Full Federal Court Patent Decision

I kept hoping that Warwick Rothnie would cover this one on his blog, because I'm far less expert in patent law than I am in trade mark or in copyright - and besides, the current issues that I'm obsessing about are mostly in the area of copyright (fair use/fair dealing, directors copyright and performers rights) and trade mark (enforcement and teaching duties).

Anyway, on 23 May the Full Federal Court (Hill, Finn and Gyles JJ) handed down their decision in Jupiters Ltd v Neurizon Pty Ltd [2005] FCAFC 90, an appeal decision on a patent case.

The first thing that strikes you about the case is it must be Australian - it's about patents in relation to electronic gaming machines. Gambling is such big business in Australia, and the oppositions process in Australia seems constantly clogged with gaming decisions - so seeing something in the courts doesn't surprise me in the least.

In essence:

• Neurizon owns a patent for a prize awarding system for use with electronic gaming devices, invented by Steven Johnson, the principal of Neurizon;
• Jupiters (as many would know) runs casinos. Jupiters developed a prize awarding system called 'Cougar', which it used in its casions. Neurizon complained that Cougar infringed its patent. Jupiters cross-claimed for things like breach of contract, breach of confidence, breach of fiduciary duty, and also for an order revoking the patent.

At trial, the primary judge found:

• there was infringement of certain claims of the patent
• the patent should not be revoked;

Then Jupiters modified Cougar, and Neurizon complained that this, too, infringed the patent. The Trial judge agreed - there was infringement by modified Cougar too.

On appeal the Full Court:

• Dismissed the appeal against the finding of infringement by both Cougar Modified and Cougar Unmodified;
• Upheld the appeal on the issue of revocation, and remitted to the primary judge on the ground of obviousness.

While it was obviousness that was the ground sent back, the more interesting discussion by the Court relates to the issue of novelty - and, in particular, the long discussion of the prior art base as it relates to information made publicly available through the doing of an act under s 18(1)(b)(i) of the Patents Act.

A patented invention can be anticipated by prior art which is not a document, but an act done in public. However, the 'act' won't give rise to anticipation unless it discloses the features of the claimed invention.

The question the court had to address was whether, when certain gaming systems were operating at several casinos, that operation made relevant information publicly available, so as to be included in the 'prior art base' against which novelty is assessed. The problem, of course, in this scenario is that just by looking at a gaming machine, you can't tell the operation 'behind the scenes' that determines when jackpots are paid.

The Court held that the operation did not make information part of the prior art base, because there was no evidence that such operation made any 'enabling disclosure' of the invention - and, in essence, there was insufficient evidence on any other 'disclosure' that might have occurred to employees or other commercial parties of more detail than you could get by just watching the system in operation. As the judges put it:

'The question as to what information was made available by Jupiters to its customers remains. no direct evidence was given on the point. We have held that mere observation of the system in operation by a person skilled in the art would not disclose the features about it which woudl anticipate the invention claimed here. However, it is quite possible that the essential features of the system would have been disclosed to personnel ...

The evidence taken at its highest for Jupiters would not be sufficient to establish enabling disclosure [of either program]. Thus, neither forms part of the prior art base..."