Jumbo Interactive Ltd & New South Wales Lotteries Corp v Elot, Inc
[2011] APO 82
•28 October 2011
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Jumbo Interactive Ltd & New South Wales Lotteries Corp v Elot, Inc. [2011] APO 82
Patent Application: 2007221934
Title:A system and a method for operating on-line state lottery games
Patent Applicant: Elot, Inc.
Opponent 1: Jumbo Interactive Ltd
Opponent 2: New South Wales Lotteries CorpDelegate: Greg Powell
Decision Date: 28 October 2011
Hearing Date: 28 July 2011, in Canberra
Catchwords: PATENTS – section 59 – opposition to the grant of patent –lack of entitlement on the basis of the Notice of Entitlement is not established – statements in the Notice of Entitlement did not establish another party as entitled – claims clear and fairly based –no evidence supplied to show that what is claimed could not work – claims novel – inventive step – claims inventive – features missing from all citations not established as common general knowledge –claims have utility – claims are not directed to a manner of manufacture – claims do not fail threshold of inventiveness but there is no “materiality” to the claimed invention as to render it a manner of manufacture – opportunity to amend allowed
Representation: Patent applicant: Andrew Fox of Counsel, assisted by patent attorney Carl Harrap of Freehills Patent & Trade Mark Attorneys, Sydney
Opponent 1: Dr Bradley Postma, patent attorney of Cullens, Brisbane
Opponent 2: No representative at hearing. Written submissions provided by Fisher Adams Kelly, Brisbane
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2007221934
Title:A system and a method for operating on-line state lottery games
Patent Applicant: Elot, Inc.
Date of Decision: 28 October 2011
DECISION
The oppositions are successful on the ground that the claims do not define a manner of manufacture.
Elot, Inc is entitled to the invention. The claims are clear and fairly based.
On the evidence supplied, it has not been shown that the claims lack utility, lack novelty and lack an inventive step.
While I am unsure whether there is patentable subject matter in the specification, I allow Elot, Inc 60 days from the date of this decision to propose suitable amendments.
Costs are awarded against Elot, Inc.
REASONS FOR DECISION
BACKGROUND
Application 2007221934 in the name of Elot, Inc. (“Elot”) was filed on 10 October 2007 as a divisional from patent application 2002236547. It was advertised accepted on 2 April 2009. A notice of opposition to the grant of a patent was filed by Manaccom Corporation Limited on 25 June 2009 and another notice of opposition was filed by New South Wales Lotteries Corporation (“NSWLC”) on 2 July 2009. Manaccom Corporation Limited subsequently changed its name to Jumbo Interactive Limited (“Jumbo”).
Both NSWLC and Jumbo served evidence in support. Elot only served evidence in answer to the evidence supplied by Jumbo, choosing not to answer the evidence of NSWLC. Jumbo served evidence in reply.
GROUNDS OF OPPOSITION
The grounds for opposition alleged by both opponents were that Elot was not entitled to the grant of a patent for the claimed invention and that the claimed invention was not a manner of manufacture, lacked novelty and inventiveness, and did not satisfy section 40(2) or (3) of the Act. NSWLC also raised the ground of lack of utility.
THE SPECIFICATION
The present invention relates to a system for playing lottery games via an electronic network. In particular, it is focused on playing lotteries that are conducted via government authorities.
The specification contains no discussion of the prior art or what problems the prior art suffered from. It simply provides the broad statement on the field of the invention before launching straight into a discussion of the invention. As such the context in which the invention appears is difficult to determine.
Notwithstanding this, it is clear that the invention provides a system in which a number of player terminals are connected to what is termed an agent server. Lottery ticket information and player information is sent from the player terminals to the agent server. The agent server then transmits the ticket information to a government lottery administrator. The government lottery administrator issues serial numbers associated with each lottery ticket and transmits them back to the agent server which stores the player, ticket and serial number information.
Part of the player information that is given to the agent server is information that is termed “subscription play information”. This information is supplied by the player to allow the same ticket information to be played for a specified number of lotteries. As an example, for a game such as Oz Lotto, Powerball or Tattslotto, the subscription play information could stipulate that the same numbers chosen by the player be played for 5 weeks of draws. To accommodate this information and to monitor the progress, the invention includes a subscription play unit which monitors the playing of the same lottery numbers for a specified number of draws.
The specification ends with 4 claims as follows:
“1. A system for facilitating governmental lottery play over an electronic network comprising:
an agent server connected via said electronic network for receiving player and ticket information, including subscription play information, transmitted from a plurality of player terminals, for transmitting said ticket information to a governmental lottery administrator, and for receiving serial numbers issued by said governmental lottery administrator in association with each lottery ticket;
a database in said agent server for storing said player and ticket information and said serial numbers associated with each lottery ticket; and
a subscription play unit for monitoring subscription play of the same lottery numbers for a specified number of draws.2.The system of claim 1, further including a screening unit in said agent server, having criteria required by the governmental lottery administrator pre-stored therein, for verifying that each player satisfies said criteria prior to transmitting said ticket information to said governmental lottery administrator.
3.The system of claim 1 or 2, wherein said subscription play unit includes means for notifying the player prior to or at the expiration of the specified number of draws that play is to end or has ended.
4.A system according to anyone of claims 1 to 3, substantially as described herein with reference to any of the figures and/or examples.”
EVIDENCE
Evidence-in-support
The evidence in support consisted of the following statutory declarations and accompanying exhibits:
For Jumbo
- A declaration by Ian Norman Morrison, director of Morricom, with exhibits A–D, dated 11 November 2009 (“Morrison 1”)
- A second declaration by Ian Norman Morrison, with exhibits A–E, dated 15 December 2009 (“Morrison 2”)
For NSWLC
- A declaration by Robert Charles (“Bob”) Morris, principal consultant of RCM2 Consulting, with exhibit RCM–1, dated 2 July 2010 (“Morris 1”)
- A second declaration by Robert Charles (“Bob”) Morris, with exhibits RCM–1 to RCM‑9, dated 2 August 2010 (“Morris 2”)
Evidence-in-answer
As noted above, Elot only answered the evidence of Jumbo. This evidence in answer consists of the following statutory declaration and accompanying exhibits:
- A declaration by Jeremy John Wade of Freehills Patent & Trade Mark Attorneys, with exhibits A1 to C3, dated 17 June 2010
Evidence-in-reply
Jumbo’s evidence in reply consists of the following declaration and accompanying exhibits:
- A third declaration by Ian Norman Morrison, with exhibits A–C, dated 28 July 2010 (“Morrison 3”)
ENTITLEMENT
Both Jumbo and NSWLC submitted that Elot was not entitled to the invention since the Notice of Entitlement filed before acceptance was defective in that it did not unambiguously state Elot’s entitlement.
The Notice states inter alia:
“We [Elot] derive title to the invention from the inventor of the invention, or would, on the grant of a patent for the invention, be entitled to have the patent assigned to us [Elot]”
NSWLC and Jumbo stated that the Notice set out two different reasons for entitlement. Jumbo submitted that such a Notice could not comply with the requirements of reg 3.1(2)(a). NSWLC submitted that, given such statements, the application did not comply with the requirements of section 29.
