A Cliffhanger with No Sequel –
Australia’s Apex Court Divided
on Patentable Subject Matter
Inspire November 2022
In a surprising turn of events, the High Court has handed down
an evenly split decision in the highly anticipated case Aristocrat
Technologies Australia Pty Ltd v Commissioner of Patents 1 . This was
the first time that Australia’s apex court has considered the issue of
patentable subject matter for computer implemented inventions.

4 for novelty and inventiveness.

computer-implemented invention?; To illustrate this point, Keifel CJ,
and if so
Gageler and Keane JJ referred to
the ball point pen argument that
> can the invention claimed broadly
“whilst a claim for the ball point pen
be described as an advance in
now would fail for anticipation and
computer technology?
obviousness, it would still be a claim
The majority in the Full Court
for a manner of manufacture”. Their
considered that the answer to
Honours explained that the ball point
the second question was ‘no’,
pen would not meet the threshold
meaning that Aristocrat’s claim
requirement that it be an alleged
was not a manner of manufacture.

invention today because it is not new.

In their separate reasonings, all
Moreover, Gordon, Edelman, Steward
Justices of the High Court ultimately
JJ noted that the threshold should
rejected the suitability of the
not be assessed in hindsight. Their
questions proposed by the Full
Honours also cautioned that when
Court, noting that the two-step
assessing the threshold question
test unnecessarily complicated
without the benefit of expert
the analysis. The High Court
evidence as to prior art, the Court
agreed that the crucial issue is the
should avoid assuming technical
characterisation of the invention.

expertise it does not have.

The threshold requirement
However, when considering the
for ‘an alleged invention’
question of how the invention should
be characterised, their Honours
Under the Patents Act, a “patentable
reached entirely different outcomes.

invention” is defined as an
invention that is “any manner of
Team ‘Not MoM’
new manufacture the subject of
Keifel CJ, Gageler and Keane JJ
letters patent and grant of privilege
reiterated that the claimed invention
within section 6 of the Statute of
was to be characterised by reference
Monopolies, and includes an alleged
Background to the terms of the specification
invention”. All Justices of the
having regard to the substance of
Hight Court generally agreed that
Aristocrat manufactures electronic
the claim and in light of common
a threshold requirement must be
gaming machines (EGMs). Aristocrat
general knowledge. In order to
satisfied for there to be an “alleged
owns four divisional innovation
invention”. The threshold requirement characterise the invention, their
patents derived from common
is separate to the consideration of
Honours considered that it was
parent application no. 2015210489,
novelty and inventive step, which
first necessary to separate out the
directed to a gaming system and
must be assessed based on prior
elements of the claim which are
method for providing a feature
art. The threshold is low and requires not common general knowledge.

game. The question central to the
only a minimal level of ‘newness’
judgement is whether the claims of
To illustrate this point, their Honours
and ‘inventiveness’. This threshold
the innovation patents are directed
referred to a card game example [30]:
is to be assessed by reference to
to patentable subject matter.

“…[T]he facilitation of card games
the face of the claim in the context
In the Full Federal Court
by the use of packs of cards
of the specification rather than with
decision reported here, their
bearing visible symbols and
reference to the prior art base. As
Honours proposed two
values has for so long been part
such, it should be less stringent
questions for consideration:
of common general knowledge
than the independent requirements
that no one would suggest that
a new variation of the rules of a
1 Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents [2022] HCA 29
2 game such as poker is patentable
Invention Pathways Pty Ltd [2010] APO 10
In 2010, the Australian Patent
Office issued a decision in
Invention Pathways 2 , refusing a
patent application for a computer
implemented business method on
the ground that the claimed subject
matter was not patentable subject
matter or a “Manner of Manufacture”
(MoM) as defined in the legislation.

The Invention Pathways decision
was one of the first of many
adverse decisions against computer
implemented inventions issued
by the Australian Patent Office.

The issue of patentability of
computer implemented business
methods has also been debated
in several subsequent Federal
Court and Full Federal Court
decisions, which set out different
considerations and assessment
criteria. The patentability of
computer implemented inventions
in Australia has been a difficult
and unsettled area of law for some
time. After over a decade of debate
and confusion, it was hoped that
the High Court would bring some
clarity to this challenging area of law.

Instead, the opposite has happened.

> Is the invention claimed a



Team ‘MoM’
Gordon, Edelman and Steward
JJ took an entirely different
approach and considered that the
characterisation of the invention
requires consideration of all the
integers of the claim in light of
the relevant facts and matters in
the specification. An artificially
specific characterisation could
confine any claim to a mere
intellectual idea, and an artificially
generalized characterisation could
remove the element of novelty or
inventiveness from any claim.

