Gift and loan arrangements – patently** not patentable

Following on from posts over the last few weeks concerning gift and loan back arrangements, a question has been raised as to whether the arrangement is proprietary or exclusive to any law firm.

In a word, the answer is: no.

The key case in this regard is Grant v Commissioner of Patents - [2006] FCAFC 120.

In this case the court considered the patentability of the following steps in relation to an asset protection method for protecting an asset owned by an owner, namely:

1. establishing a trust;
2. the owner making a gift of a sum of money to the trust;
3. the trustee making a loan of said sum of money from the trust to the owner; and
4. the trustee securing the loan by taking a charge for said sum of money over the asset.’

In other words a gift and loan back arrangement.

The court confirmed there was no novelty in the steps. Rather they were best described as a business system or method.

In concluding the approach was not patentable the court confirmed as follows:

“It has long been accepted that "intellectual information", a mathematical algorithm, mere working directions and a scheme without effect are not patentable. This claim is "intellectual information", mere working directions and a scheme. It is necessary that there be some "useful product", some physical phenomenon or effect resulting from the working of a method for it to be properly the subject of letters patent. That is missing in this case.”

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** for the trainspotters, the title today is riffed from a line in The Talking Heads song ‘Mr Jones’.

View a seriously bizarre music video here: