Acres Gaming, Inc v Aristocrat Technologies Australia Pty Ltd and Mikohn Gaming Australasia Pty Ltd
[2001] APO 65
•14 November 2001
OFFICIAL NOTICE
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Application : No. 686824 in the name of ACRES GAMING, INC
Title: Computer network for controlling and monitoring gaming devices.
Action: Oppositions under Section 59 of the Patents Act by ARISTOCRAT TECHNOLOGIES AUSTRALIA PTY LTD and by MIKOHN GAMING AUSTRALASIA PTY LTD.
Decision: Issued .
Abstract
Further evidence served by the opponent was allowed in respect to NSW gaming regulations discussed in the opponent's evidence in reply.
Evidence in response, to the further evidence, from the applicant was also allowed.
The oppositions were based on alleged lack of novelty, lack of inventive step, the alleged invention not being for a manner of manufacture, and alleged deficiency of the complete specification.
Both oppositions failed on all the grounds tendered by the opponents.
PATENTS ACT 1990
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Re:Patent application 686824 by ACRES GAMING, INC, and oppositions under section 59 by ARISTOCRAT TECHNOLOGIES AUSTRALIA PTY LTD and by MIKOHN GAMING AUSTRALASIA PTY LTD.
BACKGROUND
Acres Gaming, Inc ("Acres") filed patent application 686824 on 26 July 1995. The application claims priority from a United States application filed on 12 October 1994. Patent application 686824 was advertised accepted on 12 February 1998.
Aristocrat Technologies Australia Pty Ltd ("Aristocrat") filed a notice of opposition to the grant of a patent on the application on 11 May 1998. The notice of opposition was filed under Aristocrat's former name of Aristocrat Leisure Industries Pty Ltd. On 11 August 1998 Aristocrat filed a statement of grounds and particulars in support of its opposition.
Following several extensions of time allowed to Aristocrat and Acres, the stages for serving evidence in Aristocrat's opposition were completed on 21 September 2000.
On 19 December 2000 Acres requested further information from Aristocrat in respect to some of Aristocrat's evidence in reply. This evidence refers to NSW gaming regulations. Acres requested the identity and a copy of these regulations from Aristocrat.
On 15 February 2001 Aristocrat sought to adduce further evidence essentially to respond to Acres' request regarding the NSW gaming regulations. In the same letter Aristocrat requested amendment of its statement of grounds and particulars. The amendment primarily sought to delete references to patent specifications and other material that Aristocrat no longer intended to rely on, and include a ground of opposition that Aristocrat states was omitted from the original statement in error.
Mikohn Gaming Australasia Pty Ltd ("Mikohn") filed a notice of opposition on 12 May 1998. On 12 August 1998 Mikohn filed a statement of grounds and particulars in support of its opposition.
Acres and Mikohn both gained extensions of time to serve evidence in Mikohn's opposition. Mikohn was allowed up until 13 April 2000 to file evidence in reply to Acres' evidence. However Mikohn has not filed any evidence in reply.
The oppositions came to a hearing in Canberra on 19 February 2001. The hearing dealt with the substantive issues and Aristocrat's requests to serve further evidence and amend the statement of grounds and particulars. Mr Richard McCormack, of counsel, and Mr Boris Golja, patent attorney of Wray & Associates, represented Acres. Mr Jeremy Dobbin, patent attorney of F B Rice & Co, represented Aristocrat. On the morning of the hearing Mr Philip Young, patent attorney of Wilson & Young, advised that he would not appear nor make any submissions for Mikohn.
SPECIFICATION
The specification states the invention relates to a method of operating gaming devices interconnected by a computer network. The invention described in the specification desirably addresses a couple of specific needs. The first is the need for an automated method and apparatus to provide bonuses for gaming devices. The second is the need for a more flexible bonus system, tailored to the number and make-up of an establishment's customers, whereby any of the establishment's machines can participate in the bonus system.
The invention meets these needs by providing a method of operating gaming devices interconnected by a computer network in the following manner. In respect to bonuses, a predetermined minimum activity level of gaming device play is established. The activity level of each gaming device is monitored. A bonus period is initiated during which gaming devices that exceed the minimum activity level are eligible to be paid a bonus responsive to a predetermined event and gaming devices that do not exceed the minimum level are ineligible for such a bonus. The award of bonuses is made to the machines only during the bonus period. In meeting the described needs I rate the above arrangement as essential to the invention.
The specification ends with seven claims. Claim 1 reads as follows:
A method of operating gaming devices configured to play a preselected game interconnected by a computer network to host computer comprising:
establishing a predetermined minimum activity level of gaming device play;
permitting players to play the preselected game at the gaming devices;
paying to each device in accordance with a pay table stored in the device after each game;
monitoring the activity level of each gaming device;
initiating a bonus period during which gaming devices that exceed the minimum activity level are eligible to be paid a bonus responsive to each occurrence of a predetermined event and gaming devices that do not exceed the minimum level are not eligible for such a bonus;
awarding such bonuses only during the bonus period;
permitting continued play of the preselected game at the gaming devices during the bonus period;
continuing to pay to each device in accordance with the pay table during the bonus period;
ending the bonus period; and
again paying to each device in accordance with the pay table stored in the device after each game.
STATEMENT OF GROUNDS AND PARTICULARS
Aristocrat's original grounds for opposing the application were that the claimed invention is not novel and does not involve an inventive step. The proposed amendment of the statement of grounds and particulars seeks to add the ground that the claimed invention does not involve a manner of manufacture. A further ground originally cited by Aristocrat is that the complete specification including the claims is deficient. Aristocrat provides corresponding particulars to support each of these grounds.
