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Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents [2022] HCATrans 103 (9 June 2022)

Last Updated: 14 June 2022

[2022] HCATrans 103

IN THE HIGH COURT OF AUSTRALIA


Office of the Registry
Sydney No S40 of 2022

B e t w e e n -

ARISTOCRAT TECHNOLOGIES AUSTRALIA PTY LTD ACN 001 660 715

Appellant

and

COMMISSIONER OF PATENTS

Respondent


KIEFEL CJ
GAGELER J
KEANE J
GORDON J
EDELMAN J
STEWARD J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 9 JUNE 2022, AT 10.00 AM

Copyright in the High Court of Australia
MR D. SHAVIN, QC: May it please the Court, I appear for the appellant with my learned friends, MS C.L. COCHRANE, SC, MR P.J.T. CREIGHTON‑SELVAY and MR W.H. WU. (instructed by Gilbert + Tobin)

MR C. DIMITRIADIS, SC: May it please the Court, I appear with my learned friend, MS E.E. WHITBY, for the respondent, Commissioner of Patents. (instructed by Australian Government Solicitor)

MS F.C. ST JOHN: May it please the Court, I appear with my learned friend, MS N.L. GOLLAN, for the Institute of Patent and Trade Mark Attorneys of Australia. (instructed by Mills Oakley)

KIEFEL CJ: Yes, Mr Shavin.

MR SHAVIN: May it please the Court. The issue at the core of this appeal arises out of the provisions of section 18(1A)(a) of the Patents Act. The Court will find a set of those provisions in tab A3 of volume 1 of the joint bundle and at page 21. The significance of the section, both subsection (1) which deals with standard patents, subsection (1A) which deals with innovation patents and the patents in certain innovation patents, but for relevant purposes there is no distinction in the provisions of the section:

Subject to subsection (2), an invention is a patentable invention for the purpose of a standard patent-


or innovation patent:

if the invention, so far as claimed in any claim:

(a) is a manner of manufacture within the meaning of section 6 of the Statute of Monopolies; and

(b) when compared with the prior art base as it existed before the priority date of that claim:

(i) is novel; and

(ii) involves an inventive step –


(c) deals with utility, and (d) deals with secret use.

Now, the significance of going to the section as we start is because this Court has held repeatedly that when dealing with questions of a manner of manufacture one deals with that separately from other grounds going to patentability. Indeed, it had been said by the Full Court of the Federal Court in CCOM, with Justice Gummow, Justice Spender and Justice Heerey, that manner of manufacture has become the residual of the grounds. It is a low‑level threshold for patent eligibility.

The fact that something might have patent eligible subject matter does not go to whether the subject matter of the patent claimed will be worth – will obtain a grant. That is determined by reference to the other grounds of invalidity in section 18 and to satisfaction of the requirements of section 40.

So, the general principles for determining whether a claimed invention is a manner of manufacture were identified by this Court in NRDC – a decision with which I have no doubt the Court is familiar, but to which we will return – and more recently in Apotex v Sanofi, in D’Arcy v Myriad – and we will go to each of those where we find that there is a consistent theme as to the fundamental elements of a manner of manufacture.

Mere schemes – abstract ideas and intellectual information, which we might refer compendiously as “mere schemes” – have never been considered a manner of manufacture, unless applied to produce a practical and useful result which changes their character from merely intellectual information. One finds that because, when one considers the discussion of what is a product that is contained in the body of the decision of this Court in NRDC, the focus is on the Industrial Act application.

It is a distinction between the useful arts and the fine arts. When one has mere intellectual information, it does not have that character until it is applied. So, one can have invention in an idea, but if the idea is not given a particular practical and useful result, an application, it is not patented. This issue lies at the core of the contest between the parties today.

EDELMAN J: Mr Shavin, in your submissions at paragraph 6, you say that the inventions have already been held to be “novel and innovative”.

MR SHAVIN: In the office, in examination, your Honour.

EDELMAN J: Thank you.

GORDON J: Is that right, or was it an assumption made by them?

MR SHAVIN: No. They have been examined fully and the only objection outstanding was manner of manufacture.

GORDON J: The way I had read it was that they assumed (b) and (c) but not determined (b) and (c). Am I wrong about that?

MR SHAVIN: My understanding is that that is wrong, your Honour, but I will have it checked.

GORDON J: Thank you.

MR SHAVIN: My understanding is that the patent went through a full process of examination. All issues raised by the examiner were resolved apart from the issue of manner of manufacture.

GORDON J: Were those elements identified? Were the facts and circumstances that gave rise to (b)(i) and (ii) being satisfied identified?

MR SHAVIN: I am not sure that the examination reports are in the papers before this Court. May I refer back to – someone will just check that?

GORDON J: Thank you.

EDELMAN J: At appeal book page 31, paragraph 84, Justice Burley says that:

The other requirements of . . . novelty, innovative step, usefulness and that there be no secret use . . . are not relevant and are for present purposes to be assumed –


MR SHAVIN: That because there was not judicial determination on them. I am advised, your Honour Justice Gordon, that there were no objections raised other than to manner of manufacture.

GORDON J: I see. Thank you.

MR SHAVIN: So, the reason that, your Honour, it was said to be assumed by the court is it was not the subject of judicial determination, but in the course of prosecution no objection has been raised, and there was no outstanding objection. It has been dealt with differently to the European Patent Office which might take one objection, deal with that and then come back and deal with other objections. This is the only outstanding objection to the matter going to grant – the application being accepted.

The appeal is concerned with the essence of the threshold requirement that an invention be a manner of manufacture. The general principles of manner of manufacture are universal in their application to all inventions not expressly excluded from patentability by the Patents Act. The Court can see that when one returns to the provisions of section 18, one will find in subsection (2):

Human beings, and the biological processes for their generation, are not patentable inventions.

In subsection (3):

For the purposes of an innovation patent, plants and animals, and the biological processes for the generation of plants and animals, are not patentable inventions.

So, the legislature has explicitly dealt with those matters which are to be excluded. This was considered by this Court in Apotex v Sanofi, and your Honour the Chief Justice – in a joint set of reasons with Justice Crennan - discussed how it was inappropriate and, Justice Gageler, you also expressed an observation that it is not appropriate for this Court to create exclusions where the legislature has not, and where the legislature has explicitly considered a decision of the report from IPAC recommending there be no exclusions, that it not be a matter of statute.

As we will see, what happened below, in what we say was a reductio ad.....so to speak, from a series of decisions of the Federal Court starting with Research Affiliates, there has been effectively an exclusion of computer‑implemented inventions - where there is a computer, very broadly defined, and where the invention does not relate to an improvement in computer technology. Now, that effectively creates an exclusion by the court – and we will come to that during the course of the morning.

It is our submission that this Court should not sanction an anomalous qualification applicable only to computer‑implemented inventions, which detracts from the coherence in the law referred to by Chief Justice French in Apotex and by your Honour the Chief Justice, together with Justices Heerey and Bennett, in Grant at paragraphs 23 and 29 – and we will take the Court to Grant, which is a very significant decision.

Manner of manufacture is a threshold requirement, separate – as this Court has observed in Mirabella to the distinctive requirements of novelty and inventive step. When we revisit NRDC – and I know the Court will have a familiarity with elements of NRDC – but when we revisit the detail of NRDC, we see that manner of manufacture is focused on the useful as opposed to the fine arts – and this was considered too by this Court in Apotex.

The Court may find Apotex in Part C of the joint bundle, at tab C14 – and if I could remind the Court of a passage in paragraph 16 from the reasons of Chief Justice French, which noted:

Following a Report of the Industrial Property Advisory Committee in 1984, the 1952 Act was repealed and the 1990 Act was enacted. The criterion that an invention must be a “manner of manufacture within the meaning of s 6 of the Statute of Monopolies” was retained.


If I could jump a few lines:

The Committee rejected the alternative of a codified definition. The rationale for retaining the existing criterion was reflected in the Explanatory Memorandum for the Patents Bill 1990, which said of the proposed definition of “invention”:

“The requirement in paragraph 18(a) . . . invokes a long line of UK and Australian court decisions. It means little more than that an invention must belong to the useful arts rather than the fine arts. The Government accepted the Industrial Property Advisory Committee’s recommendation that this flexible threshold test of patentability be retained in preference to adopting a more inflexible codified definition.”


Thus, even in the explanatory memorandum, as recited by Chief Justice French, we see that the threshold is low. That is because, conceptually, manner of manufacture deals only with why is it that is within the realm of patentable patent eligible subject matter? But it does not determine whether a patent should grant. That is because there is detailed provision in section 18(1)(b) and, of course, in the terms of section 7, which require the Court to consider the invention claimed by reference to the prior art base, and by reference to particular tests evolved by this Court dealing with whether there is an inventive step.....present and dealing with the question of novelty.

They are complex issues, the subject of a great body of learning, where this Court, particularly in Hässle v Alphapharm, and again in Lockwood (No 2), explored carefully what is meant by an inventive step. It is by reference to those provisions that the Act enables the court to assess whether a claimed invention is patentable, rather than whether the subject matter is patent eligible. Thus, we have a low initial threshold, and it excludes the finite. It excludes mere intellectual information.

EDELMAN J: Mr Shavin, and you may be coming to this, but is there not a different initial threshold which is to characterise the invention? So, before one can even turn to manner of manufacture, one needs to have characterised what the invention is.

MR SHAVIN: Yes, your Honour. When one characterises the invention, what is important is that one does not slice the claim up like a salami and look to a couple of the slices, and this Court has repeatedly affirmed that what one must do – and it is very clearly articulated by this Court in NRDC – is one looks at the whole of the claim as a matter of substance.

Of course, that is what happened in D’Arcy v Myriad, is that the Court did not break the claim up between the isolated nucleic acid and the various mutations and polymorphisms, and say, well, we will look at these polymorphisms and we will forget these mutations. What the Court did is it looked at the claim as a whole and identified that when you looked at the claim for its economic utility, that lay in the informational content of the nucleotide secrets found in nature, and the fact of the isolation then did not add a sufficient practical and particular application because all that had happened was a replication of that informational content.

Now, one finds that, and we will go to it, in paragraphs 86 to 92 of D’Arcy v Myriad. But in those paragraphs the plurality looked, as a matter of substance, at the claim, but not breaking it down. The reason that one does not break it down is that, as in this case, we have a combination claim. This Court identified in NRDC at page 264, to which I will take the Court in detail, but in particular Justice Aickin in Minnesota Mining and Manufacture v Beiersdorf, articulated very clearly the accepted basis of a valid combination claim is that you have a series of integers with a working interaction, and each integer can be known – can be part of common general knowledge. The invention lies in the combination.

As this Court said in 264 in NRDC, what it is wrong to do is look at each integer and identify whether or not it is novel. It is wrong to say that there must be an inventive step in integers. What is important is to look at the substance of the invention, which is the combination as a whole. We will come back to that shortly.

KIEFEL CJ: Nevertheless, it can sometimes be said that the invention resides in particular integers that can be identified. You have a look at the integers as a whole but often the invention itself is identified within particular integers.

MR SHAVIN: The inventive step might be identified in some integers, your Honour, but the invention will be the combination unless it is a mere collocation.

KIEFEL CJ: Mr Shavin, where in your written submissions do you characterise the invention?

MR SHAVIN: We say that the primary judge was right - it is an electronic gaming machine with a number of different elements, and what our friends do is our friends – and the majority below pointed to one integer, and we will come to this. They come to ‑ integer 1.10 I think is identified by ‑ ‑ ‑

KIEFEL CJ: I think the Full Court looked at particular integers in relation to their second approach, which was to see if there was some improvement in relation to the computer itself. But in the first approach they found that the invention as a matter of substance involved the use of a particular kind of computer, being a conventional gaming machine or EGM to implement an abstract idea in the form of a scheme or set of rules for playing a game.

MR SHAVIN: Yes, we take issue with that, your Honour, because we say that, first – and I am going to come to this in the sequence a little bit later in the morning – but the answer to your Honour’s question was paragraph 87 of our submissions. But we say that the majority below fell into a clear error by asking a question that is not relevant. They asked ‑ ‑ ‑

KIEFEL CJ: But the primary judge fell into error by bifurcating the question, did he not?

MR SHAVIN: They found that the primary judge fell into error, but their error was to ask whether it was a computer.

KIEFEL CJ: Are you suggesting that the primary judge’s two questions is the correct approach?

MR SHAVIN: Yes. We say as to the second question that it may be criticised but only because he did as he must do, which was to follow the preceding Full Court, and we will explain where we think there has been a deviation by the Full Court. But we can win on the correct question framed by the primary judge, which was is this a mere scheme? If it is not a mere scheme you are not into the area of discussion.

GORDON J: I thought you were suggesting that this was a combination claim and that the characterisation of your invention was not to be assessed in that way. Am I wrong about that, Mr Shavin?

MR SHAVIN: No, you misunderstood us, your Honour, if I might say so. We say that the characterisation by the primary judge was correct because he looked at the claim as a whole.

EDELMAN J: Mr Shavin, we now have three different characterisations. We have the primary judge’s characterisation, which descended to some level of detail about some of the integers ‑ ‑ ‑

MR SHAVIN: Yes.

EDELMAN J: We have your answer to the Chief Justice, which was that the proper characterisation is that it is an electronic gaming machine with a number of different elements, and we have the characterisation in paragraph 87 of your submissions, which is that it is an electronic gaming machine:

which provides a feature game having specific characteristics, including that it meets relevant regulatory standards –


Which is the one that you choose?

MR SHAVIN: In our respectful submission, your Honour, there is no material difference between any of the ‑ ‑ ‑

EDELMAN J: There very much is. An electronic gaming machine with a number of different elements describes almost every electronic gaming machine that exists in Australia. The primary judge’s characterisation – which descends to a greater level of detail – might describe a much smaller subset of electronic gaming machines. This characterisation is very important.

GORDON J: The reason why it is important is because we know from Bristol‑Myers Squibb that you characterise it, you look at it as a whole, you do it not by reference to prior art but what is on the face of the specification, and you look for a level of inventiveness – we might have debate about what that is on the face of the specification - but you have to start with what it is you are dealing with.

MR SHAVIN: Yes, your Honour. May I respond to your Honour’s question in this way? When we say, in paragraph 87, it is:

an EGM which provides a feature game having specific characteristics –


those specific characteristics are the characteristics claimed, your Honour, so that the characteristics claimed are the characteristics which are articulated with precision by the primary judge. We did not set them all out in the paragraph. We were under very specific space constraints for very good policy reasons, so you use a shorthand. But we were not intending to suggest in any way, your Honour, that the characteristics of the electronic gaming machine were other than those the subject of the claim – being those articulated and identified with precision by the primary judge.

EDELMAN J: So, your characterisation of the invention is basically everything in the claim?

MR SHAVIN: Yes.

EDELMAN J: That is not a characterisation, that is just repeating the whole of the claim.

MR SHAVIN: May I respectfully differ, your Honour, in this way ‑ ‑ ‑

EDELMAN J: So, is the primary judge wrong in his more generalised characterisation, then?

MR SHAVIN: No. The primary judge looked at the claim, and I will come to the primary judge shortly, but I just felt it might be of more assistance to the Court if I first deal with some of the legal principles then apply them. But the primary judge looked carefully at the claim. He understood it was a combination claim. He looked at each of the integers within the claim and saw that the invention claimed was the combination of those integers, some of which were known, and some of which were new.

But for determining the invention, the thing that is important is this Court articulated with clarity, at page 264 of NRDC – is to look at the combination itself. It is not appropriate, in our respectful submission, to say you have an electronic gaming machine, it is a physical device, it is a combination of the working interaction between hardware and software elements, to pick the software element and say that is the thing that is new, so that is the invention. That, in our respectful submission is wrong, because the characterisation of the invention must be by reference to the scope of the monopoly described in the claim. It is defined in the claim.

Now, this Court in Myriad said you look at it as a matter of substance. In Myriad the Court rejected a submission that was advanced that said this is a chemical formula and it said, when you look at the economic utility of that chemical formula you look at the whole of the claim, but it comes from the information or content that is described and is within the scope of the claim. But it did not pass the claim, accepting some integers and ignoring others. That would be appropriate if you have a mere collocation, but not where you have a combination. Notwithstanding a statement to the contrary which must have fallen in error into the majority, it is plain that this claim was advanced as a combination both before the primary judge and before the Full Court and we have given the Full Court references to that in our outline.

GORDON J: Just so I am clear, is 95 the primary judge’s finding of his characterisation of the invention to be read as consistent with 87 of your submissions? It appears in the core appeal book page 34 at the top of the page.

MR SHAVIN: I think you take 95 together with 96. So, if he is characterising – 95, the primary judge expressed the view that it is to a mechanism of a particular construction, the operation of which involves a combination of physical parts which is identified in 96 and software, also identified in 96, to produce a particular outcome in the form of an electronic gaming machine that functions in a particular way ‑ ‑ ‑

KIEFEL CJ: Is not his Honour’s finding at paragraph 98?

MR SHAVIN: I think, to be fair to his Honour, you take each of those paragraphs, from 95 identified by Justice Gordon, 96 which gives the detailed articulation of the integers – a reference to the expert evidence - but, in 98 the result being to the person’s skill in the art, the invention may be characterised as a machine of a particular construction which implements a gaming function. But the elements of the gaming function are not at large or, as your Honour will appreciate, the elements of the gaming function are those that are identified within the claim.

GAGELER J: Mr Shavin, can I ask a really simplistic question, based on an analogue analogy?

MR SHAVIN: Yes.

GAGELER J: If I come up with a new way of playing cards – a standard pack of cards – nobody has ever thought of it – and create a popular variation of solitaire, that would be, I take it, a scheme or an idea ‑ ‑ ‑

MR SHAVIN: Or mere intellectual information, yes.

GAGELER J: ‑ ‑ ‑ incapable of being patented.

MR SHAVIN: Yes.

GAGELER J: When I then digitise that – digitise that new way of playing the game and load it into a computer so it causes my PC to operate in a different way, does that become a combination patent – patentable invention, in your submission?

MR SHAVIN: Only if there is a particular application. Now, our friends in their outline, I think at paragraphs 22 and 23, observed – we say correctly – that where you have the mere rules of a game they are mere intellectual information, they are not patentable. Where you reduce those into an apparatus, then you can have a practical application. But it is not every practical application. It has to be a particular application.

So, if all you have done, is you have taken the general rules – your new rules for solitaire – and identified the rules in a computer without a particular application of them, then, in our submission, that would not be sufficient to create a manner of manufacture.

GAGELER J: The particular application is that it allows me to play solitaire in my new special way and it is very popular. I like playing it, all my friends do.

MR SHAVIN: Yes.

GAGELER J: Is that enough?

MR SHAVIN: No, your Honour.

GAGELER J: So, what is the difference between that scenario and the present scenario?

MR SHAVIN: Because what we have here is an electronic gaming machine which, with the combination of elements, gives you a new means of entertainment. That new means of entertainment is not just any game of solitaire, it is here a particular application in a practical reduction. The language of this Court and in some of the established authorities used the language of a particular application.

It is the language that your Honour the Chief Justice employed in Grant, to which we will come, as being the defining characteristic of reducing something that is intellectual information to a manner of manufacture. Clearly, there can be debate as to in any particular case whether what is being identified in your Honour’s new formulated rules for solitaire and the particular application.

EDELMAN J: Mr Shavin, to give that concrete form, would that mean that if the new version of solitaire was preloaded into an existing on the market computer and sold as an existing on the market computer containing a new version of solitaire, that in your submission that would become patentable?

MR SHAVIN: I do not think it resolves the question mark that has been raised by Justice Gageler’s analogy. May I give a different analogy? I know analogies are dangerous, but to clarify what it is that we say. Let us assume we have an accounting system and it is on paper, and it is a generalised accounting system, and all we do is we convert that paper form of accounting system into a software program. So, you have a generalised accounting system which does no more than replicate the existing paper one.

Now, putting to one side questions as to whether the accounting system would be obvious – which it almost certainly would – would it be a manner of manufacture if you have simply taken something generalised without a particular application and put it into a computer? We say that the answer to that would be no ‑ ‑ ‑

KIEFEL CJ: What is the particular application here?

MR SHAVIN: Here, you have a particular form of gaming machine which gives a particular interaction to provide, in the area of gaming machine and gaming technology, an enjoyment and a commercial interest ‑ ‑ ‑

KIEFEL CJ: But the machine is simply programmed to produce the game to trigger a further game. That is really ‑ ‑ ‑

MR SHAVIN: Well, it is a complicated game, but it requires on the interaction of a whole series of hardware and software elements for it to work. This is not a computer – I know that the majority identified this as a computer, but it is not in a practical sense.

KIEFEL CJ: But it is left to the person who programs the computer to determine how to make it work. What is the application here? It is a game within a machine, and it is programmed to make it work.

MR SHAVIN: Interacting with the other elements in the machine.

KEANE J: But do you say you have a particular application that is patentable because of integer 1.10 so that anyone else comes along with a different integer 1.10, with a different bell or whistle, and that is patentable too even though all the other integers are the same? So, you have as many particular applications as you do games so that what makes each of these different and patentable is the game.

MR SHAVIN: Can I respond to that in this way? First, patentable or patent eligible - we are talking about patent eligibility - they may not be patentable, but, yes, the evidence shows that there are some 1600 patents – some to us, some to Aristocrat’s competitors – that have been granted by the Patent Office up to this point.

Secondly, if you took the game that is identified – the gaming rules are identified in the one integer – there is no constraint on anybody using those rules by themselves. It is only when they are used in the context of this particular combination that they would come within the scope of the claim.

