Bally Gaming International, Inc v I.G.T. (Australia) Pty Limited and Aristocrat Leisure Industries Pty Limited

[1999] APO 23

OFFICIAL NOTICE

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Application  :          No. 664384 in the name of BALLY GAMING INTERNATIONAL, INC

Title:          Gaming Machine Information, Communication and Display System

Action:          Oppositions under section 59 (Patents Act 1990) by I.G.T. (AUSTRALIA) PTY LIMITED and by ARISTOCRAT LEISURE INDUSTRIES PTY LIMITED

Decision:          Issued            .

Abstract

Grounds of lack of novelty and obviousness not made out; opposition successful in respect of only two relatively minor section 40 matters, one of which was not particularised.  While fair basis was not a major ground of opposition, the issue was nonetheless considered by the delegate and the claims were found to be lacking.  Direction to amend.

PATENTS ACT 1990

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Re:Patent Application No. 664384 by BALLY GAMING INTERNATIONAL, INC and oppositions thereto by I.G.T. (AUSTRALIA) PTY LIMITED and by ARISTOCRAT LEISURE INDUSTRIES PTY LIMITED

BACKGROUND

Patent application 664384 (the application) was filed as 25291/92 on 23 September 1992, claiming priority from a US application filed 23 September 1991.  Acceptance was advertised on 16 November 1995.

On 15 February 1996 a notice of opposition was lodged by I.G.T. (AUSTRALIA) PTY LIMITED (IGT), followed by a statement of grounds and particulars on 15 May 1996.  The grounds relied on are sections 18(1)(a), and 18(1)(b)(i) and (ii), and 40(2) and (3).

On 16 February a notice of opposition was also lodged by ARISTOCRAT LEISURE INDUSTRIES PTY LIMITED (Aristocrat), followed by a statement of grounds and particulars on 16 May 1996, relying on the same grounds as IGT.

On 14 June 1996 Bally filed requests for both oppositions to be dismissed; this went to hearing on 13 September 1996.  In his decisions dated 25 October 1996 the delegate refused to dismiss either of the oppositions, wholly or in part, but found that in each case certain of the opposition particulars were inadequate.  Both statements of grounds and particulars were subsequently amended.

Evidently proposed in response to these opposition proceedings, a request to amend the specification under section 104 was allowed on 15 April 1998.

All evidentiary stages were completed with the service of IGT's evidence in reply on 17 September 1998, and of Aristocrat's on 11 September 1998.

Both oppositions were heard at a single hearing in Canberra on 4 February 1999.  Bally was represented by Mr G McGowan of Counsel, and Mr J Roger Green, patent attorney of Carter Smith & Beadle, Melbourne.  Also present were Mr M L'estrange of Bally, and Messrs G and R Koveman, Bally's US patent attorneys.  IGT was represented by Mr R Miller, patent attorney of Spruson & Ferguson; also present was one of IGT's declarants, Mr J Brydon.  Aristocrat was represented by Mr C Owens, patent attorney of FB Rice & Co.

SPECIFICATION

Some extracts from the introductory part of the specification read as follows:

" The invention relates to the field of….gaming machines, and in particular to a method and system for permitting such gaming machines to communicate with a central control system, allowing the player or operator to communicate with the system, and permitting cashless operation of such gaming machines.

Background of the Invention

Gambling casinos and other establishments often have large numbers of individual gaming machines, such as slot machines and video gaming machines.  For some time it has been desirable to automate accounting, security and other functions related to such machines for efficiency, reliability and economy…..The systems known in the art, however, have been principally directed toward reporting data from the gaming machines to the central computer, and have not provided for transmission of data from the central computer to the individual machines.  Further, such systems have not provided any means by which a player or employee can communicate with the system.  Another disadvantage of these systems is that their functions have been very limited, primarily for reporting accounting data to the central computer.

In the past it has not been possible for a player to interrupt his play, leave the machine briefly, and then return and resume.  It is desirable to provide a reservation feature so that a player can temporarily reserve a machine.

It is also desirable to permit cashless gaming so that the player does not need to carry large sums of cash or obtain change in different denominations for the different machines he wishes to play.  A gaming system using credit cards wherein approval and credit is provided by a remote financial institution is disclosed in U.S. Patent 5,038,022.  However, that system does not permit winnings to be credited directly to a player's card or account, and contemplates the involvement of a third-party bank or financial institution.

Summary of the Invention

It is therefore desirable to provide a system for automating maintenance, accounting, security, player tracking, event recording and other functions for a plurality of gaming machines.

It is also desirable to provide a system including display and data entry means which permit the player or employee to interact with the system.

It is further desirable to provide a cashless gaming system in which the player may play a plurality of gaming machines using a single card in lieu of cash, and his winnings may be directly credited to his card.

It is further desirable to provide a means for a player to temporarily reserve a gaming machine.

It is also desirable to provide a signal to casino personnel to identify special players.

It is still further desirable (for) the invention to provide for the downloading of data from the central data processor to the individual gaming machines."

In some of its configurations and functions the invention is reasonably complex.  In the following I will summarise what I understand to be the main elements of it.

The invention is a system which comprises the following hardware components:

(i) For each gaming machine, a control unit called the MASTERCOM (Maintenance, Accounting, Security, player Tracking, Event Recorder, Communication).  The MASTERCOM includes a microprocessor, RAM and firmware, is mounted inside the gaming machine housing, and is designed to be suitable for (retro?) fitting to various types of gaming machines from different manufacturers.  It is interfaced with its gaming machine circuitry, and is also in bi-directional communications with two other components, firstly;

(ii) also for each machine, another component called the DMK (Display, Multiple card reader,  Keypad).  The DMK is fitted to the gaming machine so as to be accessible to a player, eg externally attached.  As suggested, the DMK includes (at least) a display (eg 12-character dot-matrix LED), a card reader (eg magnetic stripe and/or smart card), and a user-operable keypad.  The DMK also includes a processor and firmware; and secondly;

(iii) a CDP (Central Data Processor) which is located remotely from the playing areas, but within the casino, probably in a secure zone.

In summary, the installed system will include a plurality of gaming machines, each machine being fitted with a MASTERCOM and a DMK, and a remote CDP.  Each MASTERCOM is interfaced with the circuitry of its associated machine, and is in bi-directional communication with its associated DMK and the CDP.

Operation and Functions

Basically the system is operated by data entry to the DMK using the card reader and/or keypad.  The data is processed in the DMK and the MASTERCOM, according to their programming, and may be directed to the CDP, which may in turn download data from the CDP to the MASTERCOM and the DMK.

In addition to use by a player, the system can also be accessed by an employee of the casino.  The employee will be authorised to perform tasks related to machine set-up and maintenance.

The specification contemplates the system being able to carry out a large and varied number of functions, depending of course on how it is programmed.  A few of those described are set out below by way of example.

· Casino defined features of the machine (called the machine "personality", such as address, coin type, limits, and many others, but not the game per se) can be read, entered manually using the DMK, or downloaded from the CDP, by a casino employee.

· Messages which can be displayed on the DMK include "attract" messages when the machine is not in use, downloaded promotional messages, jackpot amount, requests from the system for player input, and a personalised player welcome when the player's card is read.

· A player can use the keypad to request drinks, change, or machine service; the system will then signal an employee accordingly.

· By keying in an instruction, a player can reserve his game (for a limited predetermined time), leave the machine, and then return and resume his game later.

· In a preferred embodiment of the invention the DMK includes a multi-coloured LED which can be activated by the system to identify to casino employees that the player is recognised as a "special player", eg a "high-roller".

· The system can also permit cashless gaming, either by use of a magnetic card to obtain credit, or by use of a pre-purchased smart card representing a certain cash value.  The smart card is updated by the system as play progresses.

The specification concludes with 29 claims; claim 1 is the broadest and reads as follows:

"1. An information and communication system for use with a player controlled gaming machine comprising:
     a central data processor;
     control means located within said gaming machine for communicating between said central data processor and the gaming machine; and
     an interface unit, including a keypad, a card reader and a display secured to the gaming machine and operatively connected to said control means wherein said keypad transmits player generated information to said central data processor via said control means."

I note that the claimed "control means" corresponds to the described MASTERCOM, and the "interface unit" to the DMK.

For the sake of brevity I will summarise the rest of the claims.  There are six other independent claims; they are essentially the same as claim 1 but with the addition of specific functions, as follows:

· in claim 13 the keypad is used to reserve the game;

· in claim 15 an inserted card is read to identify a special player to the CDP;

· in claim 16 promotional messages downloaded from the CDP are displayed on the interface unit;

· in claim 17 personality data input from the card reader is stored in the control means;

· in claim 18 the system permits the use of a credit card for game play;

· in claim 28 the interface unit includes a light source for signalling a predetermined type of player.

The dependent claims cover a multitude of combinations of these features and some others.

EVIDENCE

From IGT

· Declaration by Robert Morton Miller, patent attorney representing IGT in this matter, with exhibits RMM-1 to 10.  The exhibits are mainly patent specifications, and they include US 5038022 ('022), published 6 August 1991.

· Declaration by Guy John Stanford with exhibit GJS-1, which is a document produced by the Liquor Administration Board of NSW (LAB), titled "Guidelines for Centralised Cash Control Equipment for Clubs", issued 12 September 1991.  One guideline requires that such equipment be networked, and another that card operated machines be unable to use a credit card.  The opposition particulars related to this document are novelty and manner of manufacture (mischievous to the state etc).  However I was advised at the hearing that these matters would not be pursued.

· Declaration by John William Brydon, Consulting Engineer, with exhibits JWEB-1 to 9.  The exhibits relate primarily to gaming machine fittings manufactured by Computa Game International Pty Ltd (the Computa Game) of Castle Hill NSW, and installed at the Ettalong Beach Memorial Club, also in NSW.

· Second declaration by John Brydon, with exhibits JWEB-1 to 10, further relating to the Computa Game machine.

· Third declaration by John Brydon, with exhibits JWEB-1 to 2, also concerning the Computa Game, in this case installed at Harbord Diggers Memorial Club in NSW.

· Second declaration by Guy Stanford, with exhibits GJS-1 to 10, which are extracts from the International Patent Classification and listings of Australian patent applications in various classification marks.  I do not think that it was referred to at the hearing, and its significance is not all that clear.

· Declaration by Keiran Daley, Executive Chairman of IGT, with a single exhibit which is the same LAB document as GJS-1 above.

· Second declaration by Robert Miller, with a single exhibit, "Technical Standards for Gaming Machines and Subsidiary Equipment in NSW", produced by a NSW Government agency, also not referred to at the hearing.

· Declaration by Clive Evan Davies, a Director of Computa Game International.

· Declaration by Anne Louise Stephens, Functions Manager for Ettalong Beach Memorial Club, with exhibits ALS-1 and 2, also concerning the Computa Game.
· Fourth declaration by John Brydon, in which he replies to the declaration of Edward Culley.

From Aristocrat

· Declaration by Raymond Parle, Managing Director of Dataview Pty Ltd, and exhibits RP-1 to 7.  Dataview is involved in the manufacture and installation of a system which is designed to communicate with the Computa Game machine for the real-time display of statistics such as machine usage.  The exhibits are primarily the Computa Game Software Manual and the Computa Game Equipment Manual, and also '022.

· Declaration by Neville Gordon Harlick, with exhibits NGH-1 to 6.  Mr Harlick is an Engineer, who has at times, including most recently, been associated with Aristocrat or its predecessor, Ainsworth Nominees Pty Ltd.  The exhibits essentially duplicate those of Raymond Parle.

· Declaration by Brett Andrew Lunn, patent attorney of the firm representing Aristocrat in this case, with exhibits BAL-1 and 2.  The exhibits are the AU equivalent of '022 and its OPI date in Australia.

· Second declaration by Raymond Parle, with exhibit RP-8, which is just the specification in suit.  In his declaration Mr Parle replies to the declaration of Edward Culley.

From Bally

The evidence in answer is the same in respect of both oppositions, and consists only of the following documents.

· Declaration be Edward William Culley, with exhibits EWC-1 and 2.  Mr Culley claims extensive experience in the gaming industry, and has at times been employed by both opponents in this case.  The exhibits are the specification in suit and the LAB document again.

SUBMISSIONS

The submissions made were extensive and I will refer to them where necessary in my decision.  However it became clear during the hearing that, so far as the grounds of novelty and obviousness were concerned, the opponents were relying on only two of the cited particulars, namely '022 and the Computa Game, and the most relevant submissions went to the content of these disclosures and the construction of the claims.  Also at the hearing, regarding these grounds, claims 13 and 14 (game reservation) were conceded by the opponents' attorneys.

DECISION

US 5038022 ('022)

This specification discloses a gaming machine which is provided with a card reader, an alphanumeric keypad, and a liquid crystal display (LCD).  In use the player inserts (or swipes) a credit card in the card reader, the LCD shows a message requesting the player's PIN , which is entered using the keypad, followed by a displayed request for the desired credit amount, also entered via the keypad.  This data is transmitted from the reader to a remotely located financial institution, eg over a telephone line, together with two codes generated by circuitry associated with the reader, respectively identifying the particular gaming machine and the establishment where the machine is located.

The request for credit is evaluated remotely, and if approved, appropriate debits and credits made, and messages accordingly given on the LCD.  See column 3 line14 to column 4 line 34.

Thus by being able to obtain credit on-line while at the machine, a player may continue play without leaving the machine.

The specification also refers to the use of a debit card or a stored credit card, and also that the casino "may be the financial institution in the sense that it can give pre-arranged credit to the player which can be utilized by the player through the means of a financial card…." (emphasis added, column 3 lines 60-65)

I am not entirely sure what this means, however it is clear that the invention is very largely concerned with the obtaining of credit on-line from a remotely located financial institution.

The Computa Game

The evidence shows that the Computa Game System was installed in a number of clubs in NSW prior to the claimed priority date - a total of 11 in two versions between August 1988 and July 1990.  This was not disputed.  The evidence includes a copy of the Computa Game Equipment Manual, dated September 1990, and the Software Manual, dated July 1991.  I note that Section 1 of the Equipment Manual, titled "Computa Game System Overview", which could have been useful was not included, as it was apparently incomplete.  Also included in the evidence are a number of declarations describing how the system works.

While it was submitted that the Manuals were published documents in the relevant sense, I do not think that the evidence really shows this; I consider that the issue is one of prior use.  Consequently I have used the manuals as an explanation of how the installed system works in use.

The system is designed to be installed in existing gaming machines, and consists of a number of components.

· For each machine, a Personal Identification Unit (PIU) mounted on the machine so as to be accessible to the player.  The PIU includes an LCD (16 character x 2 line alphanumeric backlit) for the display of messages, three push-button service switches, an insertion type magnetic card reader, and circuitry including processor, memory, EPROM, and inputs and outputs.

· Also for each machine, a Meter Interface Module, mounted externally in version 1 and internally in version 2, which is designed to read the machine's meters, and output signals representing turnover, credit wins, cashbox, jackpot etc.  The meter interface is connected by cable to the PIU.

· A host computer at a central location in the club.  All of the PIU's are networked with the host computer.

Operations of the Computa Game

· It seems clear that a primary function of the system is the centralised auditing of the machines' meters. This is done by the host computer polling the PIU's, which receive meter readings from the meter interface board, in succession.

· Another important use is to display, in response to a player's card being inserted, various messages downloaded from the host computer, such as a welcoming message, advice of bonus points, special offers, and the like.

· The PIU includes three push-button switches, labelled "Jackpot", "Drinks", and "Service".  It appears that operation of one of these switches communicates a signal to the host computer, which then (in some way not entirely clear) sends a signal via the club's paging system to a pager-carrying employee, who responds to the request.

· The system also provides for the use by staff of special cards, such as a "maintenance card", which permits various machine settings to be altered.  The alterations are limited to such as setting the machine address, enabling/disabling the player push-buttons, meter interface settings, value of coins played for a player to be eligible for a random bonus, and a few others.  Changes are effected by the card enabling a second function for the three player service push-buttons.

Novelty

The test for want of novelty is the "reverse infringement test" as set out in Meyers Taylor Pty Ltd v Vicarr Industries Ltd (1977) CLR 228 at 235 where Aikin J said:

"The basic test for anticipation or want of novelty is the same as that for infringement and generally on can properly ask oneself whether the alleged anticipation would, if the patent were valid, constitute an infringement…."

The general rule as to what constitutes an infringement has been expressed by Lord Upjohn in Rodi & Weinenberger AG v Henry Showell Ltd (1969) RPC 367 at 391 as follows:

"The essential integers having been ascertained, the infringing article must be considered.  To constitute infringement the article must take each and every one of the essential integers of the claim."

The invention defined in present claim 1 is, in my opinion, a combination, and prima facie all of the integers in the combination are essential (Catnic Components v Hill & Smith Ltd (1982) RPC 183).

'022 discloses a gaming machine equipped with built-in card reader, display, keyboard, and associated circuitry.  It does not clearly disclose the two separate components presently claimed, namely an interface unit secured to the machine, and a control means located within the machine.  Submissions were made regarding the significance of this, and I have considered them.

However of more importance I think is that there is no mention in '022 of a central data processor.  There was a submission that the claimed CDP could be that of a remote financial institution, however I do not think that is a reasonable construction.  The specification makes it clear in context that the claimed CDP is central to the networked gaming machines.   Fig.2 of '022 shows a communication link 30, eg a telephone line, directly from the card reader to a remote location where credit approval can be granted.  This appears to suggest a dedicated line for each machine, which seems odd.  It might have been supposed that in December 1989 (the priority of '022) communications from a large number of machines to a remote site would have been managed by a local central processor.  Fig.3 does show an arrangement which has a single line from the remote site to a local transceiver, which communicates via a wireless link to further transceivers located on each machine.  In any event the fact is that '022 does not disclose a central data processor of any kind

In my opinion claim 1, and consequently the other claims also, do not lack novelty in view of '022.

I will now consider the Computa Game, which clearly does have a central data processor, together with a card reader, display, and push-buttons, all usable by the player, and another unit mounted inside the machine (in version 2).  It does appear therefore somewhat like the invention presently claimed.  However in my opinion it does not disclose the claimed keypad, and nor is the Computa Game's meter interface the same as, or analogous to, the present control means.

Collins Concise Dictionary (2^nd ed.) defines "keypad" as follows:

"a small panel with a set of buttons for operating a teletext system, electronic calculator, etc."

Whereas the present invention claims a keypad, and describes a 3x4 pad, with keys 0-9, enter and clear, the Computa Game PIU has three push-buttons arranged in a row, and I note that this is how the Equipment Manual refers to them.  In my view this does not constitute a keypad.  This is not insignificant; the three Computa Game push-buttons allow for three simple requests to be made, and nothing more.  By contrast the claimed keypad allows complex entries to be made by combinations of keys, such as a PIN.

As I have said, I also think that Computa Game's meter interface is not really comparable to the present control means.  There was some discussion regarding the location of these components.  Although the present control means is claimed as located within the machine, its described connection to the machine is electrical, and I can see no reason why it could not be located externally.  This was conceded at the hearing, and is recognised in the description as just an arrangement of convenience (page 3 lines 33-34).  In any case the different versions of Computa Game have had the meter interface mounted both internally and externally.  I do not consider this to be an issue.

