FEDERAL COURT OF AUSTRALIA

PATENTS - validity - construction of claims - drainage cell - apparatus claims - impermissible to read down apparatus claims by reference to purpose of drainage - distinction between reading down apparatus claim by reference to purpose of drainage and a “limitation by result” which forms part of an integer of apparatus described - lack of fair basing of apparatus claims on body of complete specification - lack of fair basing of apparatus claims on provisional specification - priority date, date of lodgment of complete specification - lack of novelty as at that date - misrepresentation and false suggestion.

Patents Act 1990 (Cth) ss 15(1) (a); 40(2), (3); 138(3) (f)

Electric and Musical Industries Ltd v Lissen Ltd (1939) 56 RPC 23 - applied

Ingersoll Sergeant Drill Co v Consolidated Pneumatic Tool Co Ltd (1908) 25 RPC 61 - applied

Poseidon Industri AB v Cerosa Ltd [1982] FSR 209 - applied

Ransburg Co v Aerostyle Ltd [1968] RPC 287 - applied

Welch Perrin & Co Pty Ltd v Worrel (1961) 106 CLR 588 - applied

Interlego AG v Toltoys Pty Ltd  (1973) 130 CLR 461 - applied

Sunbeam Corporation v Morphy-Richards (Aust) Pty Ltd (1961) 180 CLR 98 - applied

Decor Corporation Pty Ltd v Dart Industries (1988) 13 IPR 385 (FCA/FC) - applied

Coopers Animal Health Australia Pty Ltd v Western Stock Distributors Pty Ltd (1987) 15 FCR 382 (FC) - applied

CCOM Pty Ltd v Jiejing Pty Ltd (1994) 51 FCR 260 (FC) - applied

Leonardis v Sartas No 1 Pty Ltd (1996) 35 IPR 23 (FCA/FC) - applied

ATLANTIS CORPORATION PTY LIMITED & ANOR v PETER SCHINDLER & ORS

NG 284 OF 1997

LOCKHART, WILCOX, LINDGREN JJ

24 OCTOBER 1997

SYDNEY

 

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 284 OF 1997

 

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

 

BETWEEN:	ATLANTIS CORPORATION PTY LIMITED (ACN 003 233 681) First AppELLANT   HUMBERTO URRIOLA Second AppELLANT
AND:	PETER SCHINDLER First Respondent   INNOVATECH (AUSTRALIA) PTY LIMITED (ACN 002 287 023) Second Respondent   DESINAN SERVICES PTY LIMITED (ACN 057 580 793) Third Respondent   LUCY MARY SCHINDLER Fourth Respondent   BRUNO DESINAN Fifth Respondent   PETER SCHINDLER CROSS-APPELLANT   ATLANTIS CORPORATION PTY LIMITED (ACN 003 233 681) FIRST CROSS-Respondent   HUMBERTO URRIOLA SECOND CROSS-Respondent
JUDGES:		LOCKHART, WILCOX, LINDGREN JJ
DATE OF ORDER:		24 october 1997
WHERE MADE:		SYDNEY

 

THE COURT ORDERS THAT:

1.         The appeal be dismissed.

2.         The cross-appeal be allowed.

3.         Order 1 made on 22 December 1995 in proceeding No 1327 of 1994 in the Equity Division of the Supreme Court of New South Wales (“the Supreme Court proceeding”) be set aside and in lieu thereof it be ordered as follows:

            “1.        The Court records, pursuant to Pt 31 r 5 of the Supreme Court Rules that the separate questions ordered on 30 June 1995 to be determined separately, are decided as follows:

                        Question 1        yes;

                        Question 2        unnecessary to decide;

                        Question 3        yes;

                        Question 4        unnecessary to decide;

                        Question 5        yes;

                        Question 6        unnecessary to decide; and

                        Question 7        yes.”

4.         Orders 2 and 3 made on 22 December 1995 in the Supreme Court proceeding be set aside.

 

5.         Orders 1, 4 and 7 made on 27 March 1997 in the Supreme Court proceeding be set aside.

6.         Australian Patent No 593085 be revoked.

7.         The matter be remitted to the Supreme Court of New South Wales for the purpose of

            (a)        assessing whether any and, if so, what damages should be awarded to the respondents;

            (b)        dealing with any notices of motion that are outstanding or require reconsideration in the light of the decision of this Court, in which respect, in particular, order 9 below applies.

8.         The appellants pay the costs of the respondents of the proceedings at first instance and of the appeal and cross-appeal.

9.         Liberty to apply be reserved.

 

 

 

 

 

 

 

 

Note:                Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

 

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 284 of 1997

 

BETWEEN:	ATLANTIS CORPORATION PTY LIMITED FIRST AppELLant   HUMBERTO URRIOLA SECOND APPELLANT
AND:                               BETWEEN:     AND:	PETER SCHINDLER FIRST Respondent   INNOVATECH (AUSTRALIA) PTY LIMITED SECOND RESPONDENT   DESINAN SERVICES PTY LIMITED THIRD RESPONDENT   LUCY MARY SCHINDLER FOURTH RESPONDENT   BRUNO DESINAN FIFTH RESPONDENT     PETER SCHINDLER CROSS-APPELLANT   ATLANTIS CORPORATION PTY LIMITED FIRST CROSS-RESPONDENT   HUMBERTO URRIOLA SECOND CROSS-RESPONDENT

 

JUDGE(S):	LOCKHART, WILCOX AND LINDGREN JJ
DATE:	24 OCTOBER 1997
PLACE:	SYDNEY

REASONS FOR JUDGMENT

LOCKHART J

 

This appeal from the judgment of the Supreme Court of New South Wales in its Equity Division (McClelland CJ) in Eq concerns the construction of a patent and the questions of whether the Claims of the patent are fairly based on the matter described in the specification or whether they sufficiently define the invention.  Questions of the priority date of the Claims and novelty and whether the patent was obtained by false suggestion also arise.

The patent is Australian Patent No 593085 (“the Patent”) of which the second appellant, Humberto Urriola, is the registered proprietor and the first appellant, Atlantis Corporation Pty Limited, is an exclusive licensee.  The Patent was sealed on 17 May 1990 under the Patents Act 1952 (“the 1952 Act”) pursuant to an application accompanied by a provisional specification lodged on 9 April 1986.  The complete specification was lodged on 27 March 1987.

The invention is entitled in the complete specification “Drainage Cell” and “Relates to the provision of adequate drainage by artificial means and has particular application in the area of landscape gardening”.

