30 July 2016

Australian Patent Office Clarifies the ‘Rules of the Game’ for Computer-Implemented Inventions

Gaming MachinesThe Australian Patent Office has recently issued two decisions resulting from applicants requesting to be heard following examination objections that their respective inventions did not constitute patent-eligible subject matter, i.e. a ‘manner of manufacture’ under the Australian patent law.  Both decisions relate to electronic gaming machines (commonly known as ‘poker machines’ or ‘slot machines’), and both involve the question of whether particular computer-implemented features of such machines are patentable.  They differ, however, in the outcome.
In Konami Gaming, Inc. [2016] APO 46, which was decided on 12 July 2016, Hearing Officer M G Kraefft found that claims directed, in substance, to new game-play and payout rules implemented on ‘standard’ gaming machines were not directed to patent-eligible subject matter.
By contrast, in Aristocrat Technologies Australia Pty Limited [2016] APO 49, which was decided on 22 July 2016, Hearing Officer S D Barker found that claims directed, in substance, to an improvement in a user interface were directed to patent-eligible subject matter, notwithstanding that this also required only ‘generic computer implementation’ on an otherwise conventional gaming machine.
If you are confused by this, never fear – you are not alone!  These are difficult cases at the very frontiers of patent-eligibility under the law as it stands following the Full Federal Court judgments in Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150 and Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177, along with the High Court judgment in D'Arcy v Myriad Genetics Inc [2015] HCA 35.  For what it is worth, however, I think that both Patent Office decisions are in accordance with the Full Court and High Court rulings, as well as traditional principles of patent-eligibility, and that they therefore provide useful guidance as to the treatment of different types of computer-implemented subject matter in Australia.

The Principles of Patent-Eligibility

Assessing the patent-eligibility of computer-implemented subject matter is, paradoxically, simultaneously very straightforward and devilishly tricky.  It is simple in the sense that the principles to be applied are very clear.  But it is also hard in the sense that actually applying the principles to particular cases can be very difficult.
The basic principles can be summarised as follows.
  1. First, there is subject matter that, as a result of judicial development of the law, is well-established as being unpatentable.  In Australia, this subject matter includes pure business methods, mere schemes, fundamental scientific principles or mere discoveries, rules for playing games, mathematical formulae or equations, intellectual information and abstract ideas.
  2. However, the fact that an invention might relate to unpatentable subject matter is not determinative in itself.  An invention in which there is created an ‘artificial state of affairs’ having ‘economic utility’ will be patentable (National Research Development Corporation v Commissioner of Patents [1959] HCA 67, a.k.a. ‘the NRDC Case’).  This is a more rigorous way of saying that a concrete, useful, practical application of otherwise unpatentable subject matter can be the subject of a valid patent.
  3. As the High Court reminds us in D’Arcy v Myriad, however, the determination of whether or not a particular claimed invention is patentable is a matter of substance and not form.  In the case of computer-implemented inventions, in particular, a claim can always take the apparent form of an ‘artificial state of affairs’ in the sense that it may recite elements of computer hardware.  However, if these hardware elements are merely conventional or generic, then it will be necessary to dig deeper to identify the true substance of the invention.
In principle, therefore, the task of determining patent-eligibility of a computer-implemented invention will often come down to identifying the substance of the invention, regardless of the particular form in which it has been claimed.  In practice, however, there will always be cases that fall near the limits of patentability for which this may be challenging.  Get the ‘substance’ wrong, and you will get the wrong answer.

Importance of Getting the ‘Substance’ Right

In its RPL Central decision, the Full Court warned that taking an overly broad approach to the ‘substance’ issue would have resulted in a wrong result in previous cases in which computer-implemented inventions were rightly found to be patent-eligible (at [105]):

Care must be taken to consider the circumstances of the claimed invention, beyond the form of words used. In both IBM 2 and CCOM, the invention as claimed was patentable. However, the method in IBM 2 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”.

