Key Points
• Computer-implemented inventions continue to be patent eligible subject matter in Australia, subject to some important caveats.
• Characterisation of the “substance” of an invention is not an assessment of the “inventive concept”.
• The role of expert witnesses and common general knowledge is limited to assisting the court to construe terms in the claims and not assessing patent eligibility as a threshold question.
• Using known computer elements for a new use can be distinguished from simply putting a “mere scheme” into an uncharacterised, generic computer implementation.
• Characterisation of the “substance” of an invention is not an assessment of the “inventive concept”.
• The role of expert witnesses and common general knowledge is limited to assisting the court to construe terms in the claims and not assessing patent eligibility as a threshold question.
• Using known computer elements for a new use can be distinguished from simply putting a “mere scheme” into an uncharacterised, generic computer implementation.
The Decision
In Aristocrat Technologies Australia Pty Limited v Commissioner of Patents [2020] FCA 778 (‘Aristocrat’’), Burley J overturned a decision[1] of the Australian Patent Office to revoke a family of innovation patents directed to electronic gaming machines on the ground that the claimed subject matter was not directed to patentable subject matter. In finding that the electronic gaming machines do constitute a “manner of manufacture” and are thus patentable subject matter, Burley J provided further guidance on the correct approach for assessing patent-eligible subject matter, particularly in relation to characterisation of the “substance” of the claimed invention and the roles of prior art and expert evidence in assessing whether a claimed invention fulfils the “manner of manufacture” requirement.
The Aristocrat decision concerns four innovation patents: 2016101967, 2017101097, 2017101098, and 2017101629, each of which belongs to a single patent family relating to electronic gaming machines. During examination by the Australian Patent Office, the Examiner in each case issued an adverse report, asserting that the claimed subject matter did not constitute a “manner of manufacture”. The applicant, Aristocrat Technologies Australia Pty Limited, requested that each of the matters be heard and, noting that the applications are related and that the substance of the objection was the same in each case, requested that the four matters proceed together.
The Commissioner of Patents had posited that the claims were directed to a “mere scheme” in the form of a set of game rules, or a scheme for making money. Burley J ultimately rejected the Commissioner’s position and found that the claims were patent eligible subject matter. In particular, the Court found that the case did not fit the paradigm of an otherwise unpatentable scheme that had been merely “put into” a computer.
In his reasoning, Burley J identified the hardware, firmware, and software components present in the claim (including a display, reels, a credit input mechanism, meters, a game play mechanism, and a game controller) and found that the claimed invention was not directed to a “mere scheme”, but rather to a mechanism or physical device 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 [electronic gaming machine] that functions in a particular way”[2].
Notably, Burley J did not discount those components from his assessment of the substance of the invention, despite those components being identified as forming part of the common general knowledge agreed by both parties[3]. Relevantly, these components were not “generic, unspecified computer” components of the type contemplated by the US Supreme Court in the Alice Corporation[4] decision that was referred to by the Full Court in Research Affiliates[5]. Rather, these components were found to have specific characteristics and, when combined, produced “a device of a specific character”.[6]
Reasoning
Before the Court, the parties agreed that the specifications of the patents were sufficiently similar that the ‘967 patent could be used for the purpose of analysis. The parties also agreed that the claims under consideration were of sufficiently similar character that if claim 1 of the ‘967 patent was found to be a manner of manufacture, then so too were the rest of the claims in suit in each of the four patents.
As a threshold issue, the High Court (Australia’s ultimate appellate Court) has previously framed the proper question for assessing whether a claimed invention is directed to a “manner of manufacture” as:
‘Is this a proper subject of letters patent according to the principles which have been developed for the application of s 6 of the Statute of Monopolies?’[7]
The Courts have also consistently emphasised that the true nature of the invention is to be determined as a matter of substance over form, such that otherwise unpatentable subject matter cannot be dressed up in claim language to meet the manner of manufacture threshold[8]. Characterisation of an invention is not a broad or abstracted consideration of the field in which the invention lies, nor the purpose to which the invention may be put. Rather, it is a consideration of the true nature of the monopoly sought by the applicant or patentee.
