FEDERAL COURT OF AUSTRALIA

Bitech Engineering v Garth Living Pty Ltd [2010] FCAFC 75

THE COURT ORDERS THAT:

1.                  The parties file and serve any submissions on the costs of the appeal and on any variation to the order for the costs before the primary Judge within 7 days.

2.                  The parties propose orders to give effect to the reasons of the Full Court and the further conduct of the matter within 7 days.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

THE COURT ORDERS THAT:

1.                  The parties file and serve any submissions on the costs of the appeal and on any variation to the order for the costs before the primary Judge within 7 days.

2.                  The parties propose orders to give effect to the reasons of the Full Court and the further conduct of the matter within 7 days.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

THE COURT ORDERS THAT:

1.                  The parties file and serve any submissions on the costs of the appeal and on any variation to the order for the costs before the primary Judge within 7 days.

2.                  The parties propose orders to give effect to the reasons of the Full Court and the further conduct of the matter within 7 days.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

THE COURT ORDERS THAT:

1.                  The parties file and serve any submissions on the costs of the appeal and on any variation to the order for the costs before the primary Judge within 7 days.

2.                  The parties propose orders to give effect to the reasons of the Full Court and the further conduct of the matter within 7 days.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

the court:

1                     The appellant (Bitech) was the patentee of Australian Patent No 621713 entitled ‘Apparatus for Simulating Flames’ (the patent).  Bitech sued the respondents for infringement of the patent by, inter alia, the importation of and sale of certain electric heaters.  A feature of those heaters, which feature is the subject of the patent, is that they contain an apparatus designed to simulate the visual effect of real flames.

2                     The respondents denied infringement.  The primary Judge accepted their contention that their heaters did not fall within the scope of the claims of, and therefore did not infringe, the patent.  His Honour rejected the respondents’ contention that the patent was invalid.  The issues in the appeal concern the finding that the respondents’ heaters fall outside the scope of claims 1, 8 and 20.  The cross-appeal by Garth Living Pty Ltd (Garth Living) in proceeding NSD 1434 of 2009 concerns the primary Judge’s finding that those claims are fairly based on the specification.  The respondents in the other proceedings have not cross-appealed.

3                     Of the respondents, only Garth Living took an active role in the appeal.  The written submissions on behalf of the respondents are those of Garth Living.  Cohen Nominees Pty Ltd and Bunnings Group Ltd adopt and join in those submissions on infringement.

4                     The patent claims priority from two basic applications filed in the United Kingdom on 10 February 1989 and 15 September 1989.  The patent expired on 9 February 2010.  The utility of the appeal resides in Bitech’s claims for pecuniary relief.  Issues of quantum were not dealt with at the hearing before the primary Judge.

THE DECISION OF THE PRIMARY JUDGE

Infringement

5                     The case as presented to the primary Judge involved, primarily, questions of the construction of claim 1 and dependent claims 8 and 20 of the patent.  His Honour considered the relevant principles of construction, as stated in Jupiters Ltd v Neurizon Pty Ltd (2005) 222 ALR 155; (2005) 65 IPR 86.  His Honour stated at [21] that he was obliged to adopt a common sense construction of the claims of the patent, having regard to the prior knowledge as at the priority date and then to determine whether the alleged infringers have taken all of the essential integers of the claims (Populin v HB Nominees Pty Ltd (1982) 41 ALR 471at 475).

6                     The claims said to have been infringed are claims 1, 8 and 20.  Submissions in the appeal centred on claim 1 and, in particular, the “flame effect means”.  Claim 1 is as follows:

Apparatus for simulating flames, the apparatus comprising a source of light, simulated flame effect means for reflecting said light to simulate flames, simulated fuel means to simulate a bed of combusting fuel, and screen means on which to view an image of the simulated flames, said screen means being positioned between said flame effect means and said simulated fuel means, said screen means being capable of diffusely transmitting light reflected by said flame effect means and also being capable of reflecting light from said simulated fuel means so that the simulated flames appear to emanate between the simulated fuel means and an image of the latter means reflected in said screen means.

