IGT v The Comptroller General of Patents

This is an appeal by IGT against the decision dated 27 July 2006 of Mr AC Howard, the Hearing Officer on behalf of the Comptroller-General of Patents (“the Decision”). By the Decision, Mr Howard refused four patent applications (together “the Applications”) relating to gaming systems. Although each of the Applications was separate and was entitled to distinct and separate consideration, the Applications raised issues which have a common thread and this is no doubt why Mr Howard dealt with them in a single Decision.

The Applications were refused by virtue of section 1(2)(c) Patents Act 1977 on the basis that the claimed inventions were schemes, rules and methods for playing a game. Since Dr Colley (who appears for IGT) has submissions to make about the meaning of section 1(2) and of Article 52(2), (3) of the European Patent Convention (“EPC”), I should set out those provisions.

I should mention the computer program exclusion in Article 52(2)(c). In all four applications, objection was raised on the basis that the claimed inventions were computer programs as such. In relation to only two applications was the objection pursued before Mr Howard and in both cases he rejected it. There has been no cross-appeal by the Comptroller, although Mr Birss (who appears for the Comptroller) is entitled, of course, to make submissions about the computer program exclusion in support of his submission in relation to the rule/scheme/method exclusion. There has been some debate about whether it would be open to him to rely on the exclusion expressly as an alternative reason for refusing the applications. As will become apparent, I do not consider that there is any need to address this issue.

The Court of Appeal has recently developed the approach which the courts should adopt to the correct interpretation of Article 52(2) and (3). Whether or not the application of the Article is now more or less straightforward, or clear, than it was before is perhaps a matter on which minds may differ. The Court of Appeal had before it two appeals. The first was the appeal in Aerotel Ltd v Telco Holdings Ltd where the patent was owned by Aerotel, an Israeli company. The second appeal was from the Comptroller who had taken the view that subject-matter of an application, by a Mr Neal William Macrossan, was unpatentable. The combined appeal is found at [2006] EWCA Civ 1371. I will refer to it as Aerotel.

The differences of wording between Article 52 and section 1(2) are to be afforded no significance; the exclusions in section 1(2) are to be given practically speaking the same scope as the exclusions in Article 52, both as the result of general principle and by virtue of the specific provisions of section 130(7). Indeed, the Court of Appeal in Aerotel preferred to work from the Article rather than the section for the reasons given by Jacob LJ in paragraph 6 of his judgment (being the judgment of the Court and which I will refer to simply as “the Judgment”)). That is not to say that decisions of the European Patent Office Boards of Appeal are binding on National Courts.

In paragraphs 7 to 26 of the Judgment, Jacob LJ conducts an examination of the considerations relevant to the construction of Articles 52(2) and (3) under the headings General considerations, The position outside Europe, Other considerations. Jacob LJ then refers at paragraph 23 to the case law, a lengthy review being set out in an Appendix.

Jacob LJ identifies (and succinctly describes), at paragraphs 23 to 26 of the Judgment, a whole range of approaches adopted over the years by the EPO and national courts. These are (1) the contribution approach (2) the technical approach (3) the “any hardware approach” which has variants (i) the Pensions Benefits approach (a reference to Case T 931/95 before the EPO Board in 2000) (ii) the Hitachi approach (a reference to case T 258/03 before the EPO Board in 2004) and (iii) the Microsoft/Data Transfer approach (a reference to case T 0424/03 before the EPO Board in 2006).

His description of the technical approach is this:

“Ask whether the invention as defined in the claim makes a technical contribution to the known art - if no, Art.52(2) applies. A possible clarification (at least by way of exclusion) of this approach is to add the rider that novel or inventive purely excluded matter does not count as a "technical contribution".

This is the approach (with the rider) adopted by this Court in Merrill Lynch. It has been followed in the subsequent decisions of this Court, Gale and Fujitsu. The approach (without the rider as an express caution) was that first adopted by the EPO Boards of Appeal, see Vicom, IBM/Text processing and IBM/Data processor network”

These are references to some of the cases considered in the Appendix: Merrill Lynch’s application (1989) [1989] RPC 561 (CA); Vicom/Computer-related Invention T208/84 [1987] OJEPO 14, [1987] 2 EPOR 74; IBM/Text processing (1988) T 115/85; and IBM/Data processor network (1988) T6/83.

Jacob LJ first considered the last approach and its three variants. He noted the need to place great weight on the decisions of the Boards of Appeal, but given the state of conflict between the approaches adopted by those Boards in different cases, he considered it premature to do so (ie to place great weight on them). He recognised that, if an Enlarged Board were to rule on the question, the English court may have to reconsider its approach. That was for another day. All that the Court needed to do in Aerotel itself was to decide not to follow any of the variants of the “any hardware” approach.

At paragraph 31 of the Judgment, Jacob LJ had some important observations to make about computer programs. There are two views. The narrow view is that it means just the set of instructions as an abstract thing albeit they could be written down on a piece of paper. The wider view is that the term covers also the instructions on some form of media (floppy disk, CD or hard drive for instance) which causes a computer to execute the program – a program which works. I consider that it is clear I am bound to apply the wider view. On that wider view, I think it would also be the case that computer program covered a program which was actually open on a computer and operational and not only a program sitting, stored, unopened on a hard drive, which is consistent with paragraph 36 of the Judgment where Jacob LJ says that “computer program” includes a working computer program on a medium.

Jacob LJ next considered the contribution approach and whilst appearing to be attracted by it, rejected it because he considered the court to be bound by precedent to adopt the technical effect approach with the rider. I now need to set out a (longish) passage from the Judgment, paragraphs 38 to 49:

“38.The fact is that this court is bound by its own precedent: that decided in Merrill Lynch, Gale and Fujitsu – the technical effect approach with the rider. We think we must apply it as we understand it, namely as set out above. That we will proceed to do.

39.

However before doing so we must consider the approach which the Comptroller, through Mr Birss, urges upon us. We must in particular consider whether it is consistent with that which has already been decided.

40.

