|
|
Home
| Databases
| WorldLII
| Search
| Feedback
Federal Court of Australia - Full Court |
Last Updated: 19 November 2021
FEDERAL COURT OF AUSTRALIA
Commissioner of Patents v Aristocrat Technologies Australia Pty Ltd [2021] FCAFC 202
|
|
|
|
File number:
|
|
|
|
|
|
Judgment of:
|
|
|
|
|
|
Date of judgment:
|
|
|
|
|
|
Catchwords:
|
PATENTS – manner of
manufacture – electronic gaming machines (‘EGMs’)
– innovation patent for EGMs and methods
for providing
feature games – application for leave to appeal from decision of
primary judge concluding claims were to a manner
of manufacture within the
meaning of s 18 of Patents Act 1990 (Cth) – patentability of
‘computer-implemented inventions’ – where primary judge
applied a two-stage inquiry
for patentability – whether two-stage inquiry
correct
|
|
|
|
|
Legislation:
|
Patents Act 1977 (UK) s 1(2)
Statute of Monopolies 1624 (21 Jac 1 c 3) s 6
|
|
|
|
|
Cases cited:
|
Alice Corporation Pty Ltd v CLS Bank Int’l 573 US 208
(2014)
Aristocrat Technologies Australia Pty Ltd v Konami Australia Pty Ltd
[2015] FCA 735; 114 IPR 28
Bristol-Myers Squibb Co v F H Faulding & Co Ltd [2000] FCA 316;
97 FCR 524
CCOM Pty Ltd v Jiejing Pty Ltd [1994] FCA 396; 51 FCR 260
Commissioner of Patents v Rokt Pte Ltd [2020] FCAFC 86; 277 FCR 267
Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177; 238
FCR 27
D’Arcy v Myriad Genetics Inc [2015] HCA 35; 258 CLR 354
Dynamite Games Pty Ltd v Aruze Gaming Australia Pty Ltd [2013] FCA
163; 100 IPR 86
Encompass Corporation Pty Ltd v InfoTrack Pty Ltd [2018] FCA 421;
130 IPR 387
Encompass Corporation Pty Ltd v InfoTrack Pty Ltd [2019] FCAFC 161;
372 ALR 646
Grant v Commissioner of Patents [2006] FCAFC 120; 154 FCR 62
International Business Machines Corporation v Commissioner of Patents
[1991] FCA 625; (1991) 33 FCR 218
Konami Australia Pty Ltd v Aristocrat Technologies Australia Pty Ltd
[2016] FCAFC 103
Meat & Livestock Australia Limited v Cargill, Inc [2018] FCA 51;
129 IPR 278
National Research Development Corporation v Commissioner of Patents
[1959] HCA 67; 102 CLR 252
Neurizon Pty Ltd v LTH Consulting and Marketing Services Pty Ltd
[2002] FCA 1547; 58 IPR 93
NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd
(1995) 183 CLR 655
Official Ruling 1926A (1926) 43 RPC Appendix I
Re Cobianchi’s Application (1953) 70 RPC 199
Re Peter Szabo and Associates Pty Ltd (2005) AIPC 92-094
Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150;
227 FCR 378
Reynolds v Herbert Smith & Co Ltd (1903) 20 RPC 123
Watson v Commissioner of Patents [2020] FCAFC 56; 150 IPR 207
TA Blanco White, Patents for Inventions, 5th ed. Stevens & Sons,
London, 1983
|
|
|
|
|
Division:
|
General Division
|
|
|
|
|
New South Wales
|
|
|
|
|
|
Intellectual Property
|
|
|
|
|
|
Patents and associated Statutes
|
|
|
|
|
|
Number of paragraphs:
|
|
|
|
|
|
|
|
|
|
|
|
Solicitor for the Applicant:
|
Australian Government Solicitor
|
|
|
|
|
Counsel for the Respondent:
|
Mr D Shavin QC with Mr P Creighton-Selvay and Mr W Wu
|
|
|
|
|
Solicitor for the Respondent:
|
Gilbert + Tobin
|
ORDERS
THE COURT ORDERS THAT:
1. Within 14 days of these orders, the parties file with the Court an agreed minutes of order giving effect to these reasons for judgment, or if any disagreement, short written submissions and minutes of order, which dispute shall be determined on the papers.
MIDDLETON AND PERRAM JJ:
INTRODUCTION
1 Innovation Patent Application No. 2016101967 is entitled ‘A system and method for providing a feature game’ (‘the 967 Patent’). The present appeal concerns whether Claim 1 to the 967 Patent (‘Claim 1’) is an invention of a kind for which a patent may be granted. Claim 1 describes an electronic gaming machine (‘EGM’) with a particular feature game. An EGM is the modern form of a poker or slot machine on which a player wagers on the outcome of a game consisting of spinning reels (commonly five) with symbols on them. Depending on the symbols which appear in the win line when the reels stop spinning prizes may be awarded. Four innovation patents are involved in this litigation but the parties agreed before the primary judge that the outcome in relation to Claim 1 will determine the outcome in relation to the other three and no further mention of them need be made.
2 An invention will be of a kind that is in principle patentable if the case law developed by the courts indicates that it is patentable. This is because an invention will in principle be patentable if it is a ‘manner of manufacture’ within the meaning of s 6 of a Jacobian law, the Statute of Monopolies (21 Jac 1 c 3). This requirement is imposed both for innovation patents such as the 967 Patent and for standard patents by the terms of the Patents Act 1990 (Cth) (‘the Act’): s 18(1)(a) and s 18(1A)(a). Whether a claimed invention is a ‘manner of manufacture’ is not to be answered by seeking to interpret the expression ‘manner of manufacture’ in s 6 of the Statute of Monopolies in accordance with ordinary principles of statutory interpretation. Indeed, it is well-established that any attempt to give precise meaning to the expression ‘manner of manufacture’ is misconceived: National Research Development Corporation v Commissioner of Patents [1959] HCA 67; 102 CLR 252 (‘NRDC’) at 271 per Dixon CJ, Kitto and Windeyer JJ; D’Arcy v Myriad Genetics Inc [2015] HCA 35; 258 CLR 354 (‘Myriad’) at 346 [20] per French CJ, Kiefel, Bell and Keane JJ. Instead, the criterion that an invention should be a ‘manner of manufacture’ requires a decision by the courts as to what properly and currently falls within the scope of the patent system (CCOM Pty Ltd v Jiejing Pty Ltd [1994] FCA 396; 51 FCR 260 (‘CCOM’) at 291 per Spender, Gummow and Heerey JJ) and this decision is to be made by asking whether the invention is a proper subject of letters patent according to the principles which have been developed for the application of s 6 of the Statute of Monopolies: Myriad at 345 [18]; NRDC at 269. What is patentable is therefore to be determined in accordance with common law methodology developed through the cases: Myriad at 345 [18]. In other words, whether an invention is patentable subject matter depends on what the case law says about that kind of invention and, in turn, that case law is to be developed incrementally as if it were a common law doctrine. Controversy can attend the advance of technology into new fields of human endeavour, for example, where a patent is sought in respect of a particular human gene. When such a controversy arises the High Court has given guidance on how any incremental increase in patent coverage is to be developed in Myriad. This case involves no such advance and those potential difficulties do not arise: see also Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177; 238 FCR 27 at [118]- [119] (‘RPL Central’). This appeal therefore turns on what the cases say about inventions of the kind disclosed in Claim 1.
3 It is not suggested that there is anything inventive about Claim 1’s EGM except for its feature game and it is in all other respects an unremarkable EGM. (Because the 967 Patent is an innovation patent strictly the question is whether there is anything innovative about it, but nothing turns on the distinction between inventive and innovative for present purposes). A feature game is a secondary game awarded to a player on the occurrence of a defined event in the ordinary or ‘base’ game of spinning reels, termed a ‘trigger event’. Once the feature game is enlivened by the trigger event the feature game appears and the player is able to play it and potentially to win further prizes. When the feature game is completed the EGM reverts to the base game.
4 The point of feature games is to encourage players to keep wagering on the EGM by making it more interesting to do so. Since the revenue generated by an EGM is a function of the amount wagered upon it – in New South Wales up to 15% in the long run – the more successful a feature game is in keeping the player wagering, the more lucrative the EGM is for its operator. A successful feature game is therefore commercially valuable both from the perspective of the class of persons who operate EGMs and from the perspective of those who manufacture and distribute them to that class. The Respondent (‘Aristocrat’) is part of a world-wide group of companies engaged in the manufacture and distribution of EGMs and is the particular member of the group which owns the 967 Patent.
PATENTABILITY OF ABSTRACT IDEAS
5 Patent law has long held that mere abstract ideas cannot, without more, be the subject of a patent. One cannot patent an idea for a superior way of arranging pens on a desk or for a method for doing one’s laundry more efficiently. An impressive catalogue of non-patentable abstract ideas is gradually accreting in the authorities: for example, see Grant v Commissioner of Patents [2006] FCAFC 120; 154 FCR 62 (‘Grant’) at [14]ff per Heerey, Kiefel and Bennett JJ.
6 Part of the Applicant Commissioner’s submission in this Court turns on the extent to which the feature game defined by Claim 1 is an abstract idea in this sense. Claim 1 consists of 12 integers. Only integer 1.11 is really suggested to be inventive or innovative. Claim 1 was outlined by the primary judge this way (integer 1.11 is here italicised):
(1) A gaming machine comprising:
(1.1) a display;
(1.2) a credit input mechanism operable to establish credits on the gaming machine, the credit input mechanism including at least one of a coin input chute, a bill collector, a card reader and a ticket reader;
(1.3) meters configured for monitoring credits established via the credit input mechanism and changes to the established credits due to play of the gaming machine, the meters including a credit meter to which credit input via the credit input mechanism is added and a win meter;
(1.4) a random number generator;
(1.5) a game play mechanism including a plurality of buttons configured for operation by a player to input a wager from the established credits and to initiate a play of a game; and
(1.6) a game controller comprising a processor and memory storing (i) game program code, and (ii) symbol data defining reels, and wherein the game controller is operable to assign prize values to configurable symbols as required during play of the game,
(1.7) the game controller executing the game program code stored in the memory and responsive to initiation of the play of the game with the game play mechanism to:
(1.8) select a plurality of symbols from a first set of reels defined by the symbol data using the random number generator;
(1.9) control the display to display the selected symbols in a plurality of columns of display positions during play of a base game;
(1.10) monitor play of the base game and trigger a feature game comprising free games in response to a trigger event occurring in play of the base game,
(1.11) conduct the free games on the display by, for each free game, (a) retaining configurable symbols on the display, (b) replacing non-configurable symbols by selecting, using the random number generator, symbols from a second set of reels defined by the symbol data for symbol positions not occupied by configurable symbols, and (c) controlling the display to display the symbols selected from the second set of reels, each of the second reels comprising a plurality of non-configurable symbols and a plurality of configurable symbols, and
(1.12) when the free games end, make an award of credits to the win meter or the credit meter based on a total of prize values assigned to collected configurable symbols.
