Legislation needed on patentability of computer-implemented inventions, after High Court divided in rare 3:3 judgment

Kent Teague, Rose Jenkins
18 Aug 2022
Time to read: 3 minutes

The recent High Court judgment of Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents [2022] HCA 29 creates uncertainty about when a claimed invention that utilises computer software or hardware will be a patentable "manner of manufacture" under the Australian Patents Act.

The High Court has delivered judgment in a case about the "manner of manufacture" requirement for patentability under the Australian Patents Act.

The judges were split 3:3, meaning that the state of the law is uncertain, and ripe for legislative reform by the Federal Parliament.

Patentees of inventions involving the use of computer software or hardware should review their patent rights, which may now be vulnerable to a "manner of manufacture" attack, as occurred in this dispute.

Similarly, any person doing business in an industry where patents are relevant should assess whether their competitors' patent rights might be vulnerable to attack, to clear the way for a launch unrestrained by patents of this nature.

Introducing the players

Aristocrat manufactures and sells electronic gaming machines (EGMs), also commonly known as "pokies". The innovation patent the subject of this dispute claimed a "system and method for providing a feature game". The patent claim described the invention as, in summary, an EGM with a feature game, in which configurable symbols from the main game were retained in place during game play while non-configurable symbols were removed progressively and replaced by configurable or non-configurable symbols. A prize was awarded at the end of the feature game based on the values displayed on the configurable symbols.

Upon examination, the Commissioner of Patents disallowed the patents. When the case came to the Federal Court, Justice Burley considered that the invention qualified as a manner of manufacture and therefore was held to be a patentable invention. The Commissioner appealed and the Full Court allowed the appeal, finding that the invention should instead be characterised as an abstract idea (not patentable) rather than an advancement in computer technology (patentable).

The High Court weighs in

The High Court unanimously decided that for a computer-implemented invention, the implementation must create an "artificial state of affairs" and a "useful result", rather than merely manipulating an abstract idea. Consistent with long-standing principles, the Court confirmed that claims to a mere scheme, plan, or discovery, or mere abstract ideas or information, are not patentable subject matter.

On the application of this principle to the facts, however, the Court was split down the middle.

Kiefel CJ, Gageler and Keane JJ would have dismissed the appeal, finding that the invention, properly characterised by reference to the claim, the specification as a whole and the common general knowledge, does not contribute anything other than a mere abstract idea (the rules of the new game) which happens to be implemented in the computer software/hardware. Their Honours' judgment also considered whether the claim disclosed any technical contribution to computing or gaming technology beyond the common general knowledge. In this case, the question was answered in the negative.

In a separate judgment, Gordon, Edelman and Steward JJ would have found in favour of the patentee, Aristocrat, finding that the invention as claimed resulted in an "artificially created state of affairs" and produced a "useful result", capable of patent protection, even if selected integers of the claim would not have enjoyed patentability when separated from the integers relating to known computer software or hardware. Their Honours held that the implementation of a scheme or idea on a computer to create an artificial state of affairs should not be treated any differently to any other machine (for example, an “old fashioned” pokie machine that worked with mechanical parts rather than computerised ones). In both cases, their Honours held, the implementation must do more than merely manipulate an abstract idea. On the facts of this case, their Honours concluded that the implementation did do more, even if it involved a combination with several previously known integers.

Key takeaway

As a quirk of Australian procedure, the evenly split bench means that the decision under review is affirmed by default, with the result that the patent failed to meet the manner of manufacture requirement in accordance with the Full Court's decision below, and thus should be disallowed.

In effect, the following considerations have been endorsed as relevant to the manner of manufacture question in Australia, namely:

  • whether the invention as claimed results in an "artificially created state of affairs", meaning that the invention is something which involves "making" a product, process or outcome;
  • whether the invention as claimed produces a "useful result";
  • whether the claim contains matter over and above merely instructions which a person skilled in the art could be expected to act upon, in the exercise of his or her own judgment;
  • in the case of an electronic gaming machine, whether the claim discloses the adaptation of computer technology in a way that accommodates the exigencies of the game or in any other way; and
  • whether the specification includes a claim or claims that involve a contribution, adaption or alteration of, or addition to technology outside the common general knowledge in the relevant art.

Patents involving computer software or hardware – regardless of the field of technology – may be vulnerable to a "manner of manufacture" attack, as ultimately succeeded in this dispute. Patent owners should review their portfolios, and identify any weaknesses that can be addressed.

Similarly, any person doing business in an industry where patents protect relevant technologies should assess whether their competitors' patent rights may be vulnerable to attack, clearing the way for a launch unrestrained by computer implemented invention patents.

 The High Court's decision leaves a great deal of uncertainty about the way in which future patent applications will be examined by the Commissioner, and future patent disputes will be approached by the courts, unless and until legislative reform is implemented . In our view, the High Court’s decision is unsatisfactory and technology developers need to know what is patentable in this space and what is not. The Commonwealth Parliament needs to deal with this question by way of amendment to the Patents Act, to remove this uncertainty.

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