The Australian test for the eligibility of software inventions for patenting has evolved with a decision by Justice Burley of the Federal Court of Australia, finding an electronic gaming machine (EGM) to be eligible for patent protection.
In the decision, Aristocrat Technologies Australia Pty Limited v Commissioner of Patents  FCA 778, Burley J explained that the test for eligibility, defined by the phrase "manner of manufacture" should be approached in two steps, and found that Aristocrat's EGM succeeded at the initial step.
Four patents considered
In an earlier decision, a Delegate of the Australian Patent Office had found four of Aristocrat's innovation patents to lack a manner of manufacture.1 On appeal, the parties agreed on one representative claim to be considered to determine whether all of the patents lacked a manner of manufacture.2
The role of expert evidence
To assist the Court, the parties presented evidence from several experts. This evidence was categorised as being from lay persons,3 gaming experts4 and human computer interaction (HCI) experts.5 The gaming experts and HCI experts produced joint reports.6
Although the experts did their best to assist the Court, Burley J followed a recent Full Court decision7 to consider that it was for the Court to apply the common law principles that have developed to separate patentable inventions from schemes or methods of business. 8 Accordingly, much of the evidence given by the experts was considered to be extraneous to the real dispute between the parties.9
What are Electronic Gaming Machines?
His Honour found that the claimed invention 'has hardware, firmware and software components that are identified', and that the EGM is a physical device including the following specific components:10
- a display that must be able to show reels to emulate physical reels used in old mechanical gaming machines; and
- a credit input mechanism which may include 'at least a coin input chute, a bank note collector, a credit card reader, or a ticket reader'; and
- a game play mechanism, such as buttons which may be physical or on-screen; and
- a game controller which comprises the computational elements responsible for executing the software responsible for operating the game.
His Honour also found 'expert evidence reveals that the skilled reader understands upon reading the specification that EGMs are subject to regulatory supervision'.11
Accordingly, Burley J characterised the EGM 'as a machine of a particular construction which implements a gaming function.'12
Two-step test for determining patent eligibility
The commencement of any analysis of manner of manufacture requires determining whether the claims in suit, as read in the light of the specification as a whole and the relevant art, which in the present case is the common general knowledge, are for a manner of manufacture.
After reviewing the reasoning in several recent cases, including Grant v Commissioner of Patents  FCAFC 120, Research Affiliates LLC v Commissioner of Patents  FCAFC 150, Commissioner of Patents v RPL Central Pty Ltd  FCAFC 177, and Encompass Corporation Pty Ltd v InfoTrack Pty Ltd  FCAFC 161, Burley J clarified that the test for determining patent eligibility-i.e., whether the claim is a manner of manufacture-involves two steps:
- the initial question is whether the claimed invention is a business method, or mere scheme;14 and if answered in the affirmative,
- the second question is 'whether the computer-implemented method is one where invention lay in the computerisation of the method, or whether the language of the claim involves . merely plugging an unpatentable scheme into a computer'.15
Burley J affirmed that 'the legal character of an unpatentable method that was a mere scheme did not change "merely because the method [was] implemented by the instrumentality of a computer"',16 and affirmed that 'the distinction between a mere scheme or a plan on the one hand, and a patentable invention on the other, has been considered in a number of cases', including Grant, and Encompass. 17
A gaming machine is a device of a specific character - analogous to a ball point pen
To address the initial question, his Honour first considered 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,' because the invention included the specific components mentioned above.18
His Honour disagreed with the Commissioner's approach of first identifying the inventive concept before using this concept to conclude that the invention is a mere scheme, stating '[t]hat rather puts the cart before the horse.'19 He considered that '[a]ny claim can be stripped back to remove all specific limitations, so that at its core an abstract idea emerges. But where the abstract idea is incorporated into a means for carrying it out, it may result in a manner of manufacture', referring to the High Court decision Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (No 2)  HCA 21.
Secondly, his Honour considered that, 'were the EGM of claim 1 to have been implemented mechanically, . without using software but instead using cogs, physical reels and motors to create the gameplay, there is no doubt that it would be a manner of manufacture', and adapted an analogy used in the Full Federal Court decision CCOM Pty Ltd v Jeijing  FCA 396:20
.a ball point pen that used computerised components to enable it to function more efficiently would be no less a manner of manufacture now than the original ball point pen was when it was first invented. Whether or not it is novel or involves an inventive step is, of course, for separate enquiry.
Thirdly, his Honour considered that the claim of the patent in suit was analogous to the patent considered by Nicholas J in Aristocrat Technologies Australia Pty Limited v Konami Australia Pty Limited  FCA 735, and as the reasoning of Nicholas J was not 'plainly wrong', he was 'disposed to follow it.'21
Based on his considerations, his Honour found that the claimed invention was in substance not a business method or mere scheme. Having answered the initial question in the negative, he found it unnecessary to consider the second question of the two-step test.
Take home points
This decision suggests that a computerised version of something that has traditionally been considered to be patent-eligible should also be eligible for patent protection.
The decision also affirms that common general knowledge should be used for construing the specification and claims, but not for first identifying the inventive concept before using this concept to conclude that the invention is a mere scheme.
We note that Burley J's two-step test appears consistent with the approach adopted in Technological Resources Pty Ltd v Tettman  FCA 1889, where Justice Jagot held that an invention which involves 'physical steps carried out on a physical product using physical apparatus, to produce a physical and tangible result',22 'is not analogous to those considered to be mere schemes.'23
It remains to be seen if, and how, Burley J's reasoning will extend outside EGMs, and whether the Commissioner of Patents will file an appeal.
Overall, this decision is a positive step for software patents and patent applications in Australia, as it provides patent applicants and patentees with a legal basis to argue that their patent claims do not define a mere scheme or business method in the initial step of Burley J's two-step test, i.e., without needing to demonstrate in the second step that the computer implementation involves ingenuity or an inventive concept.
1. Aristocrat Technologies Australia Pty Limited  APO 45 ('Aristocrat').
2. Ibid .
3. Ibid -.
4. Ibid -.
5. Ibid -.
6. Ibid -.
7. Commissioner of Patents v Rokt Pte Ltd  FCAFC 86 ('Rokt').
8. Aristocrat (n 1) .
9. Ibid .
10. Ibid .
11. Ibid .
12. Ibid .
13. Aristocrat (n 1) -.
14. Ibid - citing Commissioner of Patents v RPL Central Pty Ltd  FCAFC 177; 238 FCR 27, .
15. Ibid - citing Commissioner of Patents v Rokt Pte Ltd  FCAFC 86, .
16. Ibid  citing Encompass Corporation Pty Ltd v InfoTrack Pty Ltd  FCAFC 161; 372 ALR 646, .
17. Ibid .
18. Ibid .
19. Ibid .
20. Ibid .
21. Ibid  citing Aristocrat Technologies Australia Pty Limited v Konami Australia Pty Limited  FCA 735; 114 IPR 28, .
22. Technological Resources Pty Limited v Tettman (2019) FCA 1889; 147 IPR 423, .
23. Ibid .
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