(emphasis added)

7                     Garth Living does not dispute, as Bitech does not dispute, the description of the integer concerning the flame effect means at [36] of the primary Judge’s reasons:

The integer of the apparatus defined as the simulated flame effect means for reflecting said light to simulate flames is met when the light from the light source is reflected by the simulated flame effect means in order to simulate flames in a manner which can be observed upon the screen means (the viewing screen) which is referred to later in Claim 1.  The simulated fuel means refers to a bed of simulated combusting fuel (such as imitation wood or coal) intended to mimic the combustion of that fuel, so as to create an image of combusting fuel on the viewing screen which also can be observed by a person sitting or standing in front of the device in which the apparatus is installed.

8                     The primary judge concluded at [39] that, as to the flame effect means of the patent:

The essence of the way in which light from the light source is ultimately used to create the images of flames on the screen is reflection. Claim 1 does not contemplate, in my opinion, that the flame effect means will substantially rely upon or involve to any significant degree a process whereby light is directly emitted from that means to the viewing screen so that the images viewed on the screen are substantially or predominantly the result of transmission of light directly emitted from the flame effect means.

9                     Infringement was denied, primarily on the basis that the flame effect means of the respondents’ heaters utilise directly emitted light.  His Honour emphasised that all of the embodiments described in the patent and the description of the invention were based on a process by which light from the light source is transported via the flame effect means to the viewing screen by way of reflection.  It followed, in his Honour’s opinion, that an apparatus that relies to a “substantial” degree upon the transmission of directly emitted light in order to simulate flames on the viewing screen was outside the monopoly claimed (at [44]).  

10                  In the respondents’ heaters, the source of light was directly emitted light.  However, all of the experts who gave evidence agreed that some flame shaped images observable on the viewing screen from the front of the heater were transmitted to and created on that screen by reflected light.

11                  It was in issue between the experts whether images created by reflected light added anything to the flame effect and, if so, whether the contribution was significant.  After considering the expert evidence, the primary Judge found that diffusely reflected light emanating from the filament in the globe inside the rotating cylinder of the respondents’ heaters resulted in images which are visible to users of heaters with ordinary use.  His Honour concluded at [99] that the overall image with which the viewer is presented consists of the following moving images:

(a)       Images formed from directly emitted light which are flame shaped because of the apertures in the rotating cylinder and the flame shaped cut out plate;

(b)       Images formed from diffusely reflected light that are flame shaped; and

(c)       Images formed from diffusely reflected light that are not clearly flame shaped but which nonetheless contribute to the overall flame effect.

(emphasis added)

12                  His Honour then concluded, at [100]:

About half the viewing screen is occupied by images sourced from reflected light, although they occupy the full width of the viewing screen.  The images created by directly emitted light are found in the centre area of the viewing screen, are brighter and fuller than other images and dominate the flame effect. 

13                  There is no challenge to those findings.  At [102]–[103], the primary Judge considered the respondents’ submission that very little (if any) of the light transmitted to the viewing screen of their heaters is reflected light but, rather, that “most of the light” was directly emitted from the light source.  His Honour concluded that:

…in the respondents’ heaters, a substantial and predominant contributor to the light which is transmitted through the viewing screen and is thus the source of the flame shapes observable on that screen is light which is directly emitted (and not reflected) from the light source.

14                  On this basis, that the claims of the patent did not contemplate that the flame effect means will substantially rely upon or involve light which is directly emitted from that means, his Honour concluded that there was no infringement (at [103]).  That is, the primary Judge concluded that the respondents’ heaters contained all of the essential integers of the claim but that, because they also contained the integer of a flame effect means utilising directly emitted light, they did not infringe.  It is not clear what the primary Judge meant by the statement in [39] that claim 1 “does not contemplate” the integer of a flame effect means that “substantially” relies upon or involves “to any significant degree” directly emitted light.  We are of the view that it is more likely, in the context of his Honour’s reasons as a whole, for the statement to mean that the claim does not encompass such an apparatus.  We do not consider that the statement indicates, as effectively submitted by Garth Living, that his Honour’s construction of claim 1 imported a limitation that the flame effect means must only rely upon reflected light.

