In a landmark decision, Thaler v Commissioner of Patents [2021] FCA 879, Justice Beach of the Federal Court of Australia has made the first judicial determination that recognises artificial intelligence (AI) as an inventor. The decision also confirms that under the Patents Act 1990 (Cth) (Patents Act), non-human inventors can neither be an applicant, nor a patentee.
Although likely to be controversial, the decision is, arguably, consistent with the reality of scientific advances in technology and computing we have seen this century, and the need for patent law to evolve in parallel with these advances. This need was recognised by the widening conception of manner of manufacture by the High Court of Australia in D’Arcy v Myriad Genetics Inc (2015) 258 CLR 334. The decision is arguably also consistent with the promotion of innovation underlying the policy considerations and Objects Clause contained in the Patents Act.
What is perhaps less clearly established by the judgment, and may well form the basis for an appeal, is the application of the general law of ownership in property to the vesting of entitlement to a patent in the applicant under section 15(1) of the Patents Act.
The continued growth of AI systems, machine learning and deep-learning algorithms as a tool to discovery and innovations has led patent offices in jurisdictions around the world to consider the implications for patent protection for inventions autonomously developed by AI systems. At the forefront of this charge are Professor Ryan Abbott of the University of Surrey in the UK, together with Dr Stephen Thaler, the developer of the AI system known as DABUS, who has filed applications for patents across numerous jurisdictions as test cases.
The patents concerned are now the subject of ongoing proceedings in the US, UK, Germany, Canada, Australia, South Africa, Japan and China, amongst other places. Patent office proceedings in Europe and the US have determined that the relevant legislative provisions in those jurisdictions do not permit AI to be recognised as an inventor - though both decisions are subject to appeal. This resistance to AI as an inventor primarily stems from the text of existing patent laws which define or refer to an inventor as an 'individual', 'person' or 'natural person', leaving little or no room for interpretation of non-human AI inventorship.
For example, in the UK, an appeal from the UK patents office was heard by the High Court last year. Mr Justice Marcus Smith refused the appeal, confirming that an AI system cannot be regarded as the inventor of a patent under the UK Patents Act 1977 (UK Act), as such a system is not a 'natural person'. The Court considered that a machine was incapable of holding and transferring patent rights, since it lacks the necessary legal personality to assign the rights to property, which was fatal to the entitlement of the applicant (Dr Thaler in the case) to the invention under s 7(2) of the UK Act.
By contrast, and in a world-first, on 28 July this year the South African IP office become the first patents office to issue a patent designating an AI system (DABUS) as inventor.
AI and innovation in pharma and biotech
AI is already revolutionising many industries, with drug development an exemplar.
In this context, AI has been applied to finding molecular targets (such as receptors, transporters, ion channels and enzymes) for disease states – an example of such an application being the Bayesian analysis for the determination of drug interaction targets (BANDIT).
AI has also been used:
- to identify new drug candidates, as well as repurpose known drugs, including for the identification of candidate COVID-19 treatments;
- to create artificial stimulations of vaccine-pathogen interactions as a means of fast-tracking the process of vaccine development; and
- in the support of clinical trials, for example, to assist with patient phenotype selection and treatment matching.
These examples demonstrate the central role that AI already plays in innovation and development in the pharma and biotech industries.
Background to DABUS and AI as the inventor
Dr Stephen Thaler, the applicant, named an artificial intelligence system known as a device for the autonomous bootstrapping of unified sentience (DABUS), as the inventor for Patent Application No. 2019363177. Although not relevant for present purposes, the alleged inventions are interlocking containers that improve grip by a robot, and an emergency warning light. Dr Thaler is the owner of copyright in the DABUS source code and is responsible for, and the operator of, the computer on which DABUS operates. The inventions are said to be autonomously generated by DABUS.
It was not disputed that DABUS is not a natural or legal person. DABUS is an AI system that incorporates artificial neural networks, which simulate the way in which the human brain processes information.
The Deputy Commissioner of Patents determined that the application did not comply with regulation 3.2C(2)(aa) of the Patents Regulations 1991, as it failed to name a human inventor. Regulation 3.2C(2)(aa) requires that the applicant provide the name of the inventor of the invention to which the application relates. The Deputy Commissioner further considered that section 15(1) of the Patents Act, together with regulation 3.2C(2)(aa), were inconsistent with a non-human inventor being named as an application. The decision was appealed.
