Cranway Ltd v Playtech Ltd & Ors

Cranway claim that their patent for on-line gambling (EP 0625760B1) has been infringed by Playtech and the Tote. It is not necessary to distinguish between the various Playtech corporate entities or between the various Tote corporate entities. The invention relates to an interactive, real time, realistic “home” computer gaming system using general purpose computers. Aspects of the invention concern auditing and security to ensure fairness for players and prevent players defeating the outcome of a game; fast, efficient communication to enable reliable, low cost, real time, realistic operation; accounting; and enabling players to play a variety of games. Playtech and the Tote deny infringement; but also say that the patent is invalid for three reasons:

Before setting out the relevant parts of the patent in suit, I should consider the identity of the skilled addressee. The skilled addressee has three main functions to perform in a case like this. First, it is through his eyes that the court must interpret the patent in suit. Second, it is through his eyes that the court must decide what is disclosed by any cited piece of prior art. Third, it is with his knowledge that the court will decide whether the claimed invention of the patent in suit is obvious over common general knowledge or a cited piece of prior art. The skilled addressee may be a single person or a team. Usually the parties have little difficulty in identifying who the skilled addressee is or, in the case of a team, who constitute the members of the team. However, in this case, the parties disagreed. Before explaining the nature of the disagreement, I must identify the principles to be applied. As Lord Diplock said in Catnic Components Ltd v Hill & Smith Ltd [1972] RPC 183, 242:

“a patent specification is a unilateral statement by the patentee, in words of his own choosing, addressed to those likely to have a practical interest in the subject matter of his invention (i.e. “skilled in the art”), by which he informs them what he claims to be the essential features of the new product or process for which the letters patent grant him a monopoly.” (Emphasis added)

He is also a person “with practical knowledge and experience of the kind of work in which the invention was intended to be used”. The subject matter of the patent in that case was a lintel in the form of a box-girder. Lord Diplock identified the skilled addressee as “a builder familiar with ordinary building operations” (p. 244). The practical interest in that case in effect meant putting the teaching of the patent into actual practice. Likewise in Richardson - Vicks Inc.'s Patent [1997] R.P.C. 888, 895 Aldous LJ said:

“It is therefore clear that the relevant person must have skill in the art with which the invention described in the patent is concerned. In some cases the patent may include within it information derived from or utilising more than one aspect of science or technology and in such cases the notional skilled addressee, the person skilled in the art, will consist of a combination of scientists or technicians having those skills…. Each case will depend upon the description in the patent, but there is no basis in law or logic for including within the concept of “a person skilled in the art”, somebody who is not a person directly involved in producing the product described in the patent or in carrying out the process of production.” (Emphasis added)

In other words, the skilled addressee must, as Terrell puts it (§ 6-31), “have sufficient skill and knowledge to put the invention into effect”. I should say a little more about Richardson - Vicks Inc.'s Patent. The case concerned an over the counter preparation for coughs and colds. A typical preparation contained an analgesic and one or more of decongestants, antihistamines, cough suppressants and expectorants. The alleged invention was the substitution of a non-steroid analgesic drug (such as ibuprofen) for the previously used analgesic (such as aspirin or paracetamol). The patent was attacked as being obvious. It was not suggested that the substitution produced any synergy between the components of the preparation. The patentee argued that, in the absence of such synergy, it would not have been possible to obtain regulatory approval to the new preparation. Thus it would not have been obvious to try the substitution. In support of this argument, the patentee argued that the patent specification was addressed to a team, one member of which would have been an expert on drug regulation. At first instance Jacob J. said [1995] R.P.C. 568 at 579:

“Even if it were true that that is what the regulatory man would have said (and the evidence only goes as far as indicating that the regulatory pathway would have been seen as difficult, perhaps impossible) I cannot see that it has anything to do with obviousness. All the argument amounts to is that it would have been impossible or difficult to get permission lawfully to sell the mixtures of the alleged invention.”

The Court of Appeal agreed. Aldous L.J. said, in the passage I have quoted, that it was illegitimate to include in the team to whom the patent was addressed someone who was not directly involved in producing the product described in the specification or in carrying out the process of production. He held that it had not been established on the evidence that knowledge of the regulatory requirements was part of the common general knowledge of the legitimate members of the team. He rejected reliance on regulatory approval in the following terms at 896:

“Richardson-Vicks sought to avoid the conclusion that the patent was obvious by relying upon the difficulties of obtaining regulatory approval. That was an obstacle in the path along the road to the conclusion that the patent was obvious which, they submitted, meant that, even though it was obvious to consider substitution of ibuprofen for aspirin, a skilled addressee would have realised that it was not worth trying. They were the first to perceive that it was obvious to try the substitution and therefore, relying upon cases such as Johns-Manville Corporation's Patent ([1967] R.P.C. 479), there was invention.

That submission fails for four reasons. First the alleged obstacle in the path of the skilled addressee did not form part of his common general knowledge and therefore was not an obstacle in fact. Second, claim 1 of the patent purports to monopolise the manufacture of the combination of ibuprofen and a decongestant. The alleged obstacle was not an obstacle to manufacture. It was an obstacle to marketing the combination. Thus the alleged obstacle did not prevent the manufacture of the combination being obvious. Once it was conceded that it was obvious to consider the claimed combination and the way to manufacture the combination was well-known, the conclusion that the invention was obvious was inevitable. Third the alleged obstacle only prevents commercialisation being obvious. That is not relevant to the issue of obviousness …

Fourth, the cases such as Johns-Mansville have no application. They were all concerned with patents where it was alleged that there was a technical difficulty in perceiving the result. In this case there was no such technical difficulty.”

Although this was said in the context of obviousness, it seems to me to be equally applicable to consideration of the skilled team for the purposes of interpreting the patent in suit. The second and third reasons are pertinent to the present case.

The addressee of the patent may (and usually will) be assumed to have specialist knowledge appropriate to a person of ordinary skill practising in his field of endeavour (confusingly called “common general knowledge”). But in my judgment that is not the only knowledge that he possesses. He also has the knowledge that any intelligent and wide-awake person would have (that is, “general knowledge” in the popular sense). In other words, although he is a hypothetical construct, the skilled addressee inhabits the real world.

Cranway’s expert was Mr Stacy Friedman. He is a casino game designer and inventor, computer software systems engineer, and gaming mathematician. His view is that the following three roles would be necessary for “the proper implementation” of the Patent:

Each of these would therefore be a member of the team making up the skilled addressee. The casino operations manager understands the practicalities of playing casino games. He will bring context to the patent, and will be able to explain to the computer software systems engineer why the patent is directing him to do things the way it does, what is important in the implementation and what is less important, and to educate him on the rules and fairness of the games being implemented (from both the punters' and the operator’s perspective). The computer software systems engineer is a person who can actually implement the system called for in the patent. He is a person who writes the software, configures the hardware and network, and makes the system work. Finally the gaming mathematician is a person who can ensure that the casino games are implemented properly: that each game’s mathematical house advantage is within regulatory requirements, that the game will meet the casino’s desired revenue targets, and that the game will have a comparable look and feel to a live casino so that it will be attractive to gamblers who use it. While the casino operations manager understands the rules of the game, it is the mathematician who can demonstrate (both to the players and to any regulatory authorities) that the gaming system is fair and can be trusted with players’ money.

Playtech’s expert was Professor Ian Leslie. He is Professor of Computer Science at the University of Cambridge Computer Laboratory. He points out that the patent is written in very basic terms with little or no explanation of the details of the systems it describes or how they might be implemented: it is concerned with the functionality of the system rather than details of its design. In his view the patent is addressed to a person or team of persons interested in providing a system for playing multiplayer games using a network of computers. The skilled addressee would have knowledge of the workings of personal computers as terminals remote from a mainframe computer, data transmission, modems and how to use them to interact with online service providers to play interactive games. In order to actually build a system of the type described in the patent you would need a team of people with a range of expertise and experience. This would include a systems architect to design and oversee the whole; game and graphic designers; someone with communications experience to design packet formats and select appropriate protocols; and software engineers to implement the games, server communications, and front end systems. A given individual might be able to fulfil more than one role and, depending on the complexity of the games, some tasks might require more than one person. The systems architect would commonly have a degree in computer science or electrical engineering, but that would not be essential - significant practical experience on top of another degree might be enough. Those who would build a system of the kind described would therefore be knowledgeable and skilled in a number of areas. These areas would include network architecture and communication (including distributed processing), random number generation and encryption.

Professor Leslie did not agree that the skilled team would include a gaming mathematician or a casino operator. In his view it was within the skill of a computer systems engineer to build a system as described in the patent for any game for which the rules are well known or readily ascertainable. Although the skilled team would need to know about the basic rules of any particular game and what the games looked like when they were played, he did not agree that a casino manager was needed for that purpose. However, if the system was to involve gambling for “real money”, and thus would be liable to be regulated, the skilled team would need to know something of the regulatory framework, in order to ensure that they produced a lawful game. He accepted that if you were going to implement the patent with a view to building a system for “real money”, then you would seek advice of experience of running systems for money.

Part of the reason for the disagreement about the nature of the skilled addressee turned on a question of construction of the patent in suit: were its claims limited to gaming for “real money”; or could they be infringed by gaming without wagering for “real money”, even if payment was required in some other way (e.g. by paying for time spent playing)? This presents a possible conundrum. As Lord Hoffmann explained in Kirin Amgen v Hoechst Marion Roussel [2005] RPC 169:

“The question is always what the person skilled in the art would have understood the patentee to be using the language of the claim to mean.” (Emphasis added)

If a disagreement about the identity of the skilled addressee turns on a question of construction of the patent, but the patent must be construed through the eyes of the skilled addressee, how can one decide either question independently of the other?

