Night and Day in the Decision. And the Story Continues?
As we reported here recently, the High Court of Australia handed down its eagerly awaited decision in Aristocrat Technologies Australia Pty Limited v. Commissioner of Patents [S40/2022] on 17 August.
The case concerned the patentability of an electronic gaming machine (EGM) defined in the patent as comprising a range of hardware components and operational or functional features carried out by a controller of the EGM relating to the provision of a ‘feature game’ in addition to a ‘base game’. The Appellant manufactures EGMs and owns a number of innovation patents relating to various examples of EGMs. The specification of one patent, which was deemed sufficiently similar to the others for the purpose of analysis, defined the EGM as comprising a player interface with a range of hardware features and a game controller configured to carry out functions or operations via the player interface to implement a feature game in interaction with the base game in a particular way. Both the player interface and the game controller included elements that were part of the common general knowledge. The controller was configured to trigger the feature game from the base game using configurable symbols, and these elements of the game controller were not part of the common general knowledge.
Following examination of the innovation patents by the Australian Patent Office, the Commissioner of Patents revoked each of the patents on the ground that none of the claims in any of the patents was considered to define a “manner of manufacture” (i.e., patent-eligible subject matter) under s.18(1A) of the Patents Act 1990. The Appellant successfully appealed the revocation to the Federal Court of Australia. The primary judge found that the claimed invention was not a mere scheme and was therefore patent-eligible subject matter. The Full Court of the Federal Court allowed an appeal by the Commissioner, however, with a majority of that Court holding that, while the claimed invention was computer-implemented, it did not constitute an advance in computer technology and was therefore not patent-eligible subject matter.
In March 2022 the High Court of Australia granted special leave to Aristocrat Technologies Australia Pty Limited to appeal the Full Court’s decision and set down the matter to be heard before a full bench of seven Justices. After one of the Justices became unavailable due to illness, the High Court heard the case on 9th and 10th June 2022 before only six Justices. The Institute of Patent and Trade Mark Attorneys of Australia (IPTA) and FICPI Australia (the Fédération Internationale des Conseils en Propriété Intellectuelle) both intervened in the appeal as ‘amicus curiae’ in support of the Appellant.
Regrettably, the result in this case was a High Court evenly divided 3:3 in its reasoning. Three of the Justices (Kiefel CJ, Gageler and Keane JJ) would have dismissed the appeal. Three of the Justices (Gordon, Edelman and Steward JJ) would have allowed the appeal. Interestingly, the disparity in the approaches and conclusions of the two groups of Justices in this case could be described as “night and day”, a description that some may also consider appropriate for the relative degree of light and perspective that the two judgements provide to this area of patent law for 21st century innovation in Australia.
Some Notional Agreement but Contrasting Approaches
Even on the issue where there was notional agreement between the two groups of Justices regarding a ‘threshold requirement’ for presence of a “manner of manufacture” under s.18(1) or s.18(1A) of the Patents Act 1990, there was still a contrast in approach. In discussing the ball-point pen analogy used by the Full Court of the Federal Court in the case CCOM Pty Ltd v Jiejing Pty Ltd (1994) 51 FCR 260, the three Justices who would have dismissed the appeal (here called “the Kiefel group”) arrived at the rather surprising conclusion in [72] that:
The ball point pen would not, now or at the time CCOM was decided, have met the threshold requirement of s 18 that it be an invention because it is not, and was not then, new.
This conclusion appears to have been based on the idea that a combination of features that was known, or at least ‘commonly known’, in the relevant field cannot pass the ‘threshold requirement’ for patent-eligible subject matter.
By contrast, the three Justices who would have allowed the appeal (here called “the Gordon group”), noted in [111] that:
…. the threshold necessarily imposes a less stringent requirement than the independent requirements of novelty and inventiveness in ss 18(1)(b)(i) and 18(1)(b)(ii) read with s 7. Like those provisions, the threshold should not be assessed in hindsight: “[t]he opening of a safe is easy when the combination has been already provided”. And, when assessing this threshold question without the benefit of expert evidence as to prior art, it is important to “remember warnings” that “[the] Court should be careful to avoid assuming a technical expertise it does not have”.
quoting from the decisions Minnesota Mining and Manufacturing Co v Beiersdorf (Australia) Ltd (1980) 144 CLR 253 at 293 and Bristol-Myers Squibb Co v F H Faulding & Co Ltd (2000) 97 FCR 524 at 541 [44].
The Gordon group seems to have appreciated that making a basic threshold assessment of the legal question of “manner of manufacture” dependent on an assessment of newness or even on the common general knowledge of a person skilled in a particular field (or ‘art’) may be a fraught and difficult path for the Courts.
How the Claimed Invention Is Characterised
The Justices of the High Court established early on the first day of the hearing in this case that the matter would essentially turn on how the claimed invention was characterised.
The Commissioner of Patents had argued that, in construing the “substance of the invention”, it was appropriate to exclude the known hardware features of a claim and to focus solely on the operations or functions carried out by the controller of the EGM, and further, that these operations or functions in the EGM amounted to no more than the “rules of a game”.
