IGT (Australia) Pty Ltd v Aristocrat Technologies Australia Ltd

Federal Court of Australia (Full Court)|2008-07-17|Before: Allsop J, Middleton JJ

Introduction 1 This appeal concerns the interpretation of a patent and a patent application relating to gaming machines (variously, poker machines, slot machines or fruit machines), and the difference between two well known general categories of trigger events which could be used in linked gaming systems, either to set off an entitlement to a prize or to cause some other change in game play. These are referred to as a 'combination trigger' (being the occurrence of a particular combination of symbols on one of the linked machines, such as a line up of three of the same pieces of fruit or playing cards) and a 'mystery quantum equalisation trigger' or 'count trigger' (which involves counting events such as the number of plays on the linked machines for their occurrence until a target total, typically randomly generated, is reached). 2 The appeal (brought by leave) is from orders made on 9 October 2007 in which the learned trial judge determined an appeal from a decision of a Delegate of the Commissioner of Patents pursuant to s 60(4) of the Patents Act 1990 (Cth) ('the Act'). 3 The appellants were joint applicants for the grant of a patent in respect of Australian Patent Application No 748263. The patent application in suit is entitled 'Operation of Gaming Machines in a Linked Bonus Prize Winning Mode'. It relates to a method and system for awarding a bonus prize in the playing of a number of gaming machines all linked to a central computer or processor. 4 The Delegate rejected the respondent's opposition in respect of 19 out of the 21 claims of the patent application. The remaining claims (claims 17 and 18) were refused on the basis that the invention as claimed in those claims was not novel and did not involve an inventive step, which refusal was and is not challenged by the appellants. 5 The learned trial judge set aside the decision of the Delegate except insofar as the Delegate found that the invention by claims 17 and 18 lacked novelty and did not involve an inventive step. 6 Before the learned trial judge the respondent relied upon a number of grounds of opposition. Those pressed are summarised in the learned trial judge's principal reasons handed down on 7 February 2007 (Aristocrat Technologies Australia Pty Ltd v IGT (Australia) Pty Ltd (2007) 71 IPR 259; [2007] FCA 37). The learned trial judge found that it was the prior patent specification referred to as the Bennett patent (being Australian Patent No 633469) that deprived certain of the claims of novelty because the Bennett patent disclosed the use of a combination trigger. 7 The effect of the learned trial judge's conclusions and the orders made on 9 October 2007 was that claims 1 to 7 and 9 to 15 of the patent application were not novel in light of the Bennett patent, but that the patent application could proceed to grant if amended so as to limit the claims to the subject matter of the remaining claims 8, 16, 19 and 21 which the learned trial judge found had not been shown to lack novelty in light of the Bennett patent. Accordingly, the learned trial judge made directions for any application to amend the patent application and also granted a stay of the orders pending any application for leave to appeal and any appeal. 8 The respondent no longer contests this appeal. However, because the effect of the learned trial judge's orders was to refuse the grant of a patent in respect of certain claims of the patent application, the appellants continue to prosecute this appeal.

The basis of the appeal 9 As we have indicated, the respondent appealed to the Court below pursuant to s 60(4) of the Act. It is well-established that such a proceeding, though called an 'appeal', is in the original jurisdiction of the Court and is to be conducted as a hearing de novo: see F Hoffman-La Roche AG v New England Biolabs Inc (2000) 99 FCR 56 at [29]; New England Biolabs Inc v F Hoffman-La Roche AG (2004) 141 FCR 1 at [44]; E I Du Pont de Nemours and Company v ICI Chemicals & Polymers Ltd (2003) 128 FCR 392 at 396-97 [25]; Austal Ships Pty Ltd v Stena Rederi Aktiebolag (2005) 66 IPR 420 at 422 [6] and Genetics Institute Inc v Kirin-Amgen Inc (1999)92 FCR 106. 10 The parties presented and relied upon new evidence before the Court below, including expert evidence. 11 The parties accepted, as did the learned trial judge after referring to the above authorities (at [11]): … that the issue for resolution by the Court is whether it can be concluded clearly or as a matter of practical certainty that the opposition is well made and that the patent, if granted, would be bad, and that the issue for resolution by the Court is not whether the matters grounding the opposition (here want of novelty and obviousness) have been made out in the manner required in revocation proceedings. 12 Nevertheless, his Honour went on the observe at [13] that: … Importantly, however, both sides agreed that expressing the matter in this way did not do away with the necessity of the Court coming to a final view about the proper construction and meaning of the patent application in suit and the earlier patent said to be an anticipation of it. Thus, to the extent that the outcome turns upon the meaning of either the applicant or the patent the constraining effect of the need for practical certainty is less apparent. 13 We proceed to consider this appeal in a similar fashion, namely by coming to a final view about construction of the prior patent later referred to and patent application.

