appeal.

Mr Watson is a registered patent and trade mark attorney and his firm, Bellator, was originally the Applicant for the patent before it was transferred into Mr Watson’s own name. Mr Watson’s patent is titled “A Method of Innovation” and is essentially for an idea as to how an organisation and inventor might go about organising their affairs in relation to the creation of an intellectual property right and payment for it. When (or if) the inventor created an intellectual property right, payment was to be based on the value or benefit of the intellectual property right to the organisation.

The Full Court’s decision

Upholding the findings of the primary judge that the claimed invention was merely an abstract scheme or idea, the Full Court found:

  • That the claims of the patent were “quite different” to the claims in National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252 (NRDC) (relied upon by Mr Watson) which included a “technical innovation”[1] and were instead, analogous to the substance of the scheme in Grant v Commissioner of Patent (2006) 154 FCR 62.[2]
  • The problems solved by the claimed invention were business or financial issues, not technical problems solved by the claimed method. At most, the claimed invention was to a business innovation, not a technological or technical innovation.[3]
  • There was no “new class of innovation” in claim 1 of the patent, which was nothing more than a description of a business method.[4]

Key takeaways

Key takeaway messages arising out of the Full Court’s decision are:

  • It is not necessarily enough for a claimed invention to satisfy the formula set out in NRDC i.e. that, to be patentable subject matter, an invention needs to result in an artificially created state of affairs of utility in the field of economic endeavour.  As held by the High Court in D’Arcy v Myriad Genetics Inc (2015) 258 CLR 334, the test laid out in NRDC should be taken as a guide, rather than a rigid formula, and that satisfying the NRDC formulation may not be a sufficient answer in all cases.
  • In considering whether a claimed invention contains patentable subject matter, if the claims are not directed to a “technological or technical innovation”, it may render the patent not a manner of manufacture.

Mr Watson’s patent provided no detail around the technical implementation of the invention – by way of computer or otherwise. The required technological or technical innovation was none existent. It was simply an expression of an idea. To be patentable would have required the translation of the business idea into a technical problem and claims directed to mechanisms overcoming said technical problem.

The Full Court’s decision is a reminder that while business ideas are not eligible patentable subject matter, patents directed to a technological or technical innovation are.

Author: Vanessa Farago-Diener

[1] Ibid at [31].

[2] Ibid at [31].

[3] Ibid at [31].

[4] Ibid at [32].