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Intellectual Property Case Study

Case study:

In 2010, Australian poker machine supplier Aruze Gaming Australia Pty Ltd and its US-based parent company, Aruze Gaming America Inc, (collectively, ‘Aruze’) sought Slater and Gordon’s representation in an intellectual property dispute with Australian software developer Dynamite Games Pty Ltd (‘Dynamite’). 

Dynamite commenced proceedings in the Federal Court of Australia, seeking compensation and other relief from Aruze, alleging that the “Rescue Pay” feature in certain Aruze poker machines had infringed certain Australian patents belonging to Dynamite, being a standard patent and an innovation patent for Dynamite’s claimed invention, known as its “Feature Guarantee”.  The essence of Dynamite’s claimed “Feature Guarantee” invention was a gauge referred to as an “indicator component”, which displayed how close the game was to triggering a “feature”. 

Aruze defended the claim on the basis it had not engaged in any infringement of Dynamite’s patents.  Aruze also cross claimed alleging that the Dynamite patents were invalid on various grounds including:

  • lack of novelty;
  • lack of inventive step in the case of the standard patent;
  • lack of innovative step in the case of the innovation patent; and
  • the claimed invention not being a method of manufacture.

The proceedings were heard at first instance by Emmett J in November 2012.  Emmett J found that Dynamite’s patents were invalid, hence it was not strictly necessary to consider the issue of infringement.  Emmett J nonetheless concluded that Aruze had not infringed Dynamite’s patents.  Costs were awarded to Aruze, being the successful party.

Dynamite then appealed to the Full Federal Court.  The appeal was heard in July 2013 by Bennett, Jagot and Robertson JJ.  In a unanimous decision, the Court upheld the decision at first instance and dismissed Dynamite’s appeal.  Aruze was awarded costs of the appeal as it was once again the successful party.

These decisions mark the first time that an Australian innovation patent has been found invalid on the ground that it lacked the necessary “innovative step”.

A number of lessons can be found in these decisions for those wishing to protect their intellectual property using a patent, including that:

  • a registered patent is not always valid and enforceable; and
  • care needs to be taken when attempting to enforce any rights arising from a registered patent.