Australia's Federal Court has thrown out a patent on the grounds that the bankruptcy-protection business method it sought to protect would not benefit Australian society.
Steven Grant had tried to patent a business method that he claimed would protect people's assets. The method involved setting up a trust, the owner gifting money to the trust and then the trustee loaning that sum back to the owner and securing it by taking a charge over the asset.
But the judge, Justice Branson, said that the method was one that allowed the owner of the assets to be "insulated from the operation of [bankruptcy] laws intended to serve the public interest".
The Commissioner of Patents had revoked the patent, but Grant had appealed to the courts.
The judge said that she was deciding the matter on the basis of the principle that "an invention should only enjoy the protection of a patent if the social cost of the resulting restrictions upon the use of invention is counterbalanced by resulting social benefits".
"The performance of the invention will not add to the economic wealth of Australia or otherwise benefit Australian society as a whole," she said. "For this reason, in my view, the invention the subject of the Patent is not a proper subject of letters patent according to the principles which have been developed for the application of s 6 of the Statute of Monopolies."
David Webber, a partner at Davies Collison Cave, said that the decision "seems to require a court of law, and presumably also the Patent Office, to be convinced that granting of a patent for any invention requires consideration of the resulting social or economic benefits to Australia".
"Given this has never been required before, it is unlikely the court intended to now extend this test to all subject matter for which a patent is sought," he added.
Webber said a more sensible interpretation would be to say that the decision requires a court, or the Patent Office, to be convinced of the social and economic benefits of a situation in which it is being asked to extend patent protection to subject matter where there is no precedent or prior authority for protecting such subject matter.
The case is available here.