The specification describes the invention in these terms:

“According to the present invention there is provided a rigid cell structure comprising a first and second substantially parallel perforate planar members maintained in a fixed spaced relationship from each other by means of a plurality of spacer members; the perforations in the planar members comprising at least 40% of their surface area and all areas between perforations being adapted for load bearing at a loading of at least 20 kilograms per square metre; the perforate nature of both surfaces and the disposition of spacer members being such that gases or liquids may freely pass through the composite structure around the spacer means [sic - members] in any direction.

The present invention also teaches a method of providing drainage utilising the lastmentioned apparatus.  In addition to roof-top garden applications it is envisaged that the invention may be of use to provide drainage under roadways, under embankments and elsewhere where surface erosion would otherwise be a problem.”

This is followed by a description of:

“[o]ne example of an article in accordance with the present invention ... with reference to the accompanying drawings wherein:

Figure 1 is a part perspective view of a cell in accordance with the present invention;

Figure 2 is a further part perspective view of the cell of figure 1.

Figure 3 is a side elevation of the cell depicted in figures 1 and 2.

Figure 1 depicts a drainage cell comprising a first planar perforate surface 1 and a second planar perforate surface 2 maintained in parallel spaced relationship to each other by a plurality of upright spacer members 3.

The nature of perforations in the embodiment of figures 1 and 2 may best be observed from figure 2 which clearly depicts substantially square perforate areas 4 in the first planar surface 1.  It will be noted that the square perforate areas are interposed with substantially square load bearing sections 5 such that the resulting configuration of the first planar surface 1 is checkered.  In this embodiment the second perforate planar surface is of the same configuration as the first perforate planar surface except that the square perforate sections are out of register with each other such that directly beneath each square perforate section of the first perforate planar surface lies a square load bearing section of the second planar perforate surface.”

The Claims made in the Patent are in the following terms:

“1        A rigid cell structure comprising a first and second substantially parallel perforate planar members maintained in a fixed spaced relationship from each other by means of a plurality of spacer members; the perforations in the planar members comprising at least 40% of their surface area and all areas between perforations being adapted for load bearing at a loading of at least 20 kilograms per square metre; the perforate nature of both surfaces and the disposition of spacer members being such that gases or liquids may freely pass through the composite structure around the spacer means [sic - members] in any direction.

2          A structure in accordance with claim 1 wherein each spacer member adjoins at each end wall members in turn adjoining the ends of adjacent spacer members; the orientation of the walls being perpendicular to the plane of the parallel perforate planar members; the walls thereby serving to brace the entire structure and assist in transferring local stresses throughout the structure.

3          A structure in accordance with any one of the preceding claims wherein at least twenty per cent of the total surface area of the planar surfaces is adapted to support a load.

4          A structure in accordance with claim 1 wherein the spacer members are columnar in configuration and disposed substantially normally to the two parallel perforate surfaces.

5          A structure in accordance with any one of the preceding claims wherein the perforate areas are formed as parallelograms interposed with load bearing sections of like configuration and dimensions in a checkered configuration; the spacer members being joined to the perforate planar members adjacent the corners of such parallelogram shaped load bearing sections and perforate areas.

6          A structure in accordance with any one of the preceding claims wherein the perforate areas are of a substantially square configuration interposed with substantially square load bearing sections of similar dimensions in a checkered configuration; the spacer members being joined to the perforate planar members adjacent the corners of such square sections.

7          A structure in accordance with any one of the preceding claims wherein all perforate areas of one perforate surface are out of register with the perforate areas of the opposing perforate surface.

8          A structure in accordance with any one of the preceding claims where at least one of the planar perforate surfaces includes upon its internally facing side a plurality of low upstanding walls extending between adjacent spacer members defining shallow areas adapted to trap small quantities of liquid.

9          A structure in accordance with any one of the preceding claims wherein the cell structure is of adequate strength to ensure that either one of the perforate planar surfaces has a load bearing capacity of at least twenty kilograms per square metre when the opposing perforate planar surface is supported by a rigid planar surface.”

10        A structure in accordance with any one of the preceding claims wherein the cell structure is of adequate strength to ensure that eigher [sic - either] one of the perforate planar surfaces has a load bearing capability of between 15,000 andk [sic - and] 90,000 kilograms per square metre when the opposing perforate planar surface is supported by a rigid planar surface.

11        A rigid cell structure in accordance with any one of the preceding claims wherein there is a regular pattern of shallow tongues and grooves along the peripheral edges of the structure to allow the structure to be interlocked when assembled into a mat.

12        A structure substantially as hereinbefore described with reference to the accompanying drawings.

The appellants sued the respondents for infringement of the Patent.  The respondent, Peter Schindler, filed a cross-claim seeking revocation of the Patent.  The Supreme Court ordered that seven questions be determined separately from and before any further trial of the proceeding.  Six of those questions concerned the validity of the Patent; and the seventh question was whether, in consequence of the determination of the earlier questions, an order should be made revoking the Patent and discharging or varying certain interlocutory orders made by another judge of the Supreme Court.

Question 1 asked in substance whether the specification which defined the invention was clear and succinct or was fairly based on the matter described in the specification: s 40(2) and (3) of the Patents Act 1900 (“the 1990 Act”).  The Supreme Court held that the Claims did define the invention, were clear and succinct and were fairly based on the matter described in the specification.  Question 1 was cast in the following form:

“Whether the specification in the Patent does not comply with s 40(2) and (3) of the 1990 Act, in that the claims or any (and if so which) of them:

(a)       do not define the invention;

(b)       are not clear and succinct; or

(c)        are not fairly based on the matter described in the specification;

by reason of the following matters particularised in the cross-claim:

[i]       the published monopoly is for a product only and not for a drainage system as represented by the plaintiffs in the preliminary text of the specification and as represented in the title and intended to be so interpreted

[ii]      all 12 claims of the patent are devoid of reference to drainage, sub soil drainage or drainage system

[iii]     claim 1 commenced with the words ‘A rigid call structure ...’ claim 2, 3, 4, 5, 6, 7, 8, 9, and 100 commence with the words ‘A structure ...’ such claims being dependent on claim 1 claim 11 states ‘A rigid cell structure ...’ which claim reverts to claim 1 claim 12 states ‘A structure ...” and is a consequence of claim 1

[iv]     all 12 claims are devoid of any specific or preferred end usage of the product

[v]      all 12 claims are devoid of any specific or preferred method of manufacture

[vi]     claims 2, 4, 5, 7, 11 and 12 are the specific consequence of the injection moulding process which is not novel and is commonplace in industry and cannot be the subject of any exclusive monopoly.