The approach is in 4 steps:

"(1)

properly construe the claim

(2)

identify the actual contribution;

(3)

ask whether it falls solely within the excluded subject matter;

(4)

check whether the actual or alleged contribution is actually technical in nature".

41.

The Comptroller submits that this approach is structured and thus helpful to the public and examiner alike and is consistent with the principles enunciated in Merrill Lynch. He further submits:

"A structured approach needs to be workable across the whole field of Section 1(2). This is important because although the policy behind different exclusions is not uniform, the structure of the legislation requires that they ought to work the same way. A structured approach will also allow the examiners and hearing officers applying this area of law to follow a consistent scheme and will allow the public to see how a decision has been arrived at. A problem the Comptroller is often confronted with is reliance by applicants on broad observations from earlier decisions which work well in the particular circumstances in which they were made but break down when applied elsewhere". (Mr Birss' skeleton argument).

We think this structured approach is indeed consistent with what has been decided by this court. It is a re-formulation in a different order of the Merrill Lynch test.

42.

No-one could quarrel with the first step – construction. You first have to decide what the monopoly is before going on the question of whether it is excluded. Any test must involve this first step.

43.

The second step – identify the contribution - is said to be more problematical. How do you assess the contribution? Mr Birss submits the test is workable – it is an exercise in judgment probably involving the problem said to be solved, how the invention works, what its advantages are. What has the inventor really added to human knowledge perhaps best sums up the exercise. The formulation involves looking at substance not form – which is surely what the legislator intended.

44.

Mr Birss added the words "or alleged contribution" in his formulation of the second step. That will do at the application stage – where the Office must generally perforce accept what the inventor says is his contribution. It cannot actually be conclusive, however. If an inventor claims a computer when programmed with his new program, it will not assist him if he alleges wrongly that he has invented the computer itself, even if he specifies all the detailed elements of a computer in his claim. In the end the test must be what contribution has actually been made, not what the inventor says he has made.

45.

The third step – is the contribution solely of excluded matter? – is merely an expression of the "as such" qualification of Art.52(3). During the course of argument Mr Birss accepted a re-formulation of the third step: Ask whether the contribution thus identified consists of excluded subject matter as such? We think either formulation will do – they mean the same thing.

46.

The fourth step – check whether the contribution is "technical" – may not be necessary because the third step should have covered that. It is a necessary check however if one is to follow Merrill Lynch as we must.

47.

As we have said this test is a re-formulation of the approach adopted by this court in Fujitsu: it asks the same questions but in a different order. Fujitsu asks first whether there is a technical contribution (which involves two questions: what is the contribution? is it technical?) and then added the rider that a contribution which consists solely of excluded matter will not count as a technical contribution.

48.

Mr Thorley criticised the Comptroller's approach on the basis it was a re-writing of the statutory test: it either meant the same thing in which case it was unnecessary or it meant something different in which case it was wrong (cf. the apocryphal words of Caliph Umar about the destruction of the library of Alexandria and the Word of God). We do not accept that. It is, we think, a structured and more helpful way of re-formulating the statutory test. What Mr Thorley was unable to do was to pinpoint any specific way in which the test differed from the statutory test as interpreted by this Court.

49.

Accordingly we propose to apply the Comptroller's structured approach to both cases under appeal. To these we now turn.”

It is clear, therefore, that the 4 step approach set out at paragraph 40 of the Judgment represents the law of England and Wales and is binding on me whatever differing EPO Board of Appeal decisions might say. It will only be if an Enlarged Board (or the House of Lords) rules otherwise that the law may either change or be seen to be different from that which it is presently perceived to be.

What is particularly interesting about the way in which the 4 step approach is articulated is that the first 3 steps do not use the word “technical” at all even though it is called the “technical effect” approach. That word only appears in the fourth step which is in reality only a cross-check, but a necessary one if Merrill Lynch is to be followed: as Jacob LJ says in paragraph 6 of his Judgment, the third step should have covered the point. The meaning of the word “technical” is notoriously elusive. I can really do no better than refer the reader of this judgement to the analysis in the Appendix to Jacob LJ’s judgment in Aerotel. It should be noted that even if the cross-check shows that a contribution is “technical” (in the sense that that word was used in Merrill Lynch) it does not follow that a patentable invention is to be found. The “new result in the form of a technical contribution to the prior art” (see lines 12 and 13 on p 569 of Merrill Lynch) may lie in the excluded area of, for instance, a method of doing business. The fact that a contribution may be enough to take the case out of the computer program exclusion does not mean that it is not in one of the other exclusions.

I do not propose to set out the patent claims in Aerotel and Macrossan. They can be found in the Judgment. The claims in Aerotel were claims to a method of making telephone calls and a system of facilitating telephone calls. The systems claim is described in paragraphs 52 of the Judgment:

“A conventional method of making a phone call involves the caller dialling the callee's number. The call goes through a number of public exchanges with an ultimate connection to the callee.…… A system of measuring call duration applied to appropriate rates computes the cost. If the caller has no account running from his station (e.g. is in a call box) he will have to pre-pay. The patentee's idea is to have an extra piece of equipment which he calls a "special exchange". The caller has an account with the owner of that and deposits a credit with him. The caller has a code. To make a call he calls the number of the special exchange and inputs his code and then the callee's number. If the code is verified and there is enough credit he is put through: the call will be terminated if his credit runs out.”

Jacob LJ goes on, at paragraph 53 of the Judgment, to say this:

“The important point to note is that the system as a whole is new. And it is new in itself, not merely because it is to be used for the business of selling phone calls. So, moving on to step two, the contribution is a new system. It is true that it could be implemented using conventional computers, but the key to it is a new physical combination of hardware. It seems to us clear that there is here more than just a method of doing business as such. That answers the third step. Finally the system is clearly technical in nature. We see no Art.52(2) objection to the claim.” [my emphasis]

The method claim was likewise valid: it was essentially the use of the new system. Given that that is free of any Article 52(2) objection, the same must apply to the narrower claim to its use.

