Aristocrat Technologies Australia Pty Limited v Commissioner of Patents - [2024] FCA 987 - FCA 2024 case summary — Zoe

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Aristocrat Technologies Australia Pty Limited v Commissioner of Patents

[2024] FCA 987

Federal Court of Australia|2024-08-30|Before: Burley J, O'Bryan J

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At a glance

Source facts

Court

Federal Court of Australia

Decision date

2024-08-30

Before

Burley J, O'Bryan J

Source

Original judgment source is linked above.

Judgment (16 paragraphs)

[1]

The applicant be granted leave to appeal from the orders of the Court made on 12 April 2024 at Sydney in Proceeding No. NSD 1343 of 2018 (with reasons published on 8 March 2024 as Aristocrat Technologies Australia Pty Limited v Commissioner of Patents (No 3) [2024] FCA 212).
The costs of the application for leave to appeal be costs in the appeal.
The appeal be listed before a Registrar of the Court on a date to be fixed for the purpose of making timetabling orders with respect to the hearing of the appeal. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

[2]

Introduction 1 The applicant, Aristocrat Technologies Australia Pty Ltd (Aristocrat), seeks leave under s 158(2) of the Patents Act 1990 (Cth) (Patents Act) to appeal from the orders of Burley J made on 12 April 2024 in Proceeding No. NSD 1343 of 2018 (with reasons published on 8 March 2024 as Aristocrat Technologies Australia Pty Limited v Commissioner of Patents (No 3) [2024] FCA 212 (the primary judgment or PJ)). By those orders, Burley J dismissed an appeal from a decision of the respondent, the Commissioner of Patents (the Commissioner), revoking four innovation patents held by Aristocrat on the ground that none of the claims in any of the patents was for a manner of manufacture within the meaning of s 18(1A)(a) of the Patents Act. 2 Section 25(2) of the Federal Court of Australia Act 1976 (Cth) (FCA Act) stipulates that applications for leave to appeal must be heard and determined by a single judge unless, relevantly, a judge directs that the application be heard and determined by a Full Court. By its application, Aristocrat sought that the application for leave be determined by a single judge, separately and before the hearing of any appeal. Aristocrat submitted that, if leave to appeal were granted by a single judge of the Court, this would preserve to Aristocrat the option of applying to the High Court under s 40(2) of the Judiciary Act 1903 (Cth) (Judiciary Act) for an order that the appeal be removed to the High Court on such terms as the High Court thinks fit. 3 The Commissioner opposed the grant of leave but did not oppose the application being heard separately and in advance of any appeal. 4 The question of leave to appeal in this proceeding arises against the backdrop of an exceptionally complex procedural history. By way of overview: (a) on 5 July 2018, the Commissioner revoked each of the innovation patents; (b) on 10 July 2020, Burley J made orders setting aside the decisions of the Commissioner; (c) on 6 December 2021, the Full Court granted leave to appeal against the orders of Burley J, allowed the appeal, set aside the orders made by Burley J and remitted the proceedings to his Honour for determination of any residual issues in light of the Full Court's reasons (with separate reasons having been given by Middleton and Perram JJ on the one hand and Nicholas J on the other hand); (d) on 17 August 2022, the High Court dismissed the appeal in accordance with s 23(2)(a) of the Judiciary Act in circumstances where the Court was equally divided in opinion (where three justices of the Court would have dismissed the appeal and three justices of the Court would have allowed the appeal); and (e) on 12 April 2024, on remittal, Burley J dismissed the appeal from the decisions of the Commissioner, applying the reasons of the Full Court. 5 While there is no doubt that Aristocrat requires leave to appeal the primary judgment under s 158(2) of the Patents Act, this is an unusual case in which to consider the grant of leave. The grounds of appeal relate principally to the interpretation and application of s 23(2)(a) of the Judiciary Act in the unusual circumstances of this case, and only indirectly relate to issues of patent law. 6 For the reasons given below, I have concluded that leave to appeal should be granted, with the costs of the application for leave being costs in the appeal.

[7]

