Aristocrat Technologies Australia Pty Limited v Konami Australia Pty Limited [2015] FCA 735 | Case summary

Aristocrat Technologies Australia Pty Limited v Konami Australia Pty Limited [2015] FCA 735 | Case summary | Zoe

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INTRODUCTION 1 In this proceeding the applicant ("Aristocrat") sues the respondent ("Konami") for infringement of selected claims of three standard patents. Konami denies infringement. It says that if any of the products which it supplies that are alleged to infringe are within any claim properly construed, then that claim is invalid and should be revoked. 2 Each of the patents in suit relates to gaming machines or, as they are referred to in the patents, "slot machines", "poker machines", "gaming machines" and "gaming consoles" all of which expressions are used interchangeably. These are the machines usually found in hotels, clubs and other gaming venues. The three patents in suit are: Australian patent number 754689 ("689") entitled "Slot machine game and system with improved jackpot feature" with an asserted priority date of 8 July 1997. Aristocrat alleges that Konami has infringed claims 1 - 4, 16, 17, 25, 27, 28, 37, 38 (product claims), 43, 55 and 56 (method claims). Of these, claims 1, 25 and 43 are independent claims. Australian patent number 766341 ("341") also entitled "Slot machine game and system with improved jackpot feature" with an asserted priority date of 8 July 1997. The 341 patent is a divisional of the 689 patent. Aristocrat alleges that Konami has infringed claims 1, 11 and 12. Australian patent number 771847 ("847") entitled "Gaming machine with buy feature games" with an asserted priority date of 25 August 1999. Aristocrat alleges that Konami has infringed claims 1, 19 and 56. 3 Konami is alleged to have infringed the patents in suit by (inter alia) manufacturing and supplying the following products: Free Spin Dragons - which is alleged to infringe product claims 1 - 4, 16, 17, 25, 27, 28, 37 and 38, and method claims 43, 55 and 56 of the 689 patent. Cash Carriage - which is alleged to infringe product claims 1 - 4, 16, 25, 27, 28 and 37, and method claims 43 and 55 of the 689 patent. High Velocity Grand Prix - which is alleged to infringe product claims 1 - 4, 16, 25, 27, 28 and 37, and method claims 43 and 55 of the 689 patent. This product is also alleged to infringe method claim 1, and product claims 11 and 12 of the 341 Patent. King's Reward - which is alleged to infringe product claims 1 - 4, 16, 25, 27, 28 and 37 and method claims 43 and 55 of the 689 patent. Prize Plus - which is alleged to infringe product claims 1, 19 and 56 of the 847 patent. 4 Each of these products is what is known as a feature game. A feature game is a game that can be played during the course of a main game. For example, a gaming console manufactured and sold by Konami under the name Dreaming Orcas Free Spin Dragons consists of a main game, Dreaming Orcas, and a feature game, Free Spin Dragons. It is common ground that there are no material differences between the way in which Cash Carriage, High Velocity Grand Prix, King's Reward and Free Spin Dragons operate for the purpose of determining questions of infringement relevant to the 689 or 341 patents. In opening it was accepted by Konami that each of these four feature games operate in the same way and that the question of infringement depends upon the proper construction of the claims. 5 For the purpose of resolving questions of validity, the relevant provisions of the Patents Act 1990 (Cth) ("the Act") are s 7, s 18(1), s 40 and the definitions of "prior art information", "patent area" and "prior art base" as defined in Sch 1 as the Act stood immediately prior to their amendment by the Patents Amendment Act 2001 (Cth).

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Principles of Construction 21 The principles of construction were not in issue except perhaps in one very narrow respect concerning the use that might be made of a number of documents upon which Konami sought to rely in support of its contention as to the meaning of the expression "trigger condition" as used in the claims. 22 The relevant principles have been summarised in many prior decisions of the Court including Jupiters Ltd v Neurizon Pty Ltd (2005) 222 ALR 155 (Hill, Finn and Gyles JJ) (Jupiters) and Kimberly-Clark Australia Pty Ltd v Multigate Medical Products Pty Ltd (2011) 92 IPR 21 (Emmett, Greenwood and Nicholas JJ) (Multigate) and Australian Mud Company Pty Ltd v Coretell (2011) 93 IPR 188 (Bennett, Gilmour and Yates JJ) in which the Full Court referred at [63]-[69] to the principles relevant to "purposive construction". 23 For the present purpose it is sufficient to refer to the Full Court's summary of the relevant principles in Jupiters, which (coincidentally) also concerned a patent for a prize awarding system for electronic gaming machines. Their Honours said at [67]-[68]: [67] There is no real dispute between the parties as to the principles of construction to be applied in this matter although there is some difference in emphasis. It suffices for present purposes to refer to the following: (i) the proper construction of a specification is a matter of law: Décor Corporation Pty Ltd v Dart Industries Inc (1988) 13 IPR 385 at 400; (ii) a patent specification should be given a purposive, not a purely literal, construction: Flexible Steel Lacing Co v Beltreco Ltd (2000) 49 IPR 331; [2000] FCA 890 at [81] (Flexible Steel Lacing); and it is not to be read in the abstract but is to be construed in the light of the common general knowledge and the art before the priority date: Kimberley-Clark Australia Pty Ltd v Arico Trading International Pty Ltd (2001) 207 CLR 1; 177 ALR 460; 50 IPR 513; [2001] HCA 8 at [24]; (iii) the words used in a specification are to be given the meaning which the normal person skilled in the art would attach to them, having regard to his or her own general knowledge and to what is disclosed in the body of the specification: Décor Corporation Pty Ltd at 391; (iv) while the claims are to be construed in the context of the specification as a whole, it is not legitimate to narrow or expand the boundaries of monopoly as fixed by the words of a claim by adding to those words glosses drawn from other parts of the specification, although terms in the claim which are unclear may be defined by reference to the body of the specification: Kimberley-Clark v Arico at [15]; Welch Perrin & Co Pty Ltd v Worrel (1961) 106 CLR 588 at 610; Interlego AG v Toltoys Pty Ltd (1973) 130 CLR 461 at 478; the body of a specification cannot be used to change a clear claim for one subject matter into a claim for another and different subject matter: Electric & Musical Industries Ltd v Lissen Ltd [1938] 4 All ER 221 at 224-5; (1938) 56 RPC 23 at 39; (v) experts can give evidence on the meaning which those skilled in the art would give to technical or scientific terms and phrases and on unusual or special meanings to be given by skilled addressees to words which might otherwise bear their ordinary meaning: Sartas No 1 Pty Ltd v Koukourou & Partners Pty Ltd (1994) 30 IPR 479 at 485-6 (Sartas No 1 Pty Ltd); the court is to place itself in the position of some person acquainted with the surrounding circumstances as to the state of the art and manufacture at the time (Kimberley-Clark v Arico at [24]); and (vi) it is for the court, not for any witness however expert, to construe the specification; Sartas No 1 Pty Ltd at 485-6. [68] We may add that the area of invention with which this proceeding is concerned is a particularly narrow one. It is one in which business rivals are striving to invent around the patented inventions of others and within narrow regulatory limits. In such a context it is, in our view, important to recognise that claims made for an invention may need to be formulated narrowly to avoid invalidity. While accepting the primacy of purposive construction in interpreting patents, such a construction may well provide little by way of illumination where, as here, the inventive context is a cramped one. It is not appropriate to take a claim carefully drawn to avoid invalidity and then permit a wider "purposive" construction of it for infringement purposes: Grove Hill Pty Ltd v Great Western Corp Pty Ltd (2002) 55 IPR 257; [2002] FCAFC 183 at [311]. 24 Konami placed considerable reliance upon the observations made by the Full Court in [68] of its reasons. For present purposes I regard those observations as no more than a salutary reminder that a patent specification is a unilateral document prepared in words of the patentee's own choosing, usually on the basis of skilled advice, and with an eye to the prior art: see Kirin-Amgen Inc v Hoechst Marion Roussel Ltd [2005] RPC 169; (2004) 64 IPR 444 at [35] and other authorities referred to by Greenwood and Nicholas JJ in Multigate at [45].

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THE COMMON GENERAL KNOWLEDGE 28 The notion of common general knowledge was explained by Aickin J in Minnesota Mining and Manufacturing Company v Beiersdorf (Australia) Ltd (1980) 144 CLR 253 (3M). His Honour said at 292: The notion of common general knowledge itself involves the use of that which is known or used by those in the relevant trade. It forms the background knowledge and experience which is available to all in the trade in considering the making of new products, or the making of improvements in old, and it must be treated as being used by an individual as a general body of knowledge. See also Aktiebolaget Hässle v Alphapharm Pty Ltd (2002) 212 CLR 411 (Alphapharm) at [43]-[45]. 29 The common general knowledge may include publications containing information which might not be committed to memory, but which the notional skilled addressee would refer to as a matter of course: ICI Chemicals & Polymers Ltd v Lubrizol Corporation Inc (1999) 45 IPR 577 (ICI) at [112], per Emmett J. 30 Konami contended that the common general knowledge at the earliest asserted priority date included knowledge of electronic gaming machines which: (a) have consoles that include means, such as buttons, to allow the player to make selections and play games; (b) have games with primary or base games; (c) have games with secondary or bonus features; (d) have games with triggers; (e) have games with jackpots; (f) have games with symbol driven jackpots; (g) have games with progressive jackpots; (h) have games with mystery jackpots; (i) have games where the probability of a player winning is proportional to the size of the wager; (j) are stand-alone machines; (k) form part of a network. 31 Aristocrat admitted that subparas (a) to (e) and (j) and (k) were common general knowledge but not (f) to (i) or (k). In light of specific concessions made by Mr Little in cross-examination and the expert evidence more generally, I am satisfied that the matters referred to in subparas (f) and (g) and (h) and (k) were common general knowledge as at the asserted priority date. 32 With regard to subpara (i), Mr Little did not accept that at the asserted priority date there were electronic gaming machines which had games where the probability of a player winning was proportional to the size of the bet. At that time, there were no electronic gaming machines known to Mr Little in which the greater the number of credits wagered on a single line bet, the greater the probability of the player winning a prize. Although a player who wagered multiple credits on a single play line of an electronic gaming machine stood to win a larger prize, the probability of him or her winning any prize was the same for the player who wagered only one credit on the game. 33 In addressing this issue Mr Little distinguished the situation just described from situations involving so-called "multiplier" games which permitted a player to bet on more than one pay line, which had the effect of increasing the player's chance of winning a prize in proportion to the number of play lines he or she bet on. Thus, a player who bet one credit on each of two play lines would have twice the chance of winning a prize because he or she has, in effect, placed two different wagers. In his evidence, Mr Acres referred to multiplier games as "buy a pay", "buy a pay line" or "multi-line" games. As he explained, a player can buy additional pay lines on which a win is possible. 34 I am satisfied that the matter referred to in subpara (i) was common general knowledge at the earliest asserted priority date but only insofar as it may be said to refer to "multiplier" or "multi-line" games.

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Cashcade 37 Cashcade is a type of mystery jackpot which accumulates contributions from turnover. It is specifically referred to in the specification as a prior art arrangement that counts turnover on all machines in the network, increments a prize value in accordance with turnover, and pays the jackpot when the count reaches a pre-determined, randomly selected number within a pre-determined range. It is also referred to in the specification as one of a number of arrangements in use in New South Wales and other jurisdictions for a considerable period of time. I am satisfied that Cashcade was common general knowledge at the earliest priority date. 38 The skilled addressee would have been aware that in Cashcade (and linked jackpot systems like it) the pre-determined number would be randomly generated by an electronic random number generator with the jackpot being awarded not on the basis of any combination of symbols on a gaming machine, but on the basis of a match between the turnover count and the random number selected from a pre-determined range (corresponding to the minimum and maximum jackpot values) by the random number generator. The skilled addressee would also be aware that the jackpot was increased incrementally based upon a percentage of the amount wagered by a player on a game, with the jackpot being awarded to the gaming machine that incremented the count to the amount corresponding to the randomly selected number within the pre-determined range. 39 In cross-examination it was suggested to Mr Acres that a problem with some of the prior art was that once the jackpot was won, the players left the machines and did not return until they had a better chance of winning a large jackpot. Mr Acres agreed, and added that this was true of all progressive jackpots. He said this problem (sometimes referred to as "swamping"), which he acknowledged affected Cashcade, was solved by another Aristocrat product called "Surprize". I will say more about his evidence in relation to Surprize later in these reasons. For the moment it is important to note that Mr Acres accepted that, at least until the advent of Surprize, the problem of "swamping" affected all progressive jackpots.

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Gaming Regulations 40 At all relevant times gaming machines have been heavily regulated, and regulatory approval is required for each game before it is released onto the market. The regulators' requirements cover a wide variety of matters including the "theoretical minimum return to player" ("RTP"), the display of information to players, and the submission of technical and mathematical information referable to games in respect of which regulatory approval is sought. 41 The regulations published by regulators included the Australian/New Zealand Gaming Machine National Standards ("the National Standard") identified by Mr Ellis as available in New South Wales in 1998. Mr Little was also familiar with the National Standard which he said he would have seen in 1997. The copy of the National Standard that is in evidence (Exhibit A) is designated "Revision 1.0" and is undated. The National Standard (as was acknowledged by Konami in its written submissions) was developed by participants from each of the 10 regulators in Australia and New Zealand. These include the regulators (either government departments or statutory authorities) responsible for the regulation of gaming in each of the States and Territories. 42 The history and purpose of the National Standard is explained in Chapter 1 which "introduces the standards concept, and briefly discussed [sic] the phases involved in the origin and development of these standards." Paragraphs 1.2 to 1.8 state: 1.2 The purpose of this standard is to work towards creating one basic standard for gaming machines throughout Australia and New Zealand. Initially this will be through this document providing a set of "core" requirements aimed at being common to all jurisdictions. An interim "supplementary document" will list the sections of this document that do not yet have continuity between all participating regulators, and the focal point in the future will be to eventually merge these requirements into the core standard. Each jurisdiction will provide an addendum to this the above [sic] setting out the additional requirements manufacturers must comply with in that jurisdiction. 1.3 It is the prerogative of each jurisdiction on the extent to which this document is adopted. Whilst it is intended for there to be no conflict between the "core" requirements and individual jurisdictional requirement, [sic] in the event of a conflict the local requirement for that jurisdiction overrides this standard. … 1.4 The National Standards Working Party was established by the Australian and New Zealand gaming regulators on 21 March 1994. The purpose of the working party was to develop technical requirement documents to be used by each individual jurisdiction as the basis for working towards a common technical requirement for the evaluation of gaming machines. 1.5 Commonality of technical requirements reduces duplication of effort on the part of manufacturers in the design and manufacture of a gaming machine supplied into multiple jurisdictions and provides cost savings when equipment previously approved in one jurisdiction is assessed for approval in other jurisdictions. 1.6 The process for developing national standards involves consultation with equipment manufacturers. 1.7 It has not been, in bringing the document to this stage within the scope of the working party, to attempt to change the divergent industry structures that exist between some jurisdictions. These structural differences result, not only from current regulatory policy but also from the different approaches to gaming machine ownership (venue, private monopolies or duopolies and government) and the level of technology (particularly monitoring and control system technology) available when machine gaming commenced in each jurisdiction. 1.8 Whilst these structural differences exist, jurisdictional specific technical requirements are inevitable. The working party has identified these differences and the focus of the national standards process will now shift to ensuring that any difference in technical requirements between jurisdictions are for valid and unresolvable reasons.