15                  A further argument raised by the respondents before the primary Judge was that the type of reflected light that forms part of the flame effect means is limited to light produced by “specular reflection”.  The parties do not dispute the description of specular reflection explained by Dr Cowling, a witness for Garth Living and set out by the primary Judge at [49].   Dr Cowling explained that there are two types of reflection:  specular and diffuse reflection.  Specular reflection occurs when light is reflected off a smooth surface, such as a mirror, glass or other shiny surface.  Diffuse reflection occurs when a wave of light is reflected off rough surfaces, such as wood, walls or fabric and scatters in different directions.  The latter does not produce the clear mirror image that can be seen in the case of specular reflection.

16                  The primary Judge noted that claim 1 makes no distinction between specular and diffuse reflection, neither expressly nor as understood by the skilled reader from the claim or the specification read as a whole (at [46]).  It followed that his Honour rejected that limitation of the claim.

Fair basis

17                  The primary Judge found that the claims of the patent are fairly based on and do not travel beyond what is disclosed in the specification.  His Honour observed that the respondents seemed to have been advancing this ground as a means of dealing with Bitech’s construction of the patent.  His Honour did not consider there was any room for a challenge based upon the absence of fair basis.

GROUNDS OF APPEAL: infringement

18                  Bitech’s grounds of appeal concern infringement and can conveniently be summarised as follows:

The primary Judge erred in finding that the respondents’ heaters did not infringe claim 1 because:

·                    Having found that the flame effect means of the respondents’ apparatuses provided flame shaped images produced by reflected light to a not insubstantial degree, the fact that additional light that was directly emitted from the source of light also contributed to the overall flame effect, does not avoid infringement.

·                    It is not relevant that the flame effect means of the respondents’ heaters relied to a substantial or any significant degree on the transmission of directly emitted light in addition to the images provided by reflected light.

·                    The primary Judge erred in the construction of claim 1 in holding that it excluded an apparatus that relied to a substantial or any significant degree upon the transmission of directly emitted light in order to simulate flames.

19                  Bitech does not challenge any of the primary Judge’s findings of fact.  Bitech submits that the primary Judge erred in holding that the addition or “super-adding” of a feature to the claimed combination was sufficient to avoid infringement in circumstances where all of the features of the claimed combination were present.  There is no dispute that the patent makes no mention of directly emitted light.

20                  Bitech points to the primary Judge’s reference to the fact that diffusely reflected light may be reflected off the inner surface of the back panel to the heater.  Bitech submits that this introduced a second, impermissible, qualification as to the physical components of the apparatus that could form part of the “means” but acknowledged that, from his Honour’s reasons, this did not seem to form part of the basis for the finding that there was no infringement.  We do not need to deal with it further.

Garth Living’s submissions on infringement

Directly emitted light

21                  Garth Living does not accept Bitech’s submission that this is a case of an addition of a feature to a claimed combination.  Garth Living characterises its product as one where the simulated flame effect was created “substantially and predominantly” by a feature that was not part of the claimed combination.  Garth Living points out that claim 1 (and, accordingly, dependent claims 8 and 20) makes no mention whatsoever of a simulated flame effect that relies on directly emitted light, whether alone or in combination with reflected light produced by diffuse reflection or specular reflection.  It submits that the primary Judge was correct to find that excluded from the claim is an apparatus which relies to a substantial degree on directly emitted light.

22                  Garth Living acknowledges that the simulated flame effect of its heaters is the result of both directly emitted light and diffusely reflected light but submits that the claim should be read to require that the simulated flame effect be created by reflection alone.  It submits that its heaters do not contain that essential integer and therefore do not infringe.  As its submissions developed, Garth Living modified its stance to submit that other forms of light are not necessarily excluded but that reflected light must be dominant.  Garth Living submits that the addition of a new essential integer, a light cylinder which creates a simulated flame effect by directly emitted light, means that its heaters do not rely on reflection of light to create the simulated flame effect.  It submits that this constitutes a new combination or a new working of the combination (Fresenius Medical Care Australia Pty Ltd v Gambro Pty Ltd (2005) 224 ALR 168, (2005) 67 IPR 230 at [70]), which does not infringe.

