This article was written by Caroline Ryan.
In a somewhat predictable reversal of fortune for Australia’s top patent applicant, Aristocrat Technologies Australia (Aristocrat), the principles surrounding patentability of computer-implemented inventions has returned to the Federal Court for the second time in a fortnight.
As discussed in our article on the Full Federal Court’s decision Commissioner of Patents v Rokt Pte Ltd  FCAFC 86, Justices Rares, Nicholas and Burley recently found against start-up technology company Rokt, in respect of its patent application for a software-based marketing scheme targeted to online consumers.
Last week Justice Burley handed down Aristocrat Technologies Australia Pty Limited v Commissioner of Patents  FCA 778 in favour of the patentee in a judgment that specifically applies Rokt and provides further guidance to patent attorneys and applicants when considering patentability objections to inventions comprising software-based technology.
The patentee, Aristocrat Technologies Australia (Aristocrat), is one of the largest gaming services providers in the world, and a manufacturer of electronic gaming machines (EGMs). It was also recently identified by IP Australia as Australia’s top patent applicant for 2019 in the Australian Intellectual Property Report 2020.
In 2018, four innovation patents owned by Aristocrat were the subject of examination by the Commissioner of Patents. The delegate of the Commissioner found that none of the inventions the subject of the claims were considered to be patentable subject matter (i.e. a manner of manufacture), with the substance being a mere scheme in the form of a set of game rules, or a scheme for making money (see Aristocrat Technologies Australia Pty Limited  APO 45).
Aristocrat appealed the delegate’s decision, with the central question for the Federal Court being whether the claim for an electronic gaming machine that comprises a combination of physical parts and computer software to produce a particular outcome is a “manner of manufacture” within the meaning of s18(1A)(a) of the Patents Act 1990 (Cth).
The Full Court in Rokt considered the analysis of manner of manufacture in past decisions such as Grant v Commissioner of Patents  FCAFC 120; 154 FCR 62; Research Affiliates LLC v Commissioner of Patents  FCAFC 150; 227 FCR 378; Commissioner of Patents v RPL Central Pty Ltd  FCAFC 177; 238 FCR 27; Encompass Corporation Pty Ltd v InfoTrack Pty Ltd  FCAFC 161; 372 ALR 646; and Watson v The Commissioner of Patents  FCAFC 56.
The task of construing the specification involves arriving at a characterisation of the invention claimed in order to determine whether or not it is in substance for a manner of manufacture. This requires the Court to undertake the following lines of inquiry.
- As the initial threshold question, whether the substance of the claimed invention is a mere scheme or business method, which alone would not be considered the proper subject matter for the grant of a patent; and
- if so, a subsequent inquiry as to whether:
- an invention actually lies in the computerisation of the method; or
- the computer system is “a mere tool” in which the scheme is performed, noting that “plugging an unpatentable scheme into a computer does not make it a manner of manufacture”.
The first line of inquiry requires an affirmative response before engaging in the second line of inquiry.
In Aristocrat, Justice Burley found that when considering the threshold question, the delegate of the Commissioner of Patents mischaracterised Aristocrat’s invention as an ‘inventive concept’, and therefore wrongly concluded that the invention the subject of the innovation patents was a mere scheme.
In doing so, Justice Burley noted that the delegate “rather put the cart before the horse” and prematurely discounted elements of Aristocrat’s claimed invention.
Aristocrat’s claimed invention was for a gaming machine comprising a particular construction, the operation of which involved a combination of physical parts and software to produce and implement a particular outcome in the form of an EGM that functioned in a specific way. As such, the invention was not a mere scheme and it was unnecessary for the delegate or the Court to consider the second line of inquiry at all.
The characterisation of Aristocrat’s invention in this decision aligns with Justice Nicholas’ findings in the earlier decision of Aristocrat Technologies Australia Pty Limited v Konami Australia Pty Limited  FCA 735, which held that conceptually similar inventions were not “mere ideas” but “new and useful gaming machines and new and useful methods of operation producing new and improved results”.
Justice Burley noted that the Commissioner accepted during proceedings that if the EGM the subject of Aristocrat’s claim was implemented mechanically, “the old-fashioned way, 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… It is difficult to see why the development of an implementation of an EGM that utilises the efficiencies of electronic technology would be disqualified from patent eligibility, when the old-fashioned mechanical technology was not.”
The Aristocrat decision will not radically alter the current state of play in Australia, but does provide further guidance to patentees seeking to overcome manner of manufacture objections in relation to inventions comprising software-based technology.