FEDERAL COURT OF AUSTRALIA
Nufarm Limited v Jurox Pty Limited [2008] FCAFC 180
Aktiebolaget Hassle v Alphapharm Pty Limited (2002) 212 CLR 411 cited
Minnesota Mining and Manufacturing Company v Beiersdorf (Australia) Limited (1980) 144 CLR 253 cited
VID 205 of 2008
LINDGREN, GOLDBERG AND BENNETT JJ
11 November 2008
Perth (heard in MELBOURNE)
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IN THE FEDERAL COURT OF AUSTRALIA |
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VICtoria DISTRICT REGISTRY |
VID 205 of 2008 |
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ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA |
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BETWEEN: |
NUFARM LIMITED (ACN 091 323 312) First Appellant
ARGENTA MANUFACTURING LIMITED Second Appellant
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AND: |
JUROX PTY LIMITED (ACN 000 932 230) Respondent
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DATE OF ORDER: |
11 NOVEMBER 2008 |
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WHERE MADE: |
perth (heard in MELBOURNE) |
THE COURT ORDERS THAT:
1. The appeal be dismissed.
2. The appellants pay the respondent’s costs.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
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IN THE FEDERAL COURT OF AUSTRALIA |
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VICTORIA DISTRICT REGISTRY |
VID 205 of 2008 |
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ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA |
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BETWEEN: |
NUFARM LIMITED (ACN 091 323 312) First Appellant
ARGENTA MANUFACTURING LIMITED Second Appellant
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AND: |
JUROX PTY LIMITED (ACN 000 932 230) Respondent
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JUDGES: |
LINDGREN, GOLDBERG AND BENNETT JJ |
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DATE: |
11 november 2008 |
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PLACE: |
perth (heard in MELBOURNE) |
REASONS FOR JUDGMENT
The Court:
1 Nufarm Limited was the registered proprietor of Australian Innovation Patent No. 2003101020 (‘the Patent’) at the commencement of these proceedings. Following an assignment of the Patent to Argenta Manufacturing Limited (‘Argenta’), Argenta is the present registered proprietor of the Patent. The appellants (together ‘Nufarm’) appeal from a decision of the primary judge dismissing their claim of infringement of the Patent by the respondent (‘Jurox’) (Nufarm Ltd v Jurox Pty Ltd (2008) 75 IPR 341). The hearing before the primary judge did not concern the validity of the Patent. Infringement was heard and determined as a separate question. His Honour determined that Jurox’s product, Q-Drench, does not infringe the Patent.
2 The Patent is entitled “Stable Biocidal Compositions”. It relates to stable veterinary compositions which are used as an oral drench to control intestinal parasites. These parasites infect sheep, cattle, goats and other domesticated herbivores.
3 Claim 1 of the Patent, the relevant independent claim, is as follows:
A storage stable veterinary composition for oral administration comprising:
(i) at least one avermectin as a first active ingredient;
(ii) at least one organic liquid carrier which carries at least most of said first active ingredient to define an organic liquid phase;
(iii) levamisole as a second active ingredient;
(iv) at least one benzimidazole as a third ingredient; and
(vi) at least water which carries at least most of said second and third active ingredients to define an aqueous phase;
wherein said aqueous phase has a pH of less than 7 and includes an emulsifying agent(s);
wherein said avermectin is abamectin or ivermectin; and
wherein said aqueous and organic liquid phases exist in, or can be shaken or agitated into, the form of an emulsion with any particulate content if any, being at least substantially present in said aqueous phase.
4 It can be seen that Claim 1 requires, inter alia:
· a storage stable veterinary composition;
· at least one organic liquid carrier which carries the avermectin to define an organic liquid phase;
· water carrying the levamisole and benzimidazole to define an aqueous phase;
· where the two phases exist in or can be shaken or agitated into an emulsion.
The Issues
5 There was no issue as to the active ingredients. The central issues as presented to the primary judge concerned whether or not Q-Drench is an “emulsion” or is capable of being “shaken or agitated into the form of an emulsion” and whether it has an “organic liquid phase”. This involved a consideration of the meaning of the emphasised terms:
· emulsion;
· phase; and
· organic liquid phase.
6 Consideration of the term “organic liquid phase” involved a consideration of what is meant in Claim 1 by an ‘organic liquid carrier which carries at least most of said first active ingredient to define an organic liquid phase’.
7 The primary judge found at [50], and it is not in dispute, that the relevant skilled addressee for the purpose of this proceeding is a person skilled in chemistry, particularly physical chemistry. The primary judge concluded at [82], and it is not in dispute, that the words “emulsion” and “phase” as used in the claims, which are not defined in the specification, are capable of more than one meaning and lack clarity. In those circumstances, his Honour looked to the body of the specification to construe the claims. The primary judge concluded, and the parties do not dispute, that it is permissible and appropriate to have recourse to the body of the specification to ascertain the meaning of those words and the construction of the claims, in the context of the Patent.
The patent
8 The Patent relates to stable veterinary compositions and their use to treat, eradicate and/or control helminthiasis. Helminthiasis is a disease that affects warm blooded animals, in particular cattle, sheep, goats and other domesticated herbivores. The disease is treated with endoparasiticidal compounds known as anthelmintics. Different endoparasiticidal compounds vary in their spectrum of activity. Repeated use of endoparasiticidal compounds has led to the development of drug resistance in the parasites which cause helminthiasis.
9 The background section of the Patent describes the prior art and the problems sought to be overcome by the invention. The practice had developed in this field of anthelmintic formulations to combine two or more active ingredients having different spectrums of activity in order to reduce the risk of the parasites developing resistance to each of the individual actives. However, the chemical and physical stability of prior combinations was extremely poor. Moreover, the Patent states, the pH of the prior formulations was found not to be conducive to the long-term stability of the individual endoparasiticidal compounds.
10 The Patent states that the object of the invention is to provide veterinary compositions having anthelmintic activity comprising the active ingredient levamisole, together with at least one of each of two types of actives, where the compositions ‘are both chemically and physically stable’. The Patent asserts that the invention provides a broader spectrum of activity and is ‘both chemically and physically stable for an extended period of time’.
11 Chemical and physical stability are defined in the Patent. “Chemically stable” means that the active ingredients within plus or minus [+/-] 10% w/w of their stated composition are preferably stable for at least 3 months and more preferably for at least 18 months when stored at 25°C or below and at ambient humidity. “Physically stable” means that the composition of the invention is substantially homogeneous (despite any optional particulate inclusions) and/or can be readily agitated to form a substantially homogeneous state. “Particulate” as used in the Patent is defined to mean true particles (ie parts of solids) preferably almost exclusively less than 100 microns and ideally the smaller the better (preferably less than 50 microns, more preferably less than 30 microns, still more preferably less than 20 microns and even more preferably less than 10 microns).
12 The organic liquid carrier is preferably selected from the group consisting of a number of named classes which include oils, emollient esters, an alcohol having multiple carbons, diols and glycol esters. In a more preferred aspect at least one organic liquid carrier is an oil, preferably a mineral or vegetable oil or a co-solvent such as benzyl alcohol. While the organic liquid carrier is preferably selected from the broad class referred to above, preferred formulations contain an oil, either vegetable or mineral. This is reflected in Claim 3, which is dependent on Claim 1.