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The specification 49 The specification for the 689 patent commences with a description of the field of the invention. This is said to relate to apparatus for use with a system of linked poker machines that provides an improved jackpot mechanism. This is followed by a section entitled "Background of the Invention". Here, at p 1 line 8 to p 3 line 4, the following appears: Many schemes have been devised in the past to induce players to play slot machines including schemes such as specifying periods during which jackpot prizes are increased or bonus jackpots paid. Other schemes involve awarding an additional prize to a first player to achieve a predetermined combination on a poker machine. These methods, while effective, add to club overheads because of the need for additional staff to ensure that the scheme is operated smoothly. More recently, with the advent of poker machines linked through electrical networks it has been possible to automatically generate jackpot prizes on the basis of information received from the machines being played which are connected to the system and one such prior art arrangement, commonly known as "Cashcade™", counts turnover on all machines in the network increments a prize value in accordance with the turnover and pays the jackpot prize when the count reaches some predetermined and randomly selected number. In a more recent prior art arrangement, each game played on each machine in a gaming system is allocated a randomly selected number and the prize is awarded to a machine when the game number it is allocated matches a preselected random number. In another recent prior art arrangement, the winning machine is selected by randomly selecting a number at a point in time and decrementing the number as games played on the system are counted until the number is decremented to zero at which time the game (or associated machine) causing the final decrement is awarded the jackpot. With some prior art combination based trigger arrangements there is a serious disadvantage in that the player betting a single token per line, is just as likely to achieve a jackpot as the player playing multiple tokens per line. This has the effect of encouraging players playing for the bonus jackpot to bet in single tokens, rather than betting multiple tokens per game. Jackpot games have traditionally been popular in Casinos. However, in their conventional format these games have inherent limitations: (i) Games which use specific combinations of symbols to trigger jackpots are perceived by many players as being unwinnable. The games are typically designed in such a way that the big jackpots should not be won until large amounts are accumulated. With such low frequency the jackpots are never seen to be won by most players. Anecdotal evidence suggests that many players have learnt to disregard the chance of winning the major jackpots and are realistically playing for the lesser jackpots (ie the minor and mini jackpots). The increasing popularity of small mystery jackpots with higher frequencies of occurrence tends to support this argument; (ii) Due to the increasing demand of players for a more complex and diverse game range, conventional jackpot games with combination triggers have become superseded. However, it is extremely complex to develop a wide variety of combinations which support both a feature game and mathematically exact jackpot triggers; (iii) Typically, it would be expected that the game return (RTP) is independent of the number of coins bet per line. With conventional progressive jackpot games though, increasing the credits bet per line creates a relative disadvantage as far as RTP is concerned. Lets say the start-up amount for a feature jackpot is $10000. A player who is playing 1 credit per line has a chance for $10000 for each credit played, whereas a player playing 5 credits per line only has a chance for $2000 for each credit played. This creates a scale of diminishing returns. The smart player who gambles for the feature jackpot only, will always cover all playlines, but will only bet 1 credit per line because the prize paid for the feature jackpot is the same irrespective of the bet. This is supported by data collected from casinos, (iv) Typical combination triggered progressive jackpots have fixed hit rates which removes from the operator's control the ability to vary jackpot frequency. These arrangements have been in use in the State of New South Wales and in other jurisdictions for a considerable period of time, however, as with other aspects of slot machine games, players become bored with such arrangements and new and more innovative schemes become necessary in order to stimulate player interest. In this specification, the term "combinations" will be used to refer to the mathematical definition of a particular game. That is to say, the combinations of a game are the probabilities of each possible outcome for that game. 50 At p 3 line 6 to p 5 line 28 there is a section entitled "Summary of the Invention" which includes the following consistory statement: According to a first aspect the present invention provides a random prize awarding feature to selectively provide a feature outcome on a gaming console, the console being arranged to offer the feature outcome when a game has achieved a trigger condition, the console including trigger means arranged to test for a trigger condition and to initiate the feature outcome when the trigger condition occurs, the trigger condition being determined by an event having a probability related to credits bet per game on the console. According to a second aspect, the present invention provides a random prize awarding system associated with a network of gaming consoles, the system being arranged to offer a feature outcome on a particular console when a trigger condition occurs as a result of a game being played on the respective console the prize awarding system including trigger means arranged to test for a trigger condition and to initiate the feature outcome on the respective console when the trigger condition occurs, the trigger condition being determined by an event having a probability related to credits bet per game on the respective console. According to a third aspect, the present invention provides a gaming console including a random prize awarding feature to produce a feature outcome, the gaming console being arranged to offer the feature outcome when a game has achieved a trigger condition, the console including trigger means arranged to test for the trigger condition and to initiate the feature outcome when the trigger condition occurs, the trigger condition being determined by an event having a probability related to credits bet per game on the console. 51 At p 4 lines 1 to 4 the patent specification states that, preferably, the trigger condition is determined by an event having a probability related both to expected turnover between consecutive occurrences of the trigger condition on the respective console and the credits bet on the respective game. 52 At p 4 lines 5 to 11 the patent specification explains how, in a preferred embodiment, the trigger condition is determined. A random number is selected from a pre-determined range of numbers to be associated with each bought game and for each credit bet on the respective game. These numbers are allotted to the game. If any of these numbers correspond to a randomly selected number from the same pre-determined range then the trigger condition will have occurred. 53 At p 4 lines 12 to 35 of the specification a number of preferred embodiments of the invention are described. For example: a plurality of consoles may be connected to form a network, allowing a central feature jackpot system connected to the network to provide an incrementing jackpot which increases in response to signals from the consoles connected to the network (lines 12 to 17); the consoles may be arranged to play a first main game and the feature outcome initiated by the trigger condition is a second feature game (lines 18 to 20); and the function of triggering a feature jackpot game may either be performed by a central feature game controller or a feature game controller within each console in the system (lines 21 to 23). 54 There then follows a detailed description of preferred embodiments of the invention by reference to three figures. Figure 1 is a diagram of a network of gaming consoles connected to a mystery jackpot controller. Figure 2 is a flow chart for a prize awarding algorithm. Figure 3 shows the example of a 5 reel by 3 row window display. 55 At p 6 line 2 to p 7 line 2 the specification describes a preferred embodiment in which jackpots (feature jackpots) are won from a feature game as follows: In a preferred embodiment of the invention, a new jackpot trigger mechanism provides the Casino operator with a far higher degree of flexibility. Unlike conventional combination triggered jackpots, the jackpots here are won from a feature game. The feature game is triggered randomly as a function of credits bet per game. When a feature is triggered, a feature game appears. Each jackpot can only be won from this feature game. During the feature game a second set of reel strips appears and a "spin and hold" feature game commences. The feature prize score is calculated by the total of the points appearing on the centre line of all 5 reels. Feature jackpots in this format exhibit significant differences over previous jackpot systems: (i) A jackpot game is provided which is compatible with any existing game combination within an installation independent of the platform, denomination or type of game (eg. slot machines, cards, keno, bingo or pachinko). This will allow for the linking of combinations between game type, platform type and denomination. Using this system, jackpot games can now be developed using specific combinations for the base game which were previously unsuitable for Link Progressive Systems. These games will compete with the appeal of the latest games on the market. (ii) There is no longer a need to develop mathematically exact combinations in the base game. (iii) Unlike the multiplier game in combination triggered jackpot embodiments, the present invention provides a direct relationship between the number of credits bet and the probability of winning the jackpot feature game on any one bought game. Betting 10 credits per line will produce ten times as many hits into the feature game than betting 1 credit per line. This is achieved by using a jackpot trigger which is directly related to the wager bet on a respective game and the turnover, instead of using conventional combination triggers. (iv) Jackpot hit rates can now be changed without making changes to the base game. This was previously not possible using combination triggered jackpots. (v) The jackpot feature system can be used across a wide-area-network (WAN), local-area-network (LAN), used as a stand-alone game independent of a network or used with a mystery jackpot. Flexibility is available to change combinations at will. 56 The specification describes the preferred embodiment at p 8 line 10 to p 10 line 27 as follows: In the preferred embodiment, a prize is always awarded in the jackpot feature game, the feature game being used to determine the size of the prize to be awarded (see step 27). The winning machine is then locked up (see step 28) and the controller awaits an indication that the prize has been paid before allowing the machine to be unlocked (see step 29). In some embodiments, the machine will not be locked up in steps 28 and 19, but instead the prize will simply be paid and the program will return to step 21. The machine then returns to step (see step 21) and commences a new game. If the trigger value does not match (see step 27) then there is no feature game awarded for that bought game and the machine returns to step (see step 22) and waits for the next game to commence. By way of example, a feature game might be triggered by an EGM every $5000 of turnover played, which is equivalent to 100,000 credits on a $0.05 machine. This is referred to as the jackpot feature game hit rate in credits. A random number is generated within a prescribed range of numbers at the EGM at the commencement of each bought game. The prescribed range of numbers is determined by the jackpot feature game hit rate which has been determined previously, from typical values of casino turnover, expected jackpot amounts and jackpot frequencies. The prescribed range in this example is therefore 1 to 100,000 and before the commencement of each bought game a random number is generated within this range. A bet of 20 credits will result in the numbers between 1 and 20 (inclusive) being allotted to the game (note that statistically it does not matter if the numbers are randomly selected or not or allotted as a block or scattered, the probability of a feature game being awarded is unchanged). If the number 7 is produced by the random number generator, then the feature game will be triggered. If any number between 21 and 100,000 is produced by the random number generator, the feature game will not be triggered. Similarly, a bet of 200 credits will result in the numbers between 1 and 200 (inclusive) being allotted to the game. If any number between 1 and 200 is produced by the random number generator, then the feature game will be triggered. If any number between 201 and 100,000 is produced by the random number generator, the feature game will not be triggered. The example below has been developed using example turnover data. A trigger of the second screen feature game is expected every $5000 of turnover (ie. 100000 credits on a $0.05 machine). Increasing the number of credits bet increases the chance of triggering the feature on any bought game. Preferably, when a jackpot feature game is triggered, all players are alerted by a jackpot bell that a possible grand jackpot is about to be played for. This is done so that all players share in the experience of a jackpot win. Anecdotal evidence of players watching feature games being played in Australian casinos suggests that the drawing power of such games is immense. Players are alerted by the jackpot bell instantaneously at any point during a game, but the feature game will not appear until the current game (including base game features) are completed. In this embodiment the feature game appears with the new reel strips already spinning and accompanying feature game tunes playing. The player stops the reels spinning by pressing the corresponding playline buttons in order. The feature prize score is calculated by the total of the points appearing on the centre line of all 5 reels. Across the top of the screen, a sum of the scores is displayed. The 4 feature prize meters in descending order of value are: (i) Grand Feature Prize. A score of > 100 wins the grand feature jackpot: (ii) Major Feature Prize. A score of 90-99 (inclusive) wins the major feature jackpot: (iii) Minor Feature Prize. A score of 80-89 (inclusive) wins the minor feature jackpot: (iv) Mini Feature Prize. A score of < 79 wins the mini feature jackpot. By way of example, referring to Figure 3, a 5 reel by 3 row window is displayed. If the reels of the feature game stop on the numbers shown in Figure 3, then the progressive jackpot won is the sum of the numbers on the centre line ie. 12+10+18+13+22 = 75 which is within the range for the mini feature jackpot. The instant the feature game is completed and the sum of scores from all 5 reels is shown, the feature jackpot screen and signs display which jackpot has been won. This celebration of the jackpot win is conducted in a traditional manner (ie. flashing displays, jackpot alarms, music etc). 57 At p 10 lines 28 to 31 it is observed that, as the time between the jackpot game awards is related to turnover, the number of jackpot games played between feature games and, hence their chance of winning, is directly related to the size of each bet on each game played. 58 The claims of the 689 patent that are alleged to be infringed fall into three groups; first, claim 1 and various dependent claims, second, claim 25 and various dependent claims, and third, claim 43 and various dependent claims: 1. A random prize awarding feature to selectively provide a feature outcome on a gaming console, the console being arranged to offer a feature outcome when a game has achieved a trigger condition, the console including trigger means arranged to test for the trigger condition and to initiate the feature outcome when the trigger condition occurs, the trigger condition being determined by an event having a probability related to desired average turnover between successive occurrences of the trigger conditions on the console. 2. The prize awarding feature of claim 1, wherein the trigger condition is determined by an event having a probability related both to expected turnover between successive occurrences of the trigger conditions on the console and the credits bet on the respective game. 3. The prize awarding feature of claim 1 or 2, wherein the console is arranged to play a main game, during which testing for the trigger condition will occur, and the feature outcome initiated by the trigger condition is the awarding of one or more feature games. 4. The prize awarding feature of claim 3, wherein the main game is a standard game normally offered on the console and each feature game is a jackpot game associated with a special jackpot prize. 5. The prize awarding feature as claimed in any one of claims 1 to 4, wherein the trigger condition is determined by selecting a random number from a predetermined range of numbers to be associated with each main game, and allotting to the game a set of numbers selected from the predetermined range of numbers, the size of the set of allotted numbers being related to the wager bet on the respective game, and in the event that one of the numbers allotted to the game matches the randomly selected number, indicating that the trigger condition has occurred. 6. The prize awarding feature as claimed in any one of claims 1 to 4, wherein the trigger condition is determined by selecting a random number from a predetermined range of numbers to be associated with each main game, and allotting to the game a set of numbers selected from the predetermined range of numbers, the size of the set of allotted numbers being mathematically related to the wager bet on the respective game, and in the event that one of the numbers allotted to the game matches the randomly selected number, indicating that the trigger condition has occurred. 7. The prize awarding feature as claimed in any one of claims 1 to 6, wherein the trigger condition is determined by selecting a random number from a predetermined range of numbers to be associated with each main game, and allotting to the game a number in the set of numbers, the allotted number being proportional to the wager and in the event that the allotted number is greater than or equal to the randomly selected number, indicating that the trigger condition has occurred. … 16. The prize awarding feature as claimed in any one of the preceding claims wherein the feature outcome is a simplified game having a higher probability of winning a major prize than in the main game. 17. The prize awarding feature as claimed in claim 16, wherein the feature game provides a plurality of pseudo-reels with a restricted number of different symbols on each reel and a jackpot is activated if after spinning the reels the same symbol appears on a win line of each reel. … 25. A gaming console including a prize awarding feature to produce a feature outcome, the console being arranged to offer the feature outcome when a game has achieved a trigger condition and including trigger means arranged to test for the trigger condition and to initiate the feature outcome when the trigger condition occurs, the trigger condition being determined by an event having a probability related to desired average turnover between successive occurrences of the trigger conditions on the console. … 27. The gaming console of claim 25 or 26, wherein the console is arranged to play a main game, during which testing for the trigger condition will occur, and the feature outcome initiated by the trigger condition is the awarding of a feature game. 28. The gaming console of claim 27, wherein the main game is a standard game normally offered on the console and the feature game is a jackpot game associated with a special jackpot prize. … 37. The gaming console as claimed in any one of claims 25 to 36, wherein the feature outcome is a simplified game having a higher probability of success than the main game. 38. The gaming console as claimed in claim 37, wherein the feature game provides a plurality of pseudo-reels with a restricted number of different symbols on each reel and a jackpot is activated if after spinning the reels the same symbol appears on a win line of each reel. … 43. A method of awarding a prize on a gaming console, the console being arranged to offer a feature outcome when the game has achieved a trigger condition, the method including testing for the trigger condition and when the trigger condition occurs offering the feature outcome, the trigger condition being determined by an event having a probability related to desired average turnover between successive occurrences of the trigger condition on the respective console. … 55. The method as claimed in any one of claims 43 to 54, wherein the feature outcome is a simplified game having a higher probability of success than the main game. 56. The method as claimed in claim 55, wherein the feature game provides a plurality of pseudo-reels with a restricted number of different symbols on each reel and a jackpot is activated if after spinning the reels the same symbol appears on a win line of each reel. (emphasis added) 59 I have reproduced claims 5, 6 and 7 even though they are not alleged to have been infringed. These claims are of some significance because they define various arrangements that are described as preferred in the body of the specification. I note that claims 6 and 7 use the phrases "mathematically related to the wager" and "proportional to the wager" respectively. 60 The three independent claims which are said to be infringed are: claim 1 for a "random prize awarding feature"; claim 25 for a gaming console "including a prize awarding feature"; and claim 43 for a "method of awarding a prize";