7 Most of these integers were in fact part of the common general knowledge possessed by those persons who expend their talent on the construction of EGMs (at the priority date, 11 August 2014). The common general knowledge amongst this cohort was agreed by the parties relevantly to be as follows:
At August 2014, an EGM was a physical device that was available for sale to licenced venues such as casinos, hotels and clubs. EGMs typically consisted of:
(a) a central display area or screen that displays the game(s) to be played and other game-related information (for example, prizes won and available credits);
(b) relative to the central display area or screen, upper and/or lower display areas of screens that display various information about the game in the cabinet, including the name of the game, the supplier and other pertinent information;
(c) a random number generator;
(d) a game controller which controlled gameplay by executing software stored in memory;
(e) buttons for user interaction, either touch screen or physical buttons;
(f) a credit input mechanic, being either a cash note input or ticker reader;
(g) a coin out or ticket out mechanic;
(h) artwork featured above the display in digital form as well as artwork in hardcopy on the belly of the EGM; and
(i) speakers to play music, sound effects and announcements.
In 2014, although most EGMs comprised certain core physical or hardware components, such as those described above, including computer components, they were distinguished from each other by the way in which features were introduced to utilise the physical or hardware components to provide different products that would engage and entertain users in different ways.
8 As the final sentence demonstrates, it was common general knowledge that what distinguished gaming machines from each other was their capacity to engage and entertain those who played them.
9 Although sometimes invention may lie in a combination of otherwise uninventive integers it is not suggested that the 967 Patent is a combination patent in that sense. The central question is whether the invention disclosed by Claim 1 constitutes patentable subject matter. This requires one to characterise the invention and this in turn requires one to construe the meaning of Claim 1. It is to be discerned from its terms read in light of the specification of the 967 Patent as a whole and the relevant prior art (Myriad at 343 [12]).
WHAT KIND OF ABSTRACT IDEA IS DISCLOSED BY INTEGER 1.11?
10 The feature game is defined by integer 1.11. Its commencement is regulated by integer 1.10 which provides for the trigger event which enlivens it and its conclusion by integer 1.12 which explains what happens when it is over and how any relevant prize is to be calculated. Integer 1.10 may be seen as part of the feature game in integer 1.11 but it is ancillary in a sense and it is not suggested that it is in itself inventive. Integer 1.12 is inextricably linked into the feature game in integer 1.11 because it provides for a method by which the prize is calculated, an important part of any wagering-based game. Although the feature game itself is only provided for by integer 1.11 it is useful, so long as these distinctions are borne in mind, to consider the feature game to be constituted by integers 1.10-1.12.
11 The game defined by integers 1.10-1.12 is in fact not a single game at all but rather a family of games with particular common attributes. On the occurrence of a trigger event (integer 1.10) the player is awarded one or more free games of the feature game (integer 1.11). The feature game (integer 1.11) consists of a second set of reels. Amongst the symbols on these reels are ‘configurable’ symbols. The patent does not define a configurable symbol but it does provide for them to be assigned prize values by the computer on which the game is played, which is known as the game controller (integer 1.6). A preferred embodiment of the invention suggests that the configurable symbol may be overlaid with the amount of the prize which has been assigned to it (although this is not a necessary feature of integer 1.11 and any symbol will do). In that preferred embodiment, the configurable symbol is an image of a pearl and it is configured by the overlaying on that image of different prize amounts, e.g., some pearls appear with ‘250’ and others with ‘1000’, where those figures represent credits.
12 Returning to the feature game, each time a configurable symbol appears in the display grid at the end of the free game that particular symbol position on the relevant reel stops spinning for any remaining free games and the configurable symbol remains locked in place in any subsequent play of the feature game (i.e. if the player still has any free games left). When the player eventually runs out of free games in the feature game a prize is awarded related to the number of configurable symbols which have been locked in place (integer 1.12). In the preferred embodiment the prize is the sum of the assigned values on the pearls which have been frozen on the display grid but integer 1.12 is consistent with the prize being calculated in some other way.
13 At a theoretical level this description can be implemented in an infinite number of ways because a large number of rules are left wholly unspecified. For example, it is left up to the person implementing the feature game in integer 1.11 to determine the number of configurable symbols that can trigger a feature game and the number of ways that a configurable symbol can be configured. Integer 1.12 also leaves largely open the way in which the prize is calculated at the end of the feature game. So viewed integers 1.10-1.12 do not describe the rules of a single game but rather the defining attributes of a family of games with common attributes. Even so there are external constraints on the rules of any particular feature game falling within the general description in integers 1.11 and 1.12 which the parties agreed a person skilled in the art of constructing an EGM would know. In particular, the EGM must operate in accordance with the Australian/New Zealand Gaming Machine National Standard which regulates the minimum expected return paid out to players over the entire lifecycle of a particular EGM. Whilst this does not constrain the number of games potentially defined by integer 1.11 it does mean that each such game must behave in a particular probabilistic fashion, that is, in such a fashion as will not distort the EGM’s overall performance against the minimum expected return requirement.
14 One may, therefore, view the feature game defined by integers 1.10-1.12 in two quite different ways. It may be seen as a definition of a family of games with common attributes and akin therefore to the rules of a game. Alternatively, it may be seen as a method for increasing player interest in an EGM and hence for increasing revenue to the operator. This latter characterisation is often referred to in the cases as a business scheme or, more simply, just as a scheme.
15 Whether integers 1.10-1.12 constitute a definition of a family of games or a scheme for increasing player interest (or both, which seemed to be the Applicant’s preferred characterisation) they are in any event an abstract idea. It is not necessary to choose between these two characterisations for doing so serves no purpose. The critical aspect of the family of feature games defined by them is that it is an abstract idea. Since the distinction between a set of rules defining a family of games and one which defines only a single game is immaterial to this appeal, in the interests of brevity we will generally refer to the family of feature games defined by integers 1.10-1.12 as ‘the feature game’.
THE PATENTABILITY OF AN INVENTION INVOLVING A COMPUTER
Computer Implementation of Abstract Ideas
16 The prohibition on patents being granted in respect of abstract ideas of this kind does not extend to inventions which physically embody an abstract idea by giving it some practical application. Although the rules of a game consisting of spinning reels in which prizes are awarded depending on the symbols which appear in the win line constitute no doubt an abstract idea which is not a patentable invention, it is clear nevertheless that a mechanical poker machine which allows such a game to be played upon it is a patentable invention. But the patent protects the invention which is the poker machine and not the abstract idea consisting of the game which it plays. This is consistent with decisions on board or card games to the effect that the game itself, no matter its ingenuity, does not comprise patentable subject matter but the physical apparatus used for playing the game (such as cards or the board) may do so: Re Cobianchi’s Application (1953) 70 RPC 199 at 201 per Jacob LJ; Re Peter Szabo and Associates Pty Ltd (2005) AIPC 92-094 at [38] per Deputy Commissioner Herald, citing Official Ruling 1926A (1926) 43 RPC Appendix I; A Couple’A Cowboys Pty Ltd v Ward [1995] APO 12; (1995) 31 IPR 45. Again, assuming a patent be granted for such an invention, it does not protect the abstract idea which is the game.
17 In this case it is clear from Claim 1 that integers 1.10-1.12 are to be implemented not through the mechanical apparatus which is an old fashioned one-armed mechanical poker machine but by means of a computer program which is to be executed on the game controller referred to in integer 1.6. But integers 1.10-1.12 are not a claim for a particular computer program but instead for an abstract idea which is to be implemented on the computer in integer 1.6 by means of a computer program to be supplied by the person making the EGM. Because the integers are not a claim for a computer program it is not necessary to address the circumstances in which a computer program may disclose a patentable invention.
18 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: RPL Central at [96] and [102] per Kenny, Bennett and Nicholas JJ. Because the integers do not purport to pertain to a development in computer technology but in terms do nothing more than call for the utilisation of a computer by the person implementing the invention, it follows that the feature game defined by integers 1.10-1.12 would not be a patentable invention if they and the game controller in integer 1.6 were the only integers claimed in Claim 1. However they are not and the invention in Claim 1 has a number of other features. Do these other features mean that the invention so claimed comprises patentable subject matter?
The Primary Judge’s Two Step Approach
19 That question matters because to conclude that the feature game defined by integers 1.10-1.12 does not constitute a patentable invention is not necessarily, however, to conclude that the invention disclosed by Claim 1 is not a patentable invention. Indeed, the primary judge in this case concluded that the invention disclosed by Claim 1 was a patentable invention. He did so by asking himself two questions. First, was Claim 1 for a mere business scheme; secondly, if it was for a mere business scheme implemented in a computer did the invention lie in the manner in which it had been implemented in the computer? He then examined Claim 1 and concluded that the invention it disclosed was an EGM which was a device of a particular construction with hardware and software elements. Consequently it could not be a business scheme or, to put the matter another way, that which was concrete could not be abstract. The second question did not therefore arise and the invention was patentable.
20 To arrive at that conclusion his Honour began by referring to a number of Full Court decisions concerning computer-implemented inventions and as a result of that survey formulated the two questions his Honour thought should be answered at [91]:
The reasoning in the cases ... involves an initial question of whether the claimed invention is for a mere scheme or business method of the type that is not the proper subject matter of a grant of letters patent. Once that question is answered in the affirmative, the subsequent inquiry becomes whether the computer-implemented method is one where invention lay in the computerisation of the method, or whether the language of the claim involves (to use the language employed in Rokt at [84]) “merely plugging an unpatentable scheme into a computer”. That second inquiry requires consideration of whether the invention claimed involved the creation of an artificial state of affairs where the computer was integral to the invention, rather than a mere tool in which the invention was performed. That enquiry has spawned investigations in the cases to identify whether the contribution of the claimed invention is “technical in nature” or whether it solves a “technical” problem, or whether it merely requires “generic” computer implementation: see, for instance, RPL Central at [99]. In my view it is not necessary in the present case to consider these matters because the initial question should be answered in the negative.
21 The way in which his Honour formulated the first question did not involve any question of computer implementation. But the way in which his Honour framed the second question assumed that the scheme in question had been implemented in a computer. Framed in these terms, the question of whether the invention was in fact a computer-implemented invention was never asked and consequently was never answered.
22 In cases where the invention claimed is to a method which is to be implemented in something which is undoubtedly a computer his Honour’s approach is, with respect, entirely workable. RPL Central, Commissioner of Patents v Rokt Pte Ltd [2020] FCAFC 86; 277 FCR 267 (‘Rokt’) and Encompass Corporation Pty Ltd v InfoTrack Pty Ltd [2019] FCAFC 161; 372 ALR 646 (‘Encompass’) were all cases of this kind, that is to say, the question of computer implementation was a given and it made sense to proceed directly to the question of whether the invention in substance was a mere scheme implemented in a computer. The Court in these cases did not advert to the question of whether the invention was computer-implemented because it was plain that it was. However, isolating from those decisions the single question of whether what is involved is a scheme is apt to lead to error unless the question of computer implementation is kept in the analysis. In substance, this is the error which, in our respectful opinion, has been made in this case.
23 The following passage from RPL Central at [96] neatly illustrates this:
There must be more than an abstract idea; it [ie, the invention] must involve the creation of an artificial state of affairs where the computer is integral to the invention, rather than a mere tool in which the invention is performed. Where the claimed invention is to a computerised business method, the invention must lie in that computerisation. It is not a patentable invention simply to “put” a business method “into” a computer to implement the business method using the computer for its well-known and understood functions.
