In the recent decision of Aristocrat Technologies Australia Pty Limited v Commissioner of Patents [2024] FCA 987 (Leave Decision), Bryan J of the Australian Federal Court has granted Aristocrat leave to appeal the earlier Federal Court decision that upheld the rejection of the remaining patent claims in suit by the Commissioner in this long running and complex dispute.
Typically, the question of whether leave should be granted from a first instance decision of the Federal Court is considered by the Full Federal Court at the same time as the merits of the appeal. Here Aristocrat, by applying to have the question of leave initially determined by a single judge of the Federal Court, has procedurally preserved its ability to apply to the High Court to hear any appeal – potentially leapfrogging the Full Federal Court if its application is successful.
Litigation History – The Representative Claim
A central feature of this litigation between Aristocrat and the Commissioner concerning the patentability of electronic gaming machines (EGMs) is that although four innovation patents were initially rejected by the Commissioner on the basis that they were not directed to patentable subject matter, subsequent appeals were all based on the consideration of a single representative patent claim selected from the innovation patents in suit (eg, see appeals to the Federal Court in Aristocrat Technologies Australia Pty Limited v Commissioner of Patents [2020] FCA 778 (Aristocrat FCA), the Full Federal Court in Commissioner of Patents v Aristocrat Technologies Australia Pty Ltd [2021] FCAFC 202 (Aristocrat FCAFC) and subsequently the High Court (Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents [2022] HCA 29 (Aristocrat HCA).
The parties agreed that if this representative patent claim was found to be directed to patentable subject matter, then all claims of the four disputed innovation patents would also be patentable. If on the other hand, the representative claim was rejected, then a selection of the remaining claims (referred to as the “residual” claims) would still require assessment by the Court. The Leave Decision considers these residual claims.
High Court – No Decision but Disapproval of the Two-Step Approach
Another important and unusual feature of this litigation was that the High Court bench that heard the appeal from the Full Federal Court was comprised of only six justices. These justices then split evenly on the central question of the representative claim’s patentability, with three justices issuing joint reasons dismissing the appeal (dismissing reasons), and the remaining three justices issuing joint reasons allowing the appeal (allowing reasons).
In the unusual circumstances where the High Court is evenly split, Section 23(2)(a) of the Judiciary Act 1903 (Cth) applies. This provision essentially states that where there is a “tie”, then the decision of the Court below will be affirmed. Therefore, the relevant decision was that of the Full Court in Aristocrat FCAFC, where the Commissioner successfully overturned the first instance decision of the primary judge in Aristocrat FCA, that the representative claim was directed to patentable subject matter. Accordingly, the representative claim was finally rejected when the Full Federal Court’s decision was affirmed following Section 23(2)(a).
This brings us to yet another distinguishing feature of this litigation. Neither the allowing reasons nor the dismissing reasons of the High Court agreed with the “new” approach taken by Middleton and Perram JJ as set out in the plurality judgment of Aristocrat FCAFC. This approach concerned the central question of how to assess whether a patent claim is directed to patentable subject matter and involved a newly-posited two-step analysis that asked two questions – is the invention claimed a computer-implemented invention; and if so, can the invention claimed broadly be described as an advance in computer technology?
Back to the Federal Court
When the matter went back to the primary judge of the Federal Court for consideration of the remaining residual claims in Aristocrat Technologies Australia Pty Limited v Commissioner of Patents (No 3) [2024] FCA 212 (Aristocrat No 3), the primary judge felt bound, following a consideration of section 23(2)(a) and the terms of the remitter in the Full Court’s decision, to follow Middleton and Perram JJ’s two-step approach. This resulted in a finding that all the residual claims were not directed to patentable subject matter. This was despite the High Court’s apparent disapproval of the two-step approach as noted above.
This brings us finally to the present Leave Decision where Aristocrat has been granted leave to appeal the rejection of the residual claims by the Federal Court in Aristocrat No 3.
Leave Decision
Following a review of the authorities, Bryan J determined there were three factors to consider in whether to grant leave to appeal (Leave Decision at [50]). These comprised:
- Whether the primary decision is attended with sufficient doubt to warrant it being reconsidered on appeal.
- Whether the issues proposed to be raised by the appeal are of general application.
- The consequences of a refusal to grant leave – particularly whether the refusal would finally determine the matter.
Aristocrat submitted that leave to appeal should be granted because:
- The Aristocrat No 3 judgment was effectively a final determination that the four innovation patents in suit would not be granted (Leave Decision at [52]) and that these patents (and other related standard applications) were of significant commercial value.
- There was an arguable case that the primary judge was not bound by the plurality judgment of Middleton and Perram JJ in Aristocrat FCAFC (Leave Decision at [53]).
- That the issues being considered had wider significance – particularly in the case where the plurality judgment’s approach to assessing patentable subject matter was said by Aristocrat to have been criticised by all six justices of the High Court (Leave Decision at [54]).
In reply, the Commissioner submitted that leave should be refused because:
- The primary judge’s approach in following the plurality judgment was plainly correct and in accordance with s 23(2)(a) (Leave Decision at [56]).
- There were no issues of more general or wider importance given the primary judge’s consideration of s 23(2)(a) was in accordance with normal statutory interpretation principles and there was a long line of Full Court authority applicable to assessing patentable subject matter in relation to computer-implemented inventions (Leave Decision at [57]).
- The residual claims were not a suitable vehicle for considering the questions on appeal (Leave Decision at [58]).
- There would be no substantial injustice if leave was not granted as the innovation patents in suit had all expired (Leave Decision at [59]).
As noted by Bryan J (Leave Decision at [60]), the application for leave was “finely balanced” with none of the factors weighing in favour of the granting of leave being “described as strong”.
Ultimately, Bryan J considered there were two factors that tipped the balance in favour of Aristocrat and the granting of leave to appeal (Leave Decision at [65]). The first factor was that the decision of Aristocrat 3 being appealed from was in effect a final determination that none of the innovation patents in suit would be granted. The second factor (and perhaps the more compelling for Bryan J) was that the grounds of appeal are arguable in that they relate to how section 23(2)(a) should operate in the “unusual circumstances of this case”.
Conclusion
Aristocrat can now apply to the High Court to have the appeal removed to itself for the High Court’s consideration. It is by no means certain the High Court will agree to take this appeal on, in which case the appeal will be heard by the Full Federal Court following standard procedure.
Even if the High Court agreed to take on the appeal, it could just confine itself to consider the operation of section 23(2)(a) in these unusual circumstances where a “lower” Court (ie the Federal Court in Aristocrat 3) has felt compelled to follow the approach of a “higher” Court (ie, the plurality judgment of the Full Federal Court in Aristocrat FCAFC) despite the apparent disapproval by the “highest” Court of the higher court’s approach (e.g. see both the dismissing and allowing reasons of the High Court in Aristocrat HCA).
Whether the High Court would also be minded to bring its authority to the question of how the patentability of computer-implemented inventions should be assessed is not clear. However, there was certainly a fundamental divide in approaches to this question evidenced by the dismissing and allowing reasons when the High Court last considered this topic, and perhaps the High Court may take the opportunity to bring some long desired clarity to this fundamental aspect of patent law. More to come!