Applying these principles, Burley J overturned the decision of the Commissioner of Patents and determined that the claims to electronic gaming machines were directed to a manner of manufacture and, thus, patent eligible subject matter. Burley J rejected the Commissioner’s characterisation of the invention as “a mere scheme in the form of a set of game rules, or a scheme for making money” and instead found that:
“The facts of the present case do not fit the paradigm, considered in the authorities to which I refer below, of a scheme that has merely been “put into” a computer.”[9]
Relevantly, Burley J held at [95] – [96] that the claimed invention was directed 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”, based on identifying that “the invention as claimed has hardware, firmware and software components that are identified” and that the claimed electronic gaming machine is “a physical device” that includes a number of specific components, including a display able to show reels, a credit input mechanism, meters, a game play mechanism, and a game controller comprising a processor and memory.
In characterising the invention, Burley J determined that the subject of the claimed invention yielded a tangible machine, something that is not at all abstract:
[98] The result is that to the person skilled in the art, the invention may be characterised as a machine of a particular construction which implements a gaming function. It yields a practical and useful result. Simply put, the machine that is the subject of the claims is built to allow people to play games on it. That is its only purpose. In this regard, the physical and virtual features of the display, reels, credit input mechanism, gameplay mechanism and game controller combine to produce the invention. It is a device of a specific character.
Burley J also noted that the Commissioner accepted that had the claimed electronic gaming machine been implemented mechanically, rather than using software, that there is no doubt that it would be a manner of manufacture. In doing so, his Honour noted that:
“It is difficult to see why the development of an implementation of an EGM that utilises the efficiencies of electronics technology would be disqualified from patent eligibility, when the old-fashioned mechanical technology was not. Such an approach would be antithetical to the encouragement of invention and innovation.”[10]
Significantly, Burley J rejected the approach to the characterisation of the invention adopted by the Australian Patent Office during examination of the patents and subsequently advanced by the Commissioner on appeal before the Court, “insofar as they first identify the “inventive concept” and then utilise that concept to conclude that the invention is a mere scheme. That rather puts the cart before the horse.”[11]
This confirms that the present approach of the Australian Patent Office in determining the “substance” of the invention by identifying an inventive concept, with reference to the contribution the claimed invention makes over the prior art, is incorrect.
The Court also accepted Aristocrat’s submissions that identified the danger of “denuding an invention of patentability by prematurely discounting elements of the claim”[12], noting that “Any claim can be stripped back to remove all specific limitations, so that at its core an abstract idea emerges”[13]. The danger of examining a claim at an abstracted level was previously cautioned against by the Full Federal Court in RPL Central at [105], when the Court alluded to the dangers of oversimplifying the invention, stating:
Care must be taken to consider the circumstances of the claimed invention, beyond the form of words used. In Both IBM2 and CCOM, the invention as claimed was patentable. However, the method of IBM2 could have been characterised simply to involve “drawing a curve on a computer”; in CCOM, the claimed invention could have been characterised as “to convert a word into Chinese characters.[14]
Two-step Approach or Binary Determination?
Burley J at [91] referred to recent decisions relating to computer-implemented inventions and posited that those decisions involve a two-step approach, with a first question being “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” and a second enquiry, if the first question is answered in the affirmative, of “whether the computer-implemented method is one where invention lay in the computerisation of the method”.
In the present case, by determining that the substance of the invention was not directed to a mere scheme, Burley J found that there was no need to progress to the second enquiry. This, however, raises a related question of whether the Full Court in RPL Central at [96] intended for the consideration of a claim to be a two-step approach or whether, in contrast, the Full Court was indicating that there is a distinction between two possible conclusions when characterising an invention.