However I consider that the functions of these components are essentially different.  Essentially all that the interface board does is read the machine's meters (from which it must be electrically isolated) and feed these readings to the PIU.  On the other hand, the canvased functions of the control means (pages 5-6), its connections to the machine (page 14 line 34-page 15 line 5), and its directions of data flow, are more complex.

In my opinion the claims do not lack novelty in view of the prior use of the Computa Game System.

Inventive Step

The question of inventiveness or obviousness has to be decided against the common general knowledge (cgk) in the relevant art, in the patent area, at the priority date.  Also, cgk can be taken together with a prior disclosure, so long as a person skilled in the art could reasonably be expected to have ascertained, understood, and regarded it as relevant (section 7(2) and (3)).

In Minnesota Mining and Manufacturing Co v Beiersdorf (Aust)Ltd (1980) 144 CLR 253 at 292 Aikin J said:

"The notion of common general knowledge involves the use of that which is known or used by those in the relevant trade in considering the making of new products, or the making of improvements in old, and it must be treated as being used by an individual as a general body of knowledge."

There was some discussion as to what is the "relevant art" in this case, ie gaming machines or perhaps electronic communications.  In my opinion the relevant art is primarily that of gaming machine technology, but combined with that of computer-based networking and communications systems.  This is quite specialised.  Assuming, as I think is reasonable in this case, that the addressee of the specification and the person skilled in the art are the same, then the notional skilled "person" could be a team.  See American Cyanamid Co v Ethicon Ltd [1979] RPC 215 at 245 where Graham J refers to the addressee as being "a body of technical men pooling their knowledge…".

I must then rely on the evidence to establish what was the cgk in this art as of 23 September 1991, and in this regard the evidence is of limited help.

It was submitted that the LAB Guidelines (relevantly concerning networking and non-use of credit cards) was cgk.  This was issued only days before the priority date, however it should probably be accepted (as submitted by Keiran Daley in IGT's evidence in support) that determinations of the LAB are widely and almost immediately known in the industry.  I do not believe this submission was disputed, and in any case a finding one way or the other is not a significant factor in deciding this matter.  On balance I find that the LAB publication was cgk.

There is no evidence to establish that '022 was cgk, and neither I think was it argued otherwise.

In their declaration in support of the opposition, Messrs Parle and Harlick state that it was known in Australia before the priority date to connect gaming machines to a central computer system in a club for auditing purposes.  Such systems were also used, it is said, to send incentives to players on the club's machines.  There are no details provided, nor actual evidence filed, to support these statements, other than for the Computa Game.  However I accept that it was cgk in a general sense to network gaming machines to a club's central computer.

The Computa Game is said to be an example of such systems.  Uncontested evidence shows that Computa Game Version 1 was installed in three clubs in NSW during the period August 1988 to March 1989, and Version 2 in a further eight, primarily around Sydney but as far away as Broken Hill, in the period February-July 1990.  Four of the clubs are RSL Clubs and three are Ex-Servicemens Clubs.  The evidence shows that the Computa Game can be adapted to fit various types of gaming machines, produced by a number of manufacturers, including Ainsworth, IGT, Pacific, and others.

It was not particularly argued that the Computa Game system was part of the cgk.  However, taking into account the distribution of installed systems, the type of clubs in which it was installed, the timing in relation to the priority date, the nature of the club industry, and the fairly specialised skills which I have thought to be characteristic of a person skilled in the art, it seems to me that on the balance of probabilities the Computa Game was part of the cgk, at least in NSW, before the priority date.  This was not however plainly put by the opponents' declarants, and I will award any doubt in this for the benefit of the applicant.  I am in no doubt though, that the Computa Game is prior art information which satisfies section 7(3).

In the absence of submissions to the contrary, I also find that '022 is prior art information which satisfies section 7(3).  The question then is, would the invention claimed be obvious to a person skilled in the art, and thus having a knowledge of gaming machine workings and general aspects of their networking, in view of either '022, or prior use of the Computa Game system?

