Significant ramifications for multiple industries

11 min read


Can an artificial intelligence (AI) system be named the inventor of a patent? An Australian court says ‘yes’.

The decision in Thaler v Commissioner of Patents [2021] FCA 879 is the first judicial determination in the world in favour of AI systems being named as inventors of a patent. The availability of patent protection for AI-generated inventions is a vexed and controversial issue.

As AI is increasingly contributing to research and development efforts, the decision will have significant ramifications for stakeholders across a wide range of industries.

How does this affect you?

  • Justice Beach of the Federal Court has determined that an AI system can be named as the inventor on a patent application.
  • A non-human inventor can neither be an applicant for a patent nor a grantee of a patent.
  • A natural person or corporation may be an applicant for a patent or a grantee of a patent invented by an AI system.
  • The decision will be particularly important in the pharmaceutical industry where machine learning is increasingly used to achieve effective, cheaper and quicker drug discovery.

AI as an inventor?

Whether patent protection should be given for AI-generated inventions has been a vexed issue for courts around the world. The inventive capacity of AI systems continues to evolve, raising significant philosophical and legal questions. Should inventions generated by AI be patentable? Who should be designated as the inventor of such inventions? Who should own any resulting patents?

For the first time in the world, the Federal Court of Australia has answered the key legal question in favour of permitting AI inventors and ruled on the key issues. The decision is Thaler v Commissioner of Patents [2021] FCA 879, which was handed down today.

The case that challenged the status quo

Background

Dr Stephen Thaler is the inventor of the Device for Autonomous Bootstrapping of Unified Sentience or DABUS. Dr Thaler built DABUS to generate new ideas and determine the most novel or valuable. DABUS envisioned an improved beverage container and ‘neural flame’ for search-and-rescue operations entirely of its own accord.

The Commissioner of Patents (Commissioner) had rejected the patent application filed by Dr Thaler naming DABUS as the inventor (DABUS Application) because the application documents failed to name a human inventor. The DABUS Application was filed as part of the Artificial Inventor Project, spearheaded by Dr Ryan Abbott of The University of Surrey, which has been advocating across the globe for AI to be capable of being named as an inventor.

Equivalent applications have also been filed in other countries, including Canada, China, Europe, Germany, India, Israel, Japan, South Africa, the UK and the US. The South African patent was granted two days ago, as a result of an administrative decision by the South African Companies and Intellectual Property Commission. The case in Australia is, however, the first decision by a court to allow a patent to proceed in the name of a robot inventor.

Dr Thaler sought judicial review of the Commissioner’s decision not to proceed with the DABUS Application. Mr David Shavin QC and Ms Clare Cunliffe, instructed by Allens, appeared for Dr Thaler in the proceeding.

The decision

Before descending into his analysis, Justice Beach explained how AI is already being used in one field of scientific inquiry – pharmaceutical research. His Honour said this indicates that no narrow view should be taken as to the concept of ‘inventor’, as ‘to do so would inhibit innovation not just in the field of computer science but all other scientific fields which may benefit from the output of an artificial intelligence system’.

The ordinary meaning of inventor does not exclude non-humans

Unlike some other jurisdictions, the Australian Patents Act does not define the term ‘inventor’. Rather, the term is to have its ordinary meaning.

The Commissioner’s primary contention was that the ordinary meaning of ‘inventor’, as set out in various dictionary definitions, is inherently human. The Commissioner argued that the Patent Regulations imply that the term ‘inventor’ refers to a person, and that section 15(1) of the Act, which defines who may be granted a patent, also requires the inventor to be human.

However, Justice Beach considered that more is required of him than ‘mere resort to old millennium usages of’ the word inventor, saying: ‘I need to grapple with the underlying idea, recognising the evolving nature of patentable inventions and their creators. We are both created and create. Why cannot our own creations also create?’

His Honour noted that there is no specific provision in the Act that expressly refutes the proposition that an AI system can be an inventor, nor is there any specific aspect of patent law, unlike copyright law, involving a requirement for a human author, that would drive a construction of the Act as excluding non-human inventors.

Dr Thaler invoked the concept of agent nouns to successfully argue that the ordinary meaning of inventor is not limited to humans. That is, the suffix ‘-or’ or ‘-er’ indicates that the noun describes the agent that does the act referred to by the verb to which it is attached. History shows that the definition of an agent noun can evolve over time. For example, during the space race, humans were the ‘computers’ that performed mathematics by hand to get rockets into space. Nowadays, those same calculations are completed by computers which are machines, something that would have seemed impossible 60 years ago.

AI as inventors promotes the objects of the Patents Act

Dr Thaler also argued that recognising the ordinary meaning of inventor as not excluding non-humans inventors is consistent with the objects of the Act, as set out in the recently introduced objects clause, being the promotion of technological innovation and the dissemination of technology, whether generated by a human or not. Justice Beach agreed.

His Honour also observed that, not recognising the reality of AI inventorship could produce inefficiency if not logical difficulties, including because persons not actually responsible for an invention could be recognised and rewarded without having contributed significantly to the inventive process, which would be the antithesis of the objects of the Act.

If the output of an artificial intelligence system is said to be the invention, who is the inventor? And if a human is required, who? The programmer? The owner? The operator? The trainer? The person who provided input data? All of the above? None of the above? In my view, in some cases it may be none of the above. In some cases, the better analysis, which is consistent with the s 2A object, is to say that the system itself is the inventor. That would reflect the reality. And you would avoid otherwise uncertainty.