The examples in the Patent
13 The Patent provides a number of examples. The specification states that the invention is illustrated ingreater detail with reference to the examples and that the examples show various formulations directed to ‘a resistance strategy’, where the formulations are stable and may have additional therapeutic and/or active inclusions. As is not uncommon, it is stated that it should be understood that the invention is not to be construed as being limited to these examples.
14 The primary judge summarised the specification’s commentary on the effectiveness of the different examples at [29]–[36]:
[29] Example 1 consisted of a combination formulation of abamectin and levamisole and a number of additional ingredients. The specification states that the formulation was “too thin” and examples 2-4 were thickened [with] Carbopol or gums. The following examples 2-4 included the thickening agents at varying concentrations. The specification states that the pH level of these formulations was too low for the long-term stability of abamectin.
[30] The specification then states:
These completely aqueous formulation approaches were then stopped and it was decided to use a vegetable oil to attempt to encapsulate the Abamectin and possibly protect it from the low pH of the water phase. An additional active, albendazole, a benzimidazole anthelmintic, was added to the formulation.
[31] The specification states that the formulations described in examples 5 and 6, after “accelerated stability assays” showed that the abamectin was degrading. It further stated that the physical stability of the formulations were also “poor with Albendazole flocculating out and with the oil phase showing evidence of curdling”.
[32] The formulation described in example 7 sought to overcome flocculation by adding an ingredient to coat the albendazole and improve its solubility in water. Also, the emulsifying agent Teric 380 was added, and the “percentage of the oil phase was increased to 10% to increase the partition between the oil/water phase [and] possibly improve Abamectin stability”. The formulation was apparently successful in preventing flocculation but the specification stated that the “oil phase readily separated out”.
[33] The specification states that the “oil/water phase required further stabilisation”. Examples 8-11 consisted of a series of water/oil/emulsifier blends to “optimise this aspect of the formulation”. Tween 80 was also trialled as a possible alternative to Teric 380. The conclusions from the examples were stated as follows:
As a result we concluded that:
· Teric 380 was the better emulsifier; and
· the higher concentration of oil emulsion was the most stable option.
Accordingly, the proceeding examples trialled oil concentration from 35-60% w/v.
[34] Examples 12 and 13 were trials of different thickeners and do not need to be set out in any detail here for the purposes of this proceeding.
[35] Examples 14-16 consist of formulations with tweaked concentration and varying active ingredients that do not need to be set out in any detail at this point. However, the findings in relation to the formulations are invariably “(p)roduct stable under an accelerated stability programme”.
[36] Finally, examples 17 and 18 use formulations with active ingredient benzimidazole in lactic acid. The stated findings in relation to these formulations are that “(t)hese soluble forms of benzimidazoles are likely to have advantage (more easily dermally absorbed) as pour-on formulations”.
From this summary of the Patent, we note, in particular, the following:
Example 1
15 In example 1 the surfactant used was Tween 80. The active, abamectin, was dissolved in benzyl alcohol into which Tween and propylene glycol were mixed. The organic carriers were benzyl alcohol and propylene glycol. The other active (levamisole) was dissolved in water. That formulation was said to be physically stable but considered too thin. No reference was made to chemical stability. The Patent says that, to correct the thinness, the following examples were thickened with Carbopol or gums.
Examples 2 to 4
16 Accordingly, in examples 2, 3 and 4 thickeners were added to the propylene glycol. The abamectin was still dissolved in benzyl alcohol and Tween 80 added. Levamisole was dissolved in water. The Patent then said as follows:
The low pH of these formulations 2, 3 and 4 (pH<4) was identified as unsuitable for long [sic] the long-term stability of Abamectin. These completely aqueous formulation approaches were then stopped and it was decided to use a vegetable oil to attempt to encapsulate the Abamectin and possibly protect if [sic] from the low pH of the water phase. An additional active, albendazole, a benzimidazole anthelmintic, was added to the formulation.
(emphasis added)
Examples 5 to 11
17 An additional active was added to the formulation after example 4. A vegetable oil was added, from 3% in examples 5 and 6 to 10% in examples 7, 8 and 9 and 50% in examples 10 and 11. There was also a change from Tween 80 to Teric in examples 5 to 7, 9 and 11. It is unnecessary to examine in detail the examples following example 4, save to note the following:
· vegetable oil was introduced; and
· the surfactant was changed to Teric in examples 5 to 7, 9 and 11.
18 The examples were described as a continuing process of changing various factors to improve stability and to optimise the formulation. The commentary in the specification after examples 5 and 6 was that the abamectin was degrading in accelerated stability assays and that the physical stability of the formulation was poor with albendazole ‘flocculating out and with the oil phase showing evidence of curdling’. This, according to the evidence, was indicative of the breakdown of an unstable macroemulsion. It represented to the skilled reader the first specific reference to a macroemulsion. The first reference to an oil phase was after example 5. After example 6, the Patent states that the percentage of the oil phase was increased to 10% ‘to increase the partition between the oil/water phase’. The ‘oil phase’ was also referred to after example 7, where the specification stated that the oil/water phase required further stabilisation and a series of water/oil/emulsifier blends were prepared to optimise this aspect of the formulation.
19 The appeal and the hearing before the primary judge centred on whether examples 1 to 4 were within the scope of Claim 1. It was agreed that Q-Drench was relevantly a formulation within those examples.
20 Nufarm submits that the claims were intended to cover within their scope all of the examples. Jurox submits that the claims were limited to certain of the examples and that some, including examples 1 to 4, are not within the scope of the claims. Jurox points out that, in addition to examples 1 to 4, examples 17 and 18 are pour-on formulations and do not contain an aqueous phase; therefore they are not within the scope of Claim 1. Further, apart from the question of “emulsions” and “phases”, Jurox submits that examples 1 to 4 are necessarily outside Claim 1 because they lack the third active, benzimidazole.
21 A central question was whether examples 1 to 4 contained an “organic liquid carrier to define an organic liquid phase” which carries the abamectin. There is no limitation in the specification of “an organic liquid carrier”. The preferred organic liquid carriers are set out in Claim 3 where the organic liquid carrier is selected from the group consisting of one or more oils including at least one mineral or vegetable oil, emollient esters, an alcohol having multiple carbons, diols and glycol esters. This is reflected in a consistory clause in the body of the specification which goes on to provide for a more preferred aspect of at least one organic liquid carrier as an oil, preferably a mineral or vegetable oil or a co-solvent such as benzyl alcohol. Benzyl alcohol is present in examples 1 to 4.
22 We turn to the decision of the primary judge.
The decision of the primary judge
23 There is no issue in the appeal as to the primary judge’s treatment of the background technology of the invention or as to the principles of construction applied by his Honour. Central to the appeal is what his Honour did and did not decide.
24 The primary judge conveniently summarised the problem and the solution as outlined in the specification at [39]:
The problem of how to carry all the active ingredients in a single formulation was solved by using water as the carrier for those ingredients (levamisole, benzimidazole and closantel) which do not degrade in water, while separating the ingredient (avermectin) which does degrade in water. Put simply, the composition of the invention utilises a “dual personality” carrier system. It is the effective partitioning of these two environments that forms the basis of the invention described and claimed in the patent specification.
25 The primary judge noted at [59] that there were competing views as to the correct definition of the words “emulsion” and “phase”, as there were about certain other chemical principles and concepts which were relevant to the current dispute. At [59], his Honour summarised those competing views:
The dispute between the parties stems from ambiguities which exist as a result of certain wording used in the patent. Fundamentally, those ambiguities reflect a difference of opinions within the relevant audience, namely the skilled addressee, as to the proper meaning of the words “emulsion” and “phase”. I set out below a relatively brief summary of the competing views as to the correct definition of these words, along with some other chemical principles and concepts which are relevant to the current dispute and to the evidence which was given during the course of the trial.