I think that the answer here must be in the negative.  Because of its inherent versatility it seems to me that the invention does not readily lend itself to the "problem-solution" approach to a consideration of obviousness.  However in my opinion claim 1 defines a combination of integers, different from the combination disclosed in either '022 or Computa Game, and the integers interact (or are able to interact) such as to make for an "essentially different machine" (May v Higgins (1916) 21 CLR 119, Isaacs J at 123). The nature of the difference is basically as set out in my earlier considerations under novelty.

Similar statements regarding the obviousness of combination patents can be found in Fallshaw Holdings Pty Ltd v Flexello Castors & Wheels Plc (1993) 26 IPR 565 at 568, 3M v Beiersdorf  (supra) at 266, Welch Perrin & Co Pty Ltd v Worrel (1961) 106 CLR 588 at 611, all cited with approval in Speedy Gantry Hire Pty Ltd v Preston Erection Pty Ltd (1998) 40 IPR 543.

I conclude that the claims do not fail for obviousness.

Section 40

A number of section 40 matters are particularised, different for each opponent.  Generally they were not followed up at the hearing, but it was said then that the opponents wished to press them.  One item from Aristocrat has been corrected by the amendment allowed prior to the hearing.

From Aristocrat

· It is said that the terms "special players" and "personality data", appearing in a number of claims, were unclear.  I disagree; I think that read in the context of the invention, the description of which gives examples of what they could mean, they are clear.  Basically they could mean whatever the club administration wishes them to mean.

· It is said that the term "smart card" in claim 21 is not clear, but this is a well known term, meaning a card equipped with logic and memory.

· It is also said that the statement in claim 19 that "[said credit amount] increases with the denominations of the game machine" is not clear.  I think this would certainly be clear to the specification's addressee; it simply links credit limits to the value of coins accepted by the machine.

· As described the game reservation function requires use of the keypad and the card reader.  It is put that claim 2 is not fairly based as it introduces a separate and distinct means for game reservation.  I do not think there is much substance to this; the game reservation means in claim 2 could perhaps be separate means, but as worded it is not defined to be, and it is included in the interface unit.  In practice the reservation function depends on system software.

· A final particular relates to claim 28 and game reservation, however this appears to be incorrect as the claim does not involve reservation.

· Raised at the hearing but not apparently particularised is an issue as to exactly what is being claimed.  Claim 1 is directed to:

"An information and communication system for use with a….gaming machine comprising….control means located within said gaming machine and….an interface unit….secured to the gaming machine…."

Giving "for use" its usual meaning, the question seems to be whether or not the gaming machine itself is being claimed; I consider there is some merit in this criticism, and I find that the claim is not clear.  The same applies to the other independent claims.

From IGT

· Reference is made to page 2 of the specification where it is said essential features not in the claims are identified.  In fact these features are clearly said to be only "desirable features".

· The other two particulars apparently refer to claims since amended or replaced.

Fair Basis

In the evidence, and at the hearing, much was made of what were said to be distinguishing features of the invention, namely distributed processing, two-way or bi-directional communication, and interactive communication.  The opponents' attorneys however protested that these features were in fact not defined in the claims.  This was raised in submissions regarding novelty and obviousness, and I have found that these grounds have not been made out.  In my opinion the issue becomes one of fair basis, and it is something which I can consider on my own volition (Gentech Inc & anor v Celtrix Pharmaceuticals Inc (1996) 34 IPR 162).

The importance of the feature of interactive two-way communication is not really denied in the submissions made on Bally's behalf.  Counsel for Bally helpfully introduced what was said to be a graphical representation of claim 1, which shows two-way communication between the interface unit and the control means, the control means and the central data processor, and the control means and the gaming machine, together with player generated communication through the control means and the CDP.  I also note that the statement from Mr Culley (the sole declarant) in the evidence in answer proceeds along similar lines - see especially paragraphs 4-7 and 16.