Mr Friedman did not suggest that there were any words or phrases used in the claims that had a special meaning to a gaming mathematician or to a casino operator. As far as the specification was concerned, he said that the phrase “gaming device” had a technical meaning to a casino operator. Professor Leslie did not contradict him. Mr Alexander said that once the court had been educated in that special meaning, it could embark upon the process of construction to decide whether the claims were limited to gaming with “real money”. Mr Tappin did not, I think, seriously dissent from this; because he submitted that the court had to “get a handle” on the patent in suit before deciding who made up the skilled team. But in order to “get a handle” on the patent, there is no alternative but to construe it at least in this respect. I must therefore embark on considering this question of construction before reaching a conclusion about the make up of the skilled addressee. Once I have done that, it will be possible to describe the common general knowledge of that addressee, and to consider the remaining questions of construction.

The patent in suit begins by setting out the field of the invention ([0001]):

“This invention relates to an interactive, real time, realistic “home” computer gaming system using general purpose computers. … Aspects of the invention concern auditing and security to ensure fairness for players and prevent players defeating the outcome of a game; fast, efficient communication to enable reliable, low cost, real time, realistic operation; accounting; and enabling players to play a variety of games.”

It then surveys the prior art which it groups into five categories, each of which have defects:

In [0009] and [0010] the patent summarises some of the defects of the known systems:

“[0009] Generally, while most of such systems as mentioned above concerned with wagering have accounting and auditing/security facilities, these are limited in nature largely because of the volume of data to be stored, the fact that data has to be stored continuously and the problem of errors. For example, to replay an event immediately prior to a fault, one has to store the position of the program being executed, which screens were showing, the state of the memory of the each of the host and each active terminal, and events or inputs leading up to that time of the fault. This is a monumental task, because one can never be sure when a fault is about to occur, and slows operation of each of the computers.

[0010] Most known systems thus default to voiding a game in the event of a fault, which is unfair if the fault is beyond the control of the player. On the other hand some system is required to prevent a player from deliberately defeating the outcome of a game.”

It then sets out the objective of the invention in [0011]:

“This invention seeks to provide a casino gaming system capable of interactive, real time, realistic gaming at genuinely remote locations which is economical, secure and reliable. Aspects of the invention seek to minimise telephone line usage and cost and terminal costs; to enable a variety of casino games to be played in such a manner that a player experiences the same “feel”, security etc. as if he were at a casino; and to ensure that faults, deliberate or accidental, in communication and at terminals do not lead to abuse by players or the entity operating the host computer.”

The patent summarises the invention in [0014] as follows:

“The invention provides a gaming system for playing an interactive casino game, comprising a host computer, at least one terminal computer forming a player station, communication means for connecting the terminal computer to the host computer, and program means for operating the terminal computer, the host computer and the communication means, wherein:

a.

the terminal computer has a processor and connected to the processor a video display unit and a data entry means;

b.

the terminal computer has terminal program means for:

- establishing a secure communication with the host computer;

- generating simulation output appropriate to a game including an account status of a player playing the game; and

- generating a terminal data packet representative of a valid user response generated by activation of the data entry means, and sending the data packet to the host computer;

c.

The host computer has program means for:

- generating a random number for a game being played on a terminal computer within preset criteria for that game in response to a valid terminal data packet received from said computer terminal; and

- storing an account status for a player playing the game;

characterised in that:

- the terminal computer is sited at a location remote from the host computer;

- the communication means is operable to connect the terminal computer to the host computer via a public telecommunication link;

- the host computer has program means for generating host control data packets for controlling the simulation output of the terminal computer;

- processing is distributed between the host computer and the terminal computer such that a game result and an account status are processed at the host computer and the simulation output is processed at the terminal computer so that only the minimum relevant information is transmitted between the host and terminal computer; and the simulation output is generated in response to host control data packets received by the terminal computer from the host computer.”

The patent then sets out a series of features, each of which is described as “preferable”. They are:

Processing is carried out both at the user’s computer and at the central server. This, the patent explains in [0019], is “known in the art” as a “client/server” system or application. Only essential or relevant data is transmitted between the host and the terminals, while each computer processes only those portions of the program needed to produce a required output. This speeds up the playing of the game in real time. The patent goes on to explain that the use of general purpose computers and terminals means that the system is low cost. It proposes that data packets may be encrypted, and that players may be given individual passwords.

Having thus described the invention, the patent goes on to amplify it by reference to a “non-limiting” description of a “presently preferred embodiment”.

It begins by describing the hardware needed to run the system. All the hardware is known hardware. The architecture is also known. It is a client/server system. The patent points out that at the client end, the punter uses a PC. The PC runs a program capable of generating suitable simulation output for casino games. It points out [0030] that:

“The PC does not determine the outcome of any game of chance and thus cannot be considered itself to be a gaming device in the normal sense of the term.”

The architecture of the system is illustrated in the patent. Mr Friedman produced an annotated version of the diagram, which I reproduce.

It then describes how the system operates in practice. In [0032] it says:

“A person wishing to play a game of chance from a remote PC establishes an account with a casino or host operator, deposits an opening balance, is allocated a personal password, and is given a gaming software including programs and data for generating screens appropriate to casino games. The gaming program or modifications to it may be downloaded directly from the host via a communications link if required. When the player wishes to play he activates his PC, loads the gaming program, communicates with the casino via the modem and node and “logs in” by supplying his password, which is verified by the host. The host supplies an encryption key code, which is unique for the player and may be unique for the particular communication; the key code is used to code and decipher encrypted data communicated between the PC and host by providing a one-to-one correlation between a set of 30 transmitted characters and a set of program interpretable characters. Communication is now established.”

The host then sends a message to the remote PC which causes it to display, among other things, the player’s “account balance”. The player selects the game that he wishes to play. Assuming he selects a card game, such as blackjack, the host activates a “suitable program module” for generating random numbers between 1 and 52; a data base module for evaluating outcomes; and a program module for generating appropriate data packets. It then sends a data packet to the terminal to reproduce a blackjack simulation on the video display including a request for the player to “place” his bet and a selection of valid keys that correspond to predefined bet values. The player presses an appropriate key to place his bet and “deal” his cards. This causes the PC's program to generate and transmit a data packet to the host. In response, the host, using suitable random number and database modules and an algorithm to draw unique cards from a deck of cards, “deals” cards for the house and player according to the rules of the game. This information is in turn sent to the player. The player’s own PC generates the visual display; and the player can choose his next move (e.g. draw, stand, split or surrender). His choice is made by pressing an appropriate key and it is then transmitted back to the host. Only valid keystrokes are transmitted. The game thus continues turn by turn. At the end of the game the host sends a message to the player’s terminal to display the result and the player’s “new account balance”.

The host stores all significant information needed for auditing, security, accounting, “replaying games” and restoring the status of the host and PC in the event of a fault or on demand if required. The significant information required is only the account status of the player prior to a game, the significant data contained in each data packet sent to the host and the random numbers generated by the host during the game. The significant data to which the patent refers consists only of those required for initiating program sequences and excludes pure communication data. This information can be used:

“for security and auditing and also to replay or "roll-back" each game to the status prevailing immediately prior to any fault or disruption of communication between the terminal and host.”

In the example the host is programmed automatically to restore the status of the host and the PC when the player re-establishes communication after a disruption or fault. The patent explains at [0037]:

“Thus, players will not be unfairly treated, e.g. if the fault was not caused by them, and players cannot defeat the outcome of a game. This simulates casino gaming conventions or rules.”

The replay or “roll-back” is described in [0039]:

“During roll-back the host replays a game using stored player responses and stored previously generated random numbers. In order to display or reproduce this on a terminal it may be necessary to send many data packets to the player's terminal before requiring input from the player. Thus, it is necessary to be able to send multiple data packets from the host to a player's terminal.”

The patent culminates in the claims. Shorn of the reference numbers the relevant claims are:

“1.

A gaming system for playing an interactive casino game, comprising a host computer, at least one terminal computer forming a player station, communication means for connecting the terminal computer to the host computer, and program means for operating the terminal computer, the host computer and the communication means, wherein:

a.

the terminal computer has a processor and connected to the processor a video display unit and a data entry means;

b.

the terminal computer has terminal program means for:

establishing a secure communication with the host computer;

generating simulation output appropriate to a game including an account status of a player playing the game; and

generating a terminal data packet representative of a valid user response generated by activation of the data entry means, and sending the data packet to the host computer;

c.

The host computer has program means for:

generating a random number for a game being played on a terminal computer within preset criteria for that game in response to a valid terminal data packet received from said computer terminal; and

storing an account status for a player playing the game;

characterised in that:

the terminal computer is sited at a location remote from the host computer;

the communication means is operable to connect the terminal computer to the host computer via a public telecommunication link;

the host computer has program means for generating host control data packets for controlling the simulation output of the terminal computer;

processing is distributed between the host computer and the terminal computer such that a game result and an account status are processed at the host computer and the simulation output is processed at the terminal computer so that only the minimum relevant information is transmitted between the host and terminal computers; and

the simulation output is generated in response to host control data packets received by the terminal computer from the host computer.

3.

A gaming system as claimed in any preceding claim, wherein, for each game being played, the host computer has means for storing sequentially accounting data of a player at the start of a game and data of: each valid user response transmitted from the terminal computer to the host computer; each random number generated by the host computer during that game; and whether that game was completed.

4.

A gaming system as claimed in Claim 3, wherein means is provided for automatically restoring from said data stored by the host computer the status of the host computer and a terminal computer and for reproducing the simulation output of said terminal computer when communication between the host computer and terminal computer is restored following an interruption in said communication.

5.

A gaming system as claimed in Claim 3, wherein means is provided for replaying on demand at least a portion of at least one game from said data stored by the host computer.”