Issues raised in this appeal 14 The grounds of appeal relate to the learned trial judge's finding that certain claims of the patent application were not novel in light of the Bennett patent. It is not disputed that the Bennett patent discloses a combination trigger and that the patent application discloses a count trigger - the question is whether the patent application is also in respect of a combination trigger and whether the Bennett patent discloses a count trigger. In light of the way the matter was approached before the learned trial judge and on this appeal, we now turn to consider the construction of both the patent application and the Bennett patent, and the question of novelty.

Construction of patent application 15 In looking at the patent application, it is convenient for the purposes of this appeal to focus on a consideration of claim 1, as the other claims follow. 16 Claim 1 of the patent application is as follows: 1. A method for awarding a bonus prize in the play of a plurality of gaming machines, the gaming machines being linked to a central processor having a data memory, the method comprising the steps of: transmitting, on play of any one gaming machine, a play signal therefrom to said central processor, said play signal identifying the transmitting gaming machine; registering each said play signal as an entry in said memory; executing a prize accumulation phase during which a value is accumulated with an initial value for each said play signal up to a level where the accumulating value equals a prize value that will be awarded to one of the linked gaming machines; and thereafter executing a prize awarding phase during which said accumulated value remains frozen, and subsequent plays of one or more of the gaming machines are separately counted for their occurrence, and a play of a gaming machine causing the count to equal a prize win count value results in that gaming machine be [sic] awarded said prize value. 17 It will be observed that a feature of the invention (as reflected in claim 1) is that it involves two phases of play in the method or system for awarding a bonus prize, the first being a 'prize accumulation phase' (in which the bonus prize is accumulated) and the second being a 'prize awarding phase' (in which the bonus prize is awarded). 18 The learned judge held the claim was broad enough to encompass both known general categories of trigger events, including the combination trigger. The learned trial judge's conclusion that the words of claim 1 encompassed a combination trigger was in the following terms (at [56]), focusing on the prize awarding phase: The words of claim 1, read in the light of the specification, appear to be wide enough to encompass the prize awarding phase operating with a prize win count value of "1" and a play and play signal therefrom being a particular combination of symbols as the subject or event counted (on this hypothesis counted to "1"). In those circumstances, one of the many prize win count values could be "1" and one of the many criteria of play signals counted could be a given combination. Thus, the counting of the subsequent plays of one or more of the gaming machines are separately counted for their occurrence and the count of the first given combination equalled the prize count value of "1". 19 With respect to the learned trial judge, we consider that he fell into error in so construing claim 1. In our view, the learned trial judge should have construed the claim as only including the count trigger. 20 In construing the patent application as only including the count trigger and not the combination trigger, in our view, gives the words 'counted' and 'count' a natural and ordinary meaning, and one consistent with the whole of claim 1. 21 Claim 1 distinguishes between 'play signal', which is 'register[ed]' by the central processor (as stated in the earlier part of the claim not dealing with the prize awarding phase), and 'play', which is an 'occurrence' at the gaming machine, as seen in the passage extracted above dealing with the prize awarding phase. The learned trial judge did not seem to address the distinction between 'play signal' and 'play' in his reasons, but seems to have equated a 'play' with a 'play signal'. 22 Simply put, claim 1 distinguishes between what is happening at the game machine and what is recorded or recognised at the central processor or computer. At the computer there is a registering of the play signal as either a zero or one, which is simply a recognition code for the occurrence of an event at the gaming machine. This is not a form of counting, but merely the recognition of a play signal from the gaming machine to the central processor. 