“We are both created and create. Why cannot our own creations also create?”

This was the sentiment expressed by Beach J in the Federal Court's recent finding that artificial intelligence (AI) can be an inventor under Australian law in Thaler v Commissioner of Patents  [2021] FCA 879. This is the first decision by a court worldwide to embrace the concept of AI as an inventor. The Australian patent application at issue, AU 2019363177 (the AU Application), was filed by Davies Collison Cave on behalf of Dr Thaler.

Background

The issue of whether AI can be an inventor has been at the frontier of patent law in various jurisdictions in recent years. This can be attributed to Dr Thaler and his agent, Professor Ryan Abbott, who filed a PCT application in 2019 naming Dr Thaler as the applicant and “DABUS, The invention was autonomously generated by an artificial intelligence” as the inventor. DABUS is an acronym for a device for the autonomous bootstrapping of unified sentience.

The AU Application claims the output of DABUS' processes as food and beverage containers in which convex and concave fractal elements form pits and bulges in the side walls to permit coupling of containers, as well as devices and methods for attracting enhanced attention involving providing a pulse train to an LED or lamp at a frequency and fractal dimension that is highly noticeable to humans.

Dr Thaler is the owner of copyright in DABUS' source code and the owner and operator of the computer on which DABUS operates.1 However, while Dr Thaler's contribution to the creation of DABUS itself was by no means small, he was not named as an inventor because, according to Professor Abbott, the substantive innovative work was autonomously generated by DABUS using artificial neural networks.

The relevant law

Subsection 15(1) of the Australian Patents Act 1990 (Cth) (the Act) provides that a patent may be granted to a person who:

  • is the inventor; or
  • would, on the grant of a patent for the invention, be entitled to have the patent assigned to the person; or
  • derives title to the invention from the inventor or a person mentioned in paragraph (b); or
  • is the legal representative of a deceased person mentioned in paragraph (a), (b) or (c).

Notably, there is no definition of “inventor” provided in the Act.

Further, upon entry of the national phase in Australia, a PCT application is subject to a formalities check, which requires, inter alia, that the application “provide the name of the inventor of the invention to which the application relates”.2

Patent Office rejects DABUS as an inventor

Following national phase entry of the AU Application, the Patent Office issued an adverse formalities report on the basis that a natural person was not named as an inventor and that DABUS is not capable of “transferring or communicating” (e.g., by assignment) the invention to Dr Thaler.

It was submitted in response, inter alia, that it is sufficient for the purpose of subsection 15(1) that the applicant derives title to the invention from the inventor and that Dr Thaler was the rightful owner of anything created by DABUS under the common law principle of accession (or possession). However, according to the Deputy Commissioner in Stephen L. Thaler  [2021] APO 5, subsection 15(1) supports the proposition that “entitlement of the patentee flows from the inventor, and absent devolution the inventor will become the patentee”.3 Accordingly, as the Act requires that the patentee must be a person, subsection 15(1) is not capable of sensible operation when AI is the inventor.

Federal Court embraces DABUS as an inventor

Dr Thaler applied to the Federal Court for Judicial Review of the Deputy Commissioner's decision.4 Beach J ordered that the Deputy Commissioner's decision be set aside for three main reasons:5

  • an inventor is an agent noun; an agent can be a person or thing that invents;
  • it reflects the reality in terms of many otherwise patentable inventions where it cannot sensibly be said that a human is the inventor; and
  • nothing in the Act dictates the contrary conclusion.

In particular, while the Act specifies that the owner of an invention must be a “person”, no such limitation is expressed in relation to an inventor. The Deputy Commissioner relied heavily on dictionary definitions of “inventor” to determine that an inventor must be a natural person. However, in stating this reliance was “problematic to say the least”,6 Beach J did not consider that dictionary definitions could be used in place of the words in the statute in the absence of statutory context. In this regard, the Act includes non-humans, such as bodies politic or corporations as “persons”.7

Further, Beach J considered that to deny grant of a patent for an otherwise patentable invention because the inventor is not a natural person would be the antithesis of the object of the Act to “provide a patent system in Australia that promotes economic wellbeing through technological innovation and the transfer and dissemination of technology…”.8 His Honour considered that recognising AI as being capable of inventorship would incentivise the development of creative machines and lead to new scientific advantages, where they might otherwise be protected as trade secrets.