Despite the fact that the specification did not elaborate on the details of the ‘feature game’ (i.e., no rules were provided), but rather noted that a range of different feature games could be used and interacted with correspondingly, the Kiefel group followed the Commissioner’s approach, focusing on the notion of the “rules of a game” and adopting a characterisation of the invention in [73] as simply “a new system or method of gaming: it is only in relation to the feature game that the invention is claimed to subsist”. In adopting the approach of the Commissioner, the Kiefel group states at [73]:
The claimed invention takes its character, as an invention, from those elements of the claim which are not common general knowledge. If that were not so, every EGM conforming to the generic physical and hardware components, including computer components, described in the claim would be patentable simply because it, like every other EGM, allowed a new game to be played. And the only thing differentiating each new claimed invention, as an invention, would be that unpatentable game.
This kind of narrow and constrained approach to considering the invention was viewed with considerable scepticism by the Gordon group, however, who collectively noted in [102] that the characterisation of the claim requires consideration of all of the integers of the claim in light of the relevant facts and matters in the specification and warned in [104] that:
The risk of artificially characterising a claim is particularly pronounced where the claim contains interdependent integers. Unless a claim asserts a monopoly “in any integer by itself”, it is “only necessary that each integer form part of a full description of the invention”. As will be explained below, the claim which is the subject of this appeal did not assert a monopoly in any single integer; the claim relied upon the full description of the alleged invention. In Minnesota Mining and Manufacturing Co v Beiersdorf (Australia) Ltd149, Aickin J referred to such a circumstance as a “combination patent” where:
“it combines a number of elements which interact with each other to produce a new result or product. Such a combination may be one constituted by integers each of which is old, or by integers some of which are new, the interaction being the essential requirement.”
The Gordon group observed that, while it is well-established that a “mere scheme or plan”, or any other merely intellectual endeavour, cannot be the subject matter of a patent, it is equally well-established that one way in which a “mere method” will become a manner of manufacture is when it is practised or used in a way that is embodied in a physical form. This reasoning applies equally where the idea consists of the rules of a game. Although the rules of a game per se are not proper subject matter of a patent, they may be proper subject matter when combined with physical materials used for playing the game. It is not enough that a gaming scheme or game rules involve/s the use of a machine to manipulate abstract ideas. Where there is some change in state or information in a machine, then that change must produce an artificial state of affairs and a useful result. An idea that uses a computer, but does not generate some artificial state of affairs, remains no more than an idea.
In considering claim 1 of the Appellant’s patent, the Gordon group found in [137] that two important elements of the claim, as described in the specification, are the configurable symbols and the feature games, which are part of the game controller. There was expert evidence before the primary judge that the configurable symbols, particularly the prize values overlaid on them, are a significant enhancement of a player’s experience. Both the configurable symbols and the feature games require implementation in the EGM. In the operation of the EGM, they interact with, and are entirely dependent upon, other integers of the claim, especially the physical integers. As such, they are inextricably connected with the player interface. Hence, a characterisation at the level of specificity proposed by the Commissioner entirely ignores other elements of the game controller and the whole of the player interface, which is interdependent with the game controller. The claimed operation of the game controller, displayed through the player interface, is an altered EGM involving an artificial state of affairs and a useful result amounting to a manner of manufacture.
Noting in [96] that the Commissioner had already accepted that, if the relevant claim had involved a mechanical implementation “using cogs, physical reels and motors to create the gameplay” then there would have been no doubt that the relevant claim was a manner of manufacture, the Gordon group pithily observed in [97]:
In the 21st century, a law such as s.18(1A) of the Patents Act that is designed to encourage invention and innovation should not lead to a different conclusion where physical cogs, reels, and motors are replaced by complex software and hardware that generate digital images. Throughout this litigation, the Commissioner attempted to avoid such a curious result by re-characterising Aristocrat’s claim as a mere scheme or abstract idea. The Commissioner could only achieve that characterisation by filleting from the claim essential and interdependent integers providing for the implementation of the game on the EGM. The integers stripped from the Commissioner’s characterisation included components as basic as the display component of the player interface on which the images of symbols generated by the software and hardware appeared.
The judgement of the Gordon group in this case appears to achieve a fine harmony between the law of “manner of manufacture” in Australia and a nuanced and practical understanding of innovation in the 21st century and the computer-controlled functionality it often involves.
Because the High Court was equally divided in opinion in this case, however, s.23(2)(a) of the Judiciary Act 1903 (Cth) required that the decision appealed from be affirmed. As a result, the appeal by Aristocrat Technologies Australia Pty Limited was dismissed and the two conflicting judgements in this case will not form binding precedent on the lower Courts.
For most observers, this split decision was disappointing. While it provides some rays of light in relation to a vexed issue for Australia’s Courts, it has still failed to deliver the much-needed legal clarity on the patentability of so-called computer-implemented inventions (CIIs). For the time being, therefore, it appears that the examination practice of the Australian Patent Office for CIIs will remain largely unchanged.
Interestingly, it appears that this case will continue. It is understood that the matter is to be re-listed before the primary judge of the Federal Court of Australia to reconsider the balance of the claims in dispute. So, it appears that the above issues may need to be re-examined for the other patent claims and the matter could, at least potentially, find its way back to the High Court at some stage in the future. This would be particularly interesting given that two of the Justices in the Kiefel group will soon retire.
The Engineering and Information Technologies Group at Wrays helps innovators and market-leaders protect their innovations in this technology field.