Thirdly, there has to be a working interaction between the game and the other elements of the box and, if there is, and there is a practical application of that working interaction, we say to give you a particular type of gaming machine, each would be patent eligible, leaving to one side the question as to whether they would satisfy the tests of obviousness and novelty.

It is very important, in our respectful submission, to keep separate in one’s mind the concept of patent eligibility, patent eligible subject matter, and patentable subject matter, which satisfies all of the other requirements of sections 18 and 40 because ‑ ‑ ‑

KEANE J: Patent eligible requiring an invention?

MR SHAVIN: Simply requiring the low level that is identified in IPAC of distinguishing practical arts from fine arts. Manner of manufacture is the residual, as Justice Gummow identified it, that is left over after you have looked at novelty, obviousness, utility, secret use.

KEANE J: I know we might be just playing with words – you say it is a residuum. On the other hand, in N.V. Philips the Court says it is a threshold whether there is an invention.

MR SHAVIN: It is a threshold.

KEANE J: So, it is not really a residuum. It is - one asks at the first point – the very beginning of the analysis is to say, is there an invention, and what we know is common ground is that no one says that the devising of a scheme or a plan or a game is an invention. It is not invented. It is devised.

MR SHAVIN: If I can respond to your Honour’s first point. Both your Honour and Justice Gummow are correct. It depends on your historical perspective. Initially, of course, there was no distinction in the statutes between obviousness, novelty, utility. Obviousness and novelty were only isolated in 1952 in Australia, so that when you go back to the original Statute of Monopolies you look at the whole of the scope, and by residuum, it is a residuum that is left after all the other parts have been extracted out from what might have been encompassed within the Statute of Monopolies and dealt with specifically and separately, in the United Kingdom in the 1949 Act, and in Australia in the 1952 Act.

It is in that context that the question of residuum by Justice Gummow is accurate, but also, as your Honour says, it is a threshold question. This Court has, on more than one occasion – Philips is one of them – identified it as a threshold. But the threshold is simply ‑ are you in the area of discourse or patent eligible subject matter. As the Full Court in CCOM said, a ballpoint pen is a manner of manufacture, but you would never – either at the time of that case or now – get a patent for it, because it would not be novel, and it would be obvious. But it is patent eligible – whether you describe it as the residuum that is left after one has taken out the rest of section 18, or as a threshold. You are simply looking at two sides of the same coin.

STEWARD J: Mr Shavin, can I ask – is it an important element of your argument about particular application that it is not just the devising of the game, but a game that must then be amended and modified in order to comply with a significant regulatory regime in each jurisdiction? That would also include – I imagine – things like the design of the physical machine –how big it is, how small it is – all of that all has to be within the scope of the regulations.

MR SHAVIN: Yes, and that is what makes the combination important, your Honour. It is, in our respectful submission, to fall into error to characterise the invention claimed as no more than the software element that has been described by the primary judge ‑ ‑ ‑

KIEFEL CJ: But one does not lose sight of the combination – which is the machine and the game – but one tends to focus upon the game, where the machine is a conventional electronic gaming machine.

MR SHAVIN: Yes, but that comes back ‑ ‑ ‑

KIEFEL CJ: That is understandable, that one focuses upon it.

MR SHAVIN: We accept that, your Honour, but not for the purpose of defining the invention.

EDELMAN J: Mr Shavin, just so I am clear – particularly on your answer to Justice Keane’s earlier question – as I understand your position, it is that on a proper characterisation, any new game implemented in an electronic gaming machine, with any minor variation on any existing game, would be patent eligible – though it might fail for reasons of novelty or inventiveness, or other characteristics.

MR SHAVIN: I always hesitate with the words “it is raised”, your Honour. It got me into a lot of trouble in Myriad. It is a very wide proposition, because ‑ ‑ ‑

EDELMAN J: Provided it gets through the narrowest threshold of being an apparent invention.

MR SHAVIN: And being a particular application of something. If one had simply something that is conceptual, without a particular application into the invention, then that would not satisfy. We will see how this was articulated in Grant, which was the clearest statement of it – though consistent, we would say, with what had gone before.

GORDON J: It is really a debate, is it not, Mr Shavin, about the level of characterisation upfront, and the level of inventiveness that is to be disclosed on the face of the specification.

MR SHAVIN: The level of inventiveness to be disclosed on the face of the specification, when one goes back to Microcell, is really a negative test. Is there an admission on the face of the specification that the invention claimed is not an invention.

GORDON J: I do not know about that. When you look at the primary judge, it is apparent from those paragraphs that the Chief Justice took you to, that his Honour went through that process. He stood there and he characterised the combination and then identified by reference to the integers those by analysing them what it was that might give rise to some assessment or question of inventiveness.

MR SHAVIN: We absolutely accept that, and we embrace the way in which the primary judge approached it. I was simply looking at the test that your Honour referred me to, which is, you assess inventiveness on the face of the specification. When you go back to the foundation of that, which is picked up by this Court repeatedly in the more recent decisions on manner of manufacture, in Microcell the comment really was directed to, you look at the face of the specification, do you find on the face of the specification an admission that there is in fact no invention?

That can happen – not often – but it can happen in circumstances where they might say that all of it – it is only a collocation; all of the integers were known – or that it was known, and they have just done some minor tweak. That is where Microcell came from. Of course, that is the discussion of Microcell that one finds in NRDC because the first part of this discourse in NRDC was to consider Microcell, which had been decided by the Court I think three months earlier in the year. So, the two decisions are linked very closely.

When one looks at what is on the face of the specification, one of the things one keeps in mind is the observation by IPAC recited by Chief Justice French that it is really a threshold that is determining whether or not this is in the practical arts rather than the fine arts – it is a very low threshold. That is because the heavy lifting is done by the other provisions in section 18.

The question that is raised by this case and the preceding cases to which both parties have referred, is whether what was intended as a threshold question – but a low threshold question not duplicating the work of the rest of section 18 – has been given too much emphasis with consequences that are quite significant. For example, if one follows – as we will come to – what the majority said below, one finds an overlap between the assessment by the majority of manner of manufacture and novelty.

GORDON J: They accept that. They said that expressly. They say there is some merger of ideas.

MR SHAVIN: There should not be, your Honour, because they are conceptually quite different. You are not assessing novelty. Novelty is to be assessed by reference to section 7(1) of the Act. It is a very careful and clear articulation where this Court for many, many decades has accepted that to establish that there is an anticipation that has to be a clear disclosure of each of the integers – there has to be a direction, recommendation or suggestion in the anticipation of that which is ultimately claimed.

STEWARD J: Mr Shavin, is this really asking the Court to adopt the reasons of Justices Dawson and McHugh in N.V. Philips? Is that what we are really getting at here?

MR SHAVIN: I go back further, your Honour, and say that when one looks as we come to NRDC and CCOM and Grant that in those three decisions we have a correct articulation of the principles of manner of manufacture as apply to inventions involving a computer and that what was said in CCOM with Justice Gummow, Justices Heerey and Spender, and in Grant with the Chief Justice and Justices Bennett and Heerey, we have a clear and correct articulation of principle.

We find that articulation of principle ‑ as my learned friend, Ms Cochrane, will deal - she is going to deal with an analysis of Research Affiliates and the issues that arose in Research Affiliates. But as she will explain, when the Court looks at the Full Court in Research Affiliates we find that on not less than three separate occasions in the judgment the court refers to and recites the analysis from Grant and CCOM in absolutely correct terms, but then goes and looks at the UK post‑1977 Act EU experience and picks up what is there the threshold test for invention, that is, a technical contribution, in a context where there are statutory exclusions – compatibility of computer programs “as such” as we will come to – and it picks up from section 101 of Chapter 35 in the United States where the discussion is about an improvement in a machine.

These concepts of a technical contribution in the computer and an improvement in the machine have been extracted from the US and from the EU in a context which is not the context, as this Court has noted on many occasions but particularly in Apotex, of manner of manufacture in Australia, particularly in the UK post the 1977 Act.

So, one has had built in as a layer on computer‑implemented inventions from Research Affiliates not merely as a guide but as we will see applied as a rule more and more rigorously until you get to the majority below, principles of inventive step of improvement that are no part of the contextual framework this Court has created for manner of manufacture from NRDC.

KIEFEL CJ: Mr Shavin, the primary judge used those more recent Full Court decisions to adopt the two‑stage inquiry – the second inquiry. After referring to those decisions the second part of the inquiry is if it is a mere scheme whether the computer‑implemented method is one where the invention lay in the computerisation of the method and you have said that the two‑stage approach is correct.

MR SHAVIN: Yes.

KIEFEL CJ: The two‑stage approach is in the second step, dependent upon and based upon the application of those cases.

MR SHAVIN: I did say, I think, your Honour – earlier this morning – that the second stage was a stage which his Honour was bound, of course, to articulate consistent with the previous Full Courts. As a single judge, he was bound by those Full Courts, and he did. What we have said ‑ ‑ ‑

KIEFEL CJ: But it is either right or wrong, and you said it was right. You said his approach was correct.

MR SHAVIN: His approach in identifying whether there was a mere scheme – I believe I said was correct. So that is the first stage. What I think I also said to the Court, but I stand to be corrected, that when it came to the second stage, we were critical of the formulation of the second stage, but he was bound by them. So, we are not criticising him, because he was bound by what had gone before.

You see, we say that we win on the primary judge because his analysis of the invention claimed as not being a mere scheme is correct, and if that is so you do not get to his second question or formulation. If the Court is opposed to us on that, then we say that the approach by the majority below is clearly wrong, and I will come to the reasons for that, and although we say that for the reasons which I briefly alluded to but am about to develop, Justice Nicholas’ approach to technological advance is wrongly based on the European jurisprudence. His approach of saying if there is an advance it cannot be confined to a computer, it must be in the area of technology of the invention, that is correct.

As we said in our outline, our fallback position is that Justice Nicholas’ approach is correct, and the matter should be referred back to the primary judge because although the primary judge had a great body of evidence going to the technological advances in relation to gaming technology, he did not find it necessary to deal with and make findings in relation to that evidence. In our original outline in‑chief, which is at paragraphs 12 and 13, your Honour the Chief Justice, we said:

It has long been accepted that mere schemes (plans or methods) are not patentable subject matter. The Commissioner asserted that the claimed invention is “a scheme or set of rules” . . . Burley J was correct in considering that question first (and answering it in the negative). The FFC erred in rejecting this approach.

The primary judge’s second question correctly recognises that a mere scheme is not automatically ineligible to be a MM. A claimed invention may, nevertheless, constitute an artificially‑created state of affairs of economic utility. However, the content of Burley J’s second question, which asks “whether the computer‑implemented method is one where invention lay in the computerisation of the method” . . . reflects the extent to which previous FFCs have fallen into error in assessing whether computer‑implemented inventions are a MM. The correct question is whether, notwithstanding that an invention may involve a mere scheme (which is not this case), that invention nevertheless involves something more, perhaps in its implementation –


Our thought processes since we wrote that, as reflected in our three‑page summary this morning, is to reflect that the something more must actually refer to the particular and practical application ‑ ‑ ‑

KIEFEL CJ: Or an advance in computer technology.

MR SHAVIN: Well, at that point, your Honour, we differ because at that point we say that the advance in computer technology, explicitly rejected as appropriate by the Full Court in CCOM, we say correctly, has been ‑ ‑ ‑

KIEFEL CJ: On the facts of that case, though.

MR SHAVIN: Sorry?

KIEFEL CJ: On the facts of that case.

MR SHAVIN: But dealing as a matter of principle when discussing the earlier English decisions.

GORDON J: Mr Shavin, you can accept the proposition just put to you by the Chief Justice. It may be that that is not the universe. In other words, you can identify that there is an advancement in computer technology to give rise to patentable subject matter. You just say that is not the limit.

MR SHAVIN: It is not the limit ‑ ‑ ‑

GORDON J: It is an inquiry available in an appropriate case. It just may not be an appropriate case, that is your argument.

MR SHAVIN: Yes, but there is a risk, if I might say so, your Honour.

GORDON J: There is a risk in the sense that it may limit if it is the only test in relation to an invention or alleged invention involving a computer, because it may narrow the enquiry. But if you look at patentable subject matter and accept that it is to be considered in a broad way for the purposes of the caution identified in Bristol‑Myers Squibb then you say to yourself, “Well, I have a mere idea, but because it is being implemented by an advancement in computer technology, it becomes patentable subject matter”. That is not the only way you might get a patentable subject matter, but it is an available inquiry.

MR SHAVIN: Yes. Why I was indicating it has a risk to it, your Honour – and we may not be very far apart – is that it depends what goes into the concept of an invention.

GORDON J: That is the first question.

MR SHAVIN: A technical advance, because you are not bringing in the concept of the comparison with prior art common general knowledge, a combination of documents under section 7(3). It has to be at a very high level and that is, is there on the face of the specification, because this Court has said repeatedly you look at the face of the specification, it is on the face of the specification an admission is not. But if one says in looking at whether there is an advance in the working of computers, you take evidence on that, then we would say that is just wrong. This Court has said so repeatedly since 1959.

May I try and seek to develop some of these, because some of the questions to which the Court is directing my attention ‑ ‑ ‑

KIEFEL CJ: What is the difference between an advance and a new method, because that has always been accepted as something which might make an invention a proper subject matter?

MR SHAVIN: An advance and a new method? The distinction might ‑ ‑ ‑

KIEFEL CJ: What is the distinction between an advance in some form of technology, and a new method using known materials, which is NRDC?

MR SHAVIN: Well, one might be inventive and the other might simply be new. So, it is the difference between whether there is an inventive step, whether it is novel. You might have something that is new which may not be an advance, it might just be different, but new, and still, within the test identified by this Court in omeprazole – that is Hässle v Alphapharm – picking up the Aickin test from Wellcome and going through to the “Cripps question” in determining what is a matter of routine.

You might say it is not obvious and you might say it is new. Whether it is an advance in technology might invoke considerations of – consideration of what was the state of technology and whether there has been an improvement, or whether people simply think it is different. I am just quibbling with the advance ‑ ‑ ‑

KIEFEL CJ: When the recent Full Court cases are looking at what might generally be described as advances in computer technology, that is just a general description for looking for something within the computer implementation itself which might give rise to an invention – something ‑ ‑ ‑

MR SHAVIN: Except that where that comes from in Europe is described in Symbian – that is referred to – and is also in the joint bundle – at paragraph 9 of Symbian, the Supreme Court of the United Kingdom identified that this concept of technical contribution is the core element of inventive step, under the PCT. So, what one is doing by ‑ ‑ ‑

KIEFEL CJ: It is also an aspect of an invention, is it not?

MR SHAVIN: Yes, but that is going into whether it is obvious. That is the section 18(1)(b).

KIEFEL CJ: I do not follow that, Mr Shavin.

MR SHAVIN: Okay. The test for whether you have an invention in Europe – and in the UK post‑1977 is to identify whether there is a technical contribution. That is the test for an invention – the European equivalent of our 18(1)(b). It is not done by reference to look at whether a person of reasonable skill in the art would move by a matter of routine steps from the prior art to the invention and determine whether the steps are routine by applying the Cripps question by saying, is there a reasonable expectation of success? That is the test this Court has adopted as the primary test for determining whether or not the invention is obvious, that is whether there is an inventive step.

In Europe – it does not apply that test. The test that is applied is whether there is a technical contribution. So, the use of technical contribution is to identify the obvious from the non‑obvious. That is not the role of manner of manufacture. As this Court has said – I am going to take the Court to it – this Court has said manner of manufacture is separate from the more specific grounds of objection in 18(1)(b), which is obviousness and novelty, and (c) which is utility. What is the risk from the formulation that you are putting to me is to blur and mix into manner of manufacture a requirement of inventive step which is not, in our respectful submission, the proper content of the threshold.

May I take the Court at this stage, perhaps, to NRDC. The Court will find this in tab 21 of Part C of the joint bundle. I have referred on several occasions to page 264 and may I take the Court to that, because in a sense, it is the heart of this case. I know that everyone cites the two propositions or criteria that have been discussed by this court in Myriad at page 277, but the core of the reasoning really involved page 264.

So that after - at the foot of page 263 - adopting the arguments answered by Justice Frankfurter in Funk Brothers and Kalo Inoculant that it is not helpful to look at laws of nature, the Court then proceeds – and if I could take the Court to line 9. So, the Court has said in the preceding sentence that there is not a helpful distinction between discovery and invention, because it is too imprecise and then the Court observes:

There may indeed be a discovery without invention‑‑either because the discovery is of some piece of abstract information without any suggestion of a practical application of it to a useful end, or because its application lies outside the realm of “manufacture”. But where a person finds out that a useful result may be produced by doing something which has not been done by that procedure before, his claim for a patent is not validly answered by telling him that although there was ingenuity in his discovery that the materials used in the process would produce the useful result no ingenuity was involved in showing how the discovery, once it had been made, might be applied.

Now, that is a central thesis that the Court will see this morning, in our learned friends three‑page summary where they say there is no ingenuity in making it work. We say that is a fallacy identified by this Court in NRDC. The Court proceeds:

The fallacy lies in dividing up the process that he puts forward as his invention. It is the whole process that must be considered; and he need not show more than one inventive step in the advance which he has made beyond the prior limits of the relevant art. This is perhaps nowhere more clearly put than it was by Fletcher Moulton L.J. in Hickton’s Patent Syndicate v. Patents and Machine Improvements Co. Ltd. when he said of Watt’s invention for the condensation of steam, out of which the steam engine grew: “Now can it be suggested that it required any invention whatever to carry out that idea when once you had got it? It could be done in a thousand ways, and by any competent engineer, but the invention was in the idea, and when he had once got that idea, the carryingout of it was perfectly easy. To say that the conception may be meritorious and may involve invention and may be new and original, and simply because when you have once got the idea it is easy to carry it out, that that deprives it of the title of being a new invention according to our patent law, is, I think, an extremely dangerous principle and justified neither by reason nor authority”.

That was adopted by the High Court on the following page, towards the end of the paragraph, just over halfway down the page on page 265. Can the Court see starting on the right‑hand side:

It is irrelevant, even if true –


It is about 10 lines from the end of the paragraph:

It is irrelevant, even if true, that once the discovery was made that the chemicals produce a lethal reaction when applied to the weeds and produce no such reaction when applied to the crops there was no more ingenuity required in order to show how the process might be performed. The point that matters is that a weed‑killing process is claimed which is distinguished from previously known processes by a feature the suggestion of which for such a process involved a step plainly inventive.


Now, the essence that we are seeking to draw from this analysis at 264 is that you have here the proper articulation of the approach for a combination claim, the proper approach to looking at what is the invention, the proper approach to identifying the issue raised by our friends as to whether there must be invention both in the formulation and in the implementation. The Court here has said no. These principles were properly picked up by the Full Court in Ariosa which was decided just a few months before the decision was handed down in this case, and that is to be found at D27 in the joint bundle – that is in part D at tab 27.

At paragraphs [112] to [114] on page 744 of the bundle the Full Court comprising Justices Burley, Nicholas and Middleton, so the primary judge in our case and Justice Nicholas who was in dissent in the Full Court below, all of them agreed about this. At [112] the court refers to the passage to which I have just taken the Court at 264 and continues with the balance of the passage in paragraph [113]. Then the court observes:

Three points of emphasis may be noted from these passages. First, the distinction between mere discovery and an invention lies in its practical application to a useful end. Secondly, it is important that the invention be considered as a unitary concept, not segregated artificially into parts. The invention may arise from an idea and then be applied in a perfectly well known way, and yet the combined effect of the idea and its application may result in patentable subject matter, as arose from the example described in Hickton’s Patent


The approach of the applicants in the present appeal which dealt with non‑invasive prenatal diagnosis:

which seeks to disaggregate the discovery of cffDNA in maternal plasma or serum from the method used to harness that discovery, tends to overlook these matters. Thirdly, an invention may reside in an abstract idea, such as the condensation of steam that is then put to a useful end, even though the way of putting it to that end can be carried out in many useful ways, all of which are otherwise known.


Now in our respectful submission, what one then has, we say here, is an invention which comprises a combination of hardware and software elements, which is a new electronic gaming machine. It might have within it a software step which is completely new, but the implementation of, once known, is not new. But that does not detract from its constituting a manner of manufacture.

GAGELER J: So, an invention can lie in an idea. That is what I am taking from both of the passages that you have read from.

MR SHAVIN: Yes.

GAGELER J: Is that really descriptive of what is going on in our case? I mean – what is the idea, what is the inventive idea here?

MR SHAVIN: The inventive idea is the creation, the utilisation of this machine to create a completely new and different type of game, never before seen. That is why it is such a valuable game. The evidence below talks about the traditional gaming machine had five reels, had three rows in the window, and you looked at a combination of the 15 points. But what you have in the game that is here is something quite different because you no longer are limited either to three rows or five reels. The way in which you have it can be in blocks, which are not in rows or reels and are not confined to the single width of a reel. You then have the quote “element of the configurable symbols”.

So that instead of just having the same symbols on a reel, during the course of the game, the values on the symbols change and they create all sorts of different incentives and layers in the game. So, it has been a completely novel concept of an electronic game and that concept of the electronic game has had a particular application in this electronic gaming machine to enable it to work.

Yes, you can have variations. So, so you can have different flavours of the game, whether they are crowns, or they are pearls, or whether it tells some sort of different story, but the family of game which has a particular application is to take this software – which is incredibly complicated mathematically – to satisfy the regulatory requirements.

