Neurizon Pty Ltd (ACN 077 012 376) v LTH Consulting and Marketing Services Pty Ltd

Background ART 5 The patent in suit is primarily concerned with electronic equipment. According to the discussion of background art, an electronic gaming device ("EGD") such as a poker machine provides the opportunity to win cash or other prizes. In order to entice more persons to play EGDs, operators offer bonus prizes or jackpots. EGDs may be linked electronically in a network, with each contributing a proportion of its turnover to the jackpot pool. Such linkage maximizes the available jackpots. The EGDs in a network may be located on one geographical site or spread over several sites. Whenever a player plays an EGD, it tests for a particular winning combination. If that combination is achieved, the EGD is awarded the pool. It is desirable that in each game played, a player should have the same probability of a jackpot win. This arrangement has traditionally been used in casinos. However its popularity has diminished with the increased availability of wagering options which involve multiple wagers. If a player elects one of these options, the probability of a win on the machine in question is not increased to reflect the amount of the wager. This is a major disincentive to multiple wagering. A further disadvantage of such a system is that each EGD must contain the software necessary to test for a winning combination. It is also difficult to link EGDs using differing base denominations. I assume this to refer to the basic wager amount. 6 The patent also describes another type of jackpot system which is the subject of Australian Patent No 655801. In that system EGDs are connected to a Random Jackpot Controller ("RJC"). As each game is played the RJC adds a proportion of each wager to an external pool, initially seeded by the RJC with a starting value. It then selects a random amount between the starting value and a pre-determined maximum value. As each EGD is played, it informs the RJC of the credits bet, and a proportion of the wager is added to the pool. The value of the pool is then compared with the selected random amount. If there is a match, the RJC awards the current pool value to the relevant EGD. This arrangement is commonly used to provide relatively small, but frequent jackpots. Obviously, the probability of a win on each EGD increases as the pool increases towards the maximum limit. Conversely, the probability of a win is lower in the period immediately after a win. This is generally considered to be unfair and "deterministic". The expression "deterministic" and other similar terms are of some importance in this case. In the affidavit of Steven Brian Johnson, the principal witness for the applicant, the term "non-deterministic jackpot" is defined to mean: … a jackpot system in which the prize trigger is not dependent on a previous event and where there is no increased probability over time of the jackpot being awarded … . 7 There is some disagreement as to the precise effect in practice of this and similar terms, but I do not understand this definition to be seriously challenged. The matter is of some importance because Queensland revenue law treats deterministic and non-deterministic jackpots differently. Non-deterministic jackpots are included in what is called the "return to player percentage" (the "RTP"). The effect of inclusion of such a jackpot is, as I understand it, to reduce the tax payable by the machine operator to the revenue authority. Much of the incentive for the development of the subject matter of the patent in suit arose from a desire to ensure that the jackpot system was non-deterministic. The respondents claim that the MegaGold and Voyager systems offer non-deterministic jackpots. An additional motive was to satisfy certain perceptions as to "fairness". 8 Another type of jackpot system is described in International Patent Application No PCT/AU98/00525. This application is exhibit MAH 3 to Dr Horsburgh's affidavit. In the evidence it is referred to as the "Hyperlink" system. EGDs are connected to an External Feature Game Controller ("EFGC"). Each EGD informs the EFGC of amounts wagered, and a proportion of each wager is added to an external jackpot pool which is seeded with a starting value. As each game is played, the EGD tests for the occurrence of a random "win event", the probability of which is a function of the amount wagered on that particular game. If the random event is detected, the EFGC is informed, and the EGD typically offers a feature game in which the winning amount will be determined. When the EFGC is informed of the win, it may transmit the value of the win to the EGD's credit meter or lock the EGD until the jackpot has been paid manually by an attendant. The greater the wager per game, the greater the probability of a win on that game. This arrangement is not easily applied to existing EGD installations as each machine must be fitted with special software with the capacity to determine and detect the random win event in each game. Alternatively, a Central Feature Game Controller ("CFGC") may be employed which determines and tests for the random event per game on behalf of each EGD. 9 Government requires that data be collected regularly from EGDs to provide external control over them. This is done by using specialized communications networks. Some operators also use these networks to award jackpots. However data collection cycles may not co-incide with each machine's game cycle. Delay in the collection of such data may mean that some wagers are effectively "missed" so that there is no contribution to the pool, and the wager is not considered for a jackpot. Further, once a feature game has been awarded to an EGD, a jackpot will always be awarded, regardless of the outcome of the particular game. It is therefore possible for a player to defer playing the feature game, allowing the jackpot pool to increase further. The longer the player waits, the greater the potential pool increases and the greater the prize. This may be unfair to other players.

The invention 10 The invention seeks to avoid these difficulties. It is variously described in the claims as a "method of awarding a prize", a "gaming system" or a "gaming machine". In a preferred embodiment, EGDs are connected to a communications network. The network contains a monitoring system which collects financial and other information from EGDs. This information is commonly referred to as "meters". The system also contains a Special Prize Presentation Controller Task ("SPPCT") which is the jackpot controller, maintaining one or more jackpot pools. The jackpot controller displays the current value of each jackpot pool on one or more jackpot displays which may be remote from the EGDs. It calculates and manages the pools from information provided to it by the monitoring system. A turnover meter on each EGD indicates the accumulated turnover since the EGD was commissioned (ie commenced operating). The jackpot controller calculates from the received turnover meter reading, the change in turnover since the last time the meter was read. This is the primary figure used for all jackpot calculations. As I have observed, although the patent in suit speaks primarily of awarding jackpots, a wider application is claimed. 11 For each jackpot, the jackpot controller maintains a prize pool made up of a starting amount, to which is added a fixed percentage of the increase in turnover of each EGD since the last jackpot was won. This pool will normally be the jackpot prize. The probability of an EGD winning the jackpot depends upon the turnover of that EGD over a pre-determined, elapsed period of time. This period of time is said to be a sliding or rolling "window" of time prior to each jackpot draw. Every change in the turnover meter recorded for an EGD is stored by the jackpot controller with a "time stamp" which indicates when the change in turnover was recorded. Only turnover within the time window or "record period" is used for the purpose of calculating the probability of a jackpot win. In other words, increases occurring prior to the commencement of each elapsed period will be discarded. 12 The preferred embodiment also utilizes a second time window known as the "draw period". This is the time between attempts at awarding the jackpot. To ensure that each change in turnover is included in at least one draw, the length of the draw period may be less than, or equal to the length of the record period, but may not exceed such length. The probability that an EGD will win a jackpot draw depends upon a calculated "scaling factor". In the preferred embodiment the scaling factor is calculated by taking for each EGD, the total turnover in the record period, and dividing it by the number of draw periods per record period, yielding an average turnover per draw period over the record period. This is the scaling factor. Each EGD has the same pre-determined "base probability" of winning the jackpot. This is multiplied by the scaling factor for that EGD as calculated for the draw in question. 13 The jackpot draw can be conducted by any suitable draw method which has the required overall probability. For example, a random number generator may be used. A fixed number range is defined and divided into two separate sections - the winning band and the losing band. A random number is generated over the entire range. If it falls within the winning band, the draw is won; if it falls outside the winning band, the draw is lost. The winning band is a percentage of the entire number range, reflecting the desired probability of a win. If an EGD wins a jackpot, it enters a "winning mode", and the prize is advertised on the display. The act of awarding a jackpot need not necessarily terminate the draw process. It is possible that another EGD might also be selected as a winner. I infer that this is because the random number is used in draws for all participating EGDs. Although the probability of each machine winning will vary, having regard to the amount wagered on it during the elapsed period, the random number may fall within the winning bands appropriate to more than one of them. If there are multiple winners, the prize pool is preferably paid to the first detected winner, and all other winners are awarded the reset, or starting value of the pool. Alternatively, the pool may be apportioned amongst winners. 14 The patent identifies the invention as offering the following advantages over prior art: · Each eligible player (or gaming machine) has the opportunity of winning a prize, with the probability of a win being dependent upon the amount of betting activity on that machine over a recent period, not merely the last game. This provides a fairer outcome as machines with a higher average turnover during that period have a higher win probability than a machine with a lower average turnover during the same period, even if the latter machines had a higher wager on the last game. · The trigger for a draw is not a function of individual games played on a gaming machine, but of time. Therefore the prize awarding system may be applied to existing EGDs of differing base denominations, manufacture or game type without the need for specialized software support. The system can also be operated over existing communication networks and with centralized jackpot systems. · Since the award of a prize is non-deterministic, prizes may be included in the RTP of a gaming system, effectively resulting in higher profitability for the operator. · Prize-award parameters may be changed by the operator at any time without any alteration to the hardware, firmware or internal parameters of the EGDs. · If the awarding of the prize involves a feature game, a fairer outcome is obtained by ensuring that increases in the values of prize pools are suspended until the completion of the feature game. This prevents a player from gaining financial advantage over subsequent players by delaying the feature game.

The claims 15 The claims defining the invention are as follows: 1. A method of awarding a prize in a gaming system comprising at least one gaming machine, characterised in that the probability of each gaming machine winning the prize is dependent upon at least some of the amount wagered on that gaming machine during the elapsed period. 2. A method as claimed in claim 1 wherein the probability is related to the total wagered amount recorded during the elapsed period. 3. A method as claimed in claim 1 wherein the probability is related to the maximum amount wagered on a game during the elapsed period. 4. A method as claimed in any preceding claim wherein the elapsed period is a rolling or sliding period of time. 5. A method as claimed in any preceding claim including the step of conducting a series of prize draws and, prior to each prize draw, calculating the probability of each gaming machine winning the draw. 6. A method as claimed in claim 5, wherein the elapsed period is a predetermined period preceding each draw, further comprising the steps of recording amounts wagered on each gaming machine and calculating the probability or each gaming machine winning that draw from amount(s) recorded during the predetermined period. 7. A method as claimed in claim 6, wherein the draws are conducted at periodic intervals of time, the period between the draws being no greater than the predetermined period. 8. A method as claimed in claim 6 or 7, wherein the winning probability for each gaming machine is calculated from the estimated amount wagered on that gaming machine during the period since the last draw, the estimated amount being calculated on a pro rata basis from the recorded amount of wagers during the predetermined period. 9. A method as claimed in any one of claims 5 to 8, further comprising the step of awarding to a draw winning gaming machine a further game to determine the actual prize won. 10. A method as claimed in claim 9, wherein the time allowed for playing the further game is limited to a predetermined period. 11. A method as claimed in claim 9 or 10, wherein the prize is a jackpot or one of a plurality of jackpots, the method further comprising the step of suspending the jackpot(s) until the determination of the further game. 12. A method as claimed in any preceding claim, wherein the prize is a jackpot pool. 13. A method as claimed in claim 12, wherein the jackpot pool comprises an initial amount and a proportion of the amount wagered on the gaming machine(s) since the jackpot pool was reset. 14. A method as claimed in any preceding claim further comprising the step of displaying a graphical representation of the probability of the gaming machine(s) winning the prize. 15. A method as claimed in claim 14 wherein the gaming machine includes a plurality of gaming machines, and the probabilities are displayed in relative format. 16. A method as claimed in any preceding claim, wherein each gaming machine is an electronic gaming device. 17. A gaming system comprising: (a) at least 1 gaming machine; (b) control means that is connected to the gaming machine(s), the control means being adapted to conduct a series of prize draws in each of which each gaming machine has an opportunity to win a prize on a non-deterministic basis; and (c) means for determining the winning probability of each gaming machine at each prize draw, characterised in that the probability of each gaming machine winning a prize draw is dependent on at least some of the amount wagered on that gaming machine during an elapsed period. 18. A gaming system as claimed in claim 17 wherein the probability is related to the total wagered amount recorded during the elapsed period. 19. A gaming system as claimed in claim 17 and 18 wherein the elapsed period is a rolling or sliding predetermined period of time prior to each prize draw. 20. A gaming system as claimed in claim 19, wherein the control means includes means for recording during the predetermined period amounts wagered on each gaming machine. 21. A gaming system as claimed in any one of claims 18 to 20, wherein the control means includes a jackpot controller, and the prize is a progressive linked jackpot. 22. A gaming system as claimed in any one of claims 18 to 21, wherein each gaming machine is an electronic gaming device. 23. A gaming machine as claimed in any one of claims 18 to 22, having display means to display a graphical representation of the probability of each gaming machine of winning the prize draw. 24. A gaming machine having: (a) means for effecting a prize draw to award a prize on a non-deterministic basis; and (b) means for determining the probability of the gaming machine winning the prize; characterised in that the probability of the gaming machine winning the prize is dependent on at least some of the amount wagered on the gaming machine during an elapsed period. 25. A gaming machine as claimed in claim 24, wherein the probability is related to the total wagered amount recorded during the elapsed period. 26. A gaming machine as claimed in claim 24 or 25 wherein the elapsed period is a sliding or rolling predetermined period prior to the prize draw. 27. A gaming machine as claimed in claim 26, further comprising means for recording during the predetermined period amounts wagered on the gaming machine. 28. A gaming machine as claimed in claim 24 to 27, having display means to present a graphical representation of the probability of winning the prize draw. 29. A method of awarding a prize substantially as hereinbefore described with reference to the drawings. 30. A gaming system substantially as hereinbefore described with reference to the drawings. 16 The invention appears expressly in Claims 1, 17 and 24 upon one or more of which the other claims are dependent.