[vii]    Claim 1 of the Patent is broadly based and the structure as disclosed in claim 1 can be readily applied to the common place structure used throughout industry commonly referred to as a pallet used to carry or store cargo.”

The Supreme Court found it unnecessary to decide questions 2, 4 and 6, so I shall not recite them.

Question 3 was whether the invention lacked novelty or an inventive step.  His Honour answered that question in the negative.

Question 5 was whether the Patent was obtained by fraud, false suggestion or misrepresentation within the meaning of s 138 of the 1990 Act, and the Supreme Court answered that question in the negative.

Question 7 was whether, in consequence of the determination of the earlier questions, an order should be made revoking the Patent and discharging or varying the interlocutory orders.  That question was answered by the Court in the negative.

The Supreme Court made orders for costs in favour of the appellants (order 2) and ordered that a notice of motion filed by the appellants on 25 August 1995 seeking orders for security for the costs of the appellants of their cross-claim be dismissed with costs (order 3).

The first respondent (cross-appellant) cross-appealed from the Supreme Court’s judgment of 22 December 1995. 

A second judgment was delivered by McClelland CJ in Eq on 27 March 1997 which dealt primarily with the question whether the subject of the patent in suit, when compared with the prior art base as it existed before the priority date of the Claims in the Patent, lacked novelty and was therefore not a patentable invention.  His Honour had found in the earlier judgment that the priority date of all Claims in the patent in suit was 9 April 1986 (the date of lodgment of the provisional specification).

The three pieces of prior art which were relied upon as depriving the invention described in the Patent of novelty were: (a) the Rosemeir patent, a German patent specification; (b) the Smarook patent, being a United States patent specification; and (c) information made publicly available by the marketing in Australia of a product known as “Norcore” manufactured according to the Smarook patent. 

The learned primary Judge found that the Rosemeir patent deprived Claims 1, 3, 4, 5, 6, 7 and 9 of novelty.  His Honour also found, in relation to Claims 2, 10 and 12, that he was not persuaded that there was no inventive step.  As to Claim 11, he found that this was a workshop improvement which did not involve an inventive step.

His Honour turned to the Smarook patent and found that none of the Claims in the Patent were deprived of novelty by that patent.

His Honour considered the arguments with respect to the marketing of Norcore in Australia and found that marketing of that product did not deprive the invention described in the Patent of novelty.

The primary Judge dealt with the question of infringement, limited to Claims 2, 8, 10 and 12, which he had found to be valid, and found that no infringement of those Claims had been established.

His Honour ordered that the Patent be revoked so far as it related to Claims 1, 3, 4, 5, 6, 7, 9 and 11; and made other orders which it is not necessary to recite.

The appellants appealed from the part of his Honour’s judgment given on 27 March 1997 whereby it was held that the invention, so far as claimed in Claims 1, 3, 4, 5, and 6 of the Patent, was not novel; that the invention, so far as claimed in Claim 11, did not involve an inventive step; and that there was no infringement of Claims 2, 8 and 10 of the Patent.

The case turns primarily on the construction of the Claims.  The primary Judge construed Claim 1 as being limited to use of the structure there defined for the purpose of drainage.  He reached this conclusion by the following path.  His Honour referred to the concluding words of the Claim 1, namely, “the perforate nature of both surfaces and the disposition of spacer members being such that gases or liquids may freely pass through the composite structure around the spacer means [sic - members] in any direction”; and said that they gave rise to ambiguity.  His Honour said:

“The purpose of gas or liquids being able to freely pass through the composite structure and the spacer means [sic -members] in any direction is left unclear, and in my opinion this lack of clarity may legitimately be resolved by reference to the specification as a whole from which it is abundantly clear that the purpose is drainage.”

Thus, his Honour turned to the body of the specification to resolve the perceived ambiguity.  His Honour found that, if on the true construction of the specification, any Claim expressly or by necessary implication purported to define an invention not limited to use for the purpose of drainage then that claim was invalid.

It was argued on behalf of the respondents that the primary Judge erred in his construction of the Claims by importing a limitation into them, derived from the body of the specification, which had the effect of reading down what was said to be the clear language of the Claims, so that they conformed to the matter described in the body of the specification, thus avoiding the objection that the Claims were not fairly based on the specification.

At the hearing before us counsel for the appellants conceded that his Honour had erred in holding that Claim 1 was ambiguous and that it should be construed as being “limited to use for the purpose of drainage”.

The principles concerning ambiguity in the words of the Claims of a patent are clear.  It is well established that if the words of a Claim are clear and unambiguous one does not resort to the body of the specification to interpret the Claim.  If the Claim is ambiguous then one may do so.

In my opinion the words of Claim 1 are clear and unambiguous.  I discern no obscurity in language concerning the defined features of the claimed structure which, if there had been ambiguity, may have justified resort to the body of the specification for clarification.  The relevant principles are summarized in the oft cited passage from the speech of Lord Russell of Killowen in Electric & Musical Industries Limited v Lissen Limited (1939) 56 RPC 23 at 39, namely:

“The function of the claims is to define clearly and with precision the monopoly claimed, so that others may know the exact boundaries of the area within which they will be trespassers.  Their primary object is to limit and not to extend the monopoly.  What is not claimed is disclaimed.  The claims must undoubtedly be read as part of the entire document, and not as a separate document; but the forbidden field must be found in the language of the claims and not elsewhere.  It is not permissible, in my opinion, by reference to some language used in the earlier part of the specification to change a claim which by its own language is a claim for one subject-matter into a claim for another and a different subject-matter, which is what you do when you alter the boundaries of the forbidden territory.  A patentee who describes an invention in the body of a specification obtains no monopoly unless it is claimed in the claims.”

The language of the Claims themselves marks out the ambit of the monopoly of the Claims.  In ascertaining the width of a particular claim it is impermissible to qualify the plain and unambiguous meaning of a Claim by reference to the body of the specification: Welch Perrin & Co Pty Limited v Worrel (1961) 106 CLR 588 at 610; Interlego AG v Toltoys Pty Limited (1973) 130 CLR 461 per Barwick CJ and Mason J at 478.  In the case of ambiguity of an expression used in a Claim, resort to the body of the specification is permissible to define or clarify the meaning of the words used in the claim: Electric & Music Industries Limited v Lissen Limited; Rosedale Associated Manufacturers Limited v Carlton Tyre Saving Co Limited [1960] RPC 59 at 69; Interlego at 479.