In Spencer Industries Pty Limited v Anthony Collins and B & J Manufacturing Company [2002] APO 4, when discussing the Notice of Entitlement and its role when deciding the eligibility of the nominated person, the Commissioner’s delegate said:
“Thus the only question for determination in these proceedings is whether the patentee was entitled to the grant of the petty patent by virtue of being an eligible person under section 15, not whether the basis of that entitlement has been misstated, intentionally or otherwise, by the notice filed pursuant to regulation 3.1(2) (cf. sections 138(3)(d) or (e)). Indeed, there is no provision in the Act which makes the truth of this statement a condition of validity. As confirmed by a Deputy Commissioner in Stack v Davies Shephard Pty Ltd and Another 34 IPR 117:
"When granting a patent, the commissioner normally does not require proof of entitlement; rather the patent is granted on the basis of the prima facie claim to entitlement that the applicant provides in the "notice of entitlement" required by reg 3.1(2)."
and I additionally note here the provisions of section 195(1) which have been maintained by the courts in accepting an entry on the Register of Patents as prima facie evidence of entitlement of the original grantee ( see eg. George Stack & Anor v The State of Queensland & Anor [1996] FCA 1 and Stack v Brisbane City Council, supra). Even if Mr Holt's argument were valid, there is nothing before me to suggest that the misstatement of fact by the notice of entitlement arose from an intention on the part of the patentee to deceive or mislead.”
While this statement was made in a decision taking place after grant of a petty patent, I believe such reasoning can be applied here. Non-compliance with the requirements of reg 3.1(2)(a) or the requirements of section 29, or the truth (or otherwise) of what is said in a Notice of Entitlement, are not grounds for opposition. Elot has put forward a prima facie case of entitlement which has not been rebutted by either NSWLC or Jumbo.
Putting that to one side, assuming that such statements can be used to determine entitlement, it would have to be the case that the statements would have to show that someone other than the Elot was entitled. This is not the case here. There are two options given in the Notice. In one, Elot has the invention assigned to them from the inventor. In the second, Elot obtains the invention given the relationship between them and the inventor. Assuming only one of these is correct, whichever one is chosen the result remains the same; Elot gains rightful title to the invention. Neither Jumbo nor NSWLC supplied evidence to throw doubt on this situation.
SECTION 40
Full description
In their written submissions, NSWLC stated that the specification did not adequately disclose how to implement the various modules or how they interacted. They alleged that the person skilled in the art (“PSA”) would have to undertake an unreasonable level of research to implement the invention.
In response, Elot submitted that no expert made any complaint as to the extent of the disclosure and that they fully understood the workings of the invention.
I am inclined to agree with Elot. As noted by Bennett J in Expo-Net Danmark A/S v Buono-Net Australia Pty Ltd (No 2) [2011] FCA 710:
“… the requirement to describe the invention fully must take into account the fact that that description is directed to the person of ordinary skill in the art. That is, by using the word “describe”, s 40(2)(a) does not import a requirement to describe details which would be well-known and understood by the skilled addressee. … Otherwise, a patent would not only of necessity run to substantial length but it would also make it difficult to wade through the morass of unnecessary detail in order to ascertain the invention.”
In my opinion, if anything is missing from the specification, it is the commonly used methods that the PSA would use to implement what is being described. The evidence does not establish that there is something missing that would not have been supplied by the PSA as a matter of course.
Fair basis
While both NSWLC and Jumbo raised a lack of fair basis in their Statements of Grounds and Particulars, only NSWLC made submissions at the hearing. Jumbo did not pursue this any further. NSWLC effectively submitted that:
(i)the claims did not limit the invention to occurring in an electronic network environment; and
(ii)pages 6–7 of the specification required a form of payment before a lottery ticket is issued and, as such a module was missing from the claims, they lacked fair basis.
As to (i), the basis for this statement (according to NSWLC) was that the claims define a system which allowed physically filling in a lottery ticket and submitting it to the governmental lottery administrator by email or fax. Furthermore, NSWLC submitted that a “subscription play unit” included within its scope a physical unit staffed by members arranged to monitor subscription play of lottery games. Given these examples, NSWLC contended that the claims went beyond the scope of what was described.
Elot responded that the invention was broadly described in the body of the specification (as per Societe Des Usines Chimiques Rhone-Poulenc v Commissioner of Patents [1958] HCA 27; (1958) 100 CLR 5) and that there was no obligation to describe every possible permutation that may be dreamt up.
I do not see the problems that NSWLC does. While NSWLC submitted that the claims can “reasonably be read broadly to include other aspects of operating a Government lottery”, to my mind, NSWLC has been unreasonable. It is well established that, while the claims define the invention, they are not read in the abstract. The claims are construed in the context of the specification as a whole (see Sachtler GmbH and Co KG (formerly Sachtler AG) v RE Miller Pty Ltd [2005] FCA 788; (2005) 65 IPR 605 for example). When this is done, terms like “subscription play unit” do not admit the meaning that NSWLC wish to force on them.
As to (ii), while there is certainly mention in the description of some form of payment before a lottery ticket is issued, I think NSWLC has missed the point. Fair basis is “concerned purely with the relationship between the body and claims of the one specification.” (LockwoodSecurity v Doric Products [2004] HCA 58; 217 CLR 274; 212 ALR 1; 79 ALJR 260). In addition, Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd [2001] HCA 8; 207 CLR 1; 177 ALR 460; 75 ALJR 518 noted that fair basis required “a comparison between the matter described in the specification and the claim which defines the scope of the monopoly”, referring to the reasoning of Barwick CJ in Olin Corporation v Super Cartridge Co Pty Ltd [1977] HCA 23; (1994) 180 CLR 236 when he said:
“The question whether the claim is fairly based is not to be resolved ... by considering whether a monopoly in the product would be an undue reward for the disclosure. Rather, the question is a narrow one, namely whether the claim to the product being new, useful, and inventive, that is to say, the claim as expressed, travels beyond the matter disclosed in the specification.”
As noted by Elot, NSWLC appears to have picked out a feature that they believe to be “essential” and noted its absence in the claims. I do not think this is correct. The test is one of consistency, and I do not see an inconsistency.
In my opinion, the claims are fairly based.
Clarity
NSWLC submitted that generic terms in the claims were “somewhat vague”. They exemplified words such as “agent server”, “player information”, “subscription play unit”, “Government Lottery Administrator”, “lottery ticket”, “monitoring” and “subscription play” as being unclear. They also repeated their submission that the claims were not restricted to an electronic implementation and could include a system which allowed physically filling in a lottery ticket and submitting it to the governmental lottery administrator by email or fax and a “subscription play unit” made up of a physical unit staffed by members arranged to monitor subscription play of lottery games.
Elot noted that no expert had suggested such claims were unclear.
It seems to me that NSWLC has gone out of its way to isolate words from the specification and attribute to them a lack of clarity. Even if it could be said that the words, on their own, were unclear, as I have already said, the claims are read in the context of the specification. It appears that NSWLC has not done this. I do not find the terms highlighted by NSWLC to lack clarity.
Jumbo submitted that claim 4 (the omnibus claim) lacked clarity given the use of the relative term “substantially”, the use of “any” in relation to identifying the which figures were referred to and the use of “and/or”.
Elot noted that “substantially”, “any” and “and/or” were used universally in omnibus claims and pointed out that Jumbo had been unconcerned with the words when they used it in their Statement of Grounds and Particulars when they had said:
“D1 discloses a system according to any one of claims 1 to 3, substantially as described with reference to any of the figures and/or examples”
In addition, Jumbo’s expert had no problems with the terms.
I agree with Elot. I cannot see how the terms lack clarity. This is not just because they are terms that are commonly used in omnibus claims (which is true). The terms by themselves are clear. While “substantially” is a relative term, it is not forbidden to use a relative term in a claim, in an appropriate context, where it conveys the necessary meaning (see Leonardis, Nicola v Sartas No 1 Pty Ltd & Anor [1996] FCA 449 for example). In the context of their use, “substantially”, “any” and “and/or” are clear.
