The Aristocrat Effect – Subject Matter Objections at the Australian Patent Office

On 16 September 2025, the Full Federal Court of Australia handed down its decision in Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents [2025] FCAFC 131, holding Aristocrat’s claims to computer-implemented electronic gaming machine (EGM) technology to be patent-eligible subject matter, i.e. a ‘manner of manufacture’ (MoM) under Australian law.  On 14 October 2025, IP Australia made initial amendments to its examination guidelines (most notably to section 5.6.8.1 General Principles – Assessing Manner of Manufacture and 5.6.8.6 Computer Implemented Inventions) in view of the Full Court’s decision.  Meanwhile, however, the Commissioner of Patents was applying for special leave to appeal the Full Court’s decision to the High Court of Australia.  On 5 February 2026, the High Court denied the Commissioner’s application, stating that ‘there is insufficient reason to doubt the correctness of the decision of the Full Court’ and marking the first time since 1991 that a dispute with the Commissioner over patentability of a computer implemented invention (CII) concluded with a victory for the applicant/patentee.

Since February, the examination guidelines have been twice updated – on 16 March 2026 and 3 July 2026 – firstly in view of the High Court’s refusal of special leave, and further in view feedback from stakeholders.  It is therefore reasonable, and timely, to ask: what difference, if any, have the Full Court and High Court decisions and the updates to the examination manual actually made to outcomes in the examination of CIIs in Australia?

In this short update (it is early days yet) I report preliminary and tentative evidence that outcomes are improving in examination of applications directed to CIIs.  Objections based on subject matter eligibility, i.e. MoM, have declined in every full quarter since Q3 2025, when the Full Court issued its decision in Aristocrat.  In Q2 2026, MoM objections were 40% below their peak in Q4 2024.  This is an astonishing turnaround in just 18 months, and is strong evidence that CIIs are receiving substantially more favourable treatment at the Australian Patent Office in the wake of the Aristocrat decisions.

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Tags: Computer-implemented inventions, Examination, Patent Office, Patentable subject matter

High Court Backs Aristocrat on Software Patentability – It’s Time for IP Australia to Follow Suit

The High Court of Australia has denied an application by the Commissioner of Patents for special leave to appeal a decision of the Full Federal Court in which claims to a computer-implemented invention (CII), in the form of an electronic gaming machine (EGM), were found to be patent-eligible in Australia.  This brings to an end the long-running dispute over patentability of Aristocrat’s claims, and marks the first time since 1991 (IBM v Commissioner of Patents [1991] FCA 625) that any such dispute with the Commissioner over claims to a CII has concluded with a victory to the applicant/patentee. 

The significance of this outcome cannot be overstated.  In recent years we have seen many cases conclude with claims being found ineligible – i.e. not for a ‘manner of manufacture’ under Australian law – namely Grant v Commissioner of Patents [2006] FCAFC 120, Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150, Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177, Watson v Commissioner of Patents [2019] FCA 1015 (leave to appeal refused in Watson v Commissioner of Patents [2020] FCAFC 86), Repipe v Commissioner of Patents [2019] FCA 1956, and Commissioner of Patents v Rokt Pte Ltd [2020] FCAFC 86.  That is a lot of cases telling us what is not patent-eligible, with absolutely no guidance from the courts on where the boundary might lie on the positive side of patent-eligibility.  Finally, we have a decision of the Full Federal Court that sets out a reasonably clear and concise test which is then applied to eligible claims.  The High Court, in denying the Commissioner’s application for special leave to appeal, stated that the ‘Full Court applied established principles concerning the assessment of manner of manufacture and reached a unanimous and clear conclusion as to characterisation’: Commissioner of Patents v Aristocrat Technologies Australia Pty Ltd [2026] HCADisp 15, at [2].

Following a rather convoluted passage through the Federal Court, the Full Federal Court and the High Court, back to the primary judge and then to the (differently constituted) Full Court, the final word on patent-eligibility of Aristocrat’s claims is Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents [2025] FCAFC 131.  In this decision, the Full Court effectively overruled the reasons (though not the orders) of the earlier Full Court, and adopted the affirmative reasons of three High Court judges in the split decision Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents [2022] HCA 29 (see High Court’s Failure Exposes the Festering Eligibility Sore in Australia’s Patent Laws for more).  Somewhat unusually, this also involved, in a sense, ‘overruling’ the negative reasons of the other High Court judges, in a rare instance of three judges of an inferior court asserting precedence over three judges of a superior court (albeit with the support of three further judges of that superior court).  But that’s just a function of how weird this case became!

In what follows, I will briefly summarise how we got here, where the law stands in view of the Full Court’s 2025 decision, and the High Court’s reasons for refusing special leave to appeal.  Finally, I will review the current examination practice of the Australian Patent Office, and the prospects of change in the wake of the High Court’s decision.

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Tags: Appeal, Australia, Computer programs, Examination, High Court, Patent Office, Patentable subject matter

Here We Go Again? Aristocrat Eyes High Court After Grant of Leave to Appeal

A single judge of the Federal Court of Australia, Justice O’Bryan, has granted Aristocrat Technologies Australia Pty Ltd (‘Aristocrat’) leave to appeal a decision issued back in March this year.  In that decision, Justice Burley found that all remaining claims in a group of innovation patents relating to computer-implemented electronic gaming machine (EGM) technology did not define patent-eligible subject matter.  The grant of leave opens up an opportunity for Aristocrat to ask the High Court of Australia to untangle the mess that it created back in 2022 when a six-judge panel split 3:3 on whether or not to allow an earlier appeal against a decision of the Full Federal Court relating to the primary claims of the same innovation patents.

The case has a complicated history.  For anybody who may just be joining us, or who requires a recap, here is the story so far in a nutshell.