(Emphasis added)
24 As the italicised phrase makes clear, the Court’s analysis proceeded from the fact that the invention involved the implementation of a method or scheme in a computer. In such cases where computer implementation is a given or has been established, posing as an initial question whether the invention in substance is in fact a mere scheme gives rise to few problems. Similarly, in cases where the claimed invention truly is for a mere scheme neither implemented in a computer nor for that matter in anything else (such as in Grant and Watson v Commissioner of Patents [2020] FCAFC 56; 150 IPR 207) his Honour’s approach also functions well for the same reason that no question of computer implementation arises.
25 However, in our respectful opinion, his Honour’s two step approach encounters problems where the claim includes a physical object which contains or may itself be a computer and where there is a question as to whether what is claimed is in substance a computer-implemented invention or something else. More generally, although his Honour’s two step approach is capable of operating successfully in the two circumstances we have mentioned, it is a problematic approach outside those two areas. This is because it has the potential to convert the overarching inquiry (‘is the invention patentable subject matter?’) into a single question (‘is the invention not a scheme?’). Such an approach may reduce the richness of analysis called for. This may include, for example, whether a claimed physical apparatus such as an EGM is, in truth, no more than a particular kind of computer.
Proposed Alternative Approach
26 In cases such as the present we would therefore respectfully favour the posing of these two questions in lieu of those advanced by the primary judge:
(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?
27 If the answer to (b) is no, the invention is not patentable subject matter. Of course if the answer to (a) is no, one must then consider the general principles of patentability.
28 By asking himself whether the invention in Claim 1 was a scheme his Honour was understandably led to overlook the important question of computer implementation. In particular, it led his Honour to overlook the possibility that the invention was a particular kind of computer (an EGM) upon which had been implemented the feature game defined in integers 1.10-1.12.
29 In terms of principle, the need to identify whether a claimed invention is a computer-implemented invention is a corollary of the process of characterising the claimed invention. Characterisation is a question of substance not merely one of form: Myriad at [87]-[88], [94] per French CJ, Kiefel, Bell and Keane JJ and [144]-[145] per Gageler and Nettle JJ. Following Myriad that principle has been applied consistently by this Court in this area although, we accept, not yet to the question of whether a claimed invention is a computer-implemented invention: Encompass at [80]-[81], [93] per Allsop CJ, Kenny, Besanko, Nicholas and Yates JJ and Rokt at [67], [69]. The same principle was applied in any event even before Myriad: RPL at [98]-[99], [102] and Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150; 227 FCR 378 at [107], [114], [118] per Kenny, Bennett and Nicholas JJ. We can discern no reason why the same approach should not be taken to the question of whether the invention claimed is a computer-implemented invention.
Is the Invention in Claim 1 a Computer-Implemented Invention?
30 Turning first then to that question it seems to us that the answer is that it is. In short, this is for two reasons. First, an EGM is a computer. Secondly, the invention claimed in Claim 1 is an invention consisting of the feature game in integers 1.10-1.12 implemented on the particular kind of computer which is an EGM. Whilst a computer, including an EGM, may well constitute in itself patentable subject matter (because a computer, after all, is a physical invention) it is clear that this is not the invention disclosed in Claim 1 and to characterise it that way would be to disregard the feature game called for by integers 1.10-1.12.
31 The invention disclosed by Claim 1 differs from all other EGMs only by that feature game. As such, it is apparent that the invention disclosed by Claim 1 is a computer implementation of the feature game in integers 1.10-1.12 where the computer in question is an EGM. It is useful to deal with these two points separately.
Computer?
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 in integer 1.4 and the game controller in integer 1.6 are incontestably computers. The controller consists of a processor and memory.
(b) Output device. The display in integer 1.1 is a screen on which the various aspects of the game are displayed by means of output from the game controller.
(c) Input devices. The credit input device in integer 1.2 is a device which inputs data into the input credit meter in integer 1.3. The game play mechanism in integer 1.5 provides for the input of the player’s wagers.
(d) Software instructions: the game controller is to execute code stored in memory (integer 1.7). The code is to provide for the base game (integers 1.8 and 1.9) and for the triggering, playing and conclusion of the feature game (integers 1.10-1.12).
33 In other words, the EGM is a game control computer attached to a random number generator with some input and output devices. The game controller is to execute code which is not in any way specified except to the extent that whatever else it does it will cause the game controller to play the base game and the feature game.
34 Is this arrangement a computer? It is hard to see that it is anything else. Consider by way of contrast the case of a personal computer. It consists of a computer (a central processing unit with some memory and storage devices) attached to some input devices (a keyboard, a mouse, a microphone and sometimes a camera), some output devices (a screen and some speakers) and it executes code. We are unable to discern any material difference between an EGM and a personal computer which would justify the conclusion that the latter is a computer and the former is not. No doubt, an EGM is a particular kind of purpose-built computer but that does not mean it is not a computer. The same four features may be found constituting any number of modern devices all of which, in our opinion, are plainly computers: gaming consoles (such as Microsoft’s Xbox), smart phones, tablets and smart televisions, for example.
35 In that regard, we do not with respect find especially helpful concepts such as ‘generic computer technology’ or ‘generic software’ (invoked in this appeal by the Commissioner) because it is unclear to us what they actually mean. That said, the terminology has been used by this Court in some of its decisions: see eg RPL Central at [99]-[100], [110]; Rokt at [87]-[88], [91]; Encompass at [99], [108]-[111]. The difficulties with them are as follows: A computer is a device which carries out instructions stored in memory and returns a result. Software is a set of instructions stored in some form of memory, often but not always transitory. If ‘generic’ is intended in the case of a computer to suggest that the computer belongs to a particular class of computer (i.e. a personal computer, leaving to one side whether that class also includes, mobile devices, mainframes, digital watches etc) it is difficult to discern how it advances debate.
36 In that regard, it might be noted that in the two cases in which this Court has held patentable a computer-implemented invention both have been implemented on standard personal computers. Both cases illustrate the dangers of talking loosely with an expression such as ‘generic computer technology’. The curve drawing invention in International Business Machines Corporation v Commissioner of Patents [1991] FCA 625; (1991) 33 FCR 218 (‘IBM’) could have been implemented on a personal computer but it could also have been implemented on a specialised computer which had special curve drawing needs such as a game controller. What was inventive about the patent in IBM had nothing to do with the computer upon which it was implemented.
37 The opposite was the case with CCOM. There the invention allowed a standard English keyboard to be used to generate Chinese characters for word processing purposes. The utility of the invention lay in the fact that it could be used to do Chinese word processing on a standard personal computer being used as a word processor; in other words, the use of a ‘generic’ computer.
38 Those two cases show that to inquire into whether a computer is generic does not seem to add much to the basic question of whether the invention claimed represents an advance in computer technology.
39 So far as generic software is concerned there is the same problem as to what the expression means. We doubt that it is a reference to the kind of computing language involved. The better view is that it is an attempt to restate the requirement that the invention must constitute an advance in computer technology and to distinguish software which does so (implicitly, not generic) from software which does not (implicitly, generic). If the genus to which the word ‘generic’ is to be taken to refer is that consisting of that class of software which does not involve any advance in computer technology then the expression is redundant since that is the test which is in any event applied. If it means anything else, it poses the risk inherent in terms of uncertain content.
40 The Commissioner submitted that the invention in Claim 1 involved no more than the implementation of generic software on a generic computer. For the reasons we have just given we do not think that it advances debate in either direction although, as we have said, it is certainly language sometimes employed in this Court’s decisions. As we explain later, we accept that the implementation of the feature game (integers 1.10-1.12) does not involve any advance in computer technology. Asking whether the software which achieves this implementation (which Claim 1 calls for but does not in any more than the slightest way direct) is generic or not does not add any light to whether the feature game (integers 1.10-1.12) represents an advance in computer technology.
41 Likewise, whilst we have no doubt that an EGM is a computer it is unclear what it would mean to say that it was generic or not. There are certainly a lot of EGMs in existence and perhaps that might qualify them for the description. But even if an EGM were held not to be a generic computer, we struggle to see how this would impact on the question of whether the invention in Claim 1 represented an advance in computer technology.
42 However, whatever terminology is adopted does not impact on the basic conclusion that an EGM is a computer (whether generic or otherwise). We are therefore unable to accept Aristocrat’s submission that an EGM is a specific, highly regulated machine and therefore not a computer. The submission incorrectly assumes that these are mutually exclusive concepts but they are not. An EGM is a specific, highly regulated machine as Aristocrat submitted but this does not mean that it is not a computer.
43 Aristocrat also submitted that the common general knowledge showed that the invention was a highly regulated machine and not a computer and that the evidence led at trial as to how a person skilled in the art would construe the term ‘computer’ showed the same: [18].
44 The evidence does not support Aristocrat’s contentions. The particular elements of the common general knowledge relied upon were [1]-[2] of the agreed statement of common general knowledge tendered at the trial. These are set out above at [7]. It may be accepted that [1]-[2] say that an EGM was a physical device with the elements (a)-(i) but it does not say anything as to whether such a machine is to be regarded as a computer, although [2] notes that the components of the machine include ‘computer components’. Indeed, with two exceptions all of the elements listed as the components of an EGM are either a computer (for example, the random number generator and the game controller) or are input/output devices for a computer or computer code which the person implementing the invention is required to supply. The exceptions are the hardcopy artwork referred to in (h) and the fact implied from (b) that an EGM is contained in a physical cabinet.
45 Turning then to the evidence led at trial as to how a person skilled in the art would construe the term ‘computer’ it consisted first of §11.1 of the affidavit of Mr Nicely affirmed 18 June 2019. That was in these terms:
EGM: Electronic Gaming Machine - a device which provides a cash-based game of chance in a casino. Such games include video reel slots, electro-mechanical slots, video poker, video keno and other video renditions of casino card and casino table games. When applied to the Patents, EGM always refers to a video slot machine.
46 This is not evidence that an EGM is not a computer. Secondly, the oral testimony of Mr Nicely at T140.5-23. This was in these terms:
MR NICELY: Sorry, to be more specific, I would say there are a number of embodiments of the invention, not necessarily named Lightning Link. I mean, Lightning Link, the functionality with different art, and there are also different games involving – embodying the invention.
MR SHAVIN: Yes. And they would all use a gaming – an electronic gaming machine with the functionality that is described in the patent?
MR NICELY: Yes.
MR SHAVIN: Now, you would accept, wouldn’t you, that the inventions claimed in the patents that you’ve looked at for this litigation enhance player engagement in a number of ways?
MR NICELY: The result of the embodiment to the invention does that.
MR SHAVIN: Yes. So that the invention provides functionality, and when that functionality is given effect by various games that utilise the machine they have the effect of enhancing player engagement.
47 This is not evidence that an EGM is not a computer. Thirdly, the oral testimony of Mr Nicely at T161.23-163.2:
MR DIMITRIADIS: Yes. Thank you, your Honour, briefly – two short topics. Mr Nicely, before lunch, you were asked a question by Mr Shavin to this effect: whether all embodiments in the patents use an EGM; do you recall being asked about that?
MR NICELY: I do not remember the specifics.