[44]

"trigger condition" 63 Konami submitted that the words of claim 1 confine the meaning of "trigger condition" to triggers which are not part of the rules of a game, ie. which are not combinations of a game on the console. According to Konami's written submissions: (a) the invention of the claim is a "random prize awarding feature" because the probability of the feature occurring is defined by an "event" which is not a combination of a game. The skilled addressee will read "random" as having that effect because he or she knows that, necessarily, any game on any console must produce random outcomes. In the claim, "random" signifies that the feature which is provided by the console is not part of a game on it and that the "event" which determines the trigger condition is not a part of such a game; (b) the claim distinguishes between a console, which offers a feature, and a game on the (or a) console. The whole of the claim is concerned with the relationship between the console and the feature. The game on the console is limited to playing a role in the invention which is indicated by the single reference to it. The words of that reference are not apt to describe a trigger condition which is a result in a game; (c) The third integer of the claim provides: " ... the console including trigger means arranged to test for the trigger condition and to initiate the feature outcome when the trigger condition occurs." Those words indicate that the trigger condition is external to the rules of any game on the console. It accumulates with the words of the second integer to make clear that the trigger condition and the means by which it operates all function outside the rules of the game on the console. Combination triggers are not external to a game. As the definition of "combination" at 3:l shows, combinations define a game and therefore, are internal to it. 64 I do not accept Konami's submission. 65 First, as a matter of language, the claim does not require that the event which constitutes the trigger condition not be a combination of the game. Nor do I think the presence of the word "random" indicates to the skilled addressee that it does. Secondly, the fact that the claim is concerned with a feature on a gaming console does not imply that the feature cannot be triggered by a combination trigger that is produced as part of the game play that occurs on the console. Here again, I do not think the words of the claim would indicate to the skilled addressee that a combination trigger that occurs as part of the game play in the main game cannot also constitute an event that triggers the prize awarding feature. In my opinion, none of the matters relied upon by Konami indicate that the trigger condition must be external to the main game. 66 In support of its submission Konami also referred to Mr de Bruin's affidavit evidence. Like the Konami submission, his evidence focuses on the presence of the word "random". However, Mr de Bruin's evidence does not persuade me that the notional skilled addressee would interpret the expression "trigger condition" as excluding "combination based trigger conditions". I think he was inclined to read the claim too narrowly and to pay insufficient regard to the broad language used. 67 The specification contains various references to "combination based trigger arrangements", "combination triggers" and "typical combination triggered progressive jackpots". The expression "trigger condition" as used in the claim and in the "Summary of the Invention" does not expressly or by implication exclude a combination based trigger condition. On the contrary, a "combination based trigger condition" is, as a matter of language, a type of "trigger condition". In this regard, I consider that the language of claim 1 is clear. 68 In a short note handed up in the course of Konami's closing submissions reference is made to various correspondence, a statutory declaration and other documents included in Exhibit 8 (said by counsel at the time they were tendered to be relevant to inventive step and claim construction) and to the decision of Falconer J in Furr v C D Truline (Building Products) Ltd [1985] FSR 553. This decision (in which Falconer J refused an interlocutory injunction restraining alleged patent infringement) was relied upon by Konami in support of the rather cryptic proposition that a statement made by Aristocrat's patent attorneys in a letter to the Examiner dated 13 July 2006 was "admissible as an admission against interest by Aristocrat as to, among other things, the actions taken to secure the grant of the patent". While I would accept that a statement in a document of this kind might constitute an admission as to the common general knowledge as at a particular date, the patent attorneys' letter was not relied on by Konami for that purpose. I do not regard that letter, or any of the other documents referred to in Konami's note, as constituting evidence relevant to the proper construction of any of the patents in suit: see Prestige Group (Australia) Pty Ltd v Dart Industries Inc (1990) 26 FCR 197 at 213.

[45]

relationship between probability that trigger condition will occur to desired average turnover 69 It is common ground that claim 1 expressly requires that the probability that the trigger condition will occur be related to desired average turnover between successive occurrences of the trigger condition on the console. However, Konami submitted the probability relationship referred to must be "direct". As to what "direct" means in this context, Konami's submission is that the relationship must be "linear" and that this linearity must be mathematically exact. 70 In support of its submission on this issue Konami relied on the evidence of Mr de Bruin. On his reading of the specification, Mr de Bruin considered that the relationship referred to in the relevant claims had to be "direct". By "direct" I understood him to mean that the mathematical relationship between the amount wagered on the game and the chance of winning the feature prize had to be exactly proportionate. To take an example, Mr de Bruin would say that the chance of a player winning who wagered $10.00 on a particular game should be precisely ten times that of a player who wagered only $1.00 on the game. 71 On Mr de Bruin's interpretation of the relevant claims, a direct relationship will exist if a first player who wagers $1.00 has a 1 in 10,000 chance of winning (P = 0.0001) and if a second player who wagers $10.00 has a 10 in 10,000 chance of winning (P = 0.001). However, according to Mr de Bruin, there will be no direct relationship if a first player who wagers $1.00 has 1 in 10,000 chance of winning and a second player who wagers $10.00 has a chance that is slightly greater than 10 in 10,000 (eg. P = 0.0010001). In this regard, Mr de Bruin would read the relevant claims as requiring that there be absolute or perfect linearity in the probability of the first and second players winning the feature prize. 72 Mr de Bruin relied upon various references in the body of the specification to the "direct relationship" between the number of credits wagered and the probability of winning the feature prize in any one game. He referred, in particular, to para iii at p 6 lines 23 to 30 of the specification and the passage at p 10 lines 28 to 31. I have referred to these parts of the specification at paras [55] and [57] above. 73 Aristocrat contended that the words of the relevant claims are clear and unambiguous, and that Konami's contention that they should be read as requiring that the probability of the trigger condition occurring be directly related to (inter alia) the credits bet on the respective game finds no support in either the body of the specification or the claims themselves. 74 I do not accept Aristocrat's submission that the relevant words are clear and unambiguous. Reading the relevant claims literally would produce absurd outcomes which the skilled addressee would be quick to dismiss on the basis that they could never have been intended. In particular, the requirements of the relevant claims would be satisfied if there was any relationship between the probability of the trigger condition occurring and the amount wagered on the game including, for example, a relationship whereby the probability of the trigger condition occurring decreased in proportion to the amount wagered by a player on the respective game. 75 In my view, when the relevant claims are read in the context of the specification as a whole, what is described is a relationship in which the probability of a trigger condition occurring is positively correlated to desired average (or expected) turnover between successive occurrences of the trigger condition on the console and the amount wagered by the player on the game. 76 However, I do not accept that the relationship must be mathematically exact. There is nothing in the body of the specification to justify Mr de Bruin's insistence that the probability relationship be exactly proportionate to desired average turnover. The skilled addressee would not expect very slight variations in the relative probabilities to produce different outcomes. I will return to this issue when considering the differences in the relative probabilities relied upon by Mr de Bruin in support of his opinion on the question of infringement. 77 In the result, I accept that the skilled addressee would understand the relevant claims to be referring to a direct relationship between the probability of the trigger condition occurring and the desired average (or expected) turnover between successive occurrences of the trigger condition. Beyond that, however, I think the broad language of the claims should be given effect, and not read down by importing any more specific requirement of the kind postulated by Konami, including, in particular, any requirement that the relevant relationship be absolutely or perfectly "linear".

[46]