Mikohn's grounds for opposing the application were that the claimed invention is not novel and does not involve an inventive step. Mikohn provides corresponding particulars to support these grounds.
EVIDENCE
Aristocrat's evidence in support of the opposition consists of statutory declarations by Mr John Vincent Willis, Ms Lynette Barry, Mr Daniel Munk and Mr Jeremy Dobbin.
Mr Willis has been an employee of Aristocrat for seventeen of the last twenty-one years. His expertise includes machine and systems analysis and design, installation revenue management, player marketing and promotion, and bonus systems design and implementation.
Mr Willis discusses Aristocrat's network control system. The system is known as the DACOM system. He states the DACOM 5000E version went live in July 1993 and allows bonus payments depending on the denomination of the machine. The DACOM system installed at Guildford Leagues Club in New South Wales (NSW) in 1993 offered a fixed budget promotion during which machines that met a particular threshold of use were eligible for random bonuses. Mr Willis also states the Computa Game system was another network system and was introduced in 1988/89. This system paid random bonus prizes during certain times of day to machines that met a minimum playing threshold.
Ms Barry has worked for Aristocrat since 1995. Prior to that she was gaming manager at Mingara Recreation Club, NSW, for twelve years.
Ms Barry states the Computa Game system was installed at Mingara in 1991. She states the system enabled random bonuses at certain times of the day to be paid on machines that had a predetermined minimum activity level. Ms Barry also includes exhibits of a Computa Game Equipment Manual, Revision 1, dated September 1990, and a Computa Game Software Manual, Revision 2, dated February 1991. Ms Barry further exhibits letters from various club managers who visited Mingara Recreation Club to see the Computa Game system in operation during 1991. She asserts this demonstrates the Computa Game system would have been very well known in the gaming industry in Australia before the present application's priority date.
Mr Munk became chief executive officer of Balmain Leagues Club, NSW, in 1994. Prior to that from 1989, he was secretary and manager of Guildford Leagues Club.
Mr Munk states that in July 1993 Aristocrat's DACOM 5000 system went live at Guildford Leagues Club. He also states that while Aristocrat developed the system he had input into the design by suggesting features that he as a gaming manager wanted the system to provide. Mr Munk notes the DACOM 5000 system checks each of the gaming machines in the network for a minimum threshold of playing activity and pays bonuses on a selective basis based on players' performance. Mr Munk also states large numbers of personnel from several other clubs and casinos visited Guildford Leagues Club to see the DACOM 5000 system in operation between July 1993 and December 1994 when he left Guildford Leagues Club. Consequently he suggests the system would have been well known throughout the gaming industry in Australia.
Mr Dobbin is Aristocrat's patent attorney and exhibits several patent specifications allegedly relevant against the presently claimed invention.
Acres' evidence in answer consists of statutory declarations by Mr John Francis Acres, Mr Boris Golja, Mr Christoph Tim Hoffmann and Mr Phillip Charles Dimond.
Mr Acres is founder and chairman of the board of Acres. He states in two declarations that the Acres system differs from DACOM 5000 and the Computa Game system in determining eligibility for bonuses on the basis of activity level of gaming machines and in paying bonuses directly to the gaming devices without the need for a player identification card system. Mr Acres disagrees with Mr Munk in respect to Mr Munk's suggestions that DACOM 5000 determined machines that met threshold activity levels. Mr Acres notes elsewhere in Mr Munk's declaration that Mr Munk states players' performance rather than machine activity is the determinant for eligibility for bonuses in DACOM 5000.
Mr Golja is Acres' patent attorney and exhibits several prior patent specifications by Acres relating to player tracking systems using player identification cards.
Mr Hoffmann is a consulting engineer in the field of electronic engineering design and manufacturing. He has been involved in the design of smart card cashless gaming systems. Mr Hoffmann attests that the DACOM and Computa Game systems both involve player activity monitoring via player identification cards inserted into gaming machines. He also states eligibility of players for bonuses is determined by threshold play activity by the players and that bonuses are paid into players' accounts. Mr Hoffmann contrasts this with the presently claimed invention where the activity level of individual gaming machines themselves are used to determine whether the machines become eligible for a bonus during a bonus period and that bonus awards are paid to an eligible machine.
Mr Dimond is a consultant currently contracted to Acres and has eleven years of experience in the gaming industry in Australia supplying technology solutions to gaming establishments. He discusses the patent specifications exhibited with Mr Dobbin's declaration and states the specifications generally relate to progressive jackpot systems for gaming machines. Mr Dimond concludes none of the specifications disclose methods of operating gaming systems that involve distinct bonus periods during which gaming devices that exceed a minimum activity level are eligible to be paid a bonus.
Aristocrat's evidence in reply consists of statutory declarations by Mr Andre Turnbull, Mr Willis and Ms Barry.
Mr Turnbull states the structure of the bonus award system at Crown Casino in Melbourne in 1995 for gaming machines was the DACOM 5000 system for bonus generation on gaming machines and Crown's SICO system for redemption of bonuses. The SICO system awarded bonuses to players for playing on gaming tables as well as gaming machines.
Mr Willis and Ms Barry both state the distinction between player eligibility and payment of bonuses and machine eligibility and payment is immaterial and the only reason it was not previously done for machines is because it was banned under NSW gaming regulations. Mr Willis further exemplified the allegedly immaterial nature of the distinction by stating that most players will only play one machine during a bonus period. In any case the end result is the same. Whether bonus awards or payments are made to the machine or player's account, the appropriate player still gets the bonus. He said there would have been no difficulty and no invention in re-designing the DACOM system to reward machines rather than players if that were permitted under NSW gaming regulations.