MR DIMITRIADIS: My note is that you answered “yes” to that question – whether all embodiments in the patents use an EGM. Are you able to answer this: what did you understand was meant by the reference to an EGM when you answered that question?
MR NICELY: So just so the table is properly set, the first element in all three of the independent claims says: A gaming machine comprising –
and were there nothing else within the specification, I would assume EGM. The specification does, though, go into detail about a thick client and thin client implementations of electronic game machines. So that would imply at least Class 3 slot machines – traditional, Las Vegas slot machines. Class 3 VLT, which is a – what they will refer to is their thin client – and in such a system that could be Class 3 or Class 2.
MR DIMITRIADIS: The part of the specification that you were referring to in your answer, then, is that at page 3 - - -
MR SHAVIN: I object, your Honour.
HIS HONOUR: Yes. The objection, Mr Shavin?
MR SHAVIN: Leading the witness, your Honour. It’s re-examination, your Honour.
MR DIMITRIADIS: All right. What part of the specification of the 967 patent were you referring to in referring to the thin client and thick client architecture, Mr Nicely? Take your time.
MR SHAVIN: Thank you.
MR NICELY: I have – was able to locate on court-room book pages 41 and 42, at the bottom of the page starting with:
General construction of gaming system –
mentions that:
The gaming system can take a number of forms. In a first form, a stand-alone gaming machine is provided wherein all or most of the components for implementing the game are present in a player-operable gaming machine.
And that’s what I was referring to as a thick client standalone individual unit. Second paragraph:
In a second form a distributed architecture is provided wherein some of the components required for implementing the game are present in a player operable gaming machine, and some of the components required for implementing the game are located remotely relative to the gaming machine. For example, a thick client architecture may be used when the game is executed on a player operable machine and part of the game is executed remotely, such as a gaming server, or a thin client architecture may be used when most of the game is executed remotely, such as by a gaming server, and a player operable gaming machine is used to display audible and/or visible gaming information to the player and receive input from a player.
With that said, I would like to amend my earlier statement that thick client refers to standalone. That’s how I would use it. The patent is – here is using it differently.
MR DIMITRIADIS: And, Mr Nicely, are you able to indicate by reference to the three types of machine that you’ve referred to, the standalone gaming machine, the thick client architecture and the thin client architecture, firstly, when you answered the question before lunch that all embodiments in the patents use an EGM, did you have in mind that each of those examples is an EGM or not?
MR NICELY: From a player’s perspective, unless the operator goes out of their way to make it evident, a typical player cannot tell the difference.
48 This is not evidence that an EGM is not a computer. It is common in the operation of personal computers to outsource some processing functions to a remote server. Fourthly, the affidavit of Mr Little affirmed 28 February 2019 at §§32-33. This evidence was to the same effect as the agreed general common knowledge set out at [7] above. It is not evidence that an EGM is not a computer. Fifthly, the evidence of Mr Yorg affirmed 19 June 2019 at §27 which was in these terms:
I agree with Mr Little at DL[32] that as of August 2014, an EGM typically included a number of hardware and software components such as a display, a random number generator, a game controller, buttons for user interaction, means for inputting and outputting credit, artwork and speakers. Generally speaking, the game controller would control the game play by executing software stored in memory. The software would be written so as to implement the game play features or rules of the particular game. An EGM could be a ‘standalone’ machine or linked to other EGMs or a central server.
49 Again, this is not evidence that an EGM is not a computer. There remains the question of 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 that it can.
Computer-implemented invention?
50 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 difficult to see that a claim for such a computer would not fail for want of novelty and inventiveness. 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. Both may take the form of what appears to be a claim for a computer. Indeed, that is precisely what has happened in this case.
51 Ascertaining which side of this line such an invention falls on turns on identifying the substance of the invention. In this case, are the 12 integers of Claim 1 to be characterised as a computer which is the EGM or are they to be characterised as a feature game implemented on the computer which is the EGM? It is this which is the question of substance. The form of the 12 integers does not allow one to choose between these two characterisations for they sustain both: an EGM with a feature game implemented on it does not cease to be an EGM.
52 Aristocrat submitted that in identifying what the substance of an invention is for the purpose of determining patentability one was not entitled to disregard those elements which were part of the common general knowledge, citing Rokt at [85] and [91]. We are not sure these passages in Rokt establish a proposition quite so broad but we do agree that, in general, care needs to be exercised in considering the substance of an invention not to discount or disregard those integers of the claim which are part of the common general knowledge. We respectfully therefore also agree with the primary judge that one should eschew an approach which seeks to denude an invention of patentability by prematurely discounting elements of the claim.
53 However, as we have explained above, the twelve integers making up the invention between them constitute a computer. In arriving at that conclusion we have not discounted or disregarded any of them and, indeed, each of them is important to that conclusion.
54 The only aspect of Claim 1 which is said to be inventive is the feature game. Although it is possible to read Claim 1 as a claim for a particular kind of computer being an EGM such a characterisation requires one to ignore integers 1.10-1.12. Claim 1 is not just the EGM in integers 1.1-1.9. It is that EGM with the feature game in integers 1.10-1.12. What makes this invention different to all other kinds of EGM is that feature game which is also, incidentally, its only inventive aspect. Consequently, whilst it would be correct to say that Claim 1 is for an invention which is a computer it would also be a materially incomplete description for it would ignore the relevance of the feature game in integers 1.10-1.12.
55 The correct characterisation of the invention must therefore be one which accounts both for the fact that the invention is something which includes not only the EGM (integers 1.1-1.9) but which also requires the composition of computer code providing for the feature game on that EGM (integers 1.10-1.12). That makes clear that the invention cannot be solely the EGM itself (as the primary judge found) but neither can it be solely the feature game. Further, whilst to say that the invention was an EGM and the feature game would be a description of the invention which did at least refer to all of its integers this too would be an incomplete description because it would give no account for the way in which the feature game is integrated into the EGM by means of the game controller in integer 1.6.
56 What is the relationship which emerges from the fact that the feature game in integers 1.10-1.12 is to be executed on the EGM? It is a relationship of implementation. What this purpose-specific but extremely common computer does is play the feature game. Consequently, the substance of the invention disclosed by Claim 1 is that feature game implemented on the computer which is an EGM. It is therefore a computer-implemented invention.
57 As we have already observed, integers 1.10-1.12 embody an abstract idea which may be characterised both as a set of rules defining a family of games and as a business scheme for increasing player interest in an EGM. As such its implementation in the computer which is an EGM cannot constitute patentable subject matter unless it represents an advance in computer technology.
58 Before passing to that issue, we should note for completeness the impact of the High Court’s decision in Myriad. There the High Court held that for the purposes of ascertaining whether an invention constitutes patentable subject matter, the court should be guided by questions of substance rather than form which, of course, is an uncontroversial proposition. More controversial is the apparent holding in Myriad that one may disregard the form of the claims defining the invention to conclude that the invention is something altogether different: see eg at 339 [6] per French CJ, Kiefel, Bell and Keane JJ and 373 [94] per Gageler and Nettle JJ. Myriad involved product claims for an isolated nucleic acid which had the potential to produce an identified protein with mutations indicative of a predisposition to breast or ovarian cancer. The High Court concluded that the claimed invention was in substance for the information embodied in the arrangements of nucleotides even though the claims were formulated as products.
59 In this appeal, Myriad might appear to warrant an assessment of the nature of an invention other than by reference to the claims defining it. Taking that approach one might identify the invention in Claim 1 not as the EGM but instead as the feature game in integers 1.10-1.12. The analogy would be between the actual claims defining the invention (in this case the EGM and in Myriad the product claim) and substance of the invention (in this case, the feature game in integers 1.10-1.12 and in Myriad the information embodied in the arrangement of nucleotides).
60 The analogy is imperfect. In Myriad the formulation of the claims was disregarded and the substance of the invention identified by reference to something else, information. In this case, the identified substance can at least be found amongst the claims as integers 1.10-1.12. However, we doubt whether this is a difference between the two cases which would allow one to distinguish Myriad. In particular, if one is allowed to proceed in different terms to the claims in the process of characterisation it is surely permissible to ignore some of them.
61 The application of such an approach in this appeal would be problematic. For example, by what metric can this Court identify those claims which are essential to the invention’s substance (apparently integers 1.10-1.12) from those which are not (apparently integers 1.1-1.9). We do not think it can plausibly be said that the invention is in substance a set of game rules when it is, as the primary judge correctly observed, a physical apparatus. This, of course, is the burden of Aristocrat’s submission, and the primary judge’s observation, that the Court cannot simply discard the actual claims which are made in the process of characterisation.
62 Although Myriad appears to open up the possibility of characterising an invention other than by reference to its claims, in fact its holding is directed narrowly at the situation where a patent is sought in an area which is not within the existing boundaries of the concept of a manner of manufacture. So much has been held in this Court: RPL Central at [115]-[119]; Encompass at [97]-[99]; Meat & Livestock Australia Limited v Cargill, Inc [2018] FCA 51; 129 IPR 278 at [13], [387]-[392], [421]-[423] per Beach J. The present case does not arise outside those boundaries and we do not think Myriad requires such a radical departure from orthodoxy at least in this case.
Can the invention in Claim 1 be described as an advance in computer technology?
63 Because the invention is the implementation of a feature game on the computer which is an EGM, the next question is whether what is put forward as inventive (or innovative) about Claim 1 pertains to the development of computer technology or merely its use. The fact that integers 1.10-1.12 leave it entirely up to the person designing the EGM to do the programming which gives effect to the family of games which those integers define inevitably necessitates the conclusion that Claim 1 pertains only to the use of a computer. Indeed, it purports to do nothing else. Claim 1 is silent on the topic of computer technology beyond that the person implementing the invention should use some.
64 It is not to the point in that regard, as Aristocrat submitted, that the invention improves player engagement or increases subjective satisfaction. None of that has anything to do per se with the development or advance of computer technology. The programming of the game controller in integer 1.6 to play a feature game of the kind disclosed in integers 1.10-1.12 may well improve player engagement and subjective satisfaction, but that is a function of the nature of the game in integer 1.11 and not the computer code in which it happens to be embodied. Integers 1.10-1.12 do not call upon the programmer to use his or her skills to produce code which improves player engagement and subjective satisfaction. Rather they call upon the programmer to produce code which implements the feature game.
65 Aristocrat also submitted that changes in the reel structure (in claim 3 of the 967 Patent not Claim 1) and the idea of 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.
PREVIOUS AUTHORITY ON FEATURE GAMES ON AN EGM
66 This Court has previously held that a patent for a feature game on an EGM is patentable: Aristocrat Technologies Australia Pty Ltd v Konami Australia Pty Ltd [2015] FCA 735; 114 IPR 28 (‘Konami’) at [2], [223] per Nicholas J. The same was held for a method for awarding a jackpot on an EGM in Neurizon Pty Ltd v LTH Consulting and Marketing Services Pty Ltd [2002] FCA 1547; 58 IPR 93 (‘Neurizon’) at [15], [101] per Dowsett J. We do not consider we should follow these decisions for the reasons which now follow. In relation to Neurizon, we note that the primary judge in this case accepted that the challenge on absence of manner of manufacture was rejected on a basis that does not reflect the reasoning of more recent case law: at [105].