Full Court decision 14 The Commissioner sought leave to appeal that decision to the Full Court under s 158(2) of the Patents Act. On 19 November 2021, the Full Court delivered judgment granting leave to appeal and upholding the appeal: Commissioner of Patents v Aristocrat Technologies Australia Pty Ltd (2021) 286 FCR 572 (Full Court decision). It becomes relevant to note that the Full Court delivered two judgments arriving at the same conclusion: that the appeal be allowed and the matter be remitted to the primary judge to determine any residual issues. Aristocrat submitted that the reasoning of the plurality judgment (Middleton and Perram JJ) and the reasoning of the judgment of Nicholas J differs, but the extent of the differences may be questioned. 15 The plurality observed that it was not suggested that there is anything inventive about claim 1 of the 967 patent except for its "feature game". The plurality described the feature game as follows (at [3]-[4]): … A feature game is a secondary game awarded to a player on the occurrence of a defined event in the ordinary or "base" game of spinning reels, termed a "trigger event". Once the feature game is enlivened by the trigger event the feature game appears and the player is able to play it and potentially to win further prizes. When the feature game is completed the EGM reverts to the base game. The point of feature games is to encourage players to keep wagering on the EGM by making it more interesting to do so. Since the revenue generated by an EGM is a function of the amount wagered upon it - in New South Wales up to 15% in the long run - the more successful a feature game is in keeping the player wagering, the more lucrative the EGM is for its operator. … 16 After observing that patent law has long held that mere abstract ideas cannot, without more, be the subject of a patent (at [5]), the plurality concluded that the feature game defined by integers 1.10-1.12 of claim 1 is an abstract idea (at [15]). The plurality recognised, however, that the prohibition on patents being granted in respect of abstract ideas does not extend to inventions which physically embody an abstract idea by giving it some practical application (at [16]). In that regard, the plurality said: Although the rules of a game consisting of spinning reels in which prizes are awarded depending on the symbols which appear in the win line constitute no doubt an abstract idea which is not a patentable invention, it is clear nevertheless that a mechanical poker machine which allows such a game to be played upon it is a patentable invention. But the patent protects the invention which is the poker machine and not the abstract idea consisting of the game which it plays. 17 The plurality noted that, in this case, integers 1.10-1.12 of claim 1 are to be implemented not through the mechanical apparatus which is an old fashioned one-armed mechanical poker machine but by means of a computer program (at [17]). The plurality reasoned that the implementation of an abstraction such as that disclosed by integers 1.10-1.12 by means of an unspecified computer program will not give rise to a patentable invention unless the implementation itself can be seen as pertaining to the development of computer technology rather than to its utilisation (at [18]). It was in that context that the plurality propounded two questions for assessing whether the invention is a manner of manufacture (at [26]): (a) whether the invention claimed a computer-implemented invention; and (b) if so, can the invention claimed broadly be described as an advance in computer technology? The plurality concluded that: (a) the substance of the invention disclosed by claim 1 is the feature game implemented on the computer which is an EGM, and the invention is therefore a computer-implemented invention (at [56]); and (b) the fact that integers 1.10-1.12 leave it entirely up to the person designing the EGM to do the programming which gives effect to the family of games which those integers define inevitably necessitates the conclusion that claim 1 pertains only to the use of a computer (and not to an advance in computer technology) (at [63]). 18 On that basis, the plurality concluded that the invention claimed in claim 1 of the 967 patent is not a patentable invention (at [94]). 19 The orders ultimately made by the Full Court are significant. The form of orders is set out below. After concluding that the invention claimed in claim 1 of the 967 patent is not a patentable invention, the plurality stated that there was a question about the disposition of Aristocrat's notice of contention and whether it was appropriate that the matter be remitted to the primary judge (at [95]). By its notice of contention, Aristocrat contended that, even if the primary judge erred, nonetheless the invention may be found to disclose patentable subject matter including because it is technical in nature and solves technical problems in, and involves technical and functional improvements to, the operation of EGMs. Aristocrat submitted that the matters addressed in the notice of contention should be remitted to the primary judge for two reasons: first, because the primary judge did not embark on the alternative analysis and therefore the Full Court did not have the benefit of relevant factual findings; and, secondly, because much of the evidentiary material before the primary judge had not been reproduced in the appeal papers. The plurality observed that, if those propositions were correct, then the notice of contention was procedurally misconceived (at [96]). Despite that, the plurality concluded (at [97]): Nevertheless, in our view, it is appropriate that the matter be remitted to the primary judge to determine any residual issues in light of the Full Court's reasons including any issues which concern the position of claims other than Claim 1 (identified at [8] of his Honour's reasons). 20 It is tolerably clear that the orders that were proposed to be made by the plurality were that: (a) the remitter was for the determination of any residual issues in light of the Full Court's reasons (in other words, applying the Full Court's reasons); and (b) the residual matters included any issues which concern the position of claims other than claim 1 of the 967 patent, as had been identified at [8] of the reasons of Burley J (reproduced above), but were not limited to those issues. 21 As discussed below, the parties appear to have proceeded on the assumption that the remittal order made by the Full Court did not permit any further consideration of the question of whether claim 1 of the 967 patent was a patentable invention. Having regard to the reasons of the plurality and the final orders made, that assumption might be questioned. On the remitter, however, the parties adopted an agreed position that the residual matters for determination were confined to claims other than claim 1 of the 967 patent. The parties are bound by the agreed manner in which the remittal hearing was conducted. 22 Although Aristocrat submitted that the reasoning of Nicholas J differed from the plurality, his Honour's reasoning followed a similar pathway of analysis. After explaining the principles that have been developed with respect to the identification of a manner of manufacture and the terminology used in this field of discourse, his Honour summarised the applicable principles as follows (at [118]-[119]): Mere business schemes, and abstract ideas or information, have never been regarded as sufficiently tangible in character to constitute patentable subject matter. Implementing the scheme, idea or information in a generic computer utilising its well-known and well-understood functionality does not change its fundamental character. But once a scheme is given practical effect and transformed into a new product or process which solves a technical problem, or makes some other technical contribution in the field of the invention, it may no longer be considered a mere scheme. Ultimately, the question is whether what may have begun as a mere scheme, an abstract idea or mere information, has been transformed in some definite and tangible way so as to result in a product or method providing the required artificial effect. There must be some technical contribution either in the field of computer technology (eg an improvement in processor, memory or display technology) or in some other field of technology to which the invention belongs. As the authorities to which I have referred to make clear, that transformation is unlikely to be achieved by taking an inherently unpatentable scheme and implementing it utilising generic computer technology for its well-known and well-understood functionality that does not involve any ingenuity in the way in which the computer is utilised. 23 In respect of the 967 patent, Nicholas J found (at [126]): The specification does not identify any specific problem to which the invention is directed or which the invention is said to provide a solution. Rather, the invention is directed to providing a more enjoyable experience for the player, which may advantage the operator of the gaming machines on which the game is played because it is likely to encourage game play and, with it, increase the operator's revenue. 24 Justice Nicholas concluded that the EGM described and claimed is either a computer or an apparatus that incorporates a computer (at [138]). His Honour framed the relevant question as whether there is anything about the way in which the game code causes the EGM to operate which can be regarded as having transformed what might otherwise be regarded as purely abstract information encoded in memory into something possessing the required artificial effect (at [140]). His Honour observed (at [141]): The specification does not identify any technological problem to which the patent purports to provide a solution. Nor did the expert evidence (insofar as it was made available to us) suggest that the invention described and claimed in the specification was directed to any technical problem in the field of gaming machines or gaming systems. Rather, as the specification makes clear, the purpose of the invention is to create a new game that includes a feature game giving players the opportunity to win prizes that could not be won in the base game. Ultimately, the purpose of the invention is to provide players with a different and more enjoyable playing experience. The invention is not directed to a technological problem residing either inside or outside the computer. 25 Justice Nicholas then postulated a question whether the gaming machine described and claimed might be regarded as exhibiting an unusual technical effect due to the way in which the computer is utilised (at [142]). After noting that the primary judge had not made any specific findings in relation to the use of configurable symbols (which are referred to particularly in integers 1.11 and 1.12 of claim 1), and whether they were capable of amounting to a technological innovation (at [142]), his Honour concluded that the appeal should be allowed, the primary judge's orders set aside and the matter remitted to the primary judge to consider "whether claim 1 of the 967 patent, or any of the other claims in issue, is a manner of manufacture on the basis that it involves technical and functional improvements to EGMs through the use of configurable symbols of the kind more fully described in the specification" (at [144]). His Honour expressed agreement with the orders proposed by the plurality, evidently considering that his conclusion was to the same effect as that of the plurality. 26 The orders made by the Full Court were relevantly as follows: 1. Leave to appeal is granted. 2. The appeal is allowed. 3. Orders 1 to 5 of the orders made by the primary judge on 10 July 2020 are set aside. 4. The proceedings are remitted to the primary judge for 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 dated 5 June 2020) and the costs of the hearings before the primary judge.