NOVELTY
A claimed invention is deprived of novelty if it has been given to the public before the priority date, either by prior use of a product or process, or by publication of information that equates to the claimed invention (Justice Bennett in Danisco A/S v Novozymes A/S (No 2) [2011] FCA 282; (2011) 91 IPR 209). It is well established that the basic test for anticipation and lack of novelty is the “reverse infringement” test – see General Tire & Rubber Co. v Firestone Tyre & Rubber Co. Limited [1972] RPC 457 and Meyers Taylor Pty. Ltd. v Vicarr Industries Ltd. [1977] HCA 19; (1977) 137 CLR 228 at 235. In applying this test I must ascertain whether each and every one of the essential features of the claimed invention is provided by the prior disclosure (Rodi and Wienenberger AG v Henry Showell Ltd. [1969] RPC 367, Flour Oxidising Co. Ltd. v Carr & Co. Ltd. (1908) 25 RPC 428).
In Apotex Pty Ltd v Sanofi-Aventis [2009] FCAFC 134, Bennett and Middleton JJ observed, while discussing the decision in H Lundbeck A/S v Alphapharm Pty Ltd [2009] FCAFC 70:
“From the consideration in Lundbeck, the following is apposite to the consideration of anticipation by the prior art patents in this case:
· Where the prior publication discloses exactly what is claimed, there is anticipation (Lundbeck at [180]).
· There is anticipation if the skilled addressee would add missing information to what is disclosed in the prior art as a matter of course and without the application of inventive ingenuity or undue experimentation (at [181]). A disclosure is sufficient if it enables the skilled addressee, in the ordinary course and without invention, to add what is missing in the prior publication to obtain the claimed invention (at [183]).
· If the prior art discloses the very subject matter of the invention, the person skilled in the art is assumed to be willing to make trial and error experiments to get it to work (at [189]). If the disclosure is of an invention which, if performed, would infringe the patent, there is anticipation.
· The question is whether the disclosure is sufficient to enable the skilled addressee to perceive, understand and, where appropriate, apply the prior disclosure necessarily, but within the ordinary limits of trial and error, to obtain the invention (at [190]).”
Claim features
In the claims in suit I do not think there is any doubt that every feature is essential. A feature is essential if the applicant for the patent has made it an essential feature by the terms of the claim, properly construed (Catnic Components v Hill and Smith Ltd [1982] RPC 183), and this seems to me to be the case here.
Regarding claim 1, it defines:
(1)a system for facilitating governmental lottery play over an electronic network comprising
(2)an agent server connected via said electronic network
(3)for receiving player and ticket information transmitted from a plurality of player terminals
(4)for transmitting said ticket information to a governmental lottery administrator, and
(5)for receiving serial numbers issued by said governmental lottery administrator in association with each lottery ticket
(6)a database in said agent server for storing said player and ticket information and said serial numbers associated with each lottery ticket
(7)a subscription play unit for monitoring subscription play of the same lottery numbers for a specified number of draws.
Novelty in Light of Documents
In their Statement of Grounds and Particulars, Jumbo raised 3 patent documents in relation to lack of novelty. They were:
US 6024641;
US 6146272; and
AU 2001245780.Jumbo also raised as a novelty citation in their Statement the website:
the hearing, Jumbo did not rely on all of these citations. Instead they submitted that there was a lack of novelty on the basis of US 6024641 and US 6146272 only.
NSWLC, in their Statement of Grounds and Particulars, raised 8 documents in relation to lack of novelty. They were:
US 2001/0031661
US 6277026
US 5823877
US 4922522
US 6146272
US 4815741
US 2001/0003100
US 5954582NSWLC, in their written submissions, provided a novelty table detailing the claim features and the parts of the documents which disclosed those features.
I will now discuss the documents discussed in submissions at the hearing.
US 6024641 (US’641)
US’641 relates to a system for enabling the playing of games (including lotto-type games) over the Internet. It discloses a plurality of player terminals connected to what could be termed an agent server. Player and ticket information, such as numbers selected for the game, are received by the agent server. The information from the player terminals also includes an indication of the amount of time that the player wants the selected numbers to be played. I believe this is equivalent to the “subscription play information” defined in the claims.
However, in my opinion, US’641 does not disclose a governmental lottery administrator. As such claim 1 (and, as a consequence the dependent claims) is novel. While Mr Morrison states that US’641 discloses “a governmental lottery administrator 12”, the item labelled “12” in US’641 is never categorised as a governmental lottery administrator and is never associated with a governmental department or authority. Mr Morrison appears to have added information that is not there.
I conclude that the opposed claims are novel in view of US’641.
US 6146272 (US’272)
Both Jumbo and NSWLC raised this document as a novelty-destroying citation.
US’272 relates to a conditional lottery ticket system in which a player selects numbers to play in a government lottery, but the lottery tickets are not “activated” until certain conditions that the player sets are met. For example, the player may set a condition that their ticket not be activated until the jackpot reaches a certain amount. The system comprises a lottery terminal connected via an electronic network to a central lottery server. A player enters information at the lottery terminal which is then sent to the central lottery server which stores the player information and issues a ticket. US’272 clearly notes that conditional lottery tickets could be purchased “on a perpetual subscription basis”.
Jumbo’s expert, Mr Morrison, clearly states in his evidence that US’272 “does not disclose an agent server located between player terminals 300 and governmental lottery administrator 400.” Having read US’272, I agree with this conclusion.
However, and in contrast, NSWLC’s expert, Mr Morris, states that US’272 does disclose an agent server. However, I note in his evidence Mr Morris indicates that US’272 discloses “an agent server … (see Figure 9A, Numeral 905)” and “a Governmental Lottery Authority (see Figure 9A, Numeral 905)”. Thus, Mr Morris had used the same element in US’272 to represent two different modules. There is nothing to indicate that this is what was intended by the author of US’272.
Finally (and unusually), Dr Postma (for Jumbo) in his submissions stated that he disagreed with the position his expert (Mr Morrison) had taken. In Dr Postma’s view the use of the word “central” clearly put the “central lottery server” between two modules–one being the lottery terminal and the other being something unnamed and not shown. Thus, taking the lottery terminal to be the player terminal and the central lottery server to be the agent server, the central lottery server must, in Dr Postma’s view, be connected to a governmental lottery server. Dr Postma is incorrect. It is clear that the use of “central” in US’272 is placing the central lottery terminal at the centre of a number of lottery terminals; in a manner akin to the hub of a spoked cart wheel. That is, the “central lottery server” of US’272 is equivalent to the governmental lottery administrator of the claims.
It follows that I believe that the opposed claims are novel in view of US’272.
US 2001/0031661 (US’661)
US’661 relates to a lottery pooling management system which allows players to join lottery pools. The players communicate with the system over the Internet and the system appears to store their information. However, despite the claims of NSWLC’s expert, I cannot see any disclosure of a governmental lottery administrator (although there are references to government lotteries in the document), issuing serial numbers, storing serial numbers and a subscription play unit. I note that, in relation to the subscription play unit, Mr Morris states that the “notification interface … which has the ability to notify a customer of changes in the bet status … is akin to a subscription play feature”. While there is a notification interface described, I can find no disclosure of it notifying customers of bet status updates. I also cannot see how notifying customers of bet status updates equates to a subscription play feature.
I believe that the opposed claims are novel in view of US’661.
US 6277026 (US’026)
US’026 relates to a system which facilitates the sale of lottery tickets over electronic networks in which users communicate with a lottery service provider (“LSP”) via the Internet. The lottery service provider is coupled to lottery commission systems. The users send their information to the LSP so that they can purchase a lottery ticket. Once a ticket has been purchased, the LSP generates a secure lottery ticket purchase code. It also generates (and stores) a lottery ticket purchase record including the code, numbers chosen and user details. The LSP also sends a copy of the lottery ticket purchase record to the lottery commission system. The lottery commission system, having received a valid message, will send the LSP a confirmation which is stored in the lottery ticket purchase record in the LSP. The LSP then sends the secure lottery ticket purchase code to the user.