67 In Konami, the trial judge considered three patents relating to an EGM. Konami Australia Pty Ltd (‘Konami’) was alleged to have infringed the patents by manufacturing and supplying feature games. Only one of those patents (‘the 689 patent’) was the subject of a ‘manner of manufacture’ eligibility analysis in the Court’s decision. The 689 patent was referred to as being for ‘a slot machine game and system with improved jackpot feature’.
68 Konami challenged the validity of the patents on the basis that that none of the relevant claims of the 689 patent were for a product or method constituting a ‘manner of manufacture’.
69 The relevant claims were:
70 The Court found all of these claims to be valid and infringed. We note that the decision was subsequently appealed (Konami Australia Pty Ltd v Aristocrat Technologies Australia Pty Ltd [2016] FCAFC 103) but only in relation to the issue of inventive step and not in relation to the issue of manner of manufacture.
71 The trial judge’s description of the invention in the specification for the 689 patent (at [49]-[57]) included the following description (at [55]) of a preferred embodiment in which feature jackpots are won from a feature game as follows:
In a preferred embodiment of the invention, a new jackpot trigger mechanism provides the Casino operator with a far higher degree of flexibility. Unlike conventional combination triggered jackpots, the jackpots here are won from a feature game. The feature game is triggered randomly as a function of credits bet per game. When a feature is triggered, a feature game appears. Each jackpot can only be won from this feature game. During the feature game a second set of reel strips appears and a “spin and hold” feature game commences. The feature prize score is calculated by the total of the points appearing on the centre line of all 5 reels.
Feature jackpots in this format exhibit significant differences over previous jackpot systems:
(i) A jackpot game is provided which is compatible with any existing game combination within an installation independent of the platform, denomination or type of game (eg. slot machines, cards, keno, bingo or pachinko). This will allow for the linking of combinations between game type, platform type and denomination. Using this system, jackpot games can now be developed using specific combinations for the base game which were previously unsuitable for Link Progressive Systems. These games will compete with the appeal of the latest games on the market.
(ii) There is no longer a need to develop mathematically exact combinations in the base game.
(iii) Unlike the multiplier game in combination triggered jackpot embodiments, the present invention provides a direct relationship between the number of credits bet and the probability of winning the jackpot feature game on any one bought game. Betting 10 credits per line will produce ten times as many hits into the feature game than betting 1 credit per line. This is achieved by using a jackpot trigger which is directly related to the wager bet on a respective game and the turnover, instead of using conventional combination triggers.
(iv) Jackpot hit rates can now be changed without making changes to the base game. This was previously not possible using combination triggered jackpots.
(v) The jackpot feature system can be used across a wide-area-network (WAN), local-area-network (LAN), used as a stand-alone game independent of a network or used with a mystery jackpot. Flexibility is available to change combinations at will.
72 The trial judge was very brief in the consideration of the manner of manufacture issue, and addressed it on the basis of the evidence and submissions of the parties.
73 His Honour rejected Konami’s submissions (at [221]) that the claims were not a manner of manufacture for two reasons. First, he noted that the submission assumes ‘that there is nothing new or inventive in what is claimed over Cashcade.’ Secondly, he noted that the submission assumes ‘that this lack of newness or inventiveness is apparent on the face of the specification’. He considered both of these assumptions to be incorrect.
74 In respect of the first point, this needs to be understood in the context of the trial judge’s previous analysis of the Cashcade mystery jackpot (which was referred to in the specification as one of a number of arrangements that had been in use in New South Wales and other jurisdictions for a considerable period of time). The trial judge considered Cashcade in the context of describing the prior art and what was common general knowledge at the relevant priority date. His Honour noted (at [37]) that Cashcade was a type of mystery jackpot which accumulates contributions from turnover on all machines in the network, increments a prize value in accordance with turnover, and pays the jackpot when the count reaches a pre-determined, randomly selected number within a pre-determined range.
75 At [39], the trial judge noted that the expert called by Konami had accepted the problem of ‘swamping’ affected all progressive jackpots, including Cashcade. “Swamping” is that once the jackpot was won, the players left the machines and did not return until they had a better chance of winning a large jackpot.
76 The trial judge noted the difference between the determination of the trigger condition in Cashcade and in the 689 patent, and observed:
[141] ... in Cashcade, the trigger condition is not determined by an event having a probability related to desired average turnover between successive occurrences of the trigger condition on the console. Instead, the probability of the trigger condition occurring is related to desired average turnover between successive occurrences of the trigger condition across all the gaming machines in the network...
[...]
[148] One of the advantages of the invention described in the specification is that every player who wagers one credit will have an equal chance of triggering the feature outcome. If the desired average turnover for the machine is 1000 credits, each player who wagers 1 credit will have a 1 in 1000 chance, or .001 probability, of triggering the feature outcome. Theoretically, a player will have exactly the same chance of winning with every game played as any other player has providing they are making the same sized wagers.
77 In respect of the second point, this must be understood by reference to the judgment of Black CJ and Lehane J in Bristol-Myers Squibb Co v F H Faulding & Co Ltd [2000] FCA 316; 97 FCR 524. Their Honours found (at [30]) that the case of NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd (1995) 183 CLR 655 (which Konami relied on to say that there was no quality of inventiveness apparent on the face of the relevant specification):
stands for the proposition ... that if, on the basis of what was known, as revealed on the face of the specification, the invention claimed was obvious or did not involve an inventive step – that is, would be obvious to the hypothetical non-inventive and unimaginative skilled worker in the field ... – then the threshold requirement of inventiveness is not met.
That is, the correct approach was to assess newness and inventiveness by reference only to what is disclosed on the face of the specification. In Konami, the trial judge had previously analysed the specification, where the new jackpot trigger mechanism was identified.
78 In conclusion, the trial judge recognised (at [223]) that mere ideas that do not translate into a claim for a new and useful result are not within the concept of a manner of manufacture. However, his Honour ultimately found ‘the inventions claimed in the 689 patent are not “mere ideas” but new and useful gaming machines and new and useful methods of operation producing new and improved results’.
79 Returning to the present case, the primary judge had regard to Konami and found that the claims were analogous to the 689 patent: at [103]-[104]. The primary judge considered that the reasoning in Konami was not ‘plainly wrong’ and so he was disposed to follow it. It is undoubtedly the case that challenges to the patentability of the invention (in Konami) were not put in the same way that they are presently advanced in this case and, as observed already, the reasoning was very brief. Having said that there is no conceptual distinction between the invention claimed in the 967 patent and the invention claimed in the 689 patent in Konami.
80 It may be that the trial judge in Konami worked on the assumption that because the apparatus disclosed by the patent was a new and useful gaming machine that it was not also a computer, however, this is by no means clear. In our respectful opinion, in any event, Konami is to be understood as a case in which the question of computer implementation was not addressed.
81 Turning then to the decision in Neurizon, the invention was also for an EGM in which the probability of a prize being awarded was related to the amount that had been wagered previously (thereby encouraging players to wager more). The method (or ‘system’) related primarily to jackpots and was implemented on an EGM. Under the method, the probability of a win was dependent upon the amount of betting activity on the machine over an elapsed period of time.
82 Similarly to the approach of the trial judge in Konami, in Neurizon the trial judge identified certain advantages in the invention over the prior art, which included fairer outcomes and higher profitability for the operator. The asserted fairness was because the probability of a win was dependent upon the amount of betting activity on the machine over a certain period and not merely the amount of betting activity on the last game. This advantage appears to have informed his Honour’s analysis of whether the claimed invention was a manner of manufacture.
83 At [98], the trial judge recognised that the new use of a known substance will not without more constitute an invention. However, his Honour went on to cite NRDC as authority for the proposition that there may be invention where a known substance is used for a new purpose, so long as there is a practical basis for the new use and the new use ‘takes advantage of an unknown or unrespected property of the substance’.
84 Applying that principle to the facts before him, the trial judge found ‘the claimed new idea is use of the amount wagered over an elapsed period as the basis for awarding a prize’: at [98]. His Honour then found that there was no suggestion in the specification that the subject matter of the invention was not new: at [100].
85 His Honour noted that the claims contemplate performance by an appropriate computer programme: at [100]. His Honour then referred to passages from CCOM where the principles in NRDC were discussed, and concluded (at [101]):
Clearly, the programming of EGMs is necessarily incidental to a “field of economic endeavour” to use the words of the Full Court in CCOM. In this case it is the conduct of gaming facilities. In my view the claims in the patent in suit should be read as describing particular results to be produced by appropriate computer programmes. The need for a new basis of determining probability of a win is identified in the body of the specification and not really challenged. Indeed, the respondents appear to be seeking to meet the same need. As in CCOM, it is possible that the patent in suit may fail for some other reason, but it cannot be said that on its face, there is no manner of manufacture.
86 As we have discussed already, CCOM was a case in which the Full Court held to be patentable a method for the generation and storage of Chinese characters on a computer. Although that method was premised on the abstract idea of using eight particular keystrokes on a standard keyboard to signify the eight types of brush stroke combinations which formed all Chinese characters, the Full Court held that it constituted an advance in computer technology and was therefore patentable. Far from assisting Aristocrat, the trial judge’s application of CCOM in Neurizon is only consistent with his Honour having concluded that the invention was computer-implemented. We do respectfully differ from the trial judge in Neurizon however on the assumption he made that the programming involved in that case was sufficient to satisfy the requirements of CCOM. The program in question operated in a particular probabilistic fashion. We are unable to see how that may be seen, without more, as an advance in computer technology. In our respectful opinion, Neurizon was a case where the advance in computer technology was not identified.
OTHER MATTERS
87 There are four footnotes to these observations. First, we would not exclude the possibility that an EGM might be the subject of patent protection. As Mr Shavin QC submitted, there are aspects of these machines relating to human interaction which may be inventive. If these aspects also constitute an advance in computer technology they will be patentable subject matter. For example, some form of human interactive interface akin to the advance constituted by the touch screen on a mobile phone may well disclose patentable subject matter.
88 Secondly, the learned primary judge was attracted to the anomaly that if Claim 1 had described an invention for implementation in a mechanical poker machine then it would have been a patentable invention. Whilst that is no doubt true, it is a reflection of the different way abstract ideas have been approached where questions of computer implementation are involved. Prior to the rise of computers, patent law encouraged the invention of physical apparatus, methods and processes all of which, at some level, relied upon an abstract idea. But what was protected was the invention and not the abstract idea upon which it ultimately rested. The inventor was rewarded for giving life to the abstract idea in the form of the invention but the monopoly was over the invention and not over the idea.
89 By contrast, a computer’s only purpose is to give effect to the abstract ideas embodied in the code which it executes. Giving life, therefore, to an abstract idea by implementing it in a computer has not been accepted by this Court as something warranting, without more, the grant of a monopoly. To approach the matter otherwise would not encourage the development of computer technology but would rather monopolise the abstract ideas thus embodied. This would be contrary to patent law’s disinclination to concede patent protection to abstract ideas. On the other hand, some abstract ideas implemented in a computer do constitute advances in computer technology. The embodiment of abstract ideas of this kind, by contrast, leads to the advance of computer technology which it has been concluded is something which should be encouraged by the grant of patents.
