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Dynamite attempts to enforce a feel-good gaming patent against Aruze

11 minute read

Dynamite Games Pty Limited v Aruze Gaming Australia Pty Limited [2013] FCA 163

In the recent case of Dynamite Games v Aruze Gaming & Ors, Justice Emmett of the Federal Court of Australia considered the validity and infringement of patents directed to a style of game playable on a gaming machine. Although small variations in game design may be critical to the success of a game in this industry, the Court found that the patented game features were not innovative or inventive, and ordered that the patents be revoked. In doing so, the Court commented on innovative step, the importance of the description in the specification, and patentable subject matter.

Dynamite’s proceedings against Aruze

Dynamite Games Pty Limited instituted proceedings against Aruze Gaming Australia Pty Limited and Aruze Gaming America, Inc (together, Aruze) for infringement of some claims of their Australian standard patent, and Australian innovation patent, both entitled “Gaming Apparatus and Systems”. Unsurprisingly, Aruze denied that they had infringed the patents, and cross-claimed seeking revocation of the patents. Aruze argued that the claims were not novel, were not directed to patentable subject matter, and did not involve an inventive step (in the case of the standard patent) or an innovative step (in the case of the innovation patent).

Was Dynamite’s invention a guaranteed win?

Dynamite’s invention was intended to provide a way of increasing interest in a game played on a gaming machine. A large number of consecutive losses at a gaming machine may cause a player to lose interest in game. Dynamite suggested that this potential loss of interest may be mitigated by the gaming machine guaranteeing the “triggering” of a “game event” (for example, a payout or jackpot). The Dynamite gaming machine can monitor the games played, and trigger a payout if a “set guaranteed gameplay amount” is reached (for example, a predetermined number of games have been played) without the payout or jackpot having been triggered. This provides a mechanism by which losing streaks can be interrupted with a win.

To ensure that a player does not get disheartened by the losing streak, Dynamite’s invention involves an indicator which indicates the amount of gameplay remaining to be played before the payout or jackpot is triggered. For example, a player who has lost the last 10 games may feel like giving up, but with Dynamite’s invention, the player is shown an indicator which indicates that if the player loses the next 5 games, they will receive a jackpot or payout.

Was a “rescue payout” (with indicative display) inventive or innovative?

Aruze asserted that Dynamite’s invention was not inventive or innovative based on four earlier US patents, and four earlier gaming machines or systems.

Reformulation of the inventive step test

Dynamite argued that in view of the large number of patents in the gaming industry, seemingly small differences between competing games may be important, and so small differences between the claimed invention and the prior art may be sufficient for an inventive step. Although the Court did not comment on this assertion, it agreed that no more than a scintilla of an invention was required.

Dynamite also urged the Court to adopt the inventive step formulation expressed by the High Court of Australia in the Alphapharm case,1 that is, whether a person skilled in the art, in all of the circumstances (which include knowledge of all relevant prior art) would be led directly, and as a matter of course, to the invention. However, the Court considered that this formulation of the inventive step test is somewhat inapt when considering the design of a gaming machine, and is more suited to an analysis where a chemical compound is being sought that might have a particular effect. Accordingly, the court posed the question of whether the essential feature (the event guarantee component) was obvious to try in order to produce an enhancement of gameplay interest.

The innovative step test

The Court applied the same innovative step test as set out in the Dura-Post case:2

The person skilled in the art must identify and assess the variations between the invention as claimed in each claim and the prior art, and determine whether or not those variations make a substantial contribution to the working of the invention as claimed in each claim. Substantial contribution in [this context] means real or of substance. [This provision] contemplates that, in performing that task, a person skilled in the art has certain background knowledge that that person uses in identifying and assessing such variations.

Dynamite’s invention was neither inventive nor innovative

The Court held that the four prior US patents could not be used when assessing inventive step, as it was not convinced that there was any general practice among game designers in Australia (at the priority date) of studying Australian or United States patents. Despite this, the Court found that none of the claims in Dynamite’s patents involved an inventive or innovative step, primarily because each of the features of the claims, and each combination of features, were part of the common general knowledge in Australia at the priority date.

Inventive step, designer choice and enabling description

In considering each of the dependent claims of Dynamite’s standard patent, the Court considered that a dependent claim would lack an inventive step if the feature or features introduced by the claim were:

  • well known in Australia (before the priority date);
  • matters of “designer choice”; or
  • not sufficiently described in the specification.

The distinction between a “designer choice” and an “inventive step” is not altogether clear from this judgment. However, the Court clearly assumed that where a feature was not properly “enabled” by the specification (that is, was not described in detail in the specification) that feature must be part of the common general knowledge. Unfortunately, the decision does not shed any light on whether the reverse is true, that is, whether the fact that a feature is comprehensively described in the specification would lead a Court to consider that the feature was not part of the common general knowledge, or how much detail is required to provide sufficient enablement.

