Aristocrat down to the felt in the Federal Court on remitter

Aristocrat Technologies Australia v Commissioner of Patents (No 3) [2024] FCA 212

8 March 2024

Federal Court

Burley J

On 8 March 2024 Justice Burley of the Federal Court issued the latest in a series of decisions relating to the patent-eligibility of Aristocrat’s electronic gaming machines (EGMs).  Unfortunately, the decision does not resolve the legal uncertainty created by the High Court’s 2022 split decision on the issue of the patentability of computer-implemented inventions such as EGMs.

The procedural history has been labelled ‘tortuous’ – from the initial Patent Office decision in 2018 finding Aristocrat’s claimed invention was not a manner of manufacture, Justice Burley reversing that decision on appeal and finding the claims valid, the Full Federal Court reversing that decision on further appeal (specific to one of the claims only), and then the High Court’s split decision.  Ultimately, the effect of the 3:3 High Court judgment was to affirm the decision of the Full Federal Court that the claim was not a manner of manufacture.  This triggered the operation of the Full Federal Court order remitting the remaining claims to the primary judge for determination on patentability.

Justice Burley considers the correct legal approach to apply on remitter

The invention claimed is a system and method for providing ‘feature’ games on EGMs, also known as slot machines.  A feature game is a bonus or free game triggered by aligning the correct symbols on the reel, which can issue prizes to the player.  This aims to improve player engagement and enjoyment.

When the High Court delivers a split decision, section 23(2)(a) of the Judiciary Act 1903 (Cth) (Judiciary Act) provides that the decision appealed from is affirmed.  The High Court (in its decision which we reported here) was, however, critical of the ‘two-step’ test applied by the Full Court majority to conclude the claim was not to a manner of manufacture.  The two-step test asked:

1. Is the invention claimed a computer-implemented invention?
2. If so, can the invention claimed broadly be described as an advance in computer technology?

According to the Full Court majority, if the answer to question 2. was no, the invention was not patentable subject matter.  If the answer to question 1. was no, the Court should consider the general principles of patentability.   The Full Court majority found the invention the subject of the claim on appeal did not relate to the development of computer technology and was in substance an abstract idea, being a scheme or set of rules for playing a game which is implemented using a conventional gaming machine for its known and understood functions.

The High Court’s criticism of this two-step test raised the question of what approach Justice Burley should take when considering the remaining claims on remitter from the Full Court – in particularly, whether His Honour was required to follow the two-step test applied by the Full Court majority or whether he could be informed by the reasoning of the High Court.

Justice Burley considered the language of s23(2)(a) to be plain and the remittal order unequivocal.  This meant that he must apply the reasoning of the Full Federal Court (and not the High Court) to determine whether there is a manner of manufacture, with his starting point being that the Full Court, using the two-step approach, held that claim 1 of innovation patent number AU2016101967 was not to a manner of manufacture.

Aristocrat argued unsuccessfully that Justice Burley could draw on legal principles enunciated by the High Court.  His Honour rejected this approach because, while all six High Court judges criticised the two-step test, there was otherwise no uniform approach across the divide.  Further Justice Burley stated that, even if the High Court decision had established a principle of law, he could not consider it because the wording of s23(2)(a) and the remittal order clearly required him to apply the reasoning of the Full Federal Court as it had been affirmed.

Adopting the reasoning of the Full Federal Court, Justice Burley considered that the only available conclusion on the residual claims was that they are not a manner of manufacture.   He ultimately held the residual claims to be invalid because they were not substantially different from the claim already found invalid by the Full Federal Court.

Where does this leave us on manner of manufacture for computer-implemented inventions?

After the High Court’s split decision, we are left without a clear finding on the correct approach to the patent-eligibility of computer-implemented inventions.  Justice Burley’s decision does not resolve this uncertainty, being necessarily confined by the provisions of the Judiciary Act and the remittal order.   Given the investment in these proceedings to date, this may not, however, be the end for Aristocrat, with scope to appeal the decision on the remitted claims.

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