Key points 

• The Full Court of the Federal Court of Australia in Commissioner of Patents v Thaler [2022] FCAFC 62 overturned a previous landmark decision in which Justice Beach found that Artificial Intelligence (AI) is capable of being legally recognised as an “inventor” on a patent application.
• The Full Court’s decision does not preclude recording the developer of the AI as the inventor of inventions wholly or predominantly generated by that AI.
• The entitlement of an individual to the grant of a patent is premised upon an invention arising from the mind of a natural person or persons - those who contribute to, or supply, the inventive concept are entitled to the grant.¹ 
• Where an AI machine is involved in the development of an invention, it may be prudent to identify person/s that developed the machine and maintain relevant documentation and records of their involvement.
• Thaler has made a special leave application to the High Court seeking to overturn the decision of the Full Court.

Background

Dr Stephen Thaler applied for a patent application with his AI device, known as DABUS or the Device for Autonomous Bootstrapping of Unified Sentience. DABUS was recorded as an inventor. Dr Thaler submitted that the invention was autonomously generated by the AI.

The Deputy Commissioner of Patents initially determined that the terms of the Patents Act 1990 (Cth) (Patents Act) and Patent Regulations 1991 (Cth) were inconsistent with AI being treated as an inventor.

Dr Thaler successfully appealed to the Federal Court where Justice Beach concluded that an “inventor” under the Patents Act can be an AI machine.² His Honour reasoned that the term “inventor” in its ordinary meaning, being an agent noun in the same category as “controller”, “regulator” and “collector”, can operate as either a person or a thing.³ Referencing the objects clause of the Act, his Honour held that the concept of inventor should evolve over time to include non-humans which would in turn achieve the purpose of patent system – to promote economic wellbeing through technological innovation.⁴

The Commissioner appealed the primary judge’s decision to the Full Court of the Federal Court of Australia.

The Full Federal Court Decision

On appeal, an expanded five judge bench of the Full Court unanimously overturned the primary judge’s decision and held that DABUS could not be an inventor named on a patent application. The Full Court concluded that an invention ultimately arises from the mind of a natural person and a human must be named as an inventor for the purpose of a patent application. After noting that the term “inventor” is not explicitly defined in the Patents Act 1990, the Full Court turned to the structure and history of the Patents Acts, as well as underlying objectives of the legislative scheme.

The role of an inventor

Following a consideration of the Statute of Monopolies, Patents Act 1903 (Cth) and Patents Act 1952 (Cth), the Full Court held that the historical provisions were predicated on a person with a legal personality being the “actual inventor”.⁵ Referring to legislative intent, their Honours noted that there was no indication to change the role of the inventor for current provisions to be interpreted differently.⁶ The rationale for this understanding of an “inventor” is that patents are granted as rewards for the ingenuity which resides in the “true and first inventor” or inventors.⁷

The Full Court considered that entitlement to the grant of a patent is premised upon an invention arising from the mind of a natural person or persons. This is consistent with the meaning of ‘inventor’ in the context of challenging the validity of a patent on the basis that the patent was obtained by fraud, false suggestion or misrepresentation and challenging the right of a nominated person to be entitled to grant of patent entitlement.⁸

Entitlement under the Patents Act

Under the Patents Act, there are four classes of persons who may be granted a patent for an invention, they are:

a) a person who is the inventor; or
b) a person who would, on the grant of a patent for the invention, be entitled to have the patent assigned to the person; or
c) a person who derives title to the invention from the inventor or a person mentioned in paragraph (b); or
d) a person who is the legal representative of a deceased person mentioned in paragraph (a), (b) or (c).

The construction advanced by Dr Thaler, and previously accepted by the primary judge, is that each class of persons provides an alternative basis for entitlement due to the use of the word ‘or’.⁹ The Full Court rejected this construction and held that the reference to ‘person’ in those four classes applies to natural persons only and that there must first be a legal relationship to the human inventor mentioned in class (a) for other classes of person to be entitled to the grant.

Accordingly, the Full Court rejected Dr Thaler from claiming entitlement to the DABUS’s invention as “a person who derives title to the invention from the inventor”, since the word “inventor” in class (c) refers to the same inventor as in (a), a human inventor.¹⁰

In preferring this construction, the Full Court cited the High Court of Australia’s position in D’Arcy v Myriad Genetics Inc [2015] HCA 35 in which references are made to “human action” being part of the invention making process.¹¹ Their Honours stated that such references were deliberate and followed the requirement set out in National Resource Development Corporation v Commissioner of Patents [1959] HCA 67. They concluded that both cases proceeded on the assumption that human agency is required in the development of the invention in suit.¹²

Should Dr Thaler have been recorded as the inventor?

The Full Court was not asked to decide whether Dr Thaler might have been appropriately named as the inventor for the AI generated work. Had Dr Thaler been named as the inventor, the Full Court would consider the significance of various matters including that Dr Thaler is the owner of the copyright in the DABUS source code and the computer on which DABUS operates, and that he is also responsible for the maintenance and running costs.¹³

Ultimately, it remains open for persons who are involved in developing the AI to be recorded as the inventor of inventions wholly or predominantly generated by the AI. However, it will depend on whether the person is able to prove that the invention claimed would not have come about without their involvement.¹⁴

Further, the Full Court did not accept the proposition of the primary judge “that if DABUS is not accepted to be an inventor, no invention devised by an artificial intelligence is capable of being granted a patent”.¹⁵

Final Thoughts

In finding that the intent of the Patents Act was to reward human ingenuity, the Full Court did not refer to the objects clause of the Patents Act, which refers to the promotion of economic wellbeing through technological innovation and the transfer and dissemination of technology. The Full Court raised the following policy questions concerning AI and inventions:

• redefining the term “inventor” to include a non-human entity (e.g., AI system);
• recalibrating the concept of “inventive step” (i.e., assessing what forms part of the common general knowledge); 
• reassessing the entitlement of patents for inventions devised by such non-human entities; and
• reassessing what continuing role the ground of revocation for false suggestion or misrepresentation might have for inventions devised by such non-human entities.¹⁶

The above propositions may ultimately be addressed in legislation. Nonetheless, for now, Australia has joined the ranks of US, UK and Europe on the position that AI cannot be considered an inventor of a patentable invention.

An application for special leave to appeal to the High Court of Australia has been filed by Dr Thaler. In considering whether to grant an application for special leave to appeal to the High Court, the High Court will consider: whether the Full Court’s decision involves a question of law that is of public importance; whether the High Court needs to resolve difference of opinion between different courts, or within the one court, as to the state of the law; and, whether the interests of the administration of justice require consideration by the High Court of the Full Court’s judgment.¹⁷

1. [2022] FCAFC 62, [105].
2. [2021] FCA 879, [221].
3. [2021] FCA 879, [120]-[121].
4. [2021] FCA 879, [122]-[124].
5. [2022] FCAFC 62, [98].
6. [2022] FCAFC 62, [106].
7. [2022] FCAFC 62, [86]-[89].
8. [2022] FCAFC 62, [102]-[103].
9. [2022] FCAFC 62, [52]-[55].
10. [2022] FCAFC 62, [109].
11. [2022] FCAFC 62, [115].
12. [2022] FCAFC 62, [116].
13. [2022] FCAFC 62, [121].
14. [2022] FCAFC 62, [103].
15. [2022] FCAFC 62, [121].
16. [2022] FCAFC 62, [119].
17. Judiciary Act 1903 (Cth), section 35A.