"feature", "feature outcome" and "feature game" 78 Konami submitted that the "feature" of claim 1 and its dependent claims is a feature that is additional to the game on the console which will produce a "feature outcome" in the event the trigger condition is fulfilled. According to Konami, the feature may be a simple jackpot or something which involves some further interaction between the player and the console before the feature outcome is revealed, whether it be a jackpot or some other prize (eg. a free spin). 79 Aristocrat submitted that the word "feature" had at the asserted priority date a technical meaning to the following effect: Any additional free game, free spin of certain reels, metamorphosis of the basic game rules or secondary choice necessary to complete a game (except gamble) is considered a feature. 80 This is the definition given to the term in the Glossary to the National Standard. The word "gamble" (referred to by way of exception in the definition of "feature") is defined in the Glossary to include a game option, such as Double-Up, that may be selected following a win, which allows a player to wager his or her winnings in game play providing a higher return to player. 81 The National Standard includes requirements with respect to "features" or "feature games" at paras 4.64 to 4.72. The kinds of features that are referred to in these paragraphs include free games, re-spins, held reels, bonus prizes (where one or more bonus prizes are paid to the player during the feature sequence) and metamorphic games. 82 The nature of these "features" is largely self-explanatory. Each involves some change in the basic game play. This is also true of "metamorphic games" (another term defined in the Glossary) which a player enters from another game. The Glossary defines a "metamorphic game" as: A game entered into from another game (where generally a higher [return to player] exists or an accumulated bonus prize results) which the player must risk money on in order to play. 83 It is clear from a reading of the National Standard as a whole that, so far as it is concerned, a jackpot is not a feature although a feature may ultimately result in the player winning a jackpot (eg. through a free spin). 84 Mr Ellis' evidence was that the term "feature" is generally understood in the gaming industry to be an infrequent and valuable event often involving some manual or automatic game playing subsequent to the trigger event (my emphasis). According to Mr Ellis, the use of the term "feature" in the 689 patent is consistent with his own understanding of that term. In this regard, he pointed to the distinction drawn at p 4 lines 18 to 20 of the specification between a "main game" and a "feature outcome" that is a "second feature game". That there is a distinction between a feature game and the first (or base) game is also apparent from other parts of the specification including p 5 lines 6 to 12, p 10 lines 3 to 18, and p 10 lines 32 to 33. 85 Similarly, Mr Little defined a "feature" as a change in game play occurring as a result of a combination of symbols on the console (ie. a combination trigger condition) which temporarily enhances the player's immediate prospects of success. Like Mr Ellis, Mr Little does not regard a jackpot as a feature. 86 Mr Acres described a "feature" as any distinguishing characteristic of game operation or game play. He offered the following examples of features: a gaming machine that features a bill or note acceptor that eliminates the need for coins; a game that features 5 spinning reels; a game that features a video screen; a game that features a feature game or a secondary game. 87 It is apparent that Mr Acres understands the term to have its ordinary meaning viz. a distinctive attribute or aspect of the gaming machine, the game or the game play. It is apparent that his definition of "feature" is very broad and can also encompass physical characteristics of a gaming machine that may have no connection with game play. Mr Acres also described a "feature game" as a game or an award that is in addition to the base game and a "feature outcome" to mean the awarding of one or more feature games or prizes (my emphasis). He considers a jackpot, or a jackpot mechanism, can be a "feature" of a gaming machine on the basis that it is a distinguishing characteristic of the gaming machine and the experience it provides. In term of the claims, he considers that the award of a jackpot is a "feature outcome". 88 The 689 specification defines a number of terms (eg. "combinations") but does not include a definition of the term "feature". Nor does it include any reference to the National Standard. Curiously, neither Mr Ellis nor Mr Little referred to the National Standard in their affidavit evidence. 89 Mr Ellis' definition of the term "feature" is different to what appears in the National Standard. In his oral evidence Mr Ellis said he regards a free spin as a feature. He made the point that if a free spin is awarded (unlike a progressive jackpot) the player is required to engage in some additional game play (ie. by taking the free spin). His evidence as to what constitutes a "feature outcome" when the relevant feature is a free spin was somewhat confusing, but he seemed to think that the result of the free spin (eg. the award of a jackpot prize) would constitute, or at least be part of, the "feature outcome". 90 Mr Little's definition of the term "feature" is also different to what appears in the National Standard. The National Standard does not define the term by reference to any enhancement of a player's prospects. On Mr Little's definition, a free spin would not be a feature, or a feature outcome, because (unless there is some applicable change in the rules in the case of a free spin) the prospects of winning with a free spin do not change. However, Mr Little said that in his experience most free spins involve multipliers that do increase the player's prospects of success. 91 The question whether the word "feature" is used in the 689 patent in a technical sense, as contended by Mr Ellis and Mr Little, or in a more general sense that reflects the ordinary meaning of the word, must be considered in light of the specification read as a whole as it would be understood by a person skilled in the art. 92 Although there is reference made in the body of the specification to feature jackpots and feature games, the only part of the body of the specification that refers to a (random prize awarding) "feature" per se is the consistory statement. Hence, the specification provides no clear guidance as to whether the term "feature" is used in any technical sense or in accordance with its ordinary meaning. However, if anything, the use of the expression "feature jackpot" tends to suggest that the term is used, at least in the context of the discussion of the prior art, in accordance with its ordinary meaning. In this regard, I note that the discussion of the prior art at p 2 lines 25 to 26 twice refers to "feature jackpot". 93 In its submissions Konami placed considerable emphasis upon the extensive discussion in the body of the specification concerning jackpots and jackpot mechanisms including, in particular, the title of the 689 patent which refers to the invention as a "slot machine game and system with improved jackpot feature". This was said by Konami to tell against a construction of the expression "random prize awarding feature" that excludes a jackpot or jackpot mechanism. 94 The introduction to the specification (p 1 lines 1 to 5) states that the present invention provides "an improved jackpot mechanism". The focus of the discussion of the prior art that follows is on prior art arrangements that result in the award of jackpots. It is apparent that the invention is aimed, or purportedly aimed, at overcoming particular problems with these prior art arrangements, including, in particular, the relative disadvantage suffered by players of conventional jackpot games who wager multiple credits per game (or playline) compared to the players who wager a single credit per game or line. 95 The specification describes "a random prize awarding feature" to selectively provide a feature outcome that may result in the award of a jackpot prize. This is what I understand to be the "improved jackpot feature" of the invention referred to in the title of the patent. The jackpot prize that is awarded as a result of the random prize awarding feature will itself be a prize or "special jackpot prize" associated with a "feature game". 96 When the specification is read as a whole, it is clear that a "feature game" as referred to in claims 3 and 4 is the award of an additional game (which game is the "feature outcome") via which a player may then win a prize (eg. "a special jackpot prize"). 97 Thus, claim 3 when read with claim 1 requires that there be a "main game" with the "feature outcome" constituting the award of one or more feature games. Claim 4, when read with claim 1 and claim 3, requires that each "feature game" be "a jackpot game associated with a special jackpot prize." 98 However, in my view it does not follow that a jackpot, or a jackpot mechanism, cannot be a feature for the purposes of claims 1 and 2. These claims are not limited to features that provide, or feature outcomes that consist of, one or more feature games. In my view the word "feature" is used in the claims in accordance with its ordinary meaning. I am therefore satisfied that a jackpot, or a jackpot mechanism, can be a random prize awarding feature, and that the award of a jackpot can be a "feature outcome" within the meaning of the claims. Thus, in the case of a simple progressive jackpot, the jackpot, or jackpot mechanism, can be a feature and the award of the jackpot can be the "feature outcome" within the meaning of claims 1 and 2. 99 I do not accept (as was suggested by Mr Acres) that any prize can be a "feature". Although a feature game may be awarded as a prize, and a jackpot may be the outcome of a feature game, a jackpot is not a "feature game" within the meaning of claim 3 or claim 4. Nor do I consider a jackpot to be a "simplified game" within the meaning of claim 16.

[47]

Infringement 100 Konami's principal defence to the infringement case based upon claims of the 689 patent is that: There is no infringement because each of Konami's games uses a combination of symbols to trigger the feature in a conventional symbol trigger way. There is no infringement because, on any particular play of the game, the chance of triggering the feature is not directly proportional (ie. linear) to the credits wagered on the game. 101 The first of these defences must be rejected in light of my construction of the expression "trigger condition". The second is based upon a construction of the claims that requires that there be a perfectly "linear" relationship between the probability of the trigger condition occurring and desired average turnover and/or credits bet on the respective game. For reasons previously explained, I reject Konami's argument that absolute linearity is required. 102 Mr Ellis' Confidential Exhibit BJE-17 (see also Exhibit C) includes the relevant probability figures for the Konami feature game "Cash Carriage". BJE-17 is a spreadsheet that shows the amount wagered per game and the probability of the trigger event occurring. The spreadsheet shows that the probability of the trigger condition occurring increases in direct proportion to the amount wagered. The spreadsheet and Mr Ellis' related calculations also show that for each wager that is made, the chance of the trigger condition occurring is equal to the size of the wager divided by the desired average turnover between successive trigger conditions on the console. 103 Mr Ellis' evidence drew attention to slight differences that occur in the probability of the trigger condition occurring. For example, in the feature game Cash Carriage the probability that a 20 cent wager will trigger the feature outcome is not exactly 20 times greater than the probability that a 1 cent wager will do so. But in every case the relevant probability is entirely proportional to the number of credits wagered to at least five decimal places. 104 The evidence includes various business records produced by Konami in relation to its gaming machines which describe the game rules for particular games including the relevant feature games. In the case of the game known as "Orca Dreams Free Spin Dragons" and the "Free Spin Dragons Feature" the gaming machine profile prepared by Konami for submission to the regulator includes the following statement: The chance of "Free Spin Dragons" appearing is proportional to total credits bet. 105 With regard to the difference in the relevant probability figures at the sixth and seventh decimal places, Mr de Bruin accepted that these would not trouble the regulator or cause the statement to which I have just referred in the gaming machine profile or the game rules for "Free Spin Dragons" to be regarded as incorrect in any way. I infer from this evidence that the probability of the feature being triggered is directly proportional to the number of credits bet on the game. 106 Konami raised an additional defence to the infringement case based upon claims 3 and 27 (and claims dependent on them). Konami submitted that these claims are not infringed because there is no "testing for the trigger condition" during the play of the main game. 107 Mr Ellis' view is that the main game on the various Konami consoles starts when a wager is placed and finishes when the outcome of the main game has been displayed and resolved prior to the initiation of any feature game. In Mr Ellis' view, testing for the trigger condition occurs before this resolution of the main game since it will determine whether any feature event is to be initiated. Mr de Bruin gave evidence that: … because each of Free Spin Dragons, High Velocity Grand Prix and Kings Reward has a second set of reel strips that operates simultaneously with the set of reel strips of the base game, in effect as a second game, I am of the opinion that none of Free Spin Dragons, High Velocity Grand Prix or Kings Reward has a console "arranged to play a main game, during which testing for the trigger condition will occur". 108 I prefer Mr Ellis' evidence on this issue. What the relevant claims require is that testing for the trigger condition occurs before the main game is finished. In Mr Ellis' opinion, which I accept, such testing occurs prior to the finish of the main game. 109 In his affidavit evidence Mr de Bruin also raised an additional reason why claims 16, 37 and 55 were not satisfied, though the point was not the subject of any substantive submission by either side in their written or oral closing submissions. 110 Shortly stated, the question raised by Mr de Bruin's evidence concerning claims 16, 37 and 55 is whether the feature game on the Konami consoles is a simplified game having a higher probability of winning a major prize than in the main game. Mr de Bruin says that it is not possible to win a "major" prize in the main game on the Konami games and that these claims cannot apply to them. 111 Mr Ellis was of the opinion that a "major prize" is a relative term and that in claims 16, 37 and 55 the word is used to describe a prize that is "relatively large" compared to other prizes on offer in the main game. 112 It was not suggested by either party that the expression "major prize" has any technical meaning. When these words are read in the context of the claims in which they appear and the specification as a whole I interpret them as referring to a prize that is relatively substantial or significant. I say "relatively" because, in the context of a gaming machine that accepts (for example) a 10 cent bet, a prize of $100.00 (multiplier of 1,000) might be considered to be a major prize particularly if that was the most that could be won when making the minimum wager. Of course, if the minimum bet is $5.00 then it is hard to see how a prize of $50.00 (multiplier of 10) could be considered a major prize particularly if the most that could be won was $5,000 (multiplier of 1,000). 113 Mr Ellis considered the requirements of claim 16 against Free Spin Dragons, High Velocity Grand Prix and King's Reward in his Confidential Exhibit BJE-4 ("BJE-4"). The highest prize he identifies as available in the feature game in each case is substantial when regard is had to the highest prize that he identifies as available in the main game. On the basis of Mr Ellis' evidence I am satisfied that the further requirements of claims 16, 37 and 55 are satisfied.

[49]

Fair Basis 115 In Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (2004) 217 CLR 274 ("Doric No 1") the High Court held that the requirement that a claim or claims be fairly based on matter described in the specification that is imposed by s 40(3) of the Act requires a "real and reasonably clear disclosure" of what is claimed. At [69] the High Court referred with approval to the following passage in the judgment of Gummow J in Rehm Pty Ltd v Websters Security Systems (International) Pty Ltd (1988) 81 ALR 79 at 95: The circumstance that something is a requirement for the best method of performing an invention does not make it necessarily a requirement for all claims; likewise, the circumstance that material is part of the description of the invention does not mean that it must be included as an integer of each claim. Rather, the question is whether there is a real and reasonably clear disclosure in the body of the specification of what is then claimed, so that the alleged invention as claimed is broadly, that is to say in a general sense, described in the body of the specification. 116 Also relevant for present purposes are the High Court's comments in Doric No 1 concerning consistory clauses. A consistory clause may provide a fair basis for a claim but not if there are other matters disclosed in the specification which show that the invention is different to that described in the consistory clause. Their Honours said at [99]: … the correct position is that a claim based on what has been cast in the form of a consistory clause is not fairly based if other parts of the matter in the specification show that the invention is narrower than that consistory clause. The inquiry is into what the body of the specification read as a whole discloses as the invention [Welch Perrin & Co Pty Ltd v Worrel (1961) 106 CLR 588 at 612-613]. An assertion by the inventor in a consistory clause of that of which the invention consists does not compel the conclusion by the court that the claims are fairly based nor is the assertion determinative of the identity of the invention. The consistory clause is to be considered by the court with the rest of the specification. 117 The potential significance of a general statement or description of the invention for s 40(3) purposes was considered by Greenwood and Nicholas JJ in Multigate. Their Honours said at [46]-[47]: [46] Patent specifications often include a general description or summary of the invention which may include a consistory clause. A consistory clause is in the nature of a general description of an invention which is often expressed in terms which mirror the broadest of the claims: Welch Perrin & Co Pty Ltd v Worrell (1961) 106 CLR 588 at 612. Such clauses are not compulsory but are routinely included by those responsible for drafting patent specifications often with a view to providing fair basis for the broadest claim. Whether or not a consistory clause does so will depend upon whether there are other matters disclosed in the body of the specification which show that the invention is narrower than that described in the consistory clause: Lockwood Security Products Pty Ltd v Doric Products Ltd (2004) 217 CLR 274; 212 ALR 1; 62 IPR 461; [2004] HCA 58 at [99]. [47] The part of a patent specification which is put forward by the patentee as a general description or summary of the invention may have a significant role to play in the construction of a claim which is open to different interpretations. This is because the general description or summary of the invention will often describe the invention by reference to features that the skilled addressee would understand to be common to all possible embodiments of the invention. 118 There was some debate in submissions concerning the scope of Konami's invalidity case based upon s 40(3) of the Act. It is therefore important to remind myself of Konami's pleaded case which is set out in Konami's third further amended particulars of invalidity. It is asserted (at para 6) that each of the relevant claims of the 689 patent (ie. all of those upon which Konami is sued) is not fairly based on matters described in the specification. The particulars given in support of this allegation are: If the claims are broad enough to include: (a) trigger conditions encompassing any form of trigger condition, including combination or symbol based trigger arrangements in addition to random number generator arrangements; (b) a probability relationship between the trigger condition occurring and turnover and/or credits bet that is indirect (or non-linear) in addition to direct (or linear); (c) trigger conditions being determined by an event having a probability related to turnover and/or credits bet other than per game on the console; then each of the claims travels beyond the matter disclosed in the specification. I will consider each of these points in turn.

[50]

trigger conditions 119 The first of the matters relied upon by Konami is based upon the proposition that the invention as described in the specification is one in which the use of a combination trigger as a trigger condition that initiates the feature outcome is excluded. It is not suggested by Konami that the description of the invention expressly excludes the use of a combination trigger for this purpose. Rather, Konami's submission is that, when read as a whole, it will be apparent to the skilled addressee that the specification implicitly teaches that a combination trigger cannot be used to serve as the trigger condition. 120 In support of its submission Konami refers to the language of claim 1 itself including, in particular, the use of the word "random" and the distinction drawn by the language of the claim between the gaming console and the game on the gaming console. I have previously considered these arguments in the context of the proper construction of the claims. I do not think they support Konami's fair basis case. 121 Konami also relied upon various references to the prior art in the specification. These included the reference at p 1 line 31 to "some prior art combination based trigger arrangements" and the reference at p 2 line 3 to "[g]ames which use specific combinations of symbols to trigger jackpots". The first of these refers to some combination arrangements. The second refers to an arrangement that is very different to jackpot arrangements described in the context of the invention which, in one embodiment, offers a feature referred to as a "jackpot game". This is, as I read the specification, an "improved jackpot feature" of the kind referred to in the title to the specification. 122 Konami also referred to the specification at p 6 lines 4 to 7 where the reference is made to "conventional combination triggered jackpots". However, there is nothing evident from a reading of this part of the specification to indicate that in the preferred embodiment referred to at p 6 lines 4 to 7 a combination trigger could not be used to trigger the feature game from which a jackpot might then be won. 123 I think it is apparent from a reading of the specification as a whole that the problems in the prior art that are referred to are not problems necessarily associated with the use of combination triggers as such, but problems associated with "conventional combination triggered jackpots". The invention described and claimed in claims 3 and 4 is not a "conventional combination triggered jackpot" not because it does not use a combination trigger, but because it involves a two-staged process whereby the player must first, through a random prize awarding feature, win a feature outcome (eg. a free game or a "special jackpot game") which will then provide the player with the opportunity to win a jackpot prize or one of a number of jackpot prizes.