The further evidence Aristocrat sought to adduce in respect to the NSW gaming regulations consists of a statutory declaration by Mr Willis. The declaration includes extracts of technical standards for approved poker machines, and data interface specifications for interconnection of approved poker machines and subsidiary equipment, in NSW.
Mr Willis discusses the allowed connections between gaming machine ports and subsidiary equipment. He notes ports P5 and P6 are allocated for progressive systems which are externally generated bonus jackpot payments in which a small percentage is skimmed off credit inputs into a series of linked gaming machines to periodically pay a jackpot to a player on one of those machines. Mr Willis further notes that, under the regulations, ports P5 and P6 are capable of one-way communication only. Consequently credits could not be transferred to a gaming machine's credit meter from external progressive jackpots through ports P5 and P6. Mr Willis concludes the regulations contemplated the payment of bonus awards directly to a gaming machine and expressly forbade it thereby anticipating the concept claimed in the present application.
Mikohn's evidence in support consists of a statutory declaration by Mr Rodney Pickup. He is an employee of Mikohn. Mr Pickup exhibits several patent specifications to allege the present application lacks novelty and lacks inventive step.
Acres' evidence in answer to Mikohn's evidence consists of statutory declarations by Mr Acres and Mr Dimond.
Mr Acres states that Mr Pickup provides insufficient foundation to support his allegations. Mr Acres notes a number of differences between the cited art and the claimed invention. He particularly refers to one patent specification to note there is no disclosure in that specification of a defined bonus period and of a determination of eligibility of machines to be paid a bonus.
Mr Dimond states that one of Mr Pickup's citations relates to a jackpot awarding system based on random number generation where all of the connected poker machines are eligible to receive a jackpot. Mr Dimond also states that another citation relates to a casino game system allowing a person playing a first gaming device to play a group-oriented game like bingo without leaving the first gaming device. He asserts that both cases do not disclose a defined bonus period or that only gaming devices that exceed a minimum activity level during a bonus period are eligible to be paid a bonus.
Mikohn did not serve any evidence in reply.
DECISION
AMENDMENT OF STATEMENT OF GROUNDS AND PARTICULARS
Requests to amend statements of grounds and particulars come under regulation 5.9. That regulation was amended by the Patents Amendment Regulations 2000 (No. 1) dated 22 November 2000. The amendment in respect to regulation 5.9 had the effect of removing the clause that the commissioner must not allow an amendment of the statement of grounds and particulars if he or she reasonably believes that a person would be unduly prejudiced by the amendment.
Aristocrat filed its request to amend the statement of grounds and particulars on 15 February 2001. Mr Dobbin suggested the only contentious ground appears to be the introduction of the ground that the claimed invention is not in respect to a manner of manufacture. He noted this omission from the original statement was a clerical error and supported this comment by pointing out that the original statement included particulars relating to the ground of lack of manner of manufacture.
Mr McCormack stated he neither opposed nor consented to the inclusion of this ground in the amended statement. However he took issue with the contraction of Aristocrat's case in the light of the amended statement of grounds and particulars. He noted Aristocrat was no longer relying on most of the patent specifications cited in the original statement. Mr McCormack said this contraction of the case should be reflected in any award of costs.
Mr McCormack's comments do not appear to be directed to any of the current grounds under sub-regulation 5.9(2) for refusing a request to amend the statement of grounds and particulars. It is possible Mr McCormack's comments may be interpreted as an objection to allowance of the amendment for undue prejudice to Acres. The amendment of regulation 5.9, specifically sub-regulation 5.9(2), by the Patents Amendment Regulations 2000 (No. 1) means Acres no longer has that avenue open to it as a ground for objection. Consequently, any residual rights that Acres has from the old sub-regulation 5.9(2) can only be considered in respect to whether any corresponding further evidence from Aristocrat ought to be admitted.
FURTHER EVIDENCE
At the hearing Mr McCormack submitted that Aristocrat's further evidence should not be admitted. He stated that Acres' letter to Aristocrat in respect to the NSW gaming regulations sought clarification of the regulations discussed in Aristocrat's evidence in reply. Mr McCormack stated the letter was not approval for Aristocrat to serve further evidence. He said a copy of the relevant regulations and their identity was all that was asked for. Mr McCormack also stated Mr Willis' declaration in respect to the regulations is unnecessary and goes to issues of law thereby making this evidence prejudicial. Consequently Mr McCormack said this evidence should not be admitted.
Mr Dobbin submitted Mr Willis' declaration merely corroborates evidence that Aristocrat has already served in the opposition. He stated this evidence passes the criteria for admission as further evidence.
In letters to Aristocrat and Acres dated 28 March 2001 I informed them of my decision to admit Mr Willis' declaration in respect to the NSW gaming regulations as further evidence. Additionally I explained that I would provide reasons for that decision here in the substantive decision.
Sub-regulations 5.10(4) and (5) provide the statutory basis to allow further evidence to be served. Sub-regulation 5.10(4) reads as follows:
“(4) The Commissioner may:
(a) on the application of a party; and
(b) on such reasonable terms (if any) as the Commissioner specifies;
permit the party to serve further evidence on the other party.
In respect to the serving of further evidence, sub-regulation 5.10(5) states inter alia that the commissioner must not grant an application to serve further evidence unless he or she is reasonably satisfied that the serving of further evidence is appropriate in all the circumstances.