The Aerotel appeal was allowed – and the patent reinstated – because the Court of Appeal (a) considered that there was “more here than just a method of doing business as such” and (b) the Judge has misunderstood the evidence before him. That evidence was to the effect that the patent provided a new method and system for facilitating telephone calls and that a “skilled reader of the Patent in 1985 would have been able to implement the described special exchange using an electronic control exchange of the kind that was available in the UK and elsewhere at that time”. In relation to (b), said this:

“That is not saying that the equipment used in the method is not new. Still less is it saying that the system is not new. It is merely saying that the system could have been implemented at the time using known components. So we think the Judge misassessed the contribution of the inventor – he was not saying “use existing apparatus for my new method” he was saying “create a new overall combination of apparatus using known types of apparatus – and use that combination for my method”.

Taking that passage together with paragraph 53 of the Judgment, it is clear that the Court was focusing on the physical combination of hardware; it was that feature which, on the facts of Aerotel, resulted in something more than a method of doing business. It may or may not be that the Court would have reached the same conclusion (ie something more than a mere business method) if the patent claim had been written in such a way that the features of the “special exchange” were expressed in terms of new software on an existing component of the system. But that is something which the Court did not, and did not need to, address. The relevant questions are different. In Aerotel, the question is whether the new physical combination of hardware is inventive and non-obvious. In a case where the Aerotel idea is reflected in a patent claim in which the only new feature is new software, the issue of patentability would be likely to revolve around the computer program exclusion, the question being whether that new software produces the “something further” over and above a computer and a program which is necessary for patentability in accordance with how Fox LJ describes the position in Merrill Lynch at p 169 (referring to Genentech Inc’s Patent [1989] RPC 147(CA) and Vicom):

“…it seems to me to be clear, for the reasons indicated by Dillon LJ, that it cannot be permissible to patent an item excluded by section 1(2) under the guise of an article which contains that item – that is to say, in the case of a computer program, the patenting of a conventional computer containing that program. Something further is necessary. The nature of that addition is, I think, to be found in the Vicom case where it states: “Decisive is what technical contribution the invention makes to the known art”. There must, I think, be some technical advance on the prior art in the form of a new result (eg a substantial increase in processing speed as in Vicom).”

There are some other points which I should mention which need to be borne in mind when it comes to considering the claims in the present case.

Dr Colley emphasises the abstract/intellectual component of the excluded activities. Mann J, in Macrossan, regarded the business method exclusion as aimed at the underlying abstraction of business method. But, Jacob LJ in paragraphs 67 ff of the Judgment, disagreed. There is no over-arching principle that the exclusions are limited to abstract matters. In the context of business method, Jacob LJ asked how one is to tell whether an idea is sufficiently abstract to come within the exclusion concluding that whether as an abstract or generalised activity or as a very specific activity, if it is a method of doing business it is excluded. The same approach should apply to a scheme, rule or method for playing a game. Dr Colley says, nonetheless, that the exclusions have a strong flavour of the intellectual or the abstract and finds support for that in the various Travaux Preparatoires for the EPC. That may be so. But it does not derogate from the result that there is no over-arching principle limiting the exclusions in that way. A purposive construction (which he urges on me) does not require me to construe section 1(2) and the Article 52 as if there really is such an overarching principle with somehow peripheral exceptions from it.

It is important to remember that the contribution in each Application resides in new software. It is according to the existing and new software that the gaming system and its components operate. In other words, the contribution which the claim makes to the prior art in the present case is implemented by software: that software provides (at least some of) the instructions by which the game operates. Dr Colley says that those instructions are not part of the scheme, rules and method of playing the game; Mr Birss says that the contribution is solely in that area.

One needs to consider to some extent what is meant by a “game” in this context. In the physical world, it is (usually) possible to describe a game in words and to set out its rules in writing. The rules of a game are not restricted to what a player may or may not do; some rules may set the physical constraints of a game. Thus the rules of most sports will set out the rules about physical location (eg size of pitch or court, size of ball or racket) as well as the rules of play (eg permitted interactions with a ball, offside rules, scoring and the like). There may be schemes or methods of play which do not form part of the rules (eg methods of card play designed to enhance the player’s chances of success). In these cases, it is straightforward to identify the rules of the game, for the game is really defined by its rules. And, once the rules of the game have been set, players may be able to develop successful stratagems – methods of play – for playing the game better than others.

In the virtual world, things may be different. It is possible to emulate existing games and it is possible to invent new games. In the case of an emulated game, it might be possible to argue (although Dr Colley would not agree with such an argument) that the rules of the game are the same as the rules of the real game and that the computer program, insofar as it reflects those rules but no further, falls within the excluded area.

Dr Colley introduces an example. Imagine, he asks, that the game of cricket becomes old hat and, so to make it slightly more exciting, the rules are changed in the following way. When the team which is currently batting reaches its first century, the bat is replaced by one with a slightly bendy handle. That is a rule of new cricket, but the machine for playing the new game, the bendy bat, is not a rule of the game. In the real world, the bendy bat would, in principle, be patentable. At least, let it be assumed that that is so.

He then looks at a game of virtual cricket. Suppose that the inventor of the bendy bat decides to implement his invention not on the cricket field but in the virtual game. The program running the virtual cricket game is therefore modified to introduce the bendy bat, requiring a different game-skill and the use of different keys on the controlling keyboard. Dr Colley says that, just as the real bat would have been patentable, so too is the invention which, although implemented by a computer program, is not part of the rules for playing the game any more than a real bat is part of the rules of the game played on the real cricket pitch. [He does not address the question whether it would nonetheless be caught by the computer program exclusion.]

He suggests that the virtual bat-with-the-bendy-handle is a technological implementation of something which is used to implement a game with a new rule, but not a rule in itself for technological implementation. The altered game of cricket is a game which provides a new gaming function, and the virtual bat is simply a tool for providing that gaming function. He says this:

“To make the game more interesting, one makes the game less predictable by substituting the original bat for one with a bendy handle. The rule is that you change the bat, but the technological implementation is the bendy-handled bat. They are not the same. One is necessitated to a degree by the rule, but it is not the rule itself. The problem is that when one moves into gaming of an internet nature, there is a temptation to see the two as the same thing.”