26 As the primary judge observed at [60], theoretically there is no contention about the basic definition of “a phase”, namely that it is ‘any part of a system which is uniform in chemical and physical properties and is separated from other homogenous parts of the system by boundary surfaces’. The debate arises as to the classification of certain examples, which is context-driven depending upon the function of the product. His Honour observed that the parties agreed that an example of a two phase system is olive oil shaken with water, consisting of an oil phase and a water phase. His Honour described the difference between the experts as being whether there was necessarily a threshold in terms of the number of molecules present before a separate phase is formed. This, as his Honour noted at [64], has implications for the interpretation of the term “emulsion” as used in the Patent claims.
27 The primary judge did not, in his discussion of phases at [60]–[63], decide between the conflicting expert opinions. He then turned to discuss the different descriptions of an emulsion. His Honour noted that, while an emulsion may simply be described as a dispersion of one liquid in another or a system in which there is a separation of one liquid phase from another, this raises the question of the difference in the views as to the meaning of “phase”.
28 The primary judge recorded a number of different definitions of emulsion. Some of those definitions make it clear that an emulsion is a stable mixture of two or more immiscible liquids stabilised by an emulsifier. Some of those definitions refer to the size of the particles in the dispersed phase. His Honour also noted that some scientists consider that thermodynamic instability is a defining feature of an emulsion, reflected in texts cited in the judgment which define an emulsion in terms of a thermodynamically unstable mixture of the immiscible liquids.
29 Again, his Honour did not (at [64]–[67]) decide between the conflicting views regarding the general meaning of the term “emulsion”. He then turned to consider the description of and classification of micellar systems, microemulsions and macroemulsions and whether or not these constitute “emulsions” for the purposes of the Patent. His Honour noted, generally, that there were different descriptions given by different experts of micelles, swollen micelles, microemulsions and macroemulsions. Some of these are considered true emulsions by some experts, others are not. The parties do not dispute his Honour’s description of these different terms which he set out as follows:
[69] For the purposes of this proceeding, micelles may be considered to be relatively small aggregates of molecules with a hydrophilic exterior and hydrophobic interior. Tween 80, when added to water in levels above its CMC [critical micelle concentration], forms micelles in the water. When another organic substance is added to the Tween 80/water mix, that organic material may enter the hydrophobic centre of the micelle, forming what is known as a “swollen micelle”.
[70] Debate exists as to whether a micellar system is properly to be regarded as an emulsion. Some argue that the presence of an organic region within the micelle is enough to render it an emulsion by definition. Others consider that, in practice, the mere lack of numbers of molecules within a micelle mean that it does not have not have [sic] the properties of a separate phase and cannot therefore be an emulsion of any type. Still others consider that a one-phase emulsion is possible, and see a microemulsion as a one-phase system.
[71] Those who consider that a micellar system is an emulsion view the classification of emulsions as a continuum, ranging from micellar solutions (having the smallest droplets/regions of organic material), through swollen micelles, microemulsions, and macroemulsions (having the largest droplets of organic material). Microemulsions with very small organic regions, or droplets, appear transparent to the human eye. Accordingly, some see clear emulsions, micellar systems, and microemulsions as one and the same.
[72] Those that do not consider micellar systems to be emulsions may refer to the increased thermodynamic stability of emulsions as the size of the organic droplets reduces. The less thermodynamically stable a mixture is, the more likely it is that the organic regions will coalesce and separate out into layers, with each layer being a phase. A surfactant reduces the size of the droplets, and increases the thermodynamic stability of the mixture.
[73] Centrifugation is a method by which an emulsion may be forced into its two component phases. There is, accordingly, a school of thought that a mixture which cannot, by centrifugation, be separated into two layers does not consist of two phases and is not an emulsion. This school does not consider that micellization results in the formation of droplets or, therefore, that micellar systems are within definitions of an emulsion.
30 The parties, as noted by his Honour at [74], [83] and [85], agreed and continue to agree that Q-Drench is a swollen micellar system, as are each of examples 1 to 4 of the Patent. The point of contention is whether, as a swollen micellar solution, it is an emulsion as claimed in the Patent. As his Honour appreciated at [74] ‘[a]ccordingly, given the variation of opinions about the proper classification of micelles, the parties dispute whether Q‑Drench falls within the terms of the claims’.
31 The primary judge stated the question in issue (at [86]) as being ‘whether a skilled addressee would, having regard to the patent as a whole, understand an emulsion of the type claimed by Nufarm to includesolutions such as those found in examples 1-4 (and thus also Q‑Drench) or exclude them’. As his Honour noted, this required an understanding of examples 1 to 4, in the context of the Patent.
32 In looking to see whether it could be said that Nufarm had abandoned the solutions of examples 1 to 4, his Honour noted (at [89]) that it was for the Court to consider the language of the Patent as a whole, ‘enlightened by the evidence of experts’.
33 His Honour’s conclusions were set out at [97]–[99]:
[97] In any event, I must construe the patent myself having been assisted by the expert evidence, but not dictated by it. As a starting point, I do not consider that all the examples should be seen as illustrations of the patent as claimed. The specification, to my mind, gives the examples not to show what is covered by the patent, but to show how the final Nufarm formula was arrived at and to illustrate the inventive step or steps undertaken. From the language used in the specification, it is clear that the addition of a vegetable oil, in an attempt to encapsulate the abamectin, represented a departure from examples 1-4 towards a mixture with larger organic regions. I am happy to accept that examples 1-4 may not, in fact, be “completely aqueous formulations”. However, the phrase “completely aqueous formulation” is of importance when construing the claims; the skilled addressee (the chemist) would have understood there to be a fundamental transition in the nature of the formulation after example 4. Regardless of whether examples 1-4 are properly classified as emulsions (of whatever variety) or not, the claims, when construed in light of the specification, do not, in my view, cover examples 1-4.
[98] Nowhere is there a specific definition of “emulsion”. The patentee could have confined the patent specifically to macroemulsions, but did not specifically do so in the claims or specification. However, the patent could be properly limited so as not to include examples 1-4, for instance, or micelles. Micelles are different from macroemulsions, so there is some basis for the distinction. The real problem seems to be in determining whether a particular product fits within the scope of micelle or macroemulsion, or somewhere in between. It remains the case, however, that the language of the patent claims, with its reference to “organic liquid phase” and “emulsion” does not mirror or evoke the language used in examples 1-4. Quite the opposite is true.
[99] If the various types of aqueous/organic liquid mixtures which have been referred to in this proceeding are considered as sitting on a spectrum from micelles on the one hand through to macroemulsions on the other hand, it is, to my mind, clear that the patent covers the formulations sitting towards the “macro” end of the scale. Expert evidence was given for Nufarm that the patent, properly construed, covers microemulsions to some extent. I am happy to accept this as a possibility. This does not mean, however, that all microemulsions are covered. The evidence showed that there is a range of emulsions according to the size of their organic droplets. Accordingly, a patent may cover a subset of these emulsion sizes. It is quite open for me in light of the specification to conclude that the patent covers some microemulsions and not others, namely that the patent “kicks in” somewhere after examples 1-4. Thus, even accepting that all examples in the specification are microemulsions, it does not necessarily follow that all microemulsions are covered by the patent. So, even accepting that a micellar solution such as Q‑Drench is a microemulsion, it still does not, on my reading, fall within the scope of the patent. I need not come to a decision about where on the “emulsion spectrum” the protection afforded by the patent comes to an end. I have concluded that examples 1-4 are not within the claims, and that the Q‑Drench product is within these examples.