As one can understand – because you have to have a minimum return to player, a minimum return to venue, which regulate the risks, so the mathematics behind it is enormously complicated. But, what you have in the invention is the conceptualisation of a game put within the body and confines of an electronic gaming machine where every part of the machine – the ability to control it, the ability of the player to manipulate it, the ability to take bets, all of this combined interactively to give an entertainment device that is new, and that is different. It is a particular application of the invention into this gaming machine. Now that, in our respectful submission, is what makes it ‑ ‑ ‑

KIEFEL CJ: I am sorry. Did you say it is a particular application of this invention into the gaming machine?

MR SHAVIN: “Within”, I should have said, your Honour. Can I withdraw the “into” because we do say, in fact ‑ ‑ ‑

KIEFEL CJ: But that is to say the invention is the game.

MR SHAVIN: The invention is the gaming machine.

KIEFEL CJ: The gaming machine does not make the game. The game is effectively inserted into the machine.

MR SHAVIN: The gaming machine is part of the machine – the game is part of the machine.

KIEFEL CJ: It becomes part of it once it is programmed and therefore put into it.

MR SHAVIN: Yes, but the invention – so you have the concept and you have the application. You have the concept of the ‑ ‑ ‑

KIEFEL CJ: The application is the programming into the machine.

MR SHAVIN: Forming part of the combination of the working interaction between ‑ ‑ ‑

KIEFEL CJ: The programming can take any kind of form – the code can be written whichever way ‑ ‑ ‑

MR SHAVIN: It should be, your Honour, because as this Court identified in Data Access, there is a fundamental distinction between the functionality of software, which is the proper subject matter of a patent claim, and the expression of the code, which is the proper subject matter of copyright. So, when it encompasses – the Court will have noticed in our notes - there is a discussion, or there is no particular form of the software, neither should there be because as this Court identified in paragraph 20, but really 20 to 24 of Data Access, the role of a patent claim is to limit functionality – you describe functionality – you do not, in a patent claim, put your source code. That would be an expression of the functionality on which there might be copyright, but it would form no part of a patent claim to have the expression of the functionality as the claim.

What the claim does is identify the functional elements which define the monopoly of the invention, the invention being the combination of the hardware and software to produce a new electronic gaming machine – and one which the evidence showed was incredibly successful around the world. But that is because it is something conceptually new with a particular practical application.

EDELMAN J: Mr Shavin, I do not want to hark back again to characterisation, but the conceptually new integers, are they the bonus game and the configuration of the symbols or is it something more than that?

MR SHAVIN: It is in combination with the rest of it. For example, some of the elements were the subject of the Konami case, which is referred to below, which Justice Nicholas found was a manner of manufacture and patent was granted. But I hesitate ‑ ‑ ‑

EDELMAN J: I appreciate it is the combination, I am just asking about what the novel elements within that combination are.

MR SHAVIN: There are certain claims – I think it is claim 3, that is focused upon the configurable symbols, but to say that is the inventive element is, I think, inaccurate and overly simplistic. I am not being critical, your Honour, but it is a more complicated invention than that, but that is an element of it which is the subject of a dependent claim.

We note in passing that the question of newness is determined on the face of a specification. Your Honours Justice Gageler and Justice Nettle said that at 147 in Myriad, and we have referred to Ariosa, but we refer to some of the other discussions, all of which are consistent on that point, from Microcell onwards. We find that at page 262 in NRDC at lines 2 to 5:

even if the process is within the concept the Commissioner is not bound to accept the allegation of the applicant that it is new, if it is apparent on the face of the specification, when properly construed, that the allegation is unfounded -


Your Honour Justice Gordon, that is what I was seeking to refer to – it was picked out of Microcell by the High Court in NRDC. Really we are saying that, consistent with the approach that was adopted by this Court in NRDC, one looks at the whole of the claimed invention, rather than trying to extract certain elements, say that is the invention, as if it has been put in to the combination. The combination is a combination here because there is a working interaction between all the integers. You could not usefully use this gaming machine if it did not have each of the features that were identified by the primary judge at 96. That is what distinguishes it from a mere collocation.

KIEFEL CJ: Mr Shavin, that might be an appropriate time for the Court to take its morning break.

MR SHAVIN: If the Court pleases.

KIEFEL CJ: I should have said earlier too that I have assumed that the intervener, IPTA, will follow you, Mr Shavin, before the respondent.

MR SHAVIN: My learned friend, Mr Dimitriadis, might have had a discussion about that, and although I am running badly behind, we have got more or less a breakup of the hours.

KIEFEL CJ: Yes, thank you. The Court will adjourn for 15 minutes.

AT 11.16 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.30 AM:

KIEFEL CJ: Mr Shavin, just reverting to our discussion about the order of argument and the timing of it, the Court does not expect that the time estimates will be exceeded, they are already substantial.

MR SHAVIN: Yes. I was just deferring to my friend that although, on one view, I have only gone a small way into my notes, I have covered quite a bit of territory ‑ ‑ ‑

KIEFEL CJ: Yes.

MR SHAVIN: ‑ ‑ ‑ and I will be seeking to cut my cloth accordingly.

KIEFEL CJ: Thank you.

MR SHAVIN: I am aiming to try and finish by 20 to three, quarter to 3, on the basis that at the end ‑ ‑ ‑

KIEFEL CJ: Is that three hours?

MR SHAVIN: Yes, it is approximately three hours and I will leave five or 10 minutes for reply at the end, if anything arises. We have seven hours over the day and a half.

KIEFEL CJ: Yes.

MR SHAVIN: So, three hours – there will be 20 minutes for Ms St John.

KIEFEL CJ: Yes.

MR SHAVIN: My friend will have three‑plus hours, and there ought to be five or 10 minutes left over tomorrow morning, maybe more, but I will not use it, just if there are any issues to raise in reply briefly.

KIEFEL CJ: Yes, thank you, Mr Shavin.

MR SHAVIN: I was going to take the Court briefly to one further part of NRDC before going to CCOM. The three cases that we seek to take the Court to in some detail really are NRDC, CCOM and Grant. I will then take the Court to the decision below. We have covered a fair bit of Justice Burley, I will cover some small part to that but deal with the majority and Justice Nicholas’ dissent. Then my learned friend, Ms Cochrane, will take the Court to Research Affiliates and identify what we see as being a move in Research Affiliates. I will then very briefly take the Court to what happened after that, but it will only be a matter of a few minutes in terms of Encompass - RPL Central, Encompass and Rokt, and that should draw us to the end. That is the course that we will seek to follow.

If I could take the Court back to NRDC, to just one passage, which is tab 21 in Part C of the joint bundle, and at page 270 at the top, this is where the Court has started to explore the meaning of the word “manufacture”, having previously identified the right question – being is this a proper subject matter of letters patent according to the principles which have developed for the application of section 6. Having referred to the Oxford English Dictionary at the foot of 269, the present Chief Justice said:

in Maeder v. Busch, a widening conception of the notion has been a characteristic of the growth of patent law. As early as 1795 it was possible for Eyre C.J. to say that “the exposition of the statute as far as usage will expound it, has gone much beyond the letter”; and the width of the meaning that had already been accepted may be gauged from the statement of the same learned judge that “manufacture” extended “to any new results of principles carried into practice ... new processes in any art producing effects useful to the public” –


This is really where we see, at a very early stage, a development of the concept of taking an idea, and having a particular practical application of utility.

So that if I could then take the Court to CCOM at tab 29 of Part D of the joint bundle – I should note, the Court turning to that, that when the Court re‑reads - undoubtedly it may in due course - the decision in NRDC, the concept which is picked up again in Grant, it being important not to fetter the approach to manner of manufacture by exact verbal formulae, which we say is what we will find has been in fact undertaken in the majority decision below.

Now, out of CCOM there are four propositions that we seek to advance, and I will take the Court to a couple of passages. It is a very important decision, because it was the first decision by a Full Court dealing with computer‑implemented inventions.

CCOM makes clear that the general principles of manner of manufacture are to be applied to inventions utilising computer technology. Second, it makes clear – consistent with the authority of this Court – that questions of novelty and inventive step are not relevant to manner of manufacture. Third, CCOM expressly rejects the notion that manner of manufacture is to be tested by asking whether there is anything new or unconventional in computer use. That was rejected by Justice Gummow, Justices Heerey and Spender.

Fourth, the decision in CCOM has been repeatedly cited for these propositions and approved by this Court. For example, in terms of the – each of the grounds.....are separate in Lockwood (No 1) at paragraph 48 and in Data Access at paragraph 20, where it is relied upon by this Court for the proposition that computer programs are patentable.

Now, what is often said – and what was said below, wrongly – about the technical character of the claim is it is important to keep in mind what was actually claimed in CCOM. Everyone knows generally what the invention was and the use of a keyboard to create Chinese characters, but could I ask the Court to turn to page 270 where the claim is set out. I do not want to dwell on it very much, save to observe that it is at a high level of generality, there is no source code, there is a combination of software and hardware broadly described. You have a:

“Computer processing apparatus for assembling text in Chinese language characters, said computer processing apparatus including:

a memory including character Character stroke data storage means –


Then you have “display means”. You have a “keyboard” and then:

wherein said character stroke data storage means are searched by entering through said input entry keys search criteria including the entered Chinese character stroke-type categories and the order in which the character stroke-type categories are entered through said input entry keys, whereby upon entry of said search criteria the graphic representation of the or each Chinese character which meet said search criteria are retrieved from the corresponding graphic data storage means –


So, we have a functionality defined at a high level of generality, no particular source code – that is left to the programmer to devise the source code – in a device where there is plainly a working interaction between the software and the hardware elements.

Thus, one can find a great similarity between the structural elements of the claim in CCOM and that in the package in suit. Then, having made that observation, could I take the Court please to page 287. We note, without reading it in detail to the Court, that if the Court looks at around D:

“the idea” of the invention lies in the use of a particular method of characterisation of character strokes which is applied to an apparatus in such a way that operation of the keyboard will enable the selection through the computer, in a particular way, of the appropriate Chinese characters required for word processing.

There is no special computer. Justice Gummow refers in the course of the decision that the keyboard was not a standard keyboard, but, not in a patent sense, a novel keyboard. The claim has been characterised not by looking at any particular integer, or any particular part of it that might be novel but has been characterised by looking at the claim as a whole, because the claim as a whole represents the invention in words of the patentee’s own choosing, of the scope of the monopoly.

At page 287, the Court notes that the UK decisions before commencement of the 1977 Act are also of assistance but notes at page 288C that some care is needed in referring to UK decisions postdating the 1977 Act because the Statute of Monopolies, as interpreted in NRDC, no longer supplies the criterion for patentability, and we would add, neither does section 101 of Chapter 35 of the US Code. One can see that section 4 of the 1977 Act is set out at D to E and there is a summary of section 1(2). The Court might find it easier, in Part A of the bundle at tab B7, at page 62, where section 1 ‑ ‑ ‑

KIEFEL CJ: I am sorry, which tab was that, Mr Shavin?

MR SHAVIN: Tab B8. Tab B7 is Article 52 of the Convention and tab 8 is the 1977 UK Act. Could I perhaps take the Court to tab 8, page 64 of the joint bundle and what the Court can find here is section 1 of the 1977 Act and so one finds in section 1(1) that an invention has to be new, have an inventive step, capable of industrial application. But in subsection (2):

It is hereby declared that the following . . . are not inventions for the purposes of this Act -

and one can see, in (c):

a scheme, rule or method for performing a mental act, playing a game or doing business, or a program for a computer -

and in the three lines at the end of the subsection:

but the foregoing provision shall prevent anything from being treated as an invention for the purposes of this Act only to the extent that a patent or application for a patent relates to that thing as such.

There has been an enormous amount of fun had in the European courts, the European Patent Office and the United Kingdom courts in working out the meaning of the words “as such”. None of that is relevant to our consideration, save that it demonstrates that there is a statutory set of exclusions in the United Kingdom and in Europe which are not based upon the principles of manner of manufacture, given that the 1990 Act, as we have already seen observed in Apotex, came after the UK 1977 Act and when the legislature chose not to seek to replicate the provisions in the UK but chose to maintain the – consistent with the recommendation of IPAC – reliance upon a non‑codified set of exclusions to the Statute of Monopolies.

It is our respectful submission that this is significant because, as my learned friend, Ms Cochrane, will show, when one goes to Symbian for an understanding of the test in Europe, applied in the United Kingdom, one can see that the Federal Court in Research Affiliates and applied in the successive decisions ending up in the decision below, looked for guidance in Europe as to what might be an artificially created state of affairs but ended up not looking and applying it as guidance but applying it as rules.

In doing so, the courts have moved with the most extreme position being the majority below to a position entirely inconsistent with the principles articulated by this Court and implemented and clarified in CCOM and in Grant as to the proper application of the concept of the manner of manufacture not being changed because you have a computer‑implemented invention.

Again, we go back, and we reiterate to the Court that what one is looking at is you have to have some form of a manufacture. It can be a process, it can be a method, and we saw that in the evolution from the High Court trace with the meaning of “manufacture” in NRDC. But once you understand that evolution one can see that the reason why mere schemes, business methods, intellectual information does not constitute a manner of manufacture, is that it does not have a practical application.

That is the threshold, your Honour Justice Keane, or the residuum, depending which side of the coin you look at, before you apply the tests of obviousness and novelty in section 18(b) and (c) and clarified and detailed in section 7, 7(1) for novelty, 7(2) and 7(3) for obviousness, as discussed by this Court in clear terms in recent times in Hässle v Alphapharm and in Lockwood (No 2).

When manner of manufacture is understood in those terms it can be seen that the principles articulated in CCOM and Grant still apply and that the importation as if they were rules of principles from the UK post‑1977 and the application of the detail of section 101, Chapter 35, causes one to stray from the intellectual purity demanded by an application by this Court in the 21st century of the Statute of Monopolies. Now, at page 288 at E and F ‑ ‑ ‑

KIEFEL CJ: I am sorry, where are you, Mr Shavin?

MR SHAVIN: We are in CCOM, I am sorry, your Honour.

KIEFEL CJ: Right.

MR SHAVIN: I do apologise. At tab D29.

KIEFEL CJ: Page 288?

MR SHAVIN: If your Honour pleases. The Full Court refers to the care needed when looking at the decision of the United Kingdom postdating the 1977 Act – refers in the bottom paragraph at G to the trouble that has been caused by the words “as such”.

Now, having traced the development of the 1990 Act and the law of manner of manufacture, the Full Court went at 290, E to G, to NRDC. So, the history is at B to C, and then at 291, the Full Court drew the threads together. They picked up passages about the word “manufacture” in NRDC and then said:

Accordingly, the phrase “any manner of new manufactures” has been interpreted over time in such a way as to contain within it distinct principles or doctrines concerned with patentability ‑


and looked to Ramset in the Federal Court. Then, could I take the Court to the next paragraph.

Particular grounds of invalidity, derived from the case law, were added to the modern statutes. Lack of inventiveness, as distinguished from anticipation, obtained a distinct statutory recognition only in this century and, in Australia, in the 1952 Act . . . As this development continued, the phrase “manner of new manufactures” came to represent the residuum of the central concept with which NRDC was concerned, namely what the High Court called the relevant concept of invention.


Your Honour Justice Keane, that is why I picked up the word “residuum”.

It should be noted that in NRDC (at 262) the High Court, which was dealing with the 1952 Act, spoke of the concept of patent law ultimately traceable to the use in 1623 of the words “manner of manufacture” and spoke of novelty and inventive step as distinct matters.

This distinction is now made clear by the use of the expression “manner of manufacture” in s 18 of the 1990 Act. The structure of s 18(1) emphasises that the grounds of novelty, inventive step, utility and secret use are each excised from any general body of case law which previously developed the phrase from 1623 “manner of new manufactures”. The point is made particularly clear by the reference in par (a) of the subsection to “manner of manufacture” rather than to “manner of new manufactures”.

In any event, it must be highly doubtful whether any recasting of the law was intended by the particular form taken by s 18.

Now, the essence of that was to emphasise the submission that we advanced to the Court that it is an error to incorporate within an understanding of the concept of “manner of manufacture”, the concept of “inventive step”. A concept of “invention”, at a very high level – is there an invention on the face of the specification – if there is no invention, yes, but looking at has there been an advance – an advance over what? An advance over the prior art? An advance over common general knowledge? This is not subject, in paragraph A, to section 7. You do not have the test in section 7(2). Subject to the addition of subsequent documents if they satisfy the requirements of section 7(3), built in to any consideration under manner of manufacture. It is, as the Full Court in CCOM – with the clear input of Justice Gummow sitting there – a different and separate concept. Thus, when one then comes to 291, at B and C, particularly the first complete ‑ ‑ ‑

GORDON J: Are you going to address the bottom of page 290, is that what you are referring to about the level of inventiveness?

MR SHAVIN: Yes. I shall go there now.

GORDON J: You do not have to, I just want to make sure that is what you are talking about.

MR SHAVIN: Yes, it is. Yes.

GORDON J: Thank you.

MR SHAVIN: So, the High Court deals – at 261 to 268 – I took the Court very briefly over some parts of that:

with obviousness, an aspect of which is the doctrine of analogous user, before returning to what it described as “the central question in the case”. This was (at 268) whether a process for killing weeds could be within the relevant concept of invention in s 6 because it produced a useful physical result in relation to a material or tangible entity –


This gets encapsulated, as we see in CCOM and Grant, to a particular practical application. So, there is a reference to Philips v Mirabella, and then in reference to the pre-1949 British legislation – there of course having been Acts in 1903, I think, and 1934, before the 1949 Act:

defined “invention” in virtually identical terms to those in s 6 of the 1952 Act and referred to “manner of new manufacture”.


Then, in the next paragraph:

The immediate significance of this is that in the 1990 Act, manner of manufacture, novelty, inventiveness and utility are stated as distinct requirements of a patentable invention. Thus, while a claim for the ball point pen now would fail for anticipation and obviousness, it would still be a claim for a manner of manufacture. Yet in the present case there are passages in the reasons of the primary judge (at 593) which suggest he was influenced in the determination of the issue as to “manner of manufacture” by asking whether what was claimed involved anything new and unconventional in computer use.


In our respectful submission, the Full Court here is clearly criticising the primary judge for that, because it is not a question for manner of manufacture. To do a comparison between that which is disclosed, common general knowledge, and seeking to identify an advance – new and unconventional, in computer use – that is not the test. The ballpoint pen is a manner of manufacture even in 1994, not because it was a new and unconventional advance in a writing instrument, but because of its intrinsic quality.

It was obvious, it was not novel, but it was a manner of manufacture because it was wrong to ask whether what was claimed involved anything new and unconventional. That test, adopted below, has come from Europe, and come from Europe where? Not in the context of looking at patent‑eligible material, but in the context of saying is there an inventive step? At 292 between B and C:

A distinction has also been drawn between the discovery of laws or principles of nature and the application thereof to produce a particular practical and useful result. A reason why the former has not been treated as a proper subject of patent according to the principles developed pursuant to the Statute of Monopolies was considered as long ago as 1852 in Carpmael –


and the Court can see the extract from Carpmael, and what one looks at is:

“Let it not however be supposed that the minds of the individuals making such discoveries of principles are underrated, on the contrary, the highest respect is due to both, but it will be evident that their discoveries are not of that kind which should secure to them the right of toll on all future practical applications of such principles; such a course would lead to endless difficulties –


So that what you have to have is you have to have within the claim an application, a practical particular application. So, if you look at the claim in suit, anybody could reproduce the game in 1.10. That would not infringe any patented grants. The only infringement would be if that which was taken by the third party, incorporated, consistent with the law established in this Court and the Federal Court, uncontroversially, every integer of the claim, every essential integer of the claim, and I can only think of one case in the last 30 or 40 years where there has been a non‑essential integer found under modern claim drafting – that was in 1986 in the Full Court.

If one looks at modern claim drafting that every integer is essential, given the nature of the modern claim, then you will not have infringement unless you have every part of the claim. So, if one says, well, there is invention in integer 1.10, that might be so, but there is no monopoly in that, not alone, and that is the distinction between having a patent for an idea, for a concept, for a scheme or a method, and having a patent for something that has application in a particular practical way. The former not patentable, the latter is.

Now, then the Full Court proceeds to consider a decision of the Patent Appeal Tribunal with Justices Graham and Whitford, which – at the time of the decision, which was in 1980 – were the two patent judges in the UK High Court sitting as the Patent Appeal Tribunal, so as the Full Court acknowledges, judges of deep skill and knowledge of patent law. There is an analysis of that case:

It was accepted that the scheme was not in itself novel, and that a completely standard computer could be programmed to perform it. Nevertheless, their Lordships, speaking as specialist judges of long experience in the field, held that the patent was good. They said (at 572) that what the inventor sought to claim was a method involving the operation or control of a computer, such that it was programmed in a particular way to operate in accordance with the inventor’s method. More than “intellectual information” was involved because the method was involved in the program and in the apparatus in physical form.

Now, that was adopted by the Full Court and from highly respected patent judges in the UK. We say, with respect, that this is – this, of course, was the last of the cases in the UK before the 1977 Act – or dealing with the patent before the 1977 Act.

GAGELER J: Does that apply to any computer program?

MR SHAVIN: Yes, your Honour, because there is no justification, in our respectful submission, for this Court saying that there is a special category not identified by Parliament which involves, in the words of the majority, a processor and memory. What one does is one looks at it – the invention claimed in accordance with basic principles, not with some limbs that it is a computer. That is why it is wrong below that the question asked by the majority was, is it a computer? That is not the question.