One must be very careful with analogies. Ultimately, I find the bendy bat analogy unhelpful. To describe the virtual bendy bat as a tool for providing a gaming function is to assert the conclusion rather than to justify it. One might say that the invention in Macrossan was a tool (indeed, that is how Mann J described it) but it did not prevent it being a method of doing business. The computer program in Fujitsu was a tool for modelling crystal structure combinations but was still a computer program within the exclusion. To say that “the rule is that you change the bat” is true in the real game of cricket, and the bendy bat is then its technological implementation. The claim, in such a case, would be to the bendy bat. But that is not the right approach in relation to a computer program or, rather, a contribution made by a computer program. There is no bendy bat to patent: all there is is a new program. It is necessary to construe the claim and identify the contribution made to the prior art. It is that contribution which has to be identified as within or without the excluded subject matter. In effect, there is a computer, there is a program and then some extra function introduced by the new program. The task is then to analyse that function and to ascertain whether or not it falls within the excluded territory.

I have this additional problem with the bendy bat analogy. The real bendy bat itself may be patentable, but a skilled batsman will learn how to use it. That, it seems to me, may be a method of playing cricket (or at least the batting part of the game) which, if the batsman were to write it down and teach it to others, would be a method, if not a rule, for playing a game. So we have a rule which introduces a bendy bat and a method which tells us how to use it. It leaves a very limited area for the patent – namely the bendy bat itself.

Dr Colley’s written opening skeleton argument contained a number of detailed criticisms of the Decision which I will come to. His oral opening focused on an aspect which he had not developed in the skeleton. This was the “special exchange” in Aerotel. He submits that in each of the four Applications there is something akin to the special exchange. He says that the elements of the invention were all conventional but that there was an additional feature included which performed an additional function: that, he submits, gives rise to patentable subject-matter. In each application, he purports to find a combination of hardware and software which he says is to be treated in the same way as the special exchange in Aerotel. Given that the new software could have been implemented on new hardware or with physical add-ons to existing hardware, there could have been a new configuration constituting a new system in line with Aerotel. The result should be the same, he says, even if the new software is on existing equipment, especially bearing in mind that modern software allows one to emulate one or more computers on an existing computer.

However, as I have already remarked, the decision in Aerotel is based on the fact of a new combination of physical hardware as providing something which went beyond a method of doing business. The task in the present case is to see what the claim adds to the prior art and, in that context, it is clear that the contribution, however, it is to be categorised, arises from new software and not from any new physical combination and arrangement of hardware.

Mr Birss says that the argument based on the analogy with the “special exchange” in Aerotel is wrong. For Mr Birss, the concept of a new architecture comprising or including a “special exchange” includes at least some new hardware or new and inventive combination of existing hardware. He rejects Dr Colley’s suggestion that a new architecture for this purpose can rest solely in software. He accepts that, if there had been some new hardware, or new button on the existing equipment, or some new combination of hardware, there could be something in Dr Colley’s argument. But, he says, on the facts of the four Applications, IGT has not claimed anything in the nature of a special exchange. The hardware and the architecture of the hardware is old: there is nothing equivalent, according to Mr Birss, to the special exchange in Aerotel the key to the new system being “a new physical combination of hardware”.

He points in support of that conclusion to the specifications in each of the four claims. For example, the specification in application GB0411822.0 entitled “Method apparatus and system for perpetual bonus games”. The “special exchange” which Dr Colley seeks to identify includes a bonus game display (236) together with bonus event computer (240) and in some cases a central server (220). The specification includes this:

“The functions of central server computer 220 and bonus event computer 240 may be combined in a single computer. The bonus game may be conducted solely on computer 240 and visible manifestations of the bonus game including the outcome thereof displayed as video images on one or more bonus game displays 236 as further discussed below…”

There is thus not a “special exchange” claimed as a new physical combination of hardware. There is nothing new in the combination of computers which are an entirely conventional set-up. I did not, in any case, understand Dr Colley to be putting his case on that basis.

Mr Birss made similar comments in relation to the other applications which I do not propose to set out in detail but which show that there is no new architecture, but only the use of known computers in known combinations. The only thing new is the new software.

On the basis of his approach, Dr Colley submits that the result in Aerotel should have been the same whether or not there was the physical manifestation of the invention, particularly the new combination of hardware – the “special exchange”; had the special exchange been incorporated within another component there would have been the same inventive contribution, he says, and submits that the same result as to patentability should have resulted. But, as I have already observed, that was not an issue which the Court addressed and very different questions would need to be considered in addressing the patentability of such an alternative method of implementation of the idea.

On this aspect of the case, I agree with Mr Birss on the current state of the law. A contribution to the prior art may include an improved rule, scheme or method for playing a game. If the contribution lies solely is that excluded area, it cannot be protected. But if the contribution includes something else, it may be entitled to protection. The contribution in Aerotel was a new physical combination of hardware. In the present case, however, there is no new physical combination of hardware. The novelty lies in the software – a computer program. A program as such is not patentable; nor is a computer programmed with a particular program patentable (unless, I suppose, there is a novel type of computer which could itself be patented). There has to be something more as well: see Merrill Lynch above. If that novel software produces a contribution which lies only in the excluded field of rule, method or scheme for playing a game, it cannot, in my judgment, be the subject of a valid patent. And this is so even though the invention might have been achieved by introducing a “special exchange” of a physical sort. The fact, if it be a fact, that the same result could have been achieved in Aerotel by way of software changes alone without the need for any novel configuration of known equipment is neither here nor there. The difference follows from a difference of treatment of novel computer programs from other inventions. I will, however, for completeness use Dr Colley’s words to identify what he says the “special exchange” is in relation to each of the applications when I look at them individually.

