Improving the Patent System to Promote Innovation: An Information Technology Case Study

Abstract

Together innovation and intellectual property play a significant role in industrial growth. However, in the field of information technology, much controversy surrounds the patenting of software and business methods. There are claims of stifling innovation on the one hand and equally claims of significant national economic benefit on the other. This article analyses the state of play in these related controversial fields of technology providing a background to the Australian software industry drawn from 'whole of industry' studies and the author's own empirical research into Australian patent ownership. The meaning of patentable subject matter and the ability of software based inventions and business methods to gain patent protection are considered across key jurisdictions. A critical analysis of case law across those jurisdictions will make plain the difficulties encountered by the courts in being able to identify where to draw the line between patentable and non-patentable subject matter. Arguments for and against patent-ability will be weighed in the context of the purpose of the patent system and in the light of the Raising the Bar amendments to the Australian patents regime.

Keywords: Patents, Innovation, Software, Business Methods, Information Technology, Intellectual Property

JEL Classification: K11, O31, O34