[52]

Claims 1, 25 and 43 126 The third point raised in Konami's particulars (subpara (c)) is rather cryptic. In closing submissions, the only argument advanced by Konami that is picked up by this particular was that claims 1, 25 and 43 are not fairly based because: [t]here is no disclosure in the specifications of a trigger condition determined by an event having a relationship only with desired turnover between successive occurrences of the trigger condition. 127 Importantly, the specification contains at p 3 lines 6 to 29 what appears to be the broadest description of the invention. Each of the three aspects of the invention described in this part of the specification contains no explicit reference to "turnover" but refers instead to "credits bet on the respective game" on the console. The specification states at p 4 lines 1 to 4 that: Preferably, the trigger condition is determined by an event having a probability related both to expected turnover between consecutive occurrences of the trigger condition on the respective console and the credits bet on the respective game. This preferred arrangement is reflected in claim 2. 128 The question is whether the specification contains a real and reasonably clear disclosure of what is claimed in claims 1 (and a fortiori) independent claims 25 and 43. 129 The invention described in the body of the specification under the heading "Summary of the Invention" and in the more detailed description of the preferred embodiments that follow is one in which the trigger condition will be an event having a probability related to credits bet per game on the console. There is no explicit reference to this probability relationship in claim 1. 130 Aristocrat submitted that it is implicit in claim 1 that the trigger condition will have a relationship to both credits bet per game and desired average (or excepted) turnover between occurrences of the trigger condition because, as the skilled addressee would appreciate, there is a necessary relationship between the two. 131 There is a difficulty with Aristocrat's submission that the additional requirement explicitly imposed by claim 2 is an implicit requirement of claim 1. On Aristocrat's approach, claim 2 is redundant. Moreover, in the body of the specification (at p 4 lines 1 to 4) there is the clear statement to the effect that the requirement that the trigger condition is determined by an event having a probability related to both expected turnover on the console and credits bet on the game is preferred. 132 Be that as it may, I think Aristocrat is correct. In circumstances where claim 1 is concerned with desired average turnover on the console (as opposed to on a network) then the requirements of claim 1 and claim 2 are identical in their effect. Both claims define a gaming machine in which the probability of triggering the feature outcome will be directly related to the number of credits wagered on a game. In my opinion this would be clear to the skilled addressee when reading the specification as a whole. 133 Accordingly, I am not satisfied that claims 1, 25 or 43 of the 689 patent are invalid for lack of fair basis.

[53]

Novelty 134 The prior art relied upon by Konami as novelty defeating includes Cashcade and a number of individual gaming consoles (including Surprize). No reliance was placed by Konami on s 7(1)(b) of the Act, so each such disclosure must therefore be considered separately and as a single source of information. 135 The relevant principles do not appear to be in dispute. In any event, with respect to Cashcade and the various gaming consoles that Konami relies upon, the basic test to be applied is the reverse infringement test: Meyers Taylor Pty Ltd v Vicarr Industries Ltd (1977) 137 CLR 228 at 235 per Aickin J. 136 With regard to the prior documentary disclosures, the test to be applied requires that the relevant publication contain a clear description of, or clear instructions to do or make, something that would infringe the patentee's claim: General Tire & Rubber Co Ltd v Firestone Tyre & Rubber Co Ltd [1972] RPC 457. In that case the English Court of Appeal stated at 485-486: When the prior inventor's publication and the patentee's claim have respectively been construed by the Court in the light of all properly admissible evidence … the question whether the patentee's claim is new … falls to be decided as a question of fact. If the prior inventor's publication contains a clear description of, or clear instructions to do or make, something that would infringe the patentee's claim if carried out after the grant of the patentee's patent, the patentee's claim will have been shown to lack the necessary novelty, that is to say, it will have been anticipated. The prior inventor, however, and the patentee may have approached the same device from different starting points and may for this reason, or it may be for other reasons, have so described their devices that it cannot be immediately discerned from a reading of the language which they have respectively used that they have discovered in truth the same device; but if carrying out the directions contained in the prior inventor's publications will inevitably result in something being made or done which, if the patentee's patent were valid, would constitute an infringement of the patentee's claim, this circumstance demonstrates that the patentee's claim has in fact been anticipated. If, on the other hand, the prior publication contains a direction which is capable of being carried out in a manner which would infringe the patentee's claim, but would be at least as likely to be carried out in a way which would not do so, the patentee's claim will not have been anticipated, although it may fail on the ground of obviousness. To anticipate the patentee's claim the prior publication must contain clear and unmistakable directions to do what the patentee claims to have invented … A signpost, however clear, upon the road to the patentee's invention will not suffice. The prior inventor must be clearly shown to have planted his flag at the precise destination before the patentee. See also AstraZeneca AB v Apotex Pty Ltd (2014) 226 FCR 324 (AstraZeneca) at [293]-[294], [300]-[302], [345]-[350].

[54]

Cashcade 137 I have already described Cashcade in the context of the description of the prior art that appears in the specification. In its written submissions Konami contended that each of the relevant claims of the 689 patent was anticipated by Cashcade except for claims 17, 18 and 56. 138 It is not disputed by Aristocrat that Cashcade was available in Australia before the earliest priority date. However, Aristocrat submitted that there was an issue as to whether there had been an anticipatory disclosure by way of a public act. Aristocrat's submission was that Konami had failed to discharge the onus of establishing that Cashcade was made "publicly available" at the asserted priority date: see s 7(1) of the Act. 139 Cashcade will have been made "publicly available" if it came into the hands of a person in circumstances which left him or her free to do whatever he or she liked with it: Merck & Co Inc v Arrow Pharmaceuticals Ltd (2006) 154 FCR 31 (Heerey, Kiefel and Dowsett JJ) at [98]-[100]; see also Jupiters at [125]-[147]. No doubt there may have been restrictions imposed by gaming machine operators on their employees as to what they could do with information acquired by them in the course of their employment. However, the question is whether the operators owed any obligation of confidence to Aristocrat that would prevent them from using information that could be obtained from an examination of Cashcade as they saw fit. 140 In the present case I am satisfied that Cashcade was marketed and supplied to gaming machine operators before the earliest asserted priority date in circumstances which left them free to use or disclose any information that could be gleaned from an examination of Cashcade as they saw fit. 141 Cashcade constitutes a "prize awarding feature" that offers a "feature outcome". This follows from my construction of claim 1 and, in particular, my findings as to the meaning of the words "feature" and "feature outcome". However, in Cashcade, the trigger condition is not determined by an event having a probability related to desired average turnover between successive occurrences of the trigger condition on the console. Instead, the probability of the trigger condition occurring is related to desired average turnover between successive occurrences of the trigger condition across all the gaming machines in the network. This is clear from Aristocrat's promotional material (Exhibit 1) relating to Cashcade which explains: To calculate how often the average value will be won it is necessary to calculate the average turnover required to trigger the average Bonus Jackpot prize. … The frequency of the Bonus Jackpot is calculated by dividing the total monthly dollar turnover of all the CASHCADE machines by the average dollar turnover required to trigger each Bonus Jackpot. 142 Accordingly, I am not satisfied that Cashcade has all the integers of any of the relevant claims. 143 There were other integers of the relevant claims that Mr Little considered were not found in Cashcade. He contended that Cashcade did not exhibit the requisite relationship between turnover and the probability of a trigger event occurring. This was on the basis that Cashcade is a "deterministic" system in which the probability of winning the jackpot on each game is either zero (P = 0) or certain (P = 1). 144 I accept that Cashcade is "deterministic" in the sense Mr Little uses that word. The numbers allotted to the gaming console are not the result of a random allocation. The console is allocated a set of numbers with each spin based on turnover on the network. If the allocated numbers do not match the pre-determined lucky number (which will be a randomly generated number within a fixed range) then the player has zero chance of winning the jackpot. If, on the other hand, a number allocated to his or her console matches the pre-determined lucky number, then he or she is certain to win. Of course, a player will not know whether he or she will win or lose. Mr Little's point is that, with Cashcade, the probability of the player winning the jackpot is not determined by a random event having a probability related to desired average turnover between successive occurrences of that event. 145 Mr Little's evidence raises an important issue with respect to the proper construction of claim 1. There are two elements of claim 1 that provide some support for the proposition that a "deterministic" prize awarding feature is not within the scope of the claim; the first is the presence of the word "random" and the second is the reference to the trigger event being determined by an event having a "probability" related to desired average turnover. 146 The word "random" implies that the prize awarding feature of the claim will not follow any regular pattern. If a prize awarding feature on a gaming machine awarded a feature outcome (eg. a free spin) in accordance with a set pattern (eg. every five games played) then it would be impossible to regard the prize awarding feature as a "random prize awarding feature". Even where the occurrence of the trigger condition depended upon random outcomes in the main game (eg. if the feature outcome was triggered every five losing games) it would be difficult to describe the prize awarding feature as "random". This is because the occurrence of the trigger event would follow a regular pattern, with the feature outcome being triggered in accordance with a predictable pattern. 147 The reference in claim 1 to "probability" implies that the probability of the trigger event occurring will be capable of being expressed in conventional terms as a number from 0 (impossible) to 1 (certain). 148 One of the advantages of the invention described in the specification is that every player who wagers one credit will have an equal chance of triggering the feature outcome. If the desired average turnover for the machine is 1000 credits, each player who wagers 1 credit will have a 1 in 1000 chance, or .001 probability, of triggering the feature outcome. Theoretically, a player will have exactly the same chance of winning with every game played as any other player has providing they are making the same sized wagers. 149 In my view, when claim 1 refers to "probability" it is referring to a pre-determined probability of between 0 and 1, that is to say, a chance of triggering the feature outcome that is greater than zero, but less than 1. The person skilled in the art would understand that this is what distinguishes the claimed invention from the prior art discussed in the body of the specification. 150 Konami submitted that this interpretation of the claims cannot be correct because it would necessarily follow that the preferred embodiments described in the specification would be outside the scope of claim 1. I do not accept this submission. 151 It is convenient to test the correctness of Konami's submission by reference to the preferred embodiment defined in claim 5. Claim 5 refers to a trigger condition that is determined as follows: A random number is selected from a pre-determined range of numbers to be associated with each main game. It will be clear to the skilled addressee that this range of numbers will be related to desired average turnover on the console (eg. 1-100,000 based on a turnover figure of $5,000 on a $0.05 machine); A range of numbers from within the pre-determined range is allocated to the machine for each game based upon credits bet on the game (eg. 1-20 if 20 credits are wagered); If the random number corresponds to a number within the allotted range (eg. 7) then the feature outcome will be triggered. (See the discussion at p 8 line 21 to p 9 line 6 of the 689 patent.) 152 It is apparent that in this embodiment (and in my view all other embodiments within the claims) every player who wagers a credit on a game has a chance of triggering the feature outcome. The position would be quite different if there were some numbers within the pre-determined range that were not eligible for allocation. That is not true of any of the embodiments of the invention described in the 689 patent. 153 Mr Little also said that claim 1 (and therefore claims 2, 25, 26, 43 and 44) was not anticipated because the gaming consoles in the network on which Cashcade operates do not include a trigger means arranged to test for a trigger condition. I do not think that is correct. It would be readily apparent to the skilled addressee that, with Cashcade, each of the linked gaming consoles must include some means with which to test for a trigger event (even if it be no more than a means for receiving a signal from a central controller) to signal the award of the jackpot to the player via the console. 154 I am also not satisfied that Cashcade anticipates claims 3 or 4 or any of the other relevant claims which require that there be a "feature game" because Cashcade does not award feature games.

[55]

Surprize 155 There was a considerable amount of attention given in evidence to what was referred to in Konami's submissions as "the Queensland version" of Surprize about which Mr Acres gave evidence, and about which he was cross-examined extensively. In closing submissions Konami made clear that it no longer places any reliance upon "the Queensland version" of Surprize. 156 Surprize was a poker machine supplied by Ainsworth Nominees Pty Ltd trading as Aristocrat ("Ainsworth") in New South Wales before the earliest priority date. It was first approved for use in or about August 1990. 157 The evidence includes a leaflet which contains a colour picture of the Surprize machine. The console has on it the following statements: Surprize FEATURE - A PAY BETWEEN 100 AND 200 COINS CAN BE WON AT ANY TIME. YOU WILL BE PLEASANTLY SURPRISED AT HOW FREQUENTLY THIS OCCURS. 158 Referring to Surprize, the leaflet states that "[t]he highly successful 'Cashcade' system is now incorporated in a stand alone machine". It describes Surprize as a "5 coin multiliner" with "'[g]ift' symbol substitutes on all reels for diamond, car, wallet and watch" and also includes the following statement: Player sees a second screen display the surprize feature. Then a prize of between 100 and 200 coins is paid randomly based on machine turnover. 159 I am satisfied that the poker machines called Surprize included a standard multi-line game and what Ainsworth's documents refer to as the "Surprize Feature". A letter from Ainsworth to the Liquor Administration Board dated 12 July 1990 contains a detailed description of how the machine works. The machine randomly selects a number between 100 and 200 inclusive. This number is then stored but not displayed. The number of coins inserted into the machine is counted by a meter. When the meter reaches the randomly selected amount (this being the trigger condition), the prize is won and transferred to the credit meter. The amount of the prize corresponds to the randomly selected number (ie. between 100 and 200 coins). Each time the prize is awarded the meter is reset to zero. 160 A specification attached to Ainsworth's letter refers to the Surprize feature as a "progressive jackpot". The letter of approval in respect of Surprize also refers to it as a machine that has "a progressive feature which has a zero start-up and pays out an amount between 100 and 200 coins … at random" (my emphasis). 161 The proposition that the Surprize machine does not provide either a "feature" or a "feature outcome" is difficult to accept in circumstances where Aristocrat (or at least Ainsworth, its predecessor in title) has itself described the jackpot mechanism on the Surprize machine as a "feature". 162 The Surprize feature was deterministic in the sense previously discussed. A player who won the Surprize jackpot and who continued to play on the machine would have no chance of winning the jackpot again until he or she wagered another 100 coins. I do not consider the Surprize feature to be a random prize awarding feature within claim 1. 163 However, I do not agree with Mr Little that a prize of between 100-200 coins is not a jackpot or special jackpot prize. As already mentioned, in its correspondence with the regulator, Ainsworth described Surprize as a "progressive jackpot". This was an apt description. 164 In Surprize, the prize awarding feature triggers the award of a prize, but the trigger condition (ie. the matching of an allotted number to the random number) does not initiate one or more feature games. When the trigger condition occurs, a second screen display announces that the prize has been won, but this second screen is not a "feature game" or a "simplified game" initiated by the trigger condition. 165 I am not satisfied that the Surprize machine anticipates any of the relevant claims.