Mr Birss says that the absence of a “special exchange” is the short answer to the case. It is an answer, of course, to the case insofar as it is based on the existence of a “special exchange”. But it seems to me that it is necessary to go further because, even in the absence of a“special exchange” there may be a contribution, albeit a computer program, which makes a technical contribution to the known art and which is not exclusively in the excluded territory of rule, scheme or method for playing games.

I should add that I do not consider that I need to address Dr Colley’s submission that a computer program as such equates to the lines of code comprising that program, as he describes it the “dead” program on or in a storage medium (including a computer hard disc) and not the “live” program and the effects which it achieves when operating on a computer and any devices attached to and/or controlled by the computer (although I would have thought that the Merrill Lynch approach – the need for a “technical contribution” – would apply to the live program as much as the dead one, otherwise it is hard to see what the court was intending to say). What I do say is that, even if Dr Colley were correct, the decision in Aerotel gets him nowhere if the only contribution which the live program represents is in the excluded areas. The live program can no more be a “special exchange” than the dead one.

Dr Colley submits that Mr Howard failed to appreciate the claimed inventions through the eyes of the skilled person to whom the application is addressed and failed to recognise that what is “technical” is a term which varies with the art or area of technology in question. What is “technical” is to be appreciated through the eyes of the skilled person to whom the application is addressed. He says that the claimed inventions and their technical character have to be appreciated in the context of the art or area of technology in question which is “largely a matter of appreciating that the claimed inventions enhance player experience of their interface with the game(s) in question” to quote from his skeleton argument. This, again, seems to me largely to beg the question (which is whether the contribution is in the excluded territory) by formulating the “technical” area as relating to the player interface. Even if the problem to be addressed is a need to increase interest, the solution to the problem might be found in a change to the rules of the game. Changes are often made to real games such as football and cricket in order to improve the pace and excitement of play and increase spectator enjoyment; the changes are changes to the rules nonetheless even though the problem addressed is not a rule, scheme or method. On this view, the problem (need for better player interaction) is solved by a technical solution (better game) lying entirely in the excluded area.

I will consider whether Mr Howard is to be criticised when I come to look at the Decision in some detail. But, applying the Aerotel four stage test, the issue of what is “technical” is of much less importance than in the past since that aspect ought to have been dealt with in looking at the third step. The ultimate question in each of the present applications is not whether a contribution is technical, but whether it lies solely in an excluded area.

Dr Colley also submits that it is important to keep in mind the distinction between a game and the rules for playing a game. A newly-invented board game might be patentable because the board and the pieces are patentable. But the rules for playing the newly-invented games would not be. This may or may not be true: but it does not follow from that distinction that a patent claim is excluded only when the claim itself claims a “scheme, rule or method for playing a game”. The important question, following Aerotel, is, so it seems to me, not whether the subject matter of the claim is patentable and outside the excluded territory, but whether the contribution over and above the prior art, assuming that the claim is otherwise sufficient to result in patentability, is within the excluded territory. The question is whether the contribution identified consists of excluded subject matter as such: see paragraph 45 of the Judgment. It is fair to note, however, that Article 52 does not, as it might have done, exclude games per se. The apparatus for playing a game remains, in theory, patentable.

Further, the same claim can be looked at in different ways. Mr Birss says that it is important to consider all of the exclusions which might apply. He gives the claim in Merrill Lynch as an example. In that case, the Court finally asked what it was that was claimed over and above a data processing system programmed to produce a result. The answer was a business method, an excluded item and not patentable. But, he says, one could reverse and ask what more than a business method was claimed and the answer would be a novel computer program, again an excluded item and not patentable.

Dr Colley also makes some general submissions about the (incorrect on his case) cast of mind of Examining Officers and perhaps of Mr Howard himself. It is that apparatus used to facilitate a game to be played in the sense that it is linked to some aspect of the game, can be viewed in some way as simply attributable to or equivalent to the rules of the game as such. Dr Colley says that this is an erroneous approach and does not accord with the requirements (1) to identify the actual contribution and (2) to make a proper appreciation of whether that contribution is technical. He points to the approach of the EPO in KONAMI T928/03 [2007] EPOR 1 (especially at paragraphs 4.1.1 and 5.3.3) and CANON T643/00 [2006] EPOR 53 which displays a view which diverges from that of the UK Patent Office. He says this has resulted in Mr Howard failing to appreciate that the claimed subject matter is in effect to technical gaming tools and not to gaming rules as such. Technical gaming tools as claimed comprise machines and systems which are comparable with any other modern industrial product such as a washing machine or telephone exchange.

Dr Colley asks whether there would have been a patentable invention in Aerotel if the special exchange had been a computer already forming part of the physical system and running the software instead of an extra piece of hardware (albeit that the extra piece of hardware could be a conventional computer) running that software. His answer, of course, is that it can make no difference: none of the applications is open to attack as either “not new” or “lacking inventive step”. But that is not necessarily the correct answer. The view of the Court of Appeal was that there was a new system, the key to that being a new physical combination of hardware. Given that, there was something that went beyond the software and it was not relevant to consider whether, absent, the new configuration, the computer program exclusion would have applied.

In the present case, there is no new physical hardware and no new, inventive, configuration. The contribution on the prior art – the new function – rests in, or is the result of, the new software. As I have already said, the task is then to analyse that function and to ascertain whether or not it falls within the excluded territory.

I ought to mention the decision of Pumfrey J in Shopalotto.com Ltd’s Application [2005] EWHC 2416 (Pat); [2006] RPC 7. After setting out the claim, Pumfrey J observed that the apparatus features of the claim could manifestly be satisfied by a general purpose computer connected to the Internet, the computer being programmed to provide a web server, and further software conditioning the machine so as to receive, store, select and compare. This was a computer operating in a new way, to permit a user to play in a lottery. This raised the familiar difficulties presented by the exclusions in section 1(2)(c) and (d) and Article 52(2) and (3). The Judge, without the benefit of Aerotel, expresses his conclusions, at paragraph 9 to 11, in a way entirely consistent with what the Court of Appeal later said. In particular, at paragraph 9, Pumfrey J says this:

“….From this sort of consideration there has developed an approach that I consider to be well established on the authorities, which is to take the claimed programmed computer, and ask what it contributes to the art over and above the fact that it covers a programmed computer. If there is a contribution outside the list of excluded matter, then the invention is patentable, but if the only contribution to the art lies in excluded subject matter, it is not patentable.”