It was central to his Honour’s reasoning that Claim 1 did not state the purpose of the specific feature last mentioned in Claim 1 and he resorted to the body of the specification to reach the conclusion that Claim 1 was limited to the use of the structure there defined for the purpose of drainage.  In my opinion, it was not permissible to do this since there is no ambiguity to be resolved.  The concluding words of Claim 1 which I recited earlier are limitations by reference to result of the perforate nature of both surfaces and the disposition of spacer members, with the result that gases or liquids may freely pass through the composite structure around the spacer members in any direction.

I have referred to Claim 1 and not the succeeding Claims; but it is clear from the language of those Claims that what I have said applies equally to them in view of the introductory words which incorporate by reference the language of Claim 1 and are thus dependent on Claim 1.

Construction of the Claims is critical to the issues raised by s 40(2) and (3) of the 1990 Act, namely, whether the Claims are fairly based on the specification (s 40(3)) and whether the Claims define the invention fully (s 40(2)(a) and (b)).  The principle concerning fair basing and defining the invention were discussed by Full Courts of this Court in CCOM Pty Ltd v Jiejing Pty Ltd (1994) 51 FCR 260 at 275-282 and Leonardis v Sartas (No 1) Pty Ltd (1996) 35 IPR 23 at 37-42.

By construing the Claims as the primary Judge did, that is by reading into Claim 1 the qualification that the structure is limited to use for the purpose of drainage, the conclusion can more readily be reached that the Claims are fairly based on the specification and sufficiently define the invention than if the construction were exclusive of the limitation for use of the structure for the purpose of drainage. 

In my opinion, a perusal of the body of the specification leads plainly to the conclusion that the invention concerns the provision of adequate drainage by artificial means with particular application in the area of landscape gardening.  The invention is of a particular kind of drainage cell and no other structure, with application in the field of drainage and no other field.

What the Claims assert is not a particular kind of drainage cell, but a structure which has certain defined features which may or may not be adapted for the purpose of drainage.  The invention covers any article which incorporates the claimed structure.

It is clear that the Claims are for a wider monopoly than the invention which is described in the specification.  In my opinion, the Claims are not fairly based on the matter described in the specification and therefore do not conform to the requirements of s 40(3) of the Act.

The primary Judge correctly concluded that, if the Claims purported to define an invention not limited to use for the purpose of drainage, the Claims would be invalid.  If it were not for the construction of the Claims which appealed to his Honour, he would have held that the Claims did not comply with s 40(3) and were invalid.  In view of the construction, which in my opinion is correct, the Claims must be invalid.

It also must follow that the patentee has not defined his invention; but has simply defined a structure of general and unlimited application.  Hence the Claims are not in accordance with s 40(2)(b) of the Act.

It follows that the Claims are invalid and the appeal must be dismissed and the cross-appeal allowed.

It is not necessary for the Court to consider the other issues which arise in the case, in particular the question whether the invention lacks novelty, which turns in part on the question whether the priority date of the Claims of the Patent was 27 March 1987 (being the date of lodgment of the complete specification) or 9 April 1986 (being the date of lodgment of the provisional specification).  It is also unnecessary for the Court to deal with the issue whether the Patent was obtained by fraud, false suggestion or misrepresentation, an issue raised by s 15(1) of the 1990 Act.

I would order that:

1.         The appeal be dismissed.

2.         The cross-appeal be allowed.

3.         Order 1 made by the Supreme Court of New South Wales on 22 December 1995 in proceeding No 1327 of 1994 be set aside and in lieu thereof it be ordered as follows:-

            Question 1                    Yes

            Question 2                    Unnecessary to decide

            Question 3                    Unnecessary to decide

            Question 4                    Unnecessary to decide

            Question 5                    Unnecessary to decide

            Question 6                    Unnecessary to decide

            Question 7                    Yes

4.         Orders 2 and 3 made by the Supreme Court of New South Wales on 22 December 1995 be set aside.

5.         Orders 1, 4 and 7 made by the Supreme Court of New South Wales on 27 March 1997 be set aside.

6.         Australian Patent No 593085 be revoked.

7.         The matter be remitted to the Supreme Court of New South Wales for the purpose of:

            (a)        assessing whether any and, if so, what damages should be awarded to the respondents;

            (b)        dealing with any notices of motion that are outstanding or require reconsideration in the light of the decision of this Court, in which respect, in particular, order 9 below applies.

8.         The appellants pay the costs of the respondents of the proceedings at first instance and of the appeal and cross-appeal.

9.         Liberty to apply be reserved.

I certify that this and the preceding eleven (11) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Lockhart

Associate:

Dated:              24 October 1997

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 284 OF 1997

 

On appeal from a Judge of the federal court OF AUSTRALIA

 

BETWEEN:	ATLANTIS CORPORATION PTY LIMITED (ACN 003 233 681) First Appellant   HUMBERTO URRIOLA Second AppELLANT
AND:	PETER SCHINDLER First Respondent   INNOVATECH (AUSTRALIA) PTY LIMITED (ACN 002 287 023) Second Respondent   DESINAN SERVICES PTY LIMITED (ACN 057 580 793) Third Respondent   LUCY MARY SCHINDLER Fourth Respondent   BRUNO DESINAN Fifth Respondent   PETER SCHINDLER CROSS-APPELLANT   ATLANTIS CORPORATION PTY LIMITED (ACN 003 233 681) FIRST CROSS-RESPONDENT   HUMBERTO URRIOLA SECOND CROSS-Respondent

 

JUDGES:	LOCKHART, WILCOX, LINDGREN JJ
DATE:	24 october 1997
PLACE:	SYDNEY

REASONS FOR JUDGMENT

WILCOX AND LINDGREN JJ:

 

INTRODUCTION

The second appellant, Humberto Urriola, is the registered proprietor of Australian Patent No 593085 (“the Patent”). The first appellant, Atlantis Corporation Pty Limited (“Atlantis”), of which Mr Urriola is the managing director, is an exclusive licensee under the Patent. We will generally refer to both appellants as “Atlantis-Urriola”.  The Patent specification gives the title of the subject invention (“the Invention”) as “Drainage Cell”. We will refer to it as the “Atlantis Drainage Cell”.

Atlantis and Mr Urriola, as first and second plaintiffs respectively, brought proceeding No 1327 of 1994 in the Equity Division of the Supreme Court of New South Wales against, inter alia, the present respondents as defendants, for infringement of the Patent. The first respondent, Peter Schindler, cross-claimed for revocation of the Patent.