[8]

High Court decision 27 The High Court granted special leave to appeal the decision of the Full Court and the appeal was heard by six justices of the Court. In the result, three members of the Court (Kiefel CJ, Gageler and Keane JJ) decided that claim 1 of the 967 patent was not a manner of manufacture and that the appeal should be dismissed (dismissing reasons) and three members (Gordon, Edelman and Steward JJ) decided that claim 1 was a manner of manufacture and that the appeal should be allowed (allowing reasons): Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents (2022) 274 CLR 115 (High Court decision). 28 In the dismissing reasons, Kiefel CJ, Gageler and Keane JJ reasoned that, in the absence of a claim to some variation of or adjustment to generic computer technology to give effect to, or accommodate the needs of, the new game, there is no reason to characterise the claimed invention as other than a claim for a new system or method of gaming and that it is only in relation to the feature game that the invention is claimed to subsist (at [73]). Their Honours concluded (at [75]-[76]): All members of the Full Court were right to conclude that the subject matter of Aristocrat's claim is not patentable subject matter. It is common ground that the new game devised by Aristocrat, as an idea, is not itself patentable subject matter; and there is nothing in claim 1 that might lead to the conclusion that it has produced some adaptation or alteration of, or addition to, technology otherwise well-known in the common general knowledge. 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. 29 It becomes relevant to note that the dismissing reasons expressed disagreement with two aspects of the reasoning of Middleton and Perram JJ (while agreeing with their Honours' ultimate conclusion). First, Kiefel CJ, Gageler and Keane JJ stated (at [77]) that the two-step analysis proposed by Middleton and Perram JJ "unnecessarily complicates the analysis of the crucial issue". Their Honours favoured the approach of Nicholas J which their Honours described as being to ask "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". Second, Kiefel CJ, Gageler and Keane JJ stated (at [78]) that the suggestion by Middleton and Perram JJ that the claimed invention may be an advance in gaming technology but not an advance in computer technology was an unnecessary flourish. Their Honours stated that the notion that an advance in gaming technology could not be patentable subject matter would be erroneous. However, their Honours considered that there is no reason to conclude from the terms of claim 1 of the 967 patent that it was claiming an advance in gaming technology other than the use of a generic computer to play its new game. For that reason, their Honours expressed the view that there was no occasion for remitting claim 1 of the 967 patent to the primary judge to enable findings to be made as to whether the claimed invention made any technical contribution to the common general knowledge of computerised gaming. 30 In the dismissing reasons, Kiefel CJ, Gageler and Keane JJ also addressed the significance of the configurable symbols (which are referred to particularly in integers 1.11 to 1.12 of claim 1). Their Honours concluded (at [79]-[80]) that there is nothing new or inventive about the interaction between the configurable symbols and the game and that there is also nothing disclosed in the claim in the specification to suggest that the configurable symbols have any function or physical presentation that differentiates the claimed invention from a generic EGM. 31 In the allowing reasons, Gordon, Edelman and Steward JJ characterised claim 1 of the 967 patent as an EGM incorporating an interdependent player interface and a game controller which includes feature games and configurable symbols (at [149]). Their Honours concluded (at [153]-[154]) that: … the implementation of a scheme or idea on a computer to create an artificial digital state of affairs should not be treated any differently from the implementation of a scheme or idea by any other machine to create an artificial physical state of affairs. In both cases, however, the implementation must do more than merely manipulate an abstract idea. In the language of National Research Development Corporation, it must create an artificial state of affairs and a useful result. Claim 1, characterised in light of the specification as a whole, is a manner of manufacture within s 6 of the Statute of Monopolies. As explained above, the proper characterisation of Claim 1, as an EGM incorporating an interdependent player interface and a game controller which includes feature games and configurable symbols, is not merely the idea of a game, incorporated into a game controller, without any novelty or inventiveness. The game controller, which includes feature games and configurable symbols, has been assumed at all stages of this litigation to meet the threshold requirements for an alleged invention. No suggestion to the contrary was made in this Court. Nor, on its proper characterisation, is Claim 1 a scheme or idea for a game that is separate from the external or artificial application of that game. 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. 32 It becomes relevant to note that the allowing reasons implicitly rejected the approach ultimately adopted by Middleton and Perram JJ in the Full Court, which was to consider whether the invention claimed a computer-implemented invention and, if so, whether the invention claimed could broadly be described as an advance in computer technology. Earlier, Gordon, Edelman and Steward JJ had emphasised that, where the claimed invention is implemented on a computer, the relevant distinction is between an abstract idea which is manipulated on a computer (which is not patentable) and an abstract idea which is implemented on a computer to produce an artificial state of affairs and a useful result (which is patentable). Their Honours stated (at [122]): … The artificial state of affairs and useful result may be a physical change in something, but it need not be. The artificial state of affairs may be an improvement in computer technology, but it need not be. It is enough that the artificial state of affairs and useful result are created by "the way in which the method is carried out in the computer". 33 Section 23(2)(a) of the Judiciary Act relevantly stipulates that, if the High Court is equally divided in opinion in a case where a decision of the Federal Court is called in question by appeal, "the decision appealed from shall be affirmed". As a consequence, the formal order of the High Court was that the appeal from the judgment of the Full Court was dismissed.

