For more than a decade, Australian courts and IP Australia have struggled to develop a consistent and predictable test for assessing as to how the “manner of manufacture” requirement as outlined in Section 18(1)(a) of the Patents Act 1990 (Cth) applies to computer implemented inventions (CIIs). In practice, outcomes were based on whether a claim, when fairly characterised, was nothing more than an abstract scheme expressed in software, or whether it disclosed an implemented arrangement that produced a concrete result. The Aristocrat litigation resolved that uncertainty. In Aristocrat Technologies Australia Pty Ltd and the Commissioner of Patents, 2025, the Federal Court rejected a rigid, technology improvement threshold and restored a results-based inquiry anchored in National Research Development Corporation v Commissioner of Patents (“NRDC” case, 1959). With the hon’ble High Court in February 2026 refusing the Commissioner’s application for special leave to appeal, the Federal Court’s 2025 decision (referred to as Aristocrat II) now stands as the definitive authority governing the patent eligibility of CIIs in Australia.
This decision thus reshapes the scope of what is considered a “manner of manufacture” under the Patents Act 1990 (Cth).
Statutory Foundation and the Role of NRDC
Section 18(1)(a) of the Patents Act 1990 (Cth) elucidates that a patentable invention be a “manner of manufacture” within the meaning of Section 6 of the Statute of Monopolies. Modern doctrine is anchored in the High Court’s decision in NRDC case, which rejected narrow, product centred readings of “manufacture” and articulated a flexible methodology: eligibility is satisfied where, on proper characterisation, the claim brings about an artificially created state of affairs with economic significance. Critically, NRDC cautioned against reducing the test to a fixed formula, the concept evolves case by case as technology changes.
Subsequently, in D’Arcy v. Myriad Genetics Inc & Anor case, the High Court emphasised that inherent patentability turns on the substance of what is claimed and that NRDC’s phrasing is not exhaustive. Although Myriad concerned gene claims, its approach, characterisation over labels, has direct relevance to software, where claim drafting can easily present an abstraction as machinery.
Before Aristocrat: Scheme Versus Implemented Arrangement
Before Aristocrat II, Australia’s approach to CIIs was notoriously inconsistent. In 2010 and onwards, the Full Federal Court consistently rejected claims that, on proper characterisation, amounted to abstract schemes executed on generic computers. Research Affiliates LLC v Commissioner of Patents (2014) treated a securities indexing method as a scheme notwithstanding computerisation, Commissioner of Patents v RPL Central Pty Ltd (2015) invalidated a competency assessment method for the same reason, Encompass Corporation Pty Ltd v InfoTrack Pty Ltd (2019) and Commissioner of Patents v Rokt Pte Ltd (2020) reiterated that generic implementation of an idea does not, without more, render it a “manner of manufacture.” Each of these decisions placed “characterisation” at the centre of the inquiry.
Over time, however, a practical approach emerged in examination: requirement for the invention to show an “improvement in computer technology”. Treating this approach as a threshold risked importing novelty/inventive step considerations into subject matter and sat uneasily with NRDC’s focus on implemented outcomes. IP Australia’s post Aristocrat updates now direct examiners to consider the claim as a whole and to avoid eliding subject matter with other validity grounds.
Aristocrat Patents and the Pivotal Characterisation Issue
Aristocrat’s innovation patents claim electronic gaming machines (EGMs) configured to run feature games using configurable symbols triggered by defined events, under the control of a game controller and presented via a player interface. The Commissioner refused certification on the basis that the alleged novelty resided in game rules executed on conventional hardware. The dispute therefore turned on characterisation: were the claims merely rules of play expressed in software, or did they define a configured machine whose operation created a new gameplay environment- an artificial state of affairs?
The 2021 Full Federal Court Decision: A Technology Improvement Threshold
In Commissioner of Patents v Aristocrat Technologies Australia Pty Ltd (2021), the Full Federal Court agreed with the Commissioner. Although the claims recited hardware components, the Court characterised the machine as conventional and the contribution as residing in game logic; it articulated a twostep approach that, in practice, asked whether the invention included an advance in computer technology beyond generic implementation. Read strictly, the decision imposed a special, elevated subject matter threshold on CIIs by demanding a computer science improvement to enter the eligibility gate.