23 One of the expert witnesses, Mr Culley, called on behalf of the respondent, identified the difference between a counting and the recognitions by the central processor or computer, as is demonstrated by the following exchange: HIS HONOUR: Can I just ask you something that may or may not, before going to the patent, it relates to the questions and answers that just occurred in relation to binary codes and computers and the last couple of questions were in relation to the reduction in a sense of everything that the computer does ultimately to the code of zero or one and what I was going to say was that would it be a fair or useful or meaningful expression and if not tell me why, a meaningful expression to say that that was not so much counting as a question of recognition and sequence? --- Yes, that's basically what the computer is doing is looking at --- It's not really counting it, it's recognising and ---? --- A stream of zeroes and ones are normally put into what we would call a word, eight locations or something and that group of eight zeroes and ones would be recognised as an instruction, as a number and a sequence of those put together creates your executable code yes. 24 Therefore, with respect, it seems to us clear that the learned trial judge did not come to appreciate that the recognition of say three identical playing cards (say three jacks) by the central processor or computer was not a counting at all, but was simply a recognition of an occurrence, designated zero or one. The computer adopts a binary code, but in this respect could equally have adopted a code which was either A or B in place of zero or one. The fact that a binary code is used does not mean that there is a counting between zero and one, just as there would be no counting between A and B. 25 Another consideration suggests that claim 1 relates only to the count triggers. The phrase in claim 1 relating to the prize awarding phase 'subsequent plays of one or more of the gaming machines are separately counted for their occurrence, and a play of a gaming machine causing the count to equal a prize win count value results in that gaming machine [being] awarded said prize value' is not an apt description of the alternative combination trigger. This aspect of the claim is concerned not with the recognition of a particular combination of symbols as a winning event, but rather a process of the counting or accumulation of plays on individual machines (according to attributes such as coins in, coins out, number of plays, etc) until an overall prize win count value has been reached, which then triggers the awarding of the bonus prize. 26 We observe that in construing claim 1, the learned trial judge referred to the fact that 'the application refers to every play being counted' (emphasis added), and that 'all' plays are separately counted. This does not accurately record the words or meaning of claim 1. The claim relating to the prize awarding phase provides that 'subsequent plays of one or more of the gaming machines are separately counted for their occurrence'. This is to be contrasted with the wording in the earlier part of the claim which refers to 'registering each … play signal' (emphasis added). The word 'each' is not used in the reference to the executing of the prize awarding phase. In the prize awarding phase, only those plays with a numerical value which contributes to the overall count (according to the relevant attribute, such as coins in, coins out, etc) are recognised. On the construction of the trial judge all plays are regarded as counted, even though they have no intrinsic numerical value which is capable of contributing to the overall count. This does not appear to us, with respect, to be a proper understanding of the patent application. 27 We also observe that the learned trial judge considered that the following last and emphasised sentence found on page 3(a) of the patent application appeared wide enough to encompass a combination of symbols, being a chosen fixed value of play signals: Both the method and system of the invention can provide that the play signals generated in the prize accumulation and/or prize awarding phases are based on any one or more of coin-in, coin-out, play duration and quantum of wagers. The prize awarding phase further can be based on a chosen fixed value of play signals. [emphasis added] 28 The reference to 'value' would appear to refer to monetary value, or its equivalent. The above passage referred to by the learned trial judge clearly refers in the first sentence to all typical, numerically countable events (namely number of wagers, duration of play, coin-in etc). We do not think the second sentence in referring to 'fixed value' is positing a criterion which refers to, or depends on, something other then ordinary numerical counting of a recurring event. Therefore, we do not see the passage relied upon by the learned trial judge as being inconsistent with the interpretation of claim 1 contended now by the appellants. More significantly, we do not consider that the paragraph referred to by the learned trial judge specifically includes the possibility of a combination trigger, or that it limits the ordinary and natural meaning to be given to claim 1. 29 In our view, on its proper construction, claim 1 does not relate to a combination trigger as the event which causes the award of the prize in the prize awarding phase.