34 His Honour’s discussion in looking to the whole of the specification recorded, inter alia, the following:
· After the failed attempt described in example 1, the Patent states that the resultant formulation was considered too thin and a correction was made.
· After describing the failed attempt in examples 2 to 4, the Patent says that the low pH proved unsuitable for the long-term stability of abamectin and continues: ‘[t]hese completely aqueous formulation approaches were then stopped’. The change was described as the use of a vegetable oil to attempt to encapsulate the abamectin and possibly protect it from the low pH of the water phase. An additional active was added.
· The work on micellar formulations like examples 1 to 4 stopped.
· The use of the phrase “completely aqueous formulation” to describe examples 1 to 4, within the context of the language of Claim 1, indicates that the attempt to include a micellar solution or a microemulsion was abandoned or disclaimed.
· The formulations of the type found in examples 1 to 4 are outside the claims as they are described as completely aqueous and unsuitable for long-term stability. The primary judge did not say that examples 1 to 4 were completely aqueous, or that they did not contain any organic phase but that those formulations were described in those terms.
· A number of the examples in the specification were beyond the scope of the claims.
· There was evidence called by Jurox to the effect that, despite the fact that examples 1 to 4 contained Tween 80, benzyl alcohol and propylene glycol, the presence of Tween 80 at 8% would not create an organic liquid phase so that the phrase “completely aqueous formulation” was being correctly used to describe examples 1 to 4 and the examples were not of emulsions.
· Accepting that examples 1 to 4 may not, in fact, be “completely aqueous formulations”, he was of the opinion that the addition of vegetable oil represented a departure from examples 1 to 4 towards a mixture with larger organic regions.
· Professor Grieser, an expert called by Nufarm, agreed during cross-examination that the language of the claims “quintessentially” describes a macroemulsion. Further, there was evidence that (at [95]):
…(T)he (e)xamples are all directed to exemplifying the major concept underlying the invention, namely a carrier system by which, two (or more) incompatible active ingredients can be carried in a single composition where one of these actives (levamisole) is in an acidic aqueous environment and the other active (abamectin) is chemically unstable in that acidic aqueous environment. The answer provided by the specification is to use a carrier system whereby the levamisole is in the required acidic aqueous environment but the abamectin is isolated or partitioned from that acidic aqueous environment by placing it in an organic liquid environment, such that the abamectin has limited exposure to the acidic aqueous environment, but which enables the mixture to be substantically [sic] homogenous to provide constant dosing.
· The examples are present not to show what is covered by the Patent but to show how the final Nufarm formula was arrived at and to illustrate the inventive steps taken.
35 The difficulty for the primary judge was that, as he explained in detail in his description of the expert evidence, there was a difference of opinion between the experts as to the features that properly characterise an emulsion; whether there was a spectrum from micelles to coarse emulsions; if so, where any particular formulation fell within the spectrum; where on such a spectrum it could be said that there were one or two phases; and whether the evidence of one or two phases depended on the composition and volume of organic material in the micelle or droplet.
36 The primary judge recognised the difficulty of a division between micelles, swollen micelles, microemulsions and macroemulsions. At the two ends of the spectrum, he accepted that micelles are different from macroemulsions but observed that there was a problem in determining where a particular product fits in the range between the two.
37 His Honour made it clear (at [135]) that he did not consider it necessary to come to a decision on the definition of emulsion, the proper classification of micellar systems or whether a micelle is within the notion of an “emulsion continuum”. That is, his Honour decided that he did not need to resolve the issue of what, on the spectrum from micelles to macroemulsions, the scope of the claims encompassed. Nor did his Honour determine the debate within the scientific community about where micelles and micellar systems fit into the theory and practice of emulsions.
38 As his Honour noted, the experts were generally content to admit that other experts may legitimately hold a view contrary to their own in this regard. The primary judge said that his decision was not to choose between the competing expert views in the abstract but to decide whether the Q-Drench micellar system came within the scope of an emulsion in a sense used in the Patent claims. His Honour reiterated that his finding of whether or not the Jurox product infringed the Patent was based upon a construction of the Patent in accordance with relevant legal principles. His finding was reached without the need to decide these questions.
39 His Honour did not consider that the size of the droplets as a determinative factor of an emulsion or the meaning of “particles” was of assistance, and (at [140]) made it clear that these considerations had no bearing on the basis on which he reached his decision. It was by interpreting the claims by reference to the specification and, in particular, the examples, that his Honour concluded that a micellar system of the type set out in examples 1 to 4 is not covered by the claims of the Patent.
40 The primary judge did not accept Nufarm’s submission that, where there were two liquid carriers, one carrying the organic abamectin and the other carrying the aqueous active ingredients, it could be concluded that two phases were present in Q-Drench. His Honour concluded that an organic portion does not necessarily constitute a phase. In coming to that conclusion for the purposes of a specification, the primary judge relied upon the wording used by the patentee after examples 1 to 4, which included a reference to‘completely aqueous formulation approaches’ to describe formulations in which an organic carrier was present. This supported the conclusion that the expression “phase” in Claim 1 was not intended to cover all formulations with an organic portion.
41 His Honour came to this conclusion from the wording of the specification. He did not base his decision upon the characterisation of the “emulsion spectrum”, or the characterisation of the formulation as a micellar solution, microemulsion or macroemulsion, or on the basis of the stage at which a combination of benzyl alcohol and Tween 80 can be considered an organic liquid phase. His Honour said, at [113], that he reached no conclusion about the evidence relating to the structure of a micelle as it was not necessary for him to determine ‘what are essentially theoretical arguments and which do not require determination in order to resolve the central dispute’. Similarly, his Honour did not need to determine whether thermodynamic stability or separation by centrifugation were relevant factors in the determination of whether Q‑Drench has one or two phases and therefore whether it cannot or can be considered an emulsion. His Honour concluded at [118] that he need go no further into investigating this matter having regard to the approach he had taken to ‘the central issue’.
42 The primary judge held that a skilled addressee would not understand the emulsions as claimed in the claims to include the formulations of examples 1 to 4 and the micellar systems constituted by those examples. Accordingly, his Honour held that Q-Drench does not infringe the Patent.
The Notice of Appeal
43 Nufarm advances a number of grounds as to why the primary judge was in error in holding that Q-Drench did not infringe the claims of the Patent. Broadly speaking, Nufarm says that the primary judge found that the basis of the invention was the use of a dual personality carrier system to partition the incompatible active ingredients effectively in two different environments but that his Honour failed to take that into account in his construction of the claims. Nufarm says that the word “emulsion” as used in the claims should be read as including macroemulsions, microemulsions and micellar solutions, including swollen micellar solutions of which Q-Drench was one. Further, Nufarm says that the primary judge should have found that the claims included a system in which there is a separation of one liquid phase from another and that Q-Drench, as a swollen micellar solution, is such a system. Nufarm also contends that his Honour erred in concluding that because the formulations of examples 1 to 4 of the specification were described in the Patent as “completely aqueous formulations”, a skilled addressee would have understood there to have been a “fundamental transition” in the nature of the formulations after example 4. Further, Nufarm says that simply because the specification says that work stopped on formulations like those in examples 1 to 4, a skilled addressee would not have understood that the patentee had abandoned or disclaimed micellar solutions or microemulsions.
