Stalemate in the High Court: an even split on computer-implemented inventions

The question whether computer-implemented inventions are patentable subject matter has perplexed the IP community and the courts in Australia (and other countries) for some time.

It is difficult to draw a line between what is patentable and what is not. The Australian Patent Office has had a fairly consistent approach requiring that there be an application of technology.

However, this appears to oversimplify the matter and leaves a lot of challenges in predicting the outcome of particular patent applications.

Patent attorneys and lawyers were looking forward to some clarification of the law by a recent High Court decision, but have unfortunately been left disappointed. The Patent Office has subsequently made it clear that it will simply continue to apply the test it has been observing in recent times.

Aristocrat v Commissioner of Patents

In Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents [2022] HCA 29 (Aristocrat), only six judges sat on the appeal from the Full Federal Court with Justice Gleeson being ill and unable to attend the hearing.

Kiefel CJ, Gageler and Keane JJ found Aristocrat’s claimed invention unpatentable, whereas Gordon, Edelman and Steward JJ found it patent eligible. With an even 3:3 split in the High Court, “the decision appealed from shall be affirmed” pursuant to s23(2)(a) of the Judiciary Act 1903. In other words, the invention at issue was held not patentable, as that, was the finding in the Full Federal Court.

Aristocrat (the appellant) is a company that manufactures electronic gaming machines (EGMs), and owns the four innovation patents concerned. Innovation patents have since been abolished, but the granted ones remain valid for their term unless found otherwise in a court of law. The patent in dispute was entitled “A system and method for providing a feature game”. The Commissioner (the respondent) rejected the patents on the basis that the claim was not for a manner of manufacture pursuant to s18(1A)(a) of the Patent Act.

The single question on appeal was whether the claim by Aristocrat concerned patentable subject matter within s 6 of the Statute of Monopolies as required by s18(1A)(a) of the Patents Act. The argument the Commissioner used to support the rejection of the application was that the invention “was properly characterised as being for a set of rules for playing a game, implemented using conventional computer technology”.

What was the invention claimed? – a tricky question

EGMs are computer-operated gaming machines, which consist of five reels of symbols being displayed in a matrix following a spin. A player starts a game by inserting money and selecting the value of a bet. Whether the player wins depends on the amount wagered and what symbols appear on the win line when the reels stop spinning.

The actual claim at issue is related to an EGM comprising a number of known elements, but additionally a game controller that executes game program code so as to trigger, conduct and complete a ‘feature game’ (an additional or bonus game) by a certain configuration of the symbols appearing on the game display of the EGM while the main game is played.

The Full Federal Court overturned the trial decision of Burley J, finding that the claimed invention did not satisfy the ‘manner of manufacture’ requirement. The majority (Middleton and Perram JJ) proposed two questions to be asked in determining patentability:

• Is the invention claimed a computer-implemented invention?
• If so, can the invention claimed broadly be described as an advance in computer technology?

If the invention is computer-implemented, but the answer to (2) is no, then the invention is not patentable subject matter. The majority applied these two tests and found that the feature game could not be a patentable subject matter when considered on its own, and there was therefore no advance in computer technology.

Unpatentable game: Kiefel CJ, Gageler and Keane JJs

Kiefel CJ, Gageler and Keane JJs confirmed that the Full Court came to the right conclusion that the subject matter of Aristocrat’s claim is not patentable. Aristocrat’s claim did not amount to any adaptation or alteration of well-established technology. The integers of the claim failed to address “the exigencies of the physical presentation of the operation of the game devised by Aristocrat”.

Their Honours distinguished what was claimed here from the claim in CCOM Pty Ltd v Jiejing Pty Ltd (1994) 51 FCR 260, as here there was no component affected nor was there a change in the state or information in a part of a machine [1]. In other words, the three Judges concluded that the claimed EGM invention was drawn to nothing more than an unpatentable game.

Patentable technology: Gordon, Edelman and Steward JJs

Gordon, Edelman and Steward JJ came to the opposite conclusion. Their Honours affirmed that a mere scheme cannot be patented but emphasised that although the rules of a game on their own are not proper subject matter, they can be patentable when combined with physical materials used for playing the game. In other words, the questions were:

• whether the subject matter is an abstract idea which is manipulated on a computer; or
• (ii) an abstract idea which is implemented on a computer to produce an artificial state of affairs and a useful result.

The artificial state of affairs was here sufficiently created by “the way in which the method is carried out in the computer”. The “implementation of a scheme or idea on a computer to create an artificial digital state of affairs should not be treated any differently from the implementation of a scheme or idea by any other machine to create an artificial physical state of affairs”.

Their Honours found that if exclusively focusing on the general EGM integers, it was obvious that the proposed invention was merely a “gaming machine” which was unpatentable. However, such an approach would ignore the further integers, which contained the core features of the invention that were not part of common general knowledge; that is, the triggering of the special game feature. The relevant claim was not a mere scheme or idea for a game. The claimed operation of the game controller, displayed through the player interface, was an altered EGM involving an artificial state of affairs and a useful result amounting to a manner of manufacture.

What now?

Unfortunately, the High Court decision failed to provide any real guidance for the Commissioner of Patents, attorneys, lawyers and technology developers.  IP Australia has simply stated in their blog dated 18 August 2022 that:

“the Commissioner’s practice will remain to consider that a claim invention will not satisfy the requirements for manner of manufacture in accordance with s18(1)(a) or s18(1A) (a) of the Patents Act 1990 if it is merely directed to the implementation of an otherwise unpatentable idea in conventional and well-understood computer technology.”

For the examiners in the Patent Office, nothing much has changed after the series of decisions in Aristocrat. Arguably, to create some clarity going forward, legislative amendments should be introduced to clarify Australian patent law on this point, and draw a clearer line between patentable and unpatentable digital inventions. In terms of precedent, the decision of the HCA provides no new law, so the Full Federal Court’s majority reasoning remains.

If you need advice on patents or have questions about how the High Court’s decision could affect you and your business, please contact a member of Thomson Geer’s Intellectual Property Team.

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