Construction of the Bennett patent 30 The second basis for the learned trial judge's finding of lack of novelty in light of the Bennett patent related to his construction of the Bennett patent. The issue before the learned trial judge was whether the Bennett patent, in addition to disclosing the use of a combination trigger in the prize awarding phase, also disclosed the use of a count trigger. The learned trial judge found that it did disclose the use of the count trigger. 31 It is necessary therefore to consider the proper construction and teaching of the Bennett patent. In general terms, the Bennett patent describes an arrangement for delivering a bonus prize to a player of one of a plurality of linked gaming machines. 32 The Bennett patent in its terms does not rely on the use of a count or combination trigger language. Instead, the claim in the Bennett patent uses the following very general language to define the procedure for the awarding of the bonus prize in the second phase: … the programme causes the controller to provide a visible and/or audible indication to each player and simultaneously acts to suspend any game being played on any of the machines and to impose a new game common to all machines and to award a bonus prize to the player of any machine first to achieve a predetermined objective … [emphasis added] 33 Evidence was led before the learned trial judge as to the breadth of the phrase 'predetermined objective'. It was not suggested that the phrase was a term of art, but it can be accepted that the phrase is capable of being construed broadly to cover both triggers. 34 The question is what the phrase 'predetermined objective' means in the context of the Bennett patent and in the context of the claim made therein. 35 We are mindful that a principle of patent construction is that the claim language controls where it is clear and unambiguous. As Sheppard J stated in Décor Corp Pty Ltd v Dart Industries Inc (1988)13 IPR 385 at 400: It is not legitimate to confine the scope of the claims by reference to limitations which may be found in the body of the specification but are not expressly or by proper inference reproduced in the claims themselves. To put it another way, 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. 36 Justice Gummow expressed a similar sentiment in Sartas No 1 Pty Ltd v Koukourou & Partners Pty Ltd (1994) 30 IPR 479 at 485-86: … Although the claims are construed in the context of the specification as a whole, it is not permissible to restrict, expand or amend the clear language of a claim by reference to a limitation or gloss in the language used in the earlier part of the specification, but not repeated in the claim itself. … 37 Further, as stated in Sachtler GmbH & Co KG v RE Miller Pty Ltd (2005) 221 ALR 373 at [42]: Although the claims are 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. If a claim is clear and unambiguous, it is not to be varied, qualified or made obscure by statements found in other parts of the document. 38 See also Synthetic Turf Development Pty Limited v Sports Technology International Pty Limited (2005) 67 IPR 475 and Jupiters v Neurizon Pty Ltd (2005) 65 IPR 86 at 99. 39 It is not disputed by the appellants that the claim in referring to 'predetermined objective' was well understood by anyone skilled in the art to be wide enough to include both triggers. 40 The learned trial judge did not specifically refer to the parts of the evidence in support of the construction of 'predetermined objective,' except to refer to the expert evidence generally, and particularly the evidence of the appellants' expert Mr Daley. 41 Mr Culley (called on behalf of the respondent) stated that he understood 'predetermined objective' to refer to the following: [A] predetermined objective to me in a linked progressive system, both setting a line-up as the event to cause a progressive prize [combination trigger] or using a mystery jackpot as we've been discussing [count trigger], are to me - they are both well known. They were equally as - you're as equally liable to pick one as the other depending on what the marketing people thought might work. 42 In response, Mr Daley accepted in his evidence that the phrase 'predetermined objective' was, on its own, wide enough to include both types of triggers. First, he agreed that both count and combination triggers were common general knowledge as of 9 May 1997 (the priority date of the patent application), and that these were the only two types of triggers in use. 43 When asked about the meaning of predetermined objective, Mr Daley agreed that: Just looking at [the] words ["award a bonus prize to the player of any machine first to achieve a predetermined objective"] on their own as part of this description of what the invention consists of, that predetermined objective could be any one of the numerous parameters available as a basis to award a prize or act as a trigger[.] 44 Later, Mr Daley accepted that the term was 'broad enough to cover an nth game [orthodox count trigger based on the number of plays] trigger'. 45 The construction of claims is a matter for the Court, assisted by appropriate expert evidence - see for example Clorox Australia Pty Ltd v International Consolidated Business Pty Ltd (2006) 68 IPR 254 at [21]-[22] per Stone J; Inamed Development Company v Morton Surgical Pty Ltd (2007) 73 IPR 308 at [3] per Gyles J, and Sartas No 1 30 IPR at 485-86. 46 However, it has not been suggested that the phrase 'predetermined objective' as a matter of natural and ordinary meaning as found in the context of the claim itself does not include both triggers. There has been no suggestion of ambiguity in the language of the phrase 'predetermined objective'. The evidence, to the extent relevant, discloses no ambiguity. On the contrary, all the experts agree that the phrase includes both triggers. It is thus not permissible to look to the specification in order to restrict the meaning of the phrase 'predetermined objective' to only combination triggers. Even if Mr Daley, when giving his expert testimony, did confine his attention in giving evidence about the scope of 'predetermined objective' in the patent by reference to the body of the patent, it would not be permissible in view of the otherwise unambiguous meaning given to 'predetermined objective' in the claim itself, to restrict it to a combination trigger. 47 Therefore, one can conclude that the language of the claim on its own would include both count and combination triggers.