Contrary to NSWLC’s submissions there is no disclosure of serial numbers being issued by the lottery commission. While NSWLC highlighted the confirmation received from the commission, I see no evidence of a serial number or that, in this art, a “confirmation” is synonymous with “serial number”. To my mind they are not the same thing. A “confirmation” is simply a message indicating that a message (or data) has been successfully received. It does not necessarily have any relationship with the serial number that is associated with a ticket. I also note that Mr Morris made no comment on this point in his evidence.
NSWLC also submitted that US’026 disclosed a subscription play unit. Their position was based on Mr Morris’s evidence where he stated:
“… the central concept behind the system [of US’026] is “account selling” of lottery style products over the Internet. … the concept of account selling is a form of subscription play, as it allows a set of transactions to be monitored and executed”
However, as admitted by Mr Morris:
“Account selling is the concept that an account must be established by a user before the user can sell or redeem prizes in a lottery style game”
Given this position, I find it difficult to align the concept of “account selling” with “subscription play” as Mr Morris says they should be. While the presence of an account may very well allow “a set of transactions to be monitored and executed”, this is a long way from saying that this must be subscription play. Noting General Tire & Rubber Co. v Firestone Tyre & Rubber Co. Limited (supra), I cannot see a clear and unmistakable disclosure of subscription play in the system of US’026.
I believe that the opposed claims are novel in view of US’026.
US 5823877 (US’877)
US’877 relates to a system allowing the purchase of lottery tickets using the telephone network. The player enters lottery information using the touch tones of their phone. This information, which can be user ID, the lottery to be played, the amounted wagered, the numbers selected, etc, is stored in the system. Contrary to Elot’s submissions, in my opinion column 10 lines 8–16 of US’877 clearly disclose that this information can be sent by the system to the state lottery computer which returns a confirmation number. While it also true (as Elot noted) that this same passage says that the ticket or confirmation number could be generated by the system if it is not connected to the state lottery computer, that information does not negate the other disclosure.
However, as with US’026, there is no disclosure (and no further evidence) that the confirmation number returned from the state lottery computer is a serial number.
In addition, there is no disclosure of a subscription play unit. Indeed, Mr Morris explicitly states that one is not present.
I believe that the opposed claims are novel in view of US’877.
US 4922522 (US’522)
US’522 is similar to US’877 in that it relates to a system allowing the purchase of lottery tickets using the telephone network. Information entered using the touch tones of a phone is stored in a database of a “lottery switch” (which I believe can be equated to the agent server of the claims) and is also transmitted to a centralised lottery database (which I believe can be equated to the government lottery administrator of the claims). The system of US’522 also allows subscription play information to be entered so that, at the start of every lottery period the lottery entry is sent from the lottery switch to the centralised lottery database.
However, there is no disclosure of a serial number being sent from the centralised lottery database for storage at the lottery switch. Moreover, as noted by Elot, the claims require the agent server to communicate with both the player terminals and the government lottery administrator over the same electronic network. It is debateable whether US’522 discloses such a features since the phones (i.e. the player terminals) communicate with the lottery switch via the public switched telephone network, while the lottery switch communicates with the centralised lottery database via a data link which is shown in US’522 as being separate from the telephone network.
I believe that the opposed claims are novel in view of US’522.
US 4815741 (US’741)
US’741 is directed to a system in which a user of an ATM or EFTPOS machine can win a sweepstakes game. In the most relevant embodiment disclosed, a lottery ticket is purchased using either the bank’s or the user’s funds when the user utilises the ATM/POS machine. To purchase the ticket, money is transferred from an account maintained by the bank or the user to another account maintained by the state lottery commissioner. There is a disclosure in US’741 of issuance and recording of verification or confirmation numbers by the state lottery, but there is nothing to indicate whether these are serial numbers associated with lottery tickets. As noted already, the evidence does not address this point.
In any event, as noted by Mr Morris, there is no disclosure of subscription play in US’741 and, therefore, no subscription play unit.
The claims do not lack novelty in light of US’741
US 2001/0003100 (US’100)
US’100 describes a similar system to US’522 in which a player can enter lottery games using a PC, a lottery terminal or a telephone.
It is difficult to see how US’100 discloses the invention claimed. PCs, lottery terminals and telephones are clearly presented as player terminals. These are connected to web servers, LANs, firewalls and other servers which are located in what is called a “central server”. This server might be equivalent to the agent server of the claims. It is also clear that a governmental lottery administrator (called a “state lottery computer” in US’100) can be accessed, but the extent to which it is involved is unclear. US’100 merely has the following to say:
“A firewall computer 210 limits access to central server 212 and may be used to access a state lottery computer 232 or other remote gaming system.”
“Agent 230 may also assist in the administration of kiosk 204 and act as an interface to state lottery computer 232.”
“Players may participate in a lottery game, either a state sponsored game as accessed through a lottery computer 232 (FIG. 15) or a non-state sponsored lottery game.”
“9.The remotely accessed lottery system as recited in claim 1, wherein the central station further comprises means for accessing a state sponsored lottery computer for providing state sponsored lottery games to players.”
What is transmitted to and from this administrator is never described.
In addition, unlike Mr Morris, I cannot see a subscription play unit. Mr Morris states that US’100 does disclose subscription play and refers to claim 21 for support of his position. Claim 21 states:
“21.The method as recited in claim 18, further comprises the step of accessing the central station by inserting a card into the input device, the card including personal information, account balance information and statistical information about the player.”
I do not see how this is describing subscription play. It is clear from the specification that subscription play involves a player selecting a set of numbers that will be repeatedly played in a number of lottery draws (which may or may not be consecutive). This is not what claim 21 of US’100 is defining.
I cannot see a clear and unmistakeable teaching of claim 1. It follows that the claims are novel in light if US’100.
US 5954582 (US’582)
US’582 seems to be the furthest from the claimed invention of all of NSWLC’s citations. It discloses a gaming system in which “terminals” are provided with an algorithm from a “host computer”. In addition, data called a “seed number” is then sent from the host computer to each terminal. Different terminals received different seeds numbers.
Importantly, US’582 then says:
“Once transmission 110 is completed, agent terminals are self-sufficient and will generally operate in an off-line mode through steps 112-118, which describe the sale of each individual play.”
These “individual plays” involve each terminal asking a player for a wager, generating pseudo-random wager numbers using the algorithm and seed number the terminal has received. Crucially, US’582 says:
“Each sequential play will be assigned the next pseudo-random wager number in the sequence, and a sequential serial number will also be assigned to the play in step 116.”
As such it is clear that the serial numbers are not received from a governmental lottery administrator.
In addition, as noted by Mr Morris, US’582 does not disclose storing player and ticket information, as well as subscription play. Furthermore, I cannot see any disclosure of player terminals. To my mind the “terminals” of US’582 are more like the “agent servers” of the claims (with the “host computer” being the governmental lottery administrator). Alternatively, if the “terminals” are analogous to the governmental lottery administrator, then there is no agent server or player terminal.
The claims are clearly novel over US’582.
Novelty in Light of Prior Use
As well asserting a lack of novelty in light of the above documents, Jumbo asserted a lack of novelty in light of what was known as the “TMS system” (hereafter “TMS”) which had been described in the declarations of its expert, Mr Morrison. As noted by Elot, Jumbo appeared to be asserting a lack of novelty in light of the prior use of the TMS. Jumbo also referred to a modification to the TMS known as the Wizard System. They contended that this also anticipated the claims.
In a similar way, NSWLC seemed to also be asserting a lack of novelty in light of prior use of what Mr Morris called in his evidence the “First Generation System” (hereafter “FGS”) and the “Second Generation System” (hereafter “SGS”) installed by NSW Lotteries.