The question is, is it a proper subject matter under the statute, and there is no separate category. This Court in Apotex v Sanofi clearly held that you do not create exclusions. You do not exclude methods of medical treatment. One of the key reasons, particularly by your Honour the Chief Justice and Justice Crennan is there is no exclusion in the Act to do so. It is not appropriate to break the intellectual cohesion of the concept by creating judicially‑excluded territory. The reason that that is correct as a matter of public policy is to keep in the forefront of the mind that when one says, is this a manner of manufacture? You are not saying, and it will get a patent, because it will have to overcome the issues of section 18(1)(b) and (c). It cannot be that you simply take something and drop it in a computer and that will be a practical application of it, rather than simply a reiteration in electronic form of the scheme. Nor can it be said that if you have done so, you are going to satisfy the test in omeprazole.

GAGELER J: But it does mean, I think, that if you have the software and the hardware in the claim, then, in your submission, you have a manner of manufacture.

MR SHAVIN: Yes. Because there has to be a particular practical application. As I said, if all you did was you took the concept without practical application, and just said, I have got a concept on paper; I have now got a concept in electronic form, it is still going to be a concept.

That is where there will be an area for debate, because then you will need to look at the particular patent – what is shown on the face of the specification – to see whether it satisfies this test that the Courts identified in CCOM and was picked up and applied in a very elegant manner in Grant, which we are going to come to very shortly. So that – what the Court did at 294 was it noted at B that:

counsel for the respondents submitted that what is involved is the storage of the result of linguistic tasks undertaken “outside the computer”; what the patentees claim is no more than a desirable characteristic of the computer program, the ability to search, in the manner described, a data base of the type described. We accept that in a given case objections of this type might found an attack for obviousness or lack of novelty, or for failure to comply with s 40 in one or other of its aspects.


Can I then take the Court to the penultimate paragraph, starting:

Rather, counsel for the respondents drew upon Philips for a narrower proposition. This was that there could be no manner of manufacture in identifying “basic characteristics” or “desiderata” and “to claim all ways of achieving [them]”. Applying that to the present case, it was submitted that all that had been done was to select a desirable characteristic of a computer program, the ability to search, in the manner described, a data base of the type described, and “to claim all computers present and future possessing that characteristic”.

That submission should not be accepted. It may be that such a claim lacks novelty, is obvious, or lacks utility, or there is a failure to comply with one or other of the limbs of s 40 because, for example, the invention is not fully described or the claim is not clear and succinct. But if such hurdles all are surmounted, then in our opinion in a case such as the present there does not remain an independent ground of objection as to patentability, within the sense of s 18(1)(a) of the 1990 Act.


Now, we draw this to the Court’s attention because it is clear from the composition of the Court that we have on the Court deeply experienced patent judges. Indeed, with Justice Gummow, someone who has had a formative influence, one might think, in our generation on the shape of patent law. It was followed, in Grant, comprising the Chief Justice, and Justices Bennett and Heerey, and could I take the Court to that, which is at tab 33 in part D of the joint bundle.

Now, Grant, of course, was a case in which it was said not to be a manner of manufacture. So, it gives the other side of the coin. But the principles are clear. The claim is set out in paragraph 3 at page 64. NRDC is identified as providing the reference point for considering this question. Can I take the Court – in paragraph 8, the Court observes:

The ability to adapt the notion of patentability to new scientific discoveries and technologies should not be fettered by contrived constraints.

Language of course, that echoes this Court in NRDC, and in paragraph 14, which is a key paragraph in this judgment:

Business, commercial and financial schemes as such have never been considered patentable –

and there is a reference to a paper by the late Professor Lahore –

approved in CCOM . . . in the same way that the discovery of a law or principle of nature is not patentable. Sir Robert Finlay A‑G observed in Re Cooper’s Application . . . “[y]ou cannot have a Patent for a mere scheme or plan – a plan for becoming rich; a plan for the better government of a State; a plan for the efficient conduct of business”. A law of nature becomes patentable when applied to produce a particular practical and useful result –

citing Welcome v Catuity, the decision of Justice Heerey:

While a mere scheme or plan is not the proper subject of a patent, an alleged invention which serves a mechanical purpose that has useful results does not become such an unpatentable scheme or plan merely because the purpose is in the carrying on of a branch of business –


citing Fishburn’s Application, and then then in paragraph 18, the Court, having looked at the decision in the United Kingdom by Justices Graham and Witford in Burroughs Corp vs International Business Machines Corporation’s Application, there cited:

their Lordships distinguished claims to a business scheme or intellectual information as the product of the conception of an idea, which are not patentable, from claims to methods which in practice (and whatever words are used in the claim) result in a new machine or process or an old machine giving a new and improved result which, applying NRDC, are patentable. The distinction drawn was between mere intellectual information and a method that affected the operation of an apparatus in a physical form. When the method is practised in a way that is embodied in a physical form it is a manner of manufacture. There must be more than “a mere method or mere idea or mere desideratum” . . . If this does exist it is patentable because the method affects the operation of the apparatus.

Of course, at 20, there is an observation of the:

physically observable effect . . . in the retrieval of graphical representations of desired characters –

In CCOM. In paragraph 21, again, we have this reference to what:

constituted a practical and concrete application.

In the fifth line:

This involved the transformation of data by a machine through a series of mathematical calculations to provide a share price fixed for recording and reporting purposes.

Referring to State Street. But in the discussion of State Street of course, there is no descent into the detail of section 101. There was no adoption of the language of section 101 of “improvement to a machine”. It was looking at a more conceptual level. What it will see, as Ms Cochrane goes through Research Affiliates, that the Full Court there does, it does not stay at that conceptual level which here, in Grant, the Full Court found helpful, but it was to go to the detailed statutory provision which does not reflect any part of the learning on manner of manufacture. So, then one proceeds to paragraph 29, on page 70 of the print:

NRDC emphasised the need for the adaptability of the law of patents to cover technological developments. In NRDC the High Court looked to the application of the claimed method. That is similar to the approach of courts in the United States.


We say that again observing that this was the principles, not the statutory application.

A product of a method is something in which a new and useful effect may be observed. For claimed computer programs, the courts looked to the application of the program to produce a practical and useful result, so that more than “intellectual information” was involved. CCOM provides a useful analysis of the development of patent law in this context. The underlying principle, developed from the Statute of Monopolies, that business, commercial and financial schemes, which are “intellectual information” are not themselves properly the subject of letters patent, was maintained.


We do urge the Court to consider that observation. Then in the next paragraph there is the rejection of Mr Grant’s submission. We note, of course, that Mr Grant appeared in person, but Mr Catterns was appearing for the Commissioner. There was a distinction drawn between Mr Grant’s invention and that in Catuity:

which was a method involving components such as smart cards and point of sale terminals, and produced tangible results in the writing of new information to the Behaviour file and the printing of the coupon . . . While there was not a physically observable end result in the sense of a tangible product, the invention involved an application of an inventive method where part of the invention was the application and operation of the method in a physical device. Within the concept of NRDC an artificial state of affairs was produced, a state of affairs created by the application or effect of the method.


Then, they observed in 32 that some physical effect is required. At paragraphs 35 and 38, we simply draw the Court’s attention, particularly to the last sentence of 38.

We think that to erect a requirement that an alleged invention be within the area of science and technology would be to risk the very kind of rigidity which the High Court warned against.


We make three observations. First, CCOM and Grant represent orthodox and correct applications of the general bodies of principle developed by this Court in relation to manner of manufacture. Second, both CCOM and Grant cite the approach of International Business Machines in the United Kingdom, with approval. In so doing, both the Full Court decisions make plain that there is no requirement that an invention utilising computer, involved an advance in computer technology.

The relevant question is whether the invention claimed is a mere scheme. That is why Justice Burley, as the primary judge, in asking himself the question, is this a mere scheme, was acting consistently with the principles articulated by this Court in NRDC and those in CCOM and Grant because that is the relevant question, not, as the majority below would have, asking, is it a computer? That forms no part of the rubric of manner of manufacture.

Now, can I take the Court very briefly to Apotex. It is to be found at tab C14, but really we have advanced our submissions broadly to Apotex and, as the Court will recall, it was considering whether methods of medical treatment were within the concept - in the decision of the Chief Justice observing at 13 the change in the UK law following the enactment of the 1977 Act which was to give effect to Articles 52 and 57 of the European Patent Convention and that the continuing retention in Australia, not in the UK, of the concept of “manner of manufacture” and the rejection of a codified definition of “patentable invention”. I have taken the Court already to paragraph 16 where Chief Justice French looked to the IPAC understanding:

It means little more than that an invention must belong to the useful arts rather than the fine arts.

Then, looking at exclusions of methods of medical treatments, there is an anomalous qualification on principles governing patentability and we would say that observation applies similarly when one is creating special rules simply because a computer is involved. As the Court considers the decision below, the Court might think if you are going to call a gaming machine a computer because it has a processor and memory and you have a device for undertaking remote brain surgery that also has within it a processor and memory, do you say that a device for undertaking remote brain surgery would be patentable only if it involved an improvement in computer technology, or do you say, well, it might have had a processor and memory but that is not what the invention is about.

The principle below, as we will see, was that whether it was a washing machine, whether it was a motor vehicle – and almost all cars now, as the Court will know, have processors and memory everywhere in them – whether it is a machine for remote brain surgery, according to the majority it is a computer. If that is wrong, and self‑evidently wrong, why do you call an electronic gaming machine a computer?

In the joint reasons of the Chief Justice and Justice Crennan, again there was a consideration of IPAC’s rejection of codified exclusions and the adoption by the government, a notation consistently with NRDC that manner of manufacture is a broad concept to be continually widened – paragraphs 224 and 241 – an observation that, citing NRDC at 230, that:

It is not necessary that in addition the proposed method should itself be novel or involve any inventive step.

At 240, approving the Full Court in Rescare and Justice Lockhart who accepted that:

If a process . . . results in a ‘new and useful effect’ . . . it may be considered a ‘manner of new manufacture’ –

Then an important paragraph at 290 which is worth looking at, in particular in the joint reasons of the Chief Justice and Justice Crennan where:

Drawing on jurisprudence in Europe and the United Kingdom, Apotex contended that in Australia, a hitherto unknown therapeutic use of a substance (having prior therapeutic uses) is not a manner of manufacture. This appeared to be a reinvigorated attack on novelty, or a suggestion of obviousness, in the guise of a s 18(1)(a) objection, stimulated by the construction of claim 1 favoured by the primary judge. Reliance was placed on the circumstance that there is no equivalent in the 1990 Act to sub‑ss (3) and (4) of s 4A of the Patents Act 1977 (UK), which “deem” novel known substances and compounds in respect of first and subsequent (hitherto unknown) therapeutic uses. Those deeming provisions are the legislative response in the United Kingdom to the express exclusion from patentability of pharmaceutical method patents, from which the 1990 Act is free.


In that context, we remind the Court of the exclusion in section 1(2) of computer programs “as such” in the UK, and the absence of any such exclusion in the 1990 Act.

Now, can I very briefly – because we have touched upon it already – refer to Myriad – the two core observations in relation to Myriad. The first is that in the plurality at paragraph 28, there is the observation that where you have a claim that is within the accepted boundaries of a manner of manufacture, the two factors in NRDC:

are necessary to characterisation of an invention claimed as a manner of manufacture . . .

they will also ordinarily be sufficient.


There is no debate in this case that the sort of invention claimed is within the accepted boundaries. The fact that there are some 15 or 1600 granted patents in Australia perhaps is a testament to that. The fact that similar claims have been dealt with and accepted by single judges, at least on manner of manufacture, in Konami and Neurizon as referred to in the decision below, further reinforces that.

The second proposition is that when one considers the analysis of what is the substance of the invention at paragraphs 86 to 92, in our respectful submission it is clear that the claim is looked at as a whole, and not as some slices of a salami sausage.

We note too that – it is probably not necessary given the time to go very much further than that for present purposes in‑chief – but we say that when one looks at the cases in this Court there is nothing in NRDC, Apotex or Myriad which supports the exclusion of inventions including a process or a memory being identified as a separate class called computers from the widening conception of manner of manufacture into the contrary that jurisprudence of this Court establishes the general principles to be applied are universal in their application to technology falling within the existing bounds and anomalous exclusions are to be avoided.

The fundamental distinction between mere intellectual information, a mere scheme or business method, and something which may be considered a manner of manufacture is an application with a particular practical and useful result.

The primary judge, with whose reasons the Court will be familiar, analysed the claim, considered the elements of the claim device, considered the authorities – this Court and the preceding authorities of the Full Federal Court – and observed the reasoning of the delegate before concluding at 74:

The facts of the present case do not fit the paradigm ‑


of a mere scheme, which has been put into a computer. In the present case, the invention is an EGM which includes a processor or a memory. There is nothing left that is put into the computer. There is a combination which includes software and hardware. At paragraphs 73 to 82, the primary judge recounted the submissions of the parties and, at 83 and following, considered whether the claimed invention was a manner of manufacture. He referred correctly to CCOM, to Myriad and to NRDC and at paragraphs 86 and 88 identified the correct question.

So that at paragraph 89, to which I would refer the Court, in each of these cases the question for consideration was whether or not a mere scheme or plan was nonetheless a manner of manufacture because invention lay not only in the scheme but also the means by which it was realised using computerisation. We say that he then refers to paragraph 96 of RPL. To the extent that that sentence might be thought to say that you have to have invention in both, we say that it should be read with his Honour clearly understanding NRDC and not seeking to demur from page 264 of NRDC.

“In RPL Central” ‑ I think your Honour Justice Keane referred me to RPL Central at the beginning of the morning. We do note that:

A claimed invention must be examined to ascertain whether it is in substance a scheme or plan or whether it can broadly be described as an improvement in computer technology.


Now, the first part of that is exactly what the primary judge did. You do not get to the second part until you have decided with the first part it is a mere scheme. You do not start off with consideration of a pharmaceutical compound and say is it a mere scheme, is it an advance in computer technology. You have to have decided that you are in the territory of a mere scheme and then you consider the second question.

So, in approaching it in a phased fashion by asking clearly the question, is this prima facie in the excluded territory, the primary judge acted in a manner consistent with the articulation of principles by this Court and in CCOM and in Grant, as expressed in paragraph 96 of RPL Central. This was the same question which the Full Court in Ariosa – of which the primary judge was a member of the panel ‑ at paragraphs [155] and [158] to [160], said it had been considered at each of the preceding Full Courts.

Now, we have already explored paragraphs 95 and following, but we say that here we have a critical finding of fact that distinguishes this case from other cases that the Court has considered, such as Repipe. Here you have a finding of fact. There is in fact a combination claim to a machine, a physical device. Then at 99 to 101, the primary judge rejected the approach of the Commissioner seeking to denude the claim of all its features, except for the software.

This was the approach urged on and correctly rejected by the Full Court in Ariosa at [132], and in the last three sentences of [159]. Then the primary judge at 102 identified the anomaly and found that a finding of manner of manufacture was consistent with previous first instance decisions of the Federal Court in Neurizon and Konami. So, we say that he undertook a conventional analysis, applied the general principles of patentability, correctly construed the substance of the invention from the perspective of the PSA armed with CGK and found it to be:

a machine of a particular construction which implements a gaming function -


and so found the question whether a mere scheme was nevertheless an MM because it involved something more did not arise because he was at the position of a mere scheme.

Now, I will not go further to Ariosa than I have done, but where we say that the majority went wrong is that – and the majority is to be found in tab 7 of the core appeal book – is that at paragraph 26 under the curious heading of a “Proposed Alternative Approach”, the majority laid a hard rule:

In cases such as the present we would therefore respectfully favour the posing of these two questions . . .

(a) Is the invention claimed a computer-implemented invention?

(b) If so, can the invention claimed broadly be described as an advance in computer technology?

If the answer to (b) is no, the invention is not patentable subject matter.


Now, what that has done has been to create, for the first time, a separate category of invention for the purposes of section 6 of the statute, and then a rigid test – can it be described as an advance in computer technology as the sole basis for determining whether it is patent eligible. That is in direct contrast with everything this Court has said about the inappropriateness of having rigid tests, whether it is in NRDC, whether it is in Mirabella, whether it is in Apotex, whether it is in Myriad.

Secondly, there is no foundation anywhere in the Act where this Court said you look first to see if there are exclusions because the legislature – as Chief Justice French articulated – made a conscious decision not to have exclusions. So, no basis for this Court to create them, and the fact that it really is an exclusion can be found by the fact that at paragraphs 63 to 65 the Court said it does not matter if it is an advance in gaming technology. That is not relevant to our test, does not make it patentable.

Of course, it is at that point that the majority and Justice Nicholas really part company because Justice Nicholas says you do not have rigid tests, and, of course, there is no confining – other than technical advance – to one field of computers. It must be to any field of technology in which the invention is placed. If the Court is against us on our primary submission, we say that the approach of Justice Nicholas would thereby be correct.

But on no view is there a fiat in the authorities, in the Act, or in the Statute of Monopolies itself, for this rigid, narrow approach to assessing whether or not a computer or something in a computer constitutes a manner of manufacture and remembering that paragraph 32:

Why is the EGM a computer? The totality of the integers in Claim 1 may be grouped together into four sets:

(a) Computers. The random number generator . . . and the game controller . . . are incontestably computers. The controller consists of a processor and memory –


That is the test. The car you drive is a computer. The washing machine in the laundry is a computer. The device for undertaking brain surgery remotely is a computer. All of them can be patentable only if they are an advance in computer technology.

We say with the very greatest of respect, the law cannot have that consequence and be sensible. If anything is clear from the careful analysis by this Court again and again of section 6 of the Statute of Monopolies, it is that there is a very nuanced approach to identifying that which is patent eligible from that which should be rejected because it is mere intellectual information or is something in the field of the arts. Once you overcome that, then you look to 18(1)(b) and (c), to the exclusions in 18(2) and (3), to the requirements of section 40. At that point you identify whether or not this can be the subject of the grant of a patent.

So that we say that when you look at the analysis below – putting to one side that they overlooked that the submissions before them were for a combination claim – they failed to appreciate that you must assess the combination claim as a whole, that whilst paying lip service to that, the whole of the analysis thereafter was to focus only on integer 1.10, and to ask whether that was patentable.

In our respectful submission, the majority did not cite any authority supporting the existence or terms of the new test and have acknowledged in 29 that no Full Court had ever previously inquired into the question of whether an invention was a computer‑implemented invention, and we say – with respect – there is a good reason for that. It is the wrong question. It is an irrelevant question. It has nothing to do with manner of manufacture.

Secondly, it appears the Full Court majority was motivated to propose their new test to give effect to a policy consideration identified at
93 – the encouragement of novel uses of computers to advance computer technology. The new test is precisely the sort of rigid and formulaic approach which this Court has repeatedly rejected as we have observed.

Thirdly, the new test anomalously excises from the general principles of patentability a category of inventions described as computer‑implemented inventions. Instead of asking whether a computer‑implemented invention is a manner of manufacture and applying the principles developed in NRDC and Myriad – explained by the Federal Court in CCOM and Grant – the majority substituted an entirely new question.

Finally, we say that applying the general principles of patentability to inventions, the new test involves a modified novelty inquiry – and as was observed this morning – they accepted that it went into novelty. Fifthly, you could not answer that question on the face of the specification, which is inconsistent with the decisions in this Court, in Microcell, in Mirabella, in Ramset, in NRDC. Myriad did not overrule any of those decisions.

I want to move very, very quickly through Justice Nicholas. Justice Nicholas disagreed with the test, disagreed with confining the test to an advance in computer technology, and disagreed with having a rigid and formulaic rule. He would have referred all the claims, not just the claims other than claim 1, back to the primary judge to consider the evidence that had been adduced as to advances in gaming technology.

At this stage, can I perhaps ask my learned friend, Ms Cochrane, to address the Court on the decision of the Full Court in Research Affiliates? Research Affiliates was the first Full Court decision post-Grant dealing with this area, and it was where one sees for the first time the inculcation of the test from Europe and from America into determining patentability of computer‑implemented inventions.

KIEFEL CJ: Yes, Ms Cochrane.

MS COCHRANE: Thank you, your Honour. May it please the Court. Research Affiliates is located at the joint bundle of authorities at D37, if your Honours could turn to that. At paragraph 1, at the top of native page 380, in the third line, what the Full Court recognises, is:

In essence, this raises the question of whether computer implementation of an otherwise unpatentable business scheme is sufficient to make the claimed method properly the subject of letters patent.


So, that was the contest in that case. That is also recorded in paragraph 11.

Now, I have three propositions in relation to Research Affiliates which I will endeavour to make good. The first proposition is that the Full Court in Research Affiliates repeatedly acknowledged by reference to CCOM and Grant the approach we say is correct, being mere schemes are not patentable unless applied to produce a particular practical and useful result.

The second proposition is that the Full Court in Research Affiliates undertook a very detailed analysis of authorities from the US and the UK, being those postdating the 1977 UK Act. It drew concepts from those authorities we say without heeding their foundation in legal frameworks overseas under particular legislation in which patentability is assessed by reference to considerations of novelty or inventive step contrary to the approach set down by this Court.

The third proposition is that in assessing manner of manufacture the Full Court in Research Affiliates applied as rules these concepts from the US and the UK postdating the UK 1977 Act, and in so doing the Full Court in that case fell into error as it involved importing concepts of novelty and inventive step into the assessment of manner of manufacture contrary to authorities of this Court. This erroneous approach is also reflected in the Full Court majority’s test in the present case of requiring an advance in computer technology and his Honour Justice Nicholas’ approach of requiring a technical contribution.

