Partial jackpot: split High Court relaxes, but does not resolve, the patentability test for computer-enabled inventions

Update 3 May 2024 – Federal Court remitted decision leaves open the patentability test for computer-implemented inventions

Following the High Court’s split decision (expanded on below), the matter was remitted to the Federal Court to determine whether the patent’s residual claims were patentable subject matter (a ‘manner of manufacture’). Justice Burley found that the claims were not a manner of manufacture but his judgment does not resolve the uncertainty regarding the patentability of computer inventions.[1] Instead, the decision was resolved on the basis of interpretation of the remittal order and the Commonwealth provisions dealing with split High Court decisions.[2]

Although Aristocrat argued that it was open for the Federal Court to apply the reasoning of the High Court in considering the residual claims, Justice Burley considered he was bound by the Full Court’s reasoning, as:[3]

• the result of the Judiciary Act 1903 (Cth) s 23(2)(a) is that the decision of the Full Court remains in place, and the orders of the Full Court are to be understood in light of the reasons given; and
  
  
• the remittal order unequivocally requires the Federal Court to determine the residual issues “in light of the Full Court’s reasons”.

Further, even if he were permitted to consider the High Court’s reasoning, Justice Burley was not persuaded that any relevant principle could be discerned.[4] Although both sides of the High Court’s split decision criticised the Full Court’s two-step analysis, he discerned no uniformity of approach from which a ratio decidendi emerges.

The High Court judgment against patentability (the Anti Reasons) argued the Full Court unnecessarily complicated the analysis of the critical issue, which is the characterisation of the invention by reference to the terms of specification.[5] They required consideration of the aspects of the claim considered to be ‘new’ and whether those elements included a component that produced “some adaptation or alteration of, or addition to, technology otherwise well-known in the common general knowledge”. The judgment in support of patentability (the Pro Reasons) argued that the question of whether a claim is a manner of manufacture should not be deconstructed to separately consider whether the subject matter is ‘computer-implemented’. Instead, the focus should be on whether the implementation creates “an artificial state of affairs and a useful result”.[6]

It remains uncertain for now, therefore, what, if any, principles arise from the litigation for application in future cases concerning computer-implemented inventions.[7] Given the history of the matter, it may be expected that a further appeal is in the works. Whether by way of appeal or in a future matter, this issue is likely to return to High Court.

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The recent split decision of the High Court of Australia[1] in relation to the patentability of computer-implemented inventions will be elucidated by further Federal Court decisions. In the meantime, it is possible to discern significant points of common ground between the rival pro- and anti-patentability reasons, and some preliminary learnings.

No advance in computer technology required

It is not necessary for a computer-implemented invention to result in an ‘advance in computer technology’ to be patentable. This question had arisen as Aristocrat had sought to patent an electronic gaming machine which implemented free ‘feature games’ when certain conditions were met.[2]

The Commissioner of Patents had refused Aristocrat’s application on the basis that the claimed invention did not concern a ‘manner of manufacture’ (Australia’s requirement for patentable subject matter),[3] as the substance of the invention was a mere scheme (being a game and game rules of a gaming machine).[4]  

On appeal from the Patent Office, the trial judge applied a reformulated version of previous authority on the patentability of computer-implemented inventions as a two-step test of first determining whether the invention was a mere scheme or business method and, if so, as a second step asking whether the invention lay in the computerisation of the scheme.[5] As the claim involved many physical elements, his Honour concluded the invention was patentable as it was not a mere scheme and the second question therefore did not arise.

In the Full Court below, the majority adopted a different two-part test.[6] First, the invention must be characterised to determine whether if it is a ‘computer-implemented invention’. Secondly, if so, the invention must be able to be broadly described as an advance in computer technology.  

Their Honours concluded that there was no advance in computer technology as the claim was silent as to features of code, and any improvement in player satisfaction therefore arose from the feature game itself rather than the code embodying the game.[7]

Both the Anti Reasons[8] and the Pro Reasons[9] reject the Full Court’s test including the ‘advance in computer technology’ requirement and appear to accept that computer-implemented inventions which solve a problem, or result in an improvement in some other field of technology, may properly be the subject of a patent.[10]

Characterisation of the claimed invention is required

Despite agreeing that earlier cases in relation to the patentability of computer-implemented inventions were correctly decided (as discussed below),[11] the criteria for determining whether future inventions would be patentable adopted in each of the reasons are not clear.   

The Pro Reasons discussed the approach in the leading High Court authority on patentability in NRDC[12]  that an invention is very likely to be directed to patentable subject matter if it results in an artificial state of affairs that produces a useful economic result,[13] and noted that computer-implemented inventions which produce such a result should not be treated any differently from any other machine.[14]  As a claim for game rules combined with physical materials would ordinarily be patentable,[15] the same should hold for the implementation of a digital representation of a game.

