LAWFUEL – Law News Network – The Full Court of the Federal Court of Australia, recently handed down a decision in relation to the validity of a patent which taught a method of protecting assets through legal arrangements.
Innovation Patent 2003100074, entitled “Asset Protection Method” (the patent), involved a series of transactions, whereby an asset was shielded against creditors. Claim 1 of the patent was in these terms:
‘1. an asset protection method for protecting an asset owned by an owner, the method comprising the steps of:
(a) establishing a trust having a trustee,
(b) the owner making a gift of a sum of money to the trust,
(c) the trustee making a loan of said sum of money from the trust to the owner, and
(d) the trustee securing the loan by taking a charge for said sum of money over the asset.’
Although there have been three unanimous determinations against the patentability of the alleged invention, they have been for essentially different reasons.
All decision makers referred to the test of the High Court in National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252 (NRDC). In NRDC the High Court considered a method of killing weeds in crops by applying chemicals, not formerly known to be useful for such a of purpose. At 277 the High Court stated:
‘… the method the subject of the relevant claims has as its end result an artificial effect falling squarely within the true concept of what must be produced by a process if it is to be held patentable … It is a “product” because it consists in an artificially created state of
affairs, discernible by observing over a period the growth of weeds and crops respectively on sown land on which the method has been put into practice. And the significance of the product is
economic; for it provides a remarkable advantage … for one of the most elemental activities by which man has served his material needs, the cultivation of the soil for the production of its fruits.’ (Emphasis mine)
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