[56]

Lightning Loot 166 The evidence establishes that a poker machine known as "Lightning Loot" was released by IGT in Australia in the second half of 1996. Mr Castellari recalled playing Lightning Loot at IGT's showrooms at the time it was launched. There is also evidence which establishes that Lightning Loot was in use in a number of clubs in October of that year. I am therefore satisfied that the poker machine known as Lightning Loot was publicly available in Australia before the earliest asserted priority date. 167 Lightning Loot employs a number of symbols resembling lightning bolts. The appearance of these symbols (also referred to as "bonus bolts") can result in awards during the game in the usual way, but they can also result in the accumulation of bonus credits which may also result in the award of free games. According to promotional material describing the game (Ex 2): When 5 bonus bolts are displayed above the reels, 10 free games are played after spin is pressed to start. During the free games, all normal prizes are paid at maximum stake. Payline prizes are paid at five credits per line on all paylines. 5, 4 or 3 three scattered lightning bolts are multiplied by 45. Additional prizes are awarded for 2 and 1 scattered lightning bolts (bonus points are not earned during a free game series). 168 The evidence also includes a letter to IGT from the Liquor Administration Board dated 3 June 1996 granting conditional approval of Lightning Loot for use in New South Wales clubs and a poker machine specification in respect of Lightning Loot that states: Bonus Feature Initiation: A free game series is awarded to the player when 250 Bonus Credits are accumulated. 'Bonus Bolts' are earned each time one or more scattered Lightning Bolts occur on the screen and the counter reaches zero. [50 Bonus Credits required for each 'Bonus Bolt' and The number of Bonus Credits earned increases with the number of Lightning Bolts occurring and the amount staked]. When Five (5) "Bonus Bolts" are gained, Ten (10) Free Games are played after 'Spin' is pressed to start. Free Game Series: During the free games, all normal prizes are paid at Maximum Stake. That is, payline prizes are paid at Five credits per line on ALL paylines. 5, 4 or 3 scattered Lightning Bolts are multiplied by Twenty-five (25). Additional prizes are also paid for 2 and 1 scattered Lightning Bolts during the free game series only. [Note: "Bonus Bolts" are not awarded during a free game series]. 169 The feature game in Lightning Loot is awarded when five "bonus bolts" appear. When this occurs, the player presses the "spin" button to play 10 free games. These 10 free games (in which bonus bolts cannot be obtained) make up the feature game. The trigger condition is the accrual of 250 bonus credits. Each time a player obtains a bonus bolt he or she receives 50 bonus credits. If a player begins play with no bonus credits accrued, it is necessary for the player to obtain 5 bonus bolts if he or she is to win the feature game in the current game. 170 Konami submitted that the probability of the trigger condition occurring in Lightning Loot was related to desired average turnover between successive occurrences of the trigger condition "… because that probability is chosen by the game designer as every game must have a defined return to player in order to assure that the game will take in more than it pays out." I do not accept this submission. 171 The probability of the player winning the feature game when playing Lightning Loot is not related to the turnover between the respective occurrences of the trigger condition on the console. The probability of the player who has obtained no bonus bolts winning the feature game is exactly the same from one game to the next. If in games 1, 2 and 3 no bonus bolts have been accrued, the probability of a player winning the feature game will be exactly the same in each of the games played. If a player wins the feature game in game 1 (by obtaining 5 bonus bolts) his or her chance of winning another feature game in game 2 will be the same as it was in game 1. Likewise, if the player does not win any bonus bolts in game 2, the probability of winning the feature game in that game will be exactly the same in games 1 and 3. If in game 2 the player obtains 4 bonus bolts (ie. 200 bonus credits) the chance of winning the feature game in game 3 will be much higher than it was in games 1 and 2. However, this increase in probability is related not to desired average turnover between successive occurrences of the trigger condition, but to the number of bonus credits obtained by the player in his or her prior games. 172 I am not satisfied that Lightning Loot anticipated any of the relevant claims of the 689 patent.

[57]

4Play 173 It is not in dispute that the game called 4Play was publicly available in Australia before the earliest asserted priority date. It is a stand-alone game (ie. not connected to a network) that can be described as a progressive jackpot feature game that is triggered when the symbols 4-P-L-A-Y appear on the screen of the console. 174 The evidence includes promotional material for 4Play that describes how the 4Play feature works: Whenever "4PLAY" appears on any lit line, the 4PLAY feature begins. A second screen appears with a new set of spinning reels. Stop the spinning reels by pressing the labelled playLinE buttons in order. Progressive score is determined by the total of the points on the centre line of all 5 reels. 175 Mr Acres inspected an example of 4Play at Aristocrat's premises in May 2012 where he examined the list of reel strips for the game. From this he was able to calculate the chances of a player triggering the feature game. According to Mr Acres, for a 1 credit wager, the feature game will be triggered once every 4629 credits wagered (P = .000216). 176 In his affidavit evidence Mr Acres expressed the opinion that the chances of triggering the 4Play feature had a probability that is related to desired average turnover and the size of each bet, although he said that this relationship was not linear so far as bet size was concerned. His affidavit does not contain any explanation of the basis for that opinion. 177 Mr Little's evidence was that the probability of triggering the feature game in 4Play was not related to desired average turnover between successive occurrences of the trigger condition on the console because the probability of the trigger condition occurring in 4Play appears to have no relationship to the number of credits bet. According to Mr Little, the probability of the feature game being triggered is the same irrespective of whether a one or five credit bet is placed. 178 In cross-examination Mr Acres agreed with Mr Little that if 5 credits are repeatedly wagered over one playline, the feature will be triggered once every 23,143 credits wagered on the console. Put another way, for every game played, the player wagering 5 credits has a one in 4629 chance of triggering the feature, which is the same for the player who wagers only 1 credit. It was also put to Mr Acres that the probability of a trigger event occurring in 4Play was not improved depending on how much the player bet. He accepted that this was correct. 179 Mr Acres gave evidence concerning the theoretical calculations that are undertaken by game designers for the purpose of establishing a theoretical percentage return to player. Mr Little was cross-examined on this topic specifically in the the context of the theoretical calculations relating to 4Play that were submitted to the Liquor Administration Board in support of Aristocrat's application to have 4Play approved for use in New South Wales. Mr Little accepted that these calculations indicated that there was a "non-linear relationship between turnover - between jackpots on turnover ...". 180 Mr Acres' evidence in relation to 4Play, and Konami's submissions, assumes that the theoretical calculations on which Mr Little was cross-examined show the probability of the feature game being triggered is related to desired average (or expected) turnover between successive occurrences of the trigger condition. I am not satisfied this is correct. In the first place, those calculations are not based on desired average (or expected) turnover. In the second place, it is impossible to reconcile Mr Acres' evidence on this topic with his concession that the chance of triggering the 4Play feature is the same regardless of the amount wagered by the player on a single payline. 181 I am not satisfied that any of the relevant claims is anticipated by the 4Play feature.

[58]

Pace Kitty 182 Pace Kitty is a slot machine depicted in a book by Marshall Fey entitled "Slot Machines" ("Fey"). It is not disputed that the book was publicly available in Australia prior to the earliest asserted priority date. 183 Fey includes the following colour photograph of the Pace Kitty: 184 The text accompanying the photograph states that: … this machine deposited coins behind the small window to the right of the twin jackpots. The extra "kitty" was dispensed if the player failed to hit a winner in ten pulls. The winless pulls were tabulated in the window designated by the large arrow. 185 It is clear from the photograph that the Pace Kitty is a vintage (circa 1937) mechanical "fruit" machine consisting of three spinning reels with a slot for receiving 10 cent coins. The text discloses that a prize (ie. the kitty) was paid out when the counter on the right hand side of the front of the machine registered 10 "winless" plays. 186 Mr Acres' view was that the Pace Kitty, as disclosed in Fey, was a gaming console that possessed all the integers of all of the relevant claims of the 689 patent. However, Mr Acres' evidence in relation to the Pace Kitty must be approached with caution because it is apparent that he has knowledge of the Pace Kitty beyond what the skilled addressee could glean from the photograph and description contained in Fey. His evidence also failed to give attention to the additional requirements of relevant dependant claims. 187 I am satisfied Fey clearly discloses to the skilled addressee a slot machine that has a "feature" and a "feature outcome" within the meaning of claim 1. Aristocrat's submissions to the effect that Fey does not disclose a slot machine including these integers was based upon a construction of claim 1 which I have rejected. 188 Aristocrat submitted that the relevant prize awarding feature in the Pace Kitty, as disclosed in Fey, was not "random" because it will never pay the "kitty" if the counter is at any of the positions 0-9. In this regard, the Pace Kitty is what Mr Little describes as "deterministic". 189 I accept that the prize awarding feature in Pace Kitty, as disclosed in Fey, is not "random" in the sense required by claim 1. The fact that the feature is "deterministic" puts it outside the claim. 190 It is also very difficult to say looking at the photograph and accompanying description in Fey whether the Pace Kitty is capable of accepting more than one coin (credit) as the wager on any game. On the assumption that a player can wager more than one credit per game when playing Pace Kitty, it is not apparent whether the player who wagers multiple credits has any greater chance of winning the feature prize than a player who wagers only one credit. On that basis, I am satisfied that claims 1 and 2 are not anticipated by Fey. 191 There are other relevant claims of the 689 patent which are for other reasons not anticipated by the disclosure in Fey. The Pace Kitty machine, as disclosed in Fey, does not provide a feature outcome that is the awarding of one or more feature games (claims 3 and 4) nor does it have a feature outcome that is a simplified game (claim 16). Further, the Pace Kitty's reels are mechanical reels not pseudo-reels (claim 17).

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Acres Patent No 686824 192 It is not disputed that Australian Patent No 686824 ("Acres I") was published in Australia on 2 May 1996 and therefore publicly available in Australia before the earliest asserted priority date. Mr Acres is one of three named inventors in Acres I. 193 The evidence that Konami relied upon to establish that Acres I disclosed the integers of each of the relevant claims of the 689 patent was a table prepared by Mr Acres consisting of an analysis of the relevant claims of the 689 patent and the description of the invention in Acres I. 194 Acres I is entitled "Computer Network for Controlling and Monitoring Gaming Devices". There are seven claims, the broadest of which is as follows: A method of operating gaming devices configured to play a preselected game interconnected by a computer network to host computer comprising: establishing a predetermined minimum activity level of gaming device play; permitting players to play the preselected game at the gaming devices; paying to each device in accordance with a pay table stored in the device after each game; monitoring the activity level of each gaming device; initiating a bonus period during which gaming devices that exceed the minimum activity level are eligible to be paid a bonus responsive to each occurrence of a predetermined event and gaming devices that do not exceed the minimum level are not eligible for such a bonus; awarding such bonuses only during the bonus period; permitting continued play of the preselected game at the gaming devices during the bonus period; continuing to pay to each device in accordance with the pay table during the bonus period; ending the bonus period; and again paying to each device in accordance with the pay table stored in the device after each game. 195 Accepting, of course, that the same invention may be described using different language, it is apparent that the invention described and claimed in Acres I is not the same as that claimed in the 689 patent. In particular, the feature outcome of claim 1 of Acres I (which I taken to be the reconfiguring of the payout table during the so-called "bonus period") is triggered when pre-determined minimum activity levels are achieved. Thus, if the pre-determined minimum activity levels have not, or cannot, be exceeded in a given game, then the player of the relevant gaming device will have no chance of triggering the "feature outcome" in that game. Hence, there is no random prize awarding feature that triggers a feature outcome that has a probability of occurring which is related to desired average (or expected) turnover between successive occurrences of the trigger condition on the console.