The Anti Reasons proceed on the basis that the invention was an unpatentable game or idea as the invention did not involve any “variation of or adjustment to generic computer technology to give effect to, or accommodate the needs of the new game”,[16] and the feature game which gave the claim its character as an invention did not involve any “component that [is] physically affected or a change in the state or information in part of a machine”.[17]  

The language of variation and adjustment has not previously been used in similar decisions, and almost all inventions incorporating a computer could be said to involve a change in the state or information of that machine. Notwithstanding these observations, it appears that these reasons are not intended to depart from the reasoning in NRDC. [18]

Past Federal Court decisions are approved

Both sets of reasons identified that particular past decisions finding computer-implemented inventions to be patentable are correct. The Anti Reasons[19] and the Pro Reasons[20] acknowledge that the invention in CCOM Pty Ltd v Jiejing Pty Ltd[21] (a method of using eight particular keystrokes on English-language keyboards to signify the eight types of brushstroke combinations forming Chinese characters and thereby enabling easy word processing),[22] is a patentable invention.  

The Pro Reasons also identified that an invention involving a ‘slave computer’ interrupting the operations of a ‘central computer’ such that one of these computers delivered an improved result, was a patentable computer-implemented invention,[23] and (while not approved in terms) suggest that an invention which used mathematical methods to enable a computer to produce an image of a curve was also properly patentable.[24]  

Their Honours also expressly approved earlier decisions of the Federal Court finding various inventions to be unpatentable, despite the fact that those cases did not adopt the same approach as their Honours and in many cases focussed on whether there was an ‘improvement in a computer’.[25]

Given statutory differences, Australia’s position may be internationally distinctive

Both the Anti Reasons[26] and the Pro Reasons[27] caution against overreliance on international patent law authorities when interpreting statutory provisions which differ significantly between nations.  

The adoption in US authority of a search for an ‘improvement in a computer’ could be understood in light of the relevant provision stating that “whoever invents or discovers any new and useful process, machine, manufacture or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor”.[28]  

To the extent previous decisions had relied on UK authority requiring that a computer-implemented invention have “features which contribute to the technical character of the invention”,[29] such reliance was misplaced given the fundamental shift effected on UK patent law by the Convention on the Grant of European Patents (1973).[30]

Where to from here?

While clearer guidance would have been preferable for those industries developing and using developed technology dependent on computer-enabled operability,[31] the unanimous rejection of the Full Court’s approach requiring the demonstration of an advance in computer technology is helpful.  

The High Court’s decision will avoid inventions in many fields being invalidated on the basis that, while they may have delivered useful technical results in those fields, they did not deliver useful results in the field of computing.[32] To the extent there are difficulties posed by the divergence in reasoning, those issues are likely to be resolved in future cases – possibly even in the remitter of the matter back to trial judge to consider whether remaining claims of the patents in issue are valid.[33]

IP Australia has indicated that it will “carefully review the decision and consider its implications” and that at this stage the Commissioner’s practice will be to consider that a claimed invention will not be patentable if it is merely directed to the implementation of an unpatentable idea in “conventional and well-understood computer technology”.

Finally, following the decision, it remains open to parties seeking or enforcing patents to argue that patents should be granted or, if granted, should be enforced (and not revoked) on the basis that they are directed to a method which is implemented by a computer to produce a useful result and amounts to more than mere manipulation of an abstract idea.

Parties considering their infringement risk arising from patents to computer enabled inventions will need to be aware of this development and consider their ability to respond by arguing that, properly construed, there is no technical contribution in the sense of an adaptation or alteration of known technology. The split decision of the High Court has enabled competing arguments to be made.

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^{[1] Aristocrat Technologies Australia Pty Limited v Commissioner of Patents (No 3) [2024] FCA 212 (Aristocrat No 3).}

^{[2] The Judiciary Act 1903 (Cth) s 23(2)(a) provides that where the Justices sitting as a Full Court of the High Court are equally divided in opinion on an appeal from the Federal Court of Australia, the decision appealed from will be confirmed. The remittal order provided that the proceedings be remitted to the primary judge “for the determination of any residual issues in light of the Full Court’s reasons including any issues which concern the position of claims other than claim 1 of Innovation patent No 2016101967 (referred to at [8] of the reasons of the primary judge in Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents (2020) 382 ALR 400) and the costs of the hearings before the primary judge”. See Aristocrat No 3 [4]-[5].}

^{[3] Aristocrat No 3 [112].}

^{[4] Aristocrat No 3 [113].}

^{[5] "the issue is whether the implementation of what is otherwise an unpatentable idea or plan or game involves some adaptation or alteration of, or addition to, technology otherwise well-known in the common general knowledge to accommodate the exigencies of the new idea or plan or game." [86]. See Aristocrat No 3 [117].}