The Court's reasons
The question before the Court was whether a valid application has been lodged by Dr Thaler, naming DABUS as inventor on the application. The Patents Act does not define 'inventor', and the term must therefore be given its ordinary meaning. Section 45(1) provides that if an application for examination of a standard patent is made, the Commissioner must examine the request and report on certain prescribed matters. Regulation 3.2C(2)(aa) provides that, for the purposes of section 45(1), an applicant must provide 'the name of the inventor of the invention to which the application relates'. Section 15(1) of the Patents Act sets out entitlement to ownership of a patent in in the following terms:
Who may be granted a patent?
(1) Subject to this Act, a patent for an invention may only be granted to a person who:
(a) is the inventor; or
(b) would, on the grant of a patent for the invention, be entitled to have the patent assigned to the person; or
(c) derives title to the invention from the inventor or a person mentioned in paragraph (b); or
(d) is the legal representative of a deceased person mentioned in paragraph (a), (b) or (c).
(emphasis added)
Section 15(1) makes reference to a 'person' being entitled to the grant of a patent, and section 2C(1) of the Acts Interpretation Act 1901 (Cth) provides that:
In any Act, expressions used to denote persons generally (such as “person”, “party”, “someone”, “anyone”, “no-one”, “one”, “another” and “whoever”), include a body politic or corporate as well as an individual”.
Section 15(1) makes clear that only a person (or legal person) can be an applicant for a patent, and be granted a patent, as patentee. However it did not follow that this was so for an inventor.
In considering the ordinary meaning of 'inventor', his Honour agreed with Mr Thaler's submissions that the term inventor, as an agent noun ending in the suffix 'or' or 'er', indicated that the agent could be either a person or a thing:
- For example, the word 'computer' originally referred to a person who made computations but was later also applied to a machine that made computations when such technology evolved. In this sense the ordinary meaning of words can also evolve with technological advances.
His Honour confirmed that neither section 15(1) nor regulation 3.2C(2)(aa) exclude, on a plain reading, a non-human inventor. In addition, nothing in the Patents Act, considered as a whole, dictates a contrary conclusion.
Deriving title from AI?
While his Honour was not required to consider entitlement under section 15(1), as the only requirement at the current formalities stage was for the inventor to be named, he nevertheless proceeded to do so as the Commissioner relied on this provision as a key consideration in determining whether non-human inventorship was permissible under the Act. The Commissioner, in essence, argued that section 15(1) requires the antecedent subsistence of title to the invention in the inventor, before the formality of identifying the inventor can occur. Such a construction would, by necessity, disallow an AI inventor as AI systems cannot own, or legally assign, an invention.
Under section 15(1) there are four classes of persons who may be granted a patent. The first and last limbs, ss 15(1)(a) and 15(1)(d), are not triggered by the circumstances raised in this case.
Under the second limb, section 15(1)(b), entitlement may flow from the assignment of the patent to the applicant. Here, his Honour reasoned that such an assignment could arise not only by agreement, but also informally without the need for a formal instrument, or alternately by operation of law.
Under the third limb, section 15(1)(c), the applicant may derive title to the invention from the inventor or a person mentioned in section 15(1)(b). His Honour reasoned that the concept of ‘derivation’ is broad and is not limited to assignment or transfer of title. Dr Thaler is the owner of copyright in the DABUS source code, and relevantly is in possession of the computer on which DABUS is run. Here, his Honour reasoned that on established principles of property law, Dr Thaler is the owner of DABUS and its work product. In this respect, as his Honour explained:
… the ownership of the work of the artificial intelligence system is analogous to ownership of the progeny of animals or the treatment of fruit or crops produced by the labour and expense of the occupier of the land … which are treated as chattels with separate existence to the land.
His Honour proceeded to explain that whilst DABUS is not a legal person and cannot legally assign the invention, it does not follow that it is not possible to derive title from DABUS, stating:
[t]he language of s 15(1)(c) recognises that the rights of a person who derives title to the invention from an inventor extend beyond assignments to encompass other means by which an interest may be conferred.
His Honour further explained that:
[i]n this respect, title can be derived from the inventor notwithstanding that it vests ab initio other than in the inventor. That is, there is no need for the inventor ever to have owned the invention, and there is no need for title to be derived by an assignment. [emphasis added]
His Honour concludes that when the time comes for entitlement to be considered:
Dr Thaler is, in principle, capable of being entitled to be granted a patent in relation to an invention made by an artificial intelligence system such as DABUS under at least s 15(1)(c), and possibly s 15(1)(b).