There is no mention of the TMS/Wizard System, the FGS, or the SGS in the particulars listed under Novelty in the Statements made by Jumbo and NSWLC. Furthermore, no lack of novelty via prior use was particularised by either Jumbo or NSWLC. In the normal course of events I am within my rights not to entertain any argument on prior use in this opposition. The Statement of Grounds and Particulars necessarily constrains the scope of the opposition and it does not contain this particular. However, given that Elot has taken the time to make submissions in relation to the TMS/Wizard system, the FGS and the SGS, I will consider whether these prior uses anticipate the claims.
Discussion
TMS/Wizard System
Taking the prior use relied upon by Jumbo, according to Mr Morrison the TMS (developed in 1992) allowed customers to buy lottery tickets in remote regions such as Norfolk Island, the Cook Islands and Fiji. The details of these tickets were then sent to the lottery provider Tattersalls in Australia. Mr Morrison further declares that the TMS system was also linked at a later date (in “about 1997”) to the NSW Lotteries systems. Mr Morrison also declares that a TMS Lottery website was set up “in the late 1990’s” for selling lottery tickets. Orders were apparently sold through this website via emails.
Mr Morrison then gives evidence that, in 2000, the “Wizard System” was developed for the TMS (but not apparently by Mr Morrison). This system supposedly reduced the number of manual steps involved with credit card sales from the TMS Lottery website. The Wizard System apparently took information from the usual email that arrived once a customer decided to make a purchase on the TMS website.
As noted by Elot, it is very unclear how the TMS operated and whether it discloses all the features of the claims. It appears that an email was received with a customer’s purchase order and then some manual processing occurred with some information sent to Australia. The information was then sent to Tattersalls/NSW Lotteries. With the creation of the Wizard system, credit card details were parsed out of the email that was received and then the remaining information was sent to the TMS for the processing that had occurred previously in the normal course of events so that it could be sent to Australia and Tattersalls/NSW Lotteries.
I am unsure whether there is an “agent server” in the TMS that has the features as claimed. It appears from Mr Morrison’s CV (where he discusses the form of the TMS) that the TMS did not receive player and ticket information from a plurality of player terminals. Instead it appears to rely on receiving emails from a website. This does not seem to be the same thing as what is claimed. Rather it is analogous to the terminals often seen in newsagents where members of the public can purchase tickets.
It is also unclear whether the TMS/Wizard system had a subscription play unit “for monitoring subscription play of the same lottery numbers for a specified number of draws”. While Mr Morrison points to the “database schema” of the Wizard system and notes that it includes a field labelled “product_duration”, the lack of detail in the evidence makes it hard to say whether this is the same thing. Mr Morrison refers to “VIP members” being given a 52 week lottery ticket. He states that, for this ticket, “the same numbers were processed on a weekly basis over that time”. While this is certainly describing subscription play, the existence of a “unit” is doubtful, given the apparently high level of manual processing that occurred in the TMS workflow. It is also just as likely that subscription play involved a TMS staff member manually resubmitting the same numbers each week. I do not think this is what is being claimed. As noted in Insta Image Pty Ltd v KD Kanopy Australasia Pty Ltd [2008] FCAFC 139:
“…information said to destroy novelty must be of a kind that would disclose to a person skilled in the relevant art all of the essential features or integers of the invention (cf RD Werner & Co Inc v Bailey Aluminium Products Pty Ltd (1989) 25 FCR 565 at 593–594). … information said to destroy novelty must "enable" the notional person skilled in the art at once to perceive, to understand, and to be able practically to apply the discovery, without the need to carry out further experiments in order to arrive at that point (Stanway Oyster at 581–582).”
I have no further evidence as what other people skilled in the art took to be the features of the TMS. Even Mr Morris in his evidence, while acknowledging the existence of TMS, does not go into the detail of the TMS. This is unsurprising as it is clear that he only ever saw it from the “outside”.
However, even if it was the case that the TMS did have all the features of the claims, there is a great deal of doubt whether the TMS was “disclosed” in the sense required by the Patents Act.
It is well established in the case law that disclosure occurs if information is communicated to one member of the public with no fetter on what that member may do with the information. On this point Insta Image (supra) said:
“The information must have been made available to at least one member of the public who, in that capacity, was free, in law and equity, to make use of it (PLG Research Ltd v Ardon International Ltd [1993] FSR 197 at 226 per Aldous J cited in Jupiters at [141]). … Availability to one or two people as members of the public is sufficient in the absence of any associated obligation of confidentiality (Fomento Industrial S.A. v Mentmore Manufacturing Co Ltd [1956] RPC 87 at 99–100; Re Bristol-Myers Co’s Application [1969] RPC 146 at 155 per Parker LJ).”
This is a problem in this case. During the course of the hearing I sought to ascertain when the full details of the TMS were made available without any inhibiting fetter. The position seemed to be that as Mr Morrison, the developer of TMS (or at least part of the team that developed it), had no obligations on him to keep the information confidential, it had been disclosed “to at least one member of the public who, in that capacity, was free, in law and equity, to make use of it” (to quote Insta Image (supra)). I do not think this position is correct. If it were then no invention could ever be granted since the inventor would disclose it to himself every time.
There was also the suggestion that the details of the Wizard system being communicated to Mr Morrison was also enough to disclose the features of the claims. Again, I do not think this is a disclosure. As noted by Mr Morrison, the Wizard System was developed by TMS (in this case he was clearly referring to “TMS” as the entity associated with the TMS system). There is no doubt that it would have been known “internally” within TMS, but I do not hold this to be a disclosure to a “member of the public”. The details of the Wizard System being known within TMS is, again, akin to the inventor knowing what he is developing. It is not what could be called an “external” disclosure. Therefore, it cannot be used to anticipate the claims.
Jumbo has not established that the claims lack novelty in light of the TMS/Wizard system.
FGS/SGS
Regarding the prior use relied upon by NSWLC, according to Mr Morris the FGS had a “back end” (called the “central lotteries server”) operated by a governmental lottery administrator (which I assume was NSW Lotteries). The system also had a “front end” which communicated with terminals installed around NSW. Mr Morris also mentions the TMS, but only to liken it to the other terminals installed around NSW. It is difficult to see in this arrangement either an “agent server” or a “player terminal” as required by the claims. Assuming the terminals installed around NSW to be the player terminals, then the “front end” must be the agent server. However, it is clear that the “front end” cannot perform the functions required of the agent serve of the claims. Little, if any, detail is given about the “front end”. Alternatively, if the terminals installed around NSW are considered to be the agent servers, then there are no player terminals.
Not much more information is supplied by Mr Morris in respect of the SGS. He mentions that in the mid to late 1990’s vendors such as ITS and GTECH developed second generation lottery systems which were aimed at improving interactions with a new terminal and providing new “back end” applications to produce more sophisticated statistical reports. Mr Morris also mentions that GTECH offered an “online” module which allowed “lottery players to interact with the lottery system via the Internet”.
However, none of this shows a disclosure of a system falling within the claims. It is far too general. While this is not surprising given that the matters to which the evidence refers has to have occurred at least 10 years ago to have happened before the earliest priority date, it is not enough to anticipate the claims.
In my opinion, NSWLC has not established that claims lack novelty in light of both the FGS and the SGS.
INVENTIVE STEP
The Law
Section 7 of the Patent Act 1990 provides that
“(2) For the purpose of this Act, an invention is to be taken to involve an inventive step when compared with the prior art base unless the invention would have been obvious to a person skilled in the relevant art in the light of the common general knowledge as it existed in the patent area before the priority date of the relevant claim, whether that knowledge is considered separately or together with the information mentioned in subsection (3).
(3) The information for the purposes of subsection (2) is:
(a)any single piece of prior art information; or
(b)a combination of any 2 or more pieces of prior art information; being information that the skilled person mentioned in subsection (2) could, before the priority date of the relevant claim, be reasonably expected to have ascertained, understood, regarded as relevant and, in the case of information mentioned in paragraph (b), combined as mentioned in that paragraph.”