1. Way back in 2018, a Delegate of the Commissioner of Patents revoked four innovation patents relating to the implementation of a ‘feature game’ in an EGM (i.e. a secondary, or bonus, game triggered by the occurrence of a defined event in the ‘base’ game of spinning reels) on the basis that the patents did not claim a patent-eligible ‘manner of manufacture’ under Australian law: Aristocrat Technologies Australia Pty Limited [2018] APO 45.
2. Aristocrat appealed to the Federal Court where, at first instance, Justice Burley determined that the claims were, in fact, 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’, and that this was patentable subject matter in Australia: Aristocrat Technologies Australia Pty Limited v Commissioner of Patents [2020] FCA 778.  (For more, see Federal Court Finds Computer-Implemented Gaming Machine Patent-Eligible in Australia.)  Importantly, this decision was based on consideration of a single claim that the parties agreed was representative of the primary claims in all four innovation patents.  The dependent claims of the patents were not considered at all in the judgement.
3. The Commissioner of Patents was granted leave to appeal to the Full Federal Court, where all three judges on the panel agreed that the decision of Justice Burley should be overturned, and the matter remitted back for consideration of any residual issues relating to the dependent claims.  However, a plurality of two judges (Middleton and Perram JJ) based their decision on a new two step test – first asking whether the claims are for a ‘computer-implemented invention’ and then whether that invention can ‘broadly be described as an advance in computer technology’ – while the third judge (Nicholas J) instead took a more conventional path, observing that the substance of the claimed invention lay in the mere computer implementation of an unpatentable ‘scheme or set of rules for the playing of a game’: Commissioner of Patents v Aristocrat Technologies Australia Pty Ltd [2021] FCAFC 202.  (For more, see Patent-Eligibility of Computer-Implemented Inventions – Appeals Court Says an ‘Advance in Computer Technology’ is Required.)
4. The High Court granted Aristocrat special leave to appeal.  Unfortunately, on the days of the hearing one judge was absent due to illness and – for whatever reason – the Court decided to proceed with a panel of six judges (which, astute observers will note, is an even number).  The panel split 3:3, meaning that, under section 23(2)(a) of the Judiciary Act 1903, ‘the decision appealed from shall be affirmed’.  This left the judgment of the Full Federal Court intact, notwithstanding that three judges of the High Court (Gordon, Edelman and Steward JJ) would have reversed it, and the remaining three (Kiefel CJ, Gageler and Keane JJ) would have upheld it on different grounds.  All six judges of the High Court explicitly or implicitly disapproved the novel two step test of patentability proposed by the plurality in the Full Federal Court: Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents [2022] HCA 29.  (For more, see High Court’s Failure Exposes the Festering Eligibility Sore in Australia’s Patent Laws.)
5. In accordance with the orders of the Full Court, the case was remitted back to Justice Burley for consideration of the ‘residual issues’.  In the resulting judgment, his honour determined that the effect of section 23(2)(a) of the Judiciary Act is plainly that the Full Court decision is ‘affirmed’, that he was bound, as a single judge of the court, by that decision, and that he should not therefore have any regard to the reasoning of the High Court in reaching his decision.  As a result, Burley J found all of the remaining claims to be unpatentable under the plurality’s two step test: Aristocrat Technologies Australia Pty Limited v Commissioner of Patents (No 3) [2024] FCA 212.

Aristocrat sought leave to appeal this further decision of Burley J.  Section 25(2) of the Federal Court of Australia Act 1976 stipulates that applications for leave to appeal must be heard and determined by a single judge unless a judge directs that the application be heard and determined by a Full Court – which happens quite often in cases such as this, including in Aristocrat’s appeal from Justice Burley’s original decision.  On this occasion, however, Aristocrat expressly sought that the application for leave be determined by a single judge, separately and before the hearing of any appeal.  This preserves its option to have the appeal removed directly to the High Court under s 40(2) of the Judiciary Act.

With leave having now been granted by O’Bryan J in Aristocrat Technologies Australia Pty Limited v Commissioner of Patents [2024] FCA 987, it seems reasonable to assume that Aristocrat will now apply to have the High Court take up the case directly.  But for those who may be hoping that this is a short-cut to having the Court resolve the impasse it reached in 2022, I regret that matters may not be quite so simple.

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

Why Would IP Australia Encourage Software Innovators to File for Patents?

IP Australia – the government agency responsible for administration of Australia’s patent, trade mark and design registration systems – has an important role to play in educating the public about the value of intellectual property and the requirements and processes for securing IP rights.  Generally speaking, I think it does a good job of this.  In particular, the News and Community section of IP Australia’s website includes links to many useful webinars and case studies that explain how the various types of IP rights work, and how they may be used to add resilience and value to a business.  This is (presumably) the work of the Communications, Public Awareness & Education team within the Customer Experience Group at IP Australia (see here for information on the organisational structure).  However, a recently-added case study suggests that this team may not be as familiar as it could be with the work of the Policy & Stakeholders Group or the Patents Examination Group.

I am referring to the case study Longtail UX: Patented Digital Products, which was published on 29 September 2022.  The case study discusses the experience of the Australian company Longtail UX (LUX), which describes itself as ‘the world’s first Customer Acquisition Platform’, in deciding to pursue patent protection for its technology.  Put very simply, LUX has developed a software platform that automatically generates additional pages – particularly for e-commerce sites – that are highly relevant to specific search terms by aggregating information (e.g. product descriptions) extracted from existing pages.  The advantage of this is that when someone searches for the specific term, e.g. using Google, the corresponding automatically-generated page will appear far higher in the search results than any of the original pages which were only partly relevant to the search.  Personally, I think that is a pretty clever idea.  And it must work fairly well, because LUX has been around since 2013 and counts many well-known online businesses (both in Australia and overseas) among its clients.

The case study tells the story of a business that started out with no IP protection strategy, and which first considered patents primarily as a marketing tool.  Later on, however, LUX came to realise that patents could add real value that could be important when raising capital or looking at a potential sale of the business.  Now – a number of years and two families of patent applications further down the road – LUX is on the verge of expanding into Europe, and extolling the virtues of engaging patent professionals to guide the company through the complicated process of obtaining patents in Australia and overseas.