23                  Garth Living submits that the new combination uses only directly emitted light and that any images created by the reflected light are an incidental consequence of the fact that all surfaces reflect light to a degree.  In its heaters, it says, all steps have been taken to minimise reflection and the light from the flame effect means is directly sent to the viewing screen.  This is a different combination because, it submits, when viewed in operation, it is apparent that all contribution of reflected light is, in effect, de minimis.  In this context, Garth Living submits that the flame effect is created by direct light, not as an additional feature but utilising a different simulated flame effect means to simulate flames.

24                  Garth Living submits that a “commonsense understanding” of claim 1 is of a flame effect means created by only reflection.  It relies on a principle of “purposive construction” discussed in Kirin-Amgen Inc v Hoechst Marion Roussel (2004) 64 IPR 444 to submit that the skilled addressee would read the claim that way, understanding that all surfaces reflect and absorb light.  The submission is based on an emphasis that claim 1 states that the simulated flame effect means is “for” reflecting said light.  Garth Living says that a purposive construction of claim 1 would recognise that the flame effect means within the claim must be intended and designed to promote the reflection of light, unlike the flame effect means in its own heaters which are made from materials designed to minimise reflection.  Under such a construction, Garth Living submits, its heaters do not fall within the scope of claim 1 even if there is, in fact, reflection of light contributing to the simulated flame effect.

Specular reflection and diffuse reflection

25                  Garth Living submits that the reference in the specification to the problem of the effect of dust on the long-term imaging of simulated flames points the skilled addressee to specular reflection, where the screen means must be capable of diffusing light and of reflecting light, and the optical effect is produced by a screen that is partially diffusing and partially reflective.  That is, there needs to be a strong reflection.  It follows, says Garth Living, that all references to reflected light would be read by the skilled reader as a reference to specular reflection, or at least the skilled reader would read the claim as requiring a substantial proportion of the light incident on that surface.  Garth Living accepts that nothing in the specification suggests that there must be a substantial proportion of such light but says that the reference to screen means in claim 1 must be strong enough to cast an image and therefore indicates specular reflection and not diffuse reflection.

Consideration of infringement

26                  It seems to us that, with respect, the primary Judge posed the correct question (Populin) but answered the wrong question for infringement.  His Honour looked to see whether claim 1 contained all of the integers of the allegedly infringing heaters instead of asking whether those heaters contained all of the essential integers of the claim.

27                  The primary Judge introduced a qualification that does not appear in the claims, namely that the flame effect means does not ‘substantially rely upon’ or ‘involve to any significant degree’ a process involving light directly emitted from, rather than reflected from, the light source.  The claims do not exclude the presence of light additional to the reflected light, so long as the apparatus possesses the means for reflecting light to simulate flames.  Bitech accepts that a de minimis contribution by reflected light would not be sufficient to satisfy the claimed integer, but that was not the primary Judge’s finding.  The primary Judge observed at [100] that about half the viewing screen was occupied across its full width by the images sourced from reflected light, even though the images created by directly emitted light were found in the centre area of the viewing screen, were brighter and fuller than the other images and dominated the flame effect.

28                  Garth Living focuses on a submission that Bitech is seeking to expand its monopoly to encompass a heater that uses directly emitted light.  That is not the substance of Bitech’s submissions.  Garth Living has not answered or disputed Bitech’s case that their heaters include all of the integers of claim 1. 

29                  The primary Judge’s findings show that each of the integers of claim 1 was present in the respondents’ heaters.  Moreover, his Honour noted at [99] and [100] the contribution that reflected light made to the flame effect of the respondents’ heaters, which cannot be said to be de minimis.  The fact that an additional integer is present, namely the formation of additional images by directly emitted light, does not negate the fact that all of the claimed integers, in combination, are present.  Whether or not the additional integer is inventive, Bitech says that there is infringement (Blanco-White, Patents for Inventions, 5^th edition at [3-004]; Palmer v Dunlop Perdriau Rubber Co Ltd (1937) 59 CLR 30 at 63 per Latham CJ; Fresenius at [70]).  The respondents have taken each and every one of the essential integers of Bitech’s claims.  Accordingly, there is infringement (Populin at 475).