Signposts to Substance

The courts have given us a number of ‘signposts’ that may assist in determining whether the substance of an invention is something patent-eligible.  However, each of these arose out of the particular facts of prior cases, and none provides a definitive test that can be applied in every situation.  The Aristocrat decision provides a convenient summary of a number of the potentially relevant considerations, at [35]:
  1. whether the invention is ‘more than’ an abstract idea, mere scheme or mere intellectual information;
  2. whether the contribution of the claimed invention is technical in nature;
  3. whether the invention solves a technical problem within the computer or outside the computer;
  4. whether the invention results in improvement in the functioning of the computer, irrespective of the data being processed;
  5. whether the application of the computer-implemented method produces a practical and useful result;
  6. whether the invention can be broadly described as an improvement in computer technology;
  7. whether the method merely requires ‘generic computer implementation’;
  8. whether the computer is merely an intermediary or tool for performing the method while adding nothing of substance to the idea;
  9. whether there is ingenuity in the way in which the computer is utilised;
  10. whether the invention involves steps that are foreign to the normal use of computers; and
  11. whether the invention lies in the generation, presentation or arrangement of intellectual information.
So, we can now look at how the above principles were applied in the Konami and Aristocrat decisions.

Aristocrat – A Patentable Invention

The Aristocrat decision involved  two patent applications relating to ‘multi-gaming machines’, i.e. electronic gaming machines that provide a choice of multiple different games.
Basically the inventions involve displaying images for multiple available games, along with the permitted stake denominations, on a single screen.  The asserted advantage of the claimed arrangement is stated to be that:
The present invention provides significant advantages over existing multi-gaming machines. It allows individual games accessible within a multi-game gaming machine to be advertised in addition to the multi-game gaming machine itself so that the games do not lose their identity within the multi-game machine. At the same time, it provides players the ability to view game information whilst playing the game.
The applicant argued, during examination and in its submissions to the Hearing Officer, that the arrangement has the additional advantage (not expressly disclosed in the specification) that the player is enabled to commence play of a selected game from the multi-game screen with a single action, by directly accessing one of the available stake denominations via the touch-screen display.  Prior art multi-game machines required players first to select a game before being able to see the denominations and commence play.
Here is what the improved ‘single-screen’ display looks like, according to the drawings accompanying the patent specification:
Aristocrat Multi-Game Display

And here is how it is claimed in one of the two applications (which, for present purposes, we can treat as representative of all claims in both applications):

A gaming machine including a controller and a touch sensitive electronic display, the controller being arranged to cause a game selection image to be displayed on the electronic display, the game selection image including a plurality of separate image elements including:
    a.    a name of a game that is available for play on the gaming machine; and
    b.    a set of different bet denominations for the game, wherein at least one of the sets of denominations of at least one of the separate image elements is different to the set of bet denominations of at least one other of the separate image elements,
the gaming machine being further arranged to allow a player to select a game and a denomination by touching the touch sensitive electronic display where a respective denomination is displayed.
The examiner had maintained that the substance of the claimed invention was ‘games characterised by rules for the progress of game play’, that ‘the utility of the invention lies merely in the possibility of more interesting game play’ and that: 
[t]he arrangement of the claimed interface (the ‘means for selecting a game configured with one of a plurality of denominations’) is merely part of the computer acting as the intermediary to carry out the method (allowing a player to select a game and the desired denomination associated with the game) without adding anything to the substance of the invention of rules for the progress of game play.
The Hearing Officer did not agree with this last point, stating (at [44):
The examiner's characterisation of the substance of the invention cannot be correct. Despite what the specification says, the invention is independent of the game that is being played, and precedes the playing of the game. Both the claims and the description are silent in relation to the rules of any game that might be played.
The Hearing Officer instead agreed (at [48]) with Aristocrat that:
It is reasonable to view the substance of the invention as the presentation of game information in a way that allows the game and bet denomination to be selected in a single action. It is apparent that this would achieve a practical and useful result by simplifying the use of the gaming machine by the player. Looking at the relevant considerations, the invention appears to require only generic computer implementation. However, it does not appear that it was normal (at the priority date) to configure a gaming machine interface in this particular way. Here information is located in a particular position and functionality is generated by the use of this positional location to improve the gaming machine. The contribution is technical in nature, and achieves a practical and useful result. On balance, I am satisfied that the claimed invention is a manner of manufacture.
It is notable that the specification does not provide extensive technical detail, beyond a generic description of the gaming machine hardware and the displays generated in accordance with the invention.  The ‘Detailed Description’ section is only four-and-a-half pages long.  There is a simple flowchart showing how the machine moves between operation states, but the presumption appears to be that the programming itself is straightforward.  Where this decision diverges from the approach taken by the examiner is in taking a more considered approach to identifying the ‘substance’ of the invention.