[9]

Remittal to the Federal Court 34 The effect of the dismissal of the appeal to the High Court was that the orders of the Full Court remained operative. As noted above, the Full Court's orders were that leave to appeal was granted, the appeal was allowed, the orders of the primary judge were set aside, and a remittal order was made as follows: The proceedings are remitted to the primary judge for 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 dated 5 June 2020) and the costs of the hearings before the primary judge. 35 Following the hearing of the matter on remittal, on 12 April 2024 Burley J dismissed Aristocrat's appeal from the original decision of the Commissioner (which had revoked each of the patents on the ground that none of the claims in any of the patents was for a manner of manufacture within the meaning of s 18(1A)(a) of the Patents Act), with reasons published in the primary judgment. Aristocrat seeks leave to appeal from that judgment. 36 After noting the effect of s 23(2)(a) of the Judiciary Act and the terms of the remittal order made by the Full Court, the primary judge further noted that the parties had agreed that: (a) the residual issues concerned whether the following claims (residual claims) are a manner of manufacture (at [6]): (i) claim 5 of the 967 patent (as dependent on claims 1, 3 and 4); (ii) claim 5 of the 629 patent (as dependent on claim 1); and (iii) claim 5 of the 097 patent (as dependent on claims 1, 3 and 4); and (b) if none of the residual claims are found to be for an invention that is a manner of manufacture, then none of the claims of the 967 patent, 629 patent, 097 patent or 098 patent will satisfy the requirements of s 18(1A)(a) of the Patents Act (at [7]). 37 Thus, by the parties' agreement, no question was raised on the remitter concerning claim 1 of the 967 patent. 38 Justice Burley identified the issues for determination on the remitter as follows (PJ [9]): In broad terms the issues for determination concern: the operation of s 23(2)(a) of the Judiciary Act; the effect of the remittal order; the relevance, if any, of the High Court decision to the determination of the residual issues; and whether, in light of these matters, any of the residual claims are a manner of manufacture. 39 His Honour considered that the effect of s 23(2)(a) of the Judiciary Act was clear. As a result of the High Court being equally divided in opinion, the Full Court decision was affirmed. The Full Court decision required the primary judge to consider the residual claims in light of the Full Court's reasons, and not the High Court's reasons. The primary judge explained his conclusions as follows (at [109]-[113]): The language of s 23(2)(a) is plain in its terms. The decision of the Full Court in the present case has been "affirmed". For the following reasons I do not consider that it is correct to draw upon the reasoning of the High Court to influence my decision making in the relation to the residual claims. The policy and purpose underlying s 23(2)(a) of the Judiciary Act is to enable the court to perform its institutional responsibility of resolving the dispute before it. That is, the court's "unique and essential function"; Fencott v Muller [1983] HCA 12; (1983) 152 CLR 570 at 608 (Mason, Murphy, Brennan and Deane JJ); Perara-Cathcart v The Queen [2017] HCA 9; (2017) 260 CLR 595 at [73] (Gageler J). In Perara-Cathcart, Gageler J observed (at [75]) the distinction between the effect of s 23(2)(a) of the Judiciary Act and an attempt to extract a ratio decidendi from the reasons of the High Court. Where s 23(2)(a) applies, the decision-making rule is directed to ensuring an outcome in the case, without necessarily producing a binding precedent; Perara-Cathcart [75] - [76]. The statutory affirmation of the decision of the Full Court does that by resolving the appeal to the High Court in favour of its dismissal. The result is that the decision of the Full Court remains in place. The orders of the Full Court are to be understood in light of the reasons given. Those orders and the reasons for them bind me as a single judge. The language of the remittal order, which gives effect to the decision of the Full Court, further reinforces this conclusion as it requires that I determine the residual issues "in light of the Full Courts reasons including any issues which concern the position of claims other than claim 1". That language is unequivocal. It calls for the determination of the question of the manner of manufacture of the residual claims by having regard to the reasoning of the Full Court. The consequence of these two matters is that, even if I were disposed to consider that a relevant principle of law emerges from the decision of the High Court, by virtue of the operative language of s 23(2)(a) and the remittal order, this Court is not permitted the latitude that might apply to other courts to discern from the High Court decision a relevant binding principle: I am bound by s 23(2)(a) and the terms of the remittal order to apply the reasons of the majority decision. Furthermore, although for the reasons given I do not need to address the point, I am also not persuaded that any principle emerges from the High Court decision that can properly be considered to be relevant to the remitter. 40 The primary judge rejected Aristocrat's submission that the reasoning of the Full Court plurality could not be followed in circumstances where both judgments in the High Court disagreed with the approach of the Full Court plurality (at PJ [119]), and also rejected Aristocrat's submission that the reasoning expressed in the allowing reasons of the High Court should be preferred (at PJ [120]). 41 The primary judge applied the reasoning of the Full Court plurality to the residual claims and concluded that they provided "no additional features that would warrant a conclusion different to the conclusion reached by the majority decision in respect of claim 1 of the 967 patent" and that, like claim 1 of the 967 patent, the residual claims, considered as a matter of substance, are 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 (at PJ [135], [142] and [149]).

