A Win for Computer Implemented Inventions in Australia

A Turning Point for Software Patents in Australia

The patentability of computer implemented inventions (CIIs) in Australia has long been obscured in uncertainty. A complex raft of legal precedents has left patent applicants without clear guidance on how to protect inventions involving software and digital technologies. This uncertainty has now been resolved with the Federal Court Appeal decision in Aristocrat Technologies v. Commissioner of Patents FCAFC 131 which has significantly clarified the position, resetting the “manner of manufacture” test as it applies to CIIs.

Key Takeaway: A Win for Practical Innovation

In a major win for Aristocrat, the Court allowed its appeal and ruled that the claims in four innovation patents relating to electronic gaming machines (EGMs) do indeed constitute a “manner of manufacture” under section 18(1A)(a) of the Patents Act 1990 (Cth).

In reaching this conclusion, the Court reaffirmed that the central test for determining whether an invention qualifies as a manner of manufacture is whether it brings about an artificially created state of affairs with economic utility – a test grounded in the seminal High Court decision in National Research Development Corporation v Commissioner of Patents [1959] HCA 67 (NRDC).

Crucially, the Full Court rejected the restrictive and mechanical “two-step” approach previously applied to CIIs, which had required courts to first identify the substance of the invention and then determine whether it involved a technical contribution. That approach, criticised by all six judges in the split High Court decision on Aristocrat in 2022, was found to be unnecessarily complicated and inconsistent with established principles.

What the Decision Means for Patent Applicants

For patent applicants, this means that if the hardware and software are combined to produce observable, practical and economically significant results, then the use of conventional computer technology does not preclude an invention from being patentable. The decision affirms that simple schemes or abstract ideas executed on conventional computer technology remain ineligible for patent protection, but inventions where the computer technology is necessary to achieve results will be of patentable subject matter, such as Aristocrat’s EGMs in question. These EGMs combine hardware displays, feature games, credit metres, and configurable symbols to create dynamic gameplay and prizes.

The Courts approach also resolves the anomaly where a mechanical invention (e.g. an EGM with mechanical reels) would be considered patentable whereas a computerised invention (having software generated reels) would not, despite having the same artificial effect/utility. This finding aligns with the goals of the Patents Act to encourage invention and innovation with emerging technologies [134].

Drawing the Line: Patentable vs Non-Patentable CIIs

This decision provides an innovation-friendly framework on patentable subject matter of CIIs, characterising the difference [131]: between

Not Patentable: CIIs that describe “an abstract idea manipulated on a computer”. Examples include:

Asset protection schemes (Grant v Commissioner of Patents [2006] FCAFC 120)
Securities indices (Research Affiliates [2014] FCAFC 150)
Competency assessments (RPL Central [2015] FCAFC 177)
Information display systems (Encompass [2019] FCAFC 161)
Digital marketing methods (Rokt [2020] FCAFC 86)

Patentable: CIIs where “an abstract idea is implemented on a computer in a way that creates an artificial state of affairs and produces a useful result”. Examples include:

Curve-drawing algorithms (IBM v Commissioner of Patents (1991) 33 FCR 218)
Chinese character retrieval (CCOM Pty Ltd v Jiejing Pty Ltd (1994) 51 FCR 260)
Signal-based access control (UbiPark v TMA Capital [2023] FCA 885)
Scanning methods in radios (Motorola v Hytera [2022] FCA 1585)

A Holistic Assessment of Claims

The Court affirms that the proper method for assessing the patentability of the claims is to characterise the claim’s integers as viewed as a whole, including the combination of both inventive and non-inventive elements. This is in contrast to giving undue weight to the inventive aspects of the claim over the non-inventive aspects, while also conferring due recognition to physical elements of the claim that are not inventive but are essential to the invention’s operation.

Implications for Tech-Focused Industries

This decision marks a significant shift towards a more innovation-friendly approach to software patents in Australia. It provides much-needed clarity and confidence for patent applicants in technology-driven sectors such as gaming, fintech, and digital platforms, industries where the integration of hardware and software is central to commercial success.

Applicants can now proceed with greater assurance that their inventions will be assessed on their practical and technical merits, not dismissed merely because they rely on conventional computing components.

Conclusion

Aristocrat signals a major evolution in Australian patent law concerning computer-implemented inventions. By realigning the “manner of manufacture” test with established principles and focusing on economic utility and practical effect, the Full Court has restored balance and predictability to an area long fraught with legal uncertainty.

For innovators working at the intersection of software and hardware, this decision is a welcome development, and a reminder that, in Australia, functionality and utility still matter most.

For More Information

Our Engineering and Technology group specialises in electrical and electronic engineering, computer hardware and software. Should you wish to speak to one of our technology experts about your own innovation please contact:

Scott Vilé (scott.vile@wrays.com.au)

Phil Burns (phil.burns@wrays.com.au)

Chris Juhasz (chris.juhasz@wrays.com.au)