There is no dispute about the general principles of patent construction. The task for the court is to determine what the person skilled in the art would have understood the patentee to have been using the language of the claim to mean. The principles were summarised by Jacob LJ in Mayne Pharma Pty Ltd v Pharmacia Italia SPA [2005] EWCA Civ 137 and refined by Pumfrey J in Halliburton Energy Services Inc v Smith International (North Sea) Ltd [2005] EWHC 1623 (Pat) following their general approval by the House of Lords in Kirin-Amgen v Hoechst Marion Roussel [2005] RPC 9. An abbreviated version of them is as follows:

The parts of claim 1 that bear on the question of “real money” are:

The subsidiary claims do not add much of significance on this point, although claim 3 does refer to the host computer storing “accounting data of a player at the start of a game” although not, apparently, at any other time.

Mr Tappin submits that the primary meaning of “gaming” as an ordinary English word is “to play at games of chance for money” or “to gamble”. Thus inherent in the very description of the invention is a reference to “real money”. I agree that one of the traditional meanings of “gaming” is “to play at games of chance for stakes”. I am not convinced that even in this traditional meaning the stakes must necessarily be “real money”. However, in the world of computers the word had a broader meaning even in 1993. This is illustrated by one of the cited pieces of prior art, viz. Banks: The Modem Reference, published in 1992. The following quotations make the point:

“Gaming is the major overt form of on-line entertainment for most computer users…. This is probably because computer users tend to be gamers and vice versa.”

“Among the more interesting approaches to online multiplayer gaming are in games that use special front-end software. GEnie’s Air Warrior is one of the best examples of this kind of game.”

“An interesting twist on gaming is the modem game, a multiplayer game that works by direct hookup between two personal computers.”

“Although modem gaming was quite promising in the late 1980s, it seems to have been supplanted by real-time gaming on online services.”

Pournelle’s PC Communications Bible (published in 1992) displays the same usage (p. 12-13):

“The popularity of computer gaming software is reflected in online activity. Executives at two major commercial services tell us that more user time is spent in online gaming than in any other activity except downloading software... On one service, online gaming accounts for 1000 times the amount of revenue produced by news services….

Obviously, online gaming is big business – multiplayer gaming more so than single-player gaming.”

By 1993 the Oxford English Dictionary (citing examples from the 1980s) included as one of its definitions of “gaming”:

“The playing of war-games or role-playing games.”

In addition, there is nothing in the claim itself that explicitly refers to “real money”; or that links the account status stored and processed at the host computer with an account that exists in the real world (such as a bank account or credit card account). The unit of account could be anything, including worthless chips. Nor is there anything in the claim that indicates deposits into the account from outside the gaming system or withdrawals from the account otherwise than as the result of playing a game. In other words, there is nothing in the claim that allows the player to cash in his chips or to buy chips in the first place. Mr Tappin pointed to the description of the punter’s PC in [0030] which said that it could not be considered a “gaming device in the normal sense of the term”. This, he said, showed that the patentee thought that there was a “normal sense” of the term, and thus must be addressing someone who knew what that “normal sense” was. That addressee can only be a casino operator. Mr Friedman said that the normal sense of the expression was:

“…machines which (i) allowed players to play games of chance; (ii) had a slot capable of accepting money or money's worth and (iii) the element of chance was provided by means of the machine. The most common example of a gaming machine would be a slot machine.”

I do not consider that this is a powerful point. First, the patent itself explains why a PC would not be considered as a gaming device in the normal sense of the term. The reason given is that it does not itself determine the outcome of a game of chance. The fact that it did not have a slot for accepting money (even though a PC would not have such a slot) is not given as the reason. Second, the explanation would not have been necessary to an addressee who knew all about the operation of casinos. Third, the significance to the patentee is nothing to do with whether the PC can accept money; it is to do with how the outcome of the game is determined. Fourth, the description of the PC is in that part of the specification which is said to be a “non-limiting” description of a “presently preferred” embodiment. Mr Tappin also relies on [0032] which says:

“A person wishing to play a game of chance from a remote PC establishes an account with a casino or host operator, deposits an opening balance…”

I am inclined to agree that the emphasised phrases are consistent with an external link between the gaming system and “real money”. Even so, the patent does not explain how the deposit (presumably into a “real” bank account) is then linked to the gaming system itself. However, in my judgment this is the only such explicit suggestion in the specification; and again it is in that part of the specification which is said to be a “non-limiting” description of a “presently preferred” embodiment. But the claim itself does not require either the opening of an account or the deposit of an opening balance; and neither the claim nor the specification deals with adjustments to the account if a player simply wishes to cash in his winnings. Nor, for that matter, does the specification (let alone the claim) say that the system is programmed to stop accepting bets if the player runs out of money.

Mr Tappin says that in order to set up a system for playing casino games for “real money” one would have to have:

No doubt all this is true, but where is it in the claim? Mr Tappin saw the force of this question. His answer was that these features are all implicit in the description of the system as a “gaming” system. If this is all encompassed in the word “gaming” then the patent is seriously deficient in its teaching, because it teaches nothing about how to achieve any of this. It is true that there is no insufficiency attack, but that is not the point. The point, as it seems to me, is that to choose a construction of the claim that might expose the patent to attack on the ground of insufficiency in preference to a construction that would not expose it to such an attack would be an irrational choice to make. Put another way, the skilled addressee would understand the claim to reflect the teaching of the patent.

I have consistently put the phrase “real money” in inverted commas, because I have found it difficult to understand precisely what this means. After all, games played in a casino are played with worthless chips, and it is only by a collateral agreement between the player and the casino that they are exchangeable for “real money”. Many people play bridge for points; and sometimes by agreement between the players they ascribe monetary values to the points. What if the system were used for gaming for Air Miles or Nectar points? Mr Friedman said that in this context “real money” meant “something with external value…; something that has value outside of the game that you are playing.” But the value attributable to something outside the game is a matter of agreement or convention outside the game; and the patent in suit teaches nothing about that.

In my judgment the claims are not limited to gambling with “real money”.

I do not accept that a gaming mathematician is part of the skilled team. The patent in suit says nothing about mathematics, apart from a bare reference to random numbers. As the development of Rabbit Jack's shows (a cited piece of prior art: see below) a functioning program for playing casino games can be designed and developed without the need for a gaming mathematician. Moreover, Mr Friedman himself gave evidence of a client of his who had developed on-line slot machines that were functioning without the need for a gaming mathematician. In his oral evidence Mr Friedman suggested that the gaming mathematician would be part of the team in order to make the games “realistic”, since that was one of the promises of the patent. However, as he himself said in his first report (§ 157):

“In relation to “realistic”, in paragraph [0022] the Patent describes how a feature of the invention is that “a real life simulation of playing in a casino can be offered to players at home or remote terminals.” The Patent also refers to "simulation output" (paragraph [0013]) as meaning “computer screen graphics, sound or screen graphics and sound that provide visual and optionally audible messages and representations to a player, such as instructions and game simulations.” This is in contrast to the Patent's observation on the first group of prior art (horse betting using home or agency terminals) in paragraph [0003] (column 1, line 44) that they are "not realistic in that limited information only is displayed on the terminal screens."”

He concluded from this that:

““realistic” therefore means something visually resembling a casino game, including the appropriate graphic images of cards, chips, and so forth…” (Emphasis added)

I agree with this conclusion. The contemplated realism is visual not mathematical.

What about the casino operator? On the basis of my interpretation of the claims, they are not limited to gambling for “real money”. A casino operator is not, therefore, a member of the skilled team. Suppose, however, that I am wrong and that the claims are limited to gambling for “real money”. What does the casino operator bring to the party? Mr Friedman’s first report supplied a list:

Professor Leslie’s overall view (2^nd report § 18) was that:

“The most that can be said is that a skilled team implementing the technical teaching of the Patent would, in certain circumstances, make an enquiry of such people. The circumstances I have in mind are where the skilled team seeks to implement a little known or complicated game or where he is concerned to ensure he optimises commercial success or ensures compliance with regulations.” (Emphasis added)

I agree. Mr Friedman himself said that it is the computer software engineer “who can actually implement the system called for in the Patent”. Accordingly, even if the claims are limited to gambling with “real money” I would not have held that a casino operator is part of the skilled team.

The real purpose, from Cranway’s perspective, of including a casino operator as a member of the skilled team was to rely on an alleged “mindset” hostile (or at least sceptical) about online gambling at casino games for “real money”. I will deal with this later when I come to deal with the obviousness attack.

The experts were in broad agreement about the common general knowledge of the computer software engineer in 1993. To the extent that they were not, the following are my findings of fact.

He would have been familiar with client/server architecture operating on general purpose home computers. He knew that there were a number of commercial dial up services available in the USA: CompuServe, America Online, Prodigy and GEnie. They required you to load special “front end” software onto your personal computer to use the service. In these systems the user would use appropriate communications software and a modem to access the public telephone system and thus the available services including bulletin boards and online services. “Front-end” programs are programs loaded onto the user’s terminal for use with on-line services. The front-end simplified some of the communications tasks. Proprietary front-ends were also available to connect to certain online services, including America Online and Prodigy. The purpose of these programs, which would operate on the user’s PC connected to the online service, was in part to speed up or enable features such as graphics, which would otherwise be slow or impossible to implement. They did this by providing software for the user to install at the user’s terminal for storing and processing the graphics on the user’s terminal rather than at the central server, thereby reducing the amount of data that had to be sent down the line. The skilled addressee would have been familiar with both AOL and Prodigy. If the skilled addressee did not know the characteristics of a particular service, he could easily find out either by consulting a standard book or by subscribing to the service.