[10]

Draft notice of appeal 42 Aristocrat's draft notice of appeal from the primary judgment states the following 11 grounds of appeal: 1. The Primary Judge erred, at [109], [111] and [112], in finding that he was precluded, by the operative language of s 23(2)(a) of the Judiciary Act 1903 (Cth) and the remittal order of the Full Court of the Federal Court in Commissioner of Patents v Aristocrat Technologies Pty Ltd (2021) 286 FCR 572 (the Full Court Decision), extracted at [5], (the Remittal Order) from applying any relevant principle of law that he might otherwise properly have identified in the reasons of the High Court in Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents [2022] HCA 29 (the HCA Decision). 2. The Primary Judge erred, at [110], [121] and [129], in finding that: (a) the reasons of the majority of the Full Court Decision (the Majority Decision) bound him; and (b) it was not open to him to consider whether those reasons are in conformity with established principle, including that in the HCA Decision. 3. The Primary Judge erred, at [116] (second sentence) and [119], in concluding there was no uniformity of approach and no relevant principle of law to be drawn from the HCA Decision, notwithstanding his Honour's finding, at [116] (first sentence), [117]-[118], that each of Kiefel CJ and Keane and Gageler JJ (the Dismissing Reasons) and Gordon, Edelman and Steward JJ (the Allowing Reasons), (which together constituted the HCA Decision) were both critical of the two-step analysis in the reasoning of the Majority Decision, because the Majority Decision at [26]-[27] (extracted by the Primary Judge at [59]) identified as critical questions whether: (a) the claimed invention was computer implemented; and (b) could broadly be described as an advance in computer technology. 4. The Primary Judge ought to have found, given his own findings at [116] (first sentence), [117]-[118], that each of the Allowing Reasons and the Dismissing Reasons were critical of the two-step analysis of the Majority Decision and critical of the assessment of the subject matter being computer implemented, it was not appropriate to apply that two-step analysis in determining whether the invention claimed in each of the Residual Claims was a manner of manufacture. 5. The Primary Judge erred, at [121] and [129] by finding he was bound to apply the two-step analysis of the Majority Decision to determine the invention claimed in each of the Residual Claims was not a manner of manufacture. 6. The Primary Judge ought to have determined whether the Residual Claims are a manner of manufacture in light of the reasons of the Full Court Decision, considered in the light of relevant principles of law to be drawn from the HCA Decision. 7. The Primary Judge erred, at [135]-[137], in finding that claim 5 of the 967 patent (when dependent on claims 1, 3 and 4) did not claim a manner of manufacture for the reason that the additional features or limitations on the conduct of the game, referred to in claim 5, did not pertain to the development of computer technology or constitute an advance in computer technology. 8. The Primary Judge erred, at [142], in finding that claim 5 of the 629 patent (when dependent upon claim 1) defines an invention the substance of which, resides in the feature game or the rules for carrying out the game, and is thus an abstract idea and not a manner of manufacture. 9. The Primary Judge erred, at [149], in finding that claim 5 of the 097 patent (when dependent upon claims 1, 3 and 4) is not a manner of manufacture when regard is had to the particular features of the claim in integers 3.1, 4.1, 4.2 and 5.1 (identified in [143]), on the basis that they are: (a) directed to the rules of the game itself; and (b) not concerned with the hardware or software elements in integers 1.1-1.6. 10. The Primary Judge ought to have found that each of the Residual Claims: (a) claimed a combination and should be assessed by reference to the combination of the integers claimed; and (b) claimed a manner of manufacture. 11. The Primary Judge ought to have made findings of fact as to whether, on the evidence admitted at the trial of the proceeding, the Appellant had demonstrated that the invention claimed in each of the Residual Claims embodied a technical advance. 43 The grounds of appeal can be seen to raise two principal issues. The first issue, encapsulated in grounds 1 to 6, is whether the primary judge was correct in his approach to the application of s 23(2)(a) of the Judiciary Act in the circumstances of this case: specifically, whether his Honour was correct to apply the reasoning of the Full Court plurality to determine the residual claims and, in doing so, not apply any part of the reasoning of the High Court. The second issue, encapsulated in grounds 7 to 11, is whether the primary judge ought to have found that the invention claimed in the residual claims is a manner of manufacture. In the course of the application for leave hearing, Senior Counsel for Aristocrat confirmed that, by the draft grounds of appeal, Aristocrat does not contend that the primary judge erred in his Honour's application of the reasons of the plurality of the Full Court to the residual claims. In other words, grounds 7 to 11 are dependent on grounds 1 to 6 succeeding. Aristocrat's contention on the appeal is that the primary judge erred in concluding that he was bound to apply the reasoning of the Full Court plurality to the residual claims and, if his Honour had not erred in that manner, his Honour ought to have found that the invention claimed in the residual claims is a manner of manufacture.