On 30 June 1995, the Supreme Court ordered that certain questions raising issues as to the validity of the Patent should be separately determined. Answers favourable to Mr Schindler would have led to revocation of the Patent. But on 22 December 1995, McLelland CJ in Eq answered the questions in a manner adverse to Mr Schindler (his Honour’s judgment is now reported at (1995) 33 IPR 91). In the result, the substantive proceeding went to hearing. On 27 March 1997, his Honour ordered that the Patent be revoked so far as it related to claims 1, 3, 4, 5, 6, 7, 9 and 11 (this judgment is not yet reported).

Atlantis-Urriola appeal from that order. They press challenges to holdings by his Honour of lack of novelty and lack of inventive step. Mr Schindler cross-appeals from his Honour’s answers to the preliminary questions.

Two notices of contention have been filed. On 6 May 1997, Mr Schindler filed a notice of contention directed to supporting his Honour’s dismissal of the application for reasons not supported by his Honour. On the hearing of the appeal, Atlantis-Urriola filed in Court a notice of contention relating to both judgments. More will need to be said  of this notice of contention. However, it is useful to observe at this stage that Mr Schindler agrees with Atlantis-Urriola’s contention, which may be more appropriately referred to as a “concession”, that his Honour erred in reading down the claims in the Patent by reference to the purpose of drainage which was disclosed in the body of the specification but not in the claims. Apparently Atlantis-Urriola’s case before the trial Judge, which his Honour accepted, had been to the contrary. On the appeal, but not before his Honour, it was common ground that the claims were properly construed as being simply for an article or object without reference to the purpose of drainage.

THE PATENT

The provisional specification was lodged on 9 April 1986. The complete specification was lodged on 27 March 1987. The Patent was sealed on 17 May 1990. Atlantis-Urriola contend that the priority date is 9 April 1986 but Mr Schindler contends that it is 27 March 1987 because, so he says, the claims in the specification are not fairly based on the provisional specification. It is not in dispute that between those two dates, Mr Urriola published the Invention in various ways with the consequence that it had ceased to be novel by 27 March 1987.

The specification states that the Invention “relates to the provision of adequate drainage by artificial means and has particular application in the area of landscape gardening.” It continues:

“Known methods of draining relatively large surface areas where the funnelling of water directly into narrow diameter pipes is impractical or impossible involve the use of a layer of stone or gravel capable of supporting the surface to be drained. Water from this ‘gravel’ layer may then be allowed to percolate into the ground below, follow the lie fo [sic - of] the land through said gravel to further conventional drainage channels or pipes or otherwise evacuated. In the case of a roof-top garden for example a concrete roof-top may be provided with a water impervious membrane opening into conventional channels, gutters or drains; a layer of pebbles may the [sic - then] be provided over such membrane followed by a filter membrane over such layer of pebbles over which filter membrane a layer of soil is laid in which vegetation may be grown.

The filter membrane prevents the soil clogging the layer of pebbles thereby preventing drainage; the layer of pebbles facilitates drainage of the soil and hence adequate oxygen for the roots of vegetation. The lower impervious membrane in turn prevents the ingress of moisture to the building or structure below.”

Drainage systems involving pebbles, gravel and stone are said to have been found to have shortcomings, particularly in roof-top applications. The specification contains the following passage which was the subject of submissions on the appeal:

“According to the present invention there is provided a rigid cell structure comprising a first and second substantially parallel perforate planar members [sic] maintained in a fixed spaced relationship from each other by means of a plurality of spacer members; the perforations in the planar members comprising at least 40% of their surface area and all areas between perforations being adapted for load bearing at a loading of at least 20 kilograms per square metre; the perforate nature of both surfaces and the disposition of spacer members being such that gases or liquids may freely pass through the composite structure around the spacer means in any direction.” (emphasis supplied)

The specification states that the Invention also teaches a method of providing drainage, utilising the apparatus described in the passage set out above, and that in addition to roof-top garden applications, it may be of use to provide drainage under roadways, under embankments and elsewhere where surface drainage would otherwise be a problem. The reference to “embankment” makes it clear that the Invention has applications on both a horizontal and vertical, or almost vertical, plane (Mr Urriola gave evidence before the trial Judge that in its vertical application, the Atlantis Drainage Cell can provide drainage against the inside of retaining walls).

The specification proceeds to describe one example of an article in accordance with the Invention by reference to figures 1, 2 and 3 which appear below. Figure 1 is described as a “part perspective view of a cell in accordance with the present invention;” figure 2 is a further part perspective view of the cell of figure 1; and figure 3 is a side elevation of the cell depicted in figures 1 and 2. The three figures are as follows:

In the embodiment of figures 1 and 2, the two planar surfaces represent checkerboard patterns. However, according to the specification,

“ ... the square perforate sections are out of register with each other such that directly beneath each square perforate section of the first perforate planar surface lies a square load bearing section of the second planar perforate surface.”

The specification acknowledges that the configuration so described results in planar surfaces having approximately 50 per cent of their surface area devoted to perforations and the remaining 50 per cent to a solid surface which is capable of bearing load. The specification states that in particular applications it is important that the load bearing surface comprise a significant proportion of the planar surface in order that load may be distributed and the cell will not puncture adjacent membranes.

The specification concludes with twelve claims. They all begin with one or other of the expressions “A rigid cell structure” or “A structure.” Numbers 2-12 are, in various ways, dependent on claim 1 which is as follows:

“1.       A rigid cell structure comprising a first and second substantially parallel perforate planar members [sic] maintained in a fixed spaced relationship from each other by means of a plurality of spacer members; the perforations in the planar members comprising at least 40% of their surface area and all areas between perforations being adapted for load bearing at a loading of at least 20 kilograms per square metre; the perforate nature of both surfaces and the disposition of spacer members being such that gases or liquids may freely pass through the composite structure around the spacer means in any direction.”

 

We need not set out all the other claims. The additional integer of claim 3 is that at least 20 per cent of the surface area is “adapted to support a load.” That of claim 4 is that the spacer members are “columnar in configuration and disposed substantially normally to the two parallel perforate surfaces.” Claims 5 and 6 are as follows:

“5.       A structure in accordance with any one of the preceding claims wherein the perforate areas are formed as parallelograms interposed with load bearing sections of like configuration and dimensions in a checkered configuration; the spacer members being joined to the perforate planar members adjacent the corners of such parallelogram shaped load bearing sections and perforate areas.

6.         A structure in accordance with any one of the preceding claims wherein the perforate areas are of a substantially square configuration interposed with substantially square load bearing sections of similar dimensions in a checkered configuration; the spacer members being joined to the perforate planar members adjacent the corners of such square sections.”