44 Other grounds of appeal concern the primary judge’s findings that the Patent claims covered some emulsions but not others and that examples 1 to 4 were outside the scope of the claims because they were described as “completely aqueous” and “unsuitable for long-term stability”. Nufarm also disputes that the description of examples 1 to 4 as “completely aqueous” means that they did not have an organic phase.
45 Ground 11 states that his Honour erred in finding ‘that the two liquid carriers referred to in the Claims did not define the relevant liquid phases’. Put positively, ground 12 is that the primary judge should have found that:
(i) the claims define the organic liquid phase by reference to the environment in which the first active ingredient (avermectin) is carried;
(ii) the claims define the aqueous phase by reference to the aqueous environment in which the second and third active ingredients (levamisole, benzimidazole and closantel) are carried;
(iii) Q-Drench has two liquid carriers and two liquid phases as claimed.
A further ground of appeal concerns the primary judge’s finding that a prior published patent, the Merck patent, formed part of common general knowledge in Australia in the relevant art at the priority date of the Patent.
Nufarm’s submissions
46 Nufarm characterises the invention as the use of different liquid carrier phases which substantially partition the two problematic ingredients (avermectin and levamisole) from each other in different environments. This overcomes the problem of separating the ingredients which do not degrade in water from the avermectin, which does. Nufarm characterises the infringement issues as capable of being reduced to two inter-related questions: (i) is Q-Drench an “emulsion” as claimed; and (ii) does Q-Drench have “an organic liquid phase” as claimed. Nufarm submits that the resolution of the second issue involves a determination of whether Q‑Drench has an organic liquid phase which “carries” at least most of the first active ingredient (avermectin).
47 Nufarm agrees that the formulations in examples 1 to 4 describe micellar solutions or microemulsions. Nufarm accepts that it stopped work on the types of formulations in examples 1 to 4. However, Nufarm disputes the assertion that micellar solutions or microemulsions are disclaimed in the Patent. It disputes that the use of the phrases “completely aqueous formulation” and “unsuitable for long-term stability” to describe the formulations in examples 1 to 4 represents a disclaimer.
48 The thrust of Nufarm’s submissions is that there was no proper basis to conclude that the description of examples 1 to 4 conveyed to a skilled addressee that the patentee had “abandoned” or “disclaimed” formulations of that “type”. Rather, Nufarm submits that the term “emulsion” as used in the Patent describes micellar systems (including swollen micelles but excluding bare micelles), microemulsions and macroemulsions. Nufarm says that the primary judge not only erred in finding that Q‑Drench was not an emulsion as claimed but also failed to determine whether Q‑Drench possessed an “organic liquid carrier” and an “organic liquid phase”.
49 Fundamental to Nufarm’s submissions is a contention that the primary judge concluded that the claims extend only to some microemulsions or, put another way, that the patentee had disclaimed part of a spectrum of emulsions. Nufarm’s submissions rely on the following propositions:
· The invention relies on the partitioning of the chemical environments carrying the different ingredients.
· The examples exemplify the major concept underlying the invention, namely a carrier system which partitions incompatible active ingredients.
· In order to achieve the storage stability required for a veterinary composition to be commercially viable, the formulation had to be both physically and chemically stable.
· The examples demonstrate a logical development towards a physically and chemically stable formulation.
· The formulations of examples 1 to 4 were physically stable but were unsuitable because the low pH of the water caused the abamectin to degrade chemically. That is, they were not chemically stable within the meaning of the Patent.
· Chemical stability was then improved by the addition of vegetable oil.
· The reference to the fact that work stopped on the formulations of examples 1 to 4 does not properly lead to a conclusion that the patentee abandoned any claimed micellar solutions or microemulsions.
· The Patent refers to the formulations of examples 1 to 4 as completely aqueous formulation approaches but, as those formulations included organic liquids, such a description is not correct. The term “organic liquid” used in the claims encompasses any liquid constituted by molecules containing carbon, including benzyl alcohol and propylene glycol which are used to carry the dissolved abamectin and protect it from the low pH of the aqueous phase in examples 1 to 4.
· The specification provides that the inclusion of an organic liquid to carry the dissolved avermectin and protect it from the low pH of the aqueous phase is a role that can be performed by any organic liquid, including benzyl alcohol and propylene glycol as present in examples 1 to 4.
· The claims use the term “emulsion” without qualification.
50 Nufarm contends that, properly understood, the addition of a small amount of vegetable (soyabean) oil in example 5 constitutes no more than an increase in the “organic regions” or the “organic portion” of the formulations tested in examples 1 to 4 and does not, therefore, represent a fundamental transition as found by the primary judge.
51 Nufarm submits that the primary judge erred in finding that the two liquid carriers referred to in the claims did not define the relevant liquid phases. Nufarm contends that the correct finding is that the claims define:
(i) the organic liquid phase by reference to the environment in which the first active ingredient (avermectin) is carried;
(ii) the aqueous phase by reference to the environment in which the second and third active ingredients (levamisole, benzimidazole and closantel) are carried.
52 Nufarm submits that the primary judge made no finding as to whether Q‑Drench had one phase or contained two phases. Nufarm says that, provided there is sufficient organic material (within the micelle) to carry the dissolved abamectin, there is an organic liquid phase as claimed. Nufarm submits that the volume of benzyl alcohol and propylene glycol within the micelles is more than sufficient fully to dissolve and carry all of the abamectin in the formulation and that, as those organic liquids separate the abamectin from the water around the micelle, that is all that is required to find that Q‑Drench contained a separate organic liquid phase as claimed. It follows that, if Q‑Drench has a separate organic liquid phase, it also has a separate aqueous phase. Nufarm contends that the two liquid carriers do no more functionally than provide suitable environments for the active ingredients and that they define the relevant liquid phases.
53 Nufarm points to evidence to the effect that some microemulsions and micelles are two phase. It submits that swollen micelles/microemulsions can properly be described as two phase if they contain sufficient organic material to carry the avermectin. The primary judge, as Nufarm notes, did not enter into a discussion of the amount of organic material necessary to move from a one phase to a two phase system. Nufarm emphasises that the expression “completely aqueous” does not necessarily mean the existence of a one phase system; it can be a reference to a swollen micelle/microemulsion. It says that the use of the word “phase” cannot be the basis upon which to read down the claims to include only macroemulsions as the requirement for two phases does not exclude swollen micelles or microemulsions. So much, Nufarm says, was accepted in the cross-examination of Jurox’s witnesses although as Jurox points out, these witnesses ultimately maintained the view that the claims were limited to macroemulsions only.
54 Nufarm points out that the primary judge accepted that the meaning of “phase” was context dependent. Nufarm contends that Claim 1 provides its own definition of what a phase is, which is entirely consistent with the context and function of the subject composition.
55 Nufarm emphasises that an aqueous formulation requires the absence of an organic phase. The question is not, as it says his Honour apparently understood, dependent upon the amount of organic material in the centre of the droplet. Bearing in mind that the evidence was that the word “phase” is context driven, Nufarm says that the context of the Patent is a micro-environment that protects the avermectin, and the claims only require sufficient organic material to carry the active ingredient to protect it from an aqueous environment, thus constituting a second phase. That is, in all of the examples, including examples 1 to 4, the abamectin is carried in a droplet within the micelle; the formulations in examples 1 to 4 do provide for encapsulation of the abamectin.