In 1993, a dial up connection was the standard way in which a home computer would communicate with a central service. This was a data connection that operated over a standard telephone call. It was a signal that was indistinguishable from a normal voice call, the data signal being encoded or modulated as an audio signal. For most users of dial up connections even into the early 1990s data rates were very slow by today’s standards. Any online service had to assume that a significant fraction of users would be operating at only 300 bps (for comparison, today’s personal computer with some Broadband connections can operate over 20,000 times as fast). This was very slow compared with the processing of other functions of a computer. Generating graphics by sending individual components over the communications link would be impossibly slow.

By the early 1990s, personal computers were ubiquitous; and networked personal computers with modems as add on devices were common. In contrast to the dumb terminals of earlier, the personal computer on a user’s desk had significant processing capacity including graphics processing capacity; and online services including multiplayer games often exploited that. The goal was a fast network that allowed the remote computer to make use of the capacity of the server. That could be achieved in a local area network, but was much harder for a personal computer dial up. There was thus a particular incentive to increase the front end functionality and processing in the personal computer and to minimise the amount of data transmitted down the slow line in the case of personal computers. The data being transferred between the front end and server needed to have a higher information content; and that was achieved by transmitting commands which the personal computer would process, rather than simply displaying transmitted characters as the early terminals did. The bottleneck in the system was the slow network connection, and if the personal computer was only displaying the characters, then it was being underused. Accordingly by 1993 the standard way of providing on-line services where graphics were to be displayed at the user terminal was by designing the system so that that the program running on the server could invoke an application defined program on the personal computer by sending a command. This method of processing was called “distributed processing”; that is to say that the processing of information is distributed between server and client. In distributed processing it was standard practice only to transmit essential or relevant data between host and terminals where the host would process part and the terminals would process the other part; and only the necessary parts would be transmitted between them.

By 1993 security was already a significant issue in computer use. It was important to make sure that only authorised personnel had access to stand-alone computers and for this reason users were routinely issued with passwords. Online services were no different. As the user paid, usually for the time spent online, it was important for a user to know that their time was the only time for which they were paying. Online services typically required details of a method of payment and demanded a password. Much of the strengthening of password systems was motivated by the availability of dial up access in the 1960s and 1970s. Where computation was distributed it was also important to ensure that access to information was provided only to processes that required it, bearing in mind that processes running on a personal computer could be subverted by the user.

The skilled addressee would naturally be concerned to minimise the possibility of cheating. As I have said this was a concern of any designer of software for interactive games. He would naturally, therefore, ensure that the design of the system did not allow the player to control anything that really mattered, such as the generation of random numbers, determining the game outcomes or keeping the accounts, all of which would be done at the server end.

Accordingly, anyone designing or implementing a multi-player gaming system on-line in 1993 would have a central system generating the random variables rather than doing this at the local computers. Not only would this minimise the risk of cheating (see Mr Adams’ paper to which I have referred), but if one player lost a connection the remaining players could continue the game. Thus the server is the only realistic place to perform these functions. Central server generation of the random variables would have been regarded as particularly natural for games which in the “real”, i.e. non-computer/online world, also involved central generation of the game variables. Such games include casino card games in which the dealer shuffles cards and roulette in which the wheel generates random results.

By the early 1990s there were millions of homes (particularly in the USA) with personal computers having access to on-line services. The number was growing rapidly. On-line services included many with financial effects in the real world. The position in the early 1990s was summarised by Banks as follows:

“It is now possible to purchase a surprising variety of goods and services online as well as to undertake other kinds of financial transaction.

Although banking promised early on to be one of the most-used features offered by online service, it took a nosedive and was used very little until recently, shortly after regional banks went national….Now however, online bill paying is increasingly popular, and credit card companies offer a number of cardholder services (you can even apply for a credit card online).

Online shopping is booming. Almost all online services offer shopping of one sort or another… Specialty vendors … also offer a variety of general, noncomputer merchandise.

As you might expect, computer products seem to be the mainstay of online shopping. However that appears to be changing. Most of the larger consumer online services offer the electronic equivalent of a shopping mall, populated by specialty shops (bookstore, florists, gift shops, and the like) in addition to computer software and hardware retailers. These specialty shops are catching on and doing a good business.”

He would have had access to a random number generator (more correctly a pseudo-random number generator) which was supplied as part of a standard programming language package. It is a pseudo-random number generator because its mathematical functions operate on themselves to generate a series of apparently random numbers after being initialised with a seed. However, given knowledge of the seed and the algorithm all future numbers can in fact be predicted: hence they are pseudo-random. This would have been what was known as a software RNG. These were to be contrasted with what were known as hardware RNGs. A hardware RNG produced an electrical signal in the form of an irregular square wave in the form of random bits. These are assembled into bytes by a serial port to which it is connected. A software driver determines the way in which these bytes are converted into random numbers. In 1993 hardware RNGs were not available “off the shelf”; although now they are.

Anyone who wanted to design a system that could be used for betting with real money would have to have been aware of regulatory issues. These might vary from jurisdiction to jurisdiction. The regulations would cover such things as what to do in the event of an interruption or disturbance to the playing of the game. In the event of an interruption or disturbance to a game there would have been two choices. Either the game could be restored to the state it was in before the interruption; or the whole game could be invalidated. In the case of a single-player game either was possible. But in the case of a multi-player game restoration of the state of the game before the interruption would only be possible if the game had not moved on.

The skilled addressee would also know the rules for playing blackjack, poker, bingo and other games played in casinos. Even if he did not he would have ready access to them. He would also know (or readily find out) the conventions that applied in real casinos if play was disturbed or interrupted. He would be aware of the difference between house-banked games (such as blackjack) and player-banked games (such as poker).

Having made those findings, I can now deal with the remaining issues of construction.

Mr Tappin says that this integer of the claim reflects [0035] of the Patent which explains that the terminal program “evaluates and validates each player input keystroke and transmits only those that are valid.” He says that, purposively construed, this claim requires each user response to be evaluated for validity, so that only those which are valid lead to the generation and transmission of a data packet to the host. This is consistent with the purpose of the Patent to transmit only relevant information between terminal and host.

Mr Alexander submitted that this was not the right construction. However, he did not propose an alternative construction; and did not elaborate on his reasons for saying that Mr Tappin’s construction was wrong.

I accept Mr Tappin’s submission for the reason that he gives.

The dispute under this head is whether a “hardware RNG” is within this integer of claim 1. As I have said in the case of a hardware RNG a piece of hardware emits an electrical signal, which is converted into a random number by software. It is, I think, common ground that “program means” in the claim is a synonym for “software”. Mr Alexander said that in the case of a hardware RNG the software did not “generate” the random number. That was done by the hardware which emitted an electrical signal. Consequently the integer is not satisfied by a hardware RNG. Mr Tappin argues, in effect, that this is exactly the kind of meticulous verbal analysis that the correct approach to claim construction deplores. The patentee never mentions the existence of different kinds of RNGs, so it can hardly be supposed that he was deliberately specifying one kind of RNG in preference to another. Indeed the very fact that he refers to “random numbers” rather than “pseudo-random numbers” shows that he was not strictly concerned with the question whether a hardware RNG or a software RNG was used. There is no technical reason why a hardware RNG should not be used. In any event, a hardware RNG did generate a number by means of software: the only thing that the hardware itself generated was an electrical signal. In addition, the integer not only required that the “program means” generated random numbers: the random numbers generated must be numbers within pre-set criteria. That can only be accomplished by software (or program means) and Mr Alexander did not suggest the contrary. Although Mr Alexander said that this was mapping random numbers rather than generating them, the claim treats the whole process as one, and does not divide it into generating random numbers on the one hand, and mapping them on the other.

I accept Mr Tappin’s submission, for the reasons he gives.

This is the additional integer of claim 5. The question under this head is: what form must the “replay” take? Must it be a sequential re-enactment of the various game steps (an “action replay”) or can it be a single summary in textual or graphic form of all the game moves that constituted that particular game? Mr Alexander says that it must be an action replay in this sense: Mr Tappin says that it need not be.

The following parts of the specification seem to me to be relevant to this question:

Mr Alexander submitted that [0039] is clearly contemplating sending the data packets that had been previously generated and stored and that in the replay many such data packets are sent in order to reproduce or display the stored player responses. What is being described is running through the same steps that had previously taken place (e.g. sending a data packet corresponding to game step 1 and displaying it, a data packet corresponding to step 2 and so on). If all that was necessary was a textual summary of the game, it would all be sent in one data packet. I agree that this is what is being described in [0039]. It was this paragraph that Professor Leslie relied on in expressing his view that an “action replay” was required in order to satisfy this integer. He accepted, however, in cross-examination that [0039] was directed to automatic “roll-back” in the event of an interruption rather than a replay on demand. While that is no doubt true, I do not see that it affects the construction of the integer. [0039] is the only place in the specification where use of the stored data for recreating a game is described; and both in [0016] and [0036] the stored data is said to be capable of being used either for “roll-back” or for “replay” without any distinction being drawn between the two. Indeed, if the game is “rolled back” automatically following an interruption, there would seem to me to be less of a reason for reprising the various steps sequentially than would be the case if the player wished to see a “replay” as a result of a demand. Yet that is what the specification describes. The process described in [0039] is, in my judgment, as applicable to “replay” as it is to “roll-back”. It also coincides, to my mind, with the ordinary meaning of “replay”. Mr Tappin said that in order to create a true “action replay” it would be necessary for the server to store the times between game steps, and the patent said nothing about that. But as Professor Leslie said in cross-examination that depends on whether the replay was to be carried out in precise elapsed time; or whether it would be done simply by playing the various steps sequentially. To my mind that is the complete answer to Mr Tappin’s point about storing times between game steps.

I conclude therefore that claim 5 requires a sequential re-enactment of the various game steps or an “action replay”.