From the Imperial Chemical Industries PLC v Mitsubishi Gas Chemical Co decision, (1994) 29 IPR 285, considerations which inter alia may be relevant in determining whether the serving of further evidence is appropriate in all the circumstances include:
Has the party applying to serve further evidence shown that the evidence could not have been obtained with reasonable diligence at an earlier stage?
Is the evidence such that, if given, it would probably have an important influence on the result of the case?
Is the evidence such as is presumably to be believed; i.e. is it apparently credible, though not necessarily incontrovertible?
Would allowance of the application to serve further evidence cause unnecessary protraction of the opposition?
Would there be an injustice done to either party?
There may also be other relevant factors, such as the public interest in having a serious opposition determined on its merits but also that a matter in a state of uncertainty be resolved as expeditiously as possible. See A Goninan & Co Ltd v Commissioner of Patents, (1997) 38 IPR 213 at 222, a decision on the operation of sub-regulation 5.10(5) in respect to extensions of time for filing of evidence for example.
Aristocrat served Mr Willis' declaration in respect to the NSW gaming regulations within two months of Acres' request for clarification regarding those regulations. I am satisfied Aristocrat has been reasonably diligent in filing this evidence.
On the face of it Mr Willis' evidence presents relevant extracts of regulations that govern the operating principles for networked poker machines in NSW. His comments in respect to the regulations appear to relate his understanding of what is permitted in this field by the regulations. Consequently I regard this evidence as significant and likely to have an important influence on the result of the case. The evidence may lead to a more correct and just outcome.
Mr McCormack challenged Mr Willis' declaration as relating interpretations of law. Mr McCormack suggested this means Mr Willis' evidence is prejudicial. This may make Mr Willis' evidence less credible.
Some of Mr Willis' comments may relate interpretations of law rather than presentation of facts or of his understanding. On the other hand this by itself is an insufficient ground to refuse the admission of Mr Willis' declaration as further evidence. It simply means I may need to determine the level of weight I give to Mr Willis' declaration.
It may be argued there is disadvantage to Acres and to the public interest in protracting the opposition by allowing Aristocrat to serve this further evidence. In respect to Acres there is nothing before me to indicate Acres would be seriously disadvantaged by the protraction of proceedings somewhat to deal with this further evidence. Furthermore the potential injustice to Acres by admitting Mr Willis' declaration could be overcome by allowing Acres the opportunity to serve evidence in response. The total period of protraction for this process would appear to be only a matter of months. In respect to the public interest the protraction of proceedings needs to be considered against the desire to have serious oppositions determined on their merits.
The public interest in this case appears significant. The further evidence is in respect to gaming regulations in NSW for networked poker machines. I expect these regulations would be well known to poker machine manufacturers and games designers in NSW. In this case, objections against some of Mr Willis' statements in respect to interpretations of law and against the possible unnecessary protraction of proceedings are outweighed by the likelihood of Mr Willis' evidence in respect to his understanding of the regulations leading to a more correct and just outcome.
For the above reasons I admitted Mr Willis' declaration in respect to the NSW gaming regulations as further evidence.
EVIDENCE IN RESPONSE
After several extensions of time Acres served partial evidence in response to Mr Willis' declaration on 28 June 2001. This evidence consists of a declaration by Mr Dimond. Initially he contrasts the extracts of the gaming regulations from Mr Willis' declaration with the claimed invention to assert the invention is not disclosed in the gaming regulations.
Mr Dimond further comments that his understanding of the extracts cited by Mr Willis is opposite to Mr Willis' understanding. Mr Dimond states he reads the extracts to state that with the exception of the subsidiary equipment function signal, the ports P2 to P6 are only capable of one-way communication. This indicates to him that the restriction of one-way communication does not apply to the subsidiary equipment signal since it is an exception. Mr Dimond further reads the extracts as setting out the approved subsidiary equipment that may be connected to ports P1 to P6 and that permission must be granted by the NSW Liquor Administration Board before such equipment is connected. He concludes he cannot find anything in the extracts that addresses the issue of payment of random bonuses or bonus jackpots directly to a gaming machine rather than to a player or that conveys that such payment would have breached any requirements set out in the extracts.
On 30 July 2001 Acres completed the serving of evidence in response. On that date Acres served declarations by Mr Golja and by Mr Michael Burt Shelby, an employee of Acres.
Mr Golja attests to the origin of the exhibit accompanying his declaration. The exhibit includes equivalent extracts of the technical standards for approved poker machines, and data interface specifications for interconnection of approved poker machines and subsidiary equipment, to those served with Mr Willis' further evidence. Mr Golja notes the extracts of Mr Willis' evidence contain what appear to be hand-made annotations that do not form part of the actual document. Mr Golja further states the extracts he has served are as received from a firm of Sydney lawyers and are unnumbered and do not contain any extraneous annotations.
Mr Shelby attests to his involvement in the development of software components of the Acres bonus system, the subject of the invention, for the Crown Casino in Melbourne and Star City Casino in Sydney. He also attests to being involved in detailed meetings and discussions with the relevant testing agency and Victorian and NSW state government bodies about the Acres bonus system prior to installation at the casinos. Mr Shelby states that at no time in these meetings did any representative of the relevant government or testing agencies indicate or suggest that the Acres bonus system was in violation of any government regulation or other legislation.
Following the completion of the serving of evidence in response, submissions from Acres and Aristocrat were invited on the further evidence and the evidence in response. The serving of all written submissions in this respect was completed on 19 September 2001.
