In July 2021, Justice Beach of the Federal Court, determined in the historic decision of Thaler v Commissioner of Patents  FCA 879 that an AI system could be named as the inventor on a patent application. The decision was the first judicial determination in the world to say ‘yes’ to AI inventors.
However, in a recent judgement dated 13 April 2022, the Full Court of the Federal Court in Commissioner of Patents v Thaler  FCAFC 62, has now overturned the decision of the primary judge, finding that the ‘inventor’ in an application for a patent must be a natural person.
This is one more chapter in the global debate as to whether patent law and policy should adapt to recognize the changing innovation landscape. This decision is one of a series of test cases globally regarding the effect of AI ‘inventors’ on the current state of patent law in certain jurisdictions.
An AI system, known as DABUS (or Device for the Autonomous Bootstrapping of Unified Sentience), had been named as the inventor by the Applicant, Dr Stephen Thaler. Dr Thaler built DABUS to generate new ideas and DABUS envisioned an improved beverage container and ‘neural flame’ for search-and-rescue operations on its own accord.
On 9 February 2021, after consideration of whether an AI machine can be an inventor for the purposes of a patent application under the Patents Act 1990 (Cth), the Deputy Commissioner of Patents concluded that that only a human can be named as an inventor. IP Australia’s decision was reversed in the Federal Court on 30 July 2021, the outcome becoming the first decision in the world as authority for an AI system being named as a patent inventor.
Dr Thaler has been arguing across several jurisdictions that the owner of AI systems should be the default owner of patents for inventions derived from those systems. Furthermore, that it should be possible to name those AI systems as inventors on patent applications. At present, the Court of Appeal in London has ruled that AI systems cannot own or transfer patents rights under UK law, and that only a natural person can be an inventor. The European Patent Office (EPO) also rejected Dr Thaler’s arguments in 2020, as did a District Court in the US State of Virginia.
In contrast, the South African IP Office did grant Dr Thaler’s application, but it should be noted that the South African system works as a depository system meaning no formal review is undertaken.
This recent decision by the Full Court of the Federal Court now brings Australia into line and consistent with the position in the UK, the Europe and the USA.
The court held that although not defined in the Patents Act 1990 (Cth) (Patents Act), the term ‘inventor’ in section 15 plainly enough is a reference to the inventor of the invention the subject of the patent application. Earlier cases regarding identification of the inventor had not confronted whether an AI machine could be the ‘inventor’, but it was said to be plain from those cases that the law is premised upon the assumption that an invention arises from the mind of a natural person or persons: ‘Those who contribute to, or supply, the inventive concept are entitled to the grant. The grant of a patent for an invention rewards their ingenuity.’
In considering the statutory language, structure and history of the Patents Act, and the policy objectives underlying the legislative scheme, the Full Court disagreed with the conclusion of the primary judge and found that the Deputy Commissioner was correct to conclude that the application did not comply with regulation 3.2C(2)(aa) of the Patents Regulations 1991 (Cth).
The current position in Australia (and the UK, Europe and USA) is that it is necessary to identify a human ‘inventor’ in order to apply for patent protection. This case is significant in that Australia is now in line with the rest of the Western world in determining that an AI system cannot be an inventor.
The Full Court of the Federal Court observed that by filing the application, Dr Thaler no doubt intended to provoke an important and worthwhile debate as to the role that AI may take within the scheme of the Patents Act and Regulations.
The court gave an insight as to some of the propositions (of which there are many) that need to urgently be considered in the context of AI and inventions, which include:
The various rulings around the world regarding DABUS highlight the fact that patent legislation as currently drafted does not adequately deal with AI technology. Practically speaking it would appear that patent applicants who wish to successfully register their patent, will not list the AI system as an inventor. It will remain to be seen how IP agencies will then register such patents. Courts may have to decide the link between the human creators of the idea and the underlying role played by AI.
Looking forward, how will IP agencies and governments amend the current legal frameworks to consider the new AI technologies? The World Intellectual Property Organisation (WIPO) is leading a conversation on intellectual property and AI, bringing together member states and other stakeholders to discuss the impact of Al on intellectual property. In Australia, the Australian Federal Government has released an ‘Artificial Intelligence Action Plan’, which is a key feature of the Australian Government’s ‘Digital Economy Strategy’. The Government states that the Digital Economy Strategy aims to deliver on the Australian Government’s ambition for Australia to be a leading digital economy and society by 2030.
Regulators in Australia recognise that new and emerging technologies are challenging established approaches to regulation and that unclear or outdated legislation may impose a barrier to the adoption of these technologies and can undermine public trust and confidence. An Issues Paper titled ‘Positioning Australia as a leader in digital economy regulation – Automated decision making and AI regulation’ was issued by Federal Government earlier this year and industry consultation has just closed on 22 April 2022. It will be interesting to see how the Government will respond to the industry feedback, and how they intend on modernising legal frameworks so that investment in AI technologies can be protected.
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Luvisa Grierson, Consultant