Regular readers of this blog will already know what is missing from this encouraging story about patents adding value to an innovative business.  LUX’s inventions are computer-implemented.  And they are applied to the field of search engine marketing.  This does not necessarily mean that they cannot be patented, in Australia or elsewhere.  But it does mean that even if they can be patented, the process these days is very likely to be more complex, drawn out and expensive than would be expected in less contentious fields of technology.  Yet there is no mention of this in the case study, despite the fact that IP Australia has become a world-leader in pushing the limits of patent-(in)eligibility of computer implemented inventions through the courts, and is now one of the more challenging IP offices around the world for obtaining patents on such inventions.

So how is LUX actually faring with its patent acquisition strategy?  I have taken a look at the progress of its applications in Australia, the United States and Europe, and found that its fortunes have been more mixed than the case study reveals.

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Tags: Computer programs, IP Australia, Patentable subject matter

High Court’s Aristocrat Debacle Leaves Patent Office Practice Unchanged

Back in August, the High Court of Australia handed down a ‘decision’ on the patent-eligibility, under the ‘manner of manufacture’ test in Australian law, of claims directed to computer-implemented electronic gaming machine (EGM) technology developed by Aristocrat Technologies Australia Pty Ltd: Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents [2022] HCA 29.  Unfortunately, the Court was evenly split, 3:3, on whether or not Aristocrat’s claims were patentable, resulting in the adverse decision of the Full Federal Court being affirmed on a technicality, despite all six High Court judges having criticised the approach taken by the lower court.  (See High Court’s Failure Exposes the Festering Eligibility Sore in Australia’s Patent Laws for my analysis of the case.)  This left many people scratching their heads trying to work out what effect, if any, the decisions of either the High Court, or the Full Federal Court, might have on the treatment of computer-implemented inventions by lower courts and – more immediately – the Patent Office.

While we are still waiting for a decision in which a single judge of the Federal Court is required to consider whether she or he is bound by anything said by the higher courts in the Aristocrat case, the reaction from IP Australia – following an initial statement that ‘the Commissioner will carefully review the decision and consider its implications’ – has been… silence.  There have been no further statements or other communications.  There have been no updates to the Patent Manual of Practice and Procedure (a.k.a. the Examiners’ Manual).  All indications are that the High Court’s decision has changed nothing.

As further evidence of this, there have now been three hearing decisions on patentable subject matter issued by the Patent Office since the High Court handed down its opinions in Aristocrat.  In all three cases, the inventions described and claimed in the patent applications at issue were struck down as not being patent-eligible, for reasons that would have applied equally prior to the High Court decision.

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Tags: Australia, Computer programs, Patent Office, Patentable subject matter

High Court’s Failure Exposes the Festering Eligibility Sore in Australia’s Patent Laws

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.

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Tags: Appeal, Australia, Computer programs, High Court, Patentable subject matter

Eligibility of Computer-Implemented Inventions Behind Unprecedented Numbers of Patent Office Rulings

Once upon a time – not so very long ago, in fact – it was rare for the Australian Patent Office to issue a formal published ruling on the patent-eligibility of claims submitted for examination.  Indeed, ex parte decisions (i.e. those involving only the applicant and the Office) were generally in the minority, and most of those related to pharmaceutical extensions of patent term, allowability of amendments, and extensions of time to meet various deadlines.  Historically, the overwhelming majority of decisions have related to inter partes proceedings, such as patent oppositions.  That is, however, no longer true.  Following a peak in 2015, inter partes decisions have been falling, while ex parte decisions have been generally on the rise since 2011.  In 2021, ex parte decisions outnumbered inter partes decisions for the first time.  And in 2022 more ex parte decisions have been issued so far (i.e. up until the end of July) than in any past full year, with inter partes decisions once again lagging behind.

The sole driver of the growth in ex parte decisions has been patent-eligibility according to the ‘manner of manufacture’ test under Australian patent law.  The number of published Patent Office decisions relating to subject-matter eligibility of patent claims has risen from fewer than one per year in the 2000-2009 decade to 19 decisions in 2021 and 21 decisions in just the first seven months of 2022.  Since 2010 there have been 115 published decisions on eligibility, with the claims at issue being found ineligible in 100 of those cases.  Almost all of these have related to computer-implemented inventions.

The issue here is not that some subject matter is ineligible for patent protection.  That has always been, and will always be, true.  But the massive increase in published decisions is indicative of a more insidious problem.  Applicants rarely request hearings to appeal rejections by a patent examiner, and when they do it is usually because they genuinely believe that the examiner has got it wrong, and that the additional effort and expense is justified by good prospects of a better outcome when the matter is considered by an experienced hearing officer.  The unprecedented rise in applicants requesting hearings on patent-eligibility is due to a lack of clarity and coherence in the law.  And the fact that those applicants are so frequently wasting their time and money reflects the fact that the Patent Office has been championing an interpretation of the law that is at odds with the way in which it is being interpreted by the applicants and the patent attorneys advising them.

To be clear, the Patent Office on the one hand, and applicants and their attorneys on the other, are looking at exactly the same case law, and arriving at completely different conclusions as to how that law applies to particular claims.  Over the period during which this situation has arisen, there have been five Full Bench decisions of the Federal Court of Australia that should have served to clarify the law, but which appear to have had the opposite effect.  (For the record, those decisions are Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150, Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177, Encompass Corporation Pty Ltd v InfoTrack Pty Ltd [2019] FCAFC 161, Commissioner of Patents v Rokt Pte Ltd [2020] FCAFC 86, and Commissioner of Patents v Aristocrat Technologies Australia Pty Ltd [2021] FCAFC 202.)

The Aristocrat decision is currently before the High Court, where it was heard on 9 and 10 June 2022 (transcripts at Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents [2022] HCATrans 103 and [2022] HCATrans 104).  While it might be hoped that the High Court will provide the clarity that has been lacking in the Federal Court decisions, I am not so optimistic.  Looking at what has been happening at the Patent Office over the past few years, I fear that whatever the High Court may have to say about the specific claims at issue in Aristocrat will be equally open to different interpretations when applied to different claims in other cases.

