Legal development

Does the house always win Full Federal Court finds feature games not patentable

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    What you need to know

    • The Full Federal Court has held that a system for providing "feature games" in electronic gaming machines is not patentable subject matter.
    • The Full Federal Court determined that an electronic gaming machine is, in effect, a computer.  Therefore, the strict approach in assessing the patentability of computer-implemented inventions which has been developed in the case law in the past few years was applied.

    What you need to do

    • Inventors seeking patent protection for an invention implemented using any computer (even if it is purpose built) must ensure that their invention represents more than an abstract idea or a business method. 
    • It is important for any invention which utilises a computer to demonstrate an improvement or change in the functional capability of that computer in order to satisfy the patentable subject matter requirement. 

    Aristocrat's invention

    Aristocrat Technologies Australia Pty Ltd, a manufacturer of electronic gaming machines, filed four innovation patents for systems and methods for providing "feature games" through electronic gaming machines (EGMs). 

    EGMs are typically available at licensed venues such as casinos and clubs.  EGMs generally display five "reels" of symbols on a screen.  These reels rotate in a vertical fashion and cease rotating at random positions.  EGMs include buttons for user interaction, a credit input mechanic (for payment in cash or by card) and speakers to play music, sound effects and announcements. 

    Aristocrat's patents claimed a system and method for providing bonus, or "feature", games.  These feature games were enlivened upon a trigger event.  The feature game utilised a second set of reels which include configurable symbols (for example, the preferred embodiments had pearls as the configured symbols).  Where a configurable symbol appeared during the feature game, it remained locked in place for all subsequent feature games.  At the conclusion of the feature games (the number of which varied) the player obtained a prize based on the number of configurable symbols which were locked in place.

    The delegate of the Commissioner of Patents objected to the patents during examination on the basis that each of the relevant patents did not satisfy the manner of manufacture test.  In particular, the claims were for a mere scheme or abstract idea and were therefore not patentable.

    The decision below

    Aristocrat appealed the decision of the Commissioner to the Federal Court.  At first instance, Justice Burley allowed the appeal.  

    Justice Burley concluded that the subject matter of the claims was patentable.  In doing so, the primary judge asked two questions: 

    1. was the claim was for a mere business scheme; and 
    2. if so, whether the invention lay in the manner in which it had been implemented in the computer. 

    Justice Burley concluded that the invention was not a business scheme.  Rather, the claims were for a purpose-built EGM which contained both hardware and software elements.  Therefore, his Honour concluded that the invention was for more than simply a computer and, consistent with past case law in relation to patentability of gaming machines, the invention was patentable. 

    The appeal

    The Full Federal Court (Middleton and Perram JJ, with Nicholas J agreeing in a separate judgment) held that the two step approach adopted by the primary judge led to error. 

    The Full Court found that the primary judge had failed to consider whether the invention was a computer-implemented invention.  Although the Full Court accepted that the answer to this question may be obvious in many cases, it noted that consideration of this threshold question is an important component of the analysis.  Accordingly, the Full Court offered an alternative two step approach:

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

    The Full Court answered the first question in the affirmative.  The Full Court concluded that the EGM functions as a computer.  The EGM operates by executing code and includes input and output devices consistent with a typical computer.  The fact that the EGM was purpose built and could only be used for gaming was irrelevant.

    The Full Court then went on to consider whether the invention constituted an advance in computer technology and concluded that it did not.  The Full Court noted that the invention the subject of the claim left the programming of the feature games entirely to the designer of the EGM.  Further, the claim was silent on how computer technology ought to be used to implement the feature games.  The Full Court therefore determined that there was no advance or improvement in computer technology; rather, the invention was simply an idea or rules for a game. 

    While the Full Court accepted that the invention resulted in improvement in player engagement and satisfaction, this was not sufficient because an advancement in computer technology is an essential element for patentability of a computer-implemented invention.  

    In reaching this conclusion, the Full Court elected not to follow previous cases which had found EGMs patentable. 

    Notwithstanding their conclusions, the Full Court noted that an EGM may nonetheless be the subject of patent protection where there was an improvement in computer technology.  On this basis, the Full Court allowed the appeal but otherwise remitted the matter back to the primary judge to consider issues raised by Aristocrat on its notice of contention.  In particular, Aristocrat argued that the invention did, in fact, solve technical problems and made functional improvements to the operation of EGMs.  The Full Court did not have the necessary evidence before them to resolve this issue so this argument will now be considered by the primary judge.

    What happens next?

    This judgment of the Full Federal Court is yet another contribution to the growing body of case law which considers computer-implemented inventions critically.  It will be interesting to see if Aristocrat is able to establish that its feature game invention does solve technical problems and make functional improvements to the EGM.  We will be sure to update you once a decision has been made.

    Authors: Nina Fitzgerald, Partner; and Leon Warren, Lawyer.
    The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
    Readers should take legal advice before applying it to specific issues or transactions.

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