Similar considerations informed the Court’s decision on the claims of the innovation patent – if a claim only introduced a “matter of arbitrary choice” (that is, a feature made no substantial contribution to the way the claimed gaming machine worked) the claim lacked an innovative step.

Are gaming machine games patentable subject matter?

As the Court had already found the claims of Dynamite’s patents lacking an inventive and innovative step, it did not come to a concluded view on the other grounds of invalidity. However, it usefully made observations on those other grounds.

Applications of algorithms and software are patentable

As indicated above, this case was heard by Justice Emmett, who also recently heard and determined the Research Affiliates decision, which we reported here. His general comments on the law of patentable subject matter in this judgement reflect those he expressed in Research Affiliates.

Relevantly, Justice Emmett confirmed that:

  • a new use of an algorithm may be a patentable invention;
  • although a mathematical equation may not be patentable in isolation, a process which incorporates a more efficient solution of the equation may be patentable — that is, the use of the equation may be patentable; and
  • a method involving the operation or control of a computer, programmed in a particular way, may be patentable — computer programs that have the effect of controlling computers to operate in a particular way, where such programs are embodied in physical form, are properly the subject matter of the grant of a patent.

Importance of the result of computer programs

With respect to computer programs, the Court considered that to determine whether the claim involved more than mere intellectual information, it was necessary to consider whether the application of the program produced a practical and useful result. A physically observable tangible product is not required:

Even if there is not a physically observable end result, in the sense of a tangible product, a claimed invention may be patentable if it involves an application of an inventive method, where part of the invention is the application and operation of the method in a physical device.….It is sufficient if there is a component that was physically affected or a change in state or information in part of a machine.

An invention may be found in the idea

The Court seemed to recognise that in the area of software and computer-implemented methods, the invention may lie in the conception of the idea, and not necessarily in the way it is carried out.

When an idea is incorporated into means for carrying out the idea, the idea itself can be taken into account when considering validity. Inventiveness may repose largely in the idea. It is almost inevitable that the subject matter of an invention that involves an improvement to a known combination will be described as an idea or as a concept. Invention may lie in the idea of taking a particular step. Accordingly, there may be an inventive step in having an insight that, although simple, genuinely requires an active insight rather than a mere development and application of existing ideas.

Although Dynamite in this case argued that it was not simply an idea which was described and claimed, but a gaming apparatus having specific components by which the idea will be implemented, Aruze contended that the specifications of the patents did not teach the reader how to implement the claimed invention, and that the invention was essentially no more than a concept, a mere idea as to the rules of a game.

Dynamite’s claims may not be directed to patentable subject matter

In expressing some doubt as to whether the claims were directed to patentable subject matter, the Court seemed to be influenced by its findings that the patents did not suggest that the claimed invention lies in the use of a particular computer program to bring about a desired result, and that the patents gave no indication as to how the idea was to be implemented.

Did Aruze infringe Dynamite’s (invalid) claims?

Although the Court did not need to deal with infringement, having already found all of Dynamite’s patent claims invalid, it still concluded that Aruze did not infringe any of the claims of Dynamite’s patents based on a construction of the “indicator component”. The claims required an indicator component for indicating the amount of gameplay remaining to be played before a guaranteed game event will trigger.

A central issue to be determined was whether the claimed indicator component was required to indicate the precise number of games remaining, or a much broader, imprecise indication of gameplay remaining. Aruze’s indicator component was non-linear, and did not indicate with any accuracy the number of games remaining before the guaranteed game event would trigger.

The Court concluded that the indicator component of the claims referred to an indicator component that provided information on precisely the number of games or amount of gameplay required to trigger the guaranteed event. An influencing factor in the Court’s decision on this issue was that there was no disclosure in the specifications of a non-specific, inaccurate type of indicator.

Lessons for software patents

For software-based inventions, particularly those that do not fundamentally change the general operation of the computer (for example, many smartphone applications), a question will arise as to whether the invention is merely a concept, and therefore unpatentable. A detailed description of at least one concrete implementation of the invention in the patent specification (together with appropriately drafted claims) may assist in convincing a court or tribunal that the claimed features are more than just common general knowledge, or a designer’s choice, and that the invention relates to a tangible implementation deserving of patent protection.


  1. Aktiebolaget Hassle v Alphapharm Pty Limited (2002) 212 CLR 411
  2. Dura-Post (Aust) Pty Limited v Delnorth Pty Limited (2009) 177 FCR 239 at [54], [74]