Patent-Eligibility of Computer-Implemented Inventions – Appeals Court Says an ‘Advance in Computer Technology’ is Required

In a unanimous decision – Commissioner of Patents v Aristocrat Technologies Australia Pty Ltd [2021] FCAFC 202 – a Full Bench of three judges (Middleton, Perram and Nicholas JJ) of the Federal Court of Australia (‘Full Court’) has reversed last year’s ruling by Justice Burley that claims directed to a so-called ‘feature game’ implemented on an electronic gaming machine (EGM) constituted a patent-eligible ‘manner of manufacture’ under Australia law.  (A ‘feature game’ is a secondary, or bonus, game triggered by the occurrence of a defined event in the ‘base’ game of spinning reels.)  As I explained at the time, Justice Burley applied a two step test, asking firstly 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 then – if this question is answered in the affirmative – ‘whether the computer-implemented method is one where invention lay in the computerisation of the method’ as opposed to ‘merely plugging an unpatentable scheme into a computer’.  He found the claims to be patentable at the first step, because they were directed to ‘a mechanism of a particular construction’, i.e. a gaming machine.

The Full Court has rejected Justice Burley’s test, with the majority (Middleton and Perram JJ) proposing an alternative two step test (at [26]) which asks firstly whether the claimed invention is ‘a computer-implemented invention’ and then – if so – ‘can the invention claimed broadly be described as an advance in computer technology’.  The majority determined that Aristocrat’s EGM, despite being claimed in terms of a combination of hardware and software components, was in substance a computer-implemented invention, and that the asserted contribution of the claimed invention ‘pertains only to the use of a computer’ and not to ‘the development or advance of computer technology’ (at [63]-[64]).  As such, they concluded that the claims were not directed to patent-eligible subject matter.

The third judge of the Full Court, Nicholas J, arrived at the same ultimate conclusion, by different reasoning.  He agreed with the majority that Justice Burley’s two step test was not the correct approach, because it failed to ‘engage with the Commissioner’s submission that the invention as described and claimed was in substance a mere scheme or set of rules for playing a game implemented using generic computer technology for its well-known and well-understood functions’ (at [135]).  However, rather than embarking upon an inquiry as to whether Aristocrat’s claims were directed to a ‘computer-implemented invention’ he simply observed that ‘the substance of the invention, as described and claimed, resides in the game program code which embodies a computer implemented scheme or set of rules for the playing of a game’ (at [138]).  He further reasoned (at [140]-[142]) that the game code does not solve any ‘technological problem’, nor does it exhibit any ‘unusual technical effect due to the way in which the computer is utilised’, and therefore that there is nothing ‘about the way in which the game code causes the EGM to operate which can be regarded as having transformed what might otherwise be regarded as purely abstract information encoded in memory into something possessing the required artificial effect.’

While the Full Court found the representative claim at issue to be unpatentable, it did not entirely foreclose the possibility that there may be patent-eligible aspects to the inventions disclosed in Aristocrat’s four innovation patents.  The case has been remitted back to Justice Burley to determine any residual issues in light of the Full Court’s judgment.

There are positive and negative aspects to this decision.  On the plus side, the approach taken by the majority brings some clarity to the approach to be taken in construing and assessing claims to computer-implemented inventions, which often comprise a physical apparatus defined in terms of (possibly conventional) hardware, configured via software for particular functionality.  On the down side, however, the majority also relied upon the existence of ‘an advance in computer technology’ to confer patent-eligibility upon a computer-implemented invention, without providing clear guidance on what, exactly, is covered by this terminology.  The decision also perpetuates an uncertainty that exists around the exact role to be played by prior art information in applying the ‘manner of manufacture’ test to assess patent-eligibility.

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Tags: Appeal, Australia, Computer programs, Games, Patentable subject matter

Raising the Bar Has Not Reduced the Patent Acceptance Rate in Australia

Data on patent acceptances into 2021 confirms that the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (‘RtB Act’), which came into effect on 15 April 2013, has had a minimal impact on the rate of patent application acceptance in Australia – and to the extent that an effect is present, it does not run in the direction that might be expected!  Here, I define ‘rate of acceptance’ as the proportion of examined applications that go on to be accepted for grant.  Between 2009 and 2013, the rate at which applications subject to the former (i.e. pre-RtB) provisions were accepted rose from 69% to 72%.  In comparison, the acceptance rate of post-RtB applications has stabilised at around 75% in each year between 2017 and 2021.