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Tags: Australia, Computer programs, High Court, Innovation policy, Patentable subject matter

Aristocrat’s EGM Inventions Set for Showdown in the High Court

On 10 March 2022, the High Court of Australia granted Aristocrat’s application for special leave to appeal the decision of a Full Bench of the Federal Court, which found its claims directed to an Electronic Gaming Machine (EGM) implementing a new ‘feature game’ to be ineligible for patenting under Australia’s ‘manner of manufacture’ test of subject matter.  The case – which is Case No. S40/2022 – has since been making rapid progress.  Aristocrat filed its written submissions [PDF, 711kB] on 20 April 2022.  Two parties have applied for leave to appear as amici curiae: the Institute of Patent and Trade Mark Attorneys of Australia (IPTA), which filed its written submissions [PDF, 483kB] on 5 May 2022; and Fédération Internationale des Conseils en Propriété Intellectuelle (FICPI), which filed its written submissions [PDF, 382kB] on 4 May 2022.  The Commissioner of Patents filed her written submissions in response [PDF, 718kB] on 11 May 2022.  Finally Aristocrat filed its reply [PDF, 310kB] on 20 May 2022.  The scene is now set for a hearing, which is set down to take place on 9 and 10 June 2022 before a Full Court of seven judges, which is somewhat unusual (a panel of five judges is more common) and suggests that the High Court may have decided that it is finally time to settle the question of patent-eligibility of computer-implemented inventions in Australia.

The Aristocrat case raises interesting questions.  The claims of the patents at issue recite various hardware elements, some of which are common to all computers and some of which are specific to EGMs, along with software-implemented processes comprising the ‘feature game’.  (A ‘feature game’ is a secondary, or bonus, game triggered by the occurrence of a defined event in the ‘base’ game of spinning reels.)  It is common ground that the hardware elements are well-known in the field of electronic casino gaming, and that the new and inventive contribution resides wholly in the feature game implementation. 

At first instance, the primary judge (Justice Burley) considered that the appropriate approach to such a case involves a ‘two step’ analysis.  The first step is to construe the patent specification, from the perspective of the person skilled in the relevant art, to identify the claimed invention.  This is to be determined as a matter of substance, and not merely based on the particular form of the claims.  If the invention thus identified comprises patent-ineligible subject matter, such as a mere scheme, idea, or business method, then the second step involves an enquiry into whether the claimed computerisation involves some further contribution sufficient to render the invention patent-eligible.  Applying this approach to Aristocrat’s claims, Burley J found at the first step that Aristocrat’s claims were for ‘a machine of a particular construction which implements a gaming function’.  As a result, the question of patent-eligibility was resolved immediately – an EGM is not a mere scheme or a business method, and is thus a ‘manner of manufacture’.  There was, the judge concluded, no need to proceed with step two.

On appeal, a Full Bench of the Federal Court rejected the test proposed by the primary judge.  The majority (Middleton and Perram JJ) proposed an alternative two step test 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’.  They determined that Aristocrat’s EGM 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’, such that the claims were not directed to patent-eligible subject matter.  In a separate judgment (which Aristocrat characterises as a ‘dissent’), Nicholas J arrived at the same ultimate conclusion, but disagreed with the majority that ‘an advance in computer technology’ is necessary for a computer-implemented invention to be patent-eligible.  In his view, such an invention may be patent-eligible if it results in innovation in ‘different fields of technology’ where technical problems that lie ‘outside the computer’ may be solved using ‘generic computing technology.  He proposed that the proceeding therefore be remitted to the primary judge to consider whether the inventions may be patentable as an advance in the field of gaming technology.

With all of these different lines of reasoning present in the judgments of the lower courts, the stage is surely set for a showdown before the High Court.  So what are the main arguments that each of the parties will be relying upon?

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

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

Sequenom Down-Under – Appeals Court Finds Non-Invasive Foetal DNA Test Patent-Eligible in Australia

In 18 June 2021, a Full bench of the Federal Court of Australia (Middleton, Nicholas, and Burley JJ) unanimously upheld a decision of a single judge of the court (Beach J), finding that a method of detecting cell-free foetal DNA (cffDNA) in maternal blood serum comprises patent-eligible subject matter (i.e. a ‘manner of manufacture’) under Australian law: Ariosa Diagnostics, Inc v Sequenom, Inc [2021] FCAFC 101.  The patent at issue is Australian patent no. 727,919, covering an invention originally developed by Oxford University researchers, and subsequently transferred to Sequenom Inc.  The patent expired in March 2018, however a live dispute remains because Ariosa Diagnostics licensed its ‘Harmony Test’ – which Sequenom says (and the Full Court has agreed) infringes the patent – for use in Australia since at least September 2015.

To my mind, the result in this case is neither particularly surprising nor contentious.  The patent claims are directed to a method of detecting cffDNA.  While the method is underpinned by the naturally occurring fact – not known until its discovery by the inventors prior to March 1997 – that cffDNA is present in maternal blood serum, a useful method of detecting a previously unknown natural phenomenon, having a practical application, has long been considered patentable.  Ariosa’s arguments that Sequenom’s claims were in substance directed to the ‘mere’ discovery itself, resulted only in the production of ‘information’, and therefore unpatentable, were unsuccessful.  And while the broad scope of the main claim in this case might raise other issues, such as obviousness or sufficiency of description, these matters have also been addressed at first instance and/or on appeal, and are separate from the question of subject matter eligibility. 

Nonetheless, this case will generate some interest, if only because the result in Australia is opposed to the outcome of equivalent litigation between Sequenom and Ariosa involving a corresponding patent in the United States.  In that case, a narrower claim than in Australia was found to be directed to an unpatentable natural phenomenon.  The result was controversial, not least because a number of judges on the US Court of Appeals for the Federal Circuit (CAFC) – including Judge Linn on the original panel (Ariosa Diagnostics, Inc.v. Sequenom, Inc. (Fed. Cir. 2015)) and Judges Lourie and Dyk in a decision refusing en banc rehearing – indicated that they felt bound by the Supreme Court precedents, but did not agree with the outcome.  There was therefore great disappointment when the US Supreme Court declined to hear an appeal.