Preliminary observations 17 I have been concerned, both during the trial and whilst considering the matter, by a tendency amongst the witnesses and counsel to concentrate upon the preferred embodiments of the patent in suit rather than upon the claims. I drew attention to this matter at the trial. A second matter of concern has been that many witnesses appeared to be partisan in their evidence concerning construction of the patent, apparently seeking to advance one cause or the other in areas in which there was really little room for differences of opinion. I have derived little assistance from the evidence as to construction of the patent. Further, the parties made only limited references to it in the course of their submissions. In my view the only terms which pose any apparent difficulty are "probability", "deterministic" and similar terms. There is also some difficulty in construing Claims 29 and 30, but that is for other reasons with which I will deal in due course. I also formed the view that some of the respondents' witnesses offered opinions as to comparisons between the patent in suit and prior art, which opinions were based upon misconceptions as to the true nature of the invention. Finally, the parties raised some objections as to admissibility. I resolved some of these and left the parties to resolve others. During submissions, counsel for the applicant withdrew certain objections, accepting that they were best treated as going to weight. I am not aware of any outstanding issues as to admissibility of evidence.

The skilled addressee 18 Dr Horsburgh identified the hypothetical skilled addressee as: … A person having a detailed understanding of the requirements for awarding jackpot prizes in a system of linked gaming machines, and the operation of jackpot prize awarding methodologies. Typically, these persons may be programmers, suppliers, regulators or consultants having the requisite knowledge and understanding. 19 Mr Fox, a patent attorney, said that: I have not found any technical or scientific terms or phrases or unusual words used in the specification which are material to the question of infringement or validity. There are no terms in the specification which might bear other than their ordinary meaning except, perhaps, the phrase 'on a non-deterministic basis'. 20 Nonetheless Mr Fox offered the view that a "person skilled in the art" would be: … a developer of or person involved in the development process of jackpot awarding systems. Such a person would be somewhat akin to a mathematician involved in the development of games for gaming machines. 21 Mr Hopkins, a software developer with expertise in the gaming industry, said that in order to solve the problems posed and allegedly solved by the patent, a person would need knowledge of, or experience in: · electronic game design; · software design; · aptitude for mathematics; · jackpot systems; · communications protocols; and · regulatory requirements. 22 Taken at face value, Mr Hopkins' evidence seems to deal with the qualifications of an inventor rather than those of a skilled addressee. Nonetheless it gives some indication of the skills which are required in the industry as a whole. 23 Mr Ferrar is the Executive Officer of the Australasian Gaming Machine Manufacturers Association and is widely experienced in the gaming industry. His experience includes implementation of gaming systems and policy development. He claims a good understanding of the requirements for awarding jackpot prizes in a system of linked EGMs and of the operation and commercial requirements of prize-awarding methodologies. He did not consider that he had the skills or knowledge necessary in order to be able to implement or develop a jackpot system. 24 In the end I agree with Mr Fox that the relevant terminology poses no real problems with the two exceptions to which I have referred. Both of these can, I believe, be resolved fairly easily. However the skilled addressee may also be the person skilled in the relevant art for the purposes of s 7 of the Act. Such a person may be important in my consideration of certain aspects of validity. The patent in suit appears to be widely directed. It identifies the advantages of the claimed invention and explains its operation in relatively simple terms, suggesting direction towards managers as well as technical personnel. It is likely that it is directed to regulators, consultants, managers and technical personnel involved in machine and programme design. However implementation of the invention would be within the expertise of technical personnel. This may involve some mathematical aptitude. Mr Johnson and Mr Hopkins are such persons. Mr Johnson, of course is the inventor. Of the respondents' witnesses, Mr Bennett, Mr Daly and Mr Moffitt are such persons. Mr Daly claims to be one of the inventors of the MegaGold system. Of these witnesses I have a distinct preference for the evidence of Mr Hopkins. I base this upon my perception of the logic of his position and its consistency with relevant prior art documents. The evidence of the respondents' witnesses on matters of construction and as to prior art often seemed to be argumentative and contrived. They also seemed to misunderstand either the patent in suit or the prior art. Similar comments apply to Dr Horsburgh's evidence although I do not classify him as a notional addressee. He is a patent attorney. These views are based primarily on the affidavits and other documents. I do not claim to have derived great assistance from my observation of the witnesses. 25 I will consider only those terms of which the parties have sought construction. 26 Claim 1 relates to a method for awarding a prize in a gaming system comprising at least one gaming machine. The probability of each machine winning a prize is said to be dependent upon: … at least some of the amount wagered on that gaming machine during an elapsed period … . 27 The expression "an elapsed period" means any discrete and finite period of time which has passed, having both a beginning and an end. The expression "some of the amount wagered on that gaming machine" clearly relates to the amount wagered during the elapsed period in question. The reference to "some" of that amount is to a discrete and identifiable part. The term would include a percentage of the amount. 28 The applicant submits that "probability" means mathematical probability. The evidence demonstrates that probability ("P") can be expressed mathematically by the equation: P = number of desired outcomes number of possible outcomes

29 Thus, in the classic example of tossing a coin, the probability of either a "heads" or a "tails" outcome will be demonstrated by the formula: P = 1 2