Novelty 48 However, whilst we conclude that the Bennett patent includes both triggers, and so is to be construed as encompassing the use of a count trigger, this would not necessarily lead to lack of novelty of the relevant claims in the patent application. 49 There is no doubt, as the learned trial judge concluded, that the body of the specification only expressly discloses a combination trigger. 50 We refer to certain parts of the specification which are illustrative of this conclusion: Figure 1 shows an arrangement of video machines 10 connected to a common controller 11 which includes a micro-processor/computer programmed to control the operation of the controller. The particular arrangement illustrated is programmed to provide a bonus prize of $100.00 on any player achieving a line up of three jacks on the screen of the video machine being played. The video machines are of generally conventional construction and are programmed internally to provide an input to the controller indicative of a percentage of the value of coins inserted by each player in the video machines or the number of games played on the machine. As indicated in the diagram in Figure 2, once a sufficient sum is credited in the controller from the video machines the controller causes a message to be displayed on each machine giving particulars of the bonus prize to be won and the combination required to win it. It simultaneously arrests games being played on the individual machines and imposes a secondary game screen common to all machines. The first machine to display the combination of three jacks wins the bonus and thereafter the programme of the controller causes the individual machines to revert to their original games. Figures 3 and 4 indicate in more detail the logic of the microprocessor and the controller. Figure 3 illustrates what might be described as phase 1 of the operation which commences when a nominated figure has been accumulated in the controller and ends when the secondary game appears on the screens of the individual machines. Phase 2 commences when the nominated line up entitling a player to win the bonus prize has been achieved and the machine concerned has been credited with the bonus prize. Phase 2 is completed by all machines being reverted to independent games. While all machines connected to the controller must be video machines it is not necessary that all machines shall be playing the same game at the commencement of phase 1. The arrangement is very flexible in that the value of the bonus prize and the line up required to achieve it can be readily changed. A particular advantage of the arrangement is that during phase 2 all machines are playing the same game thus giving to each player the same chance of winning the bonus. [emphasis added] 51 Looking at the above description and the figures referred to (particularly Figures 2 and 4) one can readily observe that the reference is to a nominated line up, combination required, or predetermined number of symbols - not a process of counting. 52 The Bennett patent thus can be seen to contain specific disclosures only as to a combination trigger, and does not contain a clear and direct disclosure of the claimed invention. This in itself would preclude the claim failing for want of novelty. 53 The learned trial judge in dealing with this matter stated the applicable principles as follows (at [65]): An essential step in deciding any question of novelty or anticipation is the proper construction of both the prior publication and the claims in the patent application in the light of all admissible evidence: General Tire & Rubber Company v Firestone Tyre and Rubber Company Ltd (1971) 1A IPR 121 at 137-38. The matter was expressed in General Tire & Rubber 1A IPR at 138 as follows: "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 to technical matters, the meaning of words and expressions used in the art and so forth, the question whether the patentee's claim is new for the purposes of s 32(1)(e) 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 publication 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: Flour Oxidising Co Ltd v Carr & Co Ltd (1908) 25 RPC 428 at 457, line 34, approved in BTH Co Ltd v Metropolitan Vickers Electrical Co Ltd (1928) 45 RPC 1 at 24, line 1. 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." 54 Further, the learned trial judge referred to the basic test for anticipation or want of novelty being the reverse infringement test set out by Aickin J in Myers Taylor Pty Ltd v Vicarr Industries Ltd (1977) 137 CLR 228 at 235. 55 The Full Court in ICI Chemicals & Polymers Ltd v Lubrizol Corp Inc (2000) 106 FCR 214 in considering and applying the above principles, concluded that a prior art patent did not deprive the claimed invention of novelty, despite the fact that, read literally, the terms used in prior art patent were sufficiently broad to encompass the claimed invention. The court emphasised the importance of the other aspects of the prior art disclosure, including the limits of the examples given, and concluded with the following observation at [51]: … A familiar metaphor illustrating the concept of anticipation is that the prior inventor must clearly be shown to have planted his flag at the precise destination before the patentee: General Tire at 485, 486. In the present case, the appellants' argument involved the skilled addressee rummaging through the [the prior inventor's] flag locker to find a flag which [it] possessed and could have planted. 56 The learned trial judge found that that the Bennett patent included or encompassed the use of a counter trigger in the prize awarding phase and seemed to equate that inclusion or encompassing as being 'clear and unmistakable directions' to use such a trigger. We do not consider, with respect, that the Bennett patent does give any direction in relation to the employment of the count trigger. The body of the specification, as accepted by the learned trial judge, only addresses the combination trigger. Indeed, adapting the words from General Tire set out above, the Bennett patent 'would be at least as likely to be carried out in a way which would not' infringe the claims of the patent application, by instead using a combination trigger in the prize awarding phase. 57 The learned trial judge seemed to consider that the actual 'terms' of the Bennett patent stated the use of the count trigger. His Honour said at [74]: In my view, the terms of the Bennett Patent state the use of a mystery quantum equalisation trigger as the trigger to cause the winning of the bonus prize in the second and separate prize awarding phase. 58 His Honour then went on to state at [82]: If one recognises that the phrase "predetermined objective" clearly encompasses a mystery quantum equalisation trigger, the notion of counting in the patent application in suit is contained in the Bennett Patent insofar as the mystery quantum equalisation trigger is encompassed within the meaning of "predetermined objective". 59 With respect, the terms of the Bennett patent do not make the statements attributed to them by the judge, nor would the mere encompassing by the claim of the count trigger give the clear and unmistakeable direction required, or sufficiently teach a count trigger. 60 Nowhere in the body of the specification does the Bennett patent address the crucial issue of 'counting' plays to reach 'a prize win count value' to end the prize awarding phase; it only addresses the use of a combination trigger to end the second phase. 61 Therefore, we are of the view that there is no lack of novelty of the relevant claims in the patent application.