So, if I could go to those to make those three propositions good. The first one is that the Full Court in fact acknowledged in three places what we say is the correct approach. The first place is in paragraphs 7 through to 14, where their Honours briefly consider principles arising from NRDC, Grant and Apotex – but we note not CCOM – and they acknowledge at paragraphs 8 and 9 – in bullet points in paragraph 8 – we say the approach for which we contend being that a manner of manufacture is an application with a particular practical and useful result.

Then, when the court comes to paragraphs 75 to 76 later on in their reasons, which is at native page 394, the Full Court considers CCOM in the context of the primary judge’s reasons in that case. In so doing, we see that there is a reference to – there is paragraph 76, the first bullet point refers to:

a new and useful effect –


and then the second bullet point refers to:

a practical and useful result so that more than information is involved.


Previously in paragraph 75, in about the middle of the paragraph, there is a reference to there being “particular effects” in the practical application. Then the final part of that decision that I was going to take your Honours to in relation to my first proposition is paragraphs 90 and following, where their Honours consider the Australian authorities again and as Mr Shavin pointed out in relation to Grant at paragraph 23, there is reference to that in paragraph 94 at the bottom of page 397.

We say that the Full Court there accurately identified the sort of high‑level principles to be properly drawn from the US authorities, as articulated in Grant at 23, that the same tests apply for business methods as any other claimed invention and that there is a distinction between the employment of an abstract idea and the idea itself.

Then when one comes to, also in that same paragraph, the consideration of Grant at paragraph 29 – so if we go to the top of page 298 - one sees again that the Full Court acknowledges the approach for which we contend is correct on the authorities. In considering manner of manufacture for claimed computer programs, the courts look to the application of the program to produce a practical and useful result.

We see there that that is acknowledged by the court. But then, going to my second proposition, which is that the court embarked on a very detailed analysis of US authorities and UK authorities, each of which postdated the 1977 UK Act. So that occurs at paragraph 15 through to paragraph 59. We see at paragraph 15 – and it is the middle of native page 382 – that there is a reference to the decisions overseas being helpful, but then there is an acknowledgement that there are:

differences between the legislative contexts governing their decisions and our own governing law must be borne in mind.

So, we embrace that entirely and, unfortunately, as these reasons develop, we would say that that caution was not heeded to, with the result that it resulted in errors.

GAGELER J: You started this analysis by taking us to the question as framed at the end of paragraph 1.

MS COCHRANE: Yes, your Honour.

GAGELER J: Is the burden of what you are saying that the answer to that question is yes?

MS COCHRANE: No, your Honour, what we would say is that in the case of Research Affiliates, that was a case where it was agreed that it was the method, and the method is actually set out in paragraph 65 of those reasons and it sets out what was admittedly a scheme and all that is done to that claim is to insert the words “computer implemented”. So, we would say that, applying the correct test so, was it a particular practical and useful result? We would say no, in that case.

GAGELER J: Just taking your question as framed, what is the answer to that question, in your submission?

MS COCHRANE: No. In a general sense the question is, is there a particular practical and useful result in a computer implementation.

GAGELER J: Which is the same answer that the court gave.

MS COCHRANE: Yes. So, we would say that the answer in Research Affiliates was correct, but it relied upon – it drew concepts from overseas unnecessarily and it has resulted in a whole suite of Full Federal Court decisions that have drawn concepts of novelty and inventiveness into the purity of the manner of manufacture analysis. We do not cavil with the result in this case, it is really the way that it has changed – altered the analysis, and it has culminated in what we see before your Honours today in the Full Court majority’s decision. So, what we would say in relation to looking to overseas, that was we heard cautioned against by the Full Court in CCOM, particularly in relation to the 1977 Act, and those references are 287E, 288C, 289B to D and 293B.

Now, importantly, at paragraphs 17 to 20 – now, this is all in relation to the UK authorities – starting at paragraph 17 which is at the bottom of page 382, we see that there is a reference to Article 52 from the EPC and Mr Shavin took your Honours to that in the joint bundle of authorities at B7 and also to the equivalent section in the UK Act 1977 at B8.

Then going through to paragraph 20, what the court recognises in particular at paragraph 20 that the UK EU exclusion reflected in Article 52 for inventions that relate to computer programs as such has led UK authorities post the UK 1977 Act to consider:

“technical effect” or “technical contribution” of the claimed invention.


KIEFEL CJ: Ms Cochrane, I see the time.

MS COCHRANE: Yes, thank you, your Honour.

KIEFEL CJ: The Court will adjourn until 2.15.

AT 12.47 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.14 PM:

KIEFEL CJ: Yes, Ms Cochrane.

MS COCHRANE: Thank you, your Honour. I was in Research Affiliates at D37, paragraph 36 on page 385. This is an important paragraph in the analysis we say, because when one looks at the final sentence, which commences “However” we see that the court held that:

applying a test of a “technical contribution” . . . in this area of technology –


being inventions involving computers:

can be useful in an analysis of an “artificial effect” -


which we take to be a reference to the form of words used in NRDC at 277. So, we say that was an error for three reasons. The first being that this test of technical contribution, as the Full Court acknowledged, that paragraph 17 through to 20 arises from the statutory exclusion in Article 52 and replicated in the UK Act for computer programs as such. In Australia, we do not have a statutory exclusion for computer programs at all.

Then, the second reason for it being an error is that the Full Court equated “technical contribution” – as that expression is used in the context of EU and UK law post the 1977 Act, with “artificial effect” ‑ as that expression is used in NRDC at 277, without any analysis.

Finally, we say that, properly analysed, the authorities cited by the Full Court in Research Affiliates show that the test of technical contribution, as drawn from Europe, is not consistent with the established principles of manner of manufacture.

Now, two points in support of that. If your Honours could turn back to page 384, there is paragraph 29 which is an extract from Aerotel which sets out the test for technical contribution in the context of considering patentable subject matter in Europe and in the UK since 1977. So, what one sees is you “properly construe the claim”, “identify the actual contribution”, ask whether that contribution falls “within the excluded subject matter” and then “check whether the actual” contribution is “technical in nature”.

So that can be contrasted with the approach to manner of manufacture and in particular pointing to in CCOM at 292D, which Mr Shavin referred to this morning, being the reasoning behind why abstract ideas are not patentable, whereas practical applications or particular practical applications are patentable is that abstract ideas, no matter how inventive they might be, should not secure the right of toll on all future practical applications of that idea. So, what you need is an application to produce a particular practical and useful result, and that ties in with what was recognised in NRDC at 271, that the purpose of section 6 of the Statute of Monopolies:

was to allow the use of the prerogative to encourage national development in a field –

So, if one can get a monopoly over an abstract idea or a discovery, hence you get a monopoly for all practical applications of that idea, then that would not be encouraging innovation. So that is the perspective or the underpinning of manner of manufacture which is quite different from this European concept of looking for technical contribution – is it technical? That is illustrated, we say, in the case of Symbian to which Mr Shavin referred, which is in the next tab in the folder, D38, and I was just going to go briefly to paragraph 39 to show where the test for technical contribution has come from, that it is actually an established concept in European law that underpins European assessment of inventive step and novelty. So that is apparent in paragraph 9 – sorry, paragraph 9 is in – sorry, I may have misspoken and referred to it as 39, but it is paragraph ‑ ‑ ‑

GORDON J: So, it is paragraph 9 you want us to go to?

MS COCHRANE: Yes, thank you. So, paragraph 9 of Symbian we say stands for the proposition that the concept of requiring a technical contribution is an established concept that underpins the European approach to the assessment of inventive step, and what the Full ‑ ‑ ‑

KIEFEL CJ: Why is it inconsistent with manner of manufacture?

MS COCHRANE: Because it introduces concepts of inventiveness and whether there is a contribution. So, we say that that is not consistent with ‑ ‑ ‑

KIEFEL CJ: Not usefulness?

MS COCHRANE: Well, as in the technical contribution, that is not consistent with manner of manufacture because it imports concepts of inventiveness into the analysis of manner of manufacture.

KIEFEL CJ: It cannot be approached on the basis that it is merely identifying something that is useful?

MS COCHRANE: No, I think viewed in the context of this paragraph 9 ‑ ‑ ‑

KIEFEL CJ: But if it is imported in Australian law it could be taken in a different way.

MS COCHRANE: If it were made clear that it is not ‑ ‑ ‑

KIEFEL CJ: I mean, it is not unusual to derive concepts and principles from overseas cases.

MS COCHRANE: Yes.

KIEFEL CJ: Justice Crennan and I said that in Apotex.

MS COCHRANE: Yes, indeed, and I think also your Honour has pointed out that we need to be cautious that in ‑ ‑ ‑

KIEFEL CJ: That is right.

MS COCHRANE: ‑ ‑ ‑ importing them we are not ‑ ‑ ‑

KIEFEL CJ: But understood in the context why would we not understand Research Affiliates to be speaking of it in the context of being an application which is useful and flexible?

MS COCHRANE: If that was the limit of it, that it is a useful high-level concept, that would be fine, but if it actually starts to jar with existing established principles – and we say that the way that it has been applied it does because it goes into the forbidden territory of inventive step and novelty as applied.

KIEFEL CJ: I understand what you are saying.

MS COCHRANE: Yes.

KIEFEL CJ: How do we understand how it was intended then in Research Affiliates?

MS COCHRANE: We would say that it does seem as though their Honours did err in that – the way that it is seen in the conclusion, which I will come to, in paragraph 119, where what they look to is whether there was not only inventiveness in the idea, but also in its implementation, which we say is incorrect in the light of NRDC at 264, as pointed out by Mr Shavin.

Then there is also a picking‑up of a need for an improvement in computer technology, which we say is also importing concepts of novelty and inventive step from overseas, and in particular, in relation to the US authorities, the Supreme Court has acknowledged that their test of patentability under section 101 does import concepts of inventive step and novelty. So, the simple point is that it is very useful to look at how cases have been considered overseas, but in importing them into Australia we need to be cognisant that we are not jarring with established jurisprudence. So that is the – and I will endeavour to make those points good. So, we would say that this test for technical contribution is drawn ‑ ‑ ‑

KIEFEL CJ: While you are doing that, at paragraph 33 of Research Affiliates, it is said – the Court says:

Some of the divergence in approach between the Board and the UK courts seems to stem from the Board’s consideration of inventive step in the context of patentability. That approach is not relevant to Australian law.

MS COCHRANE: Yes.

KIEFEL CJ: That is what you are saying.

MS COCHRANE: Yes, that is right.

KIEFEL CJ: So, their Honours are cognisant of that problem.

MS COCHRANE: Yes. Well, it may well be the case that – certainly, as it seems to have been applied in subsequent authorities, that it is starting to draw upon inventive step and novelty considerations.

KIEFEL CJ: But you are saying Research Affiliates is wrong as well?

MS COCHRANE: Yes – well, we say the result is not necessarily wrong, but paragraph 119, we say, is wrong by its reference to a need for inventiveness in the implementation, and also in improvement in the computer. So that is so, and the precise test endorsed by Justice Nicholas in the present case in dissent is the test looking for a technical contribution, and that is at paragraphs 116, 119 and 142 to 143, and he found that that was determinative of manner of manufacture.

One of the difficulties that we consider to have arisen is that concepts have been drawn from overseas and applied as rules in a series of Full Court decisions when they should not be applied as rules, but it needs to be considered in the context of established principles of manner of manufacture and in particular the need to keep each of these grounds distinct.

GAGELER J: So I can try to get to the bottom line of your submission, if you have software embedded in hardware, do you automatically have a manner of manufacture?

MS COCHRANE: No, your Honour, it would depend upon the claim. So, we would consider the claimed invention and how that is articulated and whether it is a particular practical and useful result that it has applied any abstract idea or scheme. And so, in each case, it would be considering whether what is claimed is a particular practical and useful result, and that would be the analysis, and we say that there was no justification for going overseas and importing concepts from overseas which are a technical contribution, improvement in the computer, that are based upon overseas statutes, overseas exclusions.

So, we say there is no justification for importing those concepts because the expression drawn from NRDC and applied in CCOM and Grant, being whether the abstract idea has been applied to result in a particular practical and useful result, is fit for purpose for considering inventions of this kind.

EDELMAN J: Why is paragraph 119 saying anything different from that?

MS COCHRANE: Looking at paragraph 119 it says:

The claimed method in this case clearly involves what may well be an inventive idea, but it is an abstract idea.

So, pausing there, based on NRDC at paragraph 264, that is fine ‑ ‑ ‑

EDELMAN J: You have no objection to that, yes.

MS COCHRANE: ‑ ‑ ‑ you can have your inventive step in the idea and the implementation can be very straightforward. The specification makes it apparent that any inventive step arises in the creation of the index as information and as a scheme. Again, I referenced NRDC paragraph 264, that is fine. There is no suggestion in the specification or the claims that any part of the inventive step lies in the computer implementation. According to NRDC paragraph 264, that is fine. That is not a problem.

Rather, it is apparent that the scheme is merely implemented in a computer and a standard computer at that. It is no part of a claimed method that there is an improvement in what might broadly be called computer technology. Now, what we would say is that the two errors in that analysis are to suggest that you need inventive step not only in the idea but also in the implementation and that it is relevant to look at the claimed invention to ascertain whether it is an improvement ‑ ‑ ‑

EDELMAN J: But that is not what paragraph 119 is saying. Paragraph 119 is saying that if you have an abstract idea, that is not enough and, in the circumstances here, it is clear that it is purely an abstract idea because there is no suggestion that there has been any computer implementation that would take it beyond being a mere abstract idea. There is no suggestion that there is an improvement in computer technology that might take it beyond being an abstract idea and there is no suggestion that there is any implementation that would take it beyond an abstract idea. What is wrong with that?

MS COCHRANE: Put that way, given that the claim in this case was a scheme where it was just inserted computer‑implementation, viewed alone in that way, that is fine. However, the way that it has been applied is that you need to look for, in the implementation of the idea, one needs to look for an improvement in technology or, as the Full Court majority said, an advance in computer technology.

So, really, what our issue is, is with the way that this has been applied and importantly the reference to “improvement in computer technology”, it is important to be cognisant of the fact that it arises from the form of section 101 of the U.S. Code, and that is set out at tab B12 of the joint bundle of authorities – I will just briefly highlight that.

GORDON J: Can I cut through this? Is your complaint about the subsequent application of 119 that it misses what is the third sentence of that paragraph and that subsequent cases take the first and the third, and leave out the implementation of an idea element? In other words, the way Justice Edelman put it to you, there are a number of propositions which, on their own, are right. In a subsequent application, is your complaint that they, in effect, go from sentence one, i.e. abstract idea, ignore that the implementation of an abstract idea might itself be patentable, and then go directly to the third limb and say you have to have an improvement in computer?

MS COCHRANE: Yes, your Honour. The issue that we have is that, as applied, it has resulted in – regardless of whether the idea might be inventive – to actually look at what is the implementation and whether there is an improvement in the computer – whether the actual implementation is inventive. We say that that would be wrong.

EDELMAN J: Could you take us to one of those applications?

MS COCHRANE: Mr Shavin is going to do that. Just very briefly, section 101 – you can see that the reference to improvement in computers derives from the way that section 101 is written, which limits patentability to:

process, machine, manufacture, or composition of matter, or any new and useful improvement thereof -


That is where the idea of improving the computer has come from, because there is a reference to improvement in a machine, which is permissible under 101.

The next point is that in Mayo – that is the joint bundle of authorities at D35 – the Supreme Court acknowledged that to be patentable subject matter in the United States, the use of an abstract idea must involve an inventive concept sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the natural law itself, and then at Mayo at page 90, recognises that the way that they are applying section 101 means that it will overlap with at least the 102 novelty inquiry. So, what our – paragraph 104 – the Full Court adopts the distinction drawn by the Supreme Court in Alice:

between mere implementation of an abstract idea in a computer and implementation of an abstract idea in a computer that creates an improvement in the computer.


As we said, that arises from the form of section 101.

Those are our submissions and the only other point to note is that there are submissions – our submissions – at paragraph 43, and also the submissions of the intervener, FICPI, at paragraph 20, refer to the US approach which involves analysis of inventive concept and also improvement in computer technology overlapping with novelty and inventive step and that has been described by US judges as having created a mess and chaos. Thank you, your Honours.

GAGELER J: Those judges are on the Federal Circuit, are they not?

MS COCHRANE: Yes, they are. They are the ones who ‑ ‑ ‑

GAGELER J: They are in a big dispute with the Supreme Court. I mean, it has been a long-running difference of view.

MS COCHRANE: Yes, and I think they are the ones who have had to apply what they regard as a test that I think was described as a ‑ ‑ ‑

GAGELER J: It is a clash of culture.

MS COCHRANE: Or, they describe it as a random walk. Anyway, thank you.

GAGELER J: Yes, that is one point of view.

MR SHAVIN: In our last few minutes, can I deal with this - can I respond to the point, Justice Gageler, you made? The problem that has been - has been the application of the two‑stage Alice test in trying to work out the “something more” in the context of section 101. The cases in the Federal Circuit are a pure random walk, in a technical sense. There is no way to reconcile. You can go through 40 or 50 of them – were cited by Mr Catterns and I between us in compass and we analysed all of them. When you look at a random walk it really is.

So, the problem has been that the nature of the two‑stage test in the context of 101 does not work. Part of that is a failure to recognise that the “something more” is the thing that actually takes it away from being a mere scheme. Now, that is because in the statutory context in section 101 you are not asked that question. So that, although at the high level, it was useful – as was discussed in Grant – to look at it conceptually, that was fine, but it is the way in which you apply it.

So, to respond both to your Honour the Chief Justice and your Honour Justice Edelman, when you look at the words of 119 in Research Affiliates, you can say that should be all right, and the analysis by your Honour Justice Gordon works. But when you then look at the way in which this has become applied, you can see where the problem arises because the court starts off with a correct analysis, and there is an inexorable creep which ends up in the majority. The majority is simply, if we might say with respect, the reductio ad absurdum of that which has gone before it. It goes far further than anything before, but it is built on the rationale that has been used before.

So that in RPL Central – if I can deal with this quite quickly – at tab D31 – and if I could take the Court at a high level – first of all to paragraph 100, you see that is a perfectly unobjectionable analysis of Research Affiliates. But then, when you go to 102, what the court looks for is a suggestion of a utilisation of an unusual technical effect, and then when you get to 103, that is explored:

There was no technical contribution to the invention or artificial effect of the invention by reason of the intervention of the inventors; the ingenuity was in the scheme not in the physical phenomenon -

Then in 104:

It is stated in the specification, and was accepted by the primary judge, that the method could not be carried out without the use of a computer.


That is not sufficient, they say, but then:

In those circumstances, the claimed invention is still to the business method itself. A computer-implemented business method can be patentable where the invention lies in the way in which the method is carried out in the computer.

Now, at that point you have started to move from looking to Europe for an interesting analysis to try and see what is the difference between mere intellectual information and something more to developing a test that there must be something lying in the way in which the method is carried out on a computer. This necessitates some ingenuity in the way in which the computer is utilised. Now, that has moved a long way away from the correct analysis, as we suggest, in CCOM and Grant and thus, when you go from 104 to 107:

Simply putting a business method or scheme into a computer is not patentable unless there is an invention in the way in which the computer carries out the scheme or method.


Now, that is creating a special rule. That is not an application of manner of manufacture where one can have an invention and an idea as long as there is a practical application in a particular way. Here, you have to have an invention in the way in which the computer carries out the scheme or method. So, that is identifying where there must be an inventive step. One can see how that then evolves in the subsequent cases. But, before we do that, we go to paragraph 112, and we find in paragraph 112 ‑ ‑ ‑

KIEFEL CJ: It is not a reference to an inventive step, is it? The reference to the way in which the computer carries out the scheme or method is its application, and that is ‑ ‑ ‑

MR SHAVIN: But it is saying ‑ ‑ ‑

KIEFEL CJ: The invention must reside there.

MR SHAVIN: But why only there? Why is it limited that it has to be in the way in which the computer carries it out? So that means that you have a combination claim – one element of which is software – but the whole of the combination claim is only manner of manufacture if, in fact, there is invention – whatever that might mean in the context – but, taken at its lowest level, in the way in which the computer carries out the scheme.

EDELMAN J: It may be that paragraph 107 is just talking about the business method. The invention, the claim, is the business method, and if your claim is the business method that does not become a patentable invention by putting it into a computer.

MR SHAVIN: But that is – and I would accept that, your Honour. The problem is, as we go incrementally through this case, you get a proposition which looks like a rule, and it comes out of it more like a rule, and then the next case becomes a rule and then ‑ ‑ ‑

EDELMAN J: But let me take us to the one where you say it goes wrong, where it necessarily leads to the wrong result.

MR SHAVIN: Well, the majority downstairs has to be wrong, with respect.

EDELMAN J: Sorry, the majority?

MR SHAVIN: Downstairs – has to be wrong.

EDELMAN J: So, it is only this case – it is not necessarily the result of any of the other cases?

MR SHAVIN: Well, there are incrementally. You see, can I just very quickly go to D. If we look at paragraph 112 – perhaps I can leave that for the moment for the purposes of this argument. Let me take you ‑ ‑ ‑

KIEFEL CJ: Is not 107 simply saying that if you have a business method or scheme something more is required?

MR SHAVIN: If it was understood as that, your Honour, it would be unexceptionable.

KIEFEL CJ: Well, the only other thing it can be is the way in which the computer implements the scheme, so it must be something in there. I mean, this is not a narrow approach, this is actually looking for an invention when, prima facie, the business method says it is not.

MR SHAVIN: Well, it depends whether there is a practical application for business method, but a practical application of the business method does not as a general principle require an improvement in the way in which the computer operates.