30 The Shorter Oxford Dictionary defines "probability" as: The quality or fact of being probable; degree of likelihood; the appearance of truth, or likelihood of being realized, which a statement or event bears in the light of present evidence. 31 An alternative definition, said to be mathematical is: As a measurable quantity: the extent to which a particular event is likely to occur, or a particular situation be the case, expressed by a number between 0 and 1 and commonly estimated by the ratio of the number of favourable cases to the total number of all possible cases. This definition reflects the equation referred to in the expert evidence, particularly that of Dr Pollett whose evidence I accept. I have found it to be of most assistance in this case. Mr Johnson gave evidence to similar effect. 32 The specification is virtually exclusively concerned with EGMs. Much of it clearly contemplates rapid and frequent calculation of probability and associated matters. In that context, it seems likely that the concept of probability, where referred to in the patent, must be a value capable of mathematical expression. However common usage often does not reflect that aspect. We predict such matters as the weather, human conduct and the outcome of sporting events, using the notion of probability in circumstances where mathematical calculation is impossible. Even where probability is capable of calculation, provided that all relevant information is available, such information is often unavailable or inherently inaccurate. 33 For reasons which I have given, it is likely that the word "probability" is used in the body of the specification in its mathematical sense, but the claims pose a problem. Many claims appear not to be limited to EGMs. They refer, expressly or by implication, to a "gaming machine" or "gaming machines". Claim 16 refers to a gaming machine which is "an electronic gaming device". It is dependent upon all preceding claims and adds this additional integer to them. In the absence of Claim 16, I would have read Claims 1 - 15 as referring to EGMs, having regard to the context set by the specification. See Kimberley-Clark Pty Ltd v Arico Trading International Pty Ltd (2001) 207 CLR 1 at [15]. However Claim 16 makes such an approach difficult. It may be that claims such as Claims 1 - 15 are not fairly based on the specification. If so, then those claims will only survive to the extent that they are incorporated into Claim 16 or other, more limited claims. 34 It is not so easy to construe "probability" as mathematical probability if one is considering all gaming machines, as opposed to only EGMs. The expression is very wide. It might include tossing two pennies using a kip or throwing dice from a cup. In those cases it would be possible to calculate the probability of a win in a mathematical way. In other cases it may not be easy to do so, or to do so quickly. Factors likely to affect probability may be difficult or impossible to ascertain. I have in mind, for example, the geared wheels on older poker machines or "fruit machines" as they were called. The effect of wear and tear upon such devices might make it difficult to predict an outcome. Climatic conditions and maintenance programmes may also be relevant. On the other hand it is obviously important to the successful operation of commercial gaming operations that the probability of a win be capable of calculation. It would otherwise not be possible to ensure an appropriate profit to the operator. In the end, I conclude that the term is used in its mathematical sense. I will deal with the difficulties posed by the width of Claims 1 - 15 and others later in these reasons. 35 For reasons which will become clear when I consider the prior art, it is necessary to say a little more about the meaning of probability in the context of Claim 1. It is implicit in the specification that an EGM can win a relevant prize only if a wager is placed upon it. Although the evidence may be a little superficial on this aspect, the case has been conducted upon the basis that money is placed in an EGM and then committed to a wager in some way, perhaps by pushing a button or pulling a lever. The event, the probability of which is referred to in Claims 1, 17 and 24 is the probability that a particular wager will yield a win. The invention requires that probability of a win be dependent upon the amount wagered on a relevant EGM within an elapsed period. Much of the respondents' case concerning prior art seemed to assume that the amount of the wager in a potentially winning game could, itself, be an amount wagered during an elapsed period. It was said to follow that where the probability of a win depended upon the amount of a wager, Claim 1 would be notionally infringed for the purposes of the reverse infringement test. I reject that construction of Claims 1, 17 and 24. In such a system, there is no identifiable lapsed period having a beginning and an end. The specification suggests that a purpose of the invention was to avoid a jackpot system which was based solely upon the amount wagered on the game in question. 36 The expression "dependent upon" means that the probability of a win will rise or fall in a way which depends upon the factor in question, namely "at least some of the amount wagered on that gaming machine during an elapsed period". The use of the expression "at least" indicates that probability may be dependent upon the whole of the amount wagered. 37 The respondents advanced a number of somewhat unpersuasive arguments concerning the construction of Claim 1 and other claims. Firstly, they argued that Claim 1 did not describe a method of awarding a prize (as claimed) because it did not identify steps. One would normally expect a method to include steps. However there may be patentable methods which do not involve steps in the usual sense. More importantly, it is not necessary that the word "step" be used in a claim in order that it be valid for the purposes of the Act, even if the word "method" is used. The test is always whether the claim discloses a manner of manufacture. In any event, Claim 1, understood in the context of the specification, says rather more about the "method" than the respondents suggest, at least to the extent that it concerns EGDs. The potential capacity of even a very small computer is now well-known to virtually everybody, and the use of such equipment is ubiquitous. Almost by definition, when one speaks of an EGD, one is speaking of a computer-driven device. This is the context set by the specification. In my view, Claim 1 contemplates an EGD driven by a computer which is programmed to produce the described result. That is sufficient to describe a "method". Clearly, Mr Hopkins so understood the claims. Indeed, I believe that all of the witnesses proceeded on that basis. There are difficulties in this approach when one considers gaming machines other than EGDs. As I have said, it may be that some claims fail as independent claims but survive to the extent that they are adopted (and narrowed) elsewhere in the patent. This matter is more conveniently dealt with in connection with the argument concerning fair basing for the purposes of s 40 of the Act. 38 A second criticism was that the expressions "at least some of the amount wagered" and "during an elapsed period" were too vague. Whilst it is true that they are very broad, I do not consider that they are vague. I see no reason to look to the specification in order to ascertain the meaning of either term. Those meanings are self-evident. The applicant claims that tying the award of a jackpot to some part of the amount wagered on an EGD during an elapsed period is an invention for the purposes of the Act. No doubt the breadth of the claim increases the range of infringing conduct. On the other hand, it may make it easier for the respondents to demonstrate want of novelty, obviousness or want of fair basing. 39 Claim 4 uses the expression "wherein the elapsed period is a rolling or sliding period of time". The applicant submits that a "rolling period of time" and a "sliding period of time" are different. A rolling period of time is said to be: … a continuous cycle of multiple elapsed periods (ie more than just one elapsed period) where each elapsed period begins at the expiration of the previous elapsed period. 40 A sliding period of time is said to mean: … that there is a continuous cycle of multiple elapsed periods (ie more than just one elapsed period) where each elapsed period begins part way through the previous elapsed period but extends beyond the expiration of the previous elapsed period. 41 The "elapsed period" in Claim 4 is apparently a special example of the "elapsed period" referred to in Claim 1. It is the time period which identifies the relevant wagers to be taken into account in calculating the probability of a jackpot win. The terms "rolling" and "sliding" appear in the body of the specification. Reference to it may assist for present purposes. At p 6 of the specification it is said that: The elapsed period is typically a rolling or sliding period of time, preceding each prize draw. Draws may be held at periodic intervals which are shorter than the sliding period of time." 42 The following passage appears on p 9: In the jackpot system of this embodiment, the probability of an EGD winning the jackpot is dependent upon the turnover of that EGD over a predetermined elapsed period of time. This period of time is a sliding or rolling "window" of time prior to each jackpot draw. 43 The following paragraphs suggest that this means that the period over which wagers are to be totalled for each successive jackpot moves forward regularly. The commencing and finishing times of any relevant elapsed period will be later in time than those of any earlier relevant lapsed period. Wagers made at the beginning of a period for one calculation drop out for the next, while more recent wagers are added. The matter is somewhat complicated by the following paragraph which appears on page 10: It can be seen from the tables that the rolling Record Period allows for variations in operational characteristics by collating all turnover changes during a sliding period. This allows all machines to have a fairer record of activity than individual change in turnover meter figures. Individual turnover figures per EGD may be recorded at varying frequencies. By running a sliding window any variation in operational characteristics can be normalized. 44 It is a little difficult to understand what is meant by this paragraph. However it probably relates to the last two paragraphs on page 9. The first refers to "the turnover meters of the EGDs" being "nominally read approximately once every 10 seconds". The second states: As shown in Table 1, EGD 1 had its change in turnover recorded approximately every 8 Seconds, EGD 2 approximately every 7 Seconds and EGD 3 approximately every 11 Seconds. This variation is due to operational variances across machines such as type, model, vintage, manufacture and network characteristics." 45 This seems to mean that although individual EGMs are to be read approximately every ten seconds, variations due to operational factors may mean that the length of time will vary from machine to machine, some being read at shorter intervals and some, at longer. For the purposes of calculating the probability of winning a jackpot, the wagers taken into account are those which have occurred during the relevant elapsed period. A further complication is the reference, later on that page, to the "draw period". This is the period of time between attempts at awarding the jackpot, which must not exceed the so-called record period. This appears to be the elapsed period referred to in the claims. 46 I do not accept the applicant's attempted distinction between the words "rolling" and "sliding". These words are metaphorical descriptors of the "elapsed period" referred to in the claims. There is no literal sense in which it can be said that the elapsed period either rolls or slides. The passages on pages 9 and 10 of the specification suggest strongly that the words "sliding" and "rolling" are used as synonyms for the same concept, namely a series of elapsed periods of the same length, the commencing times of which, and therefore the concluding times of which, are regularly moving forward. 47 I am asked by the applicant to determine the meaning of the word "calculating" which appears in Claim 5 and other claims. Clearly enough, it contemplates mathematical calculation to produce a finite result. This poses further problems, given the width of those claims which are not limited to EGMs. It is difficult to imagine how such calculations could be done sufficiently quickly or sufficiently frequently, other than by computer. 48 The applicant next asks me to construe the expression "on a non-deterministic basis", where it appears for the first time in Claim 17. In the end, Mr Johnson's definition seems not to be seriously in dispute. I have quoted it above. However I should say something about the evidence. The relevant phrase is "an opportunity to win a prize on a non-deterministic basis …". The applicant suggests that it has the meaning attributed to it by the Queensland Office of Gaming Regulation (the "QOGR"). There are difficulties in that submission, given that the patent in suit is not, as far as I can see, limited to systems operating within the jurisdiction of that Office. However some of the evidence suggests that the issue is peculiar to Queensland. As I have observed, one of the motivations in developing the claimed invention was the desire to ensure that jackpots were treated as, in effect, "deductible" in calculating the taxation payable on gaming operations. Such a result is more likely if the jackpot is characterized as awarded on a non-deterministic, rather than a deterministic basis. That does not lead me necessarily to conclude that the criteria chosen by QOGR as defining the meaning of the term "non-deterministic" should govern the construction of the patent. However they may throw some light upon an otherwise imprecise concept. The Oxford English Dictionary defines the word "deterministic" to mean: Of or pertaining to determinism or determinists. 49 "Determinism" is defined as: The philosophical doctrine that human action is not free but necessarily determined by motives, which are regarded as external forces acting upon the will. 50 Alternatively, it is defined to mean: The doctrine that everything that happens is determined by a necessary chain of causation. 51 Mr Daly (a witness called on behalf of the respondents) appears to have adopted the definition provided by QOGR. However he is employed by Golden Casket. It is hardly surprising that he should accept the Queensland definition. As I have said, it may be of assistance to consider the approach adopted by QOGR. It appears in a document described as "Jackpot Systems Minimum Technical Requirements Version 1.2". It is there said that: A deterministic jackpot is where the probability of winning the jackpot does not remain constant over time when all other variables (eg bet) are held constant. The trigger probability is dependent on previous events in time. The trigger probability (not expectation) that the jackpot will be won usually increases over time. An example of a deterministic jackpot is when the controller picks a hidden random number, then increments another number (usually based on contributions) until the hidden number is reached and the jackpot is awarded. 52 This explanation distinguishes between two situations. In the first, a win occurs when an accumulating total equals or exceeds a pre-determined number. The possibility of a win in such a game will increase as time passes simply because the number of available non-winning outcomes decreases. This is a deterministic situation. In the second situation, the probability of a win will not increase with the passage of time. An example is the tossing of a coin. That is a non-deterministic situation. Mr Johnson's definition of the term "non-deterministic jackpot" is consistent with this approach. In the invention, probability of a win might increase temporarily with the passage of time. For example, it might be raised for as long as an unusually large wager is within the elapsed period. On the other hand, probability might fall if there were a period of inactivity in wagering. It is more accurate to say that in such a situation, probability fluctuates, rather than that it increases. It seems that there is no difficulty in treating a jackpot as non-deterministic in those circumstances. As I have previously observed, the respondents claim that the MegaGold system is "non-deterministic". The term obviously has a specialized meaning in the gaming context, and the parties are largely in agreement as to its meaning. In the absence of any other evidence, I accept the QOGR definition as explained by Mr Johnson as appropriately defining the term "non-deterministic". 53 I am also asked to construe the term "the period between draws". It means, as suggested by the applicant, the period between jackpot draws. This term appears for the first time in Claim 7. In Claim 8 there is reference to the term "the last draw". Clearly enough, this is a reference to the most recent jackpot draw. 54 In Claim 10 the expression "a predetermined period" appears. Claim 10 is obviously to be construed in conjunction with Claim 9. Those claims are as follows: 9. A method as claimed in any one of claims 5 to 8, further comprising the step of awarding to a draw winning gaming machine a further game to determine the actual prize won. 10. A method as claimed in claim 9, wherein the time allowed for playing the further game is limited to a predetermined period. 55 The purpose of this feature is, as I understand the specification, to prevent a player who has won a jackpot game from deferring his or her playing of it whilst the jackpot continues to increase. In any event, the "further game" identified in Claim 10 is the "further game" referred to in Claim 9. The term "predetermined period" in Claim 10 refers to a period, fixed in advance of the award of the further game as the period during which it must be played in order to win the jackpot. 56 Claim 11 provides: A method as claimed in claim 9 or 10, wherein the prize is a jackpot or one of a plurality of jackpots, the method further comprising the step of suspending the jackpot(s) until the determination of the further game. 57 The idea of suspending the jackpot is a little vague if the claim is read in isolation. However, as I have already indicated with respect to Claims 9 and 10, the context is fairly clear. This device is designed to prevent a player from delaying the jackpot game whilst the jackpot increases. The applicant correctly submits that there is to be no further increment to the jackpot pool until the game has been played. 58 Claim 18 provides: A gaming system as claimed in claim 17 wherein the probability is related to the total wagered amount recorded during the elapsed period. 59 The expression "is related to" means nothing more or less than the expression "dependent upon" which appears in Claim 1. The applicant asserts that there is a typographical error in Claim 19 where it refers to Claim 18 or 19. It is said that this should refer to Claim 17 or 18. The applicant has moved to amend the patent. The hearing of the motion has been adjourned. This matter should await the hearing of the motion. 60 Claim 27 is dependent upon Claim 26. The reference to "the predetermined record period" in Claim 27 is clearly to the "predetermined period" referred to in Claim 26. In turn, that predetermined period is the "elapsed period" as previously defined. The reference to the "predetermined record period" in Claim 27 is also to the "elapsed period" as previously defined. 61 As to Claims 29 and 30, the respondents submit that they are meaningless, ambiguous or unclear. There is much to be said for this argument. The claims are as follows: 29. A method of awarding a prize substantially as hereinbefore described with reference to the drawings. 30. A gaming system substantially as hereinbefore described with reference to the drawings. 62 While it may be possible to extend the range of a patent by adding claims which use the word "substantially", it is difficult to see how that can be done in this case in a way which is consistent with the requirements of s 40 of the Act. Extension by reference to the drawings is subject to the same difficulty. Such techniques inevitably invite the questions: "What is substantial?" and "How do the drawings affect the description of the invention?". In the present case, the words "as hereinbefore described" pose further difficulty. Do they refer to the earlier claims, to the preferred embodiments or to the consistory clause? Many of these difficulties are discussed in Blanco White, "Patents for Inventions and the Protection of Industrial Design", 5th ed, at 2-112 and 2-113. No real attempt was made by the applicant to identify the relevant operation of these claims. I will deal with them further in considering arguments arising under s 40 of the Act.

The MegaGold system 63 On 1 April 2001, Mr Johnson attended a trade show at the Brisbane Convention and Exhibition Centre at which LTH (trading as Odyssey Gaming) was demonstrating and marketing a gaming machine jackpot system. On or about 21 May he, together with Mr Brian Johnson, attended a meeting at the Brisbane offices of Golden Casket. Also present at that meeting were Mr Peter Farley, Mr Paul Egan and Mr Chris Daly, representing Golden Casket. In the course of the meeting Mr Farley said that the technology on display on the Odyssey stand at the Convention Centre was the same as that described in the Golden Casket patent application. A letter dated 21 June 2001 to Messrs Deacons, solicitors for Neurizon, from the solicitors for LTH made it clear that LTH, at that stage, proposed to operate a "wide-area jackpot system" under a licence to be granted by Golden Casket, and that Golden Casket was an applicant for a patent in connection with the relevant technology. I am not aware of any discussion of the meaning of the term "wide area", but it seems to describe a jackpot system involving numerous EGMs at different venues. 64 Golden Casket is the applicant pursuant to Australian Patent Application No 53686/2000, Patent Co-operation Treaty Application No PCT/AU00/01011 and Australian Patent Application No 66721/2000). Although the applications are not identical, there appears to be little, if any relevant difference. I will refer to the two Australian applications respectively as the "first MegaGold application" and the "second MegaGold application". The subject matter of those applications is hereinafter referred to as the "MegaGold system". Exhibits SBJ 9, 10, 11, 12, 13 and 14 indicate that there are transactions on foot involving Golden Casket, Bounty and LTH. It is not disputed that those transactions concern the MegaGold system. The evidence demonstrates that LTH is marketing, or preparing to market a system known as "Voyager". Dr Horsburgh, a witness called by the respondents, says that the MegaGold System is materially the same as the Voyager System. 65 It is necessary to identify the MegaGold system with a view to seeing whether or not its use or exploitation would infringe the applicant's patent. Mr Johnson asserts that the MegaGold system involves the use of two devices. One is called a "Central Jackpot Controller" ("CJC"). This is a device which maintains the current jackpot amount and runs a random number generator to generate jackpot wins. The second is a "Venue Jackpot Controller" ("VJC") which receives and verifies data from EGMs and transmits it to the CJC. He swears that the MegaGold system involves the following steps: Step 1 The CJC sends a request to each VJC for the total current accumulated turnover of amounts wagered on each contributing EGM at that venue. Step 2 Approximately 3 - 3.62 seconds after sending the request, the CJC receives the accumulated turnover for each venue for the last 6 seconds. Step 3 The CJC takes the accumulated turnover from each venue which responded in Step 2 and calculates the grand total of turnover for all venues. This amount is described as the "Actual Cycle Turnover" or "Actual Turnover Contributed" (the "ATC"). Step 4 The CJC then takes a constant calculated range of numbers and divides it by the ATC. The result is known as the "Jackpot Hit Range". The constant calculated range is a constant value fed into the system by the operator. Broadly speaking it regulates the frequency of prize awards. Step 5 A random number is generated. It must lie within the Jackpot Hit Range calculated pursuant to step 4. If this random number co-incides with a single pre-selected value, then the operation continues with step 6. Otherwise, 6 seconds after the commencement of step 1 in this cycle, a new cycle commences. Dr Pollett's evidence indicates that the probability of a jackpot being awarded within the system ("PS") is given by the equation: PS = ATC constant calculated range

Step 6 A random number is generated which must be within a range equal to the turnover of all venues calculated pursuant to step 3. Step 7 An accumulator is set to zero. The turnover for each individual venue from step 2 is added to the accumulator until its total equals or exceeds the random number generated in step 6. The jackpot is assigned to the venue, the turnover of which causes that result. The probability that the turnover of any individual venue ("PV") will increment the accumulator total to equal or exceed the random number from step 6 is: PV = individual venue turnover total turnover from all venues

Step 8 A message is sent to the venue selected in step 7, requesting the individual turnover readings for the EGMs which made up the accumulated turnover for that venue as reported in step 2. Step 9 Approximately 3 seconds after step 8, the CJC receives those individual turnover readings. Step 10 A random number is generated which must be within a range equal to the total turnover of the venue selected in step 7. Step 11 An accumulator is set to zero. The turnover for each gaming machine from step 9 is added to the accumulator until its total equals or exceeds the random number generated in step 10. The jackpot is awarded to the EGM, the turnover of which brings about that result. The probability that the turnover of any individual gaming machine will increment the accumulator to a total equal to, or exceeding the random number from step 10 ("PEGM") is: PEGM = individual gaming machine turnover total turnover from its venue