Obviousness 62 We make one final observation. The Delegate considered that the Bennett patent, although not part of the common general knowledge, was a document that could reasonably be expected to have been ascertained, understood and regarded as relevant to work in the relevant art for the purposes of s 7(2) and s 7(3) of the Act. Whilst this was not contested, it was not established that a non-inventive skilled worker in the field would, as a matter of routine, have come up with the Bennett patent solution. 63 Whilst the learned trial judge referred to obviousness, this was only approached in the light of common general knowledge with no consideration to the accepted relevance of the Bennett patent for the purposes of s 7(2) and s 7(3) of the Act. However, as this particular matter was not put into contention before the Court, and as there is no contradictor before this Court, it seems to us that for present purposes the matter should proceed on the basis that the conclusion of the Delegate that the invention as claimed (other than claims 17 and 18) had an inventive step over the Bennett patent when combined with common general knowledge should stand.

Conclusion 64 In view of the above, and as the appellants have succeeded on both limbs of their argument, the Court should order that: (1) The appeal be allowed. (2) Orders 1 to 6 made by Allsop J on 9 October 2007 be set aside. (3) The appellants make any request to the Commissioner of Patents for leave to amend the specification of Australian Patent Application No 748263 pursuant to s 104 of the Actin light of the decision of the Delegate of the Commissioner of Patents given on 25 August 2004, within 60 days of the date of making of these orders. 65 The appellants have indicated to the Court that an order as to costs would not be sought by any party, and the Court will therefore make no order as to costs. I certify that the preceding sixty-five (65) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Heerey and Middleton.