[11]

Principles governing the grant of leave to appeal 44 Section 158(2) of the Patents Act states as follows: Except with the leave of the Federal Court, an appeal does not lie to the Full Court of the Federal Court against a judgment or order of a single judge of the Federal Court in the exercise of its jurisdiction to hear and determine appeals from decisions or directions of the Commissioner. 45 Section 158(2) was considered by the Full Court in Genetics Institute Inc v Kirin-Amgen Inc (1999) 92 FCR 106 (Genetics Institute) in the context of pre-grant opposition proceedings. The opposing applicant sought leave to appeal against a decision of a trial judge upholding a decision of the Commissioner of Patents to dismiss the applicant's opposition to the grant of a patent to the respondent. The Full Court emphasised that the discretionary power to grant leave under s 158(2) was not constrained by express legislative criteria and that the Court should not lay down rigid rules that would restrict the exercise of the discretion (at [13]-[14]). Nevertheless, the Full Court made some general observations about the circumstances in which it would be appropriate to grant leave against a single judge's decision rejecting a pre-grant opposition. The Full Court said, at [16]: An appeal to the Full Federal Court against a decision of a single judge to reject a pre-grant opposition will follow a full hearing of the opposition before the Commissioner of Patents and an appeal by way of rehearing before the single judge. Where an opponent to a patent has had the benefit of two hearings and has been unsuccessful in both, we think there should be limited scope for a further appeal, particularly where the matters primarily in issue are essentially questions of fact. Only in exceptional cases would it be right to grant an applicant what would effectively amount to a further consideration of factual issues. This is particularly so given that an unsuccessful opponent of a patent will still be able to institute revocation proceedings under s 138 of the Patents Act, with the result that a refusal to grant leave to appeal under s 158(2) will not be finally determinative of the opponent's rights. In such circumstances it is unlikely that substantial injustice will be caused by the refusal of leave. and at [23]: We consider that the Full Federal Court should also exercise its discretion to grant leave to appeal under s 158(2) against a decision of a single judge of the Federal Court refusing to grant relief in a pre-grant opposition proceeding with care. Leaving aside applications for leave on a question of pure law in the context of essentially undisputed facts, and subject always to considerations of fairness and the interests of justice raised by a particular case, we think the contextual and policy matters to which we have referred will ordinarily require that leave to appeal against a decision rejecting a pre-grant opposition only be granted where the applicant has demonstrated a clear prima facie case of error in the decision appealed from, such that the likely effect of that decision would be to allow an invalid patent to proceed to grant. 46 In Pfizer Corporation v Commissioner of Patents (2006) 155 FCR 578 (Pfizer), the Full Court considered the question of leave under s 158(2) in the context of a decision of the Commissioner extending the terms of certain patents under ss 70 and 77 of the Patents Act. A judge of the Court had dismissed the patentee's appeal from the Commissioner's decision. The Full Court expressed its agreement with the statements of principle in Genetics Institute, including that the Court should not lay down rigid rules that would restrict the exercise of the discretion (at [10]). The Full Court also rejected any rule or principle that, in every case, an applicant for leave had to show prima facie error in the reasons of the primary judge (at [7], cf [12]). In a case in which an applicant for a patent has had only one judicial consideration of entitlement to a grant, the Full Court said that, before refusing leave, the Court should be satisfied that it is clear, beyond doubt, that there has been no error and that any patent, if granted, should be revoked (at [9]). The Full Court concluded that leave should be granted in that case having regard to the effect of a refusal of leave, the fact that the questions raised were of general application and importance and the questions were at least arguable in the sense that it was not possible to dismiss the contentions out of hand as having no possible prospect of success (at [13] and [14]). 47 In its written submissions, Aristocrat placed reliance on the principles that commonly guide the grant of leave to appeal under s 24(1A) of the FCA Act, which were considered by the Full Court in Decor Corporation v Dart Industries (1991) 33 FCR 397 (Decor). Section 24(1A) stipulates that an appeal cannot be brought from an interlocutory judgment of the Court without leave. In Decor, the Full Court stated that the considerations applied by the Full Court of the Supreme Court of Victoria in Niemann v Electronic Industries [1978] VR 431 (Nieman), being whether the decision is attended with sufficient doubt to warrant it being reconsidered on appeal, and whether substantial injustice would result if leave were refused supposing the decision to be wrong, provided an appropriate litmus test for the general run of cases in which leave to appeal from an interlocutory decision is sought (at 399). However, the Full Court in Decor emphasised that the considerations applied in Niemann are not to be regarded as rigid rules and that "by s 24(1A) the legislature has evinced a policy against the bringing of interlocutory appeals except where the court, acting judicially, finds reason to grant leave" (at 399-400). 48 In Genetics Institute and Pfizer, the Full Court referred, by way of analogy, to the power to grant leave to appeal under s 24(1A) and the principles considered by the Full Court in Decor. In Genetics Institute, the Full Court noted that applications for leave to appeal to the Full Federal Court have been determined by reference to different principles depending on the nature and terms of the legislative provision requiring leave (at [10]). In both cases, the Full Court placed most emphasis on the statements in Decor that the discretionary power to grant leave is not governed by rigid rules (see Genetics Institute at [11] and Pfizer at [10]). 49 Subsequently, in Research Affiliates v Commissioner of Patents [2013] FCA 329; 101 IPR 218, Flick J suggested that there may be some tension between the principles which inform the exercise of discretion conferred by s 24(1A) of the FCA Act and those that inform the exercise of the discretion conferred by s 158(2) of the Patents Act (at [6]). However, his Honour also observed that the different classes of decision for which leave to appeal may be sought under each of those provisions may go some way to explaining any difference in the expression of applicable principles (at [12]). I respectfully agree with the latter observation. 50 The guidance that emerges from the above cases may be summarised as follows. Section 158(2) evinces a legislative policy against the bringing of appeals against a judgment or order of a single judge of the Federal Court in the exercise of its jurisdiction to hear and determine appeals from decisions or directions of the Commissioner except where the court, acting judicially, finds reason to grant leave. The discretionary power to grant leave is not constrained by express legislative criteria and the Court should not lay down rigid rules that would restrict the exercise of the discretion given the diversity of cases to which s 158(2) will potentially apply. In determining whether to grant leave, it is relevant to consider: whether the decision is attended with sufficient doubt to warrant it being reconsidered on appeal; whether the issues proposed to be raised by the appeal are of general application; and the consequences of a refusal to grant leave - particularly whether the refusal will finally determine the matter. None of those considerations is determinative in and of itself and the considerations are interrelated. The cases make clear that the degree of doubt with respect to the decision that would warrant a grant of leave is affected by the consequences of a refusal to grant leave. In a pre-grant opposition proceeding, where there have been two hearings with the opposition dismissed, and where the opponent of the patent will still be able to institute revocation proceedings, leave to appeal will often be granted only where the opponent has demonstrated a clear prima facie case of error in the decision appealed from. In contrast, where an opponent has been successful such that the decision will be final with respect to the grant of the patent, leave to appeal would ordinarily be granted where the grounds are arguable.