KIEFEL CJ: That would reside in – that would be the something more. I mean, if you have ‑ Justice Nicholas called it a generic machine, but if you have a conventional electronic gaming machine there has to be something else, and what they are searching for is the something else to make it a manner of manufacture.

MR SHAVIN: Well, a practical and particular application was sufficient in Grant, as your Honour said. That did not say that there must in Grant be some technical improvement in the computer.

KIEFEL CJ: But what else could it be if you are talking in the context of implementing a method or scheme in or through a computer?

MR SHAVIN: Well, it could be the way in which the scheme interacts in the computer without that being an advance in computer technology. A practical application ‑ ‑ ‑

KIEFEL CJ: Well, it has to be something to do with technology because that is what is employed.

MR SHAVIN: Well, yes, but there is more than that. There can be more than that in a business method. You can have a conceptual business method which is applied in a way that in a true combination claim sense interacts with a number of hardware elements, one of which might be a processor and memory. But it may not be dependent exclusively on an improvement in the utilisation of the processor and memory. It might be that there is a novel interaction between what you are setting out as your method and the particular application to which you put it.

KIEFEL CJ: If it was something that was not – that had not been applied before.

MR SHAVIN: Well, that is the separate quest, that is the separate issue. That is the inventive step issue.

KIEFEL CJ: Are you saying that is novelty, but it is also where an invention ‑ ‑ ‑

MR SHAVIN: Well, that is why I made the observation before, that when you look at the discussion on the face of the specification what you are really looking at on the face of the specification is there is language which, in substance, is an admission that there is no invention. You do not actually look to find the technical advance on the face of the specification. You do not look for the technical advance by reference to anything other than common general knowledge.

KIEFEL CJ: But you are not saying you stop just at business method or scheme, do you? If that is the finding, this is a business method or scheme, is that the end of it - that is it, you do not ask any further question.

MR SHAVIN: No, but I am saying that you do not confine it to an improvement in the computer.

KIEFEL CJ: What is the further question you then ask - you say is the correct question to ask if that is the finding?

MR SHAVIN: Is there a particular practical application. It is the application of the scheme ‑ ‑ ‑

KIEFEL CJ: The difference in wording is application and implementation.

MR SHAVIN: Well, it is not saying that there has to be a technical advance in the computer.

KIEFEL CJ: There has to be something in the implementation or application of it.

MR SHAVIN: Yes, absolutely there has to be something there. I am not seeking to cover every type of claim because ‑ ‑ ‑

KIEFEL CJ: But the “something else” cannot be a technical advance.

MR SHAVIN: Cannot be confined to the technical advance.

KIEFEL CJ: What else could it be?

MR SHAVIN: It could be the way in which the scheme interacts in a particular way with the hardware elements - a combination.

KEANE J: So, are you talking about a technical adaptation - a technical adaptation in order to implement the new idea?

MR SHAVIN: But it has to be an application which is the particular useful application. It cannot just be, “I have a scheme on paper, I put that in a word processor, I have a scheme in a computer, QED I have an invention”. No, we would say ‑ ‑ ‑

KEANE J: But do you not have to show the adaptation of the technology giving effect to the idea, implementing the idea ‑ ‑ ‑

MR SHAVIN: In a particular way ‑ ‑ ‑

KEANE J: ‑ ‑ ‑ to produce a useful result.

MR SHAVIN: Yes, and that may be a technical advance in the computer, but that is not the rule ‑ ‑ ‑

KEANE J: But there is an advance in the sense that you have a new idea that is being implemented in a way that involves ‑ ‑ ‑

MR SHAVIN: In a particular practical way.

KEANE J: ‑ ‑ ‑ by an adaptation to the technology.

MR SHAVIN: It will reduce in a particular way, a particular practical way. That is the test, that is the ‑ ‑ ‑

KEANE J: Is that not what was being said in CCOM?

MR SHAVIN: Yes, but what in CCOM was not being said, that you have to – in fact, what was rejected in CCOM was that you had to look for an improvement in computer technology. That is the very thing that CCOM rejected. That was what had been advanced by the primary judge in CCOM and criticised. The Court will recall, your Honour will recall, I took your Honour to the passage in CCOM ‑ ‑ ‑

KEANE J: There was an adaptation of the technology to give effect to the new idea.

MR SHAVIN: In a particular way.

KEANE J: That is right.

MR SHAVIN: Yes. That would be a manner of manufacture.

KEANE J: In other words, a bespoke adaptation of the technology to give effect to the new idea, so that, in that sense, we can speak of an improvement or advance in that technology.

MR SHAVIN: If that was what – if that is what is meant.

KEANE J: Why is it not plainly what is meant in CCOM?

MR SHAVIN: It is not in CCOM, I am talking about RPL, sorry, your Honour. I am absolutely in agreement with your Honour on CCOM. I accept what your Honour says. In my respectful submission, that is precisely what CCOM was saying.

EDELMAN J: It may be what RPL is saying as well.

KEANE J: Yes.

MR SHAVIN: Well, it is not the language they have used, and what – I am only pushing because I am running right on my time limit, but what we see is when you look then through Encompass, and you look to the majority below, what might have become an impressionistic view that one could take, as your Honour the Chief Justice has and your Honour Justice Keane has, look at the language at paragraphs 107 and 112 in RPL and say they are simply looking for this practical application, they become very specific below.

So, below, the criticism is no one looked to see whether it was a computer, and if it is a computer then you come back to paragraphs 26 and 27, so that the majority say, first question, not is it a scheme, the first question is, is the invention claimed a computer‑implemented invention? If so, the invention can broadly be described as an advance in computer technology. If the answer to (b) is no, the invention is not patentable subject matter. So, the advance in computer technology has become a bright line test and without that you have no patentable subject matter. If the answer to (a) is no, then one must consider the general principles of patentability.

Now, the first proposition is that there is no law of exclusion. You cannot say that with a computer‑implemented invention you do not apply the questions of the general principles of patentability. Then when you look at what the majority did below, the next section which starts at paragraph 30 is, is the invention in claim 1 a computer‑implemented invention? Now, we say that is an irrelevant question. The question is, is it a mere scheme? Is it merely intellectual information? Is it information of a type which is not incumbent within the concept enunciated in section 6 of the Statute of Monopolies – not is it a computer? So, they go through and look, is the gaming machine a computer, and they come to the conclusion at 49:

Again, this is not evidence that an EGM is not a computer. There remains the question whether the fact that an EGM is contained in a cabinet with artwork on it can alter its characterisation as a computer. We do not think it can.

. . .

It follows that the EGM in Claim 1 is a computer. It does not follow automatically that Claim 1 is a computer‑implemented invention. As we have said, there is no doubt in principle that a computer may constitute patentable subject matter although it is to see that a claim for such a computer would not fail for want of novelty and inventiveness.

Well, that is irrelevant to the question of manner of manufacture:

But there is a distinction to be drawn between a claim for an invention which is a computer and a claim for an invention which is implemented on a computer.

Why, we ask. Now, the only reason they got to the point of deciding that an EGM in claim 1 is a computer is because it has a processor and memory. Now, half the goods in the world now have processors and memory. It does not make them all computers. What you find is that in the approach adopted by the majority below, we say with respect, they define the question, is it a computer, then they say the test is a bright line test, is there an advance in the computer? They do not look at the substance of the claim. They do not look at the real question articulated by this Court again and again - is it a mere scheme, mere intellectual information, something that is not a manner of manufacture – and then look to see whether there is something more which might mean that it is no longer a mere scheme but it is a manner of manufacture.

GORDON J: Mr Shavin, what about in 27:

if the answer to (a) is no, one must then consider the general principles of patentability.

MR SHAVIN: So that means if it is not a computer‑implemented invention, the general principles apply, but if it is a computer‑implemented invention, the only rule is an advance in computer technology.

GORDON J: Does that not give you the expansion that you require?

MR SHAVIN: No, with respect, because that says that a computer‑implemented invention – you have an invention implemented in a computer – the only way it can be patentable, so patent eligible subject matter, is if there is an improvement, an advance in computer technology. That cannot be right, with respect. When they are defining an EGM as a computer because it has a processor and memory, and then to say that the only way it can be a manner of manufacture is if there is an advance in computer technology - take a washing machine.

GORDON J: Does that mean that the last line of 27 should be the first question, i.e. “general principles of patentability”?

MR SHAVIN: Yes.

GORDON J: Then one moves to what I think you have now accepted is the analysis in Research Affiliates and the other line of authorities. You may move to that because it may very well be that that is an appropriate analysis on the face of the specification.

MR SHAVIN: Of that specification, but we say that the principle was that articulated in Grant and CCOM. There can be no criticism of the principles articulated in CCOM and Grant. They pick up the principles articulated before and since in this Court as to what constitutes a manner of manufacture. You look to see whether there is a practical application, particular practical application of utility. That is the correct test.

Now, it may be that in the context of Research Affiliates you say they were simply looking for a proxy for that. Let us accept that, for argument’s sake. But when you look at the majority below, that is not what is being said at all. They are excluding from the general principles of patentability something that they have identified as a computer‑implemented invention. That is wrong. What they then reach to, of course, is to say that if there is an improvement in some other area of technology, it is irrelevant. That is paragraph 65. That is where Justice Nicholas disagrees, because Justice Nicholas said that cannot be right. When you go back to RPL Central at paragraph 99, for example, one finds in the first dot point on page 50 of the text:

One consideration is whether the invention solves a “technical” problem within the computer or outside the computer, or whether it results in an improvement in the functioning of the computer,

irrespective of the data being processed.


Now, Justice Nicholas comes back to this paragraph and says that that plainly means that you cannot confine your assessment as to manner of manufacture by only looking for an improvement in the computer technology. So, when, in paragraph 65, the majority below say:

Aristocrat also submitted that changes in the reel structure (in claim 3 of the 967 Patent –


which was the claim that dealt with configurable symbols:

and the idea configurable symbols were to be seen as advances in computer technology. We do not accept this submission. These may constitute advances in gaming technology but they are not advances in computer technology.


They have defined the rule that unless there is an advance in computer technology, you are not patentable. Now, that is completely inconsistent with the expanding scope that has been described in this Court. It is inconsistent with the approach adopted by this Court in Apotex which said there are not exclusions. It is creating a category – creating a rule – a rigid rule which Justice Nicholas properly criticises.

KIEFEL CJ: I think you might be repeating what you said before.

MR SHAVIN: I do apologise to the Court. Thank you. I did not mean to do that, your Honour, I am sorry. In our written submissions, we have referred to some passages from Encompass and Rokt. If I can simply rely upon those without addressing them. If anything arises from our friends, we will deal with it very briefly in reply.

KIIFEL CJ: Yes.

MR SHAVIN: Unless there is any further way we can assist the Court, those are our submissions.

KIEFEL CJ: Thank you, Mr Shavin. Yes, Ms St John.

MS ST JOHN: May it please the Court. Your Honours, my client, IPTA, represents the interests of patent attorneys in Australia who, of course, act on behalf of their clients in the prosecution of patent applications. IPTA’s members represent manufacturers and developers in the full spectrum of industries, and the inventions of those clients include computer‑implemented inventions in many fields beyond gaming. IPTA seeks to be heard on four topics that have not been addressed in detail by the parties to this appeal. Your Honour will have seen those in our written outline.

The first is the application of the Full Court’s new test for manner of manufacture in fields other than poker machines, and the impact that that would have on research and industry in Australia. The second is that the test treats computer‑implemented inventions differently from others, which is not justified in terms of the Patents Act and puts Australia at odds with its international obligations. The third is that there are some practical difficulties in the new test, in particular that it would require courts to identify and consider prior art as part of the test of manner of manufacture. Finally, there are practical difficulties with the Full Court’s approach to identifying the substance of the invention, and I will come there to some submissions about the recent practice of the Patents Office.

Your Honours, the Full Court’s statements at paragraphs 26 to 27 of the majority’s decision are a new test for manner of manufacture that I submit applies to all computer‑implemented inventions. The Commissioner has said that the test is limited to inventions that are schemes implemented in computers, but there is no such limitation in those paragraphs. We submit they would not be understood that way by subsequent courts or in the Patents Office.

GAGELER J Would there be a problem with them if they were understood that way? Would there be a problem in principle with them?

MS ST JOHN: Yes, your Honour, because they – I will come to that – but broadly because they would limit patents being granted in all sort of fields beyond the fields in which it would be obvious and beyond the field the subject matter of this application – this appeal. Under the new test, I submit, any invention that is implemented using a computer would not be patentable unless it is an advance in computer technology. That is a problem because, as Mr Shavin said, computers are now ubiquitous, they are used in every field of endeavour and that means that computer implementation is a common feature of modern inventions, and that means it is a common feature of modern patents and modern patent applications.

Under the new test, new patent applications with claims that include a computer‑implemented functionality would be refused, unless they are advances in computer technology. The result of that is that inventions of benefit to society that are novel and inventive and useful would be excluded from patentability. That, I submit, would lead to patent applicants having to try to fix the problem themselves by amending patents or by drafting – such as trying to leave out computer steps – computer functionality, to avoid having to prove that that functionality was an advance.

EDELMAN J: There would be a whole industry in what a computer is.

MS ST JOHN: Indeed, your Honour, yes. If patent applicants do do that – if they begin to carve out computer related functionality, then their patents are likely to face problems with other grounds, like support and best method. It would also mean that existing patents that include computer implementation would be subject to challenge, either by the patentee’s competitors or, in a re-examination on the Commissioner’s own motion and that might mean that many granted patents that are currently being commercialised by their inventors or their licensees, could be revoked.

All of this could have far‑reaching adverse economic effects. It would cause damage to inventors and their licensees who have conducted their businesses on the basis that they have patents that are going to remain in force until the end of their term. It would also mean that inventors would not be motivated to invest their time and money in research and development in fields where they are unlikely to be able to obtain patent protection.

KIEFEL CJ: This assumes, as you say, that the Full Court has created a new test.

MS ST JOHN: Yes, your Honour.

KIEFEL CJ: You are saying that it has departed from the line of authorities that it refers to?

MS ST JOHN: Yes, your Honour.

KIEFEL CJ: How would you identify that departure?

MS ST JOHN: Your Honour, it departs from the line of authorities primarily by the rigidness of the test – the way it sits based at paragraphs 26 and 27 is that this is a test that applies in all cases. Also, by the application of the requirement, in every case, that there be an advance in computer technology, we do not see that applied as rigidly ‑ ‑ ‑

KIEFEL CJ: But the earlier cases speak of that as well.

MS ST JOHN: Yes, your Honour, but not applied to inventions that are not otherwise considered to be new schemes.

KIEFEL CJ: I am sorry, but not otherwise?

MS ST JOHN: In this case, the requirement that there be an advancement – an advance in computer technology – is being applied to all inventions that use computers as opposed to what we see in the earlier cases which is cases where there is otherwise only a scheme and then the scheme is implemented in a computer. What we see here is the statement at 26 and 27 purports to apply to any invention, whether or not it might otherwise be considered to be merely a scheme.

GORDON J: According to Mr Dimitriadis the complaints seem to be that there was, first, the point that you have just made, as I understand your complaint, that is, the test now applies to all computer‑implemented inventions regardless of whether or not they have an underlying scheme.

MS ST JOHN: Yes, your Honour.

GORDON J: So, one asks the first question, is it a computer, which is Justice Edelman’s question. Then you step back from it. The second complaint is that one is looking to see whether there is an advancement in computer technology as distinct from in the mere scheme line of authorities looking to see whether the computer has implemented the scheme itself. Is that the second criticism - just dealing with the scheme cases – so, if you look at RPL, Research and that line of authority?

MS ST JOHN: The second problem, your Honour, is that this test imparts a requirement for newness – the requirement that there be an advance in computer technology. It is a requirement that there be something new which I submit is not part of the test of manner of manufacture.

GORDON J: I understand that. That is why I am asking. I understood the complaint that was put by the appellant is that one is looking for yes, inventiveness on the face of the specification, but you are not looking for an advance at that point in the analysis.

MS ST JOHN: Yes, your Honour. I accept that.

GORDON J: Thank you.

MS ST JOHN: I should say that the requirement that your Honour referred to – that there be something new – I understand your Honour to be referring to the Microcell line of authority, that is newness on the face of the specification.

GORDON J: Yes, I am, but I call that sort of threshold level of inventiveness, which is not novelty or inventive step, but just looking to see on the face whether there is something there that might be an alleged invention.

MS ST JOHN: Yes, your Honour. I accept that that has been said. This Court in Lockwood v Doric (No 2) – I apologise that the case is not in the bundle – but the citation is [2007] HCA 21; (2007) 235 CLR 173 at 106 - said that that species of manner of manufacture problem is a narrow species of problem, and that it is not entirely clear even if it is a manner of manufacture problem as opposed to a novelty problem. So, I submit the Microcell species of manner of manufacture is a different kind of problem from the problem that was before the Full Court in this case.

GORDON J: Thank you.

EDELMAN J: It may even be a problem at a higher level of characterisation of an alleged invention.

MS ST JOHN: Yes, your Honour.

EDELMAN J: But if there is just no apparent novelty at all, then it may not even reach the threshold of being an invention.

MS ST JOHN: Yes, your Honour, and I think that is the sense - I submit that is the sense in which this Court said in Lockwood v Doric that it is a narrow species of novelty. One can imagine that would arise only very infrequently. Mr Shavin said that is essentially a negative test, is their admissions on the face of the specification that there is nothing new. So, I submit that that is a different species of manner of manufacture problem.

If I might move on to the second aspect of my outline. The Full Court’s approach treats computer‑implemented inventions differently from other inventions. That, I submit, is erroneous. First, there is no basis for it in the legislation. There is, of course, the exception in subsection (2), but otherwise section 18 does not distinguish between different technologies. It is agnostic. It certainly does not provide for different tests for manner of manufacture.

There is also no distinction in section 6 of the Statute of Monopolies. It is also inconsistent with Australia’s international obligations. Under the Australian‑United States Free Trade Agreement, the parties agreed to:

make patents available for any invention, whether a product or process, in all fields of technology, provided that the invention is new, involves an inventive step, and is capable of industrial application. The Parties confirm that patents shall be available for any new uses or methods of using a known product.


An example of a known product is, of course, a computer.

GORDON J: Is a what, sorry?

MS ST JOHN: A computer.

GORDON J: Thank you.

MS ST JOHN: The Australian Patents Act was amended as part of the implementation of that agreement, and there was no change to section 18. Similarly, under the TRIPS Agreement patents must be available without discrimination as to the field of technology, and there was no option in that agreement to exclude computer‑implemented inventions. Again, the Australian Patents Act was amended after the TRIPS Agreement was ratified, and again no change was made to section 18.

Given that, I submit this Court would be slow to conclude that Parliament intended section 18 be read in a way that is inconsistent with Australia’s obligations under those agreements and, indeed, in Apotex, Justice Crennan and your Honour Chief Justice Kiefel held at paragraph 193 that the requirements of patentability under the 1990 Act are consistent with Australia’s international obligations under Article 27, sub‑article 1 of TRIPS.

The next problem is that it renders the law of manner of manufacture inconsistent when it should, I submit, be consistent across technologies. There is not any other type of technology that has been pulled out from the pack like this and given its own test of manner of manufacture. If I might ask your Honours to turn to Apotex, that is Part C, tab 14 at page 164. At paragraph 44 his Honour Chief Justice French says:

On the other hand, a qualification or exception to a general principle may have become anomalous to such an extent that its removal would enhance the logical and/or normative coherence of the law. The history of the exclusion of medical treatments from patentability does not disclose a stable, logical or normative foundation and seems to depend upon rather nice distinctions for its maintenance.


Then at paragraph 50 on page 167:

The exclusion from patentability of methods of medical treatment represents an anomaly for which no clear and consistent foundation has been enunciated . . . In my opinion the application of the rubric “manner of new manufacture” in a logically and normatively coherent way is not served by excluding from its scope methods of medical treatment of human beings. Methods of medical treatment can fall within the scope of a manner of new manufacture –


I submit that the exclusion from patentability of computer‑implemented inventions that do not represent advances in computer technology is anomalous and is without a logical and consistent foundation. Rather, the patentability of those inventions should be assessed in the same way as that of other inventions.

Fourthly, treating computer‑implemented inventions differently is unnecessary. The correct approach, I submit, is the same as the approach for all other inventions. It is a single step test. The court, we submit, should ask is the invention considering the subject matter of the claim as a whole no more than a mere scheme, method of doing business or abstract idea? If, by reason of computer implementation, the invention claimed in the claim is transformed from mere intellectual information into something that is practical and useful the claim is for manner of manufacture. Inventions that include schemes, of course, are not necessarily unpatentable. They are unpatentable if they are mere schemes, that is, if there is nothing more, and that is why we submit that a single‑step test which tests for a mere scheme is sufficient.

KEANE J: So, is your submission that if you really do just put a game into a computer you have an invention?

MS ST JOHN: In some cases, but not always, your Honour.

KEANE J: What is the dividing line?

MS ST JOHN: The dividing line, your Honour, is whether there is a practical and useful result, as my friend, Mr Shavin, has said. If I might ‑ ‑ ‑

KEANE J: But the result of putting a game into a computer, that is the result. What differences are you talking about? That is the practically useful result.

MS ST JOHN: Yes, your Honour. For example, if one starts off with game rules, let us say rules of solitaire, as has been talked about this morning, if those rules are typed on a computer the rules would be in the computer, but there would not be a practical and useful result, all you have still is a list of rules in the computer. It is still intellectual information, it does not do anything, it does not have any utility, it does not have any practical result. But if the rules are put into ‑ ‑ ‑

KEANE J: Well, it does, if you can play the game in the computer.