Although a number of pieces of prior art were cited, in the end it is necessary to refer only to two.

Rabbit Jack’s Casino was an on-line game offered by Quantum Computer Services (later to become AOL, which I will call them) from about 1986. It is common ground that it was made available to the public; and that a skilled computer programmer would have been able to deduce its essential features merely by playing the game; or, perhaps, with the use of a debugger, which was a standard piece of kit at the time. It was designed by Mr Robert Fulop, who gave oral evidence. Mr Fulop has a degree in electrical engineering and computer science and describes himself as a consultant and producer of video games. He is neither a casino operator nor a gaming mathematician; and neither of those disciplines was involved in the creation of Rabbit Jack's. Mr Fulop had prepared a description of Rabbit Jack’s for earlier (and unrelated) proceedings, which he confirmed was an accurate description of Rabbit Jack’s and the way that it operated. What follows is taken from that description; supplemented by the evidence of Mr Ernest Adams, which was not challenged. Mr Adams is a design consultant, lead designer, producer, and software engineer in the computer game industry. From 1989 he worked on converting Rabbit Jack's for use on a PC.

The system architecture featured a host server connected to an end user’s general purpose PC via a public telecommunications link. The host ran several simultaneous programs which simulated casino games. The games offered included blackjack, stud poker, bingo and a slot machine. The AOL server had a random number generator on it which was used for shuffling the pack in a card game, generating cards and calling numbers for bingo and generating stopping positions for the wheels in slot machine. The generation of random numbers was all carried out by the host. The host also contained a database of individual player records including a balance of chips won or lost in playing the games and accounting information. The chips were not exchangeable for cash; nor did the player have to buy them. The money-making aspect of the overall system came about because AOL charged subscribers for the time they spent on line playing the games. It was thus in AOL’s interest to keep players playing for as long as possible. In consequence, chips were given away to players every time they logged on; and games such as slot machines were slightly biased in favour of the player, so as to give the player the satisfaction of winning, and thus keep him playing for longer. A player received 250 chips every session but the published AOL guide to Rabbit Jack's said that “You can transfer some of your chips to a pal or borrow some if you’re down on your luck”.

The system architecture was illustrated in a diagram that I reproduce:

A person who wished to play on Rabbit Jack's would first open an account with AOL. This required the person to give a name, address and billing information. Subscribers received a Rabbit Jack's casino disk which ran on their own PC. This would either be sent through the post, or directly downloaded. The disk contained the program code and also the graphics and audio. When a player wanted to play he would activate his PC, log on to AOL’s system using a password, and choose Rabbit Jack's from the game menu. The player’s own PC would then load the appropriate software from the Rabbit Jack's disk already supplied. The hosts would then generate and send data packets for the PC. The PC would decode and process these data packets to display a simulation of the game being played.

If the game was blackjack the player would make a “wager” which was sent to the host in a data packet. If the host received good packets from players it would deduct the “wager” from the player balance of the player and the game would begin. The host would generate random numbers representing unique playing cards, and would send them in data packets to the individual players who were sitting at the virtual card table. Each PC would decode the packet so as to simulate a live game of blackjack being played on their screen. This would generally cause the screen graphics to be updated. In the case of blackjack, the graphic would be a representation of a card flying across the table. All the software that generated the graphic would be on the client. If a player “won” his hand of blackjack the host would tally his winnings onto his overall “bank account” and send the updated balance to the PC in a data packet. The units of account in the “bank account” were virtual chips called “Q-Pons”. They were not redeemable for value.

If the game was poker the system operated in a similar way. Each player would ante, that is, place a minimum bet to participate in the game. He would then receive a hole card face down and an up-card. The player with the highest up-card, would have the turn to bet. If he commanded his computer to place a bet of 25 chips, his computer would update the graphics tiles on its screen on its own, to show that he had placed 25 chips into the pot. His computer would also send a data packet to the server saying “bet 25”. The server updated its own records and sent data packets to the other players’ computers, instructing them to update the graphics tiles on screen to show that he had placed 25 chips into the pot. The server would send a data packet to the next player saying “it’s your turn”. This process continues according to the rules of stud poker, and at the end of a game the server would calculate the result and send data packets to everyone’s computers saying who won and how much. The server would also send the data necessary for the client to reveal everyone’s hole cards.

All data transmitted between client and server were encrypted.

The game steps were logged by the AOL server. In the case of poker and blackjack, this included the cards dealt to each player in the order in which they were dealt and the player’s responses during the game (e.g. “hit” or “stand”). In the case of bingo, it included the bingo card, the numbers called and the numbers correctly marked by the player. In the case of slots, it included the combinations displayed to the player. In all cases, it included the amounts bet and won or lost and the effect on the player’s balance. In the course of each game the server would update its records of each player’s account balance according to who won and lost. At the start of each player’s turn the server would turn on a timer. If a player did not respond within the specified time, their computer would automatically send a message to the server to say that that player had folded. The server also kept track of which players were still on-line using a system of data packets known as “heartbeats”. If a server stopped receiving the “heartbeat” from a player’s computer, the server would know that the player’s connection had been lost.

Rabbit Jack's was also described in publications made available to the public before the priority date. It was common ground that these publications added little to what would have been learned by a skilled computer programmer playing the game, although Professor Leslie said that the publications made some of Rabbit Jack's features more explicit.

In his oral evidence Mr Fulop explained that Rabbit Jack's was built using chat room libraries that were provided to him by AOL. These libraries handled the sending and receipt of all packets to and from the servers of the system, as well as displaying the options available to the users and receiving the input from the user’s keyboard which related to those options. When the Rabbit Jack’s client wanted to send information to the server, it would pass the information it wanted to send to the chat room libraries, which would then create and send a packet containing that information. When the server sent a packet to the client, the chat room libraries would see if those packets related to Rabbit Jack’s Casino or something else (for example, a chat message). Rabbit Jack’s client would periodically check to see if any packets had arrived for it. If any packets relating to Rabbit Jack’s casino had arrived, the chat room libraries would pass the information contained in those packets to Rabbit Jack’s Casino client. So, other packets were also sent and received by the underlying chat room libraries running on the client which related to other features of Q-link, such as the ability of players to chat. The Rabbit Jack’s Casino client would not “see” these packets.

However, the underlying use of a chat room library enabled Rabbit Jack's to simulate the playing of poker in which the players at the table could chat to each other while they played.

Internally, Mr Fulop and his colleagues talked about using Rabbit Jack's to enable players to play for real money. However, this was only a theoretical discussion. Mr Fulop confirmed in evidence that there was no technical reason why Rabbit Jack's should not have been used to play for real money: the reason was one of trust. He said in his witness statement:

“We discussed the idea internally at Quantum. We talked about playing casino games over the phone for real money and how it would never work. People would not trust it.”

As he put it in his oral evidence:

“At that time it was mind-boggling to even imagine that anyone would trust an online game to spin a slot machine. It is like calling someone over the phone and saying heads or tails and they would say “heads”, “you lose.””

In fact for business reasons AOL did not want its players to think that they were really gambling. They wanted a saloon in which people were kept happy by winning. That was why a marketing proposal for using Rabbit Jack's to play for real money was not adopted. Technically, however, the system would have worked for playing with real money, although additional protection (such as stronger encryption of the data packets) would have been needed; and the games would have had to comply with regulatory requirements. This, for example, would have meant that the odds of winning could not have been biased (either in favour of the player, as was the case in Rabbit Jack's, or in favour of the house).

Mecca was a patent application (UK Patent Application 2151054A). Mecca teaches an electronic system for playing games. It is particularly applicable, but not limited, to group participation games in which the individual player has the ability to affect the outcome of the game or a game in which several players participate. The system consists primarily of “a central apparatus and a plurality of remote uncommitted programmable apparatuses”. The "central apparatus" is later described as a "control unit". The "remote uncommitted programmable apparatus" is later described as a "player station". The player stations are connected to the control unit; and each of the remote apparatuses can receive at least part of a game program from the central apparatus. The merit of the system is said to be its flexibility; not least because various games may be run on the system with at least some of the processing being performed by the remote apparatuses and games can be changed in response to commands at the central apparatus. The system can be used for allowing different games to be played at each remote apparatus, but it is particularly useful for allowing all the remote apparatuses to participate in a group participation game. Mecca goes on to say:

“… if dedicated or committed processing were provided in the remote apparatuses, then the whole system would have to be modified in order to permit a change of game and this would be most inconvenient, time-consuming, and expensive. The present invention overcomes this problem and allows remote uncommitted apparatuses to be programmed from a general apparatus, thus allowing a change of game and hence of programming to be performed easily and quickly.”

Each remote apparatus may include a coin or token release mechanism to permit operation of the remote apparatus for participation in the game. The central apparatus receives information from the remote apparatus about the receipt of coins or tokens. It also maintains a record of total payments and, where appropriate, payouts. The terminals have a visual display unit and at least one player operable control. The game result can be calculated at the terminal or at the central apparatus. It is preferable for the player to activate his terminal to claim a win; whereupon the central apparatus will check the result.

In describing its specific embodiment, Mecca teaches that the system is installed in an amusement area. The system comprises the control unit (the central apparatus) and the player stations (the terminals), as well as a public display unit consisting of four display units, two loudspeakers, and a check unit. The control unit includes a game storage area in which the software for a number of different games for use in the system are stored. The control unit also includes a visual display unit arranged to provide cashier information, such as non-re-settable accumulators for stake, pay-out, and the like. The control unit is connected to the player stations by a “multidrop serial bus” which is also connected to the display units and the check unit in the public display, and the check unit for the caller. A multidrop serial bus is a local private communication method where all components on the bus are connected to the same set of wires. It is not a public telecommunications link.