There is a risk of confusion being caused in analysing the true nature of the contribution of the claimed invention to the art by the way in which the problem to be addressed is described and the purpose of the invention identified. In all of the applications, Dr Colley relies to a greater or lesser extent on the improved interface between player and machine resulting in more interaction between player and machine (or player and player). That no doubt makes the game more attractive. He would say that, to a person skilled in the art, the improved interface was a technical solution to a technical problem. But that is not necessarily an answer: the objective – a more interesting game – might well be attained by a change in the rules of the game.

In this context, I suggested to Dr Colley that the object of the gambling games was to achieve a payout. He agreed that the object of all games is to achieve a payout but said that the object of the improvement was to achieve a greater proportionality of payout. I suggested that the change was one to the rules of ascertainment of the payout which is then implemented by the new program on the computer. He disagreed, saying that one is not changing the payout but changing only the facilities which provide for achieving the desired payout: there is a tool which provides an enhanced way of achieving what was always the objective in the first place namely to provide a proportionate payout. This exchange really identifies the nub of the case, although it is a curious aspect of the case that, as Mr Howard noted when dealing with Applicatoin GB0229511.1, that the payout did not form part of the Claim.

Mr Howard notes that the Applications are not related in the strict sense of the word, but a common thread running through them is that they all relate to systems for playing gambling games of the type in which there is a “main game” and a “bonus game”. As claimed these are defined in general terms only but typically the main game may be an electronic representation of a “fruit machine” style of gambling machine while the bonus game is a distinct and different type of activity to which a player may become eligible by earning credits in the course of playing the main game.

Mr Howard carried out an assessment of each of the Applications. He relied very much on the decision of Mr Peter Prescott QC in CPFH’s Application [2005] EWHC 1589 Pat, focusing on the “advance” which was made in each case. Mr Howard decided that each Application was to be rejected as falling within the exclusion of section 1(2)(c) as a scheme, rule or method for playing a game.

In the light of the principles which I have discussed above, and of the submissions which I have so far recorded, I turn to deal with the Applications and the parties’ submissions. I would, however, make a preliminary point: Mr Howard refers to “advance” in relation to what is comprised in the claimed inventions. Mr Birss submits that the advance identified can stand as the “contribution” which is to be identified in applying the Aerotel test. I agree with him and will use the words interchangeably.

The four applications are as follows:

In relation to this application, Mr Howard was asked to consider claim 1 as notionally amended by the incorporation of claim 10, which he did. Claim 10 introduced the final paragraph of claim 1 as set out in the Appendix. Mr Howard describes the application in this way:

“The invention relates to a system comprising a plurality of gaming devices Each such gaming device could be a gaming machine such as may be found in arcades, or it could be a computer playing connected to the internet. To enhance their enjoyment, players participate in a bonus game. The system tests players’ eligibility for the bonus game by examining current and past entries stored in the system. If the player is eligible the entries are allocated to the various entry pools and if the player is not eligible the entries are designated as past entries.”

This is an application which is concerned with making unused entries available for use in future bonus games. It seeks to make machines when linked together pay out in a more balanced, and less random, manner than before. By allocating bonus entries to each player and storing them, payout can be balanced over a set of gaming devices or machines. The examiner sought to characterise the claimed advance (before the incorporation of claim 10 into claim 1) as

“[a] system of gaming devices and a controller which tracks and stores entries of the users of the gaming devices in which when a triggering event occurs a bonus game is initiated for each eligible player and entries generated by the player during a current round, some entries generated prior to the bonus round (past entries) and some future entries are placed into an entry pool. While, for non-eligible players the entries generated during the current bonus round are designated past entries, the controller determining the eligibility of the players.”

Let me summarise what Mr Howard says:

Dr Colley identifies what, according to his submissions is the “special exchange” element of the application in this way:

“The application relates to balancing payout between individual machines in a system of linked machines having a shared bonus draw. This is achieved by having each machine generate bonus entries into the shared bonus draw during operation by a player and by the provision of a ‘special exchange’ feature. The special exchange is essentially a notional black box for identifying and tracking bonus entries generated in response to play and allocating the said bonus entries to past, present and future bonus entry pools (for bonus draws) depending upon the detected eligibility of a player. …”

Dr Colley submits that Mr Howard wrongly discounted the significance of the features of claim 1 and attached undue importance to the concession I have just recorded at 54c above. He then failed to appreciate that although the response of the controllers was governed by the progress of the game, it provided an apparatus which achieved a new effect, namely proportionality in bonus payments through player/machine use tracking. Dr Colley submits that this is quite distinct from “a mere scheme, rule or method for playing a game” in that it provides distinctly different functionality, and thus experience, of the game in play. The invention accordingly makes no difference to the rules of the game as played by the player but improves the proportionality of bonus generation and distributes bonuses generated by the bonus game.

The contribution, on this argument, provided by the claimed invention is thus a new system operable to track machine use. It is new because it provides a new combination of elements including a new form of controller, not merely because of the manner of its use. He says that this is still true even if the controller could have been implemented using conventional components. The contribution is not properly to be characterised as “a mere scheme, rule or method for playing a game as such”.

He also submits that a system of linked gaming machines is clearly technical in itself. Tracking and controlling the operation of a system more accurately are objective technical functions of the system, a quality which is not cancelled by the fact that it will enter into a decision of the user interacting with the system

As to the concession, Mr Birss says that it is important to note that this claim is not describing new computer hardware or architecture and in that he is clearly correct. It is not even describing a novel configuration of existing components (as in Aerotel). The system is implemented on well-known apparatus. The concession as recorded was, it seems to me, correctly made. That does not necessarily mean that a new effect was not achieved (improved proportionality in bonus payment through the application of a computer program) but I do not read Mr Howard as deciding that the use of well-known apparatus was conclusive. Rather, he addresses the advance as it is described by the examiner and concludes that the advance is in an excluded area. That is a description of how the bonus game scheme works.