The contrasting copyright position
This decision is in clear contrast to Australian copyright law.
The High Court and Federal Court have confirmed the requirement that, for copyright to subsist, the creator of the relevant work must be a human author. For example, in Acohs Pty Ltd v Ucorp Pty Ltd (2012) 201 FCR 173, the Full Federal Court held that copyright did not subsist in a work that was largely created by a computer-automated process (albeit, in that case, not by an artificially intelligent system). This judicial approach is reinforced by section 32(4) of the Copyright Act 1968 (Cth), which requires that the author of a copyright work must be ‘Australian citizen or a person resident in Australia’. It is also consistent with the moral rights provisions introduced into the Copyright Act in 2001, which only vest those rights in the human creator of the work.
While judicial interpretation has made it clear that subsistence of copyright under the Copyright Act requires a human author, the same cannot be said for an 'inventor' under the provisions of Australia's patent legislation.
Policy considerations underlying Australia's patent legislation
An Objects Clause was recently introduced at 2A of the Act, and is expressed in the following terms:
The object of this Act is to provide a patent system in Australia that promotes economic wellbeing through technological innovation and the transfer and dissemination of technology. In doing so, the patent system balances over time the interests of producers, owners and users of technology and the public.
To this end, recognising AI-generated innovations is consistent with the promotion of innovation. It also enables the disclosure, publication and dissemination of such technological advances. Without patent protection, owners of AI systems may otherwise choose to protect these advances as trade secrets, thereby stifling information-sharing and scientific progress.
Justice Beach's decision also draws on the development of the law in relation to 'manner of manufacture' in support of the need to advance patent law more generally, stating:
… I see no reason why the concept of “inventor” should not also be seen in an analogously flexible and evolutionary way. After all the expressions “manner of [new] manufacture” and “inventor” derive from the 21 Ja 1 c 3 (Statute of Monopolies) 1623 (Imp) s 6. There is a synergy if not a symmetry in both being flexibly treated. Indeed, it makes little sense to be flexible about one and not the other. Tension is created if you give flexibility to “manner of manufacture” and then restrict “inventor”. You would be recognising an otherwise patentable invention and then saying that as there is no inventor it cannot be patented.
Here, it is worthwhile noting that Justice Beach has on two occasions upheld the patent eligibility of claims defining practical applications of genetic technologies in Sequenom, Inc. v Ariosa Diagnostics, Inc. [2019] FCA 1011 (upheld on appeal) and Meat & Livestock Australia Limited v Cargill, Inc [2018] FCA 51.
Implications for 'inventive step'
Some argue that, should AI-generated inventions be accepted, this will have problematic consequences. Namely, the threshold for what constitutes an 'inventive step' may rise, if in the future the 'person skilled in the relevant art' is assisted by artificial intelligence. Similarly the 'common general knowledge' may also be assessed by reference to the knowledge of the person skilled in the relevant art, assisted by artificial intelligence. Such changes may ultimately prevent human inventorship, although such an eventuality is likely to arise some way into a future (if ever).
His Honour largely sidesteps these questions, as the validity of the present application was not at issue here. It will be interesting to see how these difficult issues are dealt with by courts in the coming years.
Where to from here?
The ramifications of this decision, should it stand, are far-reaching for many industries including healthcare, pharmaceuticals, biotechnology, banking and financial services, e-commerce, telecommunications and manufacturing and logistics.
This decision, together with the issuing of a patent designating AI as inventor by the South African IP office, places further pressure on patent offices and courts globally to consider their own patent regimes, and whether and how these regimes can evolve in line with emerging technological advances that are of significant value and importance to society. The World Intellectual Property Organization (WIPO), as well as the patent offices in both the US and Europe, have undertaken consultations on this issue.
It is, of course, also open to the legislatures of each jurisdiction to address the question, if they see fit to do so. In this regard, the best means to achieve a more uniform approach to this question would be by way of international agreement, such as through the provisions of the Paris Convention or the TRIPS agreement.
Justice Beach's decision is far from the last word on AI inventorship in Australia, and it is likely that his Honour’s decision will be appealed given the significance of the issues raised.
Contact us if you'd like to discuss the case in more detail, and how it might affect your patents.