30                  Garth Living submits that the addition of the essential integer creates a new working of the combination that includes the essential integers of the claims.  The inclusion of additional integers to a claimed combination does not necessarily avoid infringement (Fresenius at [70]).  While infringement may be avoided where additional integers make a new working of the combination of those integers and those of the claim, that is not the case here.  It is apparent from the unchallenged findings of the primary Judge at [99] that the addition of direct light created images additional to those created by the claimed combination.  There was no interaction between the claimed combination, relevantly the source of reflected light and the new integer, relevantly a source of direct light.  There was no material effect on the way the claimed invention worked (Fresenius at [92]).

31                  To the extent that the description of the flame effect means in claim 1 is a term of art to be understood by a skilled addressee, the evidence does not assist Garth Living in its submission that those means are to be limited to a means for reflected light only.  Dr Cowling, an expert witness called by Bitech, said that “the means” is the part of the apparatus which is responsible for generating the simulated flames.  Professor Nugent, called by Garth Living, said that the flame effect means must be capable of “reflecting said light to simulate flames”.  Professor Munro, also called by Garth Living, said that the light must be reflected by the flame effect means and also that the dominant mechanism for creating the time-varying light distribution is reflection not transmission.  None of the expert witnesses read claim 1 as necessarily excluding direct light.  No concept of purposive construction (see discussion of Kirin-Amgen in Sachtler GMBH & Co KG v RE Miller Pty Ltd (2005) 221 ALR 373; 65 IPR 605) leads to a construction of claim 1 that excludes direct light.

32                  We do not read claim 1 as excluding directly emitted light.  There was, as acknowledged by Garth Living, no express exclusion.  We see no basis for such a construction of claim 1 and the relevant dependent claims.  We also see no basis for a construction that requires a quantification of the contribution of the reflected light such that it be “to a substantial degree” or as a “substantial and predominant contributor” as submitted by Garth Living.  As submitted by Bitech, this would import into the claim an unwarranted ambiguity.

33                  Further, neither the findings of fact at [99]–[100] of the primary Judge’s reasons nor the evidence from the skilled readers, nor the absence of any such suggestions in the specification supports Garth Living’s submission as to a limitation to specular reflection.  No error has been shown in the primary Judge’s reasons for rejecting this limitation.

cross-appeal: FAIR BASIS

34                  The primary Judge rejected the allegations of lack of novelty, lack of inventive step and lack of fair basis.  The only challenge in the cross-appeal by Garth Living concerns the finding that the claims are fairly based on the matter described in the specification (s 40(3) of the Patents Act 1990 (Cth) (the Act)). 

Garth Living’s submissions on fair basis

35                  In its notice of cross-appeal, Garth Living asserts that claims 1, 8 and 20 of the patent are not fairly based on the matter described in the specification because, in effect, the claims are not limited to an invention:

·                    where the simulated flame effect is created only by reflection of light from the flame effect means;

·                    where the flame effect is viewed on a viewing screen by specular reflection of light from the flame effect means;

·                    where there is no specified function for the inner surface of the back panel or outer casing; and

·                    where the only function of the inner surface of the back panel or outer casing is to prevent the ingress of dust.

36                  Garth Living’s submissions are directed to the alleged lack of fair basis of claim 1.  If that claim lacks fair basis, so too will claims 8 and 20. 

37                  Garth Living accepts that the inquiry is into what the specification discloses and describes as the invention.  It also accepts that the consistory clause in the specification matches the terms of claim 1, noting that the question is whether the specification otherwise teaches the skilled addressee that the invention is narrower than suggested by the consistory clause (Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (2004) 217 CLR 274 at [38], [69] and [83]).