90 There is therefore a disjunct between the way in which abstract ideas are approached from the perspective of physical devices, processes and so on and the way in which they are approached in the case of computer-implemented inventions. In particular, an abstract idea which may not constitute patentable subject matter when implemented in a computer may constitute patentable subject matter when implemented in some other kind of invention such as a mechanical device. For example, a physical clock is a manner of manufacture, but a clock implemented on a computer is not.
91 The anomaly identified by the primary judge certainly exists but is a function of this disjunct. Its existence does not, with respect, throw light, either one way or the other, on whether an abstract idea implemented in a computer constitutes patentable subject matter. In particular, it is important that the requirement that computer-implemented inventions constitute an advance in computer technology before being afforded patent protection is not undermined by analogies with physical devices where patent protection for the same abstract idea may indeed be afforded.
92 Thirdly, it is true that the Applicant Commissioner has for many years accepted the patentability of EGMs. It is unclear how many of these involved feature games. But even assuming that they did, that historical fact could not affect the legal analysis.
93 Finally, it should be recognised that the approach adopted in this Court of requiring a computer-implemented invention to constitute an advance in computer technology before being accepted as patentable subject matter, is likely to overlap with the question of novelty. In very many cases it is likely that a patent which constitutes an advance in computer technology is also likely to be novel although we would stop short of saying that this is inevitable. But the converse is not true. It is quite possible for a computer-implemented invention which is novel to fail to constitute an advance in computer technology, as the patent in Encompass illustrates (see also the first instance decision: Encompass Corporation Pty Ltd v InfoTrack Pty Ltd [2018] FCA 421; 130 IPR 387). The encouragement of novel uses of computers is not the point of this area of patent law. Its purpose is the encouragement of novel uses of computers to advance computer technology.
CONCLUSION AND DISPOSITION
94 For those reasons, the invention claimed in Claim 1 is not a patentable invention. Leave to appeal should be granted under s 158(2) of the Act. The question which arises is a significant one in this area.
95 There is then a question about the disposition of Aristocrat’s notice of contention and whether it is appropriate that the matter be remitted. Broadly speaking, the notice of contention asserts that even if the primary judge was wrong to adopt his two step approach or wrong to conclude that Claim 1 was not a mere scheme, nonetheless the invention may be found to disclose patentable subject matter including because it is technical in nature and solves technical problems in, and involves technical and functional improvements to, the operation of EGMs.
96 Mr Shavin submitted that the matters addressed in the notice of contention should be remitted to the primary judge for two reasons: first, because his Honour – having concluded that Claim 1 was not for a mere scheme – did not embark on the alternative analysis and therefore the Full Court does not have the benefit of relevant factual findings; and, secondly, because much of the evidentiary material before the primary judge has not been reproduced in the appeal papers. If the position is as Mr Shavin described, then the notice of contention is procedurally misconceived because the Full Court is not in a position either to uphold it or not to uphold it. Consequently, if it is appropriate that there be a remitter, this has nothing to do with the merits of the notice of contention.
97 Nevertheless, in our view, it is appropriate that the matter be remitted to the primary judge to determine any residual issues in light of the Full Court’s reasons including any issues which concern the position of claims other than Claim 1 (identified at [8] of his Honour’s reasons).
98 Accordingly, it would seem orders should be made that the appeal be allowed with an appropriate order as to costs, orders 1 to 5 made 10 July 2020 be set aside and the matter remitted to the primary judge. We will give the parties the opportunity to consider these reasons, and direct that within 14 days they file with the Court an agreed minutes of order, or if any disagreement, short written submissions and minutes of order, which dispute shall be determined on the papers.
Associate:
Dated: 19 November 2021
NICHOLAS J:
BACKGROUND
99 The question that arises in this proceeding is whether an electronic gaming machine (“EGM) as claimed in claim 1 of Innovation Patent No 2016101967 (“the 967 patent”) is a manner of manufacture as that term is used in s 18 of the Patents Act 1990 (Cth) (“the Act”). The primary judge held that it is. The majority (Middleton and Perram JJ) have held that it is not, at least not for the reasons given by the primary judge. The question is of importance because it raises for consideration yet again the inherent patentability of computer implemented inventions, this time in the context of EGMs.
100 Although there are four innovation patents in issue, it was common ground before the primary judge, and in this Court, that if claim 1 of the 967 patent is for a manner of manufacture, so too are all other claims in the four patents.
101 The Delegate of the Commissioner of Patents (“the Delegate”) found that the invention claimed in (inter alia) the 967 patent is not a manner of manufacture. He also found that there is nothing in the description of the invention that could be considered a manner of manufacture and, for that reason, saw no purpose in providing the patentee with an opportunity to amend. On that basis, the Delegate revoked the 967 patent and the three other patents in issue.
102 The Delegate considered that the substance of the invention disclosed in claim 1 of the 967 patent was a feature game in which configurable symbols from the main game were retained in place during game play while non-configurable symbols were removed as the game progressed. The removed symbols were then replaced by other non-configurable symbols or configurable symbols with a prize awarded at the end of the feature game based on the values displayed on the configurable symbols. The invention so described was in the Delegate’s opinion “a game rule” which was not an artificially created state of affairs in the sense that it did not provide a “technical effect” and did not represent “a technical contribution to the art”. The substance of the invention was, according to the Delegate, a rule in a scheme for generating either prize money for a winning player or revenue for the EGM’s operator. He observed that a scheme for making money is not a manner of manufacture.
103 The Commissioner defended the Delegate’s decision before the primary judge on the basis that the invention defined by claim 1 of the 967 patent was, in substance, a mere scheme implemented using a generic computer utilised for its well-known and well-understood functions. The primary judge rejected this analysis and found that the invention, as claimed, was a machine of a particular construction which implements a gaming function. In particular, his Honour concluded that the invention described and claimed, when understood as a matter of substance, was not a mere scheme, but was a combination of physical parts and software providing an EGM that functions in a particular way. In this Court the Commissioner challenges the correctness of the primary judge’s characterisation of the invention and, in addition, the two step approach adopted by the primary judge which the Commissioner submitted necessarily led his Honour to adopt that characterisation. The respondent seeks to uphold the primary judge’s decision and his Honour’s reasoning but, in the event that leave to appeal is granted, also relies on a notice of contention which seeks to uphold the primary judge’s decision on a different basis.
PRINCIPLES
104 The Statute of Monopolies 1624 (21 Jac I c 3) declared that all grants of monopoly were void at common law except for letters patent and grants of privilege in respect of “any manner of new manufactures”. Section 18 of the Act relevantly provides that for an invention to be patentable the invention, so far as claimed in any claim, it must be a manner of manufacture within the meaning of s 6 of the Statute of Monopolies.
105 There are a number of well-settled categories of invention that are not patentable because they do not constitute a manner of manufacture as that concept has been developed in the case law. For example, claims to a mere discovery, or to mere abstract ideas or information, are not patentable: Reynolds v Herbert Smith & Co Ltd (1903) 20 RPC 123 at 126 per Buckley J. Most relevant for present purposes, however, is the exclusion of mere schemes or plans from the concept of manner of manufacture. These have been found to include a scheme for the indexing or coding of information, a scheme for musical notation, a scheme for maritime navigation, a scheme for speech instruction, and a scheme for the management of aircraft during take-off so as to reduce noise: see TA Blanco White, Patents for Inventions, 5th ed. Stevens & Sons, London, 1983 at 4-903. In Grant v Commissioner of Patents [2006] FCAFC 120; 154 FCR 62 (“Grant”) it was held that a scheme for protecting assets from creditors was not patentable. None of these inventions, or alleged inventions, as described and claimed, utilised computer technology in their implementation.
106 More recently it was held by the Full Court in Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150; 227 FCR 378 (“Research Affiliates”) that a computer implemented business scheme was not patentable. That case concerned a scheme for compiling a weighted index of securities implemented using generic computer technology to produce an electronic file (in the well-known Excel format) containing a record of the compiled index which could then be used to determine how capital should be allocated. The Full Court emphasised that for the purpose of determining whether an invention was a manner of manufacture, the invention was to be understood as a matter of substance and not merely as a matter of form: see also D’Arcy v Myriad Genetics Inc [2015] HCA 35; 258 CLR 334 (“Myriad”) at [145] per Gageler and Nettle JJ citing with approval Research Affiliates at [107].
107 The Full Court in Research Affiliates drew heavily on the reasoning of the High Court in National Research Development Corporation v Commissioner of Patents [1959] HCA 67; 102 CLR 252 (“NRDC”) and the need to find an “artificial effect” resulting from the use of the method the subject of the relevant claims in that case. The Full Court also used the terms “technical effect” and “technical contribution”. As previously mentioned, these terms were also used by the Delegate in this case. It is useful to recall how they came to be used in this field of discourse.
108 The Full Court in Research Affiliates referred to various decisions of the English Courts and the Board of Appeal and the Enlarged Board of Appeal of the European Patent Office (“the Board”) concerned with Art 52(2) of the European Patent Convention (“the EPC”) which relevantly provides that schemes, rules and methods for performing mental acts, playing games or doing business, and programs for computers are not to be regarded as an invention. However, Art 52(3) of the EPC provides that Art 52(2) only applies to the extent to which the patent or patent application relates to such subject matter “as such”. Article 52 is also reproduced (using slightly different language) in s 1(2) of the Patents Act 1977 (UK).
109 Differences of opinion emerged between the English Courts and the Board in relation to the scope and operation of Art 52(3) of the EPC which are referred to in greater detail in Research Affiliates. The relevance of that controversy lay in the requirement that a computer program that would otherwise be captured by Art 52(2) and excluded from patent protection could be protected if the invention was not to a “computer program as such” and that therefore a computer program that has a technical effect, including by making some technical contribution to the functioning of the computer, would be patentable.
110 The Full Court in Research Affiliates broadly equated the terms “technical effect” and “technical contribution” with the NRDC requirement that the invention results in some artificial effect. As the Full Court said at [23] “... the UK decisions are of assistance in understanding the distinction to be drawn in the Australian context between an unpatentable business method and a claimed invention which may be patentable if the invention results in an ‘artificial effect’, within the understanding of that concept as explained in NRDC.” Against that background, the Full Court later went on to say at [115]-[119]:
[115] The invention set out in the specification is directed to the index itself. The method of the invention is not one that has any artificial or patentable effect other than the implementation of a scheme, which happens to use a computer to effect that implementation. There is no technical contribution to the invention or artificial effect of the invention by reason of the intervention of the inventors. To take the words of NRDC at 268, the process does not produce “either immediately or ultimately, a useful physical result in relation to a material or tangible entity.” The claimed method, the result of the ingenuity of the inventors, does not produce such a result; the ingenuity is in the scheme. Again, drawing from NRDC at 270, there is a useful result of the claimed process but there is no physical thing “brought into existence or so affected as the better to serve man’s purposes”. There is no “physical phenomenon in which the effect, be it creation or merely alteration, may be observed” (NRDC at 276).