Some people may have anticipated that, in raising the standard of inventive step and introducing stricter requirements for enablement and support of claims, the RtB reforms would result in fewer applications being accepted.  I was not one of those people, and I expect that neither were most other patent attorneys.  Those of us who work on behalf of patent applicants are well-aware that, firstly, most of those applicants are seeking patent protection in other jurisdictions that have high standards of patentability, and are not wasting time and money on equivalent Australian applications for inventions that do not meet those standards.  And, secondly, encountering a higher bar to acceptance does not necessarily mean abandoning the application altogether; often it may simply mean settling for a more limited scope of protection.

Perhaps more surprisingly, however, raising standards of patentability has not resulted in applicants making more rounds of amendment to their applications in order to achieve acceptance.  In fact, if anything applications examined under the post-RtB provisions have been, on average, subject to fewer amendments in examination than pre-RtB applications.

Interestingly, in the transition between the two legal regimes, the earliest applications to be examined under the provisions of the RtB Act had acceptance rates in excess of 90%, while acceptance rates of the last applications to be examined under the former provisions fell to below 50%.  These effects are most likely attributable to the respective applicants’ strategies in pursuing early examination of post-RtB applications, and in persisting to the bitter end with some pre-RtB applications.

Another interesting observation is that expedited examination has become increasingly popular in the years since the RtB reforms commenced, rising from just under 6% of all cases in 2014/15 to over 8% in 2020/21.  In particular, expedited examination under the Global Patent Prosecution Highway (GPPH) program rose from just 2.7% of cases in 2013/14 to 5.1% in 2019/20.  In fact, GPPH requests were the majority of all expedited examination requests in every post-RtB year except for the first (2013/14).

Finally, the most recent data confirms (once again) that the duration of patent prosecution (i.e. from examination request through to acceptance, in successful cases) has reduced significantly – from a median of over 600 days, to a little more than 400 days – since commencement of the RtB reforms.  This has been due, in almost exactly equal parts, to the tighter time constraints imposed on applicants, and to reductions in Patent Office delays in commencing examination after a request has been filed.

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Tags: Australia, Examination, Law reform, Patent analytics, Patent law, Raising the Bar

Australia and NZ: ‘Reasonable Efforts’ to Join the Hague Agreement on Industrial Designs Mean Nothing

Recently, both Australia and New Zealand have reached ‘agreement in principle’ on proposed free trade agreements (FTAs) with the UK.  Details of the Australia-UK agreement in principle can be found on the Australian Department of Foreign Affairs and Trade (DFAT) website, while the NZ-UK agreement in principle is available from the NZ Foreign Affairs and Trade website.  Each document states that Australia/NZ will make all reasonable efforts to join the UK as members of the Hague Agreement, which provides an international registration system for industrial designs.  An article which appeared on the Lexology site last month stated that these developments imply that ‘Australia has (finally!) agreed to join the Hague Agreement on Industrial Designs’.

This is not true.  I do not see Australia joining the Hague Agreement in the foreseeable future, Australia-UK FTA notwithstanding.  I am less familiar with the political position in New Zealand, but suspect that the situation is not much different in the Land of the Long White Cloud.

Here is a fun fact…  Article 17.1(5) of the Australia-US Free Trade Agreement (AUSFTA), which entered into force on 1 January 2005, states that:

Each Party shall make its best efforts to comply with the provisions of the Geneva Act of the Hague Agreement Concerning the International Registration of Industrial Designs (1999), and the Patent Law Treaty (2000), subject to the enactment of laws necessary to apply those provisions in its territory.

Yet here we are, nearly 17 years later, and Australia is still not a member of the Hague Agreement.  It would seem that the phrase ‘best efforts’ in a trade agreement basically amounts to nothing more than a promise to think about it over an unspecified – and potentially indefinite – time frame.  I suspect, therefore, that an undertaking to make ‘reasonable efforts’ in an agreement in principle is code for ‘they want us to do it; we have no plans to commit to doing it; but we do not want to hold up negotiations by actually saying no.’

And there are very good reasons – namely three separate processes of review and consultation since 2012 – for believing that Australia has no intention of joining the Hague Agreement any time soon.

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Tags: Australia, Designs, International treaties, New Zealand