Patent subject matter in Australia has had a lingering smell of uncertainty for the last eight years. On 5 February 2026, the High Court of Australia called an end to the play in Commissioner of Patents v Aristocrat Technologies Australia Pty Ltd ACN 001 660 715 [2026] HCADisp 15. All seven judges of the High Court refused the Commissioner of Patents’ application for special leave to appeal the Full Federal Court’s decision in Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents [2025] FCAFC 131 (FCAFC 131), handed down on 16 September 2025.

FCAFC 131 is a landmark realignment of the law relating to what is and is not proper subject matter for a patent. In short, the decision was that Aristrocrat’s innovation patents for electronic gaming machines (EGMs) incorporating feature games with configurable symbols and dynamic prize mechanisms are a “manner of manufacture” under s 18(1A)(a) of the Patents Act 1990 (Cth). The Full Court rejected the two-step test accepted by the majority in Commissioner of Patents v Aristocrat Technologies Australia Pty Ltd [2021] FCAFC 202 (FAFC 202).  Instead, it returned to the principle that proper subject matter requires an “artificially created state of affairs” with economic utility, as established by the High Court in the well-worn National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252 (NRDC).

The gaming machine

Claim 1 of a representative innovation patent recited a gaming machine that:

• Selects and displays symbols on a plurality of reels for a base game.
• Triggers a feature game upon a trigger event such as the appearance of a predetermined number of “prize” symbols.
• Retains the configurable symbols in their positions while replacing non-configurable symbols with a random number generator in the feature game.
• Accumulates prize values associated with the configurable symbols.
• Awards credits based on the total accumulated value at the end of the feature.

Procedural history

A Delegate of the Commissioner revoked the patents in 2018 for lack of proper subject matter – Re Aristocrat Technologies Australia Pty Ltd [2018] APO 45 (APO45). Burley J overturned this in Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents [2020] FCA 778. (FCA 778). The Commissioner appealed.

In 2021, the Full Court allowed the appeal in Commissioner of Patents v Aristocrat Technologies Australia Pty Ltd [2021] FCAFC 202 (FCAFC 202). The High Court granted special leave to appeal, but was split 3-3 in Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents [2022] HCA 29 (HCA29).

Under s 23(2)(a) of the Judiciary Act, the 2021 Full Court decision was affirmed, and the matter was remitted back to Burley J because that court had ordered that residual claims were to be remitted to the earlier court. Burley J held that he was bound by the Full Court decision and dismissed the appeal. This was appealed and FCAFC 131 was handed down.

The two-part test of FCAFC 202

In FCAFC 202, the court formulated a two-part test specifically tailored to computer-implemented inventions:

1. Is the claimed invention a computer-implemented invention?
2. If so, can the invention claimed broadly be described as an advance in computer technology?

If the answer to (2) is no, the invention is not proper subject matter.

The court found that the “substance” of the invention was the rules of the feature game and that the gaming machine was a generic computerised machine using well-known hardware and software functionality. There was no improvement in how the computer itself operated and so claim 1 did not define patentable subject matter.

The two-part test rejected

In FCAFC 131, the Full Court supported the approach of Burley J in FCA 778, who held that the approach taken by the Commissioner to deconstruct a claim to determine whether the subject matter is “computer-implemented” creates a risk that certain integers are emphasised while others were not. This may result in integers required for determination of novelty or inventive step not being given due consideration.

The court unanimously rejected any special two-part enquiry for computer-implemented inventions. It held that:

“it is too rigid and narrow an approach to say that the implementation of an idea in a computer, using conventional computer technology for its well-known and well-understood functions, cannot constitute a “manner of manufacture”. We respectfully agree with the view expressed in the allowing reasons (at [122]) that a better way of expressing the point in such cases is to ask whether, properly characterised, the subject matter that is alleged to be patentable is: (i) an abstract idea which is manipulated on a computer; or (ii) an abstract idea which is implemented on a computer to produce an artificial state of affairs and a useful result.”

Their Honours provided a useful summary of cases in which the Courts rejected the patentability of computer-implemented inventions and in which the Courts accepted the patentability of computer-implemented inventions.

The cases in which patentability was rejected were:

1. A scheme for protecting assets from unsecured judgment creditors – Grant v Commissioner of Patents [2006] FCAFC 120.
2. A scheme for construction data concerning a non-capitalisation weighted portfolio of assets – Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150.
3. A scheme for assessing the competency or qualification of people in accordance with recognised standards – Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177.
4. A method and apparatus for displaying information to provide business intelligence – Encompass Corporation Pty Ltd v InfoTrack Pty Ltd [2019] FCAFC 161.
5. A marketing scheme – Commissioner of Patents v Rokt Pte Ltd [2020] FCAFC 86 (21 May 2020)

The cases in which patentability was accepted were:

1. A curve drawing algorithm in which the desired and improved curve image was an artificially created state of affairs – Re International Business Machines Corporation v Patrick Anselm Smith, Commissioner of Patents [1991] FCA 625.
2. A particular method of characterisation of Chinese character strokes which was applied to an apparatus in such a way that the operation of a keyboard would enable the selection – Ccom Pty Ltd and Ronald Howard Thomas v Jiejing Pty Ltd, Paravet Instruments Pty Ltd, Jeffrey John Yates and Eric Russell Chappell [1994] FCA 1168.
3. A communications system, computer program, and smartphone configured to determine signal strengths of entry and exit signals to control a user’s entry to and exit from a restricted area – UbiPark Pty Ltd v TMA Capital Australia Pty Ltd (No 2) [2023] FCA 885 .
4. A method of scanning used in a Time Division Multiple Access system in digital mobile radios to reduce the time required for completing scan operations – Motorola Solutions, Inc. v Hytera Communications Corporation Ltd (Liability) [2022] FCA 1585.

Their Honours cited the allowing reasons of HCA29 which “avoided the anomaly of treating a computerised EGM as unpatentable, whereas it would be patentable if the EGM operated mechanically”.  They set out that “(A) a law, such as s 18(1A) of the Patents Act, that is designed to encourage invention and innovation, should not lead to a different conclusion where physical cogs, reels and motors are replaced by complex software and hardware that generate digital images.” And, citing Burley J, “it is difficult to see why the development of an implementation of an EGM, that utilises the efficiencies of electronics technology, would be disqualified from patent eligibility, when the old- fashioned mechanical technology was not.”

What have we learned?

It is clear from the case lists set out above that properly construed claims for business methods and marketing schemes do not define patentable subject matter. The reason is that there is no “artificially created state of affairs” as described in NRDC. On the other hand, improved curve images, Chinese character strokes, systems to determine signal strength, and reduced scan operation time are all artificially created and so define patentable subject matter.

There is no need to colour the test set out in NRDC by construing a claim to assess whether the invention is computer-implemented. The question is whether the claim, once construed, results in an artificial state of affairs, which is useful. This may not reduce the difficulties associated with the assessment, but it removes a layer of claim construction that could lead to a conclusion that is misaligned with Australian patent law.