2026 Issue 1

Recent developments in intellectual property law and practice with an Australasian focus.

Contents
Order of Steps Crucial for Interpreting Functional Apparatus Claims
AU High Court Rejects Patent Office Appeal in Aristocrat Case
NZ Government Signals Changes to Plant Variety Rights Legislation
Court Decision Gives Some Respite for Otherwise Strict Section 71 Acceptance Deadline
AU Patent Excess Claims Reminder Change

Order of Steps Crucial for Interpreting Functional Apparatus Claims
The recent Court of Appeal for the Federal Circuit (CAFC) case Rothschild Connected Devices Innovations LLC v Coca-Cola Company 24-1253 considered whether the claim scope of an apparatus claim that contains steps is restricted to apparatus’s that are configured to perform its steps in the order in which they are written in the apparatus claim.

Rothschild had sued Coca-Cola for infringing his patent for a system and method for creating a personalized consumer product. Claim 11 of that patent is for a beverage dispenser which, amongst other integers, contained:

a communication module configured to transmit the identity of the user and the identifier of the beverage to a server over a network, receive user generated beverage product preferences based on the identity of the user and the identifier of the beverage from the server and communicat[e] the user generated beverage product preferences to controller.

The U.S. District Court for the Northern District of Georgia granted summary judgment of noninfringement to Coca-Cola finding that its Freestyle dispensers do not infringe as their communication module performs its steps in a different order to that given in claim 11 of Rothschild’s patent.

Applying CAFC precedent, the CAFC applied the following two-part test for determining if steps that do not otherwise recite an order must nonetheless be performed in the order in which they are written:

Firstly, does the claim language determine, as a matter of logic or grammar, that they must be performed in the order written?
If not, does the rest of the specification determine whether it directly or implicitly requires such a narrow construction?

In applying the first part of that test the CAFC agreed with the District Court’s finding that the “… to a server …”: and “… from the server …” elements in the communication module integer of claim 11 require as a matter of logic or grammar that the steps be performed in the order in which they are written.

The CAFC applied the second part of that test to the  “communicat[e] the user generated beverage product preferences to controller” element in claim 11’s communication module integer, finding that the specification contains language and figures describing that step occurring after the “… from the server …” step. It was also noted that the specification contains nothing suggesting Rothschild’s contrary reading of claim 11.

The CAFC were not persuaded by Rothschild’s contention that the apparatus claim cannot require ordered steps as apparatus claims cover what a device is, not what a device does. The CAFC held that the principle that apparatus claims cover what a device is, not what it does, is not applicable when an apparatus claim depends on functional claiming to describe the apparatus. In such cases what the device does (and how it does it) is highly relevant to understanding what the device is, with the result that language concerning how it must do them cannot be disregarded.

 

AU High Court Rejects Patent Office Appeal in Aristocrat Case
The long running legal battle over software patents in Australia has reached a final conclusion. On 5 February 2026, the High Court of Australia refused the Commissioner of Patents application for special leave to appeal the Full Federal Court’s decision in Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents 2025 FCAFC 131. This decision effectively ends the dispute. By refusing to hear the case, the High Court has allowed the Full Federal Court’s 2025 decision to stand, which is a major win for Aristocrat and the wider software industry. This marks a significant moment for Australian patent law, particularly in how computer-implemented inventions (CIIs) are assessed for eligibility under the Patents Act 1990 (Cth).

Background:
The dispute traces back to a series of contentious decisions concerning whether electronic gaming machine technology, particularly its software elements, constitutes a “manner of manufacture”. This concept is the gatekeeper of Australian patent law, determining whether subject matter is eligible for protection. The question is central to the modern economy, as many innovations are software-driven yet have historically faced high hurdles for protection.

Previously, the Patent Office (IP Australia) had applied a strict standard, arguing that for a computer-implemented invention to be patentable, it must represent an "advance in computer technology, rather than just using the computer to create a new game or business outcome.

However, in a landmark judgment in September 2025, the Full Federal Court held that Aristocrat’s patents could indeed be patentable subject matter. The Court moved away from older, restrictive tests, instead treating the claimed invention as a whole. They focused on whether the combination of software and hardware produced an "artificial state of affairs" with a useful result.

The Commissioner of Patents sought special leave to appeal this ruling to the High Court, aiming to challenge the Full Court's adopted test.

High Court refuses special leave:
In a short, unanimous disposition, the High Court refused special leave. The Court did not provide lengthy reasoning, but made clear that:

• The Full Court’s decision had applied well-established legal principles to the question of characterisation under section 18(1A)(a) of the Patents Act 1990.
• There was no sufficient reason to doubt the correctness of that decision.
• Granting special leave was not in the interests of the administration of justice.