[60]

Obviousness 196 The statutory provisions relevant to lack of inventive step (as they stood at the relevant time) were recently considered by the Full Court in Garford Pty Ltd v Dywidag Systems International Pty Ltd (2015) 110 IPR 30 (Dowsett, McKerracher and Nicholas JJ) (Garford) at [37]-[44]. For the purpose of determining Konami's challenge to the validity of the relevant claims based upon an alleged lack of inventive step, these paragraphs in the Full Court's judgment may be taken to contain a sufficient summary of the relevant principles. I shall only refer to additional authority where I consider this necessary. 197 Konami submitted that each of the relevant claims of the 689 patent was invalid because the invention, as claimed, did not involve any inventive step. Konami did not advance any case based upon s 7(3) of the Act. Its case is based solely on the common general knowledge as it stood at the earliest possible priority date. Accordingly, Konami must satisfy me that the invention, as claimed, would have been obvious to a person skilled in the relevant art in the light of the common general knowledge as it existed in the patent area before the priority date of the relevant claims. 198 In support of its obviousness case, Konami relied upon the evidence of Mr Acres. He contended that each of the relevant claims of the 689 patent define characteristics of gaming machines that were well known in the industry in 1997. Konami also relied upon correspondence between Aristocrat and various regulatory authorities in relation to the Surprize gaming machine which was said to constitute cogent evidence of obviousness. 199 There is evidence to indicate that in early 1992 Aristocrat (or its UK affiliate) attempted to obtain approval for the Surprize machine for the Netherlands. Correspondence in evidence suggests that Dutch law required that every player be given the same chance of winning a progressive jackpot. According to a letter from the Dutch regulator to Mr Stephen Ainsworth dated 28 April 1992, this could be achieved in the Surprize machine by using: a start-up (or minimum) payout of 50 coins and a maximum payout of 100 coins (ie. an average payout of 75 coins); a first random number generator to choose the amount of the win (ie. between 50 and 100 coins); a second random number generator to choose a winning number within a range from zero up to the number of games that would need to be played in order to trigger the jackpot. 200 Mr Fong of Aristocrat wrote a memorandum to Mr Ainsworth dated 29 April 1992 which included as an attachment the following description of how Surprize worked: Surprize - MV2030 The game SURPRIZE - MV2030 is fair to the player as it is based on turnover - the number of coins put into the machine by the player. How SURPRIZE works. The random number generator chooses a number between 50 and 100. The number chosen stays in memory until the turnover reaches this figure which starts up at 50. On average the random jackpot is expected to go off every 581.39 games with an average prize of 75 coins. Since SURPRIZE is a multiline game, playing one coin (one line) constitutes one game. Playing two coins (two lines) constitutes two games and so on. Since the jackpot is expected to go off every 581.39 games, a player staking one coin is going to approach 581.39 games at a slower rate than a player staking 5 coins. In other words the player staking 5 coins has 5 times the chance of getting to the jackpot. Once the jackpot goes off, a startup of 50 coins goes to the meter and the random number generator again chooses a number between 50 and 100. 201 Mr Ainsworth responded in writing and somewhat testily. He explained that the Dutch authorities knew exactly how the Surprize machine worked, that they were not happy with it, and that they would not approve it. Mr Ainsworth continued: ... They are very strict in their application of the law which states that every player must have the same opportunity of winning. Their reasoning is that, for example, if a prize of 80 coins is randomly selected then someone playing the machine while the machine is accumulating from the low point of 50 clearly doesn't have the same chance of winning as someone who plays the machine when it has already accumulated to, say, 70. They have no problem with the machine randomly selecting a prize between 50 and 100. What they say is that everyone should have the same chance of winning that prize every time they play the machine. Clearly the chance of winning a prize as it currently stands is dependant on how much play the machine has previously had i.e., how much has accumulated before a hit. That is why they are suggesting a second random number generator to give every player an equal and independent chance of winning the random prize. I trust that this is clear now and that a machine programme can be submitted which meets the necessary criteria. 202 Mr Fong responded to Mr Ainsworth several days later advising that a second random number generator had been introduced (as suggested in the letter of 28 April 1992) which should satisfy the Dutch authorities. By this time he appears to have appreciated that the Dutch authorities were not only concerned about the so-called "dead zone" in Surprize (ie. 1-50 coins) but also the potential unfairness to players even if there were no "dead zone" due to the fact that (as in Cashcade) a new random number was only ever selected when the jackpot was won. 203 The evidence also shows that in 1992 Aristocrat sought approval for its Surprize gaming machine from the Machine Gaming Division of Queensland Treasury. The evidence includes a copy of a letter from Queensland Treasury to the Queensland Manager of Aristocrat dated 17 November 1992 which was also relied upon by Konami to demonstrate that the invention described and claimed in the 689 patent was obvious. The letter states: While evaluating the mathematical calculations for the game "Surprise" it has been noticed that a "random" surprise pay between 100 and 200 coins can be won at any time. Random prizes are regulated by section 12.13.1 of Tender C566: "A game may offer random prizes. The likelihood of obtaining a random prize must be independent of the previous game outcome. The magnitude of all random prizes must be displayed on the artwork. The random prizes contribution is not to contribute greater than 10% of the overall return" It appears that in this game the machine selects a random number. Successively for each coin bet a counter is appropriately incremented until the value stored in such counter reaches the previously selected number, and this is when the prize is awarded. From this implementation it can be concluded that the probability of triggering the feature is not constant during the game as a player who does not win the "surprise prize" feature the first hit, will have a greater probability of winning it in the successive hits and sooner or later the prize must be won. There are many methods to implement the random prize feature (in a way that the probability of triggering the feature is independent of the previous game), one of which includes choosing a random number each game. In conclusion the present implementation of the random prizes/features of the game "Surprise" is unacceptable. 204 There is no copy of "Tender C566" in evidence but it may be inferred that this document reflected the Queensland regulator's requirements in November 1992. It is apparent that these required that in the case of a game offering "random prizes" the likelihood of obtaining a random prize had to be independent of the outcome of the previous game. For reasons previously explained, this was not true of Surprize as approved for use in New South Wales. 205 In its submissions Konami placed considerable reliance upon the fourth paragraph of Queensland Treasury's letter which it contended pointed directly to the claimed invention. 206 If the Surprize machine as approved for use in New South Wales constitutes the starting point for the obviousness analysis, then it does appear that the modifications that were proposed by Aristocrat in 1992 were quite straightforward. The use of a first random number generator to determine the prize within the given range coupled with a second random number generator with which to determine when the prize would be awarded was a very simple solution to the problem that the Dutch and Queensland authorities had with the Surprize gaming machine approved for use in New South Wales. 207 However, the principal difficulty with this aspect of Konami's obviousness case is that it takes the Surprize machine as its starting point by relying on correspondence that addresses a problem identified by the Dutch and Queensland authorities in relation to the Surprize machine which was solved in that particular context. This is not a permissible approach to take in this case where the Surprize machine as approved for use in New South Wales is not common general knowledge or available s 7(3) information. 208 The fact that the Dutch or Queensland authorities' suggested modifications may have provided an obvious solution to problems associated with the Surprize machine does not mean that the Surprize machine, so modified, would have been obvious to the person skilled in the relevant art armed only with the common general knowledge. 209 In his affidavit evidence Mr Acres refers to some of these documents including, in particular, the letter from Queensland Treasury upon which Konami relies. He said that, in his experience "… the choice of a random number each game using a random number generator was well-known in the gaming industry in 1997." It is not entirely clear to me what Mr Acres means by this. If he is to be taken as saying that it was common general knowledge that a second random number generator could be utilised in a combination of the kind suggested by the correspondence emanating from the Dutch or Queensland authorities (ie. the so-called Queensland version of Surprize), then I am not persuaded that he is correct. 210 The evidence establishes that there were at least two well-known problems associated with progressive jackpots at the earliest asserted priority date. 211 The first was the problem associated with Cashcade and other progressive jackpots whereby the probability of a player winning a feature jackpot was independent of the amount of credits he or she wagered. The patent specification describes and claims an invention which overcomes this difficulty. 212 The second problem identified with Cashcade and other progressive jackpots (including the version of Surprize approved for use in New South Wales) was "swamping". The invention described and claimed in the patent specification solves this problem. 213 In evidence to which I have previously referred, Mr Acres suggested that the problem of swamping was solved by Surprize. There are two points to make about this evidence. First, the evidence given could only have related to the so-called Queensland version of Surprize. Secondly, Mr Acres' evidence recognised that swamping was a problem associated with Cashcade (which was common general knowledge) and other progressive jackpots like it. 214 The idea that a random number generator might be used for the purpose of assuring that each player has the same chance of winning the progressive jackpot (relative to the amount he or she wagered on each game) for every game played was not common general knowledge before the earliest priority date. I am not persuaded that it would have been obvious to the (non-inventive) person skilled in the relevant art as at the earliest asserted priority date that a random number generator might be used to make a gaming machine with a prize awarding feature as claimed in the 689 patent. 215 In the result, I am not satisfied that any one or more of the relevant claims of the 689 patent is invalid for lack of inventive step. 216 As I have previously mentioned, Aristocrat called Mr Willis to give evidence. For completeness I should say two things about his evidence: He gave evidence in cross-examination that the regulatory authorities had always insisted (going back to 1978 or even earlier) that gaming machines which offer progressive jackpots must give every player the same chance of winning (relative to the amount wagered on the game) for every game played. I am satisfied that Mr Willis was mistaken about this. He also gave evidence aimed at showing that Aristocrat's "Hyperlink" games were commercially successful. Some of the difficulties that can confront a patentee seeking to rely on commercial success as a secondary indicium of inventiveness were referred to by the Full Court in Garford at [87]. In my opinion Mr Willis' evidence was too general to be of any assistance on the issue of inventive step. In particular, it was not possible for me to draw any inference as to the extent of, or the reasons for, any such commercial success.

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Manner of Manufacture 217 Konami submitted that none of the relevant claims of the 689 patent was for a product or method constituting a "manner of manufacture" as required by s 18(1)(a) of the Act. Konami's argument on this issue was developed in two ways. 218 First it was submitted that the claims lacked the necessary quality of newness or inventiveness and that this was apparent on the face of the specification. This submission relies upon the reasoning of the High Court in NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd (1995) 183 CLR 655 (Philips) in which the majority said at 663-664: The effect of those opening words of s 18(1) is that the primary or threshold requirement of a "patentable invention" is that it be an "invention". Read in the context of s 18(1) as a whole and the definition of "invention" in the Dictionary in Sch I, that clearly means "an alleged invention", that is to say, an "alleged" "manner of new manufacture the subject of letters patent and grant of privilege within s 6 of the Statute of Monopolies". In the light of what has been said above about what is involved in an alleged manner of new manufacture, that threshold requirement of "an alleged invention" will, notwithstanding an assertion of "newness", remain unsatisfied if it is apparent on the face of the relevant specification that the subject matter of the claim is, by reason of absence of the necessary quality of inventiveness, not a manner of new manufacture for the purposes of the Statute of Monopolies. That does not mean that the threshold requirement of "an alleged invention" corresponds with or renders otiose the more specific requirements of novelty and inventive step (when compared with the prior art base) contained in s 18(1)(b). It simply means that, if it is apparent on the face of the specification that the quality of inventiveness necessary for there to be a proper subject of letters patent under the Statute of Monopolies is absent, one need go no further. (footnotes omitted) 219 In support of this analysis the majority referred to the High Court's earlier decisions in National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252 (NRDC) at 261-262 and Commissioner of Patents v Microcell Ltd (1959) 102 CLR 232 (Microcell). However, in obiter dicta, the majority then went considerably further and expressed a preference for a construction of s 18(1)(a) of the Act which would not impose any requirement that the relevant lack of newness or inventiveness be apparent on the face of the specification. A different majority distinguished Philips in Advanced Building Systems Pty Ltd v Ramset Fasteners (Aust) Pty Ltd (1998) 194 CLR 171 at 191-193 by reference to the different statutory language appearing in s 100(1) of the Patents Act 1952 (Cth). 220 In Bristol-Myers Squibb Co v F H Faulding & Co Ltd (2000) 97 FCR 524 the Full Court treated the majority decision in Philips as authority for the proposition that if on the basis of what was known, as revealed on the face of the specification, the invention was obvious or did not involve an inventive step, the threshold requirement of inventiveness imposed by s 18(1) of the Act would not be met. Black CJ and Lehane said at [30]: The majority of the High Court in Philips explicitly say that their observations about a case where want of the threshold requirement of inventiveness is not apparent on the face of the specification are not necessary to their decision. And, in discussing the commencement point (what is "known") of the inquiry about inventiveness, their Honours refer only to the Microcell principle. In our view, in the light of the authorities to which we have referred, Philips stands for the proposition (as a matter of construction of the 1990 Act) that if, on the basis of what was known, as revealed on the face of the specification, the invention claimed was obvious or did not involve an inventive step - that is, would be obvious to the hypothetical non-inventive and unimaginative skilled worker in the field […] - then the threshold requirement of inventiveness is not met. Some elaboration, however, is required in relation to what the specification reveals as "known". If a patent application, lodged in Australia, refers to information derived from a number of prior publications referred to in the specification or, generally, to matters which arc known, in our view the Court - or the Commissioner - would ordinarily proceed upon the basis that the knowledge thus described is, in the language of s 7(2) of the 1990 Act, part of "the common general knowledge as it existed in the patent area". In other words, what is disclosed in such terms may be taken as an admission to that effect. In substance, we think, that is what happened, both in Microcell and in Philips. If, however, the body of prior knowledge disclosed by the specification is insufficient to deprive what is claimed of the quality of inventiveness, then the only additional knowledge or information which will be taken into account is knowledge or information of a kind described in s 7(2) of the 1990 Act. That again, in our view, is consistent with the approach taken in Microcell. It is also, with respect, the only approach which does not, in practical terms, render s 18(1)(b)(ii) otiose. Of course, once that additional knowledge is taken into account, one is applying s 18(1)(b)(ii), not the opening words of s 18(1) - unless, perhaps, one might apply either, there being, in this respect, no difference between them. This is the approach that has been followed in a number of subsequent Full Court decisions including AstraZeneca at [379]-[387]. 221 Konami's submission that the invention claimed in the 689 patent lacks the necessary quality of newness or inventiveness required by s 18(1)(a) of the Act must be rejected for two reasons arising out of my previous findings. First, the submission assumes that there is nothing new or inventive in what is claimed over Cashcade. Secondly, the submission also assumes that this lack of newness or inventiveness is apparent on the face of the specification. Neither of these assumptions is correct. 222 The second way in which the argument was developed drew upon the decision of Emmett J in Dynamite Games Pty Ltd v Aruze Gaming Australia Pty Ltd (2013) 100 IPR 86 (Dynamite Games). The submission put to his Honour in that case was that the claims of the patents in issue in that case (which were also concerned with electronic gaming machines and networked gaming systems) were to "… no more than a mere idea as to the rules of a game." In relation to this submission, his Honour said at [172] that he had some doubt as to whether the first requirement of s 18 of the Act (ie. that the invention, as claimed, be a manner of manufacture) was satisfied but that he found it unnecessary to decide the point. 223 A mere idea that does not translate into a claim for a new and useful result is not within the concept of a manner of manufacture because it involves no more than "mere discovery" or "discovery without invention" cf. NRDC at 264. However, the inventions claimed in the 689 patent are not "mere ideas" but new and useful gaming machines and new and useful methods of operation producing new and improved results. 224 I am satisfied that each of the relevant claims of the 689 patent is for a manner of manufacture as required by s 18(1)(a) of the Act.