The outcome of the Australian appeal is not all bad news for Ariosa, however, with the finding of the primary judge on infringement being partially reversed.  In particular, there were periods during which the Harmony Test was not carried out in Australia, but instead samples were sent to the US for testing by Ariosa, which the primary judge found also to be infringing actions.  The Full Court has disagreed, finding that ‘importing’ the information resulting from the tests into Australia did not comprise a relevant ‘exploitation’ of the claimed method, as it might have done were the product of the method a physical article.

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Tags: Australia, Biotechnology, Diagnostic methods, Patentable subject matter

RePipe Appeals, Following Failed Attempts to Amend

Some time ago – indeed, BC (i.e. before COVID) – I reported on a decision of Justice McKerracher in the case of Repipe Pty Ltd v Commissioner of Patents [2019] FCA 1956 (RePipe No 1).  RePipe is a plumbing business based in Western Australia that has developed a risk management software system called rerisk^®, which is available as a service to other businesses that want to improve their workplace health and safety (WHS) processes.  The system comprises a server-based backend, and an app that can be installed on portable devices (i.e. smartphones or tablets) carried by workers on site.  In use, information and documentation pertinent to WHS compliance processes for particular jobs carried out by workers at specific locations are downloaded to the portable devices. The system provides prompts and checklists to ensure that workers comply with relevant procedures, generates alerts when problems or risks are identified, and enables information provided by the workers to be uploaded back to the server and/or communicated to other workers on site.

RePipe has filed patent applications in a number of jurisdictions.  In Australia, two innovation patents covering the rerisk^® system were examined and found liable to be revoked by the Patent Office, on the basis that their claims were not directed to patent-eligible subject matter, i.e. a ‘manner of manufacture’ under the Australian law.  RePipe appealed to the Federal Court, which upheld the Patent Office decisions in RePipe No 1, issued on 22 November 2019.  The court found that the claimed inventions were, in substance, merely unpatentable business methods.  The claims were not saved by the fact that the inventions were necessarily implemented in software.  As Justice McKerracher explained (RePipe No 1 at [93]-[94]):

No specific application software has been claimed or even identified in any claim of the Patents. No computing programming logic or code is disclosed anywhere in the Patents. The substance of both inventions is a mere scheme that can be implemented using some unidentified software application to cause a server computer and smartphone to perform the steps identified in the claim. To implement the scheme, a reader must use his/her own skill and knowledge to write an appropriate software application. No such application is disclosed in the Patents.

…The language used by patent attorneys when drafting and amending claims cannot convert what is, in substance, an unpatentable business method or scheme into a patentable invention by merely asserting that the invention is in the field of computer technology or by using words in the claim or specification that refer to computer technology …. As a matter of substance, there is no meaningful technical content in the description in the body of the claims or specification.

This was not, however, the end of the story.  Following some further ado (discussed below), RePipe has filed an application for leave to appeal to a Full Bench of the Federal Court of Australia, on 2 March 2021.

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Tags: Amendments, Appeal, Australia, Computer programs, Patent Office, Patentable subject matter

Australian Patent Office Rejects Amazon Cloud Computing Invention as Patent-Ineligible

A delegate of the Commissioner of Patents has refused an application (no. 2018204629) by Amazon Technologies, Inc (Amazon) on the basis that it is not for a patent-eligible invention under Australia’s ‘manner of manufacture’ requirement: Amazon Technologies, Inc [2021] APO 7.  Amazon’s claimed invention relates to the execution of processing tasks within a cloud computing system, presumably such as its own Amazon Web Services (AWS) platform.  Specifically, it provides a mechanism for applications executing on ‘virtual machines’ within the cloud system to access additional resources as required during bursts of high demand.

This is yet another case in which a computer-implemented invention that appears at least superficially ‘technical’ has been found to be unpatentable because it is, as a matter of ‘substance’, in fact an ineligible business innovation, rather than a technical innovation.  There are many, many, words in Amazon’s main claims, and a lot of them seem highly technical, principally because they define the operation of a process within a technical system.  But does this mean that the inventive process is, itself, technical in nature?  The delegate determined that it is not.  He found that Amazon’s claims were directed to a scheme in which ‘business rules’ are applied for scheduling processing tasks, while the scheduler itself was performing only its ‘usual independent function’, with ‘no improved operation of the computing technology’.

In this case, I think that the delegate’s decision is a reasonable application of the law on patent-eligibility of computer-implemented inventions, as it has been interpreted by the Australian courts.  It is, however, a long decision, which could not fairly be described as light reading.  It is unfortunate that decision-making in this area of the law has become increasingly arcane and obtuse.  So rather than picking over the delegate’s decision, dissecting the lengthy patent claims, or reviewing the Federal Court authorities, I am instead going to do my best to explain Amazon’s invention and why it failed the patent-eligibility test in my own way, as plainly as I can.  And while I believe that the delegate’s decision is justified under the current law, I shall also explain why I think the law under-emphasises the technical context in which inventions such as Amazon’s are devised, and why a more nuanced approach might be more appropriate.

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Tags: Australia, Computer programs, Patentable subject matter

Games — Now Less Patentable than Ever in Australia

In 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.

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Tags: Australia, Games, IPGOD, Patentable subject matter

Commissioner of Patents Applies to Appeal Aristocrat Ruling

In a development that should surprise nobody – least of all readers of this blog, where I have foreshadowed it twice – on 20 July 2020 the Commissioner of Patents filed an application for leave to appeal the decision in Aristocrat Technologies Australia Pty Limited v Commissioner of Patents [2020] FCA 778 to a Full Bench of the Federal Court of Australia.  I wrote about the original decision back in June, and a further decision relating to costs earlier in July.  While the Commissioner does require the Full Court to agree to hear the appeal, I anticipate that the Court will adopt the same practice as in earlier similar cases, and hear the application for leave, and the substantive appeal, concurrently.