As to the perceived new effect, Mr Birss says that the answer is to be found in the definition of the advance or contribution adopted in the Decision The Decision finds - it is submitted entirely correctly - that this advance falls within the excluded territory. Mr Birss says that this contribution is about how the bonus game scheme works and it is submitted that the rules or scheme or method defining how the game works are indeed “a scheme, rule or method for playing a game”.

Dr Colley says that a system of linked gaming machines is clearly technical in itself. But that is not the point. The question is whether the contribution is technical in nature (remembering that a contribution which consists solely of excluded matter will not count as a technical contribution). It does not follow that, just because the system of linked gaming machines is technical, that everything they do (eg tracking and controlling the operation of the system) is technical in the sense required. To say that tracking and controlling the operation are “objective technical functions” of the system is to do no more than assert the conclusion. The question here is whether those functions are really no more than a scheme rule or method for playing a game.

In my judgment, when the contribution is understood in the context of the prior art, it is properly to be seen as a way of operating a game. It is not to be categorised as a tool for playing a game (any more than the system in Macrossan was to be seen as a tool in the application of a business method). Applying the four steps in Aerotel, the contribution falls within the exclusion.

This is an application in which the player can select between first and second bonus events shared between several gaming machines and can control the timing of the selection of the winning entry.

Dr Colley identifies what, according to his submissions is the “special exchange” element of the application in this way:

“This application relates to an extension of the previous application and may be considered in effect like a dependent claim of the previous application. Accordingly, if the previous application is considered patentable this should be considered patentable as it also provides the same ‘special exchange’ feature. This application additionally provides another feature which may be thought of as a further special exchange or an addition to the special exchange. This is the provision of an input means (a notional button) and associated interface means which enable control of the time of initiation of and entry into a particular bonus draw. This is particularly embodied by the second input means and functions which take place in response to the second input as described in [claim 1]”

Dr Colley identifies the problem addressed by the invention as the insufficiently interactive nature of previously known bonus gaming systems. He thus describes the invention as including “player interaction in that it allows selection between a number of bonus pools into which a player may place a bonus entry and a player-operable control for controlling the timing of the making of a draw in a bonus pool”. The agent for IGT said that IGT was not attempting to patent the rules of the game or even the player interactions with the game but rather how the machine reacts to events in the game. The invention has physical features deciding when the draw takes place and at what time. He submitted that the advance is the provision of controls which influence a game according to game events and inputs from a player or players, thus addressing the problem of making the game more interactive.

Mr Howard accepted that claim 1 defines various features which are physical and tangible (such as various controllers) but these were merely standard items of hardware programmed to carry out the game functions. He therefore concluded that those controls are part of the gameplay. He considered that the advance lies in the way the machine sets constraints on whether and when the user is allowed to join the bonus game and on what happens in the bonus game. Given that the constraints affect the progress of the game, this pointed, he thought, to the conclusion that they are rules of the game. He also answered his own questions “Is the reaction or response of the machine to a gameplay event a rule?” in the affirmative: if the machine stores constraints which dictate its response those can be considered as within the ambit of a scheme, rule or method, a proposition which Mr Birss adopts.

Dr Colley puts the same argument as the agent had put to Mr Howard, but in different language. He submits that the invention concerns apparatus in the sense of controls on the machine which when actuated by the player cause the machine to switch between different modes. The invention’s contribution is “apparatus with player operable bonus entry and draw timing controls to be used in playing a game”.

This is a new apparatus, he says, because it comprises a new combination of features, not merely because of the manner of its use; that is true even if the features could have been implemented using conventional components. The contribution cannot properly be characterised as a mere scheme, rule or method for playing a game as such.

As before, he says that a system of linked gaming machines is clearly technical in itself. The features that provide for user interaction by mode switching contribute an objective technical function to the system. This functional/technical quality is not cancelled by the fact that it will enter into a decision of the user interacting with the system.

Mr Birss says that all this needs to be treated with care. He says that the apparatus in only “new apparatus” in the sense that the computers have been programmed to behave in a certain (new) way as far as the user is concerned – hence reference to interaction with the player. But that, he submits, is not sufficient in itself. There is no new configuration and no new use of hardware of the sort which one finds in Aerotel. The fact of interaction between player and machine did not save the application. Mr Howard was right in answering his own question in the way he did: it is how the game works.

I agree with Mr Birss’ analysis. In my judgment, this Application too relates to a contribution which falls within the excluded category or scheme, rules or method for playing a game. This is not a tool for playing the game. It is a change – an improvement – in the way the game is played and is effected through a change to the rule, scheme or method for playing the game. The contribution therefore exists only in the excluded area. There is no technical contribution.

This is an Application in which the bonus game in the linked or networked system involves the issue, and acceptance or rejection, of challenges between players and in which the players adopt the mantle of selected characters.

The agent for IGT submitted that the invention involves how the machine reacts to various steps of the game. There are two different modes of response according to whether the challenge is accepted or rejected: if accepted, its result is determined; if it is rejected, the player suffers by way of loss of credits. The agent went on to say that “the essential features are firstly to determine whether a player can enter a bonus game, then there is the initial challenge issued from one player to another, supervised by the machine, the machine then tracks acceptance or rejection of the challenge and finally determines the outcome of the challenge and pays out”. (Mr Howard noted that the payout did not form part of the claim).

Mr Howard accepted the description of the advance given on behalf of IGT. That was “the tracking of the challenge, providing the functionality for a payout and having two modes to dictate the response of the machine, that is, challenge and acceptance or challenge and rejection”. But he did not perceive anything “technical” about these two modes. He agreed that the invention relates to how the machine reacts, but to him that reaction is entirely dependent on the challenge and the acceptance/rejection rules of the game. And although claim 1 specifies a network of gaming machines, the network is acknowledged to be well-known so that it was not clear to Mr Howard what set the network apart other than the nature of the game.