Konami – An Unpatentable Invention

The Konami decision involved two further patent applications relating to gaming machines.  In this case, however, the claims were directed to operation of the machines in the course of game play.

The first of the two applications concerned a game-play method involving the award of free games.  A ‘base game’ consists of ‘spinning’ at least one virtual ‘reel’ (anyone who has ever observed a slot machine in action will understand what this means).  If a specified triggering condition occurs, the player is awarded a number of free games, each of which involves further spins of the virtual reel (or reels), with particular variations in the symbols appearing on the reels.  A payout to the player is based upon the outcomes of the free games.

The second application concerned a game-play method in which a display consists of multiple ‘frames’.  Within each frame symbols are generated (in the exemplary embodiments described in the specification the symbols are ‘Chinese dominos’).  Winning combinations may arise in any frame (e.g. matching pairs of dominos).  Payout amounts are determined based upon the appearance of winning combinations in particular pairs of frames, and the payouts may be modified on the basis of symbols appearing in another one of the frames, e.g. patterns arising among multiple frames.

The claims in both cases recited elements of the gaming machines itself, e.g. the display device, and a controller connected to the display device.  However, it should be clear from the discussion above that merely including conventional hardware elements in the claim will not generally lead to a conclusion that the substance of the invention is a patent-eligible machine.  Here, the Hearing Officer found that in both applications the substance of the invention in fact lay in the rules of a game and not to any new and unconventional implementation of those rules in a gaming machine (see the decision at paragraphs [40] and [44], respectively).

Furthermore, the Hearing Officer concluded that there was no patentable subject matter anywhere within either patent specification from which valid claims might be constructed.  He therefore refused both applications without allowing the applicant any further opportunity to amend.

Conclusion – Useful Examples of ‘Substance’ Analysis

Both of the decisions discussed above are entirely consistent with established law in relation to ‘traditional’ (i.e. non-computer-implemented) subject matter.

It has long been established that a presentation of information characterised solely by its content is not patentable.  However, where the effect of the presentation of information is to provide a practical advantage rather than being of a purely intellectual or visual character, there may be patentable subject matter.  Once the substance of the invention in the Aristocrat case is understood to lie in the arrangement of game controls on the display in a manner having a functional design and useful purpose, the conclusion that it is patent-eligible subject matter follows.

Traditionally, also, rules for playing games have not been considered patentable in themselves.  However, where a game also involves the use of novel physical components, such as a specifically-designed game board with functional features, the game as whole may be patentable.  Scrabble, for example, was patented in various countries based on an application originally filed in the UK in 1954.  There might be, in some instances, a case to be made that programming an existing gaming machine to implement features of a new game creates a ‘new’ and patentable machine.  However, where the claimed invention requires only ‘generic’ computer implementation that results in no new technical functionality, it is difficult to argue that the substance of the invention resides in anything other than the new game rules themselves.

So, both of these decisions turned on the identification of the substance of the invention.  Each provides a example of how the enquiry into the substance of the invention may be carried out.  Such examples are desperately needed to bring a greater degree of certainty and consistency to the patent application and examination processes.  Hopefully these will prove to be useful for practitioners and examiners alike.


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