July 17, 2023

Chill not chilling – Australian Court holds that telecommunication protocol is patentable subject matter


Recent Court decisions in Australia in relation to computer-implemented inventions have lead to significant concerns among patent practitioners about the direction in which judicial precedent is developing. Such were these concerns that both the Institute of Patent and Trade Mark Attorneys of Australia IPTA and Fédération Internationale des Conseils en Propriété Intellectuelle (FICPI) made submissions to the High Court of Australia in Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents1 with both parties submissions being in support of Aristocrat’s appeal from an adverse decision of the Full Federal Court in respect of a patent for an electronic gaming machine.

IPTA and FICPI expressed dismay with the approach taken by the Full Court majority of Justices Middleton and Perram in holding that Aristocrat’s patent was in respect of unpatentable subject matter. IPTA argued that the approach would have “seismic” effects beyond the gaming industry, rendering unpatentable “swathes of inventions” that otherwise would have been patentable, such as medical imaging and diagnostic machines, speed detection camera systems and biotechnology inventions such as COVID‑19 diagnosis systems. FICPI submitted that the approach would have a “chilling effect on innovation”.

So how did we get here? With the computer becoming ubiquitous and the rise of the Internet, in the late 90s and early 2000s, many patent applications were filed for inventions implemented using computing systems, a lot of them relating to how to implement aspects of e-commerce. In general,  the Australian Patent Office (APO) would grant patents on these applications provided the inventions were novel and inventive. Then, not long, after the US Supreme Court decision in Bilski v. Kappos2 in 2010, the Australian Patent Office changed its practice significantly.

Some patent applicants, aggrieved by the new practice, appealed a number of decisions made by the APO to the Federal Court of Australia. Unhelpfully, the first two cases heard by the Federal Court resulted in opposing outcomes at the single judge level and even though both cases were subsequently held to be unpatentable schemes by the Full Federal Court, the cases left a number of questions unanswered, in particular a question as to how technical an invention had to be before it was more than a scheme implemented by a computer.

This lead to a number of subsequent cases where each patent owner had a different angle as to why their invention was more technical than the inventions of the earlier decisions and hence technical enough to be considered patentable subject matter. However, one by one these inventions have been held by the Courts to be unpatentable schemes implemented on generic computing devices.

A notable difference in the Aristocrat case was that the invention was for an electronic gaming machine that functioned in a particular way that interacted with the components of the electronic game machine; that is a specific electronic device rather that a generic computing device. This difference enabled Aristocrat to be successful before a single judge of the Federal Court. However, Aristocrat on appeal to the Full Federal Court. In delivering a joint decision Middleton and Perram JJ indicated that in their view the appropriate approach was to ask two questions: is the invention claimed a computer‑implemented invention (in a general sense); and if so, can the invention claimed broadly be described as an advance in computer technology?

As can be observed from the IPTA and FICPI submissions above, this lead to concern that a) computer-implemented inventions would be treated as a specific class of patents where claims would be treated differently and b) that an “advance in computer technology” was an overly stringent test requiring the technology to be improved and hence  excluding improvements in an outcome achieved using computers – e.g. improved medical imaging, diagnostics or speed detection as put forward by IPTA.

The Aristocrat High Court case resulted in 3:3 tie with the result that the decision of the Full Court was upheld. However, both sets of judges made disapproving comments in respect to the approach of Middleton and Perram JJ.

Against this background, the decision in Motorola Solutions, Inc. v Hytera Communications Corporation Ltd (Liability)34 published on 29 June 2023 gives some comfort to patent owners.

Motorola v Hytera involved three patents relating to digital mobile radios (‘DMR’) using Time Division Multiple Access (‘TDMA’). Hytera argued that none of them related to patentable subject matter, primarily on the basis that the inventions were merely schemes because the inventions were methods achieved by programming existing hardware to carry out specified steps.

The judge in Motorola v Hytera was Perram J (part of the Full Court majority criticized by the High Court) and while Perram J’s reasons side step the criticism of the High Court and avoid specifically referencing the two step test described above, he does give an indication as to what he understands to be an improvement in computer technology in holding that one of the patents the “improves the way a particular class of computers – base stations and subscriber units – scan frequencies” by “the use of an activity indicating first information which could permit the abolition of the null ID and therefore permit compression of ID information in the second information”. That is, he clearly thinks processes implemented on standard hardware can be an improvement in computer technology.

His decision doesn’t give a great deal of guidance for future cases as it doesn’t articulate the basis for this being an improvement in computer technology beyond saying that the invention is analogous to another case that was held to be patentable. However, the decision is not indicative of seismic change so perhaps patent attorneys can chill for a while.

1 Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents [2022] HCA 29 (17 August 2022)

2 Bilski v. Kappos, 561 U.S. 593 (2010)

3Motorola Solutions, Inc. v Hytera Communications Corporation Ltd (Liability) [2022] FCA 1585

4Note the Motorola v Hytera decision was issued on 23 December 2022 but publication was delayed until 29 June 2023 to allow confidential information to be redacted.

Contact Us