In rebuttal, the applicant appears to submit that these features are either expressly or impliedly defined in claim 1.  However all that the claim plainly defines is communication between the CDP and the gaming machine via the control means, and communication from the player keypad to the CDP, also via the control means.  None of it is necessarily two-way and certainly not interactive (obviously two-way communication is not necessarily interactive).  Neither is there anything in the claim, eg by way of result or capability, that necessarily implies such characteristics.  Is then claim 1 fairly based on the matter described in the specification (section 40(3))?

In Glaverbel SA v British Coal Corp and anor [1994] RPC 443 at 498 Mummery J says:

"According to guidance in the authorities, the starting point in this inquiry is to look first at the specification to see what it is that the inventor is describing as his inventive concept: see Van der Lely NV v Ruston's Engineering Co Ltd [1985] RPC 461 page 474.

The next stage is to go to the claims, construe them and see whether the disclosure made in the specification justifies the width of the monopoly defined in the claim: see Van der Lely (supra) 474-475, 494-495 and 506-507.  The approach is succinctly stated by Dillon LJ in Therm-a-Stor Ltd v Weatherseal Windows Ltd [FSR] 323 at 339 "The claim in a patent must not go beyond the disclosure in the specification".  In Van der Lely (supra) at 595 May LJ stated that the question is whether "the material in the specification [so construed] provides a fair ground or base for the claims then made - fair, that is, as between the Patentee and the public."

If, on a fair reading of the specification, the claims for the invention are wider than the totality of the disclosure in the specification, the claim is not fairly based on the specification."

In my opinion a fair reading of the specification, both the details of the preferred embodiments and the features said on page 2 to be "desirable", would in no way suggest a system which is capable only of one-way and/or non-interactive communications, as I consider is covered by claim 1.  The claim also fails the first of the Mond Nickel Rules (Mond Nickel Ltd's Application [1956] RPC 189) which asks a question along the following lines - Is the alleged invention as claimed broadly described in the specification?

Also, in Rehm Pty Ltd v Websters Security Systems International Pty Ltd and ors 11 IPR 289 at 304 Gummow J says:

"…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."

Mullard Radio Valve Co Ltd v Philco Radio and Television Corp of Great Britain Ltd (1936) 53 RPC 323, Lord Macmillan at 347, is also relevant.

I consider that on any count, claim 1 lacks fair basis.  I will not consider the other claims in detail; it may be that by way of the functions defined in other claims some part of what I have found to be lacking in claim 1 is necessarily implied.  But this need not be so; for example it is certainly not so in claim 13 where the defined function is game reservation.

In my opinion the features of two-way and interactive communication should be expressly defined in all independent claims.

CONCLUSION

I have found that the grounds of lack of novelty and obviousness have not been made out, but there are section 40 defects.  First, the independent claims (1, 13, 15-18, 28) are not clear in regard to the claiming (or otherwise) of the gaming machine(s).  Second, the independent claims lack fair basis in failing to define that communication between each of the system components is two-way, and also interactive in relation to player generated information.

These defects should be quite easy to remedy.  Accordingly I direct that amendments aimed at overcoming my findings be proposed within 60 days of the date of this decision, else I will refuse the application.

COSTS

In actions before the Commissioner, costs usually follow the event.  In this case, on the major issues in the grounds and particulars, the applicant has been successful.  The opponents have succeeded in only two (including the section 104 action) relatively minor section 40 matters, and one of those was not particularised.  The more significant issue of lack of fair basis, that I have found, was not a ground of opposition.

That being the case I think it is appropriate to award costs against the opponents, IGT and Aristocrat.  I note that taxing of costs should reflect the fact that both oppositions were heard concurrently, and the evidence in answer was identical in each case.

RG Tolhurst
Delegate of the Commissioner of Patents

Patent attorneys for the applicant  :  Carter Smith & Beadle, Melbourne

Patent attorneys for the opponent   :  FB Rice & Co