In use, the control unit generates “random or pseudo-random” numbers and supplies these to the terminals. The terminals display the information sent by the control unit. This may be compared automatically with the numbers at the terminals, but it is preferable that the game is interactive and the player calls a win by entering data in the terminal. The control unit also stores accounting data in ‘non-resettable’ memory. It supplies information to a cashier, such as the total take, the number of players, total credits from wins and the like. Storage of some of this information in ‘non-resettable’ memory is required in order to comply with gaming laws.

An invention is not patentable unless it is new. If it is not new it is said to have been anticipated. The claim will have been anticipated if someone following the instructions given by a piece of prior art would inevitably infringe the patent. Lord Hoffmann summarised it thus in Synthon BV v SmithKline Beecham plc [2006] R.P.C. 10 (§§ 22, 23):

“…the matter relied upon as prior art must disclose subject-matter which, if performed, would necessarily result in an infringement of the patent. That may be because the prior art discloses the same invention. In that case there will be no question that performance of the earlier invention would infringe and usually it will be apparent to someone who is aware of both the prior art and the patent that it will do so. But patent infringement does not require that one should be aware that one is infringing: "whether or not a person is working [an] … invention is an objective fact independent of what he knows or thinks about what he is doing": Merrell Dow Pharmaceuticals Inc v H N Norton & Co Ltd [1996] R.P.C. 76 , 90. It follows that, whether or not it would be apparent to anyone at the time, whenever subject-matter described in the prior disclosure is capable of being performed and is such that, if performed, it must result in the patent being infringed, the disclosure condition is satisfied. The flag has been planted, even though the author or maker of the prior art was not aware that he was doing so. …

…But the infringement must be not merely a possible or even likely consequence of performing the invention disclosed by the prior disclosure. It must be necessarily entailed. If there is more than one possible consequence, one cannot say that performing the disclosed invention will infringe. The flag has not been planted on the patented invention, although a person performing the invention disclosed by the prior art may carry it there by accident or (if he is aware of the patented invention) by design. Indeed, it may be obvious to do so. But the prior disclosure must be construed as it would have been understood by the skilled person at the date of the disclosure and not in the light of the subsequent patent.”

Disclosure may be explicit or implicit. The question of implicit disclosure usually comes up in the context of added matter; but in my judgment the principle is the same when considering what is disclosed by prior art. In European Central Bank v Document Security Systems Inc [2008] EWCA Civ 192 the Court of Appeal approved the following passage in the judgment of Kitchin J at first instance:

“[It] is appropriate to consider what has been disclosed both expressly and implicitly. Thus the addition of a reference to that which the skilled person would take for granted does not matter: DSM NV's Patent [2001] R.P.C. 25 at [195]–[202]. On the other hand, it is to be emphasised that this is not an obviousness test. A patentee is not permitted to add matter by amendment which would have been obvious to the skilled person from the application.”

I propose to apply the same principle. Mr Alexander submitted that if a known product had feature X and the skilled person examining the product would assume that it also had feature Y because of the presence of feature X, then both feature X and feature Y were disclosed, even though the product did not in reality have feature Y at all. I found this a difficult proposition to accept. Mr Tappin submitted that there could be no disclosure of feature Y unless it existed in reality. I agree. It seems to me that the question of disclosure should be approached as follows:

Mr Friedman’s view, expressed in his first report, was that Rabbit Jack's lacked two of the features of claim 1:

Mr Friedman’s assumption was in fact correct. However, the question under this head is whether that information about Rabbit Jack's was made available to the public; or, in other words, disclosed.

On the assumption that Rabbit Jack's was used by a skilled computer software engineer, I find the following facts:

As Mr Friedman accepted during his cross-examination:

“Q. If an experienced computer programmer had engaged in debugging, they would have been able to determine the nature of the way in which the system operated to a much greater degree than, as it were, the mere user, someone just playing the game?

A. Certainly.

Q. For practical purposes, they would have been able to discover everything about the nature of the communications and how the computer operated client side?

A. Generally speaking, that is true.”

Having determined everything about the nature of the communications and how the computer operated client side, it must logically follow that all the other elements of the operation of the system were generated server side.

I find, therefore, that with the aid of a debugger, the skilled user would have found out all he needed to know about Rabbit Jack's after a few days of routine and uninventive work. That is not the end of the point, because Mr Tappin said that if the necessary information could only be discovered with the aid of a debugger, the information had not been made available to the public in the sense of being made available to a person free in law and equity to use the information. The reason underpinning this submission was the evidence of Mr Friedman in his first report (§ 425 (c)):

“[It] would be apparent to anyone attempting to do this [i.e. using a debugger] that the packets were encrypted for a reason (namely to stop their contents from being discovered and the system thereby being reverse-engineered), that they were not supposed to be indulging in such activities, and that such activities were not authorised by AOL. This is consistent with the specifications for the individual data packets being considered confidential. Without indulging in such activities, I do not believe it would have been possible to know for sure how the RabbitJack’s client and server worked…”

Although this was described by Mr Tappin as being unchallenged, in fact Professor Leslie expressed his disagreement with it (2^nd report §§ 62 and 66). For the reasons given by Professor Leslie I consider that Mr Friedman’s point is wide of the mark. The skilled addressee, using the debugger, is not breaking into any encrypted information. On the contrary he is analysing the information after it has been decrypted by the user’s own terminal using software supplied by AOL. Nothing in that process indicates that he is in breach of some obligation of confidence enforceable at law or in equity.

If I am correct in my construction of claim 1 (viz. that it is not limited to gambling with “real money”) I conclude that claim 1 of the patent in suit is anticipated by Rabbit Jack's.

In considering the question of obviousness the court should follow the structured approach commended in Pozzoli Spa v BDMO SA [2007] FSR 37:

Before embarking on these various stages, I need to say more about the legal test. First, the question is whether the claimed invention is technically obvious, rather than commercially obvious. The basic principle was encapsulated by Aldous J in Hallen Co. v Brabantia (UK) Ltd [1989] R.P.C. 307 (on appeal [1991] R.P.C. 195). He said:

“The word `obvious' in section 3 is I believe directed to whether or not an advance is technically or practically obvious and not to whether it is commercially obvious….. By `obvious modifications' are meant that which technically or practically would be obvious to the unimaginative skilled addressee in the art. Such a skilled man should be assured that his actions will not be covered by any monopoly granted to another if he does that which is part of the state of the art with modifications which are workshop alterations or otherwise technically or practically obvious alterations. He does not and should not have to look further and consider whether the step he is taking is obvious or not for commercial reasons. The prize for a good commercial decision or idea is a head start on the competition and not a monopoly for twenty years.”

The test that Aldous J applied was upheld on appeal. In similar vein Pumfrey J said in Glaxo Group Ltd's Patent [2004] R.P.C. 43 (§ 30):

“Such a prejudice may be a merely commercial one (‘this device won't sell’) or it may be a technical one (‘this won't work and it is not worth bothering with’). A 20-year monopoly is conferred for overcoming a prejudice of the second kind, but not for overcoming a commercial prejudice.”

It is true that later cases have accepted that “mindset” is a relevant consideration to take into account in considering whether a claimed invention is obvious; and that commercial considerations can cause a “mindset” to be formed. But in my judgment the cases have not yet undermined the fundamental point that any case based on “mindset” must show that the “mindset” relied on is one that would have limited the skilled addressee’s technical horizons. As Sedley LJ put it in Dyson Appliances Ltd v Hoover Ltd [2002] RPC 22 (§ 87):

“… the perceived limits of technical practicability are a matter of mindset, and that mindset is characteristically affected by awareness of need, of which commercial potential is both a function and an index.” (Emphasis added)

It is common ground that Rabbit Jack's is the closest piece of prior art. I have already identified the skilled addressee. I will however also consider the question of obviousness as if the skilled addressee consisted of a computer software engineer and a casino operations manager. I will assume that claim 1 in the patent in suit is limited to gambling with “real money”.

On this basis the inventive concept of claim 1 is “play for real money”. Mr Tappin says that this involved a second inventive step; namely the overcoming of a prejudice. It is not suggested that the computer software engineer would have any prejudice against converting Rabbit Jack's for playing with real money. The prejudice was said to be that of the casino operations manager. In his oral evidence Mr Friedman put it as follows:

“I think having the casino operator on the team and suggesting that one could take RabbitJack's and deploy it in a casino, not only would that not be obvious but it would be decidedly not the right thing to do. In other words, I believe there would be strong indications that that was the wrong thing to do. It is hard for me [to see] how something that to a casino operator would seem to be the wrong thing to do could simultaneously be obvious.” (Emphasis added)

In his first report Mr Friedman summarised the concerns:

In his oral evidence Mr Friedman said that the majority of the things that would make a casino operator nervous would be dealt with by the subsidiary claims; specifically claims 3 to 5. So these concerns do not apply to claim 1. Moreover, in so far as there was a fear of cheating or hacking, it would have been obvious to place all the determinants of the outcome of a game (random number generation, determining game outcomes) on the server. The same goes for all the accounting information. As Professor Leslie put it: “I think the system that comes naturally is the one where they cannot get at it and that would be similar to the way they accessed other online services where money was being used.” In giving evidence about these concerns in relation to the subsidiary claims, the following exchange with Mr Friedman took place:

“Q. I think we have been through this before but just on that aspect, it would stare one in the face that if one were wanting to do something for real money, one would need to have adequate security, auditing, fault tolerance and recordkeeping; that is right, is it not?

A. I think the functions that you are referring to are probably something that the skilled team would come up with. I think that the mechanism whereby those functions are provided is not necessarily something that the skilled team would come up with.”