The High Court in Aktiebolaget Hassle v Alphapharm Pty Ltd [2002] HCA 59 confirmed that “obvious” means “very plain” as stated by the English Court of Appeal in The General Tire & Rubber Company v The Firestone Tyre and Rubber Company Ltd where it was said:
“‘Obvious’ is, after all, a much-used word and it does not seem to [us] that there is any need to go beyond the primary dictionary meaning of ‘very plain’.”
There are a number of approaches which the courts have used to assess inventive step. In Wellcome Foundation Ltd v VR Laboratories (Aust) Pty Ltd (1981) 148 CLR 262 at 286, Aickin J stated:
“The test is whether the hypothetical addressee 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, whether they be the steps of the inventor or not.”
More recently, the High Court in Aktiebolaget Hassle (supra) referred with approval to this approach and further held:
“That way of approaching the matter has an affinity with the reformulation of the ‘Cripps question’ by Graham J in Olin Mathieson Chemical Corporation v Biorex Laboratories Ltd (1970) RPC 157. This court had been referred to Olin in the argument in Wellcome Foundation. Graham J had posed the question:
‘Would the notional research group at the relevant date in all the circumstances which includes a knowledge of all the relevant prior art and of the facts of the nature and success of [compound], directly be led as a matter of course to try [the claimed invention] in the expectation that it might well produce [the desired result]?’
That approach should be accepted.”
Problem to be solved
I note in the specification, the following passage:
“Thus, the system and the method for operating on-line state lottery games according to the present invention provides the lottery players with not only convenient and readily accessible lottery play but also more reliable security on the information for playing the state lottery games. Therefore, the present invention may facilitate lottery games so as to encourage patrons to play lottery games more frequently”
On the face of it this statement appears to provide the advantages of the invention. In my opinion, such a statement can be used to formulate the problem that the invention set out to solve. With that in mind, it appears that the problem to be solved was to develop a system that provided convenient and accessible lottery play with reliable security so that patrons to played lottery games more frequently.
Common general knowledge
A widely accepted definition of common general knowledge is that provided by Aickin J in Minnesota Mining and Manufacturing Company and Another v Beiersdorf (Australia) Limited [1980] HCA 9; 144 CLR 253 at 292:
“The notion of common general knowledge itself involves the use of that which is known or used by those in the relevant trade. It forms the background knowledge and experience which is available to all in the 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.”
The state of the common general knowledge is a question of fact which must, in general, be determined on the basis of evidence from persons whose background enables them to testify authoritatively as to the common general knowledge in the particular art. Indirect evidence such as widespread publication or admissions made in patent specifications may also serve to indicate that something is common general knowledge.
Elot did not submit at any time that Mr. Morrison and Mr. Morris could not be considered persons skilled in the art. In my opinion, it seems clear that Mr. Morrison and Mr. Morris could be considered people skilled in the art. They seem to have extensive experience.
There are a number of specific features that are identified by Mr Morrison and/or Mr Morris as common general knowledge. These have not been disputed by Elot. While there was a discussion at the hearing as to whether unrefuted evidence can be accepted at face value, in the context of this decision nothing turns on that discussion. Therefore, I will accept the features that are identified by Mr Morrison and/or Mr Morris to be common general knowledge. Hence, the common general knowledge can be said to be:
(i)a plurality of selling terminals for selling lottery tickets connected via an electronic network to a central host computer (see Morrison 2 para 20, Morris 1 para 14)
(ii)the central host computer issuing unique serial numbers for tracking lottery tickets (see Morrison 2 para 20, Morris 2 para 53)
(iii)the central host computer containing a database of tickets (see Morrison 2 para 20)
(iv)subscription lottery tickets that allowed a player to play the same lottery numbers in a number of draws (e.g. week after week) (see Morrison 2 para 20 and 21, Morris 2 several paras)
(v)the subscription lottery tickets including information showing when the subscription ticket would expire (see Morrison 2 para 20)
I note that, in his evidence, Mr Morrison draws upon his knowledge of the TMS/Wizard system when illustrating points that he has made. Given my discussion of the TMS/Wizard system in paragraphs 61 to 69 above and its public availability (or lack thereof), I am not convinced that the detail of the TMS/Wizard system was common general knowledge in the art. While people may have been aware of its existence, I am not satisfied that its “inner workings” were known in the art to such an extent that it formed part of the common general knowledge.
Similar reasoning also applies to the FGS and SGS discussed by Mr Morris. I have no doubt that the existence of these systems was known. I am not satisfied that their features form part of the common general knowledge.
Inventive step in light of common general knowledge
Comparing the list of features (i) to (v) above with the claim features (1) to (7) listed in paragraph 31 above, it is obvious that there is no exact correspondence between the two lists. In particular, the list of common general knowledge does not disclose player terminals (feature (3)) and the agent server receiving serial numbers from the government computer and storing them in the agent server (features (5) and (6)). While Mr Morrison talks of the central host computer issuing unique serial numbers for tickets and a database of tickets, he does not state that this information is stored in an agent server (or equivalent structure). Indeed, it appears that this information was stored in the government computer. The evidence does not establish that each feature of the claim 1, when taken individually, was common general knowledge, let alone that it would have been obvious to combine each feature in the manner claimed.
I cannot conclude that the claims lack an inventive step in light of common general knowledge alone.
Inventive Step in Light of Prior Art Information + Common General Knowledge
As noted in s7(3), it is permissible to combine common general knowledge with pieces of prior art information if that information could be reasonably expected to have been ascertained, understood, regarded as relevant. With respect to this point, when discussing the citations raised by Jumbo, Mr Morrison stated in his evidence:
“… a skilled person in the technical field could, before the priority date, be reasonably expected to have ascertained, understood and regarded as relevant the TMS System, US 6,024,641, US 6,146,272 and AU 2001245780. Elaborating further, the TMS system was publicly operating in Australia before the priority date. Additionally, the skilled person in the technical field would have sophisticated keyword searching skills for searching the Internet and locating relevant patent literature”
Elot attacked this statement as being a “bald contention”. They submitted that there were significant omissions from Mr Morrison’s evidence. Specifically:
(a)he did not state that he routinely searched patents (as a person skilled in the art);
(b)he did not explain how he could be reasonably expected to have ascertained any of the three patents he mentions; and
(c)he did not explain what motivation he would have had to look at the TMS system or the three patents to devise the claimed invention.
Elot have chosen not to serve evidence that refutes the statements of Mr Morrison. Noting once more that nothing turns on this fact for this decision, I will take them at face value. As such, for this decision I will accept that persons skilled in this art have sophisticated keyword searching skills for searching the Internet and that they can locate patent literature. Taking the question of whether the person skilled in this art could have ascertained patent literature when faced with the problem, while Mr Morrison did not explicitly state that he routinely searched patents, he does say that a person skilled in the art could, before the priority date, be reasonably expected to have ascertained, understood and regarded as relevant the TMS System, US 6,024,641, US 6,146,272 and AU 2001245780. This points to a practice by persons skilled in this art of searching patents. In addition, I note the large number of patents owned by “gaming companies”. Given this, to my mind it would be inconceivable that persons skilled in an art which produces an enormous number of patents would be completely ignorant of their existence when searching for solutions to problems. On balance, I believe that people skilled in this art would routinely search patents.
However, regardless of whether I decide that patents are not searched or are searched, the outcome is the same.