[116] The High Court (in NRDC at 277) spoke in terms of a separate result achieved by the claimed method that has its own economic utility consisting in the improvement. By this reasoning, the High Court directed attention to the subject matter to which the claimed method was directed, which needed to exhibit the required characteristics of a manner of manufacture to be patentable. Here, that subject matter is truly the scheme, the idea, the index. As set out in the specification it may be, and in the claimed method it is, implemented in a computer, but the ingenuity of the inventors, the end result of which is the invention, is directed to the idea, which is not patentable. That method does not have an artificial effect falling squarely within the true concept of what must be produced by a process if it is to be held patentable (NRDC at 277).
[117] The approach to be taken to deciding whether a claimed method or product is properly the subject of letters patent must be flexible and must allow for new technologies presently unknown. The principles should be applied irrespective of the area of human endeavour and invention under consideration. However, that is not to say that any and every claimed method or process is properly the subject of a patent. Examples of exceptions have been identified, such as abstract ideas and mere schemes. There is no formula to be mechanically applied. It is a question of understanding what has been the work of, the output of, and the result of, human ingenuity, and to apply the principles that have been developed and explained so well in NRDC.
[118] In the context of the claim, the significance lies in the content of the data rather than any specific effect generated by the computer. The computer-implementation is an essential integer of the claimed process. That is, of course, important. It is of particular importance in the assessment of, for example, novelty and infringement. However, in examining whether a claimed invention is properly the subject of letters patent, it is necessary to look not only at the integers of that claimed invention but also at the substance of that invention.
[119] The claimed method in this case clearly involves what may well be an inventive idea, but it is an abstract idea. The specification makes it apparent that any inventive step arises in the creation of the index as information and as a scheme. There is no suggestion in the specification or the claims that any part of the inventive step lies in the computer implementation. Rather, it is apparent that the scheme is merely implemented in a computer and a standard computer at that. It is no part of the claimed method that there is an improvement in what might broadly be called “computer technology”.
111 The scheme in Research Affiliates provided a new and innovative investment portfolio management tool. Use of a generic computer to implement the scheme enabled the relevant calculations and indexing to be performed efficiently but did not result in any improvement to either the hardware or software components of the computer. The computer was no more than the means by which the relevant data was processed. Similarly, even though the scheme was new and innovative, there was nothing new or innovative about the way in which the computer managed or processed the data.
112 It is desirable at this point to say something more about terminology that has featured in this field of discourse. The Court in Research Affiliates used the term “generic” to describe conventional computer technology (in that case a computer running the well-known Excel program). It will often be useful to distinguish between general purpose computers which involve a separate and distinct field of technology that is different from the field from which the computer implemented invention may have emerged (eg. business or financial management) and special purpose computers (eg. those used to control aircraft or drilling rigs) which may raise more complex issues as to the proper characterisation of the relevant invention. The recent Full Court decisions concerned with computer implemented schemes have drawn on this language. The same language was also used by the United States Supreme Court in Alice Corporation Pty Ltd v CLS Bank Int’l 573 US 208 (2014), where the Court held that merely requiring generic computer implementation does not transform a patent-ineligible abstract idea into a patent-eligible invention. The fact that the computer technology is generic, in the sense of purely conventional, and is utilised for its well-known and well-understood effects, provides a useful signpost when deciding whether, what began as an abstract scheme or idea, has been transformed into something that is sufficiently different to constitute an artificially created state of affairs. There are also other signposts identified in the relevant authorities which may assist in deciding this question including whether the computer implemented invention solves a “technical problem” or makes some “technical contribution” in a field of technology. However, as the Full Court said in Encompass Corp Pty Ltd v InfoTrack Pty Ltd [2019] FCAFC 161; 372 ALR 646 at [94]:
In considering whether the mere implementation by a computer of an abstract idea or scheme is enough to transform unpatentable subject matter into patentable subject matter, the Full Court in Research Affıliates (at [115]) resorted to the language of “artificial” or “physical” effects, “technical contribution” and suchlike expressions, as used by the High Court in NRDC. By resorting to this language, the Full Court was doing no more than explaining that the claimed method in that case did not transcend, as a matter of substance, what remained an abstract idea or mere information of a kind that has never been considered to be patentable subject matter under Australian law.
113 In Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177; 238 FCR 27 (“RPL Central”) the Full Court held that a computer implemented method for assessing the competency and qualification of individuals was unpatentable. In that case the Commissioner had submitted that the invention was a method for the collection of evidence of a person’s skill and knowledge and was, in substance, a mere scheme or idea that used a computer (equipped with standard software) as the tool with which to collect that evidence. She also submitted that, contrary to the findings of the primary judge in that case, the invention did not involve a new use of a computer, and that the computer was merely being used to compile the relevant information by performing its well-known and well-understood functions. She further submitted that the existence of a mere artificial effect achieved through storing instructions or data in random access memory was insufficient to meet the requirement that there be an “artificial effect”.
114 In upholding the Commissioner’s submissions the Full Court said at [96]-[98]:
[96] 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. The basis for the analysis starts with the fact that a business method, or mere scheme, is not, per se, patentable. The fact that it is a scheme or business method does not exclude it from properly being the subject of letters patent, but it must be more than that. There must be more than an abstract idea; it must involve the creation of an artificial state of affairs where the computer is integral to the invention, rather than a mere tool in which the invention is performed. Where the claimed invention is to a computerised business method, the invention must lie in that computerisation. It is not a patentable invention simply to “put” a business method “into” a computer to implement the business method using the computer for its well-known and understood functions.
[97] Is the mere implementation of an abstract idea in a well-known machine sufficient to render patentable subject matter? Is the artificial effect that arises, because information is stored in RAM and there is communication over the internet or wifi, sufficient? Does any physical effect give rise to a manner of manufacture? Are the mere presence of an artificial effect and economic utility, without more, sufficient to determine manner of manufacture?
[98] It is not a question of stating precise guidelines but of deciding, in each case, whether the claimed invention, as a matter of substance not form, is properly the subject of a patent.
115 The Full Court noted at [100] the distinction drawn in Research Affiliates at [94] between a technological innovation which is patentable and a business innovation which is not. The use of the expression “technological innovation” emphasises the need to identify a technological contribution in a field of technology. The desirability of providing patent protection to technological innovations is reflected in Art 27(1) of the Agreement on Trade Related Aspects of Intellectual Property Rights which relevantly provides that “... patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application ...”. The language of “technological innovation” has now been adopted in s 2A of the Act which refers to the promotion of economic wellbeing through technological innovation as an object of the Act.
116 The statements at [98] in RPL Central and at [117] in Research Affiliates are important because they recognise that it is not appropriate to adopt an excessively rigid or formulaic approach to the question whether a computer implemented scheme is a manner of manufacture. This is especially true in situations where there may be no clear distinction between the field to which the invention belongs, and the field of computer technology. There may well be a technological innovation in the field of technology to which the invention belongs even though it cannot be said that there has been some technological innovation in the field of computers. The field of the invention may encompass different fields of technology that have their own technical problems that lie “outside the computer”. Moreover, the solutions to these problems may necessarily rely upon generic computing technology for their implementation. That does not necessarily render such solutions unpatentable.
117 For the purpose of determining whether the invention produces the artificially created state of affairs referred to in NRDC and considered in Research Affiliates at [115]-[119], it will be often be useful to ask whether the invention solves a technical problem or makes some other technical contribution to the field of the invention. In particular, it may be useful to consider whether the invention solves a technical problem including one that exists “outside the computer”, whether the computer is utilised to produce “an unusual technical effect” or whether there is some ingenuity in the way in which the computer is utilised (RPL Central at [99], [104] and [109]).
118 Mere business schemes, and abstract ideas or information, have never been regarded as sufficiently tangible in character to constitute patentable subject matter. Implementing the scheme, idea or information in a generic computer utilising its well-known and well-understood functionality does not change its fundamental character. But once a scheme is given practical effect and transformed into a new product or process which solves a technical problem, or makes some other technical contribution in the field of the invention, it may no longer be considered a mere scheme.
119 Ultimately, the question is whether what may have begun as a mere scheme, an abstract idea or mere information, has been transformed in some definite and tangible way so as to result in a product or method providing the required artificial effect. There must be some technical contribution either in the field of computer technology (eg. an improvement in processor, memory or display technology) or in some other field of technology to which the invention belongs. As the authorities to which I have referred to make clear, that transformation is unlikely to be achieved by taking an inherently unpatentable scheme and implementing it utilising generic computer technology for its well-known and well-understood functionality that does not involve any ingenuity in the way in which the computer is utilised.
120 It follows, for example, that a computer implemented scheme or idea (eg. an algorithm) for running a refrigerator in a more energy efficient way may be patentable even though the relevant technical contribution resides in the scheme or idea rather than in the workings of the computer with which the scheme or idea is implemented. If the result of the contribution of the refrigeration engineer who conceived the scheme or idea, and the computer engineer who implemented it using conventional (or generic) computing technology, is a more energy efficient refrigeration system, then the invention may well be patentable even though the technical contribution resides in the field of refrigeration technology rather than computer technology. Similarly, in the case of EGMs, patentable subject matter may be found to exist in the way in which a gaming system or machine functions even though a computer engineer may not consider that there has been any advance in the field of computer technology.
121 This brings me to my own decision in Aristocrat Technologies Australia Pty Limited v Konami Australia Pty Limited [2015] FCA 735; 114 IPR 28 (“Konami”) upon which both Mr Shavin QC for the respondent in his submissions and the primary judge in his reasons placed reliance. There are a number of points to make about Konami.
122 Drawing on some observations of Emmett J in Dynamite Games Pty Ltd v Aruze Gaming Australia Pty Ltd [2013] FCA 163; 100 IPR 86, it was argued by the respondent in Konami that the invention was not a manner of manufacture because it was to “no more than a mere idea as to the rules of a game”. The submission was not developed by reference to any other authority. In particular there was no consideration given in submissions to any of the signposts referred to in RPL Central (which was decided after Konami) including that the invention, even if computer-implemented, solved a technical problem in the field of gaming technology that justified the finding that it was a manner of manufacture.
123 There were findings made in Konami that the invention solved a number of well-known problems associated with progressive jackpots: Konami at [35]-[39], [212]-[213]. These included the problem of “swamping” which involved players, particularly professional gamblers, timing their play on EGMs operating across a network so as to maximise their prospects of winning a progressive jackpot. It was found that the invention solved the problem of “swamping” by using a random number generator to ensure that each player had the same chance of winning the progressive jackpot relative to the amount he or she wagered on each game: Konami at [214]. This finding was made in the context of an inventive step analysis but in light of the principles discussed in RPL Central it is also relevant to manner of manufacture. Neither the problem nor the solution was abstract, and the solution could not be properly characterised as a mere scheme or rule of a game. The invention provided a technical solution (using a random number generator) to a practical, real-world problem confronting gaming machine operators.
124 The Commissioner did not make any submission to the effect that Konami was wrongly decided. Had Konami been argued differently, the reasons for decision might have been more fully or differently expressed. But Konami should be understood as a case in which a gaming machine or gaming system that provided a technical solution to a practical problem in the field of gaming technology was proper subject matter of a patent.
