Australia’s data centre boom: why tech companies should consider software patenting

What has drawn far less attention, however, is that Australia has simultaneously become a more attractive jurisdiction for protecting the software that operates within, optimises and scales on top of this infrastructure — at a time when that software is increasingly being designed, deployed and trained locally.

For technology companies building AI‑driven and data‑intensive systems in Australia, recent developments in Australian patent law mean it is no longer just a place to deploy compute — it is increasingly a place to secure meaningful patent protection for computer‑implemented inventions.

Infrastructure attracts innovation — and software follows

Modern data centres are not merely real estate or power assets. They are integral to the software value chain, enabling:

• large‑scale AI training and inference
• cloud‑native platforms and services
• data optimisation and analytics tools
• cybersecurity, resilience and redundancy systems
• energy, cooling and water‑efficiency software

As infrastructure density increases, software development increasingly follows — particularly system‑level software that interacts directly with performance, reliability and resource management of digital infrastructure.

For tech companies developing these technologies in or for Australia, IP protection for software innovation becomes strategically important.

A turning point for software patents in Australia

Until recently, many technology companies viewed Australia as a difficult jurisdiction for software patents, particularly following a period of restrictive examination practice around computer‑implemented inventions (CIIs). That landscape has now materially shifted.

Earlier this year, the High Court declined to grant special leave to appeal the Full Federal Court’s decision in Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents [2025] FCAFC 131. As a result, the Full Court’s broader and more flexible approach to assessing CII-related subject matter eligibility now stands (further commentary on that decision can be found here).

Significantly, the Australian Patent Office responded last month by issuing updated examination guidance for computer‑implemented inventions, aligning examination practice with this broader approach.

Key developments in Patent Office practice

The Patent Office’s updated guidance confirms several points of particular relevance to software and AI companies:

• Abstract ideas implemented on a computer may be patent‑eligible where they result in an artificial state of affairs and a useful result.
• Use of conventional computing technology does not, by itself, render an invention unpatentable, even where standard processors, networks or storage are employed.
• Examiners are now guided by a revised decision‑making framework requiring characterisation of the invention in light of the specification as a whole, and taking into account all integers of the claim

This represents a marked departure from the narrow approach seen over recent years. Notably, we are already seeing applications proceed to acceptance that had previously faced persistent “manner of manufacture” objections.

Why this matters for tech companies

For technology companies expanding AI and cloud infrastructure into Australia, these developments intersect in an important way.

Australia is increasingly becoming:

• a place where AI systems are trained, fine‑tuned and deployed,
• a place where infrastructure‑specific and system‑level software is developed and optimised, and
• a place where those locally deployed software inventions can be more reliably protected by patent.

Taken together, these factors point to a clear strategic alignment between where compute is located and where software innovation should be protected. In an environment where software patent eligibility remains dynamic and uncertain in other jurisdictions, Australia now offers a comparatively stable and pragmatic framework for protecting computer‑implemented inventions — particularly those tied to real‑world systems, performance outcomes and infrastructure optimisation.

This makes Australia well suited to act not just as an “extra filing”, but as a strategic jurisdiction within a global patent portfolio.

Strategic takeaway

As Big Tech expands AI and cloud infrastructure into Australia, it should also consider Australia as a strategic jurisdiction for patenting software — particularly where critical systems are deployed locally and eligibility rules have now settled in a more permissive direction.

For companies investing in data centres, cloud platforms and AI systems, aligning infrastructure deployment with local IP protection can be an important lever for long‑term value creation, helping to establish a defensible competitive moat around locally deployed technology.

FB Rice continues to advise global technology clients on navigating Australia’s evolving patent landscape and aligning patent strategy with infrastructure and R&D investment in the region.