In a keenly-awaited – and thus hugely disappointing – ‘decision’, the High Court of Australia has failed to satisfactorily resolve the question of whether patent claims directed to electronic gaming machine (EGM) technology developed by Aristocrat Technologies Australia Pty Ltd are directed to patent-eligible subject matter: Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents [2022] HCA 29. With Justice Gleeson calling in sick on the crucial days, arguments in Aristocrat’s appeal from the adverse decision of the Full Federal Court of Australia were heard by just six judges of the High Court, which astute readers will notice is an even number. The diminished bench split 3:3, with Kiefel CJ, Gageler and Keane JJ finding Aristocrat’s claims unpatentable, while Gordon, Edelman and Steward JJ would have allowed the appeal, concluding that the claimed invention was patent-eligible. In this situation, section 23(2)(a) of the Judiciary Act 1903 provides that ‘the decision appealed from shall be affirmed’. It does not, however, provide that the reasons of the court appealed from are affirmed. On the contrary, one thing on which all six High Court judges appear to be in agreement is that the two-step approach taken by the Full Federal Court majority was not correct. We were hoping for some clarity on the patent-eligibility of computer-implemented inventions. Instead, we have been delivered two opposing, but equally authoritative, outcomes in the High Court, along with a Full Federal Court decision that stands affirmed, but which has been disapproved.
To say that this is an unsatisfactory situation would be one of the great understatements in the history of Australian patent law. Oh, how the mighty have fallen! In its famous and rightly-lauded 1959 decision in the NRDC case ([1959] HCA 67) the High Court delivered a judgment on patent-eligibility of such wisdom and prescience that the Australian government chose to retain the archaic language of ‘manner of manufacture’ as the touchstone of eligibility in the Patents Act 1990, placing its trust in the courts to continue development of the law to flexibly embrace the emergence of new and unpredictable technologies. Yet here we are in 2022, and the High Court has tripped over the now relatively mature technology of computer software and tumbled flat on its face.
What follows is, I concede, a lengthy article, even by my usual standards. But I am attempting to take up some important issues, and to suggest a different way forward on the treatment of computer-implemented inventions in Australia. Following a relatively brief review of what actually happened at the High Court, I attempt to determine what, exactly, the split decision means for the lower courts, and other decision-makers such as patent office examiners and hearing officers that are bound by the authority of the courts. I then look at how we arrived at the unsatisfactory position in which we now find ourselves, and argue that division among judges is not a new feature in this area of the law, and has in fact been evident in the Federal Court for some years.
This leads me to the view that judicial development of the ‘manner of manufacture’ test has failed us in relation to computer-implemented inventions. I think that a new approach is required to bring some certainty and clarity to the law and its application. Firstly, I suggest that it would be productive for IP Australia to consult more widely with stakeholders in developing its examination practice in the wake of the Aristocrat case. Beyond this, I think the Australian government needs to clarify its policy in relation to the protection of digital innovation, and to reach a principled position on the appropriate balance between competition and the patent incentive in the case of computer-implemented inventions. And if the current law is not working for us, then the parliament may need to consider a legislative solution.