Their Honours cautioned
against the risk of artificially
characterising a claim, noting
that the risk is particularly
pronounced where the claim
contains interdependent integers:
“Unless a claim asserts a
monopoly ‘in any integer by
itself’, it is ‘only necessary that
each integer form part of a full
description of the invention’.”
Their Honours considered that
although the rules of a game alone
are not the proper subject matter
of a patent, they may be the proper
subject matter when combined
with physical materials used for
playing the game. To illustrate the
point, their Honours referred to Re
Cobianchi’s Application, in which an
idea for a new way of playing the
game of ‘Canasta’ with differently
marked cards was held to be a
manner of manufacture. At paragraph
119 it was therefore said that:
“In the 21st century, it would be
absurd if the application of this
principle were any different where
the idea of the game is combined
with a digital representation rather
than a cardboard representation of
the game. For instance, as senior
counsel for the Commissioner
properly accepted on this appeal,
the game of Monopoly is patentable
subject matter where it is embodied
in a physical form such as a
designed cardboard board, dice,
and playing characters. It could
not possibly be the case that the
game of Monopoly ceases to be
patentable subject matter if the
graphics are displayed on a machine
rather than on cardboard. To treat
the two differently on the basis that
the digital representation does not
involve a physical transformation of
something would plainly be to allow
form to triumph over substance. As
Heerey, Kiefel and Bennett JJ said
in Grant v Commissioner of Patents,
‘[a]n application is not limited to a
physical transformation’. Rather,
the requirement of a ‘physical
effect’ includes ‘a concrete effect
or phenomenon’ and extends to
‘a change in state or information
in a part of a machine’.”
Reverting to the principals
set out in National Research
Development Corporation, their
Honours noted that it would not be
enough for the scheme to merely
involve the use of a machine to
manipulate abstract ideas [120]:
“Where the manner of manufacture
relies upon some change in state or
information in a machine, then that
change must produce an artificial
state of affairs and a useful result.”
Considering the above, their
Honours determined that the best
characterisation of Aristocrat’s
claim 1 is “an EGM incorporating
an interdependent player
interface and a game controller
which includes feature games
and configurable symbols”. As
set out in paragraph 154:
“In the characterisation of Claim
1, the operation of the game
controller cannot be severed
from the interdependent player
interface in the EGM. The claimed
operation of the game controller,
displayed through the player
interface, is an altered EGM
involving an artificial state of affairs
and a useful result amounting
to a manner of manufacture.”
What Now?
With the Court evenly split as to
whether the appeal should be
allowed, the decision of the Full
Federal Court was affirmed. The
outcome in this greatly anticipated
High Court decision is almost like
making it to the end of a long movie
only to be greeted with a cliffhanger.

Except in this case, there may not
be a sequel, at least any time soon.

Perhaps one useful takeaway is that
whilst the Justices characterised
the invention in different ways,
the High Court was in general
agreement that the requirement
of an “advance in computer
technology” previously proposed
by the Full Court was incorrect,
and that the threshold requirement
in determining an “alleged
invention” should be a low one.

If nothing else, it is clear that
the patentability of computer
implemented inventions is a complex
area of law that even Justices of
the High Court find challenging.

Unfortunately, this area of law is likely
to remain unsettled for some time.

Inspire November 2022
subject matter. In such a case, the
well-known pack of cards is put to
a different use for the purpose of
the new game; but no one would
suggest that there is an invention
because the only difference from
the common general knowledge
lies in the idea of the new game.”
Consequently, their Honours
determined that without any changes
to generic computer technology
in the implementation of the new
game, Aristocrat’s invention should
be characterised as “a claim for a
new system or method of gaming,
in which the claimed invention only
subsists in the feature game, which is
not patentable subject matter”. Their
Honours reasoned that if this was not
the case, every EGM conforming to
the generic physical and hardware
components would be patentable
simply because it allowed a new
game to be played. As set out in
paragraphs 76 of the judgement:
“Neither the primary judge nor the
Full Court made any finding that any
of the integers of claim 1 addressed
the exigencies of the physical
presentation of the operation of the
game devised by Aristocrat. And
it is not apparent from the terms
of the specification of the 967
patent or claim 1 itself that there
is a basis for such a finding. In the
absence of such a finding, there
is no basis for concluding that the
claimed invention is patentable
subject matter. It is no more than
an unpatentable game operated
by a wholly conventional computer,
using technology which has
not been adapted in any way to
accommodate the exigencies of
the game or in any other way.”
5 Helen McFadzean | Principal
BE(Hons) Mechatronics MIP FIPTA
helen.mcfadzean@pof.com.au