The High Court’s 2022 Division
The High Court in Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents (2022) HCA 29 delivered a split decision (3:3). Chief Justice Kiefel CJ, and Justices Gageler and Keane JJ substantially accepted the 2021 characterisation that the claims were game rules executed on a conventional platform, they discerned no relevant change in the machine’s functioning. On the other side of the bench, Justices Gordon, Edelman and Steward JJ took the opposite view: properly characterised, the claims defined a device level implementation, an interdependent player interface and controller, that produced the required artificial state of affairs in operation, applying NRDC without a freestanding “computer improvement” requirement. Because the bench was evenly split, the earlier orders stood by operation of Section 23(2)(a) of the Judiciary Act 1903, but no binding majority test emerged.
Aristocrat II (2025): The Doctrinal Reset
On remitter, a differently constituted Full Federal Court delivered Aristocrat Technologies Australia Pty Ltd and the Commissioner of Patents, 2025. The Court rejected the 2021 twostep formulation and reinstated an orthodox NRDC analysis framed by a single threshold question: is the claim (i) an abstract idea worked on a computer (ineligible), or (ii) an abstract idea implemented on a computer so as to produce an artificial state of affairs with a useful result (eligible)? The Court directed that claims be assessed as a whole and warned against disregarding computer implementation or excising “conventional” elements before the subject matter inquiry. It reaffirmed that a CII need not improve computer technology to satisfy “manner of manufacture.”
The Court also clarified the status and outcome of earlier CII judicial precedents: Grant v Commissioner of Patents, Research Affiliates LLC v Commissioner of Patents, Commissioner of Patents v RPL Central Pty Ltd, Encompass Corporation Pty Ltd v InfoTrack Pty Ltd, and Commissioner of Patents v Rokt Pte Ltd remain correct on their facts- their claims were, on proper characterisation, abstract schemes- but none imposed a universal technological improvement requirement. The Court further noted that an equally divided High Court does not create binding precedent and that the Full Court may depart from its prior reasons where compelling grounds exist.
The 2026 Special Leave Refusal and Its Practical Effect
On 5 February 2026, the High Court refused the Commissioner’s application for special leave in Commissioner of Patents v Aristocrat Technologies Australia (2026) HCA Disp 15. The disposition recorded that the Full Court had applied established principles and reached a clear conclusion on characterisation. The refusal did not add doctrine, but it cemented the September 2025 reasoning as the operative standard for CIIs and removed uncertainty lingering since the 2022 split. Commentary immediately recognised that examination and litigation should now proceed on the Aristocrat (2025) footing.
The Controlling Test After Aristocrat (2025)
Characterise first, and as a whole. The decisionmaker must determine what the claim is in substance, read in light of the specification: is it an abstract scheme with the computer as a vehicle, or an implemented arrangement that, through interaction of software and hardware, produces a concrete outcome? The analysis must be holistic. It is wrong to ignore the computer implementation at the threshold or to excise “conventional” elements before characterisation.
Artificial state of affairs and useful result. NRDC’s twin requirements- artificiality and economic significance, remain the touchstone. If, on a proper characterisation, the implemented arrangement produces an artificially created state of affairs with utility, eligibility is satisfied. There is no freestanding requirement to improve computer technology, although such improvement (if present) may support inventive step and characterisation.
Administrative alignment. Following the 2025 decision, IP Australia updated the Manual of Practice and Procedure, instructing examiners to apply an as a whole approach to CIIs and to avoid importing novelty or inventive step analysis into subject matter. That guidance now frames examination practice.
Applying the Test to the Aristocrat Claims
The determinative feature of Aristocrat’s claims was not “game rules” in the abstract, but a machine implemented configuration in which configurable symbols and event triggered feature games, governed by a game controller and presented via a player interface, changed how the machine behaves to create a new gameplay environment. On that characterisation, the claims defined an artificial state of affairs with economic utility; the conventionality of individual computer components did not defeat eligibility, because it was the configured interaction and the result it produced that mattered at the threshold.
Relationship With Earlier CII Authorities
What remains. The exclusion of abstract schemes is intact. Research Affiliates LLC v Commissioner of Patents, Commissioner of Patents v RPL Central Pty Ltd, Encompass Corporation Pty Ltd v InfoTrack Pty Ltd, and Commissioner of Patents v Rokt Pte Ltd show that claims which, when fairly characterised, are schemes with the computer as a mere vehicle are not a “manner of manufacture.”
What changed. The notion that a CII must show a discrete advance in computer technology to pass subject matter is not the law. Aristocrat (2025) recentres the analysis on characterisation and implemented outcome, keeping subject matter conceptually distinct from other validity grounds and restoring doctrinal coherence with NRDC.