In these submissions Mr Dobbin objected to the inclusion of paragraphs 4 and 5 of Mr Dimond's evidence in response on the grounds that the evidence was not strictly in response to Mr Willis' further evidence. These paragraphs discuss the differences between the claimed invention and the material in respect to the NSW gaming regulations contained in Mr Willis' declaration. Mr Dobbin stated that issues of novelty and inventive step had already been argued at the hearing and that Mr Dimond's comments in respect thereto should be disregarded.
Mr Dimond analyses the content of the extracts of the gaming regulations tendered by Mr Willis against the claimed invention. While Aristocrat do not generally appear to rely on this part of Mr Willis' evidence as prior art against the present application (having tendered the evidence to demonstrate what was permitted by NSW gaming regulations), Mr Willis nonetheless concludes in his last paragraph as follows:
"… the regulations contemplated this particular technique and expressly forbad (sic) it. This means that the concept described in the opposed specification lacks novelty."
I find Mr Dimond's declaration to be an appropriate response to such a conclusion.
I admit the evidence in response served by Acres.
NOVELTY
The Meyers Taylor Pty Ltd v Vicarr Industries Ltd decision, (1977) 137 CLR 228, provides an appropriate test for novelty. The test is also known as the "reverse infringement test". Aickin J., at page 235, states:
"The basic test for anticipation or want of novelty is the same as that for infringement and generally one can properly ask oneself whether the alleged anticipation would, if the patent were valid, constitute an infringement."
The Rodi and Wienenberger AG v Henry Showell Ltd decision, (1969) RPC 367, states that infringement occurs where each and every one of the essential features of a claim is taken.
A practical application of the above decisions suggests a claim lacks novelty if a prior citation discloses all of the essential features of a claim. I will apply this test to the present case.
Aristocrat's Prior Art
At the hearing Mr Dobbin mainly relied on two alleged cases of prior use to support Aristocrat's opposition. The first is the DACOM system. The second is the Computa Game system.
DACOM System
Mr Dobbin noted that Mr Willis and Mr Munk both state the DACOM system went live in July 1993 at Guildford Leagues Club. Mr Dobbin also noted that Mr Acres acknowledges seeing the DACOM system in operation at various clubs in NSW during a visit to Australia in July 1993.
On the basis of these comments from declarants for both Aristocrat and Acres, I am prepared to accept the DACOM system was in public use before the priority date of 12 October 1994 of the present application.
Mr Dobbin cited Mr Willis' and Mr Munk's evidence to state the DACOM system discloses all the essential features of claim 1 of the application. Mr Dobbin particularly noted Mr Willis states the system determined minimum thresholds of machine activity for eligibility to be paid a bonus. On the other hand Mr Dobbin conceded that in the DACOM system the player, not the machine, was paid the bonus. However Mr Dobbin stated the bonus payment feature to the machine is not apparent in the claims of the application.
Mr McCormack disputed Mr Dobbin's assertion that the feature of bonus payment to the gaming device is absent from the claims. Mr McCormack referred to passages of claim 1 defining the eligibility of devices exceeding the minimum activity level to be paid a bonus, and the subsequent awarding of such bonuses only during the bonus period. He further cited the evidence of Mr Acres and Mr Hoffmann to state these features as the ones distinguishing the claimed invention over the DACOM system. Both declarants state the DACOM system determines the eligibility of players for the award of bonuses based on monitoring the activity level of players via the insertion of their player identification cards into gaming devices.
It may be argued that the claims of the application do not express the awarding of bonuses in the precise terms outlined by Mr Dobbin. That is, that an eligible machine is paid a bonus. On the other hand, there is ample support for the principles that the specification is to be read as a whole and be given a purposive construction. See for example Rosedale Associated Manufacturers Ltd v Carlton Tyre Saving Co Ltd, (1960) 77 RPC 59, Welch Perrin and Co Pty Ltd v Worrel, (1961) 106 CLR 588, Catnic Components Ltd v Hill & Smith Ltd, [1982] RPC 183, and Décor Corporation Pty Ltd v Dart Industries Inc, 13 IPR 385. In the present case the relevant features in the claims are outlined in two stages. Firstly, devices exceeding the minimum activity level are eligible to be paid a bonus. Secondly the awarding of such bonuses occurs only during the bonus period. The combined effect of these two statements necessarily means that an eligible machine will be awarded a bonus during the bonus period. Furthermore in the context of the present case, I think the award of a bonus equates with the payment of a bonus. I conclude the feature of bonus payment to an eligible machine is defined in the present claims.
Aristocrat's declarants are somewhat inconsistent in their discussion of the DACOM system on this point. In their evidence in support Mr Munk and Mr Willis both suggest the DACOM system would select an eligible machine that met the requisite activity level and award that machine a bonus prize. However elsewhere in this evidence Mr Willis comments on the DACOM system awarding bonuses based on the minimum activity level for a player, and the desirability for network systems paying bonuses to reward a club's best customers rather than casual players. In his evidence in reply Mr Willis acknowledges the DACOM system does not pay bonuses directly to a machine but rather to an account associated with a player of that machine. Mr Dobbin similarly accepted this is the case. In any case the evidence is lacking any documentation such as manuals or operating procedures explaining the operation of the DACOM system.
There is insufficient evidence to establish the DACOM system operated in the way claimed in the present application to determine eligibility for bonuses based on a minimum activity level of machines and award bonuses to one of the eligible machines.
I conclude the claimed invention is novel over the DACOM system.