In essence, the High Court endorsed the Full Court’s approach and confirmed that there was no compelling reason to revisit it at this stage.

What This Means for Patent Law in Australia
The refusal of special leave leaves the Full Court’s reasoning as binding authority. Its implications are significant.

• Holistic assessment of claims: The correct approach is to assess the invention as claimed in its entirety. Courts and examiners should not isolate an alleged abstract idea and then ask whether the remaining computer elements are inventive or novel. The focus is on the overall character of the claimed combination.
• No obligation to show an advance in computer technology: There is no standalone requirement that a computer-implemented invention must improve computer technology itself. An invention may be patentable even if it uses known or generic computing technology, provided the integrated combination produces a useful, artificially created state of affairs.

What This Means for Innovators
This outcome may prompt meaningful shifts in practice and strategy.

• IP Australia Practice Changes: We expect IP Australia will be required to update its Manual of Practice and Procedure to align with this ruling, likely resulting in a more permissive examination environment for software.
• Reviving Portfolios: Applicants should review applications that were previously stalled, rejected, or narrowed under the Commissioner’s old "advance in computer technology" test. These may now be viable.
• Drafting Strategy: The decision highlights the need to draft claims that present the invention as an integrated technological solution. Specifications should clearly explain how the components work together and the practical result achieved. The focus should be on the overall system and its functional outcome, rather than isolating software features or framing the invention as a hardware improvement.

Conclusion
The High Court’s refusal to intervene is a green light for computer-implemented inventions. By allowing the Full Federal Court’s reasoning to stand, the judiciary has confirmed that patent eligibility must be assessed by reference to the practical substance of the claimed invention as a whole. For the technology and gaming sectors, the pathway to patent protection in Australia is now clearer and more stable than it has been in years.

 

NZ Government Signals Changes to Plant Variety Rights Legislation
The New Zealand Government has announced applicant friendly changes to the Plant Variety Rights (PVR) Act will be set in motion when an amendment Bill is introduced to parliament later this year – presumably before the general election in early November.

The changes seek to improve confidence and certainty for plant breeders and importers operating in New Zealand by better incentivizing them to make the time, cost and risk commitments involved in developing and introducing new plant varieties.

The announced changes include:

• extending the maximum term of plant variety rights by five years for both existing and new rights. For woody plants or its root stock or a potato, this will extend the maximum term from 25 years after the PVR was granted to 30-years; while the maximum term for all other PVRs will extend from 20 years after the PVR was granted to 25-years.
• reinstating provisional protection enforcement rights. When the Plant Variety Rights Act 2022 replaced the Plant Variety Rights Act 1987 it removed the applicant’s ability to commence an alleged infringement action between the date of application and the determination of whether a grant will be made. By reinstating such provisional protection, plant breeders will not have to wait the 5 or more years it can take to obtain grant.
• aligning the PVR and patents fee frameworks to support a more sustainable system and help keep fees for PVR users stable over time. At this stage it is not clear whether this means PVR fees will be subsidised by patents fees. In terms of fees framework it is noteworthy that apart from the common elements of application, examination and renewal fees, PVR applicants also have field trial costs.

 

Court Decision Gives Some Respite for Otherwise Strict Section 71 Acceptance Deadline
In AbbVie Inc v The Commissioner of Patents [2026] NZHC 1140 the lack of time in which to hold a hearing after the applicant requested one 2-days before the section 71 deadline was found to constitute a delay due to the Commissioner, thereby making the applicant eligible for an extension of time.

Background:
Section 71 of the Patents Act 2013 has the effect that an application is voided if it is not in order for acceptance within 12-months from the issuance of the first examination report. The section 71 deadline is only extendable in accordance with the following provisions:

• Section 72, which allows an extension if an appeal of an Assistant Commissioner’s (AC’s) decision to the High Court is pending or possible on account of the 20-working day appeal period; or
• Section 230, which allows an extension for delays due to the Commissioner; or
• Regulation 147, which allows an extension where exceptional circumstances apply. This provision was not relevant for the appeal.

In addition to the section 71 deadline, section 67 provides for interim deadlines in which to make a substantive response to each adverse examination report. A 1-month extension of time is available for the interim deadlines, but the section 67 deadlines cannot extend the section 71 deadline. IPONZ generally sets the deadline for the first substantive response as 6-months from the issuance of the first examination report, with subsequent deadlines generally being the longer of the deadline for the first substantive response or 3-months from the issuance of the subsequent examination report.

