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DABUS is not coming, for now: AI as an inventor fails on appeal

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Last year we reported that Justice Beach found that an artificial intelligence (AI) system can be an inventor for the purposes of the Patents Act 1990 (Cth) (Patents Act). At the time, this was the first court around the world to decide that an AI system could ‘invent’ something for the purpose of a patent application.

This decision was appealed by the Commissioner of Patents to the Full Court of the Federal Court (Full Court). Yesterday, the Full Court handed down its decision – allowing the appeal and overturning Justice Beach’s finding that an AI system can be the ‘inventor’ of a patent. The Full Court was comprised of five rather than three judges (Allsop CJ, and Nicholas, Yates, Moshinsky and Burley JJ) indicating the importance placed on the subject of the appeal and the significant public interest the case has attracted.

The concept of ‘inventorship’ is central to patent law. The decision of the Full Court involves a detailed analysis of this concept and its historical underpinnings.

The decision comes at a time when the patentability of inventions by AI systems is being considered around the world. So far, the US, UK and Europe have all found that the inventor of a patent must be a natural person. In this insight, we provide an overview of the Full Court’s decision and discuss the implications for inventions creating using AI systems.

This question is of increasing importance as the uptake of AI across industries gathers pace.

Key Takeaways

  • The Full Court held that a patent application must list an inventor (or inventors) and the inventor must be a natural person – it cannot be an AI system.
  • The Full Court reached this decision by examining statutory language, and the structure and history of the Patents Act, concluding that patent law in Australia is premised on the existence of an inventor who is a natural person.
  • In observations at the conclusion of its judgment, the Full Court noted that policy questions remain in relation to the treatment of AI and inventions.

Background – Who, or what, is DABUS?

DABUS is an acronym for the ‘Device for the Autonomous Bootstrapping of Unified Sentience’ which is an AI system created by Dr Thaler. AI systems are implemented within machines to simulate specific human thought processes and actions through a set of algorithms. DABUS is an AI system that incorporates artificial neural networks – an algorithm that is designed to simulate the way in which the human brain processes and generates information. Dr Thaler is the owner of the copyright in the DABUS source code.

Full Court finds an inventor of a patent must be a natural person

Justice Beach’s finding that an AI system can be the inventor of a patent for the purposes of the Patents Act was appealed to the Full Court by the Commissioner. As previously stated, on 13 April 2022, the Full Court upheld the appeal, finding in favour of the Commissioner and overturning Justice Beach’s finding. The Full Court found that:

‘Only a natural person can be an inventor for the purposes of the Patents Act and Regulations. Such an inventor must be identified for any person to be entitled to a grant of a patent under ss 15(1)(b)-(d)’.[1]

In its judgment, the Full Court considered the statutory language, structure and history of the Patents Act, and the policy objectives underlying the legislation. Based on this discussion, the Court found that patent law in Australia is premised on the existence of an ‘inventor’ who is a natural person. Accordingly, DABUS, and other AI systems, cannot validly be an ‘inventor’ under the Patents Act.

In examining the language of the Patents Act, the Full Court found that s 15 and its predecessor (s 34(1) of the Patents Act 1936 (Cth)), require the ‘existence of an ‘actual inventor’ from whom the entitlement to the patent was directly or indirectly derived’ and the Patents Act is built on the premise that this inventor is a natural person.[2] For example, the Patents Act contemplates patent rights can exist in situations where the inventor is deceased or not a resident in Australia – implying that only a natural person, with legal personality can be the ‘actual inventor’ of a patent.

Similarly, the Full Court discussed various cases that consider who the ‘inventor’ of a patent is. Although no previous case has confronted the question of whether an AI system can be the ‘inventor’ of a patent, the Full Court found that cases that have considered the meaning of ‘inventor’ clearly show that:

‘the law relating to the entitlement of a person to the grant of a patent is premised upon an invention for the purposes of the Patents Act arising from the mind of a natural person or persons’.[3]

Inventorship in the Patents Act

The ‘inventor’ of an invention is a central concept of patent law. Under the Regulations, the inventor must be specified in any patent application and challenges contesting the entitlement to a patent often involve a nuanced examination of who ‘invented’ the relevant invention.

In Justice Beach’s primary judgment, his Honour drew an important distinction in the language of the Act between who is entitled to the grant of a patent (a ‘person’), and what can be named as an inventor. His Honour found that ‘inventor’ is an agent noun, and an agent can be a person or thing that invents. As discussed by the Full Court, Justice Beach found that:

‘As an agent noun (like “computer”, “dishwasher” or “lawnmower”) the agent can be a person or a thing. In this context the primary judge noted that, whereas once the word “inventor”, like “computer”, might originally have been apt to describe persons when only humans could make inventions (or perform computations), now the term may be used to describe machines which can carry out the same function’.[4]

Accordingly, he found that a person who derives title to the invention from the inventor can be granted a patent. The ‘inventor’ does not have to be a natural person.

In contrast, the Full Court disagreed with this construction. Instead, it found that the inventor must be a natural person and held that:

‘Although not defined in the Patents Act, the term “inventor” in 15(1) plainly enough is a reference to the inventor of the invention the subject of the patent application. “Inventor” has long been held to bear its ordinary English meaning, being the person(s) responsible for making the invention, namely, “the person who makes or devises the process or product”’.[5]

The Full Court considered the history of patent law and the language of the Patent Act and held that the ‘person who makes or devises the process or product’ could only be a natural person – not an AI system.