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The 341 Patent 225 The issues that arise in relation to the 341 patent may be dealt with briefly. As mentioned, the 341 patent is a divisional of the 689 patent based upon a divisional application filed on 31 October 2001. 226 In its written submissions, Konami said that the arguments advanced in relation to the 689 patent apply equally to the 341 patent. As must be clear from a consideration of the claims of the 341 patent, that cannot be correct. Nevertheless, subject to one matter concerning the priority date of the claims of the 341 patent (which I will come to shortly) I understood Konami to accept that if the claims of the 689 patent are valid and infringed, then claims 1, 11 and 12 of the 341 patent will also be valid and infringed by the manufacture and supply of "High Velocity Grand Prix". 227 Konami contends that the claims of the 341 patent are not entitled to a priority date earlier than 31 October 2001, that being the date upon which the specification for the 341 patent was filed. Aristocrat accepts that if Konami is correct and the priority date of the claims of the 341 patent is deferred to 31 October 2001, then the claims of the 341 patent are invalid for lack of novelty. 228 The application for the 341 patent was made under s 79B of the Act. At the relevant time, s 79B(1) provided: If a complete patent application for a patent is made (but has not lapsed or been refused or withdrawn), the applicant may, in accordance with the regulations, make a further complete application for a patent for an invention: (a) disclosed in the specification filed in respect of the first-mentioned application; and (b) where the first-mentioned application is for a standard patent and at least 3 months have elapsed since the publication of a notice of acceptance of the relevant patent request and specification in the Official Journal-falling within the scope of the claims of the accepted specification. 229 In accordance with s 43(2) of the Act, the priority date of the claims will be the date upon which the specification was filed or, where the regulations provide for a different date, the date determined in accordance with the regulations. 230 At the relevant time, the regulation governing the priority date for the 341 patent was reg 3.12, which included the following: (1) Subject to regulations 3.13 and 3.14 and subregulation (2), the priority date of a claim of a specification is the earliest of the following dates: (a) the date of filing of the specification; (b) if the claim is fairly based on matter disclosed in 1 or more priority documents, the date of filing the priority document in which the matter was first disclosed; (c) if the specification is a complete specification filed in respect of a divisional application under section 79B of the Act and the claim is fairly based on matter disclosed in the specification referred to in paragraph 79B(1)(a) of the Act - the date mentioned in subregulation (2C); (d) … (2C) The date for a specification to which paragraph 3.12(1)(c) applies is the date that would have been the priority date of the claim if it had been included in the specification referred to in paragraph 79B(1)(a) of the Act. 231 The parties made a number of concessions relevant to the priority date issue which bring it within a narrow compass. In particular, Mr Bannon SC, who appeared for Aristocrat, accepted in his closing submissions that unless the specification of the 689 patent as a whole disclosed an invention which does not import any requirement with respect to turnover between occurrences of the trigger condition, then the priority date of the claims of the 341 patent would be deferred until 31 October 2001 with the consequence that they would be invalid for lack of novelty (see transcript p 857). 232 The concession is significant because it implies that the content of the specification in respect of the application for the 689 patent, at the time it was filed, was not the subject of any relevant amendment prior to grant. Although this is not established by evidence, and is therefore not a wholly satisfactory basis on which to proceed, it is made necessary in circumstances where neither party tendered in evidence a copy of the specification filed in respect of the application for the 689 patent. 233 The question is then whether the 689 patent contains a "real and reasonably clear disclosure" of what is claimed in claims 1, 11 and 12 of the 341 patent: Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth [2011] FCAFC 132 at [155] per Nicholas J citing Doric No 1 at [69]. In applying this test it is not appropriate to engage in an "over meticulous verbal analysis" or to seek to isolate in the description and claims of the priority document "essential integers" or "essential features" of an alleged invention and ask whether they correspond with the essential integers of the claims in question: ibid at [68]. 234 The content of the 341 patent is essentially the same as the 689 patent except for the consistory statements (at p 4 lines 4 to 36) and the 23 claims. The relevant claims of the 341 patent are as follows: 1. A method of awarding a jackpot in a gaming system, wherein the method selectively provides a feature outcome on a gaming console, the console being arranged to offer the feature outcome when a game has achieved a trigger condition, the console including trigger means arranged to test for the trigger condition and to initiate the feature outcome when the trigger condition occurs, each console being arranged to play a main game during which testing for the trigger condition occurs, and wherein the feature outcome initiated by the trigger condition is the awarding of one or more feature games, there being one or more gaming consoles associated with the gaming system comprising a gaming network to which each of the gaming consoles is connected, each gaming console including a signal output means arranged to produce an output signal in response to operation of the respective console, such that a central feature jackpot system connected to the network provides an incrementing jackpot pool which increases in response to signals from the connected consoles, and when a feature jackpot game is played on one of the gaming consoles, the feature jackpot game results in a game outcome selected from a number of possible game outcomes, wherein at least one of the possible game outcomes is an award of a jackpot drawn from the jackpot pool. … 11. A gaming system providing a progressive jackpot feature, and including at least one gaming console having a prize awarding feature to selectively provide a feature outcome, the console being arranged to offer the feature outcome when a game has achieved a trigger condition, and including trigger means arranged to test for the trigger condition and to initiate the feature outcome when the trigger condition occurs, the console being arranged to play a main game, during which testing for the trigger condition occurs, and wherein the feature outcome initiated by the trigger condition is the awarding of one or more feature games, the gaming console being connected to a gaming network and including a signal output means arranged to produce an output signal in response to operation of the respective console, such that the progressive jackpot feature is implemented using a central feature jackpot system connected to the network to provide an incrementing jackpot pool which increases in response to signals from each of the at least one connected consoles, and when a feature jackpot game is played on the at least one connected consoles, the feature jackpot game results in a game outcome selected from a number of possible game outcomes, wherein at least one of the possible game outcomes is an award of a jackpot drawn from the jackpot pool. 12. A gaming system providing a progressive jackpot feature, and including at least two gaming consoles wherein one console provides a game for play by a player which is mathematically different to the game of the other console, each console having a prize awarding feature to selectively provide a feature outcome, the console being arranged to offer the feature outcome when a game has achieved a trigger condition, and including trigger means arranged to test for the trigger condition and to initiate the feature outcome when the trigger condition occurs, the console being arranged to play a main game, during which testing for the trigger condition occurs, and wherein the feature outcome initiated by the trigger condition is the awarding of one or more feature games, the gaming console being connected to a gaming network and including a signal output means arranged to produce an output signal in response to operation of the respective console, such that the progressive jackpot feature is implemented using a central feature jackpot system connected to the network to provide an incrementing jackpot pool which increases in response to signals from each of the at least one connected consoles, and when a feature jackpot game is played on the at least one connected consoles, the feature jackpot game results in a game outcome selected from a number of possible game outcomes, wherein at least one of the possible game outcomes is an award of a common jackpot prize drawn from the jackpot pool. 235 None of these claims impose any requirement that the trigger condition be related to an event having a probability related to desired average turnover (or expected turnover) between successive occurrences of the trigger event on a console. This is a fundamental difference between the invention defined in the claims of the 341 patent and the invention described in the 689 patent. In my view, the 689 patent does not contain any real and reasonably clear disclosure of what is claimed in the 341 patent. 236 Konami also raised an argument based upon the scope of the claims of the 341 patent when compared to the 847 patent which it developed on the basis that s 79B(1)(b) applied. However, if the notice of acceptance of the patent request and specification relating to the application for the 689 patent was not published in the Official Journal until 21 November 2002 (as appears to be the case) then s 79B(1)(b) is of no relevance. 237 In the circumstances, I am satisfied that claims 1, 11 and 12 of the 341 patent are invalid for lack of novelty.

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The 847 Patent 238 The 847 patent is entitled "Gaming machine with buy feature games". At p 1 lines 6 to 11 the specification describes the field of the invention as follows: Certain types of these machines have a series of rotatable reels, each of which displays a series of symbols or a video simulation of such a mechanism while other types of machines are arranged to play video simulations of card games or other types of wagering games, such as bingo or keno. The invention has particular application to an improved game played on such a machine. 239 This is followed by a brief discussion of prior art. At p 1 lines 14 to 34 the specification states: Players regularly playing gaming machines need to have their interests maintained. Therefore, it is necessary for manufacturers of these machines to develop inventive game features which add interest to the games provided on such machines in order to keep the players entertained and willing to continue to play the games. There is a continuous trade-off between what the players of the machines want and what the operators of the machines want from the machines. Naturally, operators want the players to stake more money per game so that the overall turnover is higher. Conversely, players will not do this unless they feel that they are getting more for the extra money that they are betting. Further, as the range of machines and games increases, it is becoming increasingly important to offer more options to the players. The more options that are available in one machine, the easier it is to maintain the player's interest and the easier it is for players to be able to gain access to a machine that will offer them exactly the game that they want. To date, most types of video gaming machines which are available to players offer limited options. At best, a range of bet sizes and paylines upon which the players can bet are offered. Certain machines also offer a double-up option available after a win while other machines have various ranges of paytables particularly for higher bets. 240 This is followed by a consistory statement identifying a number of different aspects of the invention and a more detailed description of the invention and its preferred embodiments. 241 The 847 patent has 60 claims. The relevant claims are as follows: 1. A gaming machine adapted to play a base game in which a player stakes a wager on an outcome of the base game, and if a winning outcome occurs, the gaming machine awards that player a prize, the gaming machine including: a display means including a plurality of display positions for displaying combinations of symbols; a control means for controlling operation of the gaming machine, the control means including a processing means for processing data and displaying selected images on the display means; and a selecting means operable by a player of the gaming machine to enable the player to select at least one feature which can be added to the base game, wherein the gaming machine requires the player to stake an additional wager in order to be eligible for the selected feature, wherein there is no guarantee that the selected feature will eventuate merely by having staked the additional wager, and wherein when the selected feature eventuates, it includes the award of a series of game events from which a prize provided by the feature may be won. … 19. A gaming machine which includes a display means including a plurality of display positions for displaying combinations of symbols; a control means for controlling operation of the machine, the control means including a processing means for processing data and displaying selected data on the display means; and a selecting means operable by a player of the machine for enabling the player to select at least one feature which can be added to a base game played on the machine, an additional wager being staked by the player in order to be eligible for said at least one feature being a fixed amount multiplied by a bet wagered per line or per draw, there being no guarantee that a benefit provided by the feature will eventuate merely by having staked the additional wager. … 56. A gaming machine adapted to play a base game in which a player stakes a wager on an outcome of the base game, and if a winning outcome occurs, the gaming machine awards that player a prize, the gaming machine including: a display means including a plurality of display positions for displaying combinations of symbols; a control means for controlling operation of the gaming machine, the control means including a processing means for processing data and displaying selected images on the display means; and a selecting means operable by a player of the gaming machine to enable the player to select at least one feature which can be added to the base game, wherein the gaming machine requires the player to stake an additional wager in order to be eligible for the selected feature, wherein the selected feature only eventuates on the occurrence of a trigger event in a game play of the base game when the additional wager has been staked, and wherein when the selected feature eventuates, at least one additional game event .is played that provides a chance for the player to win a prize.

[65]

Obviousness 245 Claims 1, 19 and 56 are claims for combinations. In Garford the Full Court referred to the approach that should be taken when seeking to determine whether the invention the subject of such a claim involves an inventive step. The Full Court said at [54]-[56]: [54] … the question to be addressed in relation to inventive step is directed to the combination. The combination will be taken to involve an inventive step unless it is established that it would be obvious to the notional person skilled in the art in light of the common general knowledge considered separately from, or together with, any available s 7(3) information. As Aickin J observed in 3M at 293: In the case of a combination patent the invention will lie in the selection of integers, a process which will necessarily involve rejection of other possible integers… It is the selection of the integers out, of perhaps many possibilities, which must be shown to be obvious. [55] In Elconnex Pty Ltd v Gerard Industries Pty Ltd (1992) 25 IPR 173 (Elconnex FC) Lockhart J (with whom Sheppard and Wilcox JJ agreed) referred to this observation of Aickin J and added (at 184) that in the case of a combination "it is impermissible to determine inventiveness by a piecemeal examination integer by integer". [56] While that is plainly correct, it is important to recognise that in assessing the inventiveness of a combination of integers it is necessary for the Court to proceed with a clear understanding of the integers that make up the combination and their working interrelationship. What is essential is that, equipped with an understanding of the way in which the combination works, the Court asks not whether the function performed by each individual integer is obvious, but whether the whole of the combination of which they form part is obvious. 246 My previous findings in relation to the common general knowledge apply to any consideration of the 847 patent. 247 In essence, claim 1 is to an electronic gaming machine that includes a particular feature which may be engaged by a player for an additional wager. The feature is one in which the player may win an additional series of games from which a prize may then be won. The feature may (as in Konami's Prize Plus) be nothing more than a series of "free spins". 248 Claim 19 is to a gaming machine that has certain characteristics which appear to me to be essentially the same as those referred to in claim 1 except for in the following respects. First, in claim 1, if the feature eventuates (ie. if it is triggered), then it will include the award of a series of game events (eg. free games) from which a prize may then be won. This is not a requirement of claim 19. Secondly, unlike claim 1, it is a requirement of claim 19 that an additional wager being staked by the player be a fixed amount multiplied by a bet wagered per line or per draw. 249 Claim 56 replicates claim 1 except in so far as it defines a gaming machine that has the following additional elements: a feature may consist of at least one additional game (as opposed to a "series of game events") in which the player has a chance to win a prize; and the trigger for the award of the additional game must be a trigger event in the base game in which the additional wager has been staked. 250 In my opinion, none of claims 1, 19 and 56 involve a scintilla of inventiveness. There was no difficulty overcome or barrier crossed by these alleged inventions. Each of the combinations defined in these claims is obvious and could be arrived at by a person skilled in the relevant art (however unimaginative he or she might be) armed only with the common general knowledge as it stood at the priority date. 251 I am satisfied that each of claims 1, 19 and 56 of the 847 patent is invalid for lack of inventive step.

Aristocrat Technologies Australia Pty Limited v Konami Australia Pty Limited

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