Comparative Perspective: Europe
The EPO accepts that CIIs can be inventions but applies COMVIK. Claims must have technical character to pass Article 52 EPC, and at inventive step only features contributing to a technical effect count; business or presentation features are ignored unless they interact to produce such an effect. Guidelines GVII, 5.4 codify the approach: identify features contributing to technical character, formulate an objective technical problem, and assess obviousness accordingly. PostG 1/19 (simulation), Boards of Appeal decisions and practitioner analyses show heightened scrutiny of whether the alleged effect is technical, credible, and achieved across the claim scope, which is especially relevant for AI.
Australia’s framework differs in form- NRDC’s “artificial state of affairs” rather than “technical effect”, but it shares an effect centred focus and a holistic assessment of what the claim does in practice. For dual filings, draft to the implemented outcome in Australia and to technical effect in Europe; in both, avoid presenting the invention as an abstract scheme.
United States
The US retains the Alice/Mayo twostep: Step One asks whether the claim is directed to a judicial exception (abstract idea, law of nature, natural phenomenon); Step Two asks whether there is an inventive concept amounting to “significantly more” than the exception. The USPTO’s MPEP § 2106 and guidance emphasise integration into a practical application during prosecution-often friendlier at the Office- but district courts can be stricter, creating divergence between prosecution and litigation outcomes. For cross filers, frame US claims and arguments around how the invention improves computer functionality or another technology; in Australia, emphasise the implemented arrangement and the artificial state of affairs it produces.
United Kingdom
While not binding in Australia, the UK moved in February 2026 to align with EPO practice in Emotional Perception AI Ltd v Comptroller General [2026] UKSC 3, displacing Aerotel/Macrossan in favour of an “any hardware” threshold and a COMVIK style technical contribution analysis. For multijurisdictional portfolios, that realignment- arriving just after the Australian clarification, means an effect centred narrative can increasingly travel across EPO, UK and Australia, with jurisdiction specific adjustments at the inventive step stage.
Strategic Implications for Portfolios and Freedom to Operate
With Aristocrat (2025) entrenched by the February 2026 refusal, portfolios that were narrowed during the “improve the computer” era warrant reassessment. Claims that define a computer-implemented arrangement producing a concrete, useful result now have a clearer path through subject matter. Conversely, freedom to operate analyses should contemplate that claims once thought borderline may now be examinable and, if valid on other grounds, enforceable- especially in gaming, fintech, AI and platform technologies. Contemporary practitioner notes urged applicants and incumbents to recalibrate drafting, licensing and FTO strategies accordingly.
Open Questions and the Near Term Trajectory
Evidentiary sufficiency for asserted effects. As disputes migrate from eligibility to novelty, inventive step, clarity and support, the quality of implementation evidence will matter, particularly for AI systems where effects may vary across the claim scope. That trend mirrors European practice after G 1/19 and G 2/21, which stress credible, technically grounded effects.
Claim breadth versus demonstrated outcome. Broad, functional CIIs that read on multiple architectures can invite sufficiency/support challenges. Careful drafting that ties the implemented arrangement to an observed and reproducible outcome will mitigate risk and strengthen the Aristocrat characterisation narrative.
Examination alignment. IP Australia’s Manual reflects the 2025 approach, but applicants should still expect to explain characterisation and implemented effects while practice fully harmonises with Aristocrat (2025). Targeted submissions that mirror the Court’s structure- characterisation, implemented state of affairs, useful result, remain the most persuasive path through examination.
Conclusion
Aristocrat restores first principles to Australian subject matter analysis for computer implemented inventions. The inquiry is characterisation first and result focused: does the claim, considered as a whole, merely manipulate an abstract idea on a computer, or does its implementation produce an artificially created state of affairs with a useful result?
The Full Federal Court’s 2025 reasons- left undisturbed by the High Court’s 5 February 2026 refusal confirm that:
1. There is no freestanding requirement to advance computer technology at the eligibility threshold.
2. Conventional components do not defeat eligibility when their configured interaction yields the claimed outcome; abstract schemes remain out.
3. For practitioners, the directive is practical and precise: draft to the implemented arrangement, substantiate the outcome, and prosecute on the footing that eligibility turns on the claim as a whole, exactly as NRDC envisaged and Aristocrat case now reaffirms.