NEW SOUTH WALES DISTRICT REGISTRY NSD 2147 of 2007

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

REASONS FOR JUDGMENT GYLES J 66 I have had the benefit of reading the reasons of Heerey and Middleton JJ in draft. Those reasons, read in the light of the principal primary judgments (Aristocrat Technologies Australia Pty Ltd v IGT (Australia) Pty Ltd (2007) 239 ALR 181,(2007) 71 IPR 259; and Aristocrat Technologies Australia Ltd v IGT (Australia) Pty Ltd [2007] FCA 1540, (2007) 74 IPR 117) explain the issues and how they arise. I agree that the appeal ought to be allowed and agree with the orders proposed by Heerey and Middleton JJ. In my opinion, that result follows from the nature of the proceeding in issue. 67 The primary judge summarised the issue for resolution as follows (Aristocrat Technologies (2007) 239 ALR 181, (2007)71 IPR 259 at [11]): "whether it can be concluded clearly or as a matter of practical certainty that the opposition is well made and that the patent, if granted, would be bad, … the issue for resolution by the court is not whether the matters grounding the opposition (here want of novelty and obviousness) have been made out in the manner required in revocation proceedings." (Original emphasis.) The parties had agreed upon the formulation of the issue in those terms. His Honour was satisfied that that reflected the effect of the authorities to which he referred. It is difficult to draw that approach from, or reconcile it with, the provisions of ss 49, 60, 158 and 160 of the Patents Act 1990 (the Act) (cf Imperial Chemical Industries Pty Ltd v Commissioner of Patents (2004) 213 ALR 399 per Crennan J at [49]-[53]). However, the correctness of the approach is not in issue in this appeal. 68 The foundation for the invalidity of claims 1, 2, 5, 6, 7, 9, 10, 13, 14 and 15 of the patent application in suit was the finding that each claimed (inter alia) what was described as a combination trigger as an event which caused the award of a prize in the prize awarding phase of the bonus prize winning mode of the linked gaming machines on the basis that Australian Patent 633469 (the Bennett patent) disclosed all integers of those claims including a combination trigger - such as a line up of three jacks. 69 The finding that a combination trigger such as a line up of three jacks involved "subsequent plays of one or more of the gaming machines (that) are separately counted for their occurrence, and a play of a gaming machine causing the count to equal a prize win count value" is counter intuitive. As the Delegate of the Commissioner of Patents pointed out, the achievement of a line up of cards does not involve plays of one or more of the gaming machines being separately counted for their occurrence, a feature which was regarded as sufficient to confer novelty on the claimed invention over what was disclosed by the Bennett patent. The decision of the primary judge turned upon giving the word "counted" in the claims of the patent application in suit an unusual meaning. It was based upon the judge's consideration of the evidence given by experts on both sides. In my respectful opinion, the use that was made of that expert evidence may have gone beyond that appropriate for construction of the claims for patent (Jupiters Ltd v Neurizon Pty Ltd (2005) 222 ALR 155, (2005) 65 IPR 86 at [67]). Be that as it may, there is considerable cogency in the criticisms of the primary judge's construction of the claims in suit by counsel for the appellant, the substance of which criticisms is accepted by Heerey and Middleton JJ. At the very least, the primary finding that the claims included a combination trigger is controversial. 70 The other basis upon which the foregoing claims, together with claims 3, 4, 11 and 12, were held to be invalid was the conclusion that the Bennett patent disclosed a count trigger in the second or prize awarding phase. The primary judge concentrated upon the following parts of the claims of the Bennett patent (which were consistent with the consistory clause) (Aristocrat Technologies (2007) 239 ALR 181, (2007)71 IPR 259 at [61]): "… the programme being arranged so that on receipt of signals from the machines serving to indicate that a predetermined sum had been accumulated for payment as a bonus prize or a predetermined number of games had been played in the machines the programme causes the controller to provide a visible and/or audible indication to each player and simultaneously acts to suspend any game being played on any of the machines and to impose a new game common to all machines and to award a bonus prize to the player of the any machine first to achieve a predetermined objective, the programme thereafter causing the controller to provide an indication on all machines that the bonus prize had been awarded and causing all machines to revert to independent games." (Original emphasis.) 71 It was held that the phrase "predetermined objective" was wide enough to encompass not only a combination trigger but also a mystery quantum equalisation (or count) trigger. However, the only trigger that is disclosed in the body of the specification is a combination trigger - the lining up of three jacks. It was held that that circumstance did not narrow the meaning of the phrase "predetermined objective". That may be so in construing the extent and content of the claims of the Bennett patent. However, that is not the relevant question. The question is whether the Bennett patent discloses each integer of the claims in suit. Prior claiming is not a ground for invalidity under the Act as had been the case pursuant to s 100(1)(f) of the Patents Act 1952 (Cth). Indeed, if the Bennett claims were construed so widely, there would have been a real question as to whether they were valid in view of the disclosures in the specification. 