In this case the first examination report issued on 11th January 2024, creating a section 67 interim deadline of 11th July 2024 and a section 71 deadline of 11th January 2025. The applicant used the 1-month extension of time for the initial and subsequent section 67 deadlines, with the result that their second substantive response was filed on 17th December 2024 – less than a month from the section 71 deadline. The examiner issued a third examination report on 21st January 2025 and, in order to account for the delay in issuing that report, provided an extension of time under section 230 thereby amending the section 71 deadline to 19th February 2025.

However, on 17th February 2025, without filing a substantive response to the third examination report, the applicant requested a hearing. In May 2025 the applicant filed its written submissions for the hearing and additionally filed specification and claim amendments. The AC’s decision issued on 14th August 2025. The AC acknowledged that the amendments would constitute a substantive response to the third examination report, but declined to allow them as they were filed after the section 71 deadline for which the AC found there to be no basis for further extension.

The Appeal:
In its appeal of the AC’s decision the applicant argued both that:

1.  section 72(3) automatically extends the section 71 deadline to 20-working days after the AC’s decision; and
2.  the AC should have granted a further extension under section 230.

The Judge found the applicant’s section 72(3) interpretation to be inconsistent with the plain meaning of the section, its legislative history and the Act’s emphasis on the timely progression of applications. The Judge found section 72 only applies where a decision of the AC has issued before the expiry of the section 71 deadline. While this means there is little flexibility in the section 71 deadline, the Judge noted that if an appeal is pending or is brought, then the court has discretion under section 72(2) to extend the section 71 deadline.

However, the Judge found that the AC should have granted a further extension under section 230. In the context of the wording of the third examination report the Judge found that the applicant was entitled to consider the filing of an appeal as an appropriate response. Notably, at [82] the Judge stated: 

“The third examination report effectively conveyed to AbbVie that the appropriate response was to request a hearing at which any objections would be considered. There was no suggestion in the third examination report that AbbVie should lodge a substantive report before requesting a hearing — unlike the first and second examination reports, the third examination report did not set a date for a response to the objections.”

The Commissioner argued at the hearing that while the third examination report did not stipulate a section 67 deadline for response, it was implicit that the deadline was the section 71 deadline. However, the Judge declined to consider that on the basis that it was a new point which was not raised in written submissions.

From that basis the Judge further found that the inability to conduct the hearing before the expiry of the section 71 deadline was a delay due to the Commissioner for which the AC should have granted an extension of time under section 230. The parties were given 20-working days in which to file a joint memorandum on appropriate relief.

Concluding Remarks
It is not clear that the strictness of the section 71 deadline is required to satisfy the Act’s purposes of providing an efficient and effective patent system or that it is an appropriate criterion for the granting of a patent. The default and strictly interpreted 12-month time frame for the section 71 deadline has undoubtedly resulted in the demise of many applications having patentable subject matter. The Judge’s finding that the inability to conduct the hearing before the expiry of the section 71 deadline is a delay due to the Commissioner will be a welcome clarification of the reach of section 230.

However, the judgment also confirms that section 72 is of little practical value to applicants as it would be rare that within 12-months of the first examination report an impasse is reached, a hearing requested, held and decision issued. Consequently, affected applicants are left relying upon the discretion of High Court Judges under section 72(2).

It will be interesting to see whether the Commissioner appeals this decision. There seems to be grounds for alleging that the Judge erred at [82] in making the above noted findings and later declining to consider the Commissioner’s oral submission regarding the implicitness of the revised section 67 deadline. In making those findings the Judge gave preference to the wording of the examination report over the clear wording of the patent’s legislation which specifies that the section 67 deadlines cannot extend the section 71 deadline and that the applicant must make a substantive response to examination reports.

 

AU Patent Excess Claims Reminder Change
From 1st July 2026 IP Australia will be changing when it sends a reminder prior to examination commencing regarding excess claim fees so that the applicant can consider reducing the amount of claims in order to avoid or reduce their exposure to excess claim fees.

As previously noted from 1st October 2024 IP Australia changed to charging for excess claims based on the number of claims in the application at the time of the first examination report (instead of at acceptance). Applicants are notified approximately 6-months prior to examination occurring, giving them the opportunity to amend the number of claims prior to the first examination report.

However, from 1st July 2026 IP Australia will change to giving the applicant 3-months from when the request for examination is filed in which to consider amending the number of claims. IP Australia will not commence examination during that 3-month period – although there can be exceptions to this where either expedited examination is requested or if a divisional application needs to be examined alongside its parent.

Also, from 1st July 2026 for applications that had examination requested before 1st July 2026 but for which no 6-month reminder has been issued, IP Australia will send a one off correspondence inviting applicants to file any desired amendments within 3 months of the date of that correspondence. Where a 6-month reminder has been issued before 1st July 2026, that 6-month period will still apply.