MS ST JOHN: I am sorry, your Honour, I have not expressed the distinction clearly enough. What I was coming to is that if the rules are not merely typed into the computer but entered into the computer such as to interact with the parts of the computer so that a game is playable on the computer rather than the rules simply being written down, the game rather is playable on the computer, then I submit there is a manner of manufacture because there is a practical and useful result which is again playable on a computer.

EDELMAN J: It might not be inventive or novel.

MS ST JOHN: Precisely, your Honour, yes.

KEANE J: What is the invention?

MS ST JOHN: Your Honour, that is ‑ ‑ ‑

KEANE J: What is the invention in putting a game into a computer?

MS ST JOHN: Your Honour, what we have for the purposes of manufacture, I submit, is not a question about invention but a question about subject matter – so that one should not be looking for newness or inventiveness as part of this ‑ ‑ ‑

KEANE J: No, but one has a threshold question about whether there is an invention.

MS ST JOHN: We submit the question of manner – the question of invention in a sense of inventiveness – is dealt with by inventive step, not by manner of manufacture.

KEANE J: So, are you inviting us to ignore or depart from N.V. Philips?

MS ST JOHN: Your Honour, I am submitting only that the test of manner of manufacture needs to be considered by reference to the result of the application of the idea in the computer. Might I ask your Honour which part of N.V. Philips?

KEANE J: The decision of the majority in this Court that adverted to the question of invention as a threshold question that might in some way overlap with the other question about inventiveness, inventive steps and so forth but that it is a separate question – to be addressed separately at the threshold.

MS ST JOHN: Your Honour, I submit that arises in two ways - first, as a potential Microcell problem, which is newness on the face – or inventiveness on the face of the specification – whether there is an admission that there is no invention – and, secondly, that it takes effect as a requirement that, when one looks for an invention, as part of the consideration of manner of manufacture, one is still looking at subject matter – whether the subject matter is an appropriate subject for the grant of letters patent.

EDELMAN J: There is the characterisation question as well, which – I think you are assuming that in the example that you give, the characterisation would be a game or software as implemented and played on a computer, whereas if one characterised a claim properly as being nothing more than the game itself, or the idea of the software, then it would not be a manner of manufacture.

MS ST JOHN: Yes, your Honour. That is not, I submit, the only matter of drafting. It is important because the way in which the claim is drafted sets out the bounds of the patentee’s monopoly, and that sets out what other parties are not allowed to infringe on.

STEWARD J: Could I ask a question, sorry. Is your practical useful result conceptually the same as vendible, as that term is sometimes used?

MS ST JOHN: In the broader sense.

STEWARD J: So, that to be an eligible subject matter, you have to have something which has a degree of – I will use the word “ingenuity” without wanting it to be loaded – but a degree of ingenuity such that there will be something that will be of use to society, which could be exploited if you run a business?

MS ST JOHN: Your Honour, I accept that as so far as it relates to economic utility, and the traditional understanding of the word “vendible” – to be vended, something that can be sold, some product or some vendible ‑ ‑ ‑

STEWARD J: Is “vendible” then a subset of practical useful result?

MS ST JOHN: Yes, your Honour.

STEWARD J: So, again, are we looking to see whether there is something on the face of the specification that makes it eligible subject matter which is more than just something that will flop – if I can put it like that – and will be of no use to society? But that is the distinction.

MS ST JOHN: Yes, your Honour, although the nicer questions of whether the product or process is usable will be dealt with as part of the utility question ‑ ‑ ‑

STEWARD J: Of course. But there has to – it has to look like it could be something that could be of use.

MS ST JOHN: Yes, your Honour.

STEWARD J: Yes, I see.

MS ST JOHN: Your Honours, I will move on to difficulties in the practical implementation of the test. The Full Court’s approach includes, I submit, some elements of newness or – that encroaches into novelty. I submit the manner of manufacture test is not concerned with newness but with subject matter, it is about the type of thing that is claimed. Mr Shavin has addressed your Honours on this aspect of the appeal, I will not repeat what Mr Shavin has covered. However, IPTA does want to make some submissions about the practical implementation of this.

The new test requires the court, or the patent examiner, to be satisfied that the invention as claimed is or includes an advance over existing computer technology, which I submit may or may not mean an advance over the prior art. It is not clear from the phrasing of “advance in computer technology” what it is said to be an advance over. If it is said to be prior art, it is unclear how that would be carried out.

The novelty test under section 7 has a very clearly‑enunciated base comparison. There is a prior art base. “Prior art” is clearly defined. But that is not the case for this test of advance in computer technology. If I might invite your Honours to go to the N.V. Philips Case, that is in Part C, tab 22, on page 583, using the red numbering at the top.

GORDON J: Could you tell us what page of the report it is, please?

MS ST JOHN: Yes. Page 670, your Honour.

GORDON J: Thank you.

MS ST JOHN: This is the decision of Justices Dawson and McHugh in dissent, I submit the analysis is helpful. Beginning at about the last third of that page:

a patentable invention is a manner of manufacture (s 18(1)(a)) which is . . . new in the sense that, when compared to the prior art base, it is novel and involves an inventive step (s 18(1)(b)(i), (ii)). There is no additional requirement that it be new in some other sense, for that would defeat one of the purposes of the section.

The prior art base, which forms the basis of the comparison required to establish novelty and an inventive step (or lack of obviousness), is defined in Sch 1. Section 7 explains how the comparison is to be made . . . What is important is that a particular kind of comparison involving a particular art base is required by s 18(1)(b). If there were a residual requirement under s 18(1)(a) that a manner of manufacture be new, the very matters covered by s 18(1)(b) might be established without making the comparison required by that provision and s 7, thus avoiding the parameters which they so carefully set. It is scarcely to be thought that the legislature, in closely defining the context for consideration of the questions of novelty and inventiveness, intended that those or related questions should otherwise remain, and remain at large.

I submit that is the ‑ ‑ ‑

KEANE J: That is a very powerful point, but is it not diametrically contrary to what the majority concluded?

MS ST JOHN: Yes, your Honour, I do acknowledge that these Justices were in dissent.

KEANE J: Particularly on the point that you have just given us.

MS ST JOHN: Yes, your Honour. This, I submit, your Honour, is merely an explanation of how section 18 works.

STEWARD J: So, to ask the question that I asked of Mr Shavin, you are not suggesting that the minority are right and the majority wrong in this case?

MS ST JOHN: No, your Honour. I am not. Only that this point feeds into the lack of clarity in the test that the Full Court has proposed over advance of computer technology. This analysis shows why it is difficult to determine how the Full Court’s test would be applied. The Full Court has not said that it is a prior art comparison – if it is to be a prior art comparison, we do not know what the prior art base would be. I submit that lack of clarity is a reason why the test would be difficult to apply practically.

GORDON J: So, there is the temporal requirement for (b) and (c) in the Act, which identifies by reference to section 7 the prior art base is to be taken into account, both the fact of the reference to the prior art base but also the date of it.

MS ST JOHN: Yes, your Honour.

GORDON J: Is your point you do not find that in (a), for method of manufacture on the statute?

MS ST JOHN: Yes, your Honour.

GORDON J: Is that what we are to take from this aspect of the Dawson/McHugh approach?

MS ST JOHN: Yes, your Honour. There is a temporal aspect, and it is also that whether a document is or is not part of the prior art base has other requirements ‑ ‑ ‑

GORDON J: I see. The contents of the prior art base itself as defined is not defined for the purposes of this test.

MS ST JOHN: Yes, your Honour. In fact, we do not even know if it is a prior art comparison. Advance in computer technology is unclear as to what the advance is to be over.

GORDON J: Can I ask you one question, which is probably what I asked you before, but it follows on from the question from Justice Keane. If you go to 663 of Philips, where there is a reference by the majority to this question of a newness apparent on the face of the relevant specification – you do not take issue with that though, do you? It is a different inquiry at a different level. You are not dealing with novelty or inventive step. You are dealing with a different question.

MS ST JOHN: Yes, your Honour. I submit that the question of newness on the face of the specification is a narrow and a separate aspect of manner of manufacture.

GORDON J: Thank you.

MS ST JOHN: I am conscious of the time, your Honours. If I might have a moment to compress what I need to say. IPTA has observed that a similar approach is now being taken by patent examiners at the Patent Office, that it has become common practice for those examiners to disregard or exclude essential features of the claims in assessing the substance of the invention. Specifically, computer hardware integers are being disregarded unless the examiner considers them to be novel or inventive. That is having the effect that subject matter that would previously have been found to be patentable subject matter is now being found not to be, and patents are being refused.

Finally, your Honours, IPTA submits that the majority’s approach results in a mismatch between how claims are read for the purpose of manner of manufacture, and how they are read for the purposes of infringement and novelty. For infringement and novelty, a patentee has to establish that every essential feature of the claim has been taken by the infringer or has been disclosed in the prior art. So, a test for manner of manufacturer that omits any of those integers, I submit, is unfair to patentees and has no logical basis for it. For those reasons, IPTA submits that the appeal should be allowed.

KIEFEL CJ: Yes, thank you. Yes, Mr Dimitriadis.

MR DIMITRIADIS: Thank you, your Honour. In the Commissioner’s submission this appeal turns on the proper characterisation of the invention claimed in claim 1 of Aristocrat’s patent. The starting point, in our submission, is that abstract ideas, such as schemes and rules for playing games are not patentable subject matter.

In its recent decisions in this area, the Full Court of the Federal Court has correctly recognised that an unpatentable abstract idea does not change its legal character merely because it is implemented by a computer. There can be no dispute that in characterising the invention for this purpose, the claim must be construed in the light of the patent as a whole and the common general knowledge. It is also common ground that it is essential to consider the invention as a matter of substance, not merely the form of the patentee’s claim.

Considered in that light, the invention in claim 1 is not a new gaming machine. It is an instruction to implement a game on a conventional gaming machine, comprising standard hardware and software components. In other words, the invention is, in substance, an abstract idea – being a scheme or set of rules for playing a game, implemented using conventional computer technology for its well‑known and well‑understood functions.

EDELMAN J: Is that essentially the difference between you and the applicant? Do you accept that if the applicant’s characterisation of the invention is correct, then it is a manner of manufacture?

MR DIMITRIADIS: Your Honour, I am not sure what the applicant’s characterisation of the invention is, to be truthful.

EDELMAN J: Any one of the four that have been proposed. Any one of the four which involves the hardware as part of the invention.

MR DIMITRIADIS: If it involved hardware as part of the invention, not being merely using conventional hardware to implement a scheme, there may be patentable subject matter.

KEANE J: Hardware adapted to allow the scheme devised to be performed or played.

MR DIMITRIADIS: Yes, your Honour. That is not this case, we submit. Put another way, there is no ingenuity in the implementation of the scheme or rules of the game here. There is no improvement in computer technology, to use the phrase adopted by Justices Middleton and Perram in the Full Court.

GORDON J: If you cannot use that test and you adopt what you started with – what I will call the old test - what is the answer?

MR DIMITRIADIS: When your Honour is referring to the old test, is this the implementation using a conventional computer ‑ ‑ ‑

GORDON J: No, the Research Affiliates line of authority, without reference to the questions posed by a majority of the Full Court.

MR DIMITRIADIS: Yes. If one applies ‑ we submit that the majority in the Full Court is consistent with Research Affiliates ‑ ‑ ‑

GORDON J: I understand that. I am putting the alternative to you.

MR DIMITRIADIS: Yes. If one applies Research Affiliates, it is plain that this is invention is not patentable, because the invention is – in substance – an abstract idea, properly characterised, implemented using conventional computer technology for its well‑known and well‑understood functions. Put another way, there is no ingenuity in the implementation of the abstract idea in the computer, and a further way – there is no improvement in computer technology, which was a phrase that also used in Research Affiliates. The only ingenuity that is identified resides in the scheme or rules of the game itself, which is not patentable subject matter.

STEWARD J: When you say we have to characterise the invention, at this threshold stage is it more accurate to simply say we have to characterise the claim and the integers to the claim?

MR DIMITRIADIS: Yes, your Honour, I think it is fair to say when we refer to the invention we mean the invention as claimed. One has to characterise that invention. Of course, one does that having regard to the whole of the claim, but considering the invention as a matter of substance, not form.

EDELMAN J: If one then looks at page 26 of the core appeal book where the claim is set out, your submission really requires a characterisation of the invention as disclosed by that claim to ignore all of the matters involved.

MR DIMITRIADIS: With respect, no, your Honour. We submit that the proper approach, and the approach the Full Court and the approach that we propose, does not disregard any element of the claim. It has regard to the whole of the claim, including the parts that define the gaming machine, integers 1.1 through 1.6. But it recognises that those parts of the claim define a conventional gaming machine and that gives effect to the substance of the claim, not merely its form. When one has regard to the whole of the claim and characterises it in that way it is, in substance, an instruction to implement the game which is disclosed in integers 1.7 through to 1.12 in a conventional gaming machine which is integers 1.1 through to 1.6.

STEWARD J: Can I ask, when you use language like “orthodox” or “conventional” I assume that is intended to address the threshold requirement of inventiveness as referred to by the majority in Philips.

MR DIMITRIADIS: Your Honour, that is one way of understanding that language. Another way of understanding it, which we submit is how it has been put in Research Affiliates and the authorities that follow, is that one is seeking to identify what is the substance of the invention and a use of ‑ ‑ ‑

STEWARD J: But for what purpose at this point? What are we testing?

MR DIMITRIADIS: The question of manner of manufacture.

STEWARD J: Yes, I understand.

MR DIMITRIADIS: Yes, your Honour.

STEWARD J: I understand that. But what I am trying to understand is when you are asking what is the invention and what is the level of ingenuity here, how does that differ from in terms of perhaps intensity to what one then must do in (1)(b), (c) and (d), et cetera.

MR DIMITRIADIS: Your Honour is referring to section 18?

STEWARD J: Yes, I am. Sorry, I beg your pardon.

MR DIMITRIADIS: Yes. Novelty and inventive step, innovative step. Those grounds are different grounds, we accept they are conceptually distinct. They are to be assessed by comparing the claimed invention with something else. In the case of novelty, it is specific disclosure, or disclosures that form part of the prior art base and were published or made publicly available. In inventive step, it is a comparison with the common general knowledge but potentially with one or more additional prior art disclosures that form part of the prior art base, and the assessment there is in accordance with section 7(2) and (3) which asks the question whether or not the invention would have been obvious to a person’s skill in the relevant art, or in the case of an innovation patent, whether there is an innovative step without going into the detail of that.

The question, for the purposes of manner of manufacture, is one that is addressed by reference to a consideration of the claim itself. It is not being compared with a piece of prior art, but it is being assessed in the light of the patent specification as a whole, construed in that light which, in turn, must be read in light of the common general knowledge which is well established.

So, the skilled person, from whose perspective the court reads the claim, brings to bear that person’s knowledge of the common general knowledge, which is the background for construing the patent, which includes what features were part of conventional gaming machines at the priority date and a skilled person reading this claim understands and, one gets this from a review of specifications in any event, that all of the features in 1.1 through 1.6 were standard hardware and software components that formed part of, essentially, every gaming machine before the priority date.

EDELMAN J: Is it correct, as Mr Shavin submitted, that there was no contest in this case about any of the elements, other than manner of manufacture?

MR DIMITRIADIS: That is correct, yes, your Honour. There was no contest in the court proceedings. It is correct that during the examination of the innovation patents, no objection was taken on the basis of lack of novelty or lack of innovative step. Your Honours - just to take that a little further – one can understand why that indicates that the scheme, the game, the rules of the game, were novel and considered to be innovative. But the role that is played by the manner of manufacture considerations, to ask whether or not this is the right subject matter, the proper subject matter for a patent ‑ ‑ ‑

EDELMAN J: That may be where this whole case went wrong, right from the start, because if the question of characterisation is about the invention, independently of manner of manufacture, novelty, inventiveness and so on, that the answer, or the characterisation of the invention may lead to different conclusions about novelty or inventiveness depending on how broadly or narrowly the invention is characterised. Characterised very narrowly as a specific game or a scheme, it may be very novel. Characterised very, very broadly as a gaming machine, it may have no novelty at all.

MR DIMITRIADIS: That may be so, your Honour, but the fact is the objection taken here was lack of manner of manufacture and that is a requirement – a threshold requirement is the way it has been put – which needs to be satisfied in order for an invention to be a patentable invention. It is well established and common ground that abstract ideas – schemes and rules for playing games – are not patentable subject matter. The question in this case is whether, properly characterised, that is what, in substance, this invention is directed to. We submit that it is, for the reasons given by the Full Court.

GORDON J: By the Full Court - by all judges? Sorry, just by saying “by the Full Court” is not very helpful. You adopt all analyses?

MR DIMITRIADIS: We say that the majority’s analysis was an available analysis and their Honours’ conclusion was correct. Reasoning by reference to the consideration of whether or not there was an advance in computer technology was a permissible way of approaching the question. Justice Nicholas focused instead on the question of whether or not the claim was, in substance, directed to the use of a generic or conventional computer for its well-known and well‑understood functions. That is another way in which the authorities, from Research Affiliates onward, have approached the question. That is also permissible.

Justice Nicholas did conclude that that was what the invention was in substance directed to. As your Honours will have seen, his Honour considered that the matter should be remitted to consider other questions, which have been raised in a notice of contention filed by Aristocrat before the Full Court which, in essence, asserted that, by reason of particular features of the game, there was a technical contribution in the field of gaming.

KIEFEL CJ: They were matters that were not addressed before the Full Court.

MR DIMITRIADIS: That is right.

KIEFEL CJ: But submissions were sought – the court, I think in one of the judgments, noted that no submissions were made.

MR DIMITRIADIS: It was hardly touched on in argument, I think was the way it was put by Justice Nicholas.

KIEFEL CJ: Yes.

MR DIMITRIADIS: Your Honour, that notice of contention was Aristocrat’s notice of contention before the Full Court, and it was for Aristocrat to make out that contention if it wished to do so. The submission that was made was that the material necessary to support it was not before the Full Court.

We submit the majority in the Full Court was right in those circumstances – firstly, to conclude one did not need to get that far because it was not a manner of manufacture, but, secondly, the notice of contention was procedurally misconceived if that was the position because the Full Court could neither uphold it nor reject it.

KIEFEL CJ: The starting point of the majority in the Full Court was to say that the primary judge was wrong to establish a two‑step inquiry. Why do you say that that – in your written submissions, you seem to say the Full Court was correct in that.

MR DIMITRIADIS: We do say that, your Honour.

KIEFEL CJ: What do you say is the fundamental error that the primary judge made by doing that?

MR DIMITRIADIS: Your Honour, the primary judge’s two‑step test bifurcated the inquiry and led his Honour into error. Your Honours will have seen that the two‑step test appears in his Honour’s reasons at paragraph 91. Perhaps I could ask your Honours to look at that. That is at page 32 of the core appeal book.

KIEFEL CJ: I suppose I should ask you at the outset, what do you say was the correct question?

MR DIMITRIADIS: We submit it is a single inquiry of characterising the claimed invention and if it is a ‑ ‑ ‑

KIEFEL CJ: Is this the proper subject matter, et cetera?

MR DIMITRIADIS: That is ultimately the correct question – the right question in NRDC. In the context of a claim which is directed to a scheme – or rules of a game implemented in a computer – one characterises the invention by considering the claim as a whole, having regard to its substance not form, and asks whether or not in substance it is directed to the abstract idea or the mere scheme, or whether it is something more. In that context, the only way one can have something more to confer patentable subject matter, is for something to arise in the way in which it is implemented in the computer in order to confer some patentable subject matter.

GORDON J: Do you accept the implementation can give rise to a useful outcome regardless of improvement in computer technology, which is the way in which it is put in NRDC, at least on one view of the test?

MR DIMITRIADIS: Your Honour, we submit that in this context ‑ ‑ ‑

GORDON J: What is “this context”?

MR DIMITRIADIS: In the context of a claim where there is an abstract idea being implemented in a computer, which we have here, understanding the phrase “improvement in computer technology” in the way in which it was used by the Full Court, it is essentially equivalent to considering whether or not there is any ingenuity in the implementation of the idea in the computer.

GORDON J: That is a different test though, is it not?

MR DIMITRIADIS: We submit ‑ ‑ ‑

GORDON J: Improvement in computer technology is different from implementation by a machine giving rise to something that is useful or some use of a computer to give rise to the abstract idea having a result.

MR DIMITRIADIS: In the context of an otherwise unpatentable abstract idea, such as a scheme or rules of a game, we submit that the patentable subject matter must arise from the implementation because if it does not all one has is the result of the scheme, and that is not patentable subject matter.

GORDON J: That did not really answer my question. I am sorry to push you, but ‑ ‑ ‑

MR DIMITRIADIS: Yes, I am sorry, your Honour. To give an illustration ‑ ‑ ‑

GORDON J: I just want to be clear about this because improvement in computer technology is a precise question. You are asking to identify something on the face of the specification which shows you that there is a change in the computer technology. That is different from improvement or change or innovation arising from implementation.

MR DIMITRIADIS: Your Honour, we submit they are ultimately directed at the same consideration, that when one asks whether or not there is ingenuity in the implementation in the computer that is another way of asking whether or not there is an advance or an improvement in computer technology.

EDELMAN J: There was not a great deal of ingenuity in the implementation in CCOM.

MR DIMITRIADIS: But CCOM is a case that our friends emphasise, of course, your Honour. That is case which can be understood as being directed to an improvement in computer technology. That is not the way in which the court ‑ ‑ ‑

KEANE J: Well, an adaptation.