Inventive step – Novelty citations
As is clear from the discussion for novelty, the citations raised by both Jumbo and NSWLC did not disclose all the features. Noting the list of seven (7) features for claim 1, the citations did not disclose the following features
Citation Features missing
US’641 4, 5, 6
US’272 2, 3, 4, 5, 6
US’661 4, 5, 6, 7
US’026 5, 6, 7
US’877 5, 6, 7
US’522 5, 6
US’741 5, 6, 7
US’100 4, 5, 6, 7
US’582 3, 4, 5, 6, 7
TMS/Wizard 2, 3, 4, 5, 6, 7
FGS/SGS 2, 3, 4, 5, 6It is clear from this list that none of the citations disclose features (5) and (6), which are:
(a)receiving serial numbers issued by said governmental lottery administrator in association with each lottery ticket
(b)a database in said agent server for storing said player and ticket information and said serial numbers associated with each lottery ticket
It is also clear that, while it is common general knowledge that serial numbers are issued with each government lottery ticket and that ticket details are stored, what has not been established by the evidence to be common general knowledge is the transmission of those serial numbers to the agent server and storing those numbers along with ticket information in the agent server. It would appear that the common general knowledge was for this information to be stored on the government’s server (see Morrison 2 para 19). As such, taking the novelty citations as having been ascertained, understood and regarded as relevant in light of the problem discussed above, I cannot see why the person skilled in the art would have then moved to alter the systems disclosed to include a feature that was not (on the evidence supplied) part of the common general knowledge and which the common general knowledge taught away from.
It follows that the claims do not lack an inventive step in light of these citations.
Inventive step – AU 2001245780 (AU’780)
In addition to citations referred to above, Jumbo submitted that the claims lacked an inventive step in light of AU’780 when combined with common general knowledge. I do not agree.
AU’780 (which belongs to Elot) discloses a system allowing the playing of games (including governmental lottery games) over an electronic network (the Internet). The principal object of the system is to verify the location of the players so that the conditions that are required to be met in the player’s location to participate in such games apply.
The system includes player terminals which communicate with an agent server. As part of the process of connecting to the agent server via the Internet, the player’s telephone service provider generates automatic number identification (ANI) information which is unique to the location of the player’s terminal. This ANI information is supplied to the player’s internet service provider (ISP) which generates caller identification (ID) information which includes the ANI information associated with the player. When the player connects through to the agent server, this caller ID information is provided to the agent server. With this caller ID information, the agent server verifies that the player meets certain criteria for playing on-line lottery games by comparing the sets of data. The criteria are provided to the agent server by a governmental lottery administrator and can be stored on the agent server. The criteria to be checked might be the minimum age of lottery players, what lotteries can be played within the state where the player is located and so on. Having been verified, the player is permitted to participate in the various on-line games being offered and/or to purchase lottery tickets.
However, in common with all the citations discussed above, AU’780 does not disclose features (5) and (6) of claim 1. Therefore, for the same reasons as discussed above, claim 1 does not lack an inventive step.
It follows that the claims do not lack an inventive step in light of this citation.
UTILITY
Lack of utility is established when a claim includes subject matter that will not produce the desired result (H Lundbeck A/S v Alphapharm Pty Ltd [2009] FCAFC 70; (2009) 81 IPR 228).
NSWLC submitted that the invention defined by the claims lacked utility because they defined an invention that couldn’t function. Their particular submission was that the claims defined discrete components that did not appear to communicate with each other to produce a useful result.
Elot submitted that a distinction had to be drawn between circumstances where the claimed invention was not useful unless an additional integer had to be added and those where the missing information can be (on a proper construction of the claim) left to the PSA to supply.
A reading of the claims makes it clear that NSWLC’s position cannot stand. The claims clearly connect the agent server to the player terminals and the governmental lottery administrator. While the subscription play unit is not stated explicitly to be connected to the agent server, given the requirement to pass subscription play information to the agent server, it is clear that a connection exists here.
Furthermore, as noted by Elot, NSWLC has supplied no evidence to show that what is claimed could not work without the addition of integers that the PSA would not supply as a matter of course.
NSWLC has not shown that the claimed invention lacks utility.
MANNER OF MANUFACTURE
In my opinion, the key issue in this opposition related to the ground of Manner of Manufacture. Both NSWLC and Jumbo submitted that the claimed invention was not for a manner of manufacture. Their submissions were on two points:
(i)that the claimed invention lacked the necessary quality of inventiveness on the face of the specification (“threshold of inventiveness”); and
(ii)the claims were directed to a non-patentable method and the implementation via a computer did not make it a manner of manufacture as the computer was incidental to the method (“no physical effect or transformation”).
Threshold of inventiveness
Under this heading, both Jumbo and NSWLC pointed to reasoning in NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd [1995] HCA 15, (1995) 183 CLR 655.
Jumbo made note of statements made by Mr Morrison in his second declaration where he said:
“… on face value, the combination of features, claimed in claim 1 to 3 of AU 2007221934 were not new prior to the priority date.”
and
“… on face value, the invention described in AU 2007221934 was not new prior to the priority date.”
NSWLC submitted that Claims 1–4 defined nothing more than the use of known techniques to facilitate “Government Lottery Play” over an electronic network.
Elot countered that these submissions did not address the patentability of a combination patent and that they depended entirely on the contention that each feature, being (allegedly) known in the art, when combined as claimed would not constitute a patentable invention.
The submission of NSWLC and Jumbo must fail. The High Court in Philips v Mirabella (supra) stated that manner of manufacture can be a threshold question:
“if it is apparent on the face of the specification that the quality of inventiveness necessary for there to be a proper subject of letters patent under the Statute of Monopolies is absent, one need go no further”
In Bristol-Myers Squibb Co v FH Faulding & Co Ltd [2000] FCA 316, the majority summarised the effect of the Philips case as follows:
“Philips stands for the proposition (as a matter of construction of the 1990 Act) that if, on the basis of what was known, as revealed on the face of the specification, the invention claimed was obvious or did not involve an inventive step - that is, would be obvious to the hypothetical non- inventive and unimaginative skilled worker in the field (Minnesota at CLR 260 per Barwick CJ) - then the threshold requirement of inventiveness is not met.”
As I understand this statement, the assessment of whether the invention passes the threshold of inventiveness is done in light of the prior knowledge (which can be considered to be the “common general knowledge”) as revealed by the specification.
No prior knowledge is described in the specification. As such, on the face of the specification alone, I cannot find any lack of inventiveness. The application thus passes the “threshold of inventiveness” test as developed in the above cases.
No physical effect or transformation
In addition to the above argument, NSWLC and Jumbo also submitted that the claims were not directed to a manner of manufacture as they were directed to a non-patentable method and the implementation via a computer did not make it a manner of manufacture as the computer was incidental to the method (following the decisions in Invention Pathways Pty Ltd [2010] APO 10, Iowa Lottery [2010] APO 25 and Research Affiliates, LLC [2010] APO 31).
Elot submitted that the features of the invention as claimed interacted and inter-related so as to produce a new and useful effect – namely a system for operating on-line state lottery games. Elot also submitted that the Commissioner has held on many occasions that the interaction of features in “gaming” cases satisfies the requirement of manner of manufacture. Given the similarities of these cases with the present application, manner of manufacture must also be satisfied.
While taking note of Elot’s submission that there have been previous decisions of the Commissioner in “gaming” cases, I have to decide the question of manner of manufacture that has been put before me in this opposition.
As noted by the delegate in Invention Pathways Pty Ltd, subsection 18(1)(a) of the Act provides that an invention is a patentable invention if, so far as claimed in any claim, it “is a manner of manufacture within the meaning of section 6 of the Statute of Monopolies”. The High Court in National Research and Development Corporation v Commissioner of Patents [1959] 102 CLR 252 has provided a definitive statement of the law in this regard which has been summarised as a requirement for “a mode or manner of achieving an end result which is an artificially created state of affairs of utility in the fields of economic endeavour” (CCOM Pty Ltd v Jiejing [1994] FCA 1168).
