30 October 2020

Games — Now Less Patentable than Ever in Australia

RouletteIn a recent decision, a Hearing Officer within the Australian Patent Office rejected Australian patent application no. 2018219972, in the name of casino operator Crown Melbourne Ltd, relating to a modified roulette table layout.  In particular, the claimed invention was designed to provide a ‘double zero’ roulette game having similar visual appearance and betting options to a ‘single zero’ game, while also offering additional betting options over the traditional ‘double zero’ game.  In essence, the modified layout ‘stacks’ the single and double zero boxes at one end of the number grid, instead of placing them side-by-side in the previously-established manner.  The application was rejected on the ground that the subject matter of the claimed invention is ineligible for patenting, i.e. is not for a ‘manner of manufacture’ under Australian law.  Specifically, the Hearing Officer found that ‘merely presenting a different wagering space layout that does nothing otherwise to the functioning of the apparatus cannot be considered as a physical phenomenon or transformation’, which would have been required for the invention to be patent-eligible.

You might not be surprised by this outcome.  Surely – you might think – simply providing a different layout of the numbered boxes on a roulette table cannot be the kind of thing for which a patent may be granted?  Traditionally, however, the situation would not have been considered so clear-cut.  Changing the layout also changes the wagering options available to players of the game.  The layout thus interacts with the rules of the game to change the game itself, arguably producing a ‘new’ game.  Throughout most of the history of the Australian patent system, this would have been considered patentable.

But you do not have to take my word for this.  The very same claims were previously found to be patentable by the Australian Patent Office!  The rejected application is a divisional, the ultimate ancestor of which was application no. 2008203384 (‘the original application’).  That application was itself filed in parallel with innovation patent no. 2008100694 (‘the innovation patent’).  The innovation patent was examined in 2008, and successfully certified on 5 February 2009.  The original application was also eventually examined, and received a clear examination report on 3 November 2014.  The only reason the original application did not proceed to acceptance and grant was because the innovation patent remained in force, and section 64 of the Australian Patents Act 1990 prohibits a single owner from being granted two patents simultaneously for the same invention.  After the innovation patent expired on 25 July 2016, Crown submitted that the original application should then proceed to acceptance.  But, instead, the Patent Office issued an adverse examination report, including the objection that the claimed invention was not a patentable ‘manner of manufacture’.

So, what changed?  The law?  Patent Office practice?  Or something less easily identified?

In this article, I discuss developments over the past 20 years in the patentability of games in Australia.  In summary, it seems that as recently as 2003 it was relatively straightforward to obtain a patent for a game, with the overwhelming majority of examined applications being successful.  Over time it has become substantially more difficult, although there are numerous examples of a relatively liberal approach by the Australian Patent Office up until at least the early 2010’s.  But since 2015 the tide has definitely turned, and patent applications relating to games now fail more often than they succeed.  The recent Aristocrat decision provides a glimmer of hope for game innovators, suggesting the possibility of a return to the principle that a working inter-relationship between game apparatus and associated rules of play may be sufficient to support a valid patent.  However, with this decision currently under appeal, and the Patent Office applying it narrowly only to certain types of analogous computer-implemented casino gaming systems, the prospects of any significant new liberalisation of examination practice in this area seem limited.

The Old, ‘Liberal’, Approach to Claims for Games

According to archived copies of the Patent Manual of Practice and Procedure (‘Examiners Manual’), at least as recently as October 2008 examiners at IP Australia were still following the guidance given in a 1926 Official Ruling of the British Patent Office, which stated:

The question having arisen upon an Examiner's report, whether a patent for a game of the above character should be refused where the only novel feature (apart from the rules of the game) lies in the particular character of the markings upon the board, the following Ruling was given:

It may be stated generally, that where the claim made in cases such as this is to apparatus for playing a game, comprising one or more playing pieces and a board marked in a particular manner substantially as shown in drawings accompanying the Specification, the playing piece or pieces being moved in accordance with directions furnished in the Specification as to the manner in which the game is to be played, the requirements involved by the definition of an “invention” contained in Section 93 of the Acts will be held to be complied with, and the application will be subject only to such objection as may arise under Section 7 [i.e. the requirement for novelty and non-obviousness] or otherwise in the normal procedure of examination.

