A Cliffhanger with No Sequel – Australia’s Apex Court Divided on Patentable Subject Matter

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.

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.


Aristocrat manufactures electronic gaming machines (EGMs). Aristocrat owns four divisional innovation patents derived from common parent application no. 2015210489, directed to a gaming system and method for providing a feature game. The question central to the judgement is whether the claims of the innovation patents are directed to patentable subject matter.

In the Full Federal Court decision reported here, their Honours proposed two questions for consideration:

  • Is the invention claimed a computer-implemented invention?; and if so
  • can the invention claimed broadly be described as an advance in computer technology?

The majority in the Full Court considered that the answer to the second question was ‘no’, meaning that Aristocrat’s claim was not a manner of manufacture.

In their separate reasonings, all Justices of the High Court ultimately rejected the suitability of the questions proposed by the Full Court, noting that the two-step test unnecessarily complicated the analysis. The High Court agreed that the crucial issue is the characterisation of the invention.

The threshold requirement for ‘an alleged invention’

Under the Patents Act, a “patentable invention” is defined as an invention that is “any manner of new manufacture the subject of letters patent and grant of privilege within section 6 of the Statute of Monopolies, and includes an alleged invention”. All Justices of the Hight Court generally agreed that a threshold requirement must be satisfied for there to be an “alleged invention”. The threshold requirement is separate to the consideration of novelty and inventive step, which must be assessed based on prior art. The threshold is low and requires only a minimal level of ‘newness’ and ‘inventiveness’. This threshold is to be assessed by reference to the face of the claim in the context of the specification rather than with reference to the prior art base. As such, it should be less stringent than the independent requirements for novelty and inventiveness.

To illustrate this point, Keifel CJ, Gageler J and Keane J referred to the ball point pen argument that “whilst a claim for the ball point pen now would fail for anticipation and obviousness, it would still be a claim for a manner of manufacture”. Their Honours explained that the ball point pen would not meet the threshold requirement that it be an alleged invention today because it is not new.

Moreover, Gordon J, Edelman J, Steward J noted that the threshold should not be assessed in hindsight. Their Honours also cautioned that when assessing the threshold question without the benefit of expert evidence as to prior art, the Court should avoid assuming technical expertise it does not have.

However, when considering the question of how the invention should be characterised, their Honours reached entirely different outcomes.

Team ‘Not MoM’

Keifel CJ, Gageler J and Keane J reiterated that the claimed invention was to be characterised by reference to the terms of the specification having regard to the substance of the claim and in light of common general knowledge. In order to characterise the invention, their Honours considered that it was first necessary to separate out the elements of the claim which are not common general knowledge.

To illustrate this point, their Honours referred to a card game example [30]:

“…[T]he facilitation of card games by the use of packs of cards bearing visible symbols and values has for so long been part of common general knowledge that no one would suggest that a new variation of the rules of a game such as poker is patentable 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.”

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.

[1] Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents

[2022] HCA 29.

[2] Invention Pathways Pty Ltd [2010] APO 10

BE(Hons) Mechatronics MIP FIPTA

Helen joined the intellectual property profession in 2009 because of her passion for innovation and cutting-edge technology. Since then, Helen has successfully obtained patents, trade marks and designs for many businesses in Australia and overseas in a large number of technology areas including machine learning and image classification, second-life battery systems, automation, smart devices, medical apparatus, manufacturing processes and equipment, subsea mining technology, automotive technology, audio signal processing, embedded software, and control systems.