So far as security of the game is concerned, Mr Friedman had already accepted that the obvious thing to do would have been to have had the generation of random numbers and game outcomes on the host:

“Q. Both for technical reasons, because it is an easier implementation, and because it more accurately mimics what is going on in the real world, there would be every reason to have an implementation of a software architecture that generated random numbers and game results at the server?

A. Yes, I can see that is accurate.

Q. That would have been appreciated by the skilled team in 1993 and 1994?

A. Yes, properly construed.”

It is true that Mr Friedman qualified his answer with the phrase “properly construed”. This suggests that it would have been the casino operator who would have seen this as obvious. But since the question was posed in terms of technical software implementation as well as mimicking the conventions of a real casino, in my judgment it would also have been obvious to a computer software engineer without the aid of a casino operator, as Professor Leslie suggested.

Professor Leslie’s approach was to take as his starting point the problem that the patent in suit set out to solve. He took the nature of the problem from paragraph [0011] of the specification, viz:

“This invention seeks to provide a casino gaming system capable of interactive, real time, realistic gaming at genuinely remote locations which is economical, secure and reliable.”

Once you had decided to solve that problem it was technically obvious how to do it. You would use known hardware and known software architecture. It would thus be obvious to have distributed processing (with client/server architecture). The available speeds of communication necessarily entailed transmitting as little data as possible between the two. It would be equally obvious to have the sensitive parts of the system (random number generation, determination of game outcome and accounting details) on the server. None of this required any special knowledge of casinos or gaming mathematics. All of it would have been within the common general knowledge of the computer software engineer, especially if he had been provided with Rabbit Jack's. He said in his second report (§ 80):

“RabbitJack’s Casino adopted the obvious distribution of processing claimed by the Patent, with the host creating the random numbers and processing the game result and account balance, and the terminal processing the simulation output. Even if an experienced user gained some knowledge about what the terminal was doing, this would not be enough to enable them to cheat because they could not interfere with the account balance and game result being processed at the host.”

I agree. The method of implementation, even if the patent in suit is limited to gambling for “real money”, is obvious over Rabbit Jack's. That method is obvious whether or not a casino operator is part of the skilled team.

But that leaves the question: would anyone have wanted to solve the problem set by the patent in suit; or have had the idea of using a system like Rabbit Jack's for playing with real money? Mr Friedman said in his first report (§ 458) that the skilled team would most likely view Rabbit Jack's as a marketing or educational opportunity. He amplified his reasoning in the following paragraphs. His reasons all depend on the desire of the casino operator to increase custom at his land-based casino. Thus Mr Friedman concluded (§ 462):

“Given this, a casino operator may view RabbitJack’s as an opportunity to replace or augment the in-casino game education sessions by using “virtual” game education sessions held in RabbitJack’s casino. The CSSE would understand that the graphics of RabbitJack’s could be changed to reflect the casino operator’s branding … and that new client software containing a different set of graphics “tiles” could be sent to current RabbitJack’s users (who would hopefully be future casino customers).” (Emphasis added)

The driver in this is plainly the casino operator. But if (as I have held) the casino operator is not a member of the skilled team, then this reasoning is undermined. In fact the evidence shows that Mr Fulop and his colleagues at AOL did have the idea of using Rabbit Jack's for playing with “real money”. They rejected it; but not for any technical reason. It was rejected for commercial reasons, essentially because they did not think that the punters would trust the system. Mr Tappin put to Professor Leslie the proposition that the casino operator member of the skilled team would resist the idea of online gambling for real money where the punter’s terminal was in a location outside the control of the casino. He relied heavily on the exchange, which went like this:

“Q. Thinking about the team that I have described, the casino operations manager, the computer scientist and the gaming mathematician, thinking about the background to casino operations that we have been through, do you say and, if so, why, that such a team would have come up with the idea of providing gaming from people's homes?

A. I think that would rather depend on the skills of the computer scientist and experience or computer systems engineer and experience. This was a time when more and more things were being done, remotely online services were growing. I can see that a casino operator, for reasons that you have pointed out, would have a view about their world and what made that world work. I think it would really depend on the experience of the computer scientist, or whether he or she was involved with communications and remote access.

Q. But the casino operations manager would have a very clear view about where he wanted any gaming devices or any terminals put ----

A. I think that is fair.

Q. ---- within his control?

A. I think that is fair.

Q. Within the controlled environment of the casino?

A. Within the controlled environment, yes.

Q. Which would exclude people's homes?

A. … I think he or she would have to be very strongly convinced that that which was in people's homes could not in any way compromise the integrity of the game.

Q. The reason for that, presumably, is he would be well aware that once you put things out of his control, his ability to deal with matters such as security would obviously be compromised?

A. Compromised unless, yes, special actions were taken and unless the design was ....

Q. If you put things in people's homes, then you are going to be exposing yourself to determined hackers, if you want to call them that, who would be able to spend as much time as they wanted trying to find a way to cheat a system?

A. I think that is true.

Q. And you would not know that they were up to that?

A. That is true as well.

Q. As we have discussed, also, you would know that the restrictions on where gaming devices could be located, they had to be in the controlled environment of the casino, or in a controlled environment that was ----

A. Yes, I guess that would depend upon jurisdiction; yes.

Q. We heard Mr. Fulop say the other day why would you want to bet money on someone tossing a coin at the end of a phone line. Why would anyone have thought that gamblers would want to bet money over a remote phone connection, in 1994?

A. I think there would be many gamblers that would have great difficulty of having that level of trust with an online casino. I mean, trust in other sorts of transaction that did not involve chance, I think, was growing, as people were making more use of online services to shop or buy and sell shares; but chance I think would be harder.

Q. There would be significant resistance to such an idea?

A.

I think that is a reasonable statement. ” (Emphasis added)

What I take Professor Leslie to be saying is this:

All these difficulties stem from the inclusion of a casino operator in the skilled team. If (as I have held) the team does not include a casino operator, the difficulties fall away. But even if a casino operator is included in the team, there would be an internal debate within the team about the technical feasibility of implementing the idea. Mr Friedman’s view was that the casino operator would, in effect, be the dominant member of the skilled team and that his views or prejudices would prevail. I do not see why that would be so. To the extent that the perceived difficulties are business difficulties, they are not relevant to the question of obviousness. To the extent that they are technical difficulties, I cannot see why the casino operator would not be satisfied by the computer specialist that the answers are technically obvious, as indeed they are.

In my judgment the idea of online gambling for “real money” was obvious over Rabbit Jack's and the technical implementation of that idea was likewise obvious.

The inventive concept of claim 3 is storing the player account at the start of the game, each valid user response, each random number, and details of whether the game was completed (i.e. what happened in the game) on the server. Professor Leslie said in his first report (§ 140):

“Maintaining history files in interactive systems as in claim 3 was common place and would often be a requirement for auditing purposes.”

Mr Friedman agreed that:

In my judgment claim 3 was obvious both over general common knowledge and over Rabbit Jack's.

The inventive concept of claim 4 is automatically putting the players back into the position they were in following a telecommunication interruption using the stored data about what had happened in the game. Professor Leslie said in his first report (§ 140):

“Rolling back to the latest agreed common state as in claim 4 was a standard practice. With a single master (the server) this is a trivial feature, and there were already solutions to more complex issues of checkpointing and rollback-recovery for distributed systems. It is straightforward to return a player of a single player game to the position he was in before any interruption. The position is more complicated in a multiplayer game as the game may proceed while the player is away. If you allow a player to rejoin a game which is continuing where he has not missed a turn then it is obvious to update his terminal with the latest game state stored on the server.”

Restoring players to the position they were in before the interruption was also an accepted convention of real casinos, as Mr Friedman accepted. It is also overwhelmingly likely that if an online system for gambling with real money were to be made available to the public, the regulators would impose this as a legal requirement anyway. I cannot see that it is inventive to include a feature that:

In my judgment claim 4 is obvious over common general knowledge and Rabbit Jack's.

The inventive concept of claim 5 is replaying on demand a portion of a game from the stored data about what had happened in the game. Professor Leslie said in his first report (§ 140):

“Claim 5 can be seen as an obvious extension to claim 4 in which the user is provided with the context by which the agreed common state was arrived at after a communications failure.”

As he said in his second report, there is no point in storing the information if it is never going to be displayed.

Mr Friedman gave no reasons for saying that claim 5 was anything other than obvious. On the contrary he accepted that it was one of the readily available options to the skilled team in 1993. Indeed in some places this was a regulatory requirement.

In my judgment claim 5 is obvious over common general knowledge and Rabbit Jack's.

Mr Tappin accurately summarised the differences between Mecca and claim 1 of the patent in suit:

Professor Leslie said that the skilled team confronted with Mecca would see at once that what it described could be implemented over a public telecommunications link; and that once that decision had been taken, all the rest would follow. Thus having seen that Mecca could be implemented over a public telecommunications link, the end product would be a system with all the features of claim 1. However, as Mr Friedman pointed out, that entails throwing away almost all the teaching of Mecca. I do not consider that the skilled addressee, reading Mecca without knowledge of the patent in suit, would discard so much of its teaching. I prefer the view of Mr Friedman on this point. In my judgment the patent in suit is not obvious over Mecca.

The scope of the exclusions from what amounts to an invention is contained in section 1 (2) of the Patents Act 1977, which corresponds to Article 52 of the European Patent Convention. Article 52, as amended, provides:

“(2)

The following in particular shall not be regarded as inventions within the meaning of paragraph 1:

…

(c)

schemes, rules or methods for performing mental acts, playing games or doing business, and programs for computers;

(3)

The provisions of paragraph 2 shall exclude patentability of the subject-matter or activities referred to in that provision only to the extent to which a European patent application or European patent relates to such subject-matter or activities as such.”