That guidance also referred to the case of Cobianchi’s Application (1953) 70 RPC 199, which concerned a modified pack of playing cards adapted for use in the well-known game of canasta.  In particular, in view of the fact that individual suits are not relevant under the rules of canasta – only rank, and the colours (red/black) of certain cards – Cobianchi’s deck was designed with simplified colour markings.  As Lloyd-Jacob J noted in his decision in Cobianchi, ‘’[e]ver since 1900 it has been the practice of the Patent Office, following a direction of the Law Officer, to allow to proceed to grant an application for protection for a pack of cards when designed for the purpose of playing a new game’ (emphasis added).  Cobianchi’s claims had therefore been rejected by the Patent Office, on the basis that cards designed for playing an old, well-known, game fell outside this ruling, and were ineligible under the general principle that printed matter, characterised only by information content having no additional material advantage, had been long-regarded as not being a patentable ‘manner of manufacture’.

Lloyd-Jacob J disagreed, reversing the Patent Office rejection in relation to the eligibility ground (although leaving open the possibility that the claims lacked novelty).  He reasoned that where…

…the aggregation into a pack is not of a number of copies, but of a number of differently printed sheets which in their association one with another have a potential working Inter-relationship, the aggregation possesses something more than the sum of its individual parts, although it is to be noted that this something more is but a potentiality which requires for its translation into actuality not only the full collection of the parts but a conception or plan for their use, for example, a card game.

He thus concluded that:

I am satisfied that the game itself, whatever its ingenuity, could not be the subject of patent protection, but I am not satisfied that the ingenuity shown in devising this novel pack, which requires the operation of a manner of manufacture for its reproduction, can be dismissed as a mere idea or plan.

For as long as the Australian Examiners Manual provided the above guidance, it would seem that at least the following would have been considered patent-eligible subject matter under the ‘manner of manufacture’ test:

  1. any combination of game rules and corresponding novel apparatus for the playing of a new game; and
  2. any modification, improvement or new design of game apparatus (including cards, counters, boards, and so forth) for use in the playing of an old game, where there is some (potential) working inter-relationship among parts of the apparatus and/or the game rules that is realised through playing of the game.

It is less clear whether new or modified rules for playing a game using known apparatus should have been considered patent-eligible under this guidance.  However, I have been able to find a number of examples of patents relating to casino table games, including baccarat, blackjack and roulette, that were accepted following examination commencing as late as 2010.  As the following representative examples illustrate, the Australian Patent Office took a fairly liberal approach to such inventions in those days.

  1. Australian patent no. 2008202639, relating to a modified baccarat game played with a standard deck of 52 cards, and characterised by novel rules for wagering and payout.
  2. Australian patent no. 2007203343, relating to domino-based versions of the conventional game of blackjack, in which players are permitted to draw their own additional dominoes from a pool (as distinct from the conventional method of cards being drawn from a shoe by the dealer).
  3. Australian patent no. 2005244551, relating to a modified roulette game in which, between the closing of bets and the outcome of the spin being known, a ‘bonus trigger event’ may occur, following which a ‘bonus feature’ (such as a free game, a payout multiplier, or a special prize) is provided.

In some cases, additional gaming features may have been computer-implemented.  But, in contrast to the position as it has since evolved, the Patent Office was generally satisfied so long as the features themselves were new, even if the computer-implementation was itself routine and involved only the use of generic hardware.  The following are further representative examples in this category.

  1. Australian patent no. 2006200534, relating to a computer-implemented multi-play poker game in which the player selects the initial cards of multiple hands from a single ‘pool hand’ via a display screen.
  2. Australian patent. no. 2008201896, relating to a baccarat game in which a computer maintains a tally of bonus counts awarded to a player over multiple games, which is used to determine a modified commission payment rate based upon prior agreement with the player.
  3. Australian patent no. 2007214029, relating to a tournament blackjack game having rules designed to encourage and reward card-counting, and including an option for players to purchase a computer-generated card-counting report in the course of play.

The most recent example I could find of ‘table game’ claims of this type that were accepted without objection on ‘manner of manufacture’ grounds is Australian patent no. 2014201053, which relates to variants on poker and/or blackjack in which players are obliged to raise their bets under certain conditions, based upon rules implemented and enforced by a ‘computing device’.  The application was examined in August 2014 – notably, perhaps, just three months before the Full Court of the Federal Court of Australia issued its decision in Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150.

That was Then, This is Now…

The position of the Australian Patent Office on claims relating to games is clearly very different now to what it was, even as recently as 2014.  The Examiners Manual currently has this to say about the patent-eligibility of games:

Games per se are not patentable being merely mental processes, abstract ideas or schemes.

Applying the authority of the Full Federal Court in Grant v Commissioner of Patents [2006] FCAFC 120, Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150 and Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177, a game does not become eligible subject matter merely because it is implemented with the assistance of cards, tokens or a games board which are characterised by intellectual information related to the rules of the game.  Games apparatus may however be patentable where it has a practical utility other than merely allowing the game to be played.

