Full Court decision brings hope for software patents in Australia

On 16 September 2025, the Full Court of Australia’s Federal Court ruled that an electronic gaming machine was patent-eligible subject matter. The Court’s comments and analysis indicate a shift towards a more favourable view of software patents than that taken by the Australian Patent Office in recent years.

The decision is for the case of Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents [2025] FCAFC 131, the latest in a series of court proceedings begun in 2020 between gaming company Aristocrat and the Commissioner of Patents. The dispute caused general dismay when it reached the High Court—the first case concerning the patent-eligibility of software to progress to Australia’s highest court—and resulted in an evenly split ruling which failed to clarify how software inventions should be assessed. Following the High Court’s ruling, the dispute returned to the Federal Court for determination of remaining issues (specifically, the patent-eligibility of the claims that had not been considered in the initial ruling).

The question at the centre of the dispute is whether Aristocrat’s electronic gaming machine, consisting of conventional hardware and new software for launching a feature game within a base game, is patent-eligible subject matter. (For interested readers, claim 1 of one of the patents in suit is reproduced at the end of this page.)

Before this latest decision, Aristocrat’s electronic gaming machine was considered to not be patent-eligible subject matter, based on a two-step test proposed by majority decision of an earlier Full Court bench which asked (1) whether the invention was a computer-implemented invention, and (2) if so, whether the invention could broadly be described as an advance in computer technology. The electronic gaming machine was a computer-implemented invention, but it was held to not advance computer technology.

The earlier Full Court’s two-step test was criticised by all six justices in the High Court. However, on account of its even split, the High Court’s ruling did not create a binding precedent, and the earlier Full Court’s decision, including its controversial two-step test, was affirmed.

In this latest decision, the Full Court decided not to follow its own two-step test, noting that it would be perverse for the Full Court to apply a test disapproved by all justices in the High Court. (Incidentally, the bench of judges that heard the latest case differs from the bench that proposed the two-step test.) The Full Court instead proposed a new test that asks whether a computer-implemented invention is an abstract idea which is manipulated on a computer or an abstract idea which is implemented on a computer to produce an artificial state of affairs and a useful result. Only the latter is patent-eligible subject matter.

Whilst the Full Court was limited by the litigation history to deciding on dependent claims not previously considered, it stated that it would have found claim 1 to be patentable subject matter, contrary to the decision of the previous Full Court.

It is important to understand, however, that the Full Court’s tests (both the old and the new) are not simply applied to the invention claimed, but to the substance of the invention. Proper characterisation of the substance of the invention is therefore critical to determining whether the invention is patent-eligible. There has been contention in recent years over the Patent Office’s practice to characterise the substance of software inventions by disregarding non-inventive features, even when those features form part of a patent claim and are essential to the operation of the invention.

Positively, the Full Court, in this latest decision, did not adopt the Patent Office’s approach to characterise the substance of the invention. The Court instead chose to characterise the substance of the invention by giving due recognition to those physical elements of the invention which, though not inventive, are fundamental to the operation of Aristocrat’s electronic gaming machine. Consequently, the Court found that the invention, in substance, was patent-eligible subject matter.

It remains to be seen whether this decision will stand should the Commissioner of Patents appeal, and, if the decision stands, how it will affect the Australian Patent Office’s practice in examining software inventions. It is encouraging that the Australian Patent Office has now flagged the relevant sections of its Examination Manual as being under review, signalling a potential change in Patent Office practice. For now, there is reason to be cautiously optimistic that the decision will be useful for supporting patent applicants seeking to protect their software inventions.

Claim 1 of Aristocrat’s patent no. 2016101967:

A gaming machine comprising:

a display;

a credit input mechanism operable to establish credits on the gaming machine, the credit input mechanism including at least one of a coin input chute, a bill collector, a card reader and a ticket reader;

meters configured for monitoring credits established via the credit input mechanism and changes to the established credits due to play of the gaming machine, the meters including a credit meter to which credit input via the credit input mechanism is added and a win meter;

a random number generator;

a game play mechanism including a plurality of buttons configured for operation by a player to input a wager from the established credits and to initiate a play of a game; and

a game controller comprising a processor and memory storing (i) game program code, and (ii) symbol data defining reels, and wherein the game controller is operable to assign prize values to configurable symbols as required during play of the game,

the game controller executing the game program code stored in the memory and responsive to initiation of the play of the game with the game play mechanism to:

select a plurality of symbols from a first set of reels defined by the symbol data using the random number generator;

control the display to display the selected symbols in a plurality of columns of display positions during play of a base game;

monitor play of the base game and trigger a feature game comprising free games in response to a trigger event occurring in play of the base game,

conduct the free games on the display by, for each free game, (a) retaining configurable symbols on the display, (b) replacing non-configurable symbols by selecting, using the random number generator, symbols from a second set of reels defined by the symbol data for symbol positions not occupied by configurable symbols, and (c) controlling the display to display the symbols selected from the second set of reels, each of the second reels comprising a plurality of non-configurable symbols and a plurality of configurable symbols, and

when the free games end, make an award of credits to the win meter or the credit meter based on a total of prize values assigned to collected configurable symbols.