[13]

Aristocrat's submissions 51 In support of its application for leave, Aristocrat advanced three primary submissions. 52 First, Aristocrat submitted that the effect of the primary judgment is to determine finally that the innovation patents in suit will not be granted. It follows, in Aristocrat's submission, that it would suffer substantial injustice if leave to appeal were refused, assuming the primary judgment were to be wrong. In that regard, Aristocrat submitted that: (a) the subject-matter of the innovation patents is of significant commercial value to Aristocrat; (b) Aristocrat has a number of standard patent applications in the same patent family, with specifications that are substantially similar to the innovation patents in suit and which are pending before the Australian Patents Office, awaiting the outcome of this litigation; and (c) Aristocrat has invested heavily in research and development and in obtaining patent protection in Australia and has a significant patent portfolio in Australia that may be impacted. 53 Second, Aristocrat submitted that the issues it wishes to raise on the appeal are arguable (indeed, it contends that they are more than arguable). In that regard, Aristocrat submitted that the primary judge erred in concluding that he was bound to apply the reasoning and approach of the Full Court plurality. There were a number of strands to this argument. The first strand was the bare contention that the primary judge could not be bound to apply the reasoning of the Full Court plurality in circumstances where all six judges of the High Court expressed disagreement with those reasons. The second strand was more developed. It relied on the principles stated in BVT20 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2020) 283 FCR 97 (BVT20) at [58] that, where an appellate body remits a matter to a primary decision-maker (in that case, the Administrative Appeals Tribunal), and there is a decision by a higher court in the period between the remittal and the redetermination by the primary decision-maker, the obligation on the primary decision-maker is to apply the law as stated by the higher court. The third strand was to the effect that the remittal order of the Full Court did not, in terms, require the primary judge to apply the reasoning of the Full Court. The order merely required the primary judge to determine the residual issues "in light of" the Full Court's reasons. The argument appeared to be that the order required the primary judge to use the Full Court's reasons to identify the residual issues, but not to determine those issues. Aristocrat also argued that the Full Court's reasons were, in any event, conflicting and the orders did not require the primary judge to apply only the plurality's reasons. The fourth strand was that, on its proper construction, s 23(2)(a) of the Judiciary Act only had the effect that the result in the Full Court decision was affirmed, but the Full Court's reasons were not binding on the primary judge. 54 Third, Aristocrat submitted that the issues arising in the proceeding have wider significance to the administration of the Patents Act. Aristocrat argued that, unless and until a Full Court of this Court or the High Court rules on the application of ss 18(1)(a) and 18(1A)(a) of the Act, lower courts in Australia and the Australian Patent Office are bound to apply the approach of the Full Court plurality which was "criticised by all of the six justices" in the High Court decision. Aristocrat also argued that the detrimental impact of the continued uncertainty in the law is also significant for business and industry in Australia. Aristocrat said that, since the High Court decision, there have been an "unprecedented" 30 Australian Patent Office decisions concerning computer-implemented inventions raising the question whether the invention claimed is a manner of manufacture. Aristocrat further argued that the lack of clarity and coherence in the law has necessitated frequent, conflicting updates from the Australian Patent Office to industry on the issue, including over 10 amendments to the "manner of manufacture" sections of IP Australia's Patent Manual of Practice and Procedure since 2015.

[14]