This should be an important appeal. The Aristocrat case presents the Full Court with an opportunity to draw a clear distinction between patent-eligible and ineligible computer-implemented inventions.  The case concerns electronic gaming machines (EGMs).  On the one hand – as the primary judge found – an EGM is very much a material product, and not an ephemeral scheme or abstract idea.  It is thus arguably just as eligible for patent protection as a traditional mechanical gaming machine.  On the other hand, in a number of recent cases the Full Court has found that taking an unpatentable method, scheme or idea, and ‘merely’ implementing it through generic programming of conventional hardware does not transform it into a patentable invention.

An argument may be made that the claims in Aristocrat differ from those in other cases, where computer-implemented processes were found to be patent-ineligible, only inasmuch as a number of the recited hardware elements are specific to EGMs.  These elements were not, however, novel or inventive, either individually or in combination, at the priority date.  They were, in fact, well-known and conventional within the specific context of the regulated gaming industry in Australia.  It was this context, as much as anything else, that led the primary judge to conclude 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.

I would note also that, in contrast to something of an abstract nature, an EGM is ‘a device of a specific character’ upon which one could painfully stub one’s toe, if one were not careful!  The question is whether the primary judge was therefore correct to conclude, as he did, that such a device is inherently patent-eligible, without proceeding to consider – as the Full Court has done in previous cases relating to computer-implemented methods – whether there is any invention in the computerisation of the method itself.

The case number for the appeal in the NSW Division of the Federal Court of Australia is NSD787/2020.

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

Costs Award Discounted for ‘Over-Egged’ Evidence in Aristocrat Case

In a postscript to last month’s decision in Aristocrat Technologies Australia Pty Limited v Commissioner of Patents [2020] FCA 778 (see Federal Court Finds Computer-Implemented Gaming Machine Patent-Eligible in Australia), the court has now ruled that the Commissioner of Patents should pay only 50% of Aristocrat’s costs associated with its expert evidence: Aristocrat Technologies Australia Pty Limited v Commissioner of Patents (No 2) [2020] FCA 974.  Under the usual practice in Australia (i.e. the so-called English Rule) a losing party can expect to be ordered to pay the reasonable costs (including attorney’s fees) of the successful party.  In this instance, however, Justice Burley was partially persuaded by the Commissioner’s argument that much of Aristocrat’s evidence ‘was irrelevant or of very limited utility’, and consequently applied a discount in respect of the costs associate with expert evidence (but not the lay evidence that was also adduced by Aristocrat).

As I reported last month, the expert witnesses in the case fell into two categories: four (two on each side) were gaming experts, and two (one on each side) were Human Computer Interaction (HCI) experts.  The six expert witnesses were cross-examined, and also combined to prepare two joint expert reports.  However, in light of the decision of the Full Court in Commissioner of Patents v Rokt Pte Ltd [2020] FCAFC 86 – which was decided after the hearing in Aristocrat, but prior to the judgment being handed down – it is now clear that the role of expert evidence in determining whether or not a claimed invention is for a patent-eligible ‘manner of manufacture’ is limited (see Rokt’s Computerised ‘Marketing Scheme’ Fails Patent-Eligibility Test on Appeal).  Aristocrat’s position was, essentially, that its approach to the expert evidence had been reasonable, in view of the way in which the approach to patent-eligibility seemed to have been developing in Australia prior to Rokt – particularly within the Patent Office, including the decision appealed in this case by Aristocrat.

Perhaps influenced by the Judgment of Solomon, Justice Burley determined that the costs (though fortunately not – unlike the biblical baby – the experts themselves) should be split in two, finding (at [12]):

There is merit in the Commissioner’s submissions, in the sense that the expert evidence adduced by Aristocrat somewhat over-egged the pudding. Even making allowances for the uncertainties arising from the development of the law in relation to the patentability of inventions involving computerisation, there was really no justification for calling three experts in separate fields to attempt to establish that there was a “technical effect” in Aristocrat’s secondary argument. Aristocrat was perhaps entitled to be creative in attempting to justify the patentability of its invention, but that should not be funded by the Commissioner, even on an ordinary basis. I agree that the Commissioner should bear 50% of the costs of Aristocrat’s experts.

Additionally, the judge rejected Aristocrat’s contention that it should also receive its costs associated with the original Patent Office decision made by a delegate of the Commissioner, finding (at [8]) that ‘[t]he delegate acted as a neutral arbiter performing a statutory function’ and that the Commissioner had not ‘engaged in any conduct that would remotely warrant an order of costs against her in relation to the decision from which the appeal was brought.’

The court’s orders also grant the Commissioner a stay of the orders requiring Aristocrat's innovation patents to be certified (but not the costs orders) for a period of 14 days (until 24 July 2020), within which she may apply for leave to appeal to a Full Bench of the Federal Court of Australia.  I anticipate that an application for leave will be filed.

[Correction: An earlier version of this article incorrectly stated that the costs orders had been stayed pending any appeal by the Commissioner.]

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

Federal Court Finds Computer-Implemented Gaming Machine Patent-Eligible in Australia

On appeal from a decision of a delegate of the Commissioner of Patents, a single judge (Justice Burley) of the Federal Court of Australia has found that the claims of a number of innovation patents owned by Aristocrat Technologies Australia Pty Ltd, directed to electronic gaming machines (EGMs), are directed to patent-eligible subject matter: Aristocrat Technologies Australia Pty Limited v Commissioner of Patents [2020] FCA 778.  As the judge put it in the first paragraph of the judgment, the central question in the case was ‘whether a claim to an [EGM], which includes a combination of physical parts and computer software to produce a particular outcome in the form of gameplay, is a manner of manufacture’ (referring to the test for patentable subject matter under the Australian Patents Act 1990).

In a series of five decisions relating to computer-implemented inventions issued by Full Benches of the court since 2014 – including one from an expanded bench of five judges – a ‘two step’ approach to assessing patent-eligibility of such inventions has emerged.  The first step is to construe the patent specification, from the perspective of the person skilled in the relevant art, to identify the claimed invention.  This is to be determined as a matter of substance, and not merely based on the particular form of the claims.  If the invention, in substance, comprises patent-ineligible subject matter, such as a mere scheme, idea, or business method, then the second step involves an enquiry into whether the claimed computerisation involves some further contribution sufficient to render the invention patent-eligible.  It is not enough, as the Full Court has made clear, simply to ‘put’ an otherwise unpatentable scheme, idea, or business method ‘into’ a computer.