Step 12 The gaming machine selected in step 11 is deemed the winner, and its venue is sent a message informing it of the win. The venue will receive this message within 8.14 seconds from the start of step 1. Step 13 7 seconds after the cycle commenced with step 1, a new cycle commences. 66 The respondents preferred to describe the MegaGold system as consisting of three steps, namely: · a random decision to award a prize; · allocation of the prize to a venue; and · identification of the winning machine at that venue. 67 I do not understand this description to detract from the validity of that advanced by Mr Johnson, nor do I understand the respondents to have disputed the accuracy of his description. However they dispute an inference drawn by Mr Johnson and Dr Pollett as to the probability of a win on any individual EGM. Mr Johnson and Dr Pollett say that the probability of any EGM ("PEGM") winning a prize in a draw is given by the equation: PEGM = EGM turnover x venue turnover x ATC venue turnover ATC constant calculated range from step 4

68 In effect, this equation multiplies the probability of a win being awarded within the system by the probability of that win being awarded to a particular venue, multiplied by the probability of a particular EGM at that venue winning the prize. As venue turnover and ATC appear both above and below the vinculum, they cancel out so that PEGM is given by the equation: PEGM = EGM turnover constant calculated range from step 4

69 In other words the probability of an EGM winning will be dependent upon turnover on that machine over the six second period, known as a "polling cycle". 70 The respondents' position appears best in pars 27 - 29 of the affidavit of Philip Charles Bennett who said: 27. As I understand it from the Golden Casket patent application, the Megagold system works in a totally different manner than does the subject of the Neurizon patent. The Megagold system applies a 3 step methodology which is dependent, in the first step, on the total amount wagered on all gaming machines linked to a central jackpot controller through a number of venue controllers. In this regard it is a true wide area system wherein the gaming activity across the network impacts on the probability of a jackpot prize being awarded. 28. In the first step of the Mega Gold system, the total turnover of all machines on the network in a polling cycle is used to determine a range from which a random number is selected. If the random number matches a pre-determined hit number (which is always 1) a decision is made to award a jackpot prize. 29. The remaining two steps are concerned with identifying the actual machine that is to be awarded the prize. In the second step, the total turnover at each venue relative to the total turnover for all venues is used to select a winning venue. In the third step the turnover on each machine at the winning venue relative to the total turnover of all machines at the winning venue is used to select the winning machine. 71 It is then said that the MegaGold system "never calculates winning probabilities for individual machines" (par 31) and that the Neurizon Patent does not utilize the total turnover of all machines in the course of relevant calculations. These propositions may well be true. However the applicant's case depends upon the claims in the patent. The relevant question is whether the MegaGold system infringes them. An examination of the differences between the claims and that system will not necessarily negate the similarities. 72 Mr Owen Peter Moffitt, the managing director of LTH, also offered an opinion as to this matter in par 4.3 of his affidavit. He said: Under the Voyager jackpot methodology, to find the jackpot winning machine you must know and use the total turnover of all machines in all venues, the turnover of each venue, and finally the turnover of each machine in the winning (and only the winning) venue. Under the Neurizon jackpot methodology, to find the jackpot winning machine you must consider only the turnover on that machine and you disregard the turnover on any other machine as well as the total turnover of all machines connected to the jackpot system. The approach of Voyager is to consider all wagers on the whole jackpot system whereas the focus of Neurizon is to consider only the wager on an individual machine. 73 While the descriptions of the two systems may be correct, this does not change the fact that in both systems, the probability of an EGM winning a jackpot is proportional to the amount wagered on that EGM during an elapsed period. 74 Dr Pollett argued that Mr Bennett had confused absolute probability with conditional probability. Absolute probability is the probability of an event occurring. Conditional probability is the probability of the event occurring given a stated set of circumstances or where extra information is provided, which circumstances or information affect or affects such probability. Thus in the present case, the probability of a particular venue or a particular EGM winning a jackpot, is increased once the decision had been taken to award a jackpot. Similarly, the probability of a particular EGM winning a jackpot increases once it is determined that the venue at which it is located is to win a jackpot. However the patent in suit considers the question of probability at the time of a particular wager. It is the probability of an EGM winning at that time which is relevant to the claimed subject matter of the invention. As demonstrated above, that probability is yielded by the equation: PEGM = EGM turnover constant calculated range from step 4

75 Dr Pollett was cross-examined at some length about this aspect of his evidence. The respondents seemed to challenge the logic of the proposition, asserting that the prospects of each EGM winning must also be affected by wagers on other machines. This was said to follow from the fact that the probability of a jackpot being awarded was dependent upon total wagers during the relevant period for the whole system. However there was no convincing mathematical counter to Dr Pollett's position. I accept his evidence and to the extent that Mr Johnson's evidence is supported by it, I also accept that evidence. My own lay response to the respondents' intuitive criticism of this evidence is simply that: · The more money wagered during the elapsed period on any EGM, the higher the probability of its winning. · Wagers on other EGMs will increase the probability of a prize being awarded within the system. · Such wagers will also create competing opportunities for other EGMs to win the prize. · The equations demonstrate that the probability of any one EGM winning the prize is not affected by wagers on other EGMs because the two effects "cancel out". 76 I am asked to find that in the MegaGold system, the total turnover of all venues is calculated during an elapsed period, described as the "polling cycle". Steps 1, 2 and 3 as described by Mr Johnson are designed to total the turnover on all machines at all venues over the preceding six seconds. In my view that period is an elapsed period. It is called a "polling cycle". I am satisfied that in the course of determining whether to award a jackpot, the MegaGold system totals the turnover at all venues during the polling cycle. I find that in the MegaGold system, total turnover of all venues, total turnover of all EGMs at a venue and total turnover of each EGM are all to be calculated for an elapsed period, namely the relevant polling cycle. The probability of a jackpot being awarded to a particular EGM is therefore proportional to the turnover of that EGM during the relevant polling cycle. Put in the language of the patent, it is dependent upon the amount wagered on that EGM during an elapsed period. The probability of an EGM winning the jackpot is not affected by the amounts wagered on any other EGM during the polling cycle. Conversely, amounts wagered on one EGM do not affect the probability of any other EGM winning the jackpot.

Integers of the claims 77 The following table sets out the relevant integers of the claims in the patent in suit: Claim No Integer 1 (a) A method of awarding a prize (b) in a gaming system (c) comprising at least 1 gaming machine (d) characterized in that the probability of each gaming machine winning the prize is dependent upon at least some of the amount wagered on that gaming machine (e) during an elapsed period 2 (f) A method as claimed in Claim 1 (g) wherein the probability is related to the total wagered amount (h) recorded during the elapsed period 3 (i) A method as claimed in Claim 1 (j) wherein the probability is related to the maximum amount wagered on a game (k) during the elapsed period 4 (l) A method as claimed in any preceding claims (m) wherein the elapsed period is a rolling or sliding period of time 5 (n) A method as claimed in any preceding claim (o) including the step of conducting a series of prize draws and (p) prior to each prize draw (q) calculating the probability of each gaming machine winning that draw 6 (r) A method as claimed in Claim 5 (s) wherein the elapsed period is a pre-determined period (t) preceding each draw (u) further comprising the steps of recording amounts wagered on each gaming machine (v) and calculating the probability of each gaming machine winning that draw (w) from the amounts recorded during the pre-determined period 7 (x) A method as claimed in Claim 6 (y) wherein the draws are conducted at periodic intervals of time (z) the period between draws being no greater than the pre-determined period 8 (aa) A method as claimed in Claim 6 or 7 (bb) wherein the winning probability for each gaming machine is calculated from the estimated amount wagered on that gaming machine (cc) during the period since the last draw (dd) the estimated amount being calculated on a pro-rata basis (ee) from the recorded amount of wagers (ff) during the pre-determined period 9 (gg) A method as claimed in any one of Claims 5 to 8 (hh) further comprising the step of awarding to a draw-winning game machine a further game (ii) to determine the actual prize won 10 (jj) A method as claimed in Claim 9 (kk) wherein the time allowed for playing the further game is limited (ll) to a pre-determined period 11 (mm) A method as claimed in Claim 9 or 10 (nn) wherein the prize is a jackpot (oo) or one of a plurality of jackpots (pp) further comprising the step of suspending the jackpot(s) (qq) until the determination of the further game 12 (rr) A method as claimed in any preceding claim (ss) wherein the prize is a jackpot pool 13 (tt) A method as claimed in Claim 12 (tt) wherein the jackpot pool comprises an initial amount and (vv) a proportion of the amount wagered on the gaming machine or machines (ww) since the jackpot pool was reset 14 (xx) A method as claimed in any preceding claim (yy) further comprising the step of displaying a graphical representation (zz) of the probability of the gaming machine(s) winning the prize 15 (aaa) A method as claimed in Claim 14 (bbb) wherein the gaming system includes a plurality of gaming machines (ccc) and the probabilities are displayed in relative format 16 (ddd) A method as claimed in any preceding claim (eee) wherein each gaming machine is an electronic gaming system 17 (fff) A gaming system (ggg) comprising at least 1 gaming machine, (hhh) control means connected to the gaming machine and (iii) adapted to conduct a series of prize draws (jjj) in each of which the gaming machine has an opportunity to win a prize (kkk) on a non-deterministic basis and (lll) a means for determining the winning probability of each gaming machine (mmm) at each prize draw (nnn) characterized in that the probability of each gaming machine winning a prize draw is (ooo) dependent on at least some of the amount wagered (ppp) on that gaming machine (qqq) during an elapsed period 18 (rrr) A gaming system (sss) as claimed in Claim 17 (ttt) wherein the probability is related to the total wagered amount recorded (uuu) during the elapsed period 19 (vvv) A gaming system (www) as claimed in Claims 17 and 18 (xxx) wherein the elapsed period is a rolling or sliding (yyy) pre-determined period of time (zzz) prior to each prize draw 20 (aaaa) A gaming system (bbbb) as claimed in Claim 19 (cccc) wherein the control means includes (dddd) means for recording amounts wagered on each gaming machine (eeee) during the predetermined period 21 (ffff) A gaming system (gggg) as claimed in any of Claims 18 to 20 (hhhh) wherein the control means includes a jackpot controller (iiii) and the prize is a progressive (jjjj) linked (kkkk) jackpot 22 (llll) A gaming system (mmmm) as claimed in any one of Claims 18 to 21 (nnnn) wherein each gaming machine is an electronic gaming device 23 (oooo) A gaming machine (pppp) as claimed in any one of Claims 18 to 22 (qqqq) having means to display a graphical representation (rrrr) of the probability of each gaming machine of winning the prize draw 24 (ssss) A gaming machine (tttt) having means for effecting a prize draw (uuuu) to award a prize (vvvv) on a non-deterministic basis (wwww) and means for determining the probability of the gaming machine winning the prize (xxxx) characterized in that the probability of the gaming machine winning the prize (yyyy) is dependent on at least some of the amount wagered on the gaming machine (zzzz) during an elapsed period 25 (aaaaa) A gaming machine (bbbbb) as claimed in Claim 24 (ccccc) wherein the probability is related to the total wagered amount recorded during the elapsed period 26 (ddddd) A gaming machine (eeeee) as claimed in Claim 24 or 25 (fffff) wherein the elapsed period is a sliding or rolling (ggggg) predetermined period (hhhhh) prior to the prize draw 27 (iiiii) A gaming machine (jjjjj) as claimed in Claim 26 (kkkkk) further comprising means for recording amounts wagered on the gaming machine (lllll) during the predetermined record period 28 (mmmmm) A gaming machine (nnnnn) as claimed in Claims 24 to 27 (ooooo) having display means (ppppp) to present a graphical representation (qqqqq) of the probability of winning the prize draw 29 (rrrrr) A method of awarding a prize (sssss) substantially as hereinbefore described (ttttt) with reference to the drawings 30 (uuuuu) A gaming machine (vvvvv) substantially as hereinbefore described (wwwww) with reference to the drawings

Infringing conduct 78 Golden Casket has licensed Bounty to exploit the MegaGold system. Bounty and LTH propose to do so under the name Voyager. I do not understand the respondents to challenge the proposition that such conduct would infringe the exclusive right to exploit the invention conferred by s 13 of the Act, assuming the applicant's case as to construction of the patent and as to the features of the MegaGold system. The term "exploit" in relation to an invention includes (according to Schedule 1 of the Act): (a) where the invention is a product - make, hire, sell or otherwise dispose of the product, offer to make, sell, hire or otherwise dispose of it, use or import it, or keep it for the purpose of doing any of those things; or (b) where the invention is a method or process - use the method or process or do any act mentioned in paragraph (a) in respect of a product resulting from such use. 79 The applicant asserts infringement of Claims 1, 2, 4, 5, 6, 7, 12, 13, 17, 18, 19, 22, 29 and 30.

Claim 1 80 The MegaGold system is a method for awarding a prize in a gaming system comprising at least one EGM. I am satisfied that the probability of each EGM winning a prize depends upon the amount wagered on that EGM during an elapsed period. Infringement of Claim 1 is demonstrated.

Claim 2 81 Claim 2 differs from Claim 1 only in that the probability of a win is to be related to the total wagered amount rather than to at least some part thereof. Infringement is demonstrated.