38                  Garth Living points to the embodiments of the invention as described in the specification.  In particular it points to the use of reflected light, the use of ribbons to provide the flame effect and the absence of a back panel or a casing that is utilised for the flame effect.  Garth Living’s submission is that the consistory clause that makes no reference to, for example, the ribbons or the casing, is broader than the rest of the specification, so that the invention is narrower than the consistory clause (Lockwood).

Consideration of fair basis

39                  As the primary Judge said at [139], fair basis involves a comparison between the claims made in the patent and what is disclosed in the specification in order to determine whether there is a ‘real and reasonably clear disclosure’ of the invention claimed, or whether the claims ‘travel beyond’ the invention described (Lockwood at [57], [69], [83]).  His Honour concluded that the claims did not travel beyond the invention described in the specification and rejected that asserted ground of invalidity of the patent.

40                  Fundamental to Garth Living’s submissions on fair basis is an analysis centred on the proposition that neither the specification nor claim 1 refers to a source of direct light.  The submission seems to be that if there is infringement by a flame effect means that utilises reflected light and also direct light, the specification must disclose or describe that additional integer.  That is simply not the requirement for fair basis.

41                  The only characteristic required by the flame effect means of claim 1 is a means for reflecting said light to simulate flames.  The screen means must be capable of diffusely transmitting light reflected by the flame effect means and also be capable of reflecting light from the simulated fuel means.

42                  Garth Living submits that the specification describes an invention narrower than the flame effect means of claim 1 and its consistory clause.  Garth Living points to the preferred embodiments which describe different preferred characteristics of the flame effect means, including:

·                    the flame effect means being sealed against the ingress of dust and dirt;

·                    the flame effect means comprising ribbons of material and in such a manner as to promote their movement.  Different such methods are exemplified; and

·                    the flame effect means being positioned closely adjacent, but not touching the screen means.

43                  The preferred embodiments also describe characteristics of the screen means which, for example, improve the realism of the simulated flames.  An embodiment of the invention is then described with reference to the drawings.  The body of the specification concludes by stating that ‘other modifications or improvements may be made without departing from the invention’.

44                  Each of the limitations sought to be imported into the invention by Garth Living is a characteristic of a preferred embodiment or of the description in the drawings of ‘an embodiment of the invention’.  It is clear from the specification that the invention is as set out in the consistory clause and that what follows, including the further characterisation, does not limit or narrow the invention.

45                  The specification explains the “problems” of prior art apparatus for simulating flames.  The specification refers to:

·                    the problems of flickering flames that lack realism;

·                    the fact that when seen from day to day, appliances with the effect of simulated flames become less convincing with time; and

·                    the fact that in many prior art devices, dust and dirt can build up on various surfaces so that the initial pleasing effect is spoilt, thereby detracting from the realism.

46                  The specification then states: ‘At least the preferred embodiments of the invention seek to solve these problems’.  What follows is the consistory clause and then the description of the preferred embodiments.  In many cases, there is a statement of how the embodiment being described solves one of the problems adverted to earlier.  In one case, alternative embodiments are described for the same problem.  This does not suggest that any one embodiment was intended to embody the extent of the invention.

47                  Claims can extend beyond the scope of preferred embodiments.  The skilled addressee would not read the specification as imposing serial restrictions or limitations on the invention.  The specification describes different preferred ways in which integers of the invention can be made to maximise the solution to the different problems of the prior art.  Those are reflected in the dependent claims. 

48                  The description in the specification includes a consistory clause which describes the invention in the same terms as claim 1.  There is nothing in the balance of the specification to indicate that the invention was narrower (Lockwood at [38]).  Claims 1, 8 and 20 are, as the primary Judge found, fairly based on the specification.

Conclusion

49                  It follows that the appeal should be allowed and the cross-appeal dismissed.  Bitech is entitled to the costs of the appeal.  The respondents other than Garth Living took no active part in the hearing of the appeal.  We will allow the parties 7 days to make submissions on the costs of the appeal, on any variation to the order for the costs before the primary Judge and to propose orders to give effect to these reasons and the further conduct of the matter.

Associate:

Dated:         23 June 2010