72 The primary judge accepted that the only references in the body of the Bennett specification were to a combination trigger but regarded that as illustrative rather than limiting. His Honour drew attention to the following portion of the Bennett specification (Aristocrat Technologies (2007) 239 ALR 181, (2007)71 IPR 259 at [63]): "It will be appreciated by person skilled in the art that numerous variations and/or modifications may be made to the invention as shown in the specific embodiments without departing from the spirit or scope of the invention as broadly described. The present embodiments are, therefore, to be considered in all respects as illustrative and not restrictive." However, prior to that passage, the following appears in the specification: "The arrangement is very flexible in that the value of the bonus prize and the line up required to achieve it can be readily changed." (Emphasis added.) 73 The critical reasoning by the primary judge on this point is as follows (Aristocrat Technologies (2007) 239 ALR 181, (2007)71 IPR 259 at [73]-[75]): "The phrase "predetermined objective" would be understood by anyone of ordinary knowledge of the subject to include both a combination trigger and a mystery quantum equalisation trigger. Thus the Bennett Patent can be understood to say that that the programme was arranged so that the programme causes the controller to impose a new game common to all machines and to award a bonus prize to the player of any machine first to achieve a predetermined objective whether by combination trigger or mystery quantum equalisation trigger, the embodiments being by reference to combination triggers. In my view, the terms of the Bennett Patent state the use of a mystery quantum equalisation trigger as the trigger to cause the winning of the bonus prize in the second and separate prize awarding phase. So understood, the patent application was anticipated and was and is not novel." (Emphasis added.) 74 The words "say" and "state" are based upon a process of implication from the judge's understanding of the expert evidence, rather than any express words. The critical problem with that approach is that, for the purposes of anticipation, it is necessary that each integer be disclosed in the prior publication. Even if the wide construction of "predetermined objective" is correct, it does not disclose any particular predetermined objective which involves the plays of one or more of the gaming machines being separately counted for their occurrence. On that approach, a necessary integer is lacking and the reverse infringement test would not be satisfied. Whilst I incline to agree with Heerey and Middleton JJ that his Honour was in error in this respect, it is sufficient to say that the finding was extremely doubtful. It could not be concluded that clearly, or as a matter of practical certainty, the relevant integer was disclosed by the Bennett patent. 75 It follows that, on neither basis found by the primary judge, could it be said that clearly, as a matter of practical certainty, the opposition was well made and that the patent, if granted, would be bad by reason of lack of novelty over the Bennett patent. 76 I should say something about an aspect of that approach to the case. At one point of the first judgment, it was said that both sides agreed that expressing the issue as they had did not do away with the necessity of the Court coming to a final view about the proper construction and meaning of the patent application in suit and the earlier patent said to be anticipation of it (Aristocrat Technologies (2007) 239 ALR 181, (2007)71 IPR 259 at [13]). However, later in the judgment the primary judge said (Aristocrat Technologies (2007) 239 ALR 181, (2007)71 IPR 259 at [80]) that senior counsel for IGT: "pressed me with the argument that to the extent that novelty was to be decided by what the Bennett Patent taught the reader, there was room for a difference of opinion. In such a case, the relevant disclosure could not, she submitted, be concluded with the necessary clarity." 77 The precise content of the suggested agreement as to construction is not clear. Whatever it was, it could not derogate from the essential issue which had been agreed and stated. That issue is applicable to the ground of lack of novelty just as much as it is to all other relevant grounds of opposition. It is to be noted that the primary judge applied it in dealing with the ground of obviousness (Aristocrat Technologies (2007) 239 ALR 181, (2007)71 IPR 259 at [85]). 78 I do not wish to add anything to the reasons of Heerey and Middleton JJ in relation to the issue of obviousness. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.

Dated: 17 July 2008 Counsel for the Appellants: Ms KJ Howard SC; Mr C Dimitriadis

Solicitor for the Appellants: Spruson & Ferguson Lawyers

Patents Act 1990(Cth)ss 7, 60(4)

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