Claim 4 82 This claim includes the additional integer, namely that the elapsed period be a "rolling" or "sliding" period of time. I have already explained my reasons for concluding that the words "rolling" and "sliding" are used synonymously. The first and second MegaGold applications speak of a "polling cycle", implying repetition of the process. (See first MegaGold application at p 10 ll 8-13 and second MegaGold application at p 9 ll 8-13.) Figure 2 also shows a polling cycle commencing at zero seconds and a second cycle commencing at six seconds. At p 12 ll 7-10 it is said that: … if there is no hit on the Jackpot Hit Value of any particular jackpot level, the CJC 200 waits until 6 seconds have elapsed from the commencement of the current polling cycle to commence a new polling cycle in which the previously described process is repeated. 83 Figure 3 suggests that if a jackpot is awarded, it may take about seven seconds to complete the process. The next polling cycle will not commence until the process has been completed. Nonetheless the polling cycles are rolling or sliding in the sense which I have previously identified. The relevant period moves forward for each draw. Infringement of Claim 4 has been demonstrated.

Claims 5, 6 and 7 84 The additional integers in Claim 5 are that the method includes: · a series of prize draws, and · calculation of the probability of each gaming machine winning a draw, · prior to each draw. 85 The Shorter Oxford Dictionary relevantly defines the term "draw"to mean: An event in which lots are drawn, a raffle; an order of contestants etc decided in this way; a lot drawn. 86 It seems that the term "draw" describes the random aspect of the process. Claim 5 prescribes that the calculation of probabilities is to occur before the draw. Thus such calculation is not to be part of the draw. There is no evidence that the probability of an individual EGM winning the jackpot is calculated at any stage in the MegaGold system. At the point at which the winning machine is selected, it would be possible to calculate the probability, at that point, of any machine at the chosen venue winning the jackpot, but that calculation is not performed. On any view of the meaning of the word "draw", in the MegaGold system it is well-advanced by the time that such calculation is performed. It could not be said that any calculation at that point occurred prior to the draw. The word "draw" must describe all random aspects of the process, commencing with that involved in deciding whether a jackpot should be awarded. Further, I have held that for the purposes of the patent in suit, the probability of an EGM winning a jackpot is the probability at the time of the potentially winning wager. The probability of a particular EGM winning a jackpot after it has been awarded to the venue at which that machine is located is quite different. The MegaGold system does not infringe Claim 5. 87 Claims 6 and 7 are dependent upon Claim 5. Infringement of those claims is not demonstrated.

Claim 12 88 Claim 12 describes a method as claimed in any preceding claim wherein the prize is a jackpot pool. The MegaGold system awards a jackpot pool. To the extent that infringement of Claims 1, 2 and 4 has been demonstrated, infringement of Claim 12 is also demonstrated.

Claim 13 89 This claim is dependent upon Claim 12 with the added integers: · wherein the jackpot pool comprises an initial amount; · and a proportion of the amount wagered on the gaming machine or machines, · since the jackpot pool was reset. 90 That each jackpot commences with an initial amount appears from p 16 ll 1-2 of the first MegaGold application which states: Next the current jackpot amount for the awarded jackpot level is reset with a Jackpot Starting Amount … . See also the second MegaGold application at p 15 ll 1-2. That a proportion of the amount wagered on an EGM or EGMs is added to the pool appears at p 12 ll 3-4 of the first MegaGold application as follows: After the ATC (actual turnover contributed) has been calculated, a percentage of the ATC is added to the jackpot amount (also known as the jackpot value). See also the second MegaGold application at p 11 ll 3-4. Infringement of Claim 13 is demonstrated.

ClaimS 17, 18, 19 and 22 91 The MegaGold system comprises a gaming system of at least one gaming machine and a control means connected to that gaming machine, adapted to conduct a series of prize draws. Each gaming machine connected to the control means has an opportunity of winning, provided only that a bet is placed on it. This seems to be what is contemplated by Claim 17, given the reference to probability which appears later in the claim. As to whether or not the opportunity is to win on a "non-deterministic basis", the respondents are promoting the MegaGold system as being non-deterministic. I did not understand them to assert to the contrary in the course of the hearing. For reasons which I have already given, I am of the view that in the MegaGold system, the probability of an individual gaming machine winning a prize is dependent on the amount wagered on that machine during an elapsed period. However the question arises as to whether the MegaGold system has a "means for determining the winning probability of each gaming machine at each prize draw … ." For reasons previously given, I conclude that it has not. Infringement of Claim 17 is not demonstrated. 92 As Claims 18, 19 and 22 are dependent upon Claim 17, infringement of those claims is also not demonstrated.

Claims 29 and 30 93 It is asserted that the MegaGold system also infringes against Claims 29 and 30. As I have previously observed, I am unable to construe those claims so as to give them any clear meaning. The applicant made no serious attempt to identify any possible area of operation, nor to show how the MegaGold system may have infringed them. In the absence of any express submissions as to what may be embodied in those claims, I see no reason to take the matter any further. I am not satisfied that there has been infringement of Claim 29 or 30.

Validity 94 The respondents cross-claim, alleging various grounds of invalidity including, in particular, that: · the claimed invention is not a manner of manufacture within the meaning of s 6 of the Statute of Monopolies as required by par 18(1)(a) of the Act; · the patent does not comply with the requirements of subss 40(2) and (3) of the Act; · want of novelty; and · obviousness.

Section 18 - MANNER OF MANUFACTURE 95 It is submitted that the claimed invention is not a manner of manufacture within the meaning of s 6 of the Statute of Monopolies. Three decisions of the High Court inform the approach to be taken to this question. The first is Commissioner of Patents v Microcell Ltd (1958-1959) 102 CLR 232. In that case the claimed invention involved the use of synthetic resinous plastic material, reinforced with mineral fibres, in the construction of self-propelled rocket projectors. After a detailed reference to the authorities, the Court said at 250: Here the specification does not on its face disclose more than a new use of a particular known product. To use Lord Buckmaster's words, no new product is obtained, and there is no new method of manufacture suggested or an old one improved. … These things are to be gathered from the specification itself, which contains no suggestion of novelty in relation to the article to be manufactured or the material to be used. … In these circumstances we do not think it can be said, merely because it does not seem previously to have occurred to anyone to make a rocket projector out of reinforced plastic, that any inventive idea is disclosed by the specification. 96 At 251 their Honours observed: We have in truth nothing but a claim for the use of known material in the manufacture of known articles for the purpose of which its known properties make that material suitable. A claim for nothing more than that cannot be subject matter for a patent, and the position cannot be affected either by the fact that nobody thought of doing the thing before, or by the fact that, when somebody did think of doing it, it was found to be a good thing to do. 97 In National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252, the Court referred to the Microcell decision, which had only recently been delivered. Referring to the observation of Lord Buckmaster that the new use of a known substance might be "nothing but a claim for a new use of an old substance", the Court observed at 262: But, as the Microcell Case … emphasizes, it must always be remembered how much is wrapped up in the 'nothing but'. Lord Buckmaster did not use the words without explanation:- '… when once a substance is known,' he said, 'its methods of production ascertained, its characteristics and its constituents well defined, you cannot patent the use of that for a purpose which was hitherto unknown.' And why? Because in the postulated state of knowledge the new purpose is no more than analogous to the purposes for which the utility of the substance is already known, and therefore your suggestion of the new purpose lacks the quality of inventiveness … . Unless invention is found in some new method of using the material or some new adaptation of it so as to serve the new purpose, no valid patent can be granted … . If, however, the new use that is proposed consists in taking advantage of a hitherto unknown or unsuspected property of the material, the situation is not that to which Lord Buckmaster's language refers. In that case there may be invention in the suggestion that the substance may be used to serve the new purpose; and then, provided that practical method of so using it is disclosed and that the process comes within the concept of patent law ultimately traceable to the use in the Statute of Monopolies of the words 'manner of manufacture,' all the elements of a patentable invention are present … . It is not necessary that in addition the proposed method should itself be novel or involve any inventive step … . 98 Whilst Microcell establishes that the new use of a known substance will not, without more, constitute an invention, NRDC establishes that there may be invention in the idea that a substance may be used for a new purpose, provided that some practical basis for so using it is disclosed. However the new use must take advantage of an unknown or unrespected property of the substance. In the present case, the claimed new idea is use of the amount wagered over an elapsed period as the basis for awarding a prize. It is implied that the relevant result will be brought about by use of appropriate computer programmes, either located in the EGD in question or in some external control system. 99 The third case to which I should refer is N V Philips Gloeilampenfabrieken v Mirabella International Pty Ltd (1995) 183 CLR 655 at 663, where the following passage appears: 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 1, 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, by reason of absence of the necessary quality of inventiveness, not a manner of new manufacture for the purposes of the Statute of Monopolies. 100 As I have observed, it is clear that the applicant claims that the subject matter of its invention is new. The specification does not suggest to the contrary. The claims, when read with the body of the specification, contemplate performance by an appropriate computer programme. In CCOM Pty Ltd v Jiejing Pty Ltd (1994) 51 FCR 260, especially at 286-295, the Full Court considered the application of the Act to computer programmes. In particular at 294-5, the Court observed: In the present case, counsel for the respondents submitted that what is involved in the storage of the result of linguistic tasks undertaken 'outside the computer'; what the patentees claim is no more than a desirable characteristic of the computer program, the ability to search in the manner described, a data base of the type described. We accept that in a given case objections of this type might found an attack for obviousness or lack of novelty or for failure to comply with s 40 in one or other of its aspects. … Rather, counsel for the respondents drew upon Philips (supra) for a narrower proposition. This was that there could be no manner of manufacture in identifying 'basic characteristics' or 'desiderata' and 'to claim all the ways of achieving (them)'. Applying that to the present case, it was submitted that all that had been done was to select a desirable characteristic of a computer program, the ability to search, in the manner described, a data base of the type described, and 'to claim all computers present and future possessing that characteristic'. That submission should not be accepted. It may be that such a claim lacks novelty, is obvious, or lacks utility, or there is a failure to comply with one or other of the limits of s 40 because, for example, the invention is not fully described or the claim is not clear and succinct. But if such hurdles all are surmounted, then in our opinion in a case such as the present there does not remain an independent ground of objection as to patentability, within the sense of s 18(1)(a) of the 1990 Act. … The NRDC case … requires a mode or manner of achieving an end result which is an artificially created state of affairs of utility in the field of economic endeavour. In the present case, a relevant field of economic endeavour is the use of word processing to assemble text in Chinese language characters. The end result achieved is the retrieval of graphic representations of desired characters, for assembly of text. The mode or manner of obtaining this, which provides particular utility in achieving the end result, is the storage of data as to Chinese characters analysed by stroke-type categories, for search including 'flagging' (and 'unflagging') and selection by reference thereto. 101 Clearly, the programming of EGMs is necessarily incidental to a "field of economic endeavour" to use the words of the Full Court in CCOM. In this case it is the conduct of gaming facilities. In my view the claims in the patent in suit should be read as describing particular results to be produced by appropriate computer programmes. The need for a new basis of determining probability of a win is identified in the body of the specification and not really challenged. Indeed, the respondents appear to be seeking to meet the same need. As in CCOM, it is possible that the patent in suit may fail for some other reason, but it cannot be said that on its face, there is no manner of manufacture.

Section 40 102 Some aspects of the respondents' submissions in this regard are not as clear as they might be. However it seems that the criticisms include: · lack of fair basing; and · lack of clear meaning. 103 Section 40 of the Act provides: (1) … (2) A complete specification must: (a) describe the invention fully, including the best method known to the applicant of performing the invention; and (b) where it relates to an application for a standard patent - end with a claim or claims defining the invention; and (c) … (3) The claim or claims must be clear and succinct and fairly based on the matter described in the specification. (4) The claim or claims must relate to one invention only.

Fair basing 104 I have observed that there is a difficulty with those claims which refer to gaming machines not limited to EGMs. The body of the specification is concerned only with EGDs. To the extent that the claims relate to gaming machines other than EGDs, they seem not to be fairly based upon the specification. Assuming that the applicant intended only to claim a method or system for use in connection with EGDs, that purpose would be served by Claims 16 and 22. However some recasting of the claims may be necessary. As far as I can see, the respondents did not take this point, and so I am reluctant to decide it without hearing further from the parties. I am, however, inclined to the view that claims relating to gaming machines other than EGDs should fail for want of proper basing on the specification. 105 The purpose of the requirement that a claim be fairly based upon matter described in the specification was explained by Dixon J (as his Honour then was) in Palmer v Dunlop Perdriau Rubber Co Ltd (1937) 59 CLR 30 at 76-77. His Honour demonstrated, by reference to the authorities, that the aim of such a provision is to ensure that a patentee does not claim an area of protection wider "than was warranted by the actual invention made". Similarly, in Olin Corporation v Super Cartridge Co Pty Ltd (1976-1977) 180 CLR 236 at 240, Barwick CJ observed: The question whether the claim is fairly based is not to be resolved, in my opinion, by considering whether a monopoly in the product would be an undue reward for the disclosure. Rather, the question is a narrow one, namely whether the claim to the product being new, useful, and inventive, that is to say, the claim as expressed, travels beyond the matter disclosed in the specification. 106 In Rehm Pty Ltd v Websters Security Systems (International) Pty Ltd (1988) 81 ALR 79 at 95, Gummow J said: … 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. 107 Quite apart from any concerns about the width of the references to "gaming machines", the respondent submits that Claims 1, 2 and 4 lack fair basing "because they do not contain any steps". It is submitted that "they are not claims for a method of putting a principle into effect: they attempt to claim a mere principle, idea or discovery." I have already given my reasons for rejecting the submission. 108 It is submitted that Claims 1, 17 and 24 do not contain each of the integers "… that the win probability for each machine is calculated from an averaged recorded turnover over moving periods of time, a sliding window of time …". It is apparently suggested that this means that there is no fair basing on the specification because the claims are wider than the true invention there disclosed. This argument depends upon identification by the respondents of aspects of the invention which they consider to be more important than others, coupled with an assertion that the claims must include all such aspects. In some circumstances that argument may be valid. However it depends upon the breadth of the disclosure and the breadth of the relevant claim. Not infrequently, the specification describes an alleged invention, embodiments of which may involve various different selections from a range of integers. It is not necessary that each claim include all aspects disclosed in the body of the invention. It is only necessary that each claim be fairly based upon the body of the specification and be for the invention there identified. In the patent in suit the use of a rolling or sliding elapsed period is said to be typical (p 6 ll 30-31). Nonetheless the disclosure is wider, including the subject matter of Claim 1. See p 5 ll 32-37. This criticism is not justified.