Computa Game System
Ms Barry exhibits a Computa Game Equipment Manual, Revision 1, dated September 1990, and a Computa Game Software Manual, Revision 2, dated February 1991. She also attests to the Computa Game system being installed at Mingara in 1991. Mr Willis discusses the introduction of the system in 1988/89. Mr Dobbin noted that Mr Acres also acknowledged seeing the Computa Game system in operation in several clubs in NSW during his visit to Australia in July 1993.
In the light of the above comments from declarants for both Aristocrat and Acres, I am prepared to accept the Computa Game system was in public use before the priority date of the present application.
As with the DACOM system, the issue with the Computa Game system against the present application appears to be of payment of bonuses directly to players' accounts as opposed to directly to gaming machines.
Mr Willis states that in the Computa Game system, the gaming machines in a venue were networked to a host computer via modules attached to the gaming machines. The network could be configured to pay random bonus prizes during certain times to machines that had met a minimum playing threshold. On the other hand Ms Barry discusses the requirements of players to insert their cards into the units and spend a threshold value to qualify for bonus payments. Ms Barry further states the system would scan players that had cards in the machines, ensure they had met the threshold, and would choose a qualified player at random to award a bonus. The bonus was paid to an account associated with a player's membership card and could be redeemed at an automated booth.
The Computa Game Software Manual similarly states at page 2.45 that, while the threshold value is set on the poker machine itself and thereby possibly makes machine eligibility the determinant, players are required to insert their cards and spend the threshold value to qualify for bonuses. This may suggest that any resulting bonuses are paid to a player's account although the manual does not appear to be definitive on this point. Certainly the manual is silent on bonuses being paid directly to an eligible machine.
At the hearing Mr Dobbin conceded the Computa Game system operated on the basis of monitoring the activity level of players at machines and paying bonuses into selected eligible players' accounts. On the other hand he again suggested the payment of bonuses to eligible machines is not claimed in the present application.
I have earlier determined this feature is defined in the present claims. There is insufficient evidence before me to establish the Computa Game system operates to determine eligibility for bonuses based on a minimum activity level of machines and to award bonuses to one of the eligible machines as claimed in the present application.
I conclude the claimed invention is novel over the Computa Game system.
Mikohn's Prior Art
In respect to Mikohn's opposition Mr Pickup discusses several patent specifications to suggest the claimed invention lacks novelty. The specifications are AU 655,801, US 4,844,464, US 5,016,880 and US 5,242,163.
Mr McCormack essentially relied on the same distinguishing features he identified in respect to the Aristocrat opposition to differentiate the claimed invention from the specifications cited by Mikohn. Mr McCormack submitted that nothing in this prior art discloses or even suggests the same combination of features as claimed in the present application.
The specifications cited by Mikohn generally discuss the monitoring of poker machine activity. However the specifications fall short on disclosing the determining of gaming machine eligibility for the award of bonuses based on a minimum level of activity of machines. In fact two of the specifications relate to single machines only rather than networked systems. This would appear to nullify the need for a system that selects machines based on them meeting eligibility criteria related to activity level. In any case, none of Mikohn's examples of prior art disclose the selection of eligible machines for the award of bonuses where eligibility is based on the machines exceeding a minimum activity level during a bonus period.
I conclude the claimed invention is novel over the patent specifications cited by Mikohn.
INVENTIVE STEP
Under sections 7(2) and (3) of the Patents Act, inventive step is presumed unless it is demonstrated that the invention is obvious. The assessment of obviousness may be made against common general knowledge alone, or together with information that was publicly available and which a person skilled in the relevant field in Australia could be reasonably expected to have ascertained, understood and regarded as relevant before the priority date.
An appropriate test for inventive step is whether a person skilled in that field, and faced with the same problem, would have taken as a matter of routine whatever steps might have led from the prior art to the invention (Wellcome Foundation Ltd v VR Laboratories (Aust.) Pty Ltd, (1981) 148 CLR 262 at page 286).
Common General Knowledge
Mr Dobbin relied on Ms Barry's declaration to state the common general knowledge in NSW is essentially coterminous with that throughout Australia. Ms Barry states that gaming machines have been legal in NSW since 1956. This is longer than any other state in Australia. Gaming machines became legal in Victoria in the late 1980s, in Queensland in 1991 and in South Australia in 1994 (the same year for which the present application derives priority). Ms Barry further suggests that, since NSW has had gaming machines for longer than any other state of Australia, NSW leads the way in technology, the number of gaming venues and the number of gaming machines.
Mr McCormack countered Mr Dobbin's submissions by stating that since the NSW gaming industry was more advanced the common general knowledge in Australia was not necessarily coterminous with that in NSW.
The British Acoustic Films Ltd v Nettlefold Productions decision, (1936) 53 RPC 221 at page 250, considered whether material disclosed in publications would constitute common general knowledge in the art. This decision held that:
“a piece of particular knowledge as disclosed in a scientific paper does not become common general knowledge merely because it is widely read, and still less merely because it is widely circulated. Such a piece of knowledge only becomes common general knowledge when it is generally known and accepted without question by those who are engaged in the particular art.”
The General Tire & Rubber Company v Firestone Tyre & Rubber Company Ltd decision, (1972) 89 RPC 457 at page 483, regarded the words “accepted without question” as putting the position rather high. This decision held the words, “generally regarded as a good basis for further action”, would be more appropriate.
It appears from the above decisions that assessments of common general knowledge should not be discriminated by region. A piece of knowledge becomes common general knowledge when it is generally known and regarded by those engaged in the particular art irrespective of where those people may be.
In the present case the issue is whether two gaming machine systems rather than a scientific paper have been so widely circulated, known and generally regarded as to constitute common general knowledge in the gaming machine industry.