Jurox’s submissions
56 In broad summary, Jurox denies that Q‑Drench, and examples 1 to 4:
· have an organic liquid that acts as a liquid carrier;
· have an organic liquid phase;
· have any phase which exists in, or can be shaken or agitated into, the form of an emulsion; or
· are emulsions.
57 Jurox’s claim, as enunciated by the primary judge at [77], is that ‘the Q‑Drench product is not an emulsion, but a micellar solution of a single aqueous phase’.
58 Jurox relies upon the evidence that, to the skilled reader, the benzyl alcohol in examples 1 to 4 was not a separate phase and the presence of an organic region does not mean that there is a separate phase. It then follows that examples 1 to 4 describe a single phase system which can then in turn be reasonably described as completely aqueous.
59 It was accepted by witnesses at the hearing, including witnesses called by Nufarm, Jurox says, that the benzyl alcohol of examples 1 to 4 was fairly evenly distributed throughout the micelle and not concentrated at the core. This is significant, so Jurox says, because it indicates that in examples 1 to 4 and therefore in Q-Drench, the abamectin is not being carried by the benzyl alcohol but by a micelle made of surfactant molecules and containing some benzyl alcohol.
60 Jurox says that, to have an emulsion, one needs a mixture of immiscible liquids stabilised by an emulsifying agent. It argues that in examples 1 to 4, Tween 80 is not acting as an emulsifying agent; rather, it is acting to solubilise the abamectin. Accordingly, Jurox says, examples 1 to 4 describe a process of solubilisation but not of emulsification. Jurox point to evidence that these are very different processes.
61 Jurox also raised issues concerning the thermodynamic stability of Q-Drench to support its characterisation as a single phase system.
Consideration
62 There was evidence, which his Honour was entitled to accept, that the construction advanced by Jurox was consistent with the way in which the skilled reader would understand the terms as used in the specification. That evidence was to the effect that examples 1 to 4 are single phase micellar solutions which could be described as completely aqueous formulations lacking an organic liquid phase in which abamectin is solubilised in micelles mainly consisting of molecules of Tween 80 together with molecules of benzyl alcohol, propylene glycol and water. Whether or not, strictly speaking, those formulations could also be characterised as emulsions is not to the point.
63 Nufarm accepts that there is no universally held view of the limit to the range of emulsions. There was a great deal of evidence before the primary judge as to the meaning that should be given to the word “emulsion” and as to whether or not it includes micellar solutions and microemulsions. There was also evidence as to the role of thermodynamic stability in the characterisation of an emulsion, because a commonplace definition of emulsion is in terms of a thermodynamically unstable system.
64 There was no universal acceptance in the evidence as to whether microemulsions are one phase or two phase systems. For example, Professor Tucker was of the view that thermodynamically stable microemulsions are one phase systems. There was evidence, including evidence of Nufarm witnesses, that most people in the industry would regard a microemulsion as a single phase system.
65 The evidence also indicated that the term “microemulsion” may be used to describe swollen micelles containing an internal phase like a solubilised solution. Microemulsions may also appear as clear transparent solutions but unlike micellar solubilised systems, microemulsions may not be thermodynamically stable. They have been characterised as intermediate between thermodynamically stable solubilised solutions and ordinary emulsions which are relatively unstable. His Honour appreciated that, as at the priority date, there were different views as to what was included in the definition of an emulsion.
66 However, the primary judge did not decide the case by determining the scope of the meaning of the terms “emulsion” or “organic phase” in a theoretical or abstract sense. His Honour recognised the difficulty of adopting that course in circumstances where expert opinion was divided. Rather, armed with an understanding derived from the explanations of the persons of skill in the art, his Honour considered whether Q-Drench (within the formulations of examples 1 to 4) was an “emulsion” with an “organic liquid phase” within the meaning of the claims (at [97]-[99], [113], [118] and [135]). For this purpose his Honour looked to the body of the specification, which explained that:
· The point of the formulations was to protect the abamectin from the water;
· The low pH of the formulations in examples 1 to 4 made them unsuitable for the long-term stability of the abamectin;
· This was because the abamectin was not sufficiently separated in those formulations from the water;
· A vegetable oil was added after example 4 to encapsulate the abamectin and possibly protect it from the low pH of the water phase.
67 Nufarm says that there is a separate organic phase of droplets or globules which are dispersed throughout an aqueous phase, stabilised by the emulsifying agent. There seems to be some force in Nufarm’s submissions that the abamectin will chemically degrade unless it is located away from the aqueous phase and that the abamectin in Q-Drench is protected by the benzyl alcohol from chemical degradation by water. Abamectin is almost completely insoluble in water. Benzyl alcohol was used to dissolve the abamectin and protect it from the water phase by removing it from the water phase. The formulations of examples 1 to 4 were physically stable but they did not display sufficient long-term stability for commercial purposes.
68 Nufarm’s position is as follows: there was no reason to exclude examples 1 to 4 from the scope of the claimed monopoly. They were representative of the invention, being the use of separate organic and water phases whereby the abamectin in the “organic phase” was separated from the “water phase”. Thus read, the reference to the cessation of the approaches of examples 1 to 4 referred only to long-term stability, and the formulations were still representative of the invention. Examples 1 to 4 represented emulsions, being emulsions with smaller droplets than a macroemulsion. Because of the droplet size the appearance was clear. This interpretation does not preclude the existence of a microemulsion or of a swollen micelle. The claims do not refer to macroemulsions but include emulsions unlimited as to droplet size.
69 It is apparent that the success of the formulation depended upon the success of separating the abamectin from the water. However, the patentee did not consider that examples 1 to 4 achieved the object of the invention. The formulations of examples 1 to 4 could be described as being completely aqueous formulations, in that they did not operate sufficiently to separate the abamectin from the water. The primary judge recognised that examples 1 to 4 involved the use of organic material, which could have provided a sufficiently separate phase to protect the abamectin in what could be termed a microemulsion or an emulsion. However, the specification described these formulations as completely aqueous even if they were not. That description differentiated the unsuccessful formulations from those which achieved sufficient partition for the purposes of the invention.
70 Bearing in mind the range of meanings encompassed by the term “emulsion”, the patentee apparently sought to clarify which formulations were not, for the purposes of the Patent, considered emulsions even if, theoretically, they could be described as “micelles”, “swollen micelles” or “microemulsions”, or as containing an organic and an aqueous phase. The description of examples 1 to 4 as completely aqueous solutions contrasts with the language of the claims, which required an organic liquid phase. By referring to them as “completely aqueous formulations”, the patentee made it clear that they did not, for the purpose of the Patent, contain a separate organic phase sufficient to be considered to be part of the solution to the problem of the degradation of abamectin. For the purposes of the specification, the formulations of examples 1 to 4 are not “emulsions”. It is not uncommon for a patentee to define or describe subject matter for the purposes of the specification and the claims in a way contrary to otherwise accepted scientific characterisation. The primary judge was entitled to take that into account in determining the meaning of expressions in the claims.