MR DIMITRIADIS: Yes, your Honour.

KEANE J: An adaptation directed to facilitate the idea about being able to type Chinese characters on a ‑ ‑ ‑

MR DIMITRIADIS: Yes, your Honour. The reasons in CCOM, of course, are not to be taken as a rigid formula. That point was made in Myriad. The claim in CCOM concerned a method or means of assembling text in Chinese characters for use in an apparatus to produce a Chinese language word processor and we submit it can be seen as a case in which an invention, say a computer program, had the effect of controlling the computer to operate in a particular way which was an improvement or advance or adaptation in computer technology. The Full Court in Repipe ‑ ‑ ‑

KEANE J: An adaptation to accommodate the exigencies of a scheme so as to make it a manner of manufacture.

MR DIMITRIADIS: Yes, your Honour. We say, understood in that way, the facts in CCOM are different to the present case and different to the line of cases beginning with Research Affiliates through to Repipe because this case and those cases are cases in which an invention that merely used a conventional computer in a conventional way to implement an abstract idea or scheme was for consideration by the court and that is not a patentable invention.

KEANE J: Mr Dimitriadis, having regard to what you have just said, why does one ask, as the majority in the Full Court did – why does one ask is this a computer? Why would one ask that?

MR DIMITRIADIS: That aspect of the majority’s reasons followed a submission that was made by Aristocrat before the Full Court that this was not a computer‑implemented invention and therefore it was different to the line of cases from Research Affiliates onwards which were said to be inapplicable. So, it was submitted that a gaming machine was not a computer, that is why the Full Court dealt with that question, and it was relevant for the Full Court to consider that question in those circumstances, and it was relevant because one needs to understand the subject matter of the claim and what is said on the specification to give rise to the patentable subject matter. It must be something other than the mere scheme or the abstract idea of the rules of the game, and the only other possibility in this specification is the gaming machine.

EDELMAN J: Is that just another way of saying, though, that the questions that the Full Court asked were not and should not be regarded as questions of principle, they should just be regarded as responding to a submission that was made in a particular case and should not be treated in future cases as raising any principled approach?

MR DIMITRIADIS: Your Honour, they are not rigid rules, they are not principles which are inflexible. They are the reasoning of the court in response to submissions that were made and the particular facts that were before the court, just as the reasons in Research Affiliates, RPL, Encompass and Rokt were.

GORDON J: Does that explain why – I put this too, earlier – that paragraph 27 – as I understand the way you are now putting your submissions in response to the two tests proposed or two questions, you would start with the last question?

MR DIMITRIADIS: Is your Honour referring to 27 of the Full Court?

GORDON J: Yes, in effect, look at the whole of the claim and ask is it patentable subject matter? That is the first question.

MR DIMITRIADIS: That is in a sense, always the first question, yes, your Honour. That is the broad question.

GORDON J: Of course, but that means you do not adopt this break‑up in 26(a) and (b) as being the starting points for these kinds of cases.

MR DIMITRIADIS: Your Honour, the critical words in 26 are:

In cases such as the present ‑ ‑ ‑


GORDON J: But what does that mean?

MR DIMITRIADIS: That means in cases where what the claim is addressed to is the implementation of an otherwise unpatentable abstract idea in a computer. That is the whole context of the Full Court’s consideration of this issue. Your Honours can see that, going back to paragraph 18 – after considering the claim – their Honours said:

The implementation of an abstraction such as that disclosed by integers 1.10‑1.12 by means of an unspecified computer program to be executed on the computer which is the game controller will not give rise to a patentable invention unless the implementation itself can be seen as pertaining to the development of computer technology rather than to its utilisation –


So that is the context of the Full Court’s positing of the questions, in paragraph 26. It is in:

In cases such as the present –


That type of case where one can ask:

Is the invention claimed a computer‑implemented invention?

In other words, is it an invention involving the implementation of an otherwise unpatentable abstract idea in a computer, and:

If so, can the invention claimed broadly be described as an advance in computer technology?

We say that is not the only touchstone that can be used – one can put it in the other ways which are outlined in Research Affiliates and the cases that followed it, as we have said in our written submissions. But that is a permissible way of approaching the question on the facts of this case.

GAGELER J: Is the terminology of “advance in computer technology” meant to be something different from what was being referred to in RPL as “improvement in the functioning of a computer”?

MR DIMITRIADIS: No. We say they are the same thing, ultimately, your Honour. We say this is an application of RPL, set out in two questions which are specifically stated in 26(a) and (b), but ultimately that is what it is. It an application of those principles ‑ ‑ ‑

KIEFEL CJ: “Advancement in computer technology” is meant to be a broad term to encompass anything which is practically useful.

MR DIMITRIADIS: Yes, your Honour. Can I say something about the terminology of “practically useful”? Our friends have used that to refer to the claim in this patent.

KIEFEL CJ: Yes.

MR DIMITRIADIS: One needs to understand what is meant by that. One can consider the facts in Rokt which I will come to. It is one of the Full Court cases. That is the one that related to the advertising scheme implemented in computers in a conventional way, held not to be patentable recently. That was a correct result. Of course, one could say that the advertising scheme had a practical result, or a useful result. But that is not sufficient for patentability - for patentable subject matter – because the practical, useful result resulted from the scheme – the unpatentable scheme and improved advertising method.

The same applies here. The result one gets from the application of the abstract idea in the gaming machine is nothing more than the implementation of the game, which is directed at increasing a player’s enjoyment or encouraging them to play more. That is classically not the sort of result which is regarded as an artificially created state of affairs of economic utility or “a vendible product”, in the language used in the cases prior to NRDC. It does not affect practical matters in the real world. It is an impact on the enjoyment of players or the engagement of players.

The advertising scheme can be seen in a similar way. People would be encouraged to purchase products as a result of the advertising scheme but that is not a relevant practical and useful result, because it does not relate to the so-called artificially created state of affairs of economic utility that was discussed in NRDC.

STEWARD J: Does that assume that the status of the idea of the game as an unpatentable thing retains its character once it is implemented by a computer with the requisite degree of ingenuity, or is it all one thing, now that it is a patentable subject matter?

MR DIMITRIADIS: Your Honour, we say, just to be clear about our submission in this patent, there is no ingenuity in the implementation.

STEWARD J: I understand that. I have that.

MR DIMITRIADIS: If there had been ingenuity in the implementation, that may be something that could confer a patentable subject matter.

STEWARD J: Yes.

MR DIMITRIADIS: But the result of the implementation here is simply the presentation of the game to the player. It is the implementation of the scheme. That results entirely from the scheme itself which is the unpatentable subject matter. So, in the language of the Full Court used in Research Affiliates and RPL, the only ingenuity – or inventiveness, if one wants to use that word – resides in the scheme and that cannot confer patentable subject matter.

Your Honours, what I wanted to do, if it is convenient, is to go to Myriad which is an important decision in this area and important for the present case. This is addressed in our outline at paragraphs 3 and 4. We submit that there are four key propositions which emerge from Myriad. First, the Court confirmed the finding in NRDC that it is necessary to ask whether the invention is a proper subject of letters patent according to the principles developed for the application of section 6 of the Statute of Monopolies. That was called the right question in NRDC.

Secondly, the Court in Myriad made it clear that the criteria of an artificially created state of affairs and economic significance, while useful to refer to in particular contexts, are not the statutory test. They are not a substitute for the right question, and they do not represent an exhaustive statement of the concept of manner of manufacture.

Thirdly, the Court’s reasons in Myriad emphasised that the definition of the allegedly patentable invention depends on the construction of the claim in the light of the specifications as a whole in the relevant prior art. In this case that is the common general knowledge. Fourthly, the decision makes it clear that the proper characterisation of the invention for this purpose must be determined as a matter of substance, not form.

So, those are the key propositions. If I may, because they are important propositions, I would like to take the Court to some paragraphs of Myriad. Myriad is in Part C, tab 17, commencing at page 322 of the bundle. May I ask the Court to go first to paragraph 12, to the part which is at the top of page 343 in the CLR report. Here, the plurality noted that the inquiry, that is, the inquiry of manner of manufacture:

requires a definition of the allegedly patentable invention. That definition depends upon the construction of the impugned claims read in the light of the specification as a whole and the relevant prior art. The prior art in this case was reflected in expert evidence . . . in the scientific primer –

Here, there are findings as to the common general knowledge in the present case. Next, at paragraph 18, there is a reference to the right question in NRDC:

to be answered according to a common law methodology . . . as developed through the cases -


In 19, the plurality observed that in NRDC:

The Court generalised what had come to be treated, erroneously, as a “rule” –


that is, the need for a:

“vendible product” –


as a result of a process. That led to the criteria of an:

“artificially created state of affairs of economic significance” –


As pointed out in paragraph 20, that terminology is:

to be understood in the context . . . It was not intended as a formula exhaustive of the concept of manner of manufacture.


That same point was made at the bottom of paragraph 20 in relation to the Court’s decisions in Apotex. Then, in 21, the plurality noted that CCOM, which applied those criteria, also needed to be understood in context:

The formulation in CCOM, like the so‑called vendible product “rule”, should be taken as a guide rather than as a rigid formula.


That is at the end of paragraph 21. Then, your Honours, in paragraph 27 at page 350 of the CLR report, the plurality observed that Myriad, the patentee, had:

submitted that the Court ought to treat the impugned claims –


in that case:

as claims for a chemical compound . . . That submission sought to locate the claims well within the established understanding of “manner of manufacture” . . . Properly construed, however, the claims are not within the established boundaries and wider considerations . . . come into play.

Then, in paragraph 28, as Mr Shavin noted when he went to Myriad briefly, the plurality indicated that:

According to existing principle derived from the NRDC decision, the first two factors are necessary to characterisation of an invention claimed as a manner of manufacture:


being, is it:

for a product made, or a process producing an outcome as a result of human action -


and whether it has:

economic utility ‑ ‑ ‑


So, drawing on the artificially created state of affairs of “economic utility”:

When the invention falls within the existing concept of manner of manufacture, as it has been developed through cases, they will also ordinarily be sufficient.


Now, our friends submitted this morning that there is no dispute in this case that the claim is within the accepted boundaries of manner of manufacture. That is incorrect. We do dispute that. We make that clear in paragraphs 56 and 57 of our written submissions.

As Myriad shows, it is necessary in considering these matters to consider the claimed invention as a matter of substance, not form. Considered as a matter of substance, the invention here is an unpatentable abstraction or abstract idea, which is implemented in a conventional gaming machine. That is not within the existing boundaries but rather firmly outside them. So, the two criteria alone are not a sufficient test for whether or not there is a manner of manufacture.

GAGELER J: So, is the first criterion satisfied or not satisfied according to your submission?

MR DIMITRIADIS: Your Honour, there are some more subtleties here, which I need to address in order to answer that. The formulation in NRDC of an artificially created state of affairs of economic utility was used in relation to a process – a process claim – and the question was, was the result of that process an artificially created state of affairs of economic utility – held yes because of the impact on the crops.

If one applies it in that way to this case – although the claim is framed as a product claim – there is no artificially created state of affairs that is produced by this invention. The only impact is on player engagement, which is classically the thinking of people. Intellectual impacts are not an artificially created state of affairs.

If one seeks to apply it to the product that is claimed, if one did characterise this as a claim to a new gaming machine, that would no doubt be a product made as a result of human action, but that is not the proper characterisation of this claim, because it is ‑ ‑ ‑

GORDON J: Do you accept – so, just to test that, if it is seen as a product claim which is in a sense the way in which Mr Shavin put it, then you come up against the CCOM kind of analysis, do you not, in relation to the ballpoint pen? Is that the problem?

MR DIMITRIADIS: The ballpoint pen analogy is a ‑ ‑ ‑

GORDON J: What they say in relation to the ballpoint pen is, listen, on the test of just manufacture, you have a method of manufacture because you have a thing that is created – a product that does something.

MR DIMITRIADIS: Yes.

GORDON J: It would fail on novelty and inventive step but, because they are now isolated, and because you do not have those temporal analyses that we were talking about before, that the analysis is so confined, that you have this – at one level, it is artificial – but you end up with this thing which exists – it operates, it creates a useful state of affairs, it generates this – and therefore the ballpoint pen would pass 18(1)(a) but fail (b) and (c).

MR DIMITRIADIS: The ballpoint pen would, we accept that, but not this invention.

EDELMAN J: But that is why your case stands and falls on characterisation of this invention.

MR DIMITRIADIS: It does, your Honour.

EDELMAN J: How much of the common general knowledge are we entitled to take into account when characterising the invention more specifically than the terms of the claim, which include, as Justice Gordon says, the ballpoint pen aspects?

MR DIMITRIADIS: The claim must be construed in light of the specification as a whole and the common general knowledge. That point was made in Myriad, and so to the extent that there are findings of common general knowledge, they need to be taken into account.

EDELMAN J: What I am asking you is what are the bits of common general knowledge that allow us basically to discount the ballpoint pen aspects of the claim, the hardware, the game controller, and so on?

MR DIMITRIADIS: I can take your Honour to the findings on the common general knowledge to demonstrate that. I will do that now and then I will come back to Myriad.

GORDON J: One of the things that worries me just in that context and the reason why I am asking this question, we know from Bristol‑Myers Squibb that the court says, “You must be very cautious, judge. Looking at the specification on its face just on this limb, to suddenly think that you are the expert on computer technology or the expert on what is set out there, be very cautious before reaching the conclusion that there is no inventiveness sufficient for an invention”. So I think this question is important, at least at this level.

MR DIMITRIADIS: Yes, I understand the point, your Honour. We say it is always necessary to read the specification in light of the common general knowledge because it is directed to the scheme reader who is familiar with that.

GAGELER J: If you do that, I know the ballpoint pen was used in CCOM to make a point, but CCOM I think was decided slightly before N.V. Philips, and if you read a claim for a ballpoint pen, would it survive the Philips test?

MR DIMITRIADIS: It may well not, your Honour. That was not considered in CCOM. Yes, your Honour. The second point I would make, just in answer to your Honour Justice Gordon’s observations, is in addition to reading the specification in light of the common general knowledge, of course the claim has to be construed in light of the specification itself and I will take your Honours to the specification of the patent, but we say a reading of that document itself makes clear that the hardware and software aspects of the claim – in other words, those that form the conventional gaming machine – were indeed conventional at the priority date.

There is no suggestion in the specification that any of the hardware and software aspects are new. It is apparent, reading the specification, that the ingenuity is said to lie in the rules of the game that are presented to the player. Before I continue on Myriad, in order to answer your Honour Justice Edelman’s question, may I ‑ ‑ ‑

EDELMAN J: You should do it in whatever manner is convenient for you.

MR DIMITRIADIS: I will just point your Honour to the findings on common general knowledge and then I will come back to them. They are sufficiently recorded in the primary judge’s reasons at paragraph 30, which is at core appeal book page 15 – 30 and 31 – and then there are some subsequent paragraphs as well. Your Honours will see there are various features identified as being typically parts of EGMs at the priority date, EGM being a gaming machine, a display random number generator game controller buttons for user interaction, credit input mechanics, coin out or ticket mechanics, mechanics, et cetera.

They reflect integers 1.1 through 1.6 in the claim, as the Full Court found. There was some further evidence which I will come to – point your Honours to later which underlies those findings and is consistent with them. So those are the findings on common general knowledge against which the specification must be read.

STEWARD J: Could I just ask ‑ ‑ ‑

MR DIMITRIADIS: Yes, your Honour.

STEWARD J: Sorry. When I read paragraph 30, what I could not distil from that was to what extent within the paragraphs of each subparagraph there is going to be a variety in the type of game machine that is being designated or created. I am probably a bit like you, I do not play these machines, but I have taken notice that they come in different shapes and sizes and so on, in the same way that, you know, if you describe the interior of a car you have a steering wheel, a gear stick, a central display and so on.

MR DIMITRIADIS: Yes, your Honour.

STEWARD J: Is there a great deal of variety or is it all going down the same path or what?

MR DIMITRIADIS: I think at the level of abstraction with which these findings are stated there is no real variety, they are the standard features of gaming machines. No doubt one could have a display which is larger or smaller or perhaps is touch screen or not, but not at the level of abstraction with which these are stated and with which they are defined in the claim. They are standard hardware and software components that form part of gaming machines at the priority date.

Your Honours, if I could come back to Myriad, I was at paragraph 28, which is at page 351 of the CLR report. Could I then go to paragraph 86, which is at page 370 in the CLR report. These are in the conclusions of the plurality. It is noted that:

Myriad submitted . . . that its claims are for a product . . . “a chemical compound –


which characterisation accorded superficially with their form. That involved an apparently straightforward characterisation based on the formal terms of the patent. Then in paragraph 88, it is said that:

Identification of the subject matter of the claims as a class of chemical compounds is the premise upon which the Full Court’s conclusion is based. It is a premise which, with respect, elevates form over substance to the detriment of the developmental function entrusted to the Court as explained in NRDC

Then in paragraph 89, after the quote, it is noted that:

the existence of that –


genetic information:

is an essential element of the invention as claimed. The product is the medium in which that information resides.


Then, passing over to paragraph 92, on the next page, in the last couple of sentences, one way of looking at this was to say:

that the particular chemical compound embodies and conveys the information.


That is the genetic information:

The latter approach gives the priority to the informational aspect which its importance to the utility of the claimed invention warrants.


Then in 93:

When proper regard is paid to their emphasis on genetic information, the subject matter of the claims lies at the boundaries of the concept of “manner of manufacture”.


Then in 94:

Although it may be said in a formal sense that the invention as claimed, referring to isolated nucleic acids, embodies a product created by human action, that is not sufficient to support its characterisation as a manner of manufacture. The substance of the invention as claimed and the considerations flowing from its substance militate against that characterisation.


So that is a very clear example of the need to have regard to the substance of the invention as claimed, and what was said to be important about the invention in the specification – here being the genetic informational aspect of it. That was not within the realms of patentable subject matter.

Then, your Honours, in the reasons of your Honour Justice Gageler and Justice Nettle, at paragraph 124, at page 379 in the CLR report, there is a reference to NRDC, and a quote is set out leading to the right question – so, the same question posed by the plurality. In 125, it was noted that in NRDC the concept of:

an artificially created state of affairs of economic significance –


was referred to. In the part of paragraph 125 which is on the next page, after the quote – it is said that that is to be understood in context, in short. It is not to be taken as those are the only considerations relevant to whether an invention is a manner of manufacture. Then, in paragraph 144, page 387 of the CLR report, it is said that:

The way in which a claim is drafted cannot, however, transcend the reality of what is in suit . . . Monopolies are granted for inventions, not for the inventiveness of the drafting with which applicants choose to describe them . . . Whatever words have been used, the matter must be looked at as one of substance and effect must be given to the true nature of the claim.

Then, in paragraph 145 that same point is emphasised and a statement in Research Affiliates to that effect is approved, that is:

an “invention is to be understood as a matter of substance and not merely as a matter of form”.

That approach is consistent with the plurality’s approach to considering the invention as a matter of substance. Then, at paragraph 166 at CLR 395, it was observed that:

much of the judgment at first instance and of the judgment of the Full Court appears to attribute misplaced significance to the conclusion reached in NRDC [relating to] an artificially created state of affairs of economic significance.

Again, it is emphasised that that is not the test. In particular, it was posed in relation to a process or method claim in NRDC and “it does not follow that it is enough to found a claim for a monopoly” that those requirements are satisfied. That is at the end of paragraph 167.

GAGELER J: Well, here you have – as with any business scheme, you can have economic significance, so that factor really does not take you anywhere, and begs the question of what an artificially created stated of affairs is, I suppose.

MR DIMITRIADIS: Yes, your Honour, and whatever, it is not an impact on human intellect. That is not an artificially created state of affairs. The possible results of the application of this invention, as noted by the majority of the Full Court, are either an increase in player engagement or enjoyment or, potentially, the consequence of that which is encouraging players to wager more by playing for longer or betting more. Neither of those things
are relevantly an artificially created state of affairs. If they were, and that was sufficient for patentability, then business schemes and financial schemes would be patentable. But they are not. So, the advertising scheme in Rokt would be patentable on the same basis. But it is not.

Your Honours, just to conclude Myriad very briefly. Your Honour Justice Gordon in paragraph 272, which is at CLR 416, referred to NRDC. Sorry, I should first refer your Honours to paragraph 221 of Justice Gordon’s reasons where your Honour referred to the right question in NRDC, the same question that was referred to in the other reasons, and then in 272, referred to the reference to the “vendible product”, or “artificially created state of affairs of economic significance” criterion in NRDC and, in 273, referred to CCOM applying that. In paragraph 275, your Honour made the point that:

these passages are not a statute . . . they must be read and understood in their context.

In 276, your Honour observed that the concept of an artificially created state of affairs was used in NRDC in relation to a process, and the result of that process. In 278, your Honour emphasised that it is necessary to have regard to the:

subject matter of the claims.

In paragraph 279, in the part at the top of CLR 418, in applying that your Honour referred to the claims:

As a matter of substance . . . focuses on the existence of one or more elements of an identified –


genetic code. Again, having regard to the substance of the invention, none of that involves discounting integers of the claim. One has regard to the whole of the claim but understands where the substance of it lies. That is the approach which we submit supports the Full Court in this case. I see the time, your Honour.

KIEFEL CJ: Yes, thank you. The Court will adjourn until 9.45 am tomorrow.

AT 4.14 PM THE MATTER WAS ADJOURNED
UNTIL FRIDAY, 10 JUNE 2022


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