^{[6] See Aristocrat No 3 [118].}

^{[7] The Patent office has not changed its practice regarding computer-implemented inventions.}

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_{[1] Aristocrat Technologies Pty Ltd v Commissioner of Patents [2022] HCA 29 (Aristocrat HCA). As there is no majority decision, the decision below is affirmed – see Judiciary Act 1903 (Cth), section 23(2)(a), and the Court’s summary of the decision.}  

^{[2] Claim 1 of the patent was: 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.} 

^{[3] Section 18(1)(a) (and (1A)(a)) require that an invention is “manner of manufacture within the meaning of section 6 of the Statute of Monopolies”. That section of the Statute of Monopolies declared all monopolies to be void save for “Letters Patents and Grants of Privilege for ... the sole working or making of any manner of new Manufactures within this Realm, to the true and first Inventor and Inventors of such Manufactures, which others at the time of making such Letters Patents and Grants shall not use, so as also they be not contrary to the Law nor mischievous to the State, by raising prices of Commodities at home, or hurt of Trade, or generally inconvenient ...”. See Aristocrat HCA [2022] HCA 29, [20].}

^{[4] Aristocrat Technologies Australia Pty Ltd [2918] APO 45, [67]; Patents Act 1990 (Cth), s 18(1)(a).}

^{[5] Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents [2020] FCA 778, [91], [101].}

^{[6] Commissioner of Patents v Aristocrat Technologies Australia Pty Ltd [2021] FCAFC 202 (Aristocrat FFC), [26]; Aristocrat HCA [2022] HCA 29, [43], [142].}

^{[7] Aristocrat FFC [2021] FCAFC 202, [63]-[64].}

^{[8] Aristocrat HCA [2022] HCA 29, [78], [87].}

^{[9] Aristocrat HCA [2022] HCA 29, [122].}

^{[10] Aristocrat HCA [2022] HCA 29, [46] (Kiefel CJ, Gageler and Keane JJ), [122] (Gordon, Edelman and Steward JJ).}

^{[11] Aristocrat HCA [2022] HCA 29, [73], [101]-[105].}

^{[12] National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252. This case determined that a method of removing weeds from crops using a previously known herbicide could be patentable.}

^{[13] Aristocrat HCA [2022] HCA 29, [122].}

^{[14] Aristocrat HCA [2022] HCA 29, [153].}

^{[15] Using the examples of a pack of specialised playing cards and a boxed set of Monopoly: Aristocrat HCA [2022] HCA 29, [118]-[119].}

^{[16] Aristocrat HCA [2022] HCA 29, [73], [76]-[77].}

^{[17] Aristocrat HCA [2022] HCA 29, [74].}

^{[18] National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252. See Aristocrat HCA [2022] 29, [21]-[23].}

^{[19] Aristocrat HCA [2022] HCA 29, [28], [74].}

^{[20] Aristocrat HCA [2022] HCA 29, [124].}

^{[21] (1994) 51 FCR 260.}

^{[22] See the description in Aristocrat FFC [2021] FCAFC 202. 86].}

^{[23] Aristocrat HCA [2022] HCA 29, [125] citing Burroughs Corporation (Perkins’) Application [1974] RPC 147.}

^{[24] Aristocrat HCA [2022] HCA 29, [126] citing International Business Machines Corporation v Commissioner of Patents (1991) 33 FCR 218.}

^{[25] See Aristocrat HCA [2022] HCA 29, [121] listing Grant v Commissioner of Patents (2006) 154 FCR 62, Research Affiliates LLC v Commissioner of Patents (2014) 227 FCR 378, Commissioner of Patents v RPL Central Pty ltd (2015) 238 FCR 27, Encompass Corporation Pty Ltd v InfoTrack Pty Ltd (2019) 372 ALR 646, Commissioner of Patents v Rokt Pte Ltd (2020) 277 FCR 267}

^{[26] Aristocrat HCA [2022] HCA 29, [92]-[93].}

^{[27] Aristocrat HCA [2022] HCA 29, [127]-[129].}

^{[28] 35 USC §101, cited in Aristocrat HCA [2022] HCA 29, [90], [129].}

^{[29] See Aristocrat’s submissions dated 20 April 2022, [35] quoting Symbian Ltd v Comptroller General of Patents [2009] RPC 1}

^{[30] Aristocrat HCA [2022] HCA 29, [128].}

^{[31] For example, medical devices, renewable energy, biotechnology, mining and resources, and information technology.}

^{[32] A concern noted by the Institute of Patent and Trade Mark Attorneys, which filed submissions in the proceeding as an intervener: IPTA’s submissions dated 4 May 2022, [10]-[17].}

^{[33] See order 4 of the orders of the Full Court made on 6 December 2021.}