The Commissioner's submissions 55 The Commissioner submitted that leave should be refused for the following reasons. 56 First, the Commissioner submitted that the primary judge's decision was plainly correct and is not attended by sufficient doubt to warrant the grant of leave. The prospects of any appeal to the Full Court, if leave were to be granted, are such that the grant of leave would in effect be futile. In that regard, the Commissioner submitted that the primary judge correctly concluded that: (a) Pursuant to well-established High Court authority, the High Court decision does not create any binding precedent because only unanimous or majority decisions of that Court have binding authority (PJ [105]-[108]). (b) The language of s 23(2)(a) of the Judiciary Act is plain in its terms, such that the Full Court decision has been affirmed, and the orders and the reasons for them bound the primary judge (PJ [109]-[110]). (c) The language of the Full Court's orders is unequivocal, requiring the primary judge to determine the residual issues "in light of the Full Court's reasons including any issues which concern the position of claims other than claim 1". It calls for the determination of the question of manner of manufacture of the residual claims having regard to the reasoning of the Full Court (PJ [111]). (d) As a consequence, the primary judge was not permitted to consider any principle of law that might emerge from the High Court decision; but in any event, his Honour correctly held that no principle emerged from the High Court decision that could be relevant to the remittal, as there was no uniformity of approach from which a ratio decidendi may be discerned (PJ [112]-[128]). (e) In the circumstances, the starting point was the Full Court's finding that claim 1 of the 967 Patent was not for a manner of manufacture (PJ [129]). (f) Critically, having regard to the findings made by the plurality in the Full Court decision, none of the residual claims provide additional features that would warrant a conclusion different to that reached in the Full Court decision in respect of claim 1 of the 967 Patent (PJ [135], [142], [146], [149]). The Commissioner further submitted that BVT20 is distinguishable from the present case because the effect of s 23 of the Judiciary Act is to affirm the decision of the Full Court, and the remittal order of the Full Court (which was affirmed) explicitly required the application of the Full Court's reasons. 57 Second, the Commissioner submitted that the primary judgment does not raise any issues of general importance. The primary judge's approach was entirely consistent with the language of s 23 of the Judiciary Act and High Court authority with respect to s 23. As to the relevant principles for determining manner of manufacture, the Commissioner argued that there is already a long line of Full Court authority in this area which delegates of the Commissioner and the Federal Court are continuing to apply, including Research Affiliates LLC v Commissioner of Patents (2014) 227 FCR 378; Commissioner of Patents v RPL Central Pty Ltd (2015) 238 FCR 27; Commissioner of Patents v Rokt Pte Ltd (2020) 277 FCR 267 and Encompass Corp Pty Ltd v InfoTrack Pty Ltd [2019] FCAFC 161; 145 IPR 1. The Commissioner also submitted that the fact that the Australian Patent Office continues to make decisions concerning computer-implemented inventions and whether the invention claimed is a manner of manufacture is unsurprising, as is the fact that there have been updates to IP Australia's Patent Manual of Practice and Procedure as new judgments have been delivered. 58 Third, the Commissioner submitted that the issues concerning the residual claims do not provide a suitable vehicle to consider the questions sought to be raised by Aristocrat on the appeal. The parties agreed to seek the determination of claim 1 of the 967 patent as the determination of that claim would guide the determination of the other claims. The patentability of claim 1 of the 967 patent has been finally determined. The question raised before the primary judge was whether any of the residual claims warranted a different result in light of the Full Court's reasons. The regime of the exemplar claims, which led to claim 1 of the 967 patent being considered first, was not intended to allow Aristocrat to run a second, independent case at the appellate level on the basis of the residual claims, despite the adverse final determination on claim 1 of the 967 patent. To permit that course would add to, rather than resolve, the long history of the dispute. 59 Fourth, the Commissioner submitted that no substantial injustice would be caused by the refusal of leave. That is because the innovation patents have expired since the matter was before the High Court and Aristocrat has other, pending, standard patent applications covering the same subject matter and which remain on foot. During the hearing, the Commissioner confirmed that it would not contend that Aristocrat would be estopped, on the basis of the judgments in this proceeding, from challenging a decision of the Commissioner in respect of Aristocrat's other patent applications raising similar claims.

[15]

Consideration of the competing submissions 60 The application for leave in the present case is finely balanced. None of the factors weighing in favour of the grant of leave can be described as strong. 61 It is correct, as Aristocrat submitted, that the effect of the primary judgment is to determine finally that the innovation patents in suit will not be granted. However, the weight of that consideration is lessened by two factors. First, the parties have agreed that the patentability of claim 1 of the 967 patent, which was the exemplar claim put forward by the parties, has been finally determined by the Full Court's decision. All that remains is the determination of other residual claims, which is the subject of the primary judgment. Second, as submitted by the Commissioner, the innovation patents in suit have expired since the matter was before the High Court and Aristocrat has other, pending, standard patent applications covering the same subject matter which remain on foot and will be the subject of separate determinations. 62 I also accept that the grounds of appeal that are sought to be raised by Aristocrat are arguable in the sense that it is not possible to dismiss the contentions out of hand as having no possible prospect of success. While the Commissioner has advanced forceful arguments as to why the decision of the primary judge was plainly correct, the issues sought to be raised by Aristocrat are novel. Those issues concern the proper application of s 23(2)(a) of the Judiciary Act in the unusual circumstances of this case, where the decision of the Full Court that was affirmed by operation of that section required the remitter of the matter to the primary judge in light of the reasons of the Full Court and where both judgments of the High Court disagreed with aspects of those reasons. 63 I do not fully accept Aristocrat's argument concerning the wider significance of the issues sought to be raised by the appeal. The first and primary issue that is sought to be raised is the proper application of s 23(2)(a) of the Judiciary Act in the circumstances of this case. As already noted, the issues are novel precisely because this is an unusual case and by definition not a case with wider significance. It is only if that issue is determined in Aristocrat's favour that the second issue, concerning the manner of manufacture requirement in s 18(1A)(a) of the Patents Act, will arise. Further, while I accept in a general sense that that issue has a wider significance, the determination of the residual claims in this proceeding is a less than satisfactory vehicle for reconsidering those issues in circumstances where a final determination of claim 1 of the 967 patent has already been made under the Full Court's decision. 64 In the present case, I am particularly troubled by whether the interests of justice truly favour the grant of leave. As submitted by the Commissioner, the parties agreed to seek the determination of claim 1 of the 967 patent as the determination of that claim would guide the determination of the other claims. The patentability of claim 1 of the 967 patent has been finally determined. Whilst it is unfortunate that the High Court's consideration of that issue resulted in an equally divided opinion, s 23 of the Judiciary Act determines the resolution of the dispute in those circumstances. All that remains is the determination of other residual claims, which is the subject of the primary judgment. As submitted by the Commissioner, there is a real sense in which, by this application for leave to appeal, Aristocrat is seeking to have a "second go" with the aim of establishing different principles for the adjudication of the manner of manufacture requirement on the residual claims. That is rather confirmed by Aristocrat's stated intention, if leave is granted, to apply to have the appeal removed to the High Court. One important element weighing upon the interests of justice is finality in litigation. 65 Having taken all of the foregoing factors into account, I have determined on balance that leave to appeal should be granted. Ultimately, two factors weigh marginally in favour of the grant of leave: that the effect of the primary judgment is to determine finally that the innovation patents in suit will not be granted, and that the grounds of appeal sought to be raised by Aristocrat are arguable (raising novel questions about the operations of s 23(2)(a) in the unusual circumstances of this case). If Aristocrat is able to persuade an appellate court that the primary judge's application of s 23(2)(a) of the Judiciary Act in this case was erroneous, Aristocrat should be entitled to have the residual claims adjudicated in accordance with the legal principles that the appellate court determines are applicable.