Claim 7 introduces the integer that “all perforate areas of one perforate surface are out of register with the perforate areas of the opposing perforate surface”. Claim 10 requires that the cell structure be “of adequate strength to ensure that eigher [sic- either] one of the perforate planar surfaces has a load bearing capability of between 15,000 andk [sic - and] 90,000 kilograms per square metre when the opposing perforate planar surface is supported by a rigid planar surface.” Claim 11 adds the integer that there is a regular pattern of shallow tongues and grooves along the peripheral edges of the structure to allow it to be interlocked with other cell structures and assembled into a mat.

 

REASONING OF THE TRIAL JUDGE

Reasons dated 22 December 1995

The Patent was granted under the Patents Act 1952 (Cth) (“the 1952 Act”) which was repealed by the Patents Act 1990 (Cth) (“the 1990 Act”), the commencement day of which was 30 April 1991. By a course of reasoning which is not challenged, McLelland CJ in Eq concluded that it was unnecessary for him to give separate consideration to questions based on the 1952 Act and that it sufficed for him to answer only Questions 1, 3 and 5 based on the 1990 Act. Question 1 was, relevantly, as follows:

“Question 1:

Whether the specification in the Patent does not comply with s.40(2) and (3) of the 1990 Act, in that the claims or any (and if so which) of them:

(a)       do not define the invention;

(b)       .........................................; or

(c)        are not fairly based on the matter described in the specification;

by reason of the following matters particularised in the cross-claim:

[i]       the published monopoly is for a product only and not for a drainage system as represented by the plaintiffs in the preliminary text of the specification and as represented in the title and intended to be so interpreted

[ii]      all 12 claims of the patent are devoid of reference to drainage, sub soil drainage or drainage system

[iii]     claim 1 commenced with the words ‘A rigid call [sic - cell] structure ...’ claim 2, 3, 4, 5, 6, 7, 8, 9, and 10 commence with the words ‘A structure ...’ such claims being dependent on claim 1 claim 11 states ‘A rigid cell structure ...’ which claim reverts to claim 1 claim 12 states ‘A structure ...’ and is a consequence of claim 1

[iv]     all 12 claims are devoid of any specific or preferred end usage of the product

[v]      all 12 claims are devoid of any specific or preferred method of manufacture

[vi]     claims 2, 4, 5, 7, 11 and 12 are the specific consequence of the injection moulding process which is not novel and is commonplace in industry and cannot be the subject of any exclusive monopoly.

[vii]    Claim 1 of the Patent is broadly based and the structure as disclosed in claim 1 can be readily applied to the common place structure used throughout industry commonly referred to as a pallet used to carry or store cargo.”

Subsection 138(3) of the 1990 Act provides, relevantly, that the Court may, by order, revoke a patent, wholly or so far as it relates to a claim, on one or more of certain grounds specified in the subsection and no other grounds. The grounds relevant to the present case are:

“(a)     that the patentee is not entitled to the patent;

(b)       that the invention is not a patentable invention;

(c)        ... ;

(d)       that the patent was obtained by ... false suggestion or misrepresentation;

(e)        ... ;

(f)        that the specification does not comply with subsection 40(2) or (3).”

Subsections 40(2) (a) and (b) and (3) of the 1990 Act provide:

“(2)     A complete specification must:

(a)       describe the invention fully, including the best method known to the applicant of performing the invention; and

(b)       where it relates to an application for a standard patent - end with a claim or claims defining the invention; and

(c)        ...

(3)       The claim or claims must be clear and succinct and fairly based on the matter described in the specification.

...” (emphasis supplied)

His Honour described Mr Schindler’s argument on Question 1 as follows:

“ ... the invention described in the specification is clearly and expressly limited to a particular use of the designated structure, namely for the purpose of drainage. However, the claims purporting to define the invention contain no such limitation. They refer only to the structure itself and make no reference to its use, thereby claiming a monopoly far wider than the invention described in the specification, from which it follows that the claims neither define the invention described in the specification nor are fairly based on the matter described in the specification.”

His Honour implicitly accepted that use for drainage was an essential part of the inventive idea as described in the body of the specification and expressed the opinion that if any claim, properly construed, purported to define an invention not limited by reference to that use, the claim would be invalid.

His Honour then noted the following element in claim 1:

“the perforate nature of both surfaces and the disposition of spacer members being such that gases or liquids may freely pass through the composite structure around the spacer means in any direction.”

He thought that the purpose of such free passage was left unclear and that the lack of clarity might legitimately be resolved by reference to the specification as a whole. He said that from the specification as a whole, “it is abundantly clear that the purpose is drainage” and that “[t]he mere title of the invention ‘Drainage Cell’ is sufficient to indicate this” (at 98). In the result, his Honour answered Question 1 “no”.

As noted earlier, on the appeal, Atlantis-Urriola, by a notice of contention, accepts that claim 1 defines without reference to purpose an article or object, namely, a rigid cell structure. They distinguish a limitation by reference to the purpose of an invention from a “limitation by reference to result” which they accept is found in the words in claim 1 “... such that gases or liquids may freely pass through the composite structure around the spacer means in any direction”. Mr Schindler is not at issue with Atlantis-Urriola on these matters. The parties are therefore agreed that, notwithstanding the way in which they had argued Question 1 before him, the learned trial Judge erred in reading down claim 1 by reference to the purpose of drainage. We will return to this matter under “REASONING ON THE APPEAL” below.

Question 3 before the trial Judge was, relevantly, as follows:

“Question 3:

Whether the invention the subject of the Patent is not a patentable invention in that, so far as claimed in any (and if so which) claim when compared with the prior art base as it existed before the priority date of that claim:

(a)       it is not novel; or

(b)       it does not involve an inventive step;

within the meaning of s.18 of the 1990 Act, by reason of the following matters particularised in the cross-claim:

B (i)     At a date before 9 April 1986 the second plaintiff/cross-defendant obtained the alleged invention indirectly from one or more persons or parties at 10 Myall Avenue, Vaucluse.

(ii)       At a date before 9 April 1986 one or more parties other than the second plaintiff/cross-defendant invented or contributed to the invention the subject of the Patent.

(iii)      The second plaintiff/cross-defendant did not invent the invention the subject of the Patent but commissioned drawings and drafting of specifications for the Patent describing a piece of a plastic object found in the grounds of 10 Myall Avenue, Vaucluse shortly prior to 9 April 1986.

(iv)      On or before 26 April 1986 the second plaintiff/cross-defendant instructed Ted Burton of Burton Plastics Pty Limited Brookvale to commission a metal mould for injection moulding purposes to enable production to take place of finished plastic product in accordance with the sample.

(v)       Upon manufacture of the mould in or about July 1986 the company Burton Plastics Pty Limited went into commercial production of the product on behalf of the first and second plaintiff in the second half of 1986.