AI as inventors is not inconsistent with the Patents Act

Justice Beach queried the Commissioner’s reliance on section 15(1), given that at the formalities stage the only requirement is that the inventor be named. Justice Beach said that section 15(1) concerns who may be granted the patent, and the Commissioner is not being asked to decide that question now. Ultimately, the question is whether a valid application has been presently lodged, and his Honour considered that it had been, as the name of the inventor can be a non-human.

However, his Honour did consider whether Dr Thaler prima facie falls within section 15(1).

Section 15(1) provides that a patent may be granted to a person who:

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

Nobody suggested that DABUS was a person who should be the owner of the patent. Instead, Dr Thaler argued he could be granted a patent under limbs (b) or (c).

Justice Beach accepted that, in principle, Dr Thaler is capable of being entitled to be granted a patent in relation to an invention made by DABUS under at least section 15(1)(c), and possibly section 15(1)(b).

As to section 15(1)(b), Dr Thaler argued that he is the owner of the invention made by DABUS, as he is the owner, programmer and operator of DABUS. Invoking centuries-old law, Dr Thaler argued that ownership of the output of the AI system is analogous to the 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. On that basis, if the patent were granted, he would be entitled to have the patent assigned to him.

Justice Beach observed that section 15(1)(b) does not require the existence of an inventor at all: it requires no more than that the applicant is entitled to have a patent assigned to him, in the event that there is a grant.

Justice Beach rejected the Commissioner’s submission that section 15(1)(b) applies only to the situation where a person is entitled to assignment of a patent from a human inventor, because an AI system cannot assign a patent. Rather, his Honour said that this section encompasses scenarios where an employee holds his interest in an invention as trustee for the employee, where a person has contracted with an employer to own an invention made by the employer’s employees, and where a third party misappropriates an invention such that the inventor’s employer could bring an action seeking an equitable assigning from the third party. And it could also apply where an invention made by an AI system was the subject of contract, or had been misappropriated, giving rise in either case to a legal or equitable right of assignment.

Justice Beach considered that it cannot be said now that Dr Thaler could not bring himself within section 15(1)(b) when the time arises.

As to section 15(1)(c), the Commissioner argued that this subsection presupposes the existence of ‘title’, which is held by the inventor and which then moves or is transferred to the patent applicant, who may be granted a patent. As an AI system cannot own title, being a non-legal person, it also cannot assign or transfer title.

Dr Thaler argued that there is no requirement for title to ‘move’ from a human inventor to the patent applicant. Section 15(1)(c) extends beyond assignments, and encompasses other means by which title may be acquired from the inventor. Dr Thaler argued that he has possession of the invention through and from DABUS, and as a consequence of his possession of the alleged invention, combined with his ownership and control of DABUS, also obtained title to the invention. On that basis, Dr Thaler derived his title to the alleged invention from DABUS.

Justice Beach agreed with Dr Thaler. Justice Beach found there is a prima facie basis for saying that Dr Thaler is a person who derives title from the inventor, DABUS, by reason of his possession of DABUS, his ownership of the copyright in DABUS’ source code, and his ownership and possession of the computer on which it resides.

His Honour considered that the language of section 15(1)(c) recognises that the rights of a person who derives title to the invention from an inventor extend beyond assignments. As to the concept of possession, Justice Beach said that proprietary rights may subsist in an invention before applying for a patent and that an invention is capable of being possessed and ownership may arise from possession. Dr Thaler, as the owner and controller of DABUS, would own any inventions made by DABUS when they came into his possession.

Justice Beach also said that title can be derived from the inventor, notwithstanding that it vests from the beginning other than in the inventor. There is no need for the inventor to have ever owned the invention.

Other countries?

The Australian decision follows the recent grant of a South African patent naming DABUS as the inventor. However, those cases stand in contrast to the decisions of courts and Patent Offices in other jurisdictions such as the UK, Europe and the US, where equivalent applications to the DABUS Application have been filed but rejected.

For example, the UK Intellectual Property Office determined that DABUS could not be the inventor of an invention for the purposes of the 1977 Patents Act. Dr Thaler appealed the decision of the Intellectual Property Office to the UK High Court, which was also of the view that DABUS cannot be an inventor as it is not a person and is incapable of conveying property to Dr Thaler. Dr Thaler has been granted permission to appeal the UK High Court’s decision to the Court of Appeal. That appeal was heard earlier this week.

Future implications

Some commentators have expressed concerns that providing patent protection for AI-generated inventions could raise the bar of inventiveness or fundamentally change the concept of the ‘person skilled in the art’, and therefore make it harder for human inventors to secure patent rights. Justice Beach swept aside these concerns, observing that the Act focuses on inventive step, which uses a hypothetical and objective construct which is not at all concerned with the inventor’s mental processes as such. His Honour also said that whether the inventive step is produced by a human or a machine is simply irrelevant to the inquiry mandated by the Act, because one takes the inventive step, howsoever it arose, and compares it with the prior art base and common general knowledge – it is not about the inventor or his or its characteristics or status whatsoever.

Some commentators have also suggested that, by accepting inventorship as extending to AI systems, it would elevate the status of AI to that of a legal person, allowing it to hold and exercise proprietary rights. However, those who support patent rights for AI-generated inventions argue it will incentivise the making and disclosure of innovations using AI. Another issue is that wrongly naming a human inventor, when the alleged invention has in fact been made by AI and not by the named human, has the potential to result in an invalid patent.

The decision will have significant ramifications for many industries, such as the pharmaceutical industry where, as recognised by Justice Beach, machine learning is becoming an important tool utilised to achieve effective, cheaper and quicker drug discovery.

The decision may be appealed. We will keep you updated as to the progress of the case.