Well, the answer may be no, if you have full ownership of the product without limitation. This view is supported by a High Court ruling in Calidad Pty Ltd v Seiko Epson Corporation.
The latest research shows there are more than 6.92 billion smartphone users in the world. That’s about 85% of the population that uses a smartphone to browse the web, keep up with friends and interact with their favourite businesses. If you want to take advantage of that audience, developing a smartphone or computer app is a great way to make an impression. But, apps have the potential to generate significant revenue for a business, so it’s important to seek intellectual property protection and stay ahead of your competitors. In this article we’ll discuss how to patent an app idea in Australia, and whether a patent is the right decision for your business.
What Is a Patent?
A patent is a type of intellectual property that grants the owner the exclusive right to commercially exploit inventions that are new and useful. That includes things like products, processes, software, business methods and some types of biological materials.
You can only patent an inventions that are:
Can You Patent an App Idea?
It is possible to patent a computer or mobile app, but you cannot patent anabstract idea. You do not need to have a completed app (or even a working proof of concept), but your invention must be technological in nature.
With that said, you may be able to patent certain parts of your app, such as:
Seeking a patent is a serious investment. We recommend engaging a patent attorney to assist with filing an application. A patent attorney with experience in software and apps can determine whether your invention is novel, and whether it qualifies for patent protection.
How to Patent an App Idea in Australia
If your app qualifies for patent protection, applying for a patent in Australia is relatively straightforward:
Other Forms of Intellectual Property Protection for Apps
Patenting your app isn’t always the right choice for your business. Patents can’t be used to protect code or non-technical ideas behind your app. And, since many apps might offer similar functionality and processing methods, your invention may not meet the “inventive step” requirement. That means pursuing a patent can be a time-consuming and costly exercise.
The good news is that other forms of protection are also available. Parts of your app may be eligible two other types intellectual property protection:
Protect Your App Idea with Intellectual Property Services by Kings!
While it’s possible to patent an app, it’s not always the most appropriate form of intellectual property protection. But, if you want to safeguard your ideas, the team at Kings can develop an intellectual property strategy just for you!
Kings is an independent firm of patent attorneys that works with clients across Australia. We handle all types of intellectual property matters, including patents, trade marks, design registrations and more. With an experienced team that’s well-versed in software, ICT and the app market, we can make sure you retain control of your most valuable IP and assets. You are welcome to contact us at any time for more information, or call us to book a confidential consultation.
In this case, Seiko manufactured patented ink cartridges under the brand name “Epson”. A third party obtained used cartridges and injected ink into them to make them reusable. Calidad imported and sold these remanufactured cartridges in Australia. In 2015, Seiko commenced proceedings against Calidad for patent infringement.
After losing this case in both the Federal Court and the Full Court, Calidad appealed to the High Court by grant of special leave. In a majority decision, the High Court held that refilling ink into OEM cartridges (with reprograming or replacing the embedded microchips) by customers does not amount to patent infringement.
*These are remanufactured Epson cartridges that have been precision processed with specially formulated Calidad ink. These products are not endorsed by Epson. Epson and Epson printer models are registered trademarks of Epson Seiko Co. Calidad has no affiliation with Epson.
Exclusive rights given by a patent
Section 13(1) of the Patents Act 1990 (Cth) grants a patentee the exclusive rights to use or exploit the invention disclosed in a patent for a limited period of time (usually 20 years). In this case, there was no dispute that only Seiko can manufacture these patented ink cartridges. But can Seiko, as the patentee, prevent others from remanufacturing these cartridges after they have been sold to customers?
There is a longstanding principle of implied licence in UK law and Australia also adopts it. According to this principle, the sale of a patented product by the patentee includes an implied licence that the purchaser may use the product without infringing the rights of the patentee. Seiko argued that the implied licence gives the cartridge purchasers a right to use but not modify them. Furthermore, these “imposed conditions” apply to not only the initial purchaser but all subsequent owners of the product. Seiko insisted that their products are designed to be single-use, and any modifications to make them reusable are out of the scope of this implied licence.
Exhaustion of rights
However, the law of personal property provides that the owner of chattels has an absolute right to use or dispose of their personal property as they think fit. In this regard, a patentee’s exclusive rights for a product ought to be exhausted on sale. The rationale is that once the patentee has received on sale the royalty for their invention in that particular product, the purchaser will then have full control of the product without any further restriction. According to this exhaustion doctrine, customers can modify the cartridges as far as they have full ownership over the product. Calidad or any third party should be protected to modify or repair the cartridges they own.
The High Court’s decision
Both the principles of implied licence and exhaustion of rights came from UK law and have been adopted in Australia for a long time. In this case, the High Court faced a fundamental question: “can a purchaser use or dispose of a patented article without the need for the patentee’s consent?” In the majority judgment, the High Court upheld that Seiko’s exclusive rights were exhausted when the product was sold to its purchaser. In particular, the High Court concluded that the modifications to the OEM cartridges were consistent with the exercise of the rights of an owner to alter an article to improve its usefulness and enable its reuse. This decision is also in line with the US and EU positions.
US and EU Position
In Impression Products v. Lexmark International, the Supreme Court of the United States held that Lexmark had exhausted its patent rights in the cartridges “the moment it sold them”. Accordingly, the act of refilling Lexmark cartridges by Impression Products did not amount to patent infringement. Nevertheless, their Honours acknowledged that the single-use/no-resale restrictions in Lexmark’s contracts with its customers may be enforceable under contract law, but not patent law. European Union has a similar policy such that once an IP owner has sold the product, they cannot prevent the further circulation of that product in the market.
The High Court decision clears the way for small businesses to repair and remanufacture patented products as far as they have full ownership of them and are not in breach of other terms. In general, it is also a win for consumers because they may have an opportunity to choose consumables between OEM products and remanufactured products.
The High Court judgment in favour of Calidad highlights that a patentee’s exclusive rights with respect to a product usually exhaust on sale. Imposing restrictions on after-sale use of patented products cannot be achieved implicitly. These restrictions have to be negotiated explicitly to give some certainty to both parties.
Not sure about whether you have infringed someone’s IP? Contact Kings Patent and Trade Marks Attorneys for professional advice on IP protection and infringement. Book a complimentary consultation to speak with our expert Patent Attorney Brisbane team today.
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