Lack of clear meaning 109 I have previously dealt with the criticisms made of the terminology used in the claims. As Hely J observed in Doric Products Pty Ltd v Lockwood Security Products Pty Ltd [2001] FCA 1877 at [260]: Ambiguity ordinarily arises if no reasonably certain construction can be given to a claim, or if it is fairly and equally open to diverse meaning. Ambiguity may also arise in relation to a claim if it so obscure that its proper construction must always remain a matter of doubt. That is not the case here. 110 I do not accept that the language used in the patent (other than in Claims 29 and 30) is incapable of bearing ascertainable meaning. There is room for differences of opinion, but that does not necessarily create ambiguity which is beyond resolution. Various witnesses expressed opinions in this regard, but I did not find them to be particularly persuasive. As I have observed, much of this evidence appeared to be partisan. Claims 29 and 30 are as follows: 29. A method of awarding a prize substantially as hereinbefore described with reference to the drawings. 30. A gaming system substantially as hereinbefore described with reference to the drawings. 111 The use of the phrase "as hereinbefore described" poses difficulties in this case. It is not clear whether the reference is to the consistory clauses, the preferred embodiments or the earlier claims. The consistory clauses under the heading "Summary of Invention" describe four alternative forms of the invention. There are at least two preferred embodiments. It is said of the first of these that "there are various alternative implementations that achieve the same or similar outcome as the preferred embodiment." (See p 13, ll 36-38.) Similarly, in connection with the second preferred embodiment it is observed that "various modifications can be made to the foregoing without departing from the scope of the invention." (See p 16 ll 2-4.) Obviously enough, numerous combinations of integers emerge from the earlier claims. I find some difficulty in identifying precisely which of these various forms of the invention is the basis for comparison for the purposes of Claims 29 and 30. The reference to the drawings compounds the problem. The applicant made no attempt to explain how they might expand, qualify or vary the subject matter of the earlier claims or interact with the consistory clauses, the preferred embodiments or the claims. Given the nature of the claimed invention, both as disclosed in the specification and as claimed, it is impossible to give any useful meaning to Claims 29 and 30. They are not clear and succinct as required by subs 40(3). In my view they are invalid.

Want of Novelty and Obviousness 112 Paragraph 18(1)(b) provides that a patentable invention must be novel and involve an inventive step. Subsections 7(1), (2) and (3) of the Act provide: Novelty (1) For the purposes of this Act, an invention is to be taken to be novel when compared with the prior art base unless it is not novel in the light of any one of the following kinds of information, each of which must be considered separately: (a) prior art information (other than that mentioned in paragraph (c)) made publicly available in a single document or through doing a single act; (b) prior art information (other than that mentioned in paragraph (c)) made publicly available in 2 or more related documents, or through doing 2 or more related acts, if the relationship between the documents or acts is such that a person skilled in the relevant art in the patent area would treat them as a single source of that information; (c) prior art information contained in a single specification of the kind mentioned in subparagraph (b)(ii) of the definition of prior art base in Schedule 1. Inventive step (2) For the purposes of this Act, an invention is to be taken to involve an inventive step when compared with the prior art base unless the invention 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 claim, whether that knowledge is considered separately or together with either of the kinds of information mentioned in subsection (3), each of which must be considered separately. (3) For the purposes of subsection (2), the kinds of information are: (a) prior art information made publicly available in a single document or through doing a single act; and (b) prior art information made publicly available in 2 or more related documents, or through doing 2 or more related acts, if the relationship between the documents or acts is such that a person skilled in the relevant art in the patent area would treat them as a single source of that information; being information that the skilled person mentioned in subsection (2) could, before the priority date of the relevant claim, be reasonably expected to have ascertained, understood and regarded as relevant to work in the relevant art in the patent area. 113 The term "prior art base" is defined in Schedule 1 as follows: (a) in relation to deciding whether an invention does or does not involve an inventive step or an innovative step: (i) information in a document that is publicly available, whether in or out of the patent area; and (ii) information made publicly available through doing an act, whether in or out of the patent area. (b) in relation to deciding whether an invention is or is not novel: (i) information of a kind mentioned in paragraph (a); and (ii) information contained in a published specification filed in respect of a complete application where: (A) if the information is, or were to be, the subject of a claim of the specification, the claim has, or would have, a priority date earlier than that of the claim under consideration; and (B) the specification was published after the priority date of the claim under consideration; and (C) the information was contained in the specification on its filing date and when it was published. 114 "Prior art information" is defined to mean: (a) For the purposes of subsection 7(1) - information that is part of the prior art base in relation to deciding whether an invention is or is not novel; and (b) for the purposes of subsection 7(3) - information that is part of the prior art base in relation to deciding whether an invention does or does not involve an inventive step; and (c) …