I have added the bold emphasis to highlight the significant departure from the old (1926 UK) practice, under which it was clearly sufficient for the claims to encompass some article of manufacture (such as cards, tokens, or a games board) to be used in accordance with rules of the game.  Indeed, based on accepted claims, it appears to have been the case at least as recently as 2010 that the article of manufacture did not, itself, need to be new.  Patents were certainly granted for inventions comprising new or modified rules for games using well-known apparatus such as standard decks of playing cards, conventional roulette wheels and tables, or sets of dominoes.

However, I am hard-pressed to find examples of patents relating to table games that have been issued in more recent years.  Rather than trawling through examination records for dozens of rejected applications looking for common threads, I decided to go straight to the data in search of overall trends.  In particular, I have used IP Australia’s IP Government Open Data (IPGOD) 2019 release to analyse the outcomes for standard patent applications relating to games, based on their primary classification under the International Patent Classification (IPC) system.  (Note that although the 2020 release of IPGOD is now available, IP Australia has changed the structure of the data this year, and I have yet to incorporate it into my own database.)

The dataset that I have analysed comprises ‘examined applications’ meeting the following criteria:

  1. standard patent applications filed since 1996 and/or examined since 2000,
  2. for which the primary IPC class is A63F, covering card, board, and roulette games, and indoor games using small moving playing bodies, but excluding the group A63F 13, which specifically covers video games, and
  3. for which a first examination report and/or a notice of acceptance had been issued at the time of production of the IPGOD 2019 data.

For each year, I counted the total number of applications meeting the above criteria, the number of these that went on to be accepted (i.e. successfully passed examination), and the number that had failed to achieve acceptance (i.e. had been abandoned by the applicant, or actively refused by the Patent Office).

Games: Getting Harder to Patent in Australia Since 2003, 2007 & 2015!

The chart below shows the total number of examined applications filed (or entering the national phase in Australia, in the case of PCT applications) each year between 1996 and 2016, along with the corresponding numbers subsequently accepted and failing to achieve acceptance following examination.  It is clear that in the earlier years a substantial majority of the applications examined were successful.  For applications filed from 2003 onwards, however, it became more common for applicants to fail to achieve acceptance.  In very recent years, i.e. from filing year 2015, it seems to have become more likely that a game-related patent will be denied than accepted.

Game-Related Applications by Filing Year

While a general trend is apparent in the above chart, the effects of any underlying changes in examination practice are obscured by the fact that the time between filing and commencement of examination can vary considerably among applications.  It is therefore helpful to also look at outcomes based upon the time at which examination commenced, regardless of when the application was filed.  The chart below shows the rate (i.e. proportion) of acceptance versus non-acceptance for all examined applications based upon the year of the first examination report.  (If an application proceeded directly to acceptance, with no examination reports – which is relatively rare in Australian practice – then the year of acceptance is used instead.)  A small number of applications, particularly in the most recent years, remain ‘unresolved’, i.e. while examination had commenced, the status of the application, according to IPGOD 2019, does not (yet) indicate an outcome either way.

Outcomes for Game-Related Applications by Examination Year

While a general trend against applications successfully achieving acceptance is again apparent from 2003 onwards, this chart shows two notable ‘step changes’ in examination outcomes along the way:

  1. between 2007 and 2009, acceptance rates slumped, before recovering to hover around 60% between 2010 and 2015; and
  2. from 2016 onwards the balance tipped abruptly against game-related claims, with it becoming significantly more common for applications to be denied than accepted.

Although the actual numbers of examinations are not shown in the above chart, the slump in acceptance rates between 2007 and 2009 coincided with a spike in the rate of examination.  While applicants had been filing over 100 game-related applications in most years since 2003, IP Australia had been commencing examination of only between 40 and 70 applications, creating a backlog in this field of innovation.  The number of new examinations peaked at over 200 in 2010, and since 2012 has been steady at around 100 each year, consistent with the ongoing rate of new filings.  Exactly how the slump in acceptances comes to be (apparently) correlated with the increased examination workload would be a matter for speculation.

As for the swing against game-related claims from 2015, I hypothesise that this is related to the decisions of the Full Federal Court in Research Affiliates (November 2014) and Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177 (December 2015).  When I include applications relating to video games in the analysis, then the overall form of the chart remains much the same, except that the balance shifts in 2015, rather than in 2016.  We might conclude, therefore, that while Research Affiliates dealt a significant blow to computer-implemented gaming claims, the further effect of RPL Central – and subsequent changes in Patent Office practice – also impacted upon other types of gaming claims.