C (i)     The provisional specification as filed by the second plaintiff/cross-defendant on 9 April 1986 is silent as to:

            (a)        area percentage of perforations in the planar members

            (b)        load capabilities of the cell structure.

(ii)       These characteristics (a & b above) were first contemplated in the complete specification filed 27 March 1987.

(iii)      The second plaintiff/cross-defendant had since 1986 and prior to 27 March 1987 exposed the product known as Drainage Cell in the public domain and had commercialised same.”

In order to understand Question 3 fully, it is necessary to have some background. Section 18 of the 1990 Act provides, relevantly:

“18.(1)   ... a patentable invention is an invention that, so far as claimed in any claim:

            ...

            (b)        when compared with the prior art base as it existed before the priority date of that claim:

                        (i)         is novel; and

                        (ii)        involves an inventive step;

                        ...” (emphasis supplied)

 

The word “invention” is defined to mean “any manner of new manufacture the subject of letters patent and grant of privilege within section 6 of the Statute of Monopolies” and includes an alleged invention.

Subsection 43 (2) of the 1990 Act provides:

“(2)        The priority date of a claim is:

            (a)        the date of filing of the specification; or

            (b)        where the regulations provide for the determination of a different date as the priority date - the date determined under the regulations.”

Under Patents Regulation 23.18, the priority date of each claim of the Patent is to be determined under s 45 of the 1952 Act which, so far as relevant, provided as follows:

“45.(1)   Subject to this Act, the priority date of a claim of a complete specification is the date of lodgment of that complete specification.

 (2)         ... the priority date of a claim of a complete specification received after a provisional specification, being a claim fairly based on matter disclosed in the provisional specification, is the date of lodgment of that provisional specification.” (emphasis supplied)

Accordingly, the priority date of any claim of the Patent is 27 March 1987 (the date of lodgement of the specification) unless the claim is fairly based on matter disclosed in the provisional specification, in which event the priority date is 9 April 1986 (the date of lodgement of the provisional specification).

Mr Schindler contended unsuccessfully before the trial Judge, and has repeated the submission on the appeal, that claim 1 is not fairly based on the provisional specification because of the provisional specification’s silence as to two matters specifically required in that claim, namely, a minimum perforate area of the surface area of each planar member (40 per cent) and a minimum load-bearing capacity of “all areas between perforations” (20 kilograms per square metre).

Section 7 of the 1990 Act provides as follows:

“7.(1)  For the purposes of this Act, an invention is to be taken to be novel when compared with the prior art base unless it is not novel in the light of any one of the following kinds of information, each of which must be considered separately:

            (a)        prior art information (other than that mentioned in paragraph (c)) made publicly available in a single document or through doing a single act;

            (b)        prior art information (other than that mentioned in paragraph (c)) made publicly available in 2 or more related documents, or through doing 2 or more related acts, if the relationship between the documents or acts is such that a person skilled in the relevant art in the patent area would treat them as a single source of that information;

            (c)        prior art information contained in a single specification of the kind mentioned in subparagraph (b)(ii) of the definition of ‘prior art base’ in Schedule 1.

(2)       For the purposes of this Act, an invention is to be taken to involve an inventive step when compared with the prior art base unless the invention would have been obvious to a person skilled in the relevant art in the light of the common general knowledge as it existed in the patent area before the priority date of the relevant claim, whether that knowledge is considered separately or together with either of the kinds of information mentioned in subsection (3), each of which must be considered separately.

(3)       For the purposes of subsection (2), the kinds of information are:

            (a)        prior art information made publicly available in a single document or through doing a single act; and

            (b)        prior art information made publicly available in 2 or more related documents, or through doing 2 or more related acts, if the relationship between the documents or acts is such that a person skilled in the relevant art in the patent area would treat them as a single source of that information;

            being information that the skilled person mentioned in subsection (2) could, before the priority date of the relevant claim, be reasonably expected to have ascertained, understood and regarded as relevant to work in the relevant art in the patent area.” (emphasis supplied)

Schedule 1 of the 1990 Act includes the following definitions of “prior art base” and “prior art information”:

“‘prior art base’ means:

(a)       in relation to deciding whether an invention does or does not involve an inventive step:

            (i)         information in a document, being a document publicly available anywhere in the patent area; and

            (ii)        information made publicly available through doing an act anywhere in the patent area; and

            (iii)       where the invention is the subject of a standard patent or an application for a standard patent - information in a document publicly available outside the patent area; and

(b)       in relation to deciding whether an invention is or is not novel:

            (i)         information of a kind mentioned in paragraph (a); and

            (ii)        information contained in a published specification filed in respect of a complete application where:

                        (A)       if the information is, or were to be, the subject of a claim of the specification, the claim has, or would have, a priority date earlier than that of the claim under consideration; and

                        (B)       the specification was published after the priority date of the claim under consideration; and

                        (C)       the information was contained in the specification on its filing date and when it was published;

‘prior art information’ means:

(a)       for the purposes of subsection 7(1) - information that is part of the prior art base in relation to deciding whether an invention is or is not novel; and

(b)       for the purposes of subsection 7(3) - information that is part of the prior art base in relation to deciding whether an invention does or does not involve an inventive step.”

Mr Urriola caused copies of the Atlantis Drainage Cell to be manufactured between 9 April 1986 and 27 March 1987. Accordingly, if the latter were the relevant priority date, the Invention would not have been a patentable invention as at that date for lack of novelty.

After referring to authorities, the learned trial Judge concluded that it was clear from the nature of the system described in the provisional specification that the planar surfaces required some minimum area of perforations for effective drainage and that the structure required some minimum load bearing capacity in order to be ableto bear soil and other material of considerable depth and weight. His Honour decided that the inclusion in claim 1 of a particular minimum area of perforations and a particular minimum load bearing capacity did not preclude the claim from being regarded as “fairly based” on the provisional specification. It followed, for his Honour, that all twelve claims had a priority date of 9 April 1986 and that the Invention was not prevented from qualifying as a patentable invention by reason of Mr Urriola’s acts done after that date.