Burley J referenced the decision of the Full Court in RPL at 96, with emphasis added:
A claimed invention must be examined to ascertain whether it is in substance a scheme or plan or whether it can broadly be described as an improvement in computer technology. The basis for the analysis starts with the fact that a business method, or mere scheme, is not, per se, patentable. The fact that it is a scheme or business method does not exclude it from properly being the subject of letters patent, but it must be more than that. There must be more than an abstract idea; it must involve the creation of an artificial state of affairs where the computer is integral to the invention, rather than a mere tool in which the invention is performed. Where the claimed invention is to a computerised business method, the invention must lie in that computerisation. It is not a patentable invention simply to “put” a business method “into” a computer to implement the business method using the computer for its well- known and understood functions.
Burley J emphasised the word “starts” and the expression “Where the claimed invention is to a computerised business method”, indicating that to his mind there is an initial question as to whether the claimed invention is, in substance, a scheme or plan. If that enquiry is decided in the negative, then the claimed invention is directed to patent eligible subject matter and no further enquiry is necessary. In the alternative, if the claimed invention is deemed to be directed to a scheme or plan, Burley J suggests that RPL Central posits that a second enquiry is then to be made as to whether the claimed invention might be directed to patent eligible subject matter if the invention lies in that computerisation.
Such an interpretation of RPL Central is problematic in that it is difficult to contemplate any scenario in which a claim that has been properly construed and characterised as a scheme or plan could be saved. That is, if the nature of a properly construed claim is deemed to be directed to an unpatentable scheme or plan, how could the nature of that claim then change by considering any improvement in the implementation of that scheme or plan? If the invention lies in the computerisation of a business method or otherwise unpatentable scheme or plan, then the integers of the claim that give rise to the improvement in the computer should form part of the substance of the invention, when initially considered.
The alternative to the “two-step” approach posited by Burley J based on RPL Central at [96] is that the Full Court in RPL Central provided, within the context of computer‑implemented methods, a binary distinction[15] between a claimed invention being directed to:
(i) an unpatentable scheme or plan; OR
(ii) an improvement in computer technology.
Under that binary formulation, once the claim has been construed, the question is whether the nature of the claim, considered as a matter of substance, not form, is directed to a scheme or plan or to an improvement in computer technology. In such an interpretation, a “scheme” or “plan” or “improvement in computer technology” is a conclusion reached at the end of the assessment of the substance of the claim. One cannot determine that the substance of a claimed invention is directed to an unpatentable scheme or plan and then look to make it patentable. When considering the substance of an invention, once an invention is found to be more than purely abstract or intellectual, and rather is found to have been practically applied, the invention is not directed to a “scheme”. This approach would seem consistent with the seminal decision of the High Court in NRDC[16].
Under this latter interpretation, the terms emphasised by Burley J would belong to an explanation of the initial threshold assessment and the underlying basis of that assessment, rather than a prescription for performing the assessment itself. Further, this latter interpretation would seem to sit more comfortably with the correct manner by which to characterise the invention, by taking into account the various claimed features and their working inter-relationships.
Role of Expert Evidence and Common General Knowledge
It is clear from the recent decisions in Repipe[17], Rokt[18], and now Aristocrat that any lingering doubt regarding the role of the prior art, particularly in relation to the common general knowledge and expert evidence to establish the same, is limited to placing the Court in the position of the person skilled in the art at the priority date, in order to properly construe the claimed invention. The High Court in Myriad[19] adopted this approach in utilising a primer, in order to be informed so as to understand correctly the terms used in the claims. Likewise, as McKerracher J stated in Repipe, in setting out the “Relevant Principles” for assessing manner of manufacture, “The approach is not to compare the claim against the common general knowledge in the field of computer technology or against prior art in that field”.[20]
Importantly, the legislated requirement for “manner of manufacture”[21] does not have a temporal component and patent eligible subject matter does not change over time. There is no prior art base defined in the Patents Act 1990 in relation to manner of manufacture, so in this context the priority date of a claim is only relevant for establishing the common general knowledge at the relevant time in order to assist the Court in construing the claims.