Finally, Beach J noted that subsection 15(1) concerns who may be granted  a patent, whereas the relevant question at this stage is whether the AU application meets the formalities requirements, specifically whether the application names an inventor. However, the Act does not mandate that the named entity is an actual inventor, nor that the inventor be a human.

In any case, Beach J was of the view that Dr Thaler could be entitled to grant of the patent by virtue of 15(1)(c) (or possibly even paragraph 15(1)(b)).9 In relation to paragraph 15(1)(c), His Honour stated that “the concept of derivation is broad and is not limited to assignments or any transfer of title as such”.10 In particular, Beach J considered there to be a prima facie  case that Dr Thaler derives title to the invention by virtue of his possession of DABUS, ownership of the copyright in DABUS' source code, and his ownership and possession of the computer on which DABUS operates.11

In relation to paragraph 15(1)(b), His Honour stated that Dr Thaler could be entitled to have a patent on the invention assigned to him without a formal assignment instrument, citing examples such as employees or contractors who invent in the course of their employment/contract or in the case of a third party who misappropriates the invention. Relevantly, Beach J stated:

…title can be derived from the inventor notwithstanding that it vests ab initio other than in the inventor. That is, there is no need for the inventor ever to have owned the invention, and there is no need for title to be derived by an assignment.

Other jurisdictions

Dr Thaler also filed several applications in other jurisdictions naming DABUS as the inventor, including Europe, the UK, the US, Japan, Saudi Arabia, India, South Africa and New Zealand. To date, the only jurisdiction to grant a patent naming DABUS as the inventor is South Africa, which does not conduct substantive examination and accepts the designation of an inventor in the PCT application prior to grant.

Meanwhile, although the relevant applications withstood substantive examination in Europe and the UK, the European Patent Office Board of Appeal issued preliminary communications to the effect that DABUS does not have “legal capacity” within the meaning of the European Patent Convention (although oral proceeding are not scheduled until December 2021)12 and the UK High Court deemed the relevant applications withdrawn because a human was not named as the inventor.13 However, a further application has since been filed in the UK naming DABUS as the inventor.14 The USPTO also rejected Dr Thaler's application on the basis that DABUS is not a “natural person”.15

Implications

This landmark decision means that applications naming AI as an inventor will not be rejected for failing to name a human inventor, and human applicants thereof are prima facie entitled to grant of a patent in Australia, subject to any appeal by the Commissioner of Patents.

Other key takeaways from the decision are as follows:

  • While Beach J was prepared to equate DABUS with AI and consider DABUS as semi-autonomous, he did not propose any definition of AI or prescribe how “ownership” of an AI invention must be determined.
  • Beach J described the concepts of “manner of manufacture” and now “inventor” as being seen in “analogously flexible and evolutionary way”.16 It is likely that the object clause of the Act will continue to be invoked by the courts to expand or contract the definitions of various concepts/terms of patent law.
  • This decision may have important implications for other technologies and scientific fields, particularly the pharmaceutical industry, which relies increasingly on AI at all stages of the drug development process.

Footnotes

1 Thaler v Commissioner of Patents [2021] FCA 879 at [8]

2 Patents Regulations 1991  (Cth), reg 3.2C(2)(aa)

3 Stephen L. Thaler [2021] APO 5 at [20]

4 Pursuant to the Administrative Decisions (Judicial Review) Act 1977 (Cth), s 5

5 Thaler v Commissioner of Patents [2021] FCA 879 at [10]

6 Thaler v Commissioner of Patents [2021] FCA 879 at [147]

7 By virtue of the Acts Interpretation Act 1901  (Cth), s 2C(1); Thaler v Commissioner of Patents [2021] FCA 879 at [154]

8 Patents Act 1990  (Cth), s 2A

9 Thaler v Commissioner of Patents [2021] FCA 879 at [165]

10 Thaler v Commissioner of Patents [2021] FCA 879 at [163]

11 Thaler v Commissioner of Patents [2021] FCA 879 at [193]

12 EP 3564144 and EP 3563896

13  GB1816909.4 and GB1818161.0; see Thaler v The Comptroller-General of Patents, Designs And Trade Marks [2020] EWHC 2412 (Pat)

14 GB 2105428.3

15 US 16/524,350

16 Thaler v Commissioner of Patents [2021] FCA 879 at [121]

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