Aristocrat hits the jackpot in Federal Court ruling

In the recent decision in Aristocrat Technologies Australia Pty Limited v Commissioner of Patents [2020] FCA 778 (Aristocrat Case), the Federal Court had to consider whether a claim in four (4) innovation patents directed to an electronic gaming machine (EGM), having a combination of physical parts and computer software for gameplay, was a manner of manufacture. The Federal Court ultimately found that the delegate of the Commissioner of Patents (Delegate) had erred in deciding that the claims were not a manner of manufacture.

Background to patents in question

Aristocrat Technologies Australia Pty Ltd ACN 001 660 715 (Aristocrat) is one of the largest gaming services providers in the world and a manufacturer of EGMs. Accordingly, Aristocrat owns a large number of patents relating to EGM’s.

In 2018, four (4) of Aristocrat’s innovation patents were subject to examination by the Delegate. It found that the claims related to games and game rules, and therefore considered the inventions to be a mere ‘scheme’. In relation to this, the delegate said that the substance of the invention is a:

“game characterised by the rules which enable particular symbol[s] to be selected and retained for future games, while non-selected symbols are randomly changed in future games. However, a game per se is a scheme or abstract idea and is not patentable subject matter”.

The delegate then rejected Aristocrat’s argument that, in the event the claims were found to be to a mere scheme, the claimed inventions did offer a “technical contribution”, a “technical effect”, solution to a “technical problem” or an “improvement in computer technology”.

Ultimately the delegate ruled that the claims were not a manner of manufacture. Aristocrat appealed the decision, with the central question for the Federal Court being whether an EGM with a combination of physical parts and computer software is a manner of manufacture, within the meaning of section 18(1)(a) of the Patents Act 1990 (Cth).

The threshold test

The case law has established a two-step approach to assessing patent eligibility of computer-implemented inventions.[1] Justice Burley in the Aristocrat Case explained that this process:

“…involves an initial question of whether the claimed invention is for a mere scheme or business method of the type that is not the proper subject matter of a grant of letters patent. Once that question is answered in the affirmative, the subsequent inquiry becomes whether the computer-implemented method is one where invention lay in the computerisation of the method, or whether the language of the claim involves (to use the language employed in Rokt at [84]) “merely plugging an unpatentable scheme into a computer”.

Unlike the Delegate, His Honour said that the first limb was satisfied and therefore there needed to be no consideration of the second limb. His Honour went on to disagree with the approach taken by the Delegate to the characterisation of the invention, as they first identify the ‘inventive concept’ and then utilise that concept to conclude that the invention is a mere scheme. With respect to this, Justice Burley said this “puts the cart before the horse”.

The Federal Court’s findings

With respect to manner of manufacture, the Court said the Delegate had prematurely disregarded elements of Aristocrat’s invention, and therefore wrongly concluded that it was an “inventive concept” and subsequently a mere scheme.

The Court accepted Aristocrat’s argument that the question of manner of manufacture should not be addressed in isolation, but rather should consider the combination of hardware and software. With respect to this, Justice Burley found that the invention “yields a practical and useful result” and:

“is to a mechanism of a particular construction, the operation of which involves a combination of physical parts and software to produce a particular outcome in the form of an EGM that functions in a particular way.”

The Court also noted that a similar EGM had previously been held to be a manner of manufacture. Citing Nicholas J in the earlier case of Aristocrat Technologies Australia Pty Limited v Konami Australia Pty Limited [2015] FCA 735, Justice Burley said about EGMs generally that they are:

“new and useful gaming machines and new and useful methods of operation producing new and improved results”.

Ultimately the Court found that the claims were in fact a manner of manufacture and therefore constituted patentable subject matter.

Takeaways

The Court may be willing to overrule decisions of the Commissioner of Patents if the applicant has established the invention contains more than a mere scheme. The Aristocrat case provides further guidance to applicants when considering patentability objections to inventions involving software or computer implemented technology.

Links and further references

Legislation

Patents Act 1990 (Cth)

Cases

Aristocrat Technologies Australia Pty Ltd [2016] APO 49

Aristocrat Technologies Australia Pty Limited v Konami Australia Pty Limited [2015] FCA 735

Aristocrat Technologies Australia Pty Limited v Commissioner of Patents [2020] FCA 778

Encompass Corporation Pty Ltd v Infotrack Pty Ltd [2019] FCAFC 161

Commissioner of Patents v Rokt Pte Ltd [2020] FCAFC 86

Further information about intellectual property rights

If you need advice on enforcing your intellectual property rights, contact us for a confidential and obligation-free discussion:

Malcolm Burrows B.Bus.,MBA.,LL.B.,LL.M.,MQLS.
Legal Practice Director
T: +61 7 3221 0013 (preferred)
M: +61 419 726 535
E: mburrows@dundaslawyers.com.au

Disclaimer

This article contains general commentary only. You should not rely on the commentary as legal advice. Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.

[1] Encompass Corporation Pty Ltd v Infotrack Pty Ltd [2019] FCAFC 161; Commissioner of Patents v Rokt Pte Ltd [2020] FCAFC 86.