Want of Novelty 115 Much of the respondents' case concerning novelty depends upon what is described in the evidence as the "Frankovic" invention or specification and certain patents or patent applications held or lodged by Aristocrat Leisure Industries Pty Ltd. They are exhibits MAH 3, 4 and 5 to the affidavit of Dr Horsburgh. Some witnesses treated the Frankovic and various "Aristocrat" systems as being similar; others considered them individually. The most specific description of the Frankovic system appears in the evidence of Mr Christopher Stephen Daly who is a principal analyst in the employ of Golden Casket. At par 13 he described the Frankovic jackpot system as follows: These systems operate by counting signals determined from turnovers (credits wagered) from each of a number of linked gaming machines that are generated when each gaming machine is played. A portion of this turnover is added to the accumulating jackpot. The accumulated amount of the jackpot is compared to a random number generated (known as the 'mystery' amount) within a pre-determined range. The range is determined at the time the jackpot is started and remains the same until the jackpot has been won. The range actually represents the upper and lower dollar amounts of the possible jackpot value and is known to the players. When the amount of the accumulated jackpot pool is equal to or exceeds the mystery amount, a prize is awarded to the machine that contributed the signal which took the amount of the accumulated jackpot pool onto or past the mystery amount. 116 Mr Moffitt gave a similar description. In this system, each cycle commences with the selection of a winning number or value. Thereafter, amounts are added to the pool until it equals or exceeds that value. The probability of a win increases with the contribution of wagers by all EGMs in the relevant system. It is the wager on the game in which the jackpot may potentially be won which determines whether an EGM will win the jackpot. For reasons previously given, probability of a win in such a system is not dependent upon an amount wagered "during an elapsed period" for the purposes of the patent in suit. The Frankovic system uses no such period. None of the principal claims 1, 17 or 24 was anticipated by the Frankovic system. 117 The Aristocrat Patent, which is exhibit MAH 3 to Mr Horsburgh's affidavit, is also referred to in the evidence as "Hyperlink". Ross Edward Ferrar, the executive officer of the Australasian Gaming Machine Manufacturers Association said of Hyperlink: In Hyperlink, a jackpot prize draw is conducted every game, on every machine. A machine's probability of winning the jackpot prize draw is weighted according to the turnover of the current game. If a machine wins the jackpot, one of four jackpot pools is awarded and the machine enters a second screen feature. On completion of the second screen feature , the current jackpot pool amount is either transferred to the machine's credit meter or a machine attendant is called to arrange payment. 118 Probability of a win dependent upon the turnover of "the current game", that is the amount wagered on the relevant game, is not within the claims of the patent in suit. I have previously given my reasons for this conclusion. However Dr Horsburgh said at pars 68 and 69 of his affidavit, concerning Hyperlink: 68. … On page 3 from line 1 the specification states, '… the trigger condition is determined by an event having a probability related both to expected turnover between consecutive occurrences of the triggered condition on the respective console and the credits bet on the respective game'. The trigger condition signals the award of a jackpot. Thus, the probability of each gaming machine winning a prize is dependent upon the amount wagered on the machine (being the expected turnover conditioned by the credits bet) during an elapsed period (being the time between consecutive occurrences of the trigger condition). This is re-iterated by the preferred embodiment in which the trigger condition is determined by selecting a random number from a predetermined range of numbers. On page 4 from line 24 the specification states, 'In the preferred embodiment, the predetermined range of numbers is determined as a function of expected turnover between consecutive occurrences of the trigger condition, expected jackpot amounts and jackpot frequencies and will equal the expected average turnover per machine between successive initiations of progressive jackpot games divided by the credit value for that machine. 69. The specification reiterates the dependency on turnover in an elapsed period on page 6 at line 28 by stating, '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 triggers'. Turnover is the amount bet on the machine in a given period of time. 119 At par 72, Dr Horsburgh opined: The elapsed period of the Aristocrat application could be of any length and therefore could cover the play of a single game. 120 At par 73 he continued: The elapsed period in the Aristocrat application is the period between successive draws. On page 10 at line 28 the specification states, 'As the time between jackpot game awards is related to turnover, the number of jackpot games played by a player between feature games and hence their chance of winning is directly related to the size of each bet on each game played. Thus the time between jackpot game awards (the elapsed period) is not fixed but may slide to shorter or longer time. Thus the Aristocrat invention would infringe claim 4 of the Neurizon patent, so claim 4 lacks novelty. 121 Mr Bennett said of both the Frankovic and Aristocrat systems: In the Frankovic system a number of gaming machines are linked to a central jackpot controller. When the jackpot controller is initialised a random number is chosen between two predetermined amounts. One is an initial value (shall we say $100) being the reset or the start up value. Another amount is chosen, for example $300, which is the maximum value of the jackpot value of the jackpot within the range. Through a random process a number is generated which represents a particular value of the jackpot within the range, in this case between $100 and $300. Call it $218.52. From the time of the reset or the initilisation of the system, turnover that is played on every gaming machine linked to the system is recorded by the controller and causes the progressive jackpot on display to progress by a small percentage of the turnover. The players do not know the random number representing $218.52. It is a mystery value. So when the players, through their turnover in a combined way, make the progressive jackpot reach or exceed the mystery value of $218.52, the jackpot controller recognizes that fact then indicates through the controller which machine has been responsible for triggering that event and the controller then makes an indication to all players so that the player at the winning machine will hopefully still be there and will be able to claim that jackpot as the winning player. Payments are usually made manually. Once the payment is made an attendant will re-set the jackpot controller, or it happens automatically, depending upon the particular system implementation. The reset value goes back to the original $100 start up amount, and the same process continues. … In summary, the system operates by counting signals determined from turnover (credits wagered) from each of a number of linked gaming machines that are generated when each gaming machine is played. The count is compared to a random number generated within a predetermined range. When the count exceeds the random number a prize is awarded to the machine that contributed the signal that put the count past the random number. The probability of any given machine being awarded the prize is dependent upon the value of turnover on that machine (and, hence, the amount wagered) in an elapsed period (being the period between prize awards). 122 On the other hand Mr Hopkins offered the following opinion: 20. In the Hyperlink system the decision to award a prize is conducted every game, on every machine, so that the awarding of the prize is synchronized to the playing of a game. There is no 'elapsed period of time' which affects the decision to award a prize. Mr Bennett recognises, in paragraph 38 of his affidavit, that time or an elapsed period of time has no bearing on probability of a win in the Hyperlink system, and I agree with this. 21. In the Hyperlink system, a machine's probability of winning the jackpot prize draw is weighted based on the turnover of the most recent game only. The trigger of a jackpot is a random number set within a range of numbers. When that random number is hit on a particular machine, the machine enters a second screen feature. On completion of the second screen feature, one of four jackpot pools is either transferred to the machine's credit meter or a machine attendant is called to arrange payment. 22. In the Hyperlink system, time does not affect the decision to award the prize. Turnover of the most recent game is all that the award of the prize depends on. Time is not a factor. 23. However the probability of win is scaled to the amount bet on the most recent game. Accordingly, it is a 'fair' system. 123 The best place to start in order to resolve any differences of opinion is the Aristocrat patent, exhibit MAH 3 to Dr Horsburgh's affidavit. In the "Summary of the Invention" on p 3, it is said that in the first aspect of the invention, the probability of a win is "related to credits bet per game on the console", in other words the wager on the game in question. For reasons which I have previously given, that does not equate to the requirement in Claim 1 that probability of a win be dependent upon "some of the amount wagered on that gaming machine during an elapsed period". It is rather the amount of one instantaneous wager. There is no identified elapsed period. It is said that in the second aspect of the Hyperlink invention, probability of a win is related to credits bet per game. Similar passages occur in the description of the third and fourth aspects. However it is then said (p 4 ll 1-4) 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. 124 It is significant that the reference is to "expected turnover". As I understand it, expected turnover regulates the frequency with which jackpots are to be awarded. The trigger condition for such an award is to be determined by selecting a random number from a pre-determined range of numbers to be associated with each bought game and for each credit bet on the respective game, allotting to the game one or more numbers from the pre-determined range. In the event that one of the numbers matches the randomly selected number, the trigger has occurred. It is disclosed that in the preferred embodiment: The predetermined range of numbers is determined as a function of expected turnover between consecutive occurrences of the trigger condition, expected jackpot amounts and jackpot frequencies and will equal the expected average turnover per machine between successive initiations of progressive jackpot games divided by the credit value for that machine. For example, if the progressive jackpot is to be played for an average of every $5,000 of turnover played and the credit value on the machine is $0.05 then the number range will be 1 - 100,000. … In the preferred embodiment the gaming machine will allocate the lowest numbers in the range to the player such that if the player plays 20 credits he will be allocated numbers 1 - 20 giving him a 1 in 5,000 chance of triggering a jackpot feature game. 125 Thus it can be seen that the use of expected turnover is to regulate the frequency with which jackpots are awarded. That factor will presumably be a constant, selected by the operator. Expected turnover is quite distinct from the actual turnover on an EGM. The only feature of the operation of an EGM which will be relevant is the amount wagered on the potentially winning game. It is true that at p 6 ll 27-30 the following sentence appears: 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. 126 This statement occurs in a detailed description of the preferred embodiments. In my view, it refers back to the earlier references to expected turnover rather than to actual turnover on any one machine or on all machines. Similar comments apply to the references at p 7 ll 20-25, p 9 ll 7-11 and p 11 ll 1-3. 127 There are also references in the claims to "turnover" and to "average turnover" or "desired average turnover". This probably bespeaks some looseness in drafting. There is, as far as I can see, nothing in the specification which would explain how turnover (as opposed to average turnover) could be used. In view of the detailed explanation of the process, it is most unlikely that such an issue would have been overlooked. For the sake of completeness I should say that there is nothing in the patent which suggests that the jackpot is to be awarded when the total turnover, either of an EGM or of the system, equals the anticipated average. Indeed, the fact that it is an average demonstrates an expectation that actual turnover between jackpots will fluctuate. The desired average turnover is inserted into the equation to regulate the frequency with which jackpots are awarded. It says nothing about the way in which individual machines will be awarded the jackpot. That depends upon the amount wagered in each game. I accept Mr Hopkins' evidence as to the operation of the Hyperlink system. Probability of a win is dependent upon the amount wagered in any particular winning game. Hyperlink did not anticipate the invention. 128 Dr Horsburgh said that exhibit MAH 4 to his affidavit discloses a variation upon the Hyperlink system. In par 90 of his affidavit, he observed of exhibit MAH 4: On page 5 at line 23 the specification states, 'The controller would be programmed (step 30) to select a winner n times in a user-defined period (step 31). Once the controller decides that it is time for a prize to be awarded (step 32) the mth game to be played from that instant becomes the winner (step 34), where m is a random number chosen between user selected limits. 129 Obviously enough, the system as so described makes no reference to amounts wagered over an elapsed period of time. However Dr Horsburgh continued at par 90: The selection of a winner is described as occurring at a random time on page 6 at line 28ff. Playing of a game requires a wager, thus the probability of winning a prize is dependent upon wagering an amount in the period while the m games are being counted. If claim 1 of the Neurizon Patent were valid the invention described in the Aristocrat Patent would infringe. Therefore Claim 1 of the Neurizon Patent lacks novelty in light of the Aristocrat patent. 130 I do not accept the logic of this proposition. Once again it fails to recognize that the key to the invention in the patent in suit is not the amount of the wager on a particular game, but rather the amount wagered over an elapsed period of time. Dr Horsburgh's reliance upon the divisional application, which is exhibit MAH 5, is based upon this same line of reasoning. 131 The respondents also rely upon what is described as the "Wintech patent" which is exhibit MAH 6 to the affidavit of Dr Horsburgh. Dr Horsburgh's observations concerning it demonstrate why, in my view, it has no application. At par 92 he quoted from the specification as follows: An even simpler jackpot game is to make the jackpot a fixed amount and to generate a random time within a specified time frame (1 hour, 24 hours etc …). When the time arrives a venue is randomly selected and then the jackpot controller 32 at the venue makes the next EGM to make a contribution the winner. A slightly fairer model is to randomly select the venue from a list that is weighted according to each venue's average total contribution rates over a selected period. Again the jackpot controller 32 is notified and the next EGM to make a contribution is the winner. 132 Dr Horsburgh commented: Thus an EGM can only win the jackpot if it is at the selected venue and the probability of selecting a venue is dependent upon the average contribution (amount wagered) over a selected period (elapsed period). 133 In the first embodiment mentioned above, the process of selecting a venue is entirely random, without reference to amounts wagered at the various venues. The first machine to be played thereafter at the selected venue wins. The probability of any EGM winning a jackpot would not be dependent in any sense upon the amount wagered on that machine in an elapsed period or otherwise. In the second embodiment (said to be "slightly fairer"), selection of a venue would be from a list "weighted" according to each venue's average total contribution rate over a selected period. It is not clear what is meant by the expressions "average total contribution rate" and "a selected period". Presumably, total wagers at a venue would make it more likely that such venue would be assigned the jackpot, although wagers at other venues might have off-setting effects. In any event, the winning EGM is still to be that which is first played after identification of the winning venue, uninfluenced by any amount wagered on that EGM over an elapsed period or otherwise. Wintech did not anticipate the patent in suit. 134 The respondents rely on what is called the "Mikohn patent" which is exhibit MAH 7 to Dr Horsburgh's affidavit. Dr Horsburgh described the invention as follows: It describes a controller-based progressive jackpot system for linked gaming machines (the Mikohn invention). The Mikohn invention is summarized at page 6 ln 6ff. Each time a gaming machine is played a current value is incremented by a fixed amount of each bet received. When the incremented current value is equal to or exceeds a bonus mode value the system enters a bonus mode time period in which eligible machines compete for randomly awarded bonus jackpots. To be eligible for play in the bonus mode a machine must have received a monetary amount within a predetermined time frame. Thus, the probability of any given machine winning a bonus jackpot (prize) is dependent upon a monetary amount (at least some of the amount wagered on the machine) during an elapsed period (the bonus mode time period). The timing for the elapsed period is described in detail on page 20 from line 24 with reference to Figure 4. The specification states at 25, 'the Controller 200 determines the eligibility of the gaming machine by continually sensing a pre-determined time frame Δ T after game play has started S.' 135 Mr Daly said (at par 12): … I became intimately familiar with the methodology of the Mikohn jackpot system. It was a mystery jackpot system of the standard Frankovic type. This involved a jackpot having a lower and upper limit, generating a random number to pick the actual jackpot amount between the upper and lower limit (the exact size of the jackpot not being disclosed and hence the stylisation of this jackpot as 'mystery'). Under this system, a percentage of the turnover contributed by wagers on all linked machines is allocated to an accumulated jackpot pool. The pool increases until the accumulated jackpot pool equals or exceeds the mystery jackpot amount. The machine which causes this trigger is the jackpot winning machine. Under this Mikohn jackpot system, and other standard Frankovic mystery jackpots, the jackpot pool is made up of only a portion of the amount wagered, and so the trigger for the jackpot is comprised of only a portion of the amount wagered on the winning machine. 136 Although Mr Dobbin's evidence on this aspect is referred to in the respondents' submissions, my understanding is that such evidence was excluded. In any event, it takes the matter no further. Mr Hopkins said of the Mikohn system: In the system and method described by Dr Horsburgh as the Mikohn Patent (Australian patent number 736679), a machine's eligibility to win (or possibility of winning) a prize requires that a game is played on that machine in the relevant time period. The amount wagered effects (and increases) the jackpot pool. The amount wagered also has an effect on eligibility, as an amount must be wagered in order to play the game, but does not effect probability of a win. 137 I have found the Mikohn Patent rather difficult to read and understand, but Mr Hopkins' view appears to be correct. In particular, the question of eligibility to participate in the jackpot is described most clearly in the summary of the invention at pp 6-7 where the following passage appears: The system determines which gaming machines are eligible by locking in all gaming machines that have received a monetary amount within a predetermined time frame after play has started in response to entering the bonus mode time period. 138 In other words, those machines which are played within a fixed period of time after commencement of the bonus mode time period may participate in the jackpot awarding process, but will not necessarily win. Dr Horsburgh referred to a passage which appears on p 32 as follows: Even though the player selection is random, both in time and in identity, playing the maximum coin insert rather than a single coin insert and playing as rapidly as possibly increases the odds that the player may be the player to bring the current value 530 equal to the award trigger 520. 139 This means that by maximizing the amount wagered on each game and the number of games played during the bonus period, the gambler will improve the prospects of winning. That may be so, but the probability of a win on each wager is not in any way affected by the amount previously wagered. 140 The respondents rely on what is described as the "Acres patent" which is contained in exhibit MAH 8 to Dr Horsburgh's affidavit. Dr Horsburgh described that invention as follows: A predetermined percentage of the money played is allocated to a bonus pool. When the bonus pool exceeds a predetermined level a bonus period is initiated. A machine may win a bonus (jackpot prize) if a predetermined event occurs. In one form of the Acres Invention (pg 4/5 ln 1) the predetermined event is making a wager. In the further preferred feature (pg 4/5 ln 8) a machine is only eligible to win a bonus if a predetermined minimum gaming device activity is achieved. In one example (pg 48 ln 19) a player is only eligible for a bonus time jackpot if at least 20 coins are played over the last three minutes. 141 As I understand it, a bonus period is initiated when the pool exceeds a pre-determined value. The bonus may then be awarded upon the occurrence of any pre-determined event, preferably "a predetermined transaction at the gaming device", such as a wager. There is no suggestion that the probability of winning the bonus should be dependent upon the amount wagered over an elapsed period of time. Dr Horsburgh suggested that in the second aspect of that patent, eligibility for the bonus is dependent upon minimum gaming device activity. He referred to p 4/5 l 8 of the Acres patent as supporting that proposition. In my view the reference there is to a test of eligibility for a bonus, and not to probability of any particular EGM winning it. Dr Horsburgh then referred to the following passages at p 48 of the Acres patent: At ll 9-11: The subfield (B) of the bonus time data specifies whether the player is eligible for the bonus time data only if the player is playing the maximum coin in the machine. At ll 18-20: For example, the player can be required to play at least 20 coins over the last three minutes in order to be eligible for the bonus time jackpot. 142 He suggested that these passages anticipate the invention. Unfortunately, in order to fully understand this submission it is necessary to discuss the Acres patent in some detail. 143 Table 2 on p 47 is said to be "an example of a data structure for storing the reconfiguration data". It appears in a discussion of computer programmes. I suspect, without being sure, that "reconfiguration" means reconfiguration of the usual operating system to make provision for operation in a "bonus mode". Table 2 is divided into three parts namely "Bonus Type", "Mystery Jackpot Data" and "Bonus Time Data". It is the third of these which is presently relevant. At p 47 l 33 and on p 48 the following passage appears: The bonus time jackpot is a promotion wherein the machine pays out more than that dictated by its default payout schedule. In one embodiment of the bonus type time promotion, the payout schedule of the machine can be modified to a multiple of its default to payout schedule, … . 144 I take this to mean that the machine will pay out multiples of what it would normally pay out for ordinary wins. The passage continues: This promotion can be used to encourage gaming activity during off-peak hours, eg, midnight to 4.00 a.m. on weeknights. Alternatively, the bonus time promotion can be activated on a random basis. The timing of the multiple jackpot is specified by the casino on one of the computers connected to the network. The bonus time data also specifies the conditions under which the player becomes eligible for the bonus time jackpot. The subfield (B) of the bonus time data specifies whether the player is eligible for the bonus time data only if the player is playing the maximum coin in the machine. Subfield (C) limits the bonus time promotion to a pre-determined number in seconds. This field limits the bonus time promotion to a pre-determined number of seconds; if the player does not hit a jackpot within this specified time period, the bonus time promotion concludes. The minimum activity level can also be specified in subfield (D). This field can be used to specify the minimum activity level required by the player in order to be eligible for the bonus time jackpot. For example, the player could be required to play at least 20 coins over the last three minutes in order to be eligible for the bonus time jackpot. An indicator light on the player's machine can be used to indicate when the player reaches the minimum activity level and thereby becomes eligible for the bonus time jackpot. 145 The relevant bonus is the opportunity to play an EGM in a bonus mode for a period "limited to a predetermined number of seconds", and "if the player does not hit a jackpot within the specified time period, the bonus time promotion concludes". Dr Horsburgh pointed out that to win a jackpot, a player must wager, and that the more he or she wagers in the available time, the greater the chance of hitting a jackpot. From this he inferred that the probability of a player hitting the jackpot was dependent upon the amount wagered during the bonus period. All of this may be true, but I do not understand it to relate to the patent in suit. As I have indicated, the invention considers the probability at the time of each wager. 146 Referring to the proposed requirement that a player play at least twenty coins over a three minute period in order to be eligible for the bonus time jackpot, Dr Horsburgh argued that this was not a test of eligibility to participate in the bonus period, but a criterion for winning the jackpot. It is difficult to see how this could be so in view of the following passage: The minimum activity level can also be specified in subfield (D). This field can be used to specify the minimum activity level required by the player in order to be eligible for the bonus time jackpot. 147 The language of eligibility cannot easily be converted into the language of probability. Further, the statement that the minimum activity level can "also be specified in subfield (D)" suggests that it is specified elsewhere. This appears to be a reference to the discussion of sub-field (B) which sub-field "specifies whether the player is eligible for the bonus time data only if the player is playing the maximum coin in the machine." In my view, what is contemplated is that once a player is eligible to participate in the bonus period, prizes will be won or lost according to the method normally used for awarding prizes on that machine. However the prizes will be multiples of the prizes normally awarded. The passages referred to by Dr Horsburgh do not relate to "probability" in the sense in which the term is used in the patent in suit. 148 Mr Dobbin also referred to the Acres patents at par 41 of his affidavit. However his evidence appears to go to common general knowledge at the relevant time and is not relevant for present purposes. 149 Dr Horsburgh also referred to another Acres patent application which is exhibit MAH 9, particularly at p 9 l 18. It is there suggested that eligibility for a bonus might be determined by reference to, amongst other things, "specified play rate in coins/minute". I have some difficulty in understanding this aspect of the application. At p 8 l 9 et seq there is a discussion of the process for identifying the "selected machine" which is to go into "bonus mode". This is to be done by using some form of technology, having no relationship to any amount wagered. The following paragraph commences at l 15: A second level query (step 114) is made to determine whether a player on a selected machine would be eligible for bonuses payable during the bonus session. Examples of eligibility criteria, such as payment of a MAX bet, are listed below. If the player is deemed eligible, then the MCI authorizes payment (step 116) of the bonus according to the bonus mode rules stored in gaming machine memory. 150 Step 114 is further explained on p 9, under the heading "Eligible for Bonus? (step 114)". The passage is as follows: Besides no play on the game, there could be any number of criteria used to determine if a game is eligible for the bonus. Examples are listed below:

1. Gaming machine ID matches ID listed within bonus token.
2. Player tracking card 66 (FIG 2) must be inserted in gaming machine 12.
3. Maximum coin bet must be played.
4. Specified play rate in coins/minute.
5. A particular reel sequence is obtained.
6. The 'rating' of the player currently at the machine (eg whether he or she is a valued patron of the casino). If the selected gaming machine is deemed eligible, then play proceeds to the next step in which the bonus is paid to the player (step 116). If the gaming machine is not eligible, then step 116 is skipped and a determination is made whether the bonus period has expired (step 118). In either case, however, pay table jackpots would be paid out normally given the proper reel sequence. 151 To the extent that it is relevant, I understand all of this to mean that a random system is used to identify a "selected machine". Whether or not the bonus will be paid to that machine depends upon any one of a number of factors. However they are, again, matters of eligibility. There is no question of probability dependent upon amount wagered in an elapsed period or otherwise. 152 Finally, Dr Horsburgh referred to what is described as the "IGT application" which is exhibit MAH 10 to his affidavit. He said of that application at pars 107-108 of his affidavit: The gaming system shows a number of gaming machines linked to a control means which conducts prize draws by, in one embodiment, comparing random numbers … . Each gaming machine has a random opportunity to win a jackpot. The specification states on page 10 that, 'random should be taken to mean an event not dependent upon or necessarily manipulated by previous events or a history relating to the playing of a playing station …'. This statement correlates with the definition on non-deterministic at page 1 line 16. The IGT application describes (pg 11 ln 9) that, 'the controller will deduce the probability of the jackpot outcome which represents a player having one chance in N of winning the jackpot per unit bet …'. The specification states on page 11 at line 18 that the sum of all contributing stations is relayed to the jackpot engine 'as often as required', which implies a period which elapses between relay of contributions. I conclude that the IGT application describes a gaming system comprising a number of gaming machines and a control means. The control means conducts a series of prize draws which give each machine an opportunity to win a prize on a non-deterministic basis. The control means also determines winning probability for each machine (or player). The probability of any given machine winning a prize is dependent upon the amount wagered (per unit bet) during an elapsed period (between relaying the sum of contributions as often as required). 153 On p 11 ll 7 et seq of the application, it is said that: There are essentially three stages in the random jackpot gaining system, namely an initial stage, contribution stage and winning stage. 154 The specification then discusses the initial stage before addressing the contribution and winning stages. The reference to relaying "the sum of all contributing stations" is clearly to the contribution stage and not to the winning stage. The winning stage is addressed on p 12 where it is said that: Once the contribution values are set, each unit bet at a site causes the controller to call the random number generator which is the first step in the winning stage. The site or machine which wins the jackpot is that which contributes the winning unit which causes the random number jackpot to determine chance N as equal to zero. 155 The passage referred to by Dr Horsburgh has nothing to do with probability of a win.

Summary on novelty 156 In my view none of the prior art to which I have been referred anticipates the feature of the patent in suit that probability of a win should be dependent upon at least some of the amount wagered on the relevant gaming machine during an elapsed period. As each of the claims is dependent upon Claim 1, directly or indirectly, no claim has been anticipated by the prior art.

Obviousness 157 The respondents rely specifically upon Messrs Bennett, Daly, Moffitt and Dobbin to establish absence of an inventive step. Accepting Mr Bennett as a person skilled in the relevant art for the purposes of subss 7(2) and 7(3) of the Act, I am nonetheless of the view that he has failed to come to grips with the true nature of the claimed invention. At par 40 of his affidavit he said that his knowledge and "common knowledge" prior to 9 August 1999 included: 40.2 The probability of any given machine winning a jackpot may be related to the amount wagered on that machine. The Frankovic systems work in this manner. Even some non-networked machines, such as multi-line machines work in this manner. For instance, playing multiple lines of a multi-line machine increases the chances of winning a prize on that machine; 40.3 The awarding of a jackpot prize may be related to the total amount wagered in a given period of time. Progressive jackpot systems, such as Cashcade, are like this. The more you wager, the closer you get to a mystery jackpot level. In other words, if a player makes larger bets more often they have a better chance of winning the mystery jackpot … . 158 As I have observed in the course of addressing novelty, neither of these propositions deals with the subject matter of Claim 1 which is not concerned with probability based upon the amount wagered on a particular game, nor with a deterministic jackpot system in which wagers are accumulated towards a mystery jackpot level. Subparagraph 40.9 of the affidavit reveals a similar misconception. 159 At par 44 Mr Bennett observed: In considering what could be done to improve the randomness of jackpot systems and thus gain the approval of the Queensland Office of Gaming Regulation, there were only limited options that realistically could be considered. In all known systems, turnover (credits wagered) was the universal criteria used to award jackpot prizes. A player must have played a game and, hence, wagered credits or money to participate in the chance to be awarded a game. Thus, it was obvious that at least some amount of turnover must be included in the process of awarding a prize. It then followed that the system must determine eligible turnover to be that which was wagered in the last game or, alternatively, credits wagered on previous games (possibly, including the latest game) over an elapsed period of time. An obvious solution to the problem was to divorce the awarding of a jackpot from the physical action of playing a game and to apply an alternative method of having regard to recorded turnover on a historical basis over one or more periods of time. Such systems were then known throughout Australia when applied to loyalty programs. 160 The reference to "loyalty programs" is to par 39 of his affidavit in which he said: I am also aware of a number of player loyalty systems that have been in operation throughout Australia since well before 1999 going back to at least the mid-1980s. Three well-known systems are Computa Game, Turbo Bonus and Dacom. These player loyalty systems are directly linked to gaming machines. A player is issued an electronic card that may be placed in the card reader connected to a gaming machine. As long as the player has a valid card reader the player has an opportunity randomly to be awarded a prize (such as a free lunch) by a central controller. The systems also record machine turnover for each player so that, typically, players receive points proportional to their amount of turnover (credits wagered). The points can be redeemed for gifts or, in some instances cash. Accumulation of points may also move a player up reward levels with increased machine play. Higher reward levels based on credits wagered over periods of time may give players better chances of winning better prizes or a venue may identify 'premium players' in order that such players may be targeted for special promotions and rewards. 161 Mr Bennett's argument is that the history of player loyalty schemes made the subject matter of Claim 1 obvious. Mr Bennett was there speaking of systems for rewarding loyal customers involving identification of such customers as they moved from machine to machine. Their loyalty might be rewarded by increased prospects of winning particular prizes, lunches or in other ways. Claim 1, on the other hand, seeks to reward continued play on one EGM. It is almost to teach away from the subject matter of Claim 1 to seek to reward players who move from machine to machine, taking accumulated status with them. Claim 1 of the patent in suit relates specifically to wagers on a gaming machine. It is not inconceivable that a player might benefit from wagers placed by a previous player, at least if there is a quick change of players. It is most unlikely that the idea of rewarding loyal customers could be the subject of a patent. On the other hand, a method of doing so might well be patentable. The question is not whether the patent in suit rewards loyal customers, but whether it does so in a way which was inventive as at the priority date. I see nothing in Mr Bennett's evidence which suggests that it was not. 162 Mr Daly approached the problem upon the basis that the patent in suit was anticipated by the Frankovic patent and was therefore obvious. I have already explained the differences between the two inventions. I consider that subpars 7.2, 7.3, 7.9 and 7.10 (which appear in par 16 of Mr Daly's affidavit) are not to the point. I see nothing in Mr Daly's evidence which would lead to the conclusion that the claimed invention was obvious as at the priority date. 163 Mr Moffitt also relied upon the Frankovic system. He argued (at par 22), concerning the requirement that probability of a win be dependent upon at least some of the amount wagered during an elapsed period, that: … designing a method or a system or constructing a machine which incorporated that characteristic would have been obvious to anybody skilled in the art as at August 9, 1999. 164 Mr Moffitt then referred (at pars 22-23) to player loyalty systems as follows: 22. … Player loyalty systems are designed to attract players to play more regularly and for a greater period of time. To do that, venues must reward them for their participation by awarding them a benefit which can be points or a dollar value. One version of a player loyalty system awards a number of points relative to the amount of turnover being wagered by that player. In other words, the more you bet, the more points you are awarded. A further variation of this consists of creating various levels of player loyalty which can be achieved. One of the player loyalty systems in the marketplace is known as ComputaGame. Since at least the beginning of 1999, ComputaGame has offered Gold Silver and Bronze levels of player loyalty. By way of example, to achieve a gold level, a player must turnover two thousand dollars in wagers over thirty days. If he does that, the player loyalty points which he received for a wager as a old level player will be greater than the points he previously received before qualifying for Gold player status. Accordingly, the player is being awarded with a level of loyalty points dependent upon the amount he has wagered over a period of time. The use of these types of player loyalty levels was wide spread at the time and well known to people skilled in the art. 23. In my view, it is an obvious extension of this idea to apply it to the award of a jackpot prize, namely to have a system wherein the probability of any particular machine winning a jackpot prize will be dependent upon the amount wagered on it over a period of time. 165 I have largely dealt with this analogy in considering Mr Bennett's evidence. However it is worth pointing out the stark difference between a player reward system based upon, say, an investment of $2,000 over a thirty day period and the claimed subject-matter of the invention. Again, I see nothing in this evidence to suggest that the claimed invention was obvious as at the priority date. 166 Mr Dobbin is a patent attorney whose firm acts for Aristocrat. That does not disqualify him from giving evidence, but it suggests that his experience has been obtained in an area which is perhaps a little remote from that of a person skilled in the relevant art as contemplated in s 7. Mr Dobbin very properly eschewed any claim to be such a person. Similarly, he expressly disavowed any suggestion that his knowledge was necessarily part of common general knowledge. In those circumstances, it is difficult to see how his evidence could possibly be admissible in considering obviousness. In any event it takes the matter no further. I am not satisfied that the subject-matter of Claim 1 was obvious as at the priority date. I prefer the evidence of Mr Hopkins to contrary effect. It follows that none of the claims fails for obviousness.

Conclusions 167 I have suggested, subject only to any further submissions from the parties, that Claims 1 - 15 are invalid. It is likely that some other claims are invalid for the same reason. Claims 29 and 30 are invalid for different reasons. Should the parties require any further findings, they may seek them. The appropriate course is to stand the matter over to enable the parties to consider my reasons. I will then receive submissions as to orders and costs. I certify that the preceding one hundred and sixty-seven (167) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett.

Counsel for the Applicant and Second Cross Respondent: Ms K E Downes

Solicitor for the Applicant and Second Cross Respondent: Phillips Fox

Counsel for the First and Second Respondents and Cross-Applicant: Mr R G Bain QC Mr S J Lee

Solicitor for the First and Second Respondents and Cross-Applicant: Clarke and Kann

Date of Hearing: 3, 4, 5, 6, 7, 11 & 12 June 2002

Date of Judgment: 13 December 2002