Legal development

The High Court does not go all in 3 3 split on patentability of feature games

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    What you need to know

    • The High Court was equally split on whether a new form of feature game in an electronic gaming machine was patentable subject matter.
    • According to three members of the High Court, when characterising an invention it is important to consider the common general knowledge to determine what elements of the claimed subject matter are new.  If those new elements are unpatentable (for example, they constitute a game, discovery or scheme), the invention is not patentable subject matter.
    • The Patent Commissioner has confirmed that the decision will not change current practice in the Patent Office.  Inventions which are directed to the implementation of an unpatentable idea in conventional and well-understood computer technology will not be found to be patentable.  

    What you need to do

    • The patentability of computer-implemented inventions will continue to be challenging and claims will need to be carefully crafted to seek to overcome the hurdles.
    • If your invention is computer-implemented, it will be important to demonstrate that there has been some change or development in the computer technology after implementation of the claimed invention.

    This case has a long history starting in 2015 when Aristocrat Technologies Australia Pty Ltd (Aristocrat), a manufacturer of electronic gaming machines (EGMs), filed four innovation patents for systems and methods for providing feature games through EGMs.  

    The Commissioner of Patents denied the patent applications on the basis that the claims did not satisfy the patentable subject matter test.  Aristocrat appealed the Commissioner's decision to the Federal Court.  The primary judge disagreed with the Commissioner and concluded that the subject matter of the claims was patentable.  

    The Commissioner appealed this first instance decision to the Full Federal Court. The Full Federal Court unanimously found for the Commissioner and concluded that the subject matter of the claims was not patentable.  In doing so, the majority applied a two-step test, considering whether the claimed invention: 

    1. was a computer-implemented invention; and 
    2. if so, whether the claimed invention constituted an advance in computer technology.  

    The majority concluded that the claimed invention was a computer-implemented invention as the EGM functioned as a computer.  However, the claimed invention did not constitute an advance in computer technology, being simply an idea or rules for a game.  It was therefore ineligible for patent protection.  For further detail on the Full Court decision, see our previous article here.  

    Aristocrat appealed the decision to the High Court bringing hope to practitioners that this case might result in a clear statement of principle from the High Court in relation to the patentability of computer-implemented inventions.

    However, when the judgment came down on 17 August 2022 the High Court was split 3:3 on whether the subject matter of the claims was patentable. Kiefel CJ, Gageler and Keane JJ (Dismissing Plurality) dismissed the appeal and Gordon, Edelman, and Steward JJ (Allowing Plurality) would have allowed the appeal.  As a result of the split, the Full Federal Court decision is affirmed.  There are no other appeal avenues.

    The absence of a majority means that the reasoning of both pluralities will need to be considered going forward.  

    The Dismissing Plurality

    The Dismissing Plurality emphasised the importance of first characterising the invention by reference to the specification, the substance of the claim and the common general knowledge.  As a result, this decision makes clear that common general knowledge is not only relevant to novelty or obviousness but is also necessary to determine patentability.  

    Adopting this approach, the claimed invention is identified by the elements of the claim which do not form part of the common general knowledge.  In this case, the feature that distinguished the claimed invention from the common general knowledge was the new feature game.  The Court concluded that it is well established that a game is not patentable subject matter and there was no adaption, alteration or addition to technology which could render the game patentable.  On this basis, the Dismissing Plurality dismissed the appeal.

    Interestingly, the Dismissing Plurality did not agree that the two step test propounded by the majority of the Full Federal Court was necessary or helpful.  Rather, the Court concluded that the invention should be characterised so as to decide whether the unpatentable element involves some adaptation, alteration or addition to technology to accommodate the particular element.  The absence of any such adaptation, alteration or addition to technology is fatal to the application.  

    The Allowing Plurality

    The Allowing Plurality adopted a different approach.  Instead of focusing on individual features, the Allowing Plurality proposed a holistic approach including all integers of the claim and all matters forming part of the idea, as well as the implementation.  The Allowing Plurality concluded the claim was to "an EGM incorporating an interdependent player interface and a game controller which includes feature games and configurable symbols".

    To determine whether the characterised invention satisfied the patentable subject matter requirements, the Allowing Plurality rejected the requirement that there must be an improvement in computer technology.  Rather, the Allowing Plurality drew a distinction between an abstract idea manipulated on a computer (which is not patentable) and an abstract idea which is implemented on a computer to produce an artificial state of affairs and a useful result (which is patentable).  In this case, the Allowing Plurality concluded that the operation of the EGM as altered by the feature game created an artificial state of affairs and a useful result. 

    What happens next?

    The split High Court demonstrates the difficulties of determining patentability of computer-implemented inventions.  There are now two different approaches proposed by the High Court and it is not clear which will be adopted going forward.  

    While the profession grapples with trying to determine whether this will affect their current practice, IP Australia has stated that the Commissioner will continue with its current approach.  In particular, inventions will fail the manner of manufacture requirements if they are "merely directed to implementation of an otherwise unpatentable idea in conventional and well-understood computer technology" (See IP Australia's announcement here). Therefore, this judgment is unlikely to have an immediate effect on the day-to-day practice of patent attorneys and the Patent Office. 

    However, the challenges presented by the High Court's approach are likely to result in increased calls for law reform in this area.  We will keep you updated as developments in this space progress!  

    Authors: Nina Fitzgerald, Partner and Huiling Mah, Graduate.

    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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