The reasoning of Burley J in Aristocrat is consistent with earlier decisions of the High Court in emphasising that consideration of the prior art base (including the common general knowledge) has no place in assessing manner of manufacture beyond assisting with claim construction. To refer to the prior art base when assessing manner of manufacture is an impermissible conflation of the separate grounds of novelty, inventive step, and manner of manufacture. Such an approach was cautioned against by the High Court in Ramset[22] (subsequently approved in Myriad[23]), in which the Court found that the Full Federal Court had “erred in considering “inventive merit” in light of prior art” for the purposes of assessing manner of manufacture. Similarly, as the Full Court plainly stated in CCOM[24] at [291], reaffirmed by Burley J in this decision[25], whilst a claim for a ball point pen would fail for anticipation and inventive step, it would still be a claim for a manner of manufacture.
Take Home Messages
This is a positive decision for applicants and patentees of computer-implemented inventions in Australia. Hopefully, the initial characterisation of the “substance” of an invention will now be approached by the Australian Patent Office in a more consistent manner, having full regard to all integers of the claim in order to make an assessment of whether a claimed invention is directed to proper subject matter for grant of a patent.
This decision also affirms the distinction between simply putting an otherwise unpatentable scheme or business method into an uncharacterised generic computer (which remains unpatentable subject matter) versus patentable subject matter in which computer components (irrespective of how well known those components may be) interact to provide a tangible machine or physical device of a particular construction.
The Commissioner of Patents has lodged an application for leave to appeal this decision to the Full Federal Court and Rokt has lodged an application to the High Court for special leave to appeal the Full Court’s decision in Rokt[26], which indicates that further consideration by the Courts is required to provide consistency in assessing patentable subject matter across technology fields, with particular regard to computer-implemented inventions.
[1] Aristocrat Technologies Australia Pty Limited [2018] APO 45 (5 July 2018)
[2] Aristocrat at [95]
[3] Aristocrat at [29]-[45]
[4] Alice Corporation Pty Ltd v CLS Bank International 134 S Ct 2347 (2014)
[5] Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150
[6] Aristocrat at [98]
[7] National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252 (NRDC), D’Arcy v Myriad Genetics Inc (2015) 258 CLR 334 at [18]
[8] Myriad at [144] – [145], Research Affiliates at [106],
Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177 at [98]
[9] Aristocrat at [74]
[10] Aristocrat at [102]
[11] Aristocrat at [99]
[12] Aristocrat at [101]
[13] Aristocrat at [101], referencing Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (No 2) [2007] HCA 21; 235 CLR 173 at [60]
[14] RPL Central at [105]
[15] As submitted by the Commissioner of Patents in Rokt Pte Ltd v Commissioner of Patents [2018] FCA 1988 at [189] and broadly accepted by Robertson J at [201], and
as contemplated by Perram J in Encompass Corporation Pty Ltd v InfoTrack Pty Ltd [2018] FCA 421, referenced by the Full Court in Encompass Corporation Pty Ltd v InfoTrack Pty Ltd [2019] FCAFC 161 at [40].
[16] National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252
[17] Repipe Pty Ltd v Commissioner of Patents [2019] FCA 1956
[18] Commissioner of Patents v Rokt Pte Ltd [2020] FCAFC 86
[19] Myriad at [12]
[20] Repipe at [35]
[21] Patents Act 1990 s18(1)(a)
[22] Advanced Building Systems Pty Ltd v Ramset Fasteners (Aust) Pty Ltd [1998] HCA 19; (1998) 194 CLR 171 at 188-191 [27]-[35] per Brennan CJ, Gaudron, McHugh and Gummow JJ
[23] Myriad at [130]
[24] CCOM Pty Limited v Jiejing Pty Limited (1994) 51 FCR 260 at [289]
[25] Aristocrat at [84]
[26] Commissioner of Patents v Rokt Pte Ltd [2020] FCAFC 86