While there are a number of reasons why applications may fail to achieve acceptance, the acceptance rates for examinations of game-related applications commenced in 2016 and 2017 are exceptionally low in comparison to other fields of innovation.  In one earlier analysis I showed that the overall acceptance rate at the Australian Patent Office, across all areas of technology, was around 80% for examinations requested in 2015.  In a another analysis I showed that, for examinations requested in 2016, the acceptance rate within most examination sections was above 80%, with the most notable exception being ‘computing’, with an acceptance rate of around 60%.  Even this is almost double the 32% acceptance rate of game-related applications examined during the same period.

And Then There Was Aristocrat

The most recent complication in the overall picture is the decision of Justice Burley in Aristocrat Technologies Australia Pty Limited v Commissioner of Patents [2020] FCA 778.  As I explained when reporting on the ruling back in June, the Aristocrat case concerned an electronic gaming machine (EGM) of the kind widely used in casinos (and in many Australian pubs and clubs) in which the novelty of the claimed invention lay wholly in the computer-implemented rules and processes of game play.  However, in the context of the specification and claims considered as a whole, from the perspective of a person skilled in the art, the judge found (at [98]) that:

…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.

This, it might be argued, represents a step back towards the former approach under which rules and procedures for playing a game may be considered patentable so long as they are tied to specific apparatus – whether new or old – limiting the invention to the purpose of playing a particular game.

The Aristocrat decision is a ruling of a single judge of the Federal Court, and thus does not carry the same force as a judgment on appeal to the Full Court, but is nonetheless binding on the Patent Office.  The Commissioner of Patents has appealed the decision (the appeal, number NSD 787/2020, is scheduled to be heard on 11 November 2020 before Justices Middleton, Perram, and Nicholas).  In the meantime, my understanding is that the Patent Office is interpreting Aristocrat narrowly, applying it to allow claims only where a link to the specific purpose of playing a game is extremely clear.  Two examples that I have identified are:

  1. application no. 2018267641, which relates to EGM’s directly comparable to those in the Aristocrat case, where the applicant amended its claims to expressly include the standard hardware features making up the ‘particular construction’ that Justice Burley had relied upon in reaching his decision; and
  2. application no. 2020201329, which relates to a computer-implemented system that ‘repurposes’ live baccarat game play results to provide additional wagering opportunities for players at electronic terminals – in this case, the applicant successfully argued that the requirement for actual baccarat tables, and monitoring equipment used to determine the live outcomes at the tables, resulted in ‘a system of specific construction that has its only purpose as being to play games’.

Conclusion – Applicants’ Expectations Frustrated?

It is clear that the approach taken by the Australian Patent Office towards claims directed to games has changed over the past two decades.  Why this is so, however, is less clear.  There has not, for example, been any judicial reconsideration of the patentability of games specifically.  The current guidance in the Examiners Manual cites the decisions of the Full Federal Court in Grant – which related to an asset protection scheme using a trust structure – Research Affiliates – which related to computer-implemented methods for building an index of securities – and RPL Central – which related to an online system for gathering evidence of prior learning.  With the exception of Grant, which did not involve the use of a computer, these and subsequent Full Court decisions are all ultimately concerned with the patentability of computer-implemented business methods.  They have nothing to say directly about the patentability of games.

Over the same period, single judges of the Federal Court considered patents relating to electronic casino gaming machines on three occasions – in the recent Aristocrat case discussed above, in Neurizon Pty Ltd v LTH Consulting and Marketing Services Pty Ltd [2002] FCA 1547, and in Aristocrat Technologies Australia Pty Limited v Konami Australia Pty Limited [2015] FCA 735.  Each time, the court found the claims to be patent-eligible.  The Aristocrat case, in particular, harks back to the traditional approach formerly taken by the Patent Office in view of the 1926 UK Official Ruling and the Cobianchi case, in that the combination of new (computer-implemented) game rules and processes with the – admittedly known – material components of a standard electronic gaming machine, was found to constitute a patent-eligible ‘manner of manufacture’.

Meanwhile, applicants have continued to file patent applications relating to games, regardless – or perhaps in ignorance – of their ever-declining prospects of success.  This is concerning.  It suggests that these applicants hold a settled expectation that the subject matter of their patent applications is patentable, while the Patent Office has, over time, developed a different view.  This expectation is being frustrated, after the applicants have already made a substantial investment not only in the development of their innovations, but also in pursuing patent protection.

Crown knows this frustration better than most.  In 2014 it was on the cusp of having its modified roulette layout patented, delaying to await the expiration of its existing innovation patent, only to find that the goalposts had been shifted less than two years later.  Four years further down the track, it continues to be frustrated.


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