Australian court rules that an artificial intelligence system can be considered an inventor under patent law

Australian court rules that an artificial intelligence system can be considered an inventor under patent law

In the life sciences industry, artificial intelligence (AI) and machine learning are gradually being utilized for research and drug discovery, including:

  • finding molecular targets (i.e. molecular structures with which certain APIs interact);
  • finding a “hit” or “lead” (e.g.Through automated high-throughput screening, a “hit” can be found, allowing for the identification of candidates for lead structures, which are then examined as a starting point for drug design);
  • drug repurposing;
  • identifying existing drug candidates (including for polypharmacology) by screening existing databases to analyze molecular structures, correlate them with certain properties, and convert them into algorithms;
  • designing new compounds for single targets and polypharmacology by harvesting and integrating information from databases (e.g. molecular pathways, crystal structures, binding affinities, pharmacological targets, disease relevance, chemical properties, and biological activities);
  • the development of vaccines (including via gene sequencing, and simulations of vaccines to assess likely efficacy);
  • determining the three-dimensional structure of proteins including their folding forms; and
  • for use in clinical trials (e.g. patient selection, disease/condition detection, gene targets and biomarkers identification, molecule effect prediction, and on/off-target effects).

This expeditious apprehension of AI and the machine learning in the life sciences industry has raised concerns about the implications of incorporating such technologies into the inventive process, including the patentability of resulting inventions, in order to protect and reward a company’s investments in new drug candidates, treatment methods, and/or therapeutic uses.

Can an AI system be the inventor for a patent?

According to Thaler v Commissioner of Patents [2021] FCA 879, an AI system can be the named inventor for an Australian patent application, with a person or corporation designated as the applicant for that patent, or as a grantee of the patent.

This is the first court judgment in the world to rule that an AI system can be considered an inventor under patent law. While the Australian patent application has yet to be granted (the Federal Court’s judgment just allows the patent application to be examined), Following an administrative decision by the South African Companies and Intellectual Property Commission, a similar South African patent was granted last week.

These achievements follow the rejections of similar patent applications in the UK, Europe, and the United States that named the AI system DABUS as the inventor. An inventor must be a natural person, according to the UK Intellectual Property Office (UKIPO), the European Patent Office (EPO), and the US Patent and Trademark Office (USPTO). Furthermore, an AI system is incapable of owning property, and hence cannot transfer ownership to a normal person or company (e.g., in an employer-employee relationship), according to rulings made to date in the UK and Europe. The UKIPO ruling was also challenged: an appeal to the UK High Court was dismissed, and a further appeal to the UK Court of Appeal was heard last week.

The Patents Act 1990 (Cth) in Australia does not define an “inventor” (Patents Act). As a result, the term should be renamed to reflect its ordinary meaning. The ordinary meaning of the word “inventor” is not confined to humans and does not preclude AI systems, according to Justice Beach, who also stated that it was critical for the Court to recognize “the evolving nature of patentable inventions and their creators”, including the prospect that human inventions can contribute to even more inventions.

Allowing AI systems to be designated inventors would also be consistent with the Patents Act’s goals of promoting “economic wellbeing through technological innovation and the transfer and dissemination of technology.” Furthermore, refusing to enable AI inventors would result in “inefficiency and logical difficulties,” according to Justice Beach: Either an invention would not be patentable (which could lead to the use of trade secrets to protect the invention, preventing public disclosure in violation of the Patents Act’s goals), or a person who “discovered” the AI system’s output could be credited as an inventor without having participated in the creative process.

Allowing AI systems to be named inventors has the advantages of representing reality and providing assurance (e.g., which human should be named if not the AI system?. Is it the programmer, the owner, the operator, the trainer, or someone else who provides data?).

Who can be granted a patent?

The Commissioner of Patents brought the question of who can be granted a patent under section 15(1) of the Patents Act. However, Justice Beach pointed out that the question before him only involved whether a legitimate application had been filed, which only requires the identification of an inventor.

According to Section 15(1) of the Patents Act, a patent may be granted to:

  • an inventor;
  • a person who would be entitled to have the patent assigned to them on grant of the patent;
  • a person deriving title to the invention from the inventor or the person in (b) above; or
  • the legal representative of a deceased person in (a) to (c) above.

In principle, Justice Beach agreed that Dr. Thaler could be entitled to a patent if the DABUS AI system was named as the inventor under subsection 15(1)(c): title can be derived from the inventor without first vesting in the inventor; Dr. Thaler can derive title by virtue of his possession of the invention, combined with his ownership and control of the DABUS AI system.

Furthermore, Justice Beach believed that because Dr. Thaler is the owner, programmer, and operator of DABUS, he might be entitled to a patent pursuant to subsection 15(1)(b). The following is Justice Beach’s statement:

…in that sense, the invention was made for [Dr. Thaler]. On established principles of property law, he is the owner of the invention. In that respect, the ownership of the work of the artificial intelligence system is analogous to ownership of the progeny of animals or the treatment of fruit or crops produced by the labor and expense of the occupier of the land (Fructus industrial), which are treated as chattels with separate existence to the land.

Justice Beach also pointed out that subsection 15(1)(b) is not limited to the assignment of a patent by a human inventor; in fact, the subsection does not even require the existence of an inventor, so it is unaffected by whether the inventor is human or not, or whether the inventor can or cannot assign a patent.

“If an employee makes an invention that falls within his duty to make, he holds his interest as trustee for the employer,” Justice Beach said, explaining that subsection 15(1)(b) applies to situations where an employer may be granted a patent created by an employee (even in the absence of a contract to that effect) where the employee created the invention in the course of the employee’s duties: “If an employee makes an invention that falls within his duty to make, he holds his interest as trustee for the employer.” Other situations that would warrant a legal or equitable right of the assignment are also included (e.g. third-party misappropriation of an invention).

This judgment by the Australian Federal Court is notable not only because it is the first of its kind anywhere in the world, but also because of the framework that Justice Beach used to interpret the Patents Act. Despite the fact that the case did not directly involve the pharmaceutical industry, Justice Beach went into great detail about the utilization of AI and machine learning in cutting-edge pharmaceutical research.

Given the widespread usage of AI in important industries such as pharmaceuticals, Justice Beach recognized that taking a restricted view of the idea of an inventor would stifle innovation in all fields that could profit from the output of AI systems. As a result, Justice Beach said at the opening of his judgment that “unless the [Patents] Act demands it, outmoded notions of the agent that may invent and the subject matter of a patentable invention are not controlling. And if the concept of ‘invention’ in terms of the manner of manufacture evolves, as it must, why not the concept of ‘inventor’?

While the Commissioner of Patents may appeal the decision in Thaler v Commissioner of Patents [2021] FCA 879, this first-instance decision suggests that AI inventors and the inventions created by those AI systems, will be treated much more favorably under Australian patent law than they have been in many other international jurisdictions to date.




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