In July 2021, Australia was thrust into the spotlight as a favourable country to patent AI-created inventions as a result of the Australian Federal Court’s decision in Thaler v Commissioner of Patents [2021] FCA 879 – see our previous coverage here.

At first instance, the Court construed “inventor” as including “a person or thing that invents”.¹ The decision was an appeal from a Patent Office hearing where the Office rejected a patent application in the name of Stephen L. Thaler as the creator of the “inventor”, AI system (Device for the Autonomous Bootstrapping of Unified Sentience (DABUS)). As DABUS had autonomously generated the invention, for the purposes of the patent application Dr Thaler derived title to the invention from DABUS.

An expanded bench of five judges has now unanimously overturned the first instance court decision. Specifically, in the decision of Commissioner of Patents v Thaler [2022] FCAFC 62, the Court concluded that an AI system such as DABUS cannot be named as an inventor for the purposes of a patent application. In reaching a decision, the Full Court considered the existing tests for establishing whether a person is entitled to be named an inventor,² alongside the language and underlying policy of the Patents Act 1990 and corresponding regulations. Their Honours confirmed the law relating to the entitlement of a person to grant of a patent as being premised upon an invention “arising from the mind of a natural person or persons”.³ A natural reading of section 15(1) of the Act was said to create the requirement for a legal relationship to exist between the actual inventor and the person first entitled to the grant, and “something without a legal identity cannot give effect to an assignment”.⁴

Their Honours affirmed the Commissioner’s submission that Dr Thaler’s persistence in naming DABUS as the inventor had the inevitable consequence that the application lapsed for failing to meet a formalities requirement (i.e. that the application failed to stipulate the name of the inventor).⁵ Inevitably, the Full Court’s decision recognises that the issue of clarifying AI-based inventorship now rests with the Australian legislature, and that consideration of this and other questions concerning AI should be addressed “with some urgency”.⁶

The Full Court’s decision realigns Australia’s position of AI-based inventorship with Europe and the United States – where Dr Thaler’s attempts to name AI system DABUS as an inventor have also been rejected. We nevertheless await news of legislative change or an application by Dr Thaler for special leave to appeal to the High Court.

Harlee Bolger also contributed to this article.

FOOTNOTES

1 Thaler v Commissioner of Patents [2021] FCA 879 at [10].

2 Ibid at [104], citing Polwood Pty Ltd v Foxworth Pty Ltd [2008] FCAFC 9.

3 Ibid at [105].

4 Ibid at [108].

5 Ibid at [117].

6 Ibid at [120].