Mr Dobbin submitted both the DACOM system and Computa Game system were part of the common general knowledge in Australia at the priority date of the application. He referred to Mr Munk's and Ms Barry's declarations. Both cite cases where representatives from various clubs throughout NSW viewed the operation of the systems at Mr Munk's and Ms Barry's respective clubs. Ms Barry further cites the Computa Game Equipment Manual to list the various clubs in NSW where the Computa Game system had been installed. Mr Munk and Ms Barry attest that the DACOM and Computa Game systems, respectively, would have been very well known throughout the gaming industry in Australia before the priority date of the present application.
There appears to be widespread evidence of knowledge and interest in the DACOM and Computa Game systems amongst NSW club representatives before the priority date of the present application. For instance the Computa Game Equipment Manual from Ms Barry's evidence lists a large number of clubs in NSW where the Computa Game system had been installed. Outside NSW, a handful of other instances of knowledge dissemination about the systems are noted. Mr Munk states that some representatives from Crown Casino in Melbourne and from New Zealand and South Africa saw the DACOM system in operation at Guildford Leagues Club while he was working there in 1993 and 1994. Inventive step is assessed against the common general knowledge in Australia (Minnesota Mining & Manufacturing Co v Beiersdorf (Australia) Ltd, (1980) 144 CLR 253 at 295). This means that only the NSW examples and the Melbourne example are strictly pertinent. Nonetheless these examples are many and widespread.
I conclude the DACOM and Computa Game systems were so prolific and generally regarded as to render these systems common general knowledge in Australia at the priority date of the application.
From the evidence before me and from the specification itself I additionally conclude as follows in respect to the common general knowledge in Australia at the priority date of the application. At that time, networked gaming devices and means for monitoring their level of use over various periods of time were common general knowledge. The manual payment or award of bonuses, such as double jackpot or similar initiatives, to encourage greater usage of gaming machines was also common general knowledge at that time.
Aristocrat's Prior Art
Mr Dobbin submitted the feature of awarding bonuses to a gaming device rather than to a player's account is not an inventive step. He cited Mr Willis' and Ms Barry's evidence in reply to state the only reason prior gaming systems did not award bonuses directly to gaming devices was that such an arrangement was banned by NSW gaming regulations. Mr Dobbin further suggested that since the NSW gaming regulations expressly forbade the award of bonuses directly to gaming devices, it was clear that people in this field had contemplated such an arrangement.
Mr McCormack submitted that Aristocrat's declarants discuss what could have been done rather than what would have been done by a person skilled in the art at the priority date of the application. He noted Mr Willis' evidence states it would have been possible to re-design the DACOM system to enable bonus payments to the machines if that were permitted by the regulations. Mr McCormack concluded this statement is a long way short of stating the advance made by Acres was a matter of routine to a person skilled in the field. Mr McCormack also cited evidence of the commercial acceptance of the invention to state the invention made by Acres is not a trivial invention even though a scintilla of invention would be enough for the grant of a patent.
The Wellcome Foundation (supra) decision requires the alleged advance to be a matter of routine to a person skilled in the field before one can say the advance lacks inventive step. Statements of what would have been possible or could have been effected fall short of the test that a person skilled in the field would have taken those steps relating the alleged advance as a matter of routine.
It may be argued the step of awarding bonuses directly to gaming devices would have been a matter of routine to a person skilled in the field if that were permitted by NSW gaming regulations. For NSW though, the evidence from the parties appears contradictory on whether the awarding of bonuses directly to gaming machines was prohibited by the NSW gaming regulations. Mr Willis understands the regulations prohibited the awarding of bonuses directly to gaming machines while Mr Dimond sees no such prohibition in the regulations.
Mr Dobbin's submissions suggest that Mr Willis' evidence is to be preferred. Mr Willis is currently employed in the consultancy and project management arm of Aristocrat and requires a full knowledge of the relevant regulations surrounding the gaming industry. On the other hand Mr Dobbin states that Mr Dimond's experience is more technical in nature and that Mr Dimond does not claim any particular knowledge of regulatory affairs in the gaming industry. Mr Dobbin further notes Mr Dimond does not state that payment of bonuses to machines in NSW would not have breached NSW gaming regulations. He merely states he cannot come to the conclusion such payment would breach the regulations from reviewing Mr Willis' exhibits.
In this case I think I do not need to decide whether the evidence sufficiently demonstrates prohibition by the NSW gaming regulations of the awarding of bonuses directly to gaming devices. If that is prohibited then argument that such an arrangement lacks inventive step, because it must have been contemplated since the regulations forbade it, is flawed. Rather prohibition would suggest it could not have been regarded a matter of routine that a person skilled in the field would have taken these steps and arrive at the claimed invention. If the awarding of bonuses to gaming devices is not prohibited by any regulations it does not necessarily follow that such activity lacks inventive step. Any number of other variants may be equally plausible. The onus is on the opponent to demonstrate a certain step would have been a matter of routine to a person skilled in the art in Australia before it could be considered obvious irrespective of whether that step is prohibited by regulations or not.
Mr Shelby discusses testing and regulatory requirements in respect to software developments at two casinos after September 1996. This date is well after the priority date of the present application and is of little value in determining what was permitted by the regulations prior to the priority date or whether the awarding of bonuses directly to gaming machines would have been obvious before that date. In any case Mr Dobbin's submissions point out that Mr Shelby's experience relates to the casino market. Mr Dobbin states that casinos are regulated by the Casino Control Authority regulations and not by the regulations for poker machines and subsidiary equipment tendered in Mr Willis' further evidence.