The NRDC (supra) decision has since been applied in numerous cases that have tested the distinction between the useful arts and the fine arts. In Grant vCommissioner of Patents [2006] FCAFC 120 the Court found that a method of protecting an asset including steps of establishing a trust, making a gift to the trust, making a loan from the trust and securing the loan was not a manner of manufacture. Its conclusion the Court stated:
“Whether the method is properly the subject of letters patent is assessed by applying the principles that have been developed for determining whether a method is a manner of manufacture, irrespective of the area of activity in which the method is to be applied. It has long been accepted that "intellectual information", a mathematical algorithm, mere working directions and a scheme without effect are not patentable. This claim is "intellectual information", mere working directions and a scheme. It is necessary that there be some "useful product", some physical phenomenon or effect resulting from the working of a method for it to be properly the subject of letters patent. That is missing in this case.”
In Network Solutions, LLC [2011] APO 65, the delegate discussed a recent decision in the United States in CyberSource Corporation v. Retail Decisions, Inc., No. 2009-1358 (Fed. Cir. August 16, 2011). He noted that that decision stated:
“As we stated in Bilski, to impart patent-eligibility to an otherwise unpatentable process under the theory that the process is linked to a machine, the use of the machine ‘must impose meaningful limits on the claim’s scope.” 545 F.3d at 961. In other words, the machine “must play a significant part in permitting the claimed method to be performed.” SiRF Tech., Inc. v. Int’l Trade Comm’n, 601 F.3d 1319, 1333 (Fed. Cir. 2010).”
The delegate then noted:
“The commonality in approach with the US in relation to abstract ideas has been noted by Australian Courts (eg Grant at [21]-[24]) and, to the extent that a rule of materiality may not have been explicitly expressed in Australia, I nevertheless consider it to be an inherent requirement of the law which otherwise would elevate form over substance to the point of absurdity. It arises in the requirement that a patentable invention “must be one that offers some advantage which is material, in the sense that the process belongs to a useful art as distinct from a fine art” (NRDC at [22] citing with approval Re Virginia-Carolina Chemical Corporation's Application (1958) RPC 35) or, for example, from the requirement for a “useful effect” as emphasised in International Business Machines Corporation v Commissioner of Patents [1991] FCA 625 at [14].”
To my mind it is the position in Australia that, while “physical effects” might be able to be identified in claims, the consideration must be to ask whether those effects are “material” or, to use the words in CyberSource (supra), whether the effect places a meaningful limit on the claim’s scope.
For the current case, taking claim 1, whatever physical effects are present I do not believe that they impose meaningful limits on the claim’s scope. Claim 1 is essentially directed to lottery playing scheme in which certain particular pieces of information are collected and stored in a database in an environment of purchasing a lottery ticket. While the collection and storage of the particular information mentioned in the claim may not, on the basis of the evidence supplied, have been disclosed previously or considered an obvious thing to do, it is, nevertheless, simply information which is characterised solely by its content. It goes no further than that. Information has never been considered sufficient for patentability unless its presentation provides some material advantage (see for example Re Cooper’s Application for a Patent (1901) 19 RPC 53 and Re Virginia-Carolina Chemical Corporation's Application (1958) RPC 35).
The presence of an agent server and a subscription play unit do not provide the requisite “concrete effect or phenomenon or manifestation or transformation” required by Grant. In this regard I note that in Invention Pathways Pty Ltd the delegate said:
“… it is however clear that the substance of the claimed method is a scheme to encourage the completion of certain commercialisation assessments within a specified period that relates to time limits present in the patent system.”
The delegate also noted:
“… one must consider whether the subject matter of a claim considered as a whole falls within the scope of patentable subject matter and that this cannot be achieved merely by pointing to some physical effect or transformation that, while present in the claimed method, does not alter its fundamental character.
…
… the physical effect identified is in my view peripheral and subordinate to the substance of the claimed method which is a scheme for the commercialisation of inventions.”
It is similar in the present case. The agent server is said to be capable of collecting and storing particular pieces of information. However, whatever “effect” is generated by that collection and storage, it is incidental to the claimed invention. The agent server of the present invention is essentially characterised by the information content of the data it stores. It provides no material advantage to the agent server and, therefore, the agent server does not place a meaningful limit on the claim.
With regard to the subscription play unit, which is said to monitor subscription play of the same lottery numbers for a specified number of draws, I take this to be nothing more than facilitating the play. In Invention Pathways the delegate stated with respect to a checklist which allowed the production of reminders:
“To the extent that this is facilitated by a computer implemented updateable checklist, its utility lies in the information it holds and conveys to a commercialisation agent about the commercialisation steps a) – g) and particularly whether they have been completed within the specified timeframe of 30 months from the earliest priority date.”
This is the case here. The utility of this unit lies in the information that it monitors (i.e. the “subscription play information”). The unit in and of itself does not place a meaningful limit on the claim.
In my opinion, claim 1 of the present application does not define a manner of manufacture.
I consider that this conclusion also applies to claims 2–4. Claim 2 defines the addition of a screening unit. The screening unit has information stored in it and the unit is:
“for verifying that each player satisfies said criteria prior to transmitting said ticket information to said governmental lottery administrator.”
Claim 3 defines the subscription play unit as having:
“means for notifying the player prior to or at the expiration of the specified number of draws that play is to end or has ended”
Claim 4 is simply an omnibus claim.
I do not take the features in these claims as having the necessary “materiality” required of a manner of manufacture. As noted by the delegate in Invention Pathways:
“The authorities make it clear that in many circumstances a method including the processing of information and the production of a substantive effect in or through a computer or peripheral, if novel and not obvious, will result in patentable subject matter.”
I cannot see the “substantive effect” that the units achieve “in or through a computer or peripheral”. Considering that the claims are essentially directed to scheme in which certain particular pieces of information are collected and stored in a database in an environment of purchasing a lottery ticket, the provision of a unit which is capable of notifying a user is (to quote the delegate in Invention Pathways):
“ … merely a matter of convenience and does not result in a substantive effect that can be correctly considered to result in patentable subject matter”
To my mind these claims do not rely on any effect of advantage or utility in the operation of the units at all but constitute general steps in the lottery playing scheme that could as well be carried out with a telephone and a paper notebook (as per Network Solutions, LLC (supra)).
The question that now arises is, despite the generality of claims 1–4, whether they can be amended to include specific operations within the system, such that the claims may embody a substantive “concrete, tangible, physical, or observable effect”. As noted in Network Solutions, the claims would have to do more than just list general features of the scheme in a system context, but reflect the real application and effect of the method in the operation of the system.
I am unsure whether the application discloses patentable subject matter. While there is certainly discussion of the implementation of the system, the level of generality is of concern. On the other hand, there is also discussion of the operation of the system and it may well be the case that within this discussion are the physical effects that need to be placed into the claims to ensure that they are directed to patentable subject matter. Moreover, the submissions from the parties at the hearing in relation to manner of manufacture were of a fairly general nature and did not canvass amendments that could be made to the claims in the event that I found no manner of manufacture. Given these considerations, I believe it is appropriate in this case to allow the applicant an opportunity to make amendments to address my findings under manner of manufacture.
CONCLUSION
The opposition is successful on the ground that the claims do not define a manner of manufacture. Of the remaining grounds, the opponents, Jumbo and NSWLC, have not established that Elot is not entitled to the invention, that the claims do not comply with section 40, that the claimed invention lacks utility and that the claims are not novel or lack an inventive step.
The lack of manner of manufacture is a matter that might be able to be overcome by amendment. I allow the applicant 60 days from the date of this decision to propose suitable amendments.
COSTS
In proceedings such as these it is usually the case that costs follow the event.
The oppositions were successful on the ground that the claims do not define a manner of manufacture. While this is only one ground of many put forward, it does not change the fact that the opponent’s were successful and I see no reason to vary the usual approach on this occasion. I award costs in accordance with Schedule 8 against Elot.
GREG POWELL
Delegate of the Commissioner of Patents
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