71 Whether or not a micelle or a swollen micelle may be characterised or categorised as an emulsion, the evidence establishes that there is a difference between a micelle and a macroemulsion even if they exist within a spectrum. The terminology of the Patent and the explanation of examples 1 to 4 make it apparent that the patentee adopted a different approach in the later formulations. Whether or not the skilled reader would expect examples 1 to 4 to have a second phase, the skilled reader would understand that the patentee was drawing a distinction, whether or not it could be drawn in theory and in the abstract. After example 4, the inventors changed their approach and moved from the solubilisation of active ingredients in micelles to emulsification. This represented a change from a micellar based approach to emulsification. There was evidence, for example, of Professor White and Professor Tucker that supported and was consistent with that understanding. Dr Parris acknowledged that it was clear from the Patent that the microemulsions of the formulations of examples 1 to 4 failed to protect the abamectin from chemical degradation and the Patent specification made it clear that what followed was a different approach. That different approach was described in language characteristic of macroemulsions. Whether or not the problem with example 4 was chemical stability, physical stability, or both, the patentee made it clear that examples 1 to 4 were failed attempts to arrive at the invention.
72 Nufarm criticises his Honour’s reasoning at [99]. The primary judge considered that he need not come to a decision about where on the “emulsion spectrum” the protection afforded by the Patent comes to an end. This was because he had already concluded that examples 1 to 4 were not within the claims, on the basis of his finding that there was a departure of process after example 4 and that the methodology and formulations of examples 1 to 4 had been abandoned.
73 Nufarm submits that no physico-chemical basis for the “carve-out” of examples 1 to 4 was identified. Nufarm complains about the primary judge’s terminology in finding that the claims covered formulations ‘sitting towards the “macro” end of the scale’ and that the Patent ‘“kicks in” somewhere after examples 1-4’. Nufarm asks by reference to what characteristics of the formulation or the claims or the examples can it be ascertained where the claims “kick in”? If it was by reference to the addition of vegetable oil, this is not apparent from the claims and no amount of oil is identified to provide the state along the continuum from micelle to macroemulsion that would come within the claims.
74 The issue before his Honour was whether the Q‑Drench formulation, agreed to be relevantly within examples 1 to 4, infringed. In an area where terminology is not necessarily precise and where the limits on the application of a term such as “emulsion” are not universally accepted, the patentee has attempted to clarify the scope of Claim 1 by requiring not only an organic liquid carrier but also the result that the organic liquid carrier carries at least most of the avermectin to define an organic liquid phase. The claim requires that the organic and aqueous phases exist in or can be shaken or agitated into the form of an emulsion. It may be that there will be difficulties in proving infringement by some formulations, depending on their characterisation; however, that is not the case for Q‑Drench. The terminology complained of was not part of the ratio of his Honour’s conclusion. He did not need to ascertain precisely where “along the scale from micelle to macroemulsion” the Patent claims “kick in”.
75 The patentee does not say that the description of the formulations of examples 1 to 4 as completely aqueous formulations was a mistake or an inadvertent description, although in oral submissions, counsel for Nufarm described the use of that description as a “misnomer”. No attempt was made to amend the specification to change that description.
76 Organic liquids do not necessarily create an organic liquid phase. However, the point being made in the specification is that the increase in the organic region effects a sufficient organic region or organic portion within the micelle effectively to partition the abamectin and separate it from the water. Even if it could be argued that the presence of the organic liquids in examples 1 to 4 constituted an organic liquid phase, it is apparent from the language of the specification that the patentee chose to describe those examples as not doing so. This is also consistent with the use of the examples to describe the steps taken by the patentee towards the invention. The claims do not, in terms, exclude examples 1 to 4. However, there is a contrast between the requirement in the claims for an “organic phase” and “completely aqueous formulations”. The patentee used the examples to describe the steps taken which were then rejected, altered or qualified until the claimed formulations were reached.
77 His Honour acknowledged conflicting evidence as to whether Q‑Drench could be described as a single phase system or whether it contained two separate phases. His Honour found compelling the evidence that if “phase” were accepted to mean a physically distinct and mechanically separable portion of a dispersion, then despite “heroic” centrifuging Q‑Drench did not separate into different phases.
78 Much emphasis was made in the appeal on the categorisation of the formulations of the examples into micelles, swollen micelles, microemulsions and macroemulsions. However it is apparent that such terminology or categorisation did not define the primary judge’s conclusions. His Honour accepted that there may be organic material in examples 1 to 4 but concluded at [97] that the phrase “completely aqueous formulation” would have conveyed to the skilled addressee that there was ‘a fundamental transition’ in the nature of the formulation after example 4, namely the addition of vegetable oil in an attempt to encapsulate the abamectin. This represented a departure from the formulations of examples 1 to 4 towards a mixture with larger organic regions. His Honour said that regardless of whether examples 1 to 4 are properly classified as emulsions (of whatever variety) or not, the claims, when construed in the light of the specification, do not cover examples 1 to 4.
79 The specification does state that it ‘should be understood that the present invention is not construed as being limited to these Examples’. As Jurox accepts, that takes account of the infinite number of possible formulations within the claims. However, as Jurox points out, the converse is not true. That is to say it does not follow from that statement that all of the examples referred to in the specification are within or illustrative of the claims.
80 To submit, as Nufarm does, that the examples represent progressive attempts to optimise the ingredients of a most preferred form of the invention while maintaining a central direction is not to the point. The specification makes it clear that some of the examples did not give the sought result; they did not achieve a two phase system sufficient to protect the abamectin for the purposes of the invention as described and claimed.
81 It may be the case that examples in a specification are directed to exemplifying the major concept underlying the invention. However that can be done in a number of ways. One is to give examples each of which exemplifies the invention; another is to give a number of examples showing the difference between a control or a non-working of the invention and the invention itself. The fact that the formulations of examples 1 to 4 are present in the Patent specification as “examples” does not of itself mean that those formulations were intended to have been included within the scope of the claims. It is a matter of reading the specification as a whole.
82 Nufarm says that it is possible to distinguish macroemulsions from other forms of emulsions on a thermodynamic basis but that, once the primary judge accepted that some microemulsions are included, a thermodynamic basis no longer forms the basis for discrimination. His Honour’s identification of the word “phase” to identify the departure or “fundamental transition” is, Nufarm says, not sufficiently transparent to justify exclusion from the scope of the claims and is not a conclusion that would be drawn by a person skilled in the art.
83 It was not necessary for his Honour to resolve the conflicting evidence concerning the effect of droplet size and the degree of dispersion, or the proper terminology to be applied. After example 4, the inventors changed their approach and moved to emulsification unequivocally so-called and this represented a different approach. This is reflected in the reference to an oil phase in discussing examples 5, 6 and 7 and to curdling of the oil phase after examples 5 and 6, both referable to macroemulsions.
84 We agree with the primary judge that the Patent specification does not base its exclusion of the formulations of examples 1 to 4 on the niceties of thermodynamic stability or on droplet size.
85 Nufarm submits that his Honour rejected evidence of both sides without saying which part of the evidence he rejected and why. However, the primary judge largely accepted the scientific evidence on both sides and accepted that the different views were legitimately held.
86 Two matters were persuasive to the primary judge. One was that there were differing views amongst the experts as to the precise application of the terminology. The second was that, for the purpose of interpreting the claims and the scope of the claims, it was necessary to see how those matters were dealt with in the context of the specification.