THE 967 PATENT
125 The 967 patent is entitled “A System and Method for Providing a Feature Game”. According to the specification, the invention relates to a gaming system and a method of gaming. In existing gaming systems, feature games may be triggered, which gives players an opportunity to win additional prizes, or larger prizes, than otherwise would be available in the base game, and which may enhance player enjoyment. The specification states that “[a] need exists for alternative gaming systems”.
126 The specification does not identify any specific problem to which the invention is directed or which the invention is said to provide a solution. Rather, the invention is directed to providing a more enjoyable experience for the player, which may advantage the operator of the gaming machines on which the game is played because it is likely to encourage game play and, with it, increase the operator’s revenue.
127 The summary of the invention includes a consistory statement that mirrors claim 1. This is followed by a detailed description of the invention that describes a preferred embodiment by reference to various figures. The detailed description states at page 3, line 18 – page 4, line 1:
Referring to the drawings, there are shown example embodiments of gaming systems having components which are arranged to implement a base game, from which may be triggered a feature game. In these embodiments, symbols are selected from a set of symbols comprising a plurality of configurable symbols and non-configurable symbols. The gaming system incorporates a mechanism that enables the symbols to be configured. In one example, the gaming system is configured so that a feature game is triggered when six of the configurable symbols are selected for display. The invention is not limited to triggering a feature game only when six configurable symbols are selected, however. In other embodiments, any number of configurable symbols may trigger the feature game.
Furthermore, each of the configurable symbols comprises a variable portion which is indicative of the value of a prize. When the feature game is triggered, the player is guaranteed to win the accumulated value of the prizes indicated by the variable portions of the configurable symbols.
The gaming system can take a number of different forms. In a first form, a standalone gaming machine is provided wherein all or most components required for implementing the game are present in a player operable gaming machine.
In a second form, a distributed architecture is provided wherein some of the components required for implementing the game are present in a player operable gaming machine and some of the components required for implementing the game are located remotely relative to the gaming machine. ...
It is apparent from this passage that the gaming system described incorporates a mechanism that enables symbols to be configured (“configurable symbols”) which may be used to trigger the award of a feature game. It also shows that these configurable symbols comprise a variable portion which is indicative of the value of a prize and that, when the feature game is triggered, the player is guaranteed to win the accumulated total value of the prizes indicated by the variable portions of the symbols.
128 The specification describes what are said to be several core components of the gaming system which include a player interface arranged to enable the interaction between a player and the gaming system. This typically includes a credit mechanism to enable players to input credits and receive payouts. Another core component is the game controller which is described at page 4, lines 26-38. The detailed description refers to various other optional features of the gaming system which may include a top box carrying artwork, pay tables and details of bonus awards and facilities for dispensing cash from the gaming machine.
129 There is a more detailed account of the use made of configurable symbols at page 9, line 36 – page 10, line 9:
In an embodiment, the configurable symbols each comprise at least a common component and at least a variable component. The variable component is indicative of a value of a prize that is associated with each of the configurable symbols. An example of a configurable symbol is shown in Figures 9A-9C, in the form of a pearl symbol. The common component is the pearl itself 902, while the variable component is the indicia 904 overlaying pearl 902. In this case, indicia 902 are numerals directly indicative of the value of the prize. In other embodiments, such as shown in Figure 10A-10B, the indicia indirectly indicate the value of the prize, such as “major” indicia 1002, “minor” indicia 1004 or “mini” indicia 1006. It will be appreciated that the indicia can also be in other forms, which may also be indicative of a prize. For example, the car icon indicates that the player has the opportunity to, or has, won a car. In some embodiments, the indicia may indicate only a portion of a prize. Continuing with the car example, the car icon may be split into four portions, each portion being assigned to a different configurable symbol. In such embodiments, all four portions of the car icon are required to be selected for display in order for the car prize to be won.
130 The feature game depicted by figures 9A-9C discussed in the above passage is referred to as the “Hold & Spin” feature. The Hold & Spin feature is triggered when six pearl symbols are displayed. In the embodiments depicted in the figures the common component is a pearl symbol while the variable component is the indicia overlaying the pearl, comprising numerals which indicate the value of the prize that will be won upon completion of the feature game.
131 Claim 1 of the 967 patent is set out in the reasons for judgment of Middleton and Perram JJ at [6] above. The gaming machine defined by claim 1 includes five integers (integers 1.1 – 1.5) and at least part of another integer (integer 1.6) which were, at the priority date, common features of EGMs. The applicant does not suggest that any of those features distinguish the EGM claimed by the patent from other EGMs that were well known at the priority date. Nor is there anything new in an electronic gaming machine that includes a game controller that executes game program code (integer 1.7) which enables play in the base game to trigger a feature game which will consist of a number of free games (integers 1.8 – 1.10). At the priority date it was common for free games (or “free spins”) to be awarded based on a trigger event occurring in base game play.
132 It is apparent from the specification that a “configurable symbol” as referred to in integers 1.6, 1.11 and 1.12 is a symbol that can be reconfigured during the course of play so as to change the prize value assigned to that symbol. The game controller assigns prize values to the configurable symbols as required during play. The configurable symbols which appear when the feature game is triggered and any additional configurable symbols collected during the playing of the feature game will represent the accumulated prize value which will be awarded when the feature game ends. In some embodiments described in the specification the configurable symbols will consist of a common component (eg. a pearl) and a variable overlaying component in the form of an indicia of prize value.
133 There was expert evidence before the primary judge that indicated that the configurable symbols, and in particular the presentation of prize values on their face, significantly enhanced user experience by allowing a player to visualise in real time potential rewards as play progressed toward completion of the feature game. Mr Little, a highly experienced game designer, gave the following evidence concerning the prior art and the benefits of configurable symbols:
84. There had been games where symbols had been highlighted or differentiated such as by the addition of background indicia, for example, a border, in order to indicate that the symbol was now contributing to triggering a feature or jackpot. However, I had never encountered a symbol that could have variable awards displayed over or on the symbol. In my view, this is a significant advance because it immediately indicates to the player that they may be entitled to some particular award or prize associated with that symbol. This is a significant enhancement of the player experience .
...
88. One particular example of configurable symbols described in the patents is to provide a variable prize value on their face. This has the effect of making it immediately obvious to the player what they can potentially win. Such a win may include prizes, such as the credit awards of, for example, 500 credits as shown in figure 10A, and prizes or jackpots such as a 'mini', ' minor' or 'major' jackpot. This enhances the player's engagement during play of the game.
...
134 The experts called by both sides distinguished between “replaceable symbols” and “configurable symbols” of the kind referred to in Mr Little’s evidence and described in the 967 patent. The applicant’s experts appear to have accepted that they were not aware of configurable symbols with variable awards displayed over or on the symbol having been used in EGMs before the priority date.
CONSIDERATION
135 In my opinion leave to appeal should be granted. The primary judge’s two step approach to the manner of manufacture issue did not engage with the Commissioner’s submission that the invention as described and claimed was in substance a mere scheme or set of rules for playing a game implemented using generic computer technology for its well-known and well-understood functions. In particular, the primary judge’s two step approach does not adequately address the question of whether the EGM referred to in claim 1 is, or includes, a computer and whether the invention that is in substance described and claimed is a computer implemented scheme or set of rules governing the playing of a game. In my respectful opinion the primary judge’s two step approach was erroneous.
136 Claim 1 describes an EGM consisting of physical components that are common to such machines. These components include a memory device capable of storing, and a processor capable of executing, game program code which determines what reels and symbols appear on the display during game play, whether or not a player wins a prize and, if so, of what kind (eg. a free spin or a jackpot). The specification makes clear that the invention is for a gaming machine (or gaming system) which seeks to enhance player enjoyment by offering a feature game that may be triggered during play of the base game.
137 Nothing about the description of the physical components of the machine or, its capacity to trigger a feature game, is new. It is accepted by the respondent that all such features were common to EGMs that were on the market at the priority date. No doubt such machines featured different games due to them having been programmed with different code but the architecture of the EGM described in the specification is purely conventional.
138 In my opinion the EGM described and claimed is either a computer or an apparatus that incorporates a computer. Whether it is classified as a computer or as an apparatus that incorporates a computer does not alter the analysis in this case because the substance of the invention, as described and claimed, resides in the game program code which embodies a computer implemented scheme or set of rules for the playing of a game.
139 Embodied in the game code are the instructions that determine the course of play for both the base game and the feature game. As encoded in the memory in which it is stored, the code takes the form of electrical impulses which facilitate the storage of machine readable instructions governing how the game is played. The fact that these instructions are embodied in the storage device or that they are processed by the game controller does not of itself create the required artificial effect: RPL Central at [96]. Whether those instructions are expressed in machine readable form, or in some different language, they represent abstract information in the nature of a scheme or set of rules governing the playing of a game.
140 The question is then whether there is anything about the way in which the game code causes the EGM to operate which can be regarded as having transformed what might otherwise be regarded as purely abstract information encoded in memory into something possessing the required artificial effect.
141 The specification does not identify any technological problem to which the patent purports to provide a solution. Nor did the expert evidence (insofar as it was made available to us) suggest that the invention described and claimed in the specification was directed to any technical problem in the field of gaming machines or gaming systems. Rather, as the specification makes clear, the purpose of the invention is to create a new game that includes a feature game giving players the opportunity to win prizes that could not be won in the base game. Ultimately, the purpose of the invention is to provide players with a different and more enjoyable playing experience. The invention is not directed to a technological problem residing either inside or outside the computer.
142 That brings me to whether the gaming machine described and claimed might be regarded as exhibiting an unusual technical effect due to the way in which the computer is utilised. As previously mentioned, the primary judge did not make any specific findings in relation to the use of configurable symbols, and whether they were capable of amounting to a technological innovation. The fact that a game is made more interesting to players is not in itself such an effect but there may well be ways in which the computer could be utilised that adds to the attractiveness of the game through the use of unconventional technical methods or techniques which might themselves give rise to patentable subject matter.
143 The extent to which the use of configurable symbols might amount to a technical contribution to the field of gaming technology was hardly touched on in oral argument in this Court. Mr Shavin QC informed us that he did not consider that all of the evidentiary material relevant to this question was before the Court and that the respondent’s preferred approach would be for the matter to be remitted to the primary judge for further confirmation. This would effectively leave the issues arising under the notice of contention (not the subject of findings by the primary judge) unresolved by the appeal. Mr Dimitriadis SC, who appeared for the applicant, submitted that while it was open to the Full Court to deal with the matters raised in the notice of contention, the Commissioner’s position was that this was a matter for the Full Court.
144 In my opinion the appropriate orders in this case require that leave to appeal be granted, the appeal be allowed and the primary judge’s orders be set aside. However, I would remit the proceeding to the primary judge pursuant to s 28(1)(c) of the Federal Court of Australia Act 1976 (Cth) to consider whether claim 1 of the 967 patent, or any of the other claims in issue, is a manner of manufacture on the basis that it involves technical and functional improvements to EGMs through the use of configurable symbols of the kind more fully described in the specification. In the circumstances, I agree with the orders proposed by Middleton and Perram JJ.
|
I certify that the preceding forty-six (46) numbered paragraphs are a true
copy of the Reasons for Judgment of the Honourable Justice
Nicholas.
|
Associate:
Dated: 19 November 2021
AustLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.austlii.edu.au/au/cases/cth/FCAFC/2021/202.html