Dr Colley identifies what, according to his submissions is the “special exchange” element of the application in this way:

“This application relates to a system of linked gaming machines wherein a challenge gamble facility is provided such that a player at one machine may issue a challenge to a player at another machine. The special exchange is essentially considered to be expressed by the provision of a notional button, associated interface means, and a notional light (the display). The interface means is operable to determine the acceptance or rejection of a challenge and the display is operable in response thereto to indicate the outcome of the challenge and the outcome of the bonus game. The operation of the special exchange is particularly described by the underlined passage in the marked copy of claim 1 attached herewith.”

Dr Colley identifies the problem addressed by the invention as, again, the insufficiently interactive nature of previously known bonus gaming systems. As well as the contribution just mentioned, he says that a further possible aspect of the contribution is the ability of the gaming machine to display the features and so provide insight into the condition of the machine.

The contribution is thus, he says, a new machine operable to switch modes and/or a new machine operable to display features and thus provide insight into the condition of the machine. The provision of a machine comprising new features is new in itself and not merely because of the manner of use. Again, the contribution cannot properly be characterised as a mere scheme, rule or method for playing a game as such.

Again he says that a system of linked gaming machines is clearly technical in itself and submits that the features which provide for use interaction by mode switching contribute an objective technical function to the system. And again he says that this functional/technical quality is not cancelled by the fact that it will enter into a decision of the user interacting with the system.

Mr Birss submits that Mr Howard was right to say that how the machine reacts is dependent on the challenge itself and therefore on the way the game works (“the gameplay”). In my judgment, the contribution to the art identified by Mr Howard does indeed fall into the excluded area. The advance does not result in a new machine; it is no more than a contribution to the existing art in an area which falls within scheme, rules or method for playing a game.

As to the added feature of a display now relied on by Dr Colley, I agree with Mr Birss when he says that this cannot add anything.

This is an application in which the bonus game is continuing and a player can enter and leave while the game continues. An image associated with the bonus game is displayed to the player, parts of which alter, either dependently or independently of player input, in accordance with whether or not the player is actually in the bonus game. In this way, players are encouraged to keep playing the main game in order to earn eligibility to enter the bonus game. There is an alternative claim which is a new claim 1 based on the previous version of claim 4 when appended to the previous claim 1. The problem addressed by the invention, according to Dr Colley, is that previous known gaming systems provided a discrete bonus game which once played was terminated upon exit and as such were lacking in player interactivity.

Mr Howard dealt first with the objection raised of lack of inventive step identifying the inventive step as a gaming system running a continuous bonus game which the players can enter and exit when they like, the system comprising a gaming machine which displays an associated image, parts of the image being altered when a player or players qualify for the bonus game and when a player or players exit a bonus game. He decided that, on balance, an inventive step was present. But his analysis of the differences between the claimed invention and the prior art gave him a good springboard, to use his words, for applying the test in CFPH LLC’s application [2006] RPC 5 (a decision examined in Aerotel).

Mr Howard considered the advance to lie in the aspect of switching between a main game and a continuous game, the controls to allow the selection between modes, and the associated degrees of player involvement and alteration of parts of the image when a player is deemed to have qualified for the bonus game or when a player’s involvement is terminated.

Mr Howard considered that the switching over to a bonus game and the fact that the bonus game is continuous are all part of the gameplay; they fall within the bounds of a scheme, rule or method for playing a game.

The alteration of parts of the image caused Mr Howard more difficulty. He decided that, in essence, the image alteration is signalling to the user that a bonus game is beginning or ending. It is therefore inextricably linked with the progress of the game and its function only has its meaning in the context of the game. It was, in his view, part of the gameplay.

Dr Colley identifies what, according to his submissions is the “special exchange” element of the application in this way:

“This application relates to a gaming machine having a main game and a bonus game. The special exchange is considered to lie in the provision of a toggle mechanism operable in response to the occurrence of particular triggering events to change the mode of the gaming machine from one where the bonus game runs without player input to one where it runs with player input. This is felt to be embodied by features operable to determine that a qualifying activity or a termination input has occurred and those features responsive thereto [as set out in a marked-up copy of claim 1].”

Dr Colley describes the contribution in slightly different words from Mr Howard as providing a machine which allows a player to participate (once or more) in a continuing bonus game and which provided visual indications of the switch between two discrete modes and so of a change of state within the machine associated with access to the bonus game. He identifies the problem addressed by the invention as, again, lack of player interactivity because previous gaming systems provided only a discrete bonus game which once played was terminated upon exit.

Dr Colley submits that the contribution which he identifies as set out above is a new machine operable to switch modes in response to bonus game access. He says that the provision of a machine comprising a new combination of features is new in itself and not merely because of the manner of its use, so that its contribution to the art of the invention cannot be characterised as a mere scheme, rule or method for playing a game as such. He says that a gaming machine is clearly a technical device in itself: the features which provide for bonus game access mode switching contribute an objective technical function to the machine. The functional/technical quality is not cancelled by the fact that it will enter into a decision of the user interacting with the machine.

Mr Howard’s conclusion is that the switching and control aspects are clearly part of the “gameplay” and therefore excluded. In my judgment, he was right to reach that conclusion. Again, the contribution was, I consider, in the excluded field and there was no technical advance. The problem which the invention addresses is a problem which was met by a change in the scheme, rules and method of playing the game.

As to the image alternation feature Mr Howard, correctly in my view, concluded that the image alteration is again inextricably linked to the way the game works and is signalling to the user that the bonus game is beginning or ending. It is part of the gameplay and as before excluded. For the same reasons as given in relation to the other applications, there is no new machine outside the excluded area and no technical advance.

Each of the four applications is, in my judgment, one which is excluded from patentability by virtue of Article 52(2). I agree with Mr Howard’s conclusions and his reasoning. IGT’s appeals are accordingly dismissed.