In the present case, however, the judge effectively short-circuited this enquiry, finding at the first step that Aristocrat’s claims were, in substance, for ‘a machine of a particular construction which implements a gaming function’.  As a result, the question of patent-eligibility was resolved immediately – an EGM is not a mere scheme or a business method, and is thus a ‘manner of manufacture’.  There was, the judge concluded, no need to proceed with step two.

This finding seems straightforward enough, and accords with common sense.  As the judge also observed, there is no dispute that an old-style mechanical gaming machine would be patent-eligible, so why should the outcome be any different if the same functionality is implemented using modern technology?  On the other hand, however, the form of the claims in the present case is not necessarily so different from those in a number of the earlier decisions where the inventions were found not to be patent-eligible.  I therefore suspect that this decision may not yet be the last word on the patentability of EGMs under the ‘manner of manufacture’ test.

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

Rokt’s Computerised ‘Marketing Scheme’ Fails Patent-Eligibility Test on Appeal

Following an appeal by the Commissioner of Patents, a Full Bench of the Federal Court of Australia has overturned a decision of a single judge of the Court relating to the patent-eligibility of a computer-implemented invention.  The Full Court has ruled that a claimed method and system, developed by Singapore-based Rokt Pte Ltd, for providing ‘a dynamic, context-based advertising system, introducing a distinction between an engagement offer, without a direct advertising benefit, and an advertisement designed to lead directly to the sale of the product’ is not patent-eligible subject matter under the Australian ‘manner of manufacture’ test: Commissioner of Patents v Rokt Pte Ltd [2020] FCAFC 86.

Broadly speaking, the claimed invention provides a mechanism whereby a user has an opportunity to engage with an offer (characterised by the Full Court as ‘click bait’) while accessing a web site before being presented with targeted advertising.  In this way, advertisements are presented only to those users that are most likely to interact with them, and make a purchase.  Since advertisers must often pay for placement of their advertisements within web pages, the invention provides an improvement in that the costs associated with placing advertisements in front of consumers who do not interact with them may be reduced.

In an earlier Patent Office decision, a Hearing Officer had found that ‘the substance of the invention in this case amounts to business innovation’, which was not patentable, and therefore refused Rokt’s patent application: Rokt Pte Ltd [2017] APO 34.  (A previous decision, relating to an alternative set of claims proposed by Rokt, had reached a similar conclusion: Rokt Pte Ltd [2016] APO 66.)

Rokt appealed to the Federal Court, where the primary judge (Justice Alan Robertson) reversed the Patent Office decision, finding that ‘[t]he invention solved not only a business problem but also a technical problem’, ‘… there was a business problem of attracting the attention of the user and having the user choose to interact with the advertiser, but this problem was translated into the technical problem of how to utilise computer technology to address the business problem’, such that ‘use of computers was integral, rather than incidental, to the invention in the sense that there is an invention in the way in which the computer carries out the business scheme’: Rokt Pte Ltd v Commissioner of Patents [2018] FCA 1988 at [205]-[208].

The Commissioner, in turn, appealed to a Full Bench of the Federal Court (composed of Justices Rares, Nicholas and Burley), which has now allowed the appeal, finding that ‘the invention is a scheme or, more accurately, a marketing scheme’, that ‘nothing about the way that the specification describes the computer hardware or software indicates that either is any more than a vehicle for implementing the scheme, using computers for their ordinary purposes’, and that ‘the claim amounts to an instruction to carry out the marketing scheme’ expressed at a ‘level of abstraction [which] demonstrates that it does no more than provide a list of steps to be implemented using computer technology for its well-known and understood functions’: Commissioner of Patents v Rokt Pte Ltd [2020] FCAFC 86 at [108], [109], [115].  As such, the Full Court concluded that Rokt’s claimed invention is not a patent-eligible manner of manufacture, and that ‘the learned primary judge erred in finding otherwise.’

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Tags: Australia, Computer programs, Patent Office, Patentable subject matter

Abstract Ideas and ‘Software Patents’ – Two Sides to the Story

I recently wrote about the decision of the Federal Court of Australia in Repipe Pty Ltd v Commissioner of Patents [2019] FCA 1956, in which two innovation patents owned by RePipe were found to be invalid, and thus liable to be revoked, on the ground that neither was for a patent-eligible ‘manner of manufacture’ under Australian law.  In that article, I noted that even when software innovators, like RePipe, make substantial investments and incur significant business risks in devising, developing, and bringing an invention to market, they may find themselves unable to access the same protection under the Australian patent system that is available to innovators in other fields of technology.  I observed that while some relatively trivial, low-social-impact, and low-risk innovations, such as a ‘packing box for shuffled playing cards’, enjoy uncontroversial patent protection, RePipe’s sophisticated, high-impact, high-risk, development of a networked system for improving workplace health and safety, is denied protection on the basis that it is a ‘mere scheme’ implemented using ‘standard’ or ‘generic’ hardware and software.

I questioned the policy basis for this distinction, in view of the classical economic rationale for having a patent system, viz., to provide an incentive for individuals and businesses to engage in the risky process of invention, development, and marketing of new products and services.  Which is all very well when this process of commercialisation actually takes place, and there is a genuine investment to be protected.  But that is not always the case.  Sometimes, the only ‘investment’ is in the preparation and filing of a patent application.  And where the claimed invention is software-implemented, a suspicion may arise that the real ‘work’ of innovation, which would justify the grant of exclusive patent rights under the classical rationale, can be avoided. 

I believe it is this suspicion that has caused courts and patent offices – along with legislators, in those jurisdictions that have chosen to impose statutory restrictions on patenting of ‘computer programs’ – so much angst.  This has led, in turn, to confusion and inconsistency in decision-making, such that the patent system can appear capricious, unpredictable, and discriminatory when applied to software innovations. This is bad for innovative businesses that can add confusion and uncertainty around the availability of patent protection, for themselves and their competitors, to all of the other risks and unknowns that they already face in developing and commercialising new products and services.