87 The mere fact that the patentee described the examples as a progressive evolution of the optimal formulation, or as the steps taken in the course of the invention, does not of itself mean that the less than perfect examples were abandoned or excluded from the scope of the claims. A patentee may well wish to include within the claims a formulation representative of the invention even if it was not the optimal working of it. It is quite common for a patentee to use the examples to describe a range of formulations with greater or lesser degrees of activity or as representing different components of the formulation. It is necessary to see what work the examples do in the patent specification in any particular case. The patentee may use an example to describe a control or a non-working of the invention, better to explain the nature of the invention itself. In this case, the patentee used examples 1 to 4 as examples of a formulation which did not accord with the invention, better to explain, in an area of discourse where language was imprecise, the nature of the invention and the scope of the claims with greater clarity. That is, examples 1 to 4 do not reflect a less than optimal working of the claimed invention but formulations that do not come within it.
88 The claimed invention was not the concept of partitioning the two chemical environments. It was in the ability to achieve it to the requisite standard. Examples 1 to 4 failed to do so.
89 Having regard to the wealth of scientific evidence before his Honour as to which there was both agreement and disagreement, it cannot be said that his Honour’s conclusions were unsupported by scientific opinion and characterisation. There was support for a characterisation of Q‑Drench as a single phase micellar solution rather than as an emulsion. His Honour considered it unnecessary to decide between legitimately held expert opinions to determine whether examples 1 to 4 were excluded. It may be that another case of infringement would require such analysis, for example, where the allegedly infringing product did not fall within examples 1 to 4, but that is not this case.
90 The course of the evidence may have been explained by the fact that it seemed that Jurox’s proposition before the primary judge was that the claims were limited to macroemulsions and therefore excluded swollen micelles such as Q-Drench. His Honour did not accept that proposition. However, for the reasons given by the primary judge, that did not mean that the scope of the claims did extend to the formulations of examples 1 to 4. Nufarm’s position was that the claims covered any formulation in which the two phases were present (excluding only bare micelles which contained no organic material). Nufarm says that neither party contended that the claims excluded examples 1 to 4 but “kicked in” some time after example 4 and that none of the experts put the proposition accepted by his Honour. Nufarm submits that a skilled reader would not read the claims in the way they were read by the primary judge and that, accordingly, his Honour erred in adopting a “middle ground” between the two views put by the parties.
91 We do not agree. His Honour made it clear, correctly, that it was not for the experts to construe the Patent specification. However, his Honour was entitled to take into account conflicting evidence of the experts, including concessions, on the meaning of particular expressions in the art in order to construe the specification.
92 The primary judge did not attempt to determine in any abstract sense what constitutes an emulsion or a phase. His Honour was concerned to determine whether Q‑Drench was an “emulsion” with an “organic liquid phase” and an “aqueous phase” within the meaning of the claims. It is apparent from paragraph [92] that his Honour understood the expression “completely aqueous” to convey to the skilled reader that the formulation in question did not have an organic liquid phase. His Honour accepted at [97] that examples 1 to 4 may not be completely aqueous formulations, which follows from the fact that they include organic liquids. It is clear from the evidence that the skilled reader would readily appreciate that examples 1 to 4 could not strictly be described as completely aqueous formulations. The fact that the Patent so describes them makes it clear that, within the context of the Patent, there is a difference between those formulations which include organic solvents insufficient to constitute a separate “phase” within the meaning used in the Patent and those examples which followed, where, for example, vegetable oil was added. It is not as if benzyl alcohol is understood only to provide an organic phase. The Patent explains that benzyl alcohol is used as a “co-solvent” to be used where the water insoluble anthelmintic active is only partially soluble in the oil phase. The role of the benzyl alcohol is to assist in dissolving the water insoluble active ingredient, such as abamectin, into the oil phase.
93 The Patent itself drew a distinction or, to put it another way, drew a line based upon the organic content of the formulation without specifying in percentage or absolute terms the precise amount of the delineation. His Honour did not need to define or determine that delineation as, wherever it fell, it was after example 4 and Q-Drench was on one side of it. The point of the specification as acknowledged by his Honour at [97] is that the skilled addressee would appreciate that what is described in examples 1 to 4 is, for the purposes of the invention, fundamentally different from what appears thereafter. In an area that is admittedly one of conflicting expert opinion in the application of terminology to a particular formulation, which meaning is context driven, the Patent uses differences in language to explain that the formulations of examples 1 to 4 are different in character from those that follow and not included within the scope of the claims.
The Merck patent
94 The primary judge relied on the evidence of Mr Shepherd to conclude that the Merck patent formed part of the common general knowledge as at the priority date of the claims of the Patent. Mr Shepherd only came to discover the Merck patent in the context of particular research. He discovered the Merck patent as a result of his own earlier knowledge of a book concerning ivermectin/abamectin. The Merck patent is not referred to in the Patent. Other witnesses stated that they did not know of the Merck patent or its contents, and that they did not know of it as at the priority date.
95 There was insufficient evidence for the primary judge to conclude (at [148]) that, merely because some experts read patents, the Merck patent was ‘a common general knowledge resource’. There was only a single witness who, in his own special circumstances, had read the Patent. Other witnesses had not read it and were not aware of it. This does not provide the basis for finding that the Merck patent was common general knowledge, in the sense that it was known or used by those in the trade (Minnesota Mining and Manufacturing Company v Beiersdorf (Australia) Limited (1980) 144 CLR 253 at 292-295). There was no sufficient evidence that those working in the field followed a practice of making themselves familiar with patent specifications (Aktiebolaget Hassle v Alphapharm Pty Limited (2002) 212 CLR 411 at [44]–[45]). There was no evidence that the Merck patent had ‘entered the body of common general knowledge’ (Aktiebolaget Hassle at [45]). There was insufficient evidence to establish that the Merck patent had become common general knowledge.
96 However, knowledge of the Merck patent was said by Mr Shepherd to affect the reading of the term “emulsion”. That did not affect his Honour’s conclusion on infringement.
Notice of Contention
97 The notice of contention raises the resolution of the scientific characterisation in which his Honour declined to engage. It arises for consideration only if his Honour was in error in concluding that such characterisation is unnecessary for the determination of infringement by Q-Drench.
98 Jurox contends that the evidence did not establish that Q-Drench comprised the following three components:
(a) an organic liquid phase which carries at least most of the avermectin;
(b) a separate aqueous phase which carries at least most of the levamisole and benzimidazole; and
(c) an emulsifying agent.
99 Jurox also contends that the words “emulsion” and “phase” each bear a specific meaning. Each of these assertions requires a detailed analysis of the scientific evidence which did not form part of his Honour’s conclusions.
100 In view of the fact that we have concluded that the primary judge did not err in his analysis based upon the construction of the specification, it is unnecessary for us to deal with the matters that form the basis of the notice of contention.
CONCLUSION
101 Nufarm has not established that the primary judge was in error in concluding that the Jurox product Q-Drench did not infringe the claims of the Patent.
102 The appeal should be dismissed with costs.
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I certify that the preceding one hundred and two (102) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Lindgren, Goldberg and Bennett. |
Associate:
Dated: 11 November 2008
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Counsel for the Appellants: |
Mr B N Caine SC and Mr G Fitzgerald |
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Solicitor for the Appellants: |
Phillips Ormonde & Fitzpatrick Lawyers |
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Counsel for the Respondent: |
Mr J V Nicholas SC and Mr A J Maryniak |
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Solicitor for the Respondent: |
Sparke Helmore |
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Date of Hearing: |
19, 20 August 2008 |
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Date of Judgment: |
11 November 2008 |