In the present case Playtech pleads that the claimed invention is not patentable because it is a scheme rule or method of performing a mental act or playing a game and/or is a computer program. It does not specifically allege that it is a method of doing business; although there is a general plea that it “otherwise makes no relevant technical contribution.” Mr Tappin raised no objection to this form of pleading; and Mr Alexander made submissions on the “method of doing business” exclusion too.

The scope of these exclusions has now been considered twice by the Court of Appeal in recent times: first in Aerotel v. Telco; Macrossan's Application [2007] RPC 7 ("Aerotel"), and second in Symbian Ltd v Comptroller-General of Patents [2009] RPC 1 ("Symbian"). In Aerotel the Court of Appeal laid down the following four step test to decide whether a claimed invention is patentable:

In Aerotel Jacob LJ described the second step as follows:

“How do you assess the contribution? Mr Birss submits that the test is workable – it is an exercise in judgment probably involving the problem 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.”

In Re AT&T Knowledge Ventures LP [2009] EWHC 343 (Pat) I said:

“… asking what the inventor has added to human knowledge necessarily means that the questioner has some notion of the state of the art. In other words, patentability cannot be put into a watertight compartment completely separate from novelty.”

That is why I have taken this question after dealing with novelty.

The patent in suit implements standard casino rules and conventions in software on standard, known hardware at the priority date. Rabbit Jack's had all the features of claim 1, except that (if I am wrong about the construction of claim 1) it was not played for “real money”. On that basis, the only contribution that the patent in suit makes to the sum of human knowledge is the idea of playing for “real money”. In my judgment that is a method of doing business and hence not an invention.

So far as the implementation of this idea is concerned, since the patent in suit uses standard hardware and standard architecture, all that is required is software. The contribution can only lie in the software. Mr Tappin said that the contribution must be assessed without regard to the fact that it is implemented in software. He relied on what I said in Re AT&T Knowledge Ventures LP § 20, commenting on the decision of the EPO Board of Appeal in Vicom:

“What the Board are saying in this paragraph is, I think, that you assess the patentability of a claimed invention ignoring the fact that it operates through a computer program. If, ignoring the computer program, it would be patentable, then the fact that a computer drives the invention does not deprive it of patentability.”

The difficulty in this case is that if I ignore the fact that the claimed invention operates through a computer program, there is nothing left of the invention. Its sole raison d’être is the computerisation of conventional gambling for real money. In my judgment the contribution that the patent in suit describes is a computer program as such.

In Re AT&T Knowledge Ventures LP § 40 I tried to set out some “signposts” which might help to consider whether a claimed invention had a relevant technical effect. They were:

I added that if there is a technical effect in this sense, it is still necessary to consider whether the claimed technical effect lies solely in excluded matter. In my judgment the answer to all these questions in the present case is “No”.

Accordingly in my judgment the sole contribution made by the patent in suit lies wholly in excluded matter.

Having decided that the relevant claims of the patent in suit are obvious and that what it claims is not an invention and that, for good measure, claim 1 has been anticipated, I think that I can take infringement shortly.

The question under section 60(1) is whether the Defendants’ product, as described in the Product Description, infringes. In support of the contention that it does not, the Defendants rely on two features of their product:

Both these points depend on the construction of the claims. I have construed claim 1 in a sense that favours Cranway’s contention, with the result that, if claim 1 is valid, the Defendants’ product infringes that claim. I have construed claim 5 in a sense that favours the Defendants’ contention. Thus even if the Defendants’ product does infringe claim 1, it does not infringe claim 5.

The second point is a defence on which Playtech alone relies. It is common ground that the defence does not apply to the Tote. The defence arises under 60 (2) of the Patents Act 1977. Section 60 (2) provides:

“Subject to the following provisions of this section, a person (other than the proprietor of the patent) also infringes a patent for an invention if, while the patent is in force and without the consent of the proprietor, he supplies or offers to supply in the United Kingdom a person other than a licensee or other person entitled to work the invention with any of the means, relating to an essential element of the invention, for putting the invention into effect when he knows, or it is obvious to a reasonable person in the circumstances, that those means are suitable for putting, and are intended to put, the invention into effect in the United Kingdom.”

Section 60 (3) also has a bearing on this point. It says:

“Subsection (2) above shall not apply to the supply or offer of a staple commercial product unless the supply or the offer is made for the purpose of inducing the person supplied or, as the case may be, the person to whom the offer is made to do an act which constitutes an infringement of the patent by virtue of subsection (1) above.”

The point that arises is this. Playtech supplies the Tote with client-side software. It does not supply anything to any of the punters. They are supplied with the client-side software by the Tote. The client-side software that Playtech supplies to the Tote is not itself supplied to punters. It is used by the Tote to make (or to allow the punters to make) copies of the software; and it is those copies that the punter uses.

Mr Alexander argues that Playtech can only be liable under section 60 (2) if they supply the punters, because it is the punters who, potentially, will infringe under section 60 (1). If they supply someone (in this case the Tote) who themselves will only infringe under section 60 (2), then the liability does not run back up the supply chain. Accordingly if A supplies essential means to B who then works the invention without being entitled to do so, A will infringe under section 60 (2). But if A supplies essential means to B, who then supplies to C, and it is only C who works the invention without being entitled to do so, B may be liable under section 60 (2), but A will not be. On the facts of the present case Playtech is in the position of A, the Tote is in the position of B, and the punter is in the position of C.

Mr Alexander argues that the supply prohibited by section 60 (2) is a supply to someone who is not entitled to work the invention. If A supplies essential means to B, who supplies them to C, and C is entitled to work the invention, then it would be absurd if B was not liable (because C is entitled to work the invention) but A is liable for supplying B.

In support of this submission Mr Alexander relies on section 60 (3) and what Aldous LJ said about it in Menashe Business Mercantile Ltd v William Hill Organisation Ltd [2003] 1 W.L.R. 1462 § 27 in relation to the same patent in suit:

“Section 60(3) also suggests that section 60(2) is concerned with means for implementing the invention. This section removes from the ambit of section 60(2) the supply of a staple commercial product except where the supply is for the purpose of inducing an infringing act. Recourse to article 26(2) makes it clear that what is contemplated by use of the word “infringement” in section 60(3) is a direct act of infringement, namely one falling within section 60(1). If so, it is likely that the draftsman believed that section 60(2) was concerned with means intended to put the invention into an infringing state. To construe section 60(2) so as to extend it to cases where an effect occurs would be inconsistent with that belief.” (Emphasis added)

Relying on the sentence I have emphasised, Mr Alexander says that section 60 (2) is concerned with means intended to put the invention into an infringing state. If the person directly supplied does not have that intention, then the mischief against which section 60 (2) is directed is not engaged. I do not consider that Aldous LJ’s observations support Mr Alexander’s submission. In my judgment he was considering a different question: namely the nature of the essential means, rather than the intention of the person to whom they were supplied.

However, there is, to my mind, considerable force in Mr Alexander’s example. It would, as he said, be very odd if B were not liable but A was. Mr Tappin counters it by another example. Suppose, he says, that A is a counterfeiter. If he supplies essential means directly to an end user, he is liable under section 60 (2). But if he supplies to an intermediary, then on Mr Alexander’s argument, he is not liable. That, too, would be absurd. However, it seems to me that Mr Tappin’s counter-example would be covered in most cases by the principles of joint torfeasance or common design. Common design as between Playtech on the one hand and the Tote on the other was not pleaded in this case. So Mr Tappin’s counter-example does not to my mind blunt the force of Mr Alexander’s example.

Is there any clue in section 60 (2) itself which might tip the balance one way or the other? I think there is. One of the conditions for the liability of a supplier of essential means is that he knows (or it is obvious to a reasonable person):

“that those means are suitable for putting, and are intended to put, the invention into effect”.

Whether means are suitable for putting an invention into effect must be a purely objective test. But whether they are intended to put an invention into effect cannot be wholly objective. Only human beings can have intentions, although their intentions may be attributed to other legal persons, according to rules of attribution. Thus this limb of the test must depend on the subjective intention of someone. A supplier of essential means might reasonably be supposed to know what the intention of his immediate counter-party is. But it would be a far stronger thing to expect him to discern the intention of a person far down the supply chain. Moreover, at the time of the supplier’s supply of the essential means the person who ultimately forms the intention to use the means to put the invention into effect may not be ascertainable and he may not have formed that intention. It thus seems to me to be more likely that section 60 (2) was directed to a supply of essential means to a direct infringer rather than to another secondary infringer. Coupled with Mr Alexander’s absurdity argument, I hold that this defence would have succeeded.

The second point on infringement is this. Mr Alexander says that the essential means supplied must be the same thing as is used to work the invention. If A supplies software to B who then allows C to copy the software and then C uses the copy to work the invention, the essential means that A supplied to B is not the same means that C is using to work the invention. They are different copies of the software. I reject this submission. The essential means are the software. How the software is carried or transmitted (e.g. on CD or by download) is, in my judgment, irrelevant. The CD itself is not the means because it is useless without the software. Moreover, as Mr Tappin pointed out, if software is supplied on a CD, the way in which it is used requires a copy of the software on the CD to be loaded into the RAM of the user’s computer, so that what is in fact used will always be a copy. If Mr Alexander is right there will never be an infringement under section 60 (2). He made a further submission which I also found compelling. Take the case of a patented virus or bacterial culture. The particular cells which make it up will multiply and die. Thus if someone is supplied with a culture of the patented virus or bacteria and makes an onward supply to someone else, what he supplies will not be the same cells as were supplied to him, even though they are genetically identical. Again, if Mr Alexander were right, this would be no infringement. I agree with Mr Tappin that section 60 (2) should not be interpreted to have this result. I hold, therefore, that Playtech would not have had a defence on this ground.

The patent is invalid. If it had been valid claim 1 would have been infringed.