Comments from the Full Court

The Full Court emphasised that its task was one of statutory construction, informed by the object of the Patents Act. In observations at the conclusion of their judgment, their Honours note that policy questions remain in relation to the treatment of AI and inventions. If AI were to be recognised as an inventor, who would own the invention created? Also, as observed by the Full Court, if AI is to be recognised as an inventor, does the standard of inventive step need to be recalibrated “such that it is no longer judged by reference to the knowledge and thought processes of the hypothetical uninventive skilled worker in the field? If so, how?”

Further the Full Court observed that in this case, it was said to be an agreed fact that DABUS was an inventor and Dr Thaler was not. The Full Court highlighted the fact that it was not asked to consider whether the invention at issue in this case had a human inventor.

Although the Full Court did recognise that the decision brings Australia in line with the decision in the UK the judgment acknowledges that the Australian case focuses on the language of the Patents Act, which in “material respects differs” from the equivalent UK legislation.

What is next

AI poses many conceptual issues for intellectual property. Copyright enthusiasts and practitioners will earnestly debate the appropriate author of ‘monkey selfies’ , and now the time has come for Patent Offices around the world to consider how machines might play a role in inventions. Numerous DABUS patent applications have also been filed under the Patent Cooperation Treaty (PCT), which streamlines applications internationally, and many of those applications are currently pending examination. Additionally, some major jurisdictions have also made findings regarding whether DABUS can be an inventor:

Maybe
GERMANY

The German Patent Office refused Thaler’s application.

Thaler appealed this to the Federal Patent Court. On 11 November 2021, the Federal Patent Court found that AI generated inventions are not excluded from patentability in Germany, however a human inventor needs to be named.

SOUTH AFRICA

The South African Companies and Intellectual Property Commission granted Thaler’s application. The application was published in the July 2021 patent journal.

It is noted that only a formalities check is required in South Africa.

It remains to be seen whether Thaler’s patent will be challenged.

NO
THE EUROPEAN UNION

The European Patent Office (EPO) rejected the Thaler patent applications, stating than an inventor needs to be a natural person.

Thaler appealed. The EPO Legal Board of Appeal (BoA) revealed its preliminary view on 21 June 2021 stating than an inventor must be a person having legal capacity.

After the oral hearing on 21 December 2021, the BoA rejected the appeal and agreed with the EPO’s reasons.

THE UNITED KINGDOM

The UK Intellectual Property Office rejected Thaler’s application on the basis that he did not fulfil the statutory requirements concerning inventorship and entitlement.

Thaler appealed to the High Court. This appeal was unsuccessful, with Mr Justice Smith stating that “the provisions of the Patents Act 1977 are extremely clear” that an inventor must be a person.

Thaler then appealed to the England and Wales Court of Appeal which were also dismissed. The majority found that an inventor must be a person.

It is understood that Thaler has filed an application for permission to appeal to the UK Supreme Court.

THE UNITED STATES

The US Patents and Trademarks Office (USPTO) rejected the application stating that the legislation and case law required an inventor to be a natural person.

Two petitions requesting a review and a reconsideration of that review were also dismissed by the USPTO.

Thaler than appealed to the United States District Court for the Eastern District of Virginia. This District Court agreed with the USPTO and the appeal was unsuccessful.

Thaler has appealed this decision to the Court of Appeals for the Federal Circuit.

At a philosophical level, recognition of artificial intelligence as an inventor raises important questions about the intent and rationale of the patent system. A key pillar of the system is the macroeconomic bargain struck by rewarding those who invest in inventions with a limited period of exclusivity, at the price of disclosing their invention so that others may understand and (after expiry of the period of exclusivity) use the invention. The Full Court recognised this concept in its judgment, observing:

‘We note that the consideration for “the reward” of the grant of the patent in the form of a statutory monopoly has long been the disclosure of the invention to the public in a manner that enables a person skilled in the art to perform the invention upon the expiry of the term of the patent … As noted above, a person’s entitlement to that reward is closely linked to the act of invention by the true and first inventor.’[6]

What message would be sent about the value of innovation and human inventorship by recognising machines?  This raises questions about whether the objective of the Patents Act to “promote economic wellbeing through technological innovation” is being met given recent technological developments. It is unlikely that Dr Thaler has significant expertise in the subject-matter of the inventions that might be conceived by DABUS, and whether his creation of and investment in DABUS should entitle him to exclusivity in such a field of potential inventions is more than a legal question.

His Honour Beach J may have been rhetorical when asking in his primary judgment: “We are both created and create. Why cannot our own creations also create?”  For now, the Full Court answered his question by finding that the creation cannot itself be an inventor, at least in the scheme and context of the Patents Act.

The decision of the Full Court may be the subject of an application for special leave to appeal to the High Court of Australia - an application that, if made, will be closely watched by many in Australia and around the world.

 

References

[1] Commissioner of Patents v Thaler [2022] FCAFC 62 [113].

[2] Commissioner of Patents v Thaler [2022] FCAFC 62 [98].

[3] Commissioner of Patents v Thaler [2022] FCAFC 62 [105].

[4] Commissioner of Patents v Thaler [2022] FCAFC 62 [46].

[5] Commissioner of Patents v Thaler [2022] FCAFC 62 [100].

[6] Commissioner of Patents v Thaler [2022] FCAFC 62 [88].

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