The patent system is supposed to be ‘technology neutral’, and capable of adapting to new developments and the emergence of new technologies.  However, it plainly is not.  The primary legal tests for determining what is, and is not, deserving of patent protection – novelty, inventive step, and the provision of a sufficient disclosure of the invention – are proving inadequate to deal fairly and consistently with computer-implemented innovations.  As a result, the blunt instrument of subject matter eligibility has become the tool of choice for striking down claims that are deemed to be unworthy of protection.

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Tags: Computer programs, Patentable subject matter

Repipe Rebuffed in Appeal Against Rejection of Patent on Computer-Implemented Invention for Workplace Safety

In a decision issued on 22 November 2019 (Repipe Pty Ltd v Commissioner of Patents [2019] FCA 1956), Justice McKerracher in the Federal Court of Australia has found two innovation patents owned by RePipe Pty Ltd to be invalid, and thus liable to be revoked, on the ground that neither was for a patent-eligible ‘manner of manufacture’ under Australian law.  Coming on the heels of the recent five-judge decision in Encompass Corporation Pty Ltd v InfoTrack Pty Ltd [2019] FCAFC 161 (for more on which, see ‘Generic’ Implementation of an Abstract Idea is not Patentable, but Does Prior Art have Anything to Do with It?), the Repipe decision is further evidence – assuming any such evidence was needed – of the difficulties now inherent in securing patent protection for computer-implemented inventions, even when the inventions in question satisfy all other requirements for patentability, and reflect considerable investment in the development of innovative and useful technology that was not previously available in the market.

Repipe confirms that where the overall functionality of a computer-implemented invention relates only to excluded subject matter, such as an abstract idea or a business scheme, then the fact that the functionality is embodied via software in a technical system is, in itself, insufficient to confer patent-eligibility.  There must, additionally, be some patentable ingenuity (whatever that might mean) in the implementation itself.  Of course, the relevant implementation details would necessarily be reflected in the claims, and the scope of protection available is therefore correspondingly limited.  This applies regardless of the cost and business risk involved in devising, developing, and bringing the invention to market.

As a result, many software innovators seem to be second-class citizens under the Australian patent system when compared with those working in other fields of technology.  It is difficult to discern any coherent policy basis for this distinction.  The classical economic rationale for having a patent system is to provide an incentive for the risky process of invention, development, and marketing of new products and services.  Once an invention has proven to be commercially successful, competitors can enter the now-established market at considerably reduced risk, even if their production costs are the same as those of the innovator.  Why, then, should patent protection be considered justified for, say, a ‘packing box for shuffled playing cards’, but not for RePipe’s invention of a sophisticated networked system for improving workplace health and safety?  I know which one of these involved the larger investment and business risk in development, and I know which one offers the greater social benefit … and it is not the one that is entitled to patent protection in Australia!

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Tags: Australia, Computer programs, Patent Office, Patentable subject matter

‘Generic’ Implementation of an Abstract Idea is not Patentable, but Does Prior Art have Anything to Do with It?

On Friday the 13^th of September 2019, an expanded five judge panel of the Full Bench of the Federal Court of Australia handed down its much-anticipated judgment in the appeal by Encompass Corporation Pty Ltd against the finding of a single judge that its computer-implemented method for displaying information gathered from multiple sources was ineligible for patenting under Australia’s ‘manner of manufacture’ subject matter test: Encompass Corporation Pty Ltd v InfoTrack Pty Ltd [2019] FCAFC 161.  For those of us who had been hoping that this case would bring some much-needed clarity to the law relating to patent-eligibility of computer-implemented inventions, the decision is something of an anticlimax.  The Full Court has unanimously dismissed Encompass’ appeal, easily finding, at [112], that there was ‘no error’ in the primary judge’s ‘ultimate conclusion that no manner of manufacture is involved in the method and apparatus as claimed.’

The concern that many interested stakeholders had with the first instance decision in the Encompass case was the way the judge appeared to conflate considerations of novelty and inventive step with his evaluation of the subject matter of the invention.  As I pointed out at the time, this would violate what I called the ‘ball point pen principle’ (after an analogy drawn in the earlier unanimous Full Court decision of CCOM Pty Ltd  v Jiejing Pty Ltd [1994] FCA 1168).  According to this principle, while advances in technology will generally restrict what is subsequently patentable on grounds of anticipation or obviousness, the question of whether or not something is suitable subject matter for a patent is – or should be – independent of the state of the art.  Put simply, a ball point pen does not cease to be the ‘kind of thing’ for which a patent might, in principle, be granted simply because it is no longer new and inventive.

This issue has significance beyond the Encompass case, because it is now the published official practice of the Australian Patent Office to take the prior art into account when assessing patent-eligibility under the ‘manner of manufacture’ test: see Section 2.9.2.2 of the Patent Manual of Practice and Procedure (as archived on 8 March 2019).

For this reason I had hoped – in vain, as it turns out – that the five judge panel in Encompass would take the opportunity to state expressly, once and for all, whether the Court had intended, by various comments in its two previous decisions on patentability of computer-implemented inventions (Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150 and Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177) to bring considerations of prior art into the assessment of patent-eligibility.  My own view is that it did not, and that Encompass implicitly reinforces that position.  However, in seemingly being reluctant to expressly criticise the primary judge’s reasoning, the Full Court in Encompass stops short of making any explicit statement to this effect.

The fact is that Encompass was not an appropriate case for the Court to consider broader principles for patentability of computer-implemented inventions.  It was readily able to find the alleged invention ineligible on the well-established basis that the claims merely required generic computer implementation of an otherwise unpatentable abstract idea or scheme.  This finding requires no consideration of the state of the prior art, notwithstanding that the primary judge might have appeared to follow such an approach.

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Tags: Australia, Computer programs, Patent Office, Patentable subject matter