Irrespective of whether or not certain gaming regulations prohibited the awarding of bonuses directly to gaming machines, the evidence does not establish it would have been a matter of routine to a person skilled in the field to make this advance at the priority date of the application.
Mr Dobbin further referred to Mr Willis' and Ms Barry's declarations to state that people in the field regarded the distinction between player and machine eligibility and payment of bonuses as artificial. Whether bonus payments go to the machine or to the player's account, the end result is the appropriate player gets the bonus.
In considering inventive step it is irrelevant whether the end result is the same, namely the appropriate player gets the bonus. It is well established that different inventions relating different modes of achieving the same end result are equally patentable. The award of a bonus to a player's account is not the same as an award to a particular machine. Aristocrat's evidence is inadequate to establish the latter arrangement lacks inventive step over the former.
I conclude the claimed invention is inventive over the DACOM and Computa Game systems.
Mikohn's Prior Art
I have earlier considered the claimed invention against the patent specifications exhibited with Mr Pickup's declaration. Those specifications generally discuss the monitoring of poker machine activity. They do not disclose the selection of eligible gaming machines for the award of bonuses where eligibility is based on the machines exceeding a minimum activity level during a bonus period.
I am satisfied these specifications do not challenge the inventiveness of the claimed invention.
MANNER OF MANUFACTURE
The NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd decision, (1995) 32 IPR 449, and the Bristol-Myers Squibb Company v FH Faulding & Co Ltd decision, (2000) 46 IPR 553, state the present position in respect to a threshold requirement of inventiveness. The latter case at page 564 appears to affirm the decision in the former case. If, on the basis of what was known, as revealed on the face of the specification, the claimed invention was obvious or did not involve an inventive step, then the threshold requirement for an invention to be apparent on the face of the specification is not met.
Mr Dobbin did not pursue this ground at the hearing. The invention relates to a method of operating gaming devices interconnected by a computer network. The specification suggests the advance made in this field by the present invention is of automating the provision of bonuses to gaming devices by determining the eligibility of devices to be paid a bonus based on the devices exceeding a minimum activity level during a bonus period. I am satisfied the requisite threshold of inventiveness is apparent on the face of the specification.
CLARITY OF DESCRIPTION AND CLAIMS
In respect to the clarity of the description and the claims, at the hearing Mr Dobbin stated he would rely on the statements made by Aristocrat in the statement of grounds and particulars. He did not provide any further submissions to support those statements.
The statement of grounds and particulars mentions the omission of page 63 from the specification. It is apparent the specification was accepted with page 63 missing from the specification. Acres rectified this omission with a proposed amendment after acceptance of the specification. The allowance of that amendment was advertised on 12 November 1998. This would appear to resolve Aristocrat's objection on this point.
The page is a descriptive segment of the specification primarily related to assigning gaming device addresses. I am satisfied the cases of Acres and Aristocrat have not been hampered by any potential misunderstanding over page 63.
The remaining six particulars raised by Aristocrat relate essentially to clarity of terms in the specification. I am satisfied there is nothing of consequence in these particulars for Acres to address.
CONCLUSION
I have previously admitted Mr Willis' declaration on behalf of Aristocrat in respect to the NSW gaming regulations as further evidence.
I have also admitted Acres' evidence in response from Mr Dimond, Mr Golja and Mr Shelby.
Aristocrat's and Mikohn's oppositions were based on alleged lack of novelty, lack of inventive step, the alleged invention not being for a manner of manufacture, and alleged deficiency of the complete specification.
Aristocrat and Mikohn have both failed to establish their grounds of opposition to the application.
I direct the application may be sealed after twenty-eight (28) days from the date of this decision.
If the Commissioner of Patents is served with a notice of appeal from this decision before that time, I direct that sealing not occur until the appeal has been decided or discontinued.
COSTS
Generally the parties submitted that costs should follow the event. In respect to Aristocrat's opposition, Mr McCormack further noted though that the contraction of Aristocrat's case as evident from its amended statement of grounds and particulars should be reflected in any award of costs.
It is a common occurrence that parties vary the presentation of their cases depending on the strength of their supporting evidence. A case where the contraction of an opponent's case was reflected in the award of costs is Comsat Corporation v Telstra Corporation Limited, [2001] APO 19. In that case it only became apparent at the hearing that much of the considerable documentary evidence filed in that case would not be relied upon by the opponent.
In the present case Aristocrat's original statement of grounds and particulars cited more than fifty patent references. Subsequently Aristocrat's evidence in support included only about ten of these references as well as the DACOM and Computa Game material. Aristocrat's amended statement of grounds and particulars largely reflects this presentation of the evidence. This situation differs markedly from one where the contraction of a case only becomes apparent at the hearing.
Furthermore it appears Acres clearly understood the nature of Aristocrat's case. The bulk of Acres' evidence in answer concentrates on the DACOM and Computa Game systems. From the above discussion these two systems, more than any other evidence in support, have been of greatest challenge against Acres' application.
In any case Acres has been the successful party in respect to both oppositions.
I see no reason to depart from the usual practice that costs in accordance with Schedule 8 follow the event.
I award costs in accordance with Schedule 8 against Aristocrat and against Mikohn.
M. G. Kraefft
Delegate of the Commissioner of Patents
Patent attorneys for Acres Gaming, Inc : Wray & Associates, Perth
Patent attorneys for Aristocrat Technologies Australia Pty Ltd : F B Rice & Co, Sydney
Patent attorneys for Mikohn Gaming Australasia Pty Ltd : Wilson & Young, Sydney
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