Mr Schindler’s second submission on lack of novelty was based on uncontradicted evidence that there existed in the public domain prior to 9 April 1986 a manufactured article embodying a structure practically identical with that depicted in figures 6-10 accompanying the provisional specification and with that described and illustrated in the specification. The article was a plastic “paddle bat” used for playing games. The blade of the bat had a structure substantially similar to that of the Atlantis Drainage Cell, although its edges were, of course, “sealed off” or “walled off”, whereas there is no suggestion of this feature in either the provisional specification or the complete specification. In early 1986, Mr Urriola found a broken piece of such a bat in rubbish at 10 Myall Avenue, Vaucluse. He adapted its design to the drainage cell, on the design of which he had been working. Until he found the broken piece of bat, his projected design for the drainage cell had had the perforations in the two parallel planar surfaces opposite each other; likewise the “filled-in” or “solid” parts of those surfaces. Manufacture would have required that the two surfaces be joined by welding or otherwise. The finding of the broken piece of bat gave Mr Urriola the idea of having rectangular openings positioned so that each corresponded with a solid rectangular area on the opposing surface. The advantage of this was that the structure could be manufactured by a single injection moulding process without the necessity of joining two distinct surfaces. This method of manufacture was cheaper and would result in a stronger product. Mr Urriola added a description of this alternative “unitary” mode of construction and figures 6-11 to his existing draft of the proposed provisional specification, and lodged the provisional specification incorporating these additions on 9 April 1986, as noted earlier.

Mr Schindler submitted (and submits) that according to the true construction of claim 1, it was for a structure that was substantially identical to that of the broken piece of bat. His Honour concluded, however, that his construction of the claim as incorporating the purpose of drainage removed the foundation of Mr Schindler’s submission that the structure of the bat deprived the claim of novelty. The relevant part of his Honour’s judgment was as follows (see (1995) 33 IPR 91 at 103-4):

“The pre-existence of the bat is not inconsistent with novelty and an inventive step subsisting in the finding of a new adaptation of the structure so as to serve a new purpose, namely drainage, which was in no degree analogous to its use in a bat; cf National Research Corp v Commissioner of Patents (1959) 102 CLR 252 at 262-3. To apply the ‘reverse infringement’ test (see eg Meyers Taylor Pty Ltd v Vicarr Industries Ltd (1977) 137 CLR 228 at 235; 13 ALR 605), it could not be said that the use of the structure in question in a bat would, if the patent were valid and limited to the purpose of drainage, constitute an infringement. Nor could it be said that the use of the structure in question in a bat would ‘enable the notional skilled addressee at once to perceive and understand and be able practically to apply’ the structure for drainage ‘without the necessity of making further experiments’; cf Nicaro Holdings Pty Ltd v Martin Engineering Co (1990) 16 IPR 545; 91 ALR 513 at 517 per Lockhart J.”

In the result, his Honour held that this second of Mr Schindler’s arguments addressed to Question 3 also failed and he answered Question 3 “no”.

The fifth question for decision by the trial Judge was as follows:

“Question 5:

Whether the Patent was obtained by fraud, false suggestion or misrepresentation, within the meaning of s.138 of the 1990 Act by reason of the following matters particularised in the cross-claim:

B (i)     At a date before 9 April 1986 the second plaintiff/cross-defendant obtained the alleged invention indirectly from one or more persons or parties at 10 Myall Avenue, Vaucluse.

(ii)       At a date before 9 April 1986 one or more parties other than the second plaintiff/cross-defendant invented or contributed to the invention the subject of the Patent.

(iii)      The second plaintiff/cross-defendant did not invent the invention the subject of the Patent but commissioned drawings and drafting of specifications for the Patent describing a piece of a plastic object found in the grounds of 10 Myall Avenue, Vaucluse shortly prior to 9 April 1986.

(iv)      On or before 26 April 1986 the second plaintiff/cross-defendant instructed Ted Burton of Burton Plastics Pty Limited Brookvale to commission a metal mould for injection moulding purposes to enable production to take place of finished plastic product in accordance with the sample.

G(ii)    application for Patent dated 7 April 1986 of Humberto Urriola which states inter alia ‘The actual inventor(s) of the said invention is/are ... Humberto Urriola’

(iii)      Declaration in support of application for Patent entitled ‘Drainage Cell’ and dated 24 October 1989 which states: ‘3 I am the actual inventor of the invention’ signed by Humberto Urriola. The representation was made with specific knowledge of the existence of the prior art. Such misrepresentation was made fraudulently, and constituted a false suggestion and a misrepresentation to the Australian Patents Office.”

Section 138 of the 1990 Act was, so far as relevant, set out earlier. His Honour noted that the suggestion that the Patent was obtained by false suggestion or misrepresentation depended upon its being established that Mr Urriola was not the “inventor”. Mr Schindler relied on the same considerations as had been dealt with in respect of Questions 1 and 3. Consistently with his Honour’s reasons for answering those questions “no”, he answered Question 5 “no” also.

The last question with which his Honour had to deal, Question 7, was the ultimate one whether the Patent should be revoked (and whether certain interlocutory orders founded on its validity should be discharged or varied). It followed from his negative answers to Questions 1, 3 and 5, that he answered Question 7 “no” also.

Reasons dated 27 March 1997

The alleged infringement sought to be restrained was the manufacture, use, importation, offer to supply, and sale, in Australia, of a product comprising a drainage system known as “Nordrain”. However, the primary issue in the proceeding was that raised by Mr Schindler’s cross-claim, namely, the validity of the Patent. The principal ground on which Mr Schindler relied, in the light of the rejection by his Honour of his submissions in respect of the questions ordered to be separately determined, was that the Invention, when compared with the prior art base as it existed as at the priority date of the claims (already decided by his Honour to be 9 April 1986) was not novel, and was therefore not a patentable invention: see ss 18(1) (b) (i) and 138(3) (b) of the 1990 Act, set out earlier.

Before the trial Judge, Mr Schindler relied upon three pieces of “prior art information” which, he submitted, fell within s 7(1) (a) set out earlier. They were described by his Honour as follows:

“(1)     information in the Rosemeier patent being German Patent Specification DE2521373 (a copy, together with a translation, of which are annexed to the affidavit of Annette R Corkhill of 7 June 1996) which became open to public inspection in the Australian Patent Office on 10 March 1977 [“the Rosemeier patent”];

(2)       information in the Smarook patent being United States Patent Specification No 4148954 (exhibit EX1) which became open to inspection in the Australian Patent Office on 21 May 1979 [“the Smarook patent”]; and

(3)       information made publicly available by the marketing in Australia of the product known as “Norcore” manufactured according to the Smarook patent.”

 

As required by s 7(1), his Honour considered the three separately. He noted that the allegation of lack of novelty in the light of the Rosemeier patent was, ultimately, pressed only in respect of claims 1, 3, 4, 5, 6, 7 and 9. He accepted Mr Schindler’s submission that the Rosemeier patent deprived those claims of novelty.

He then went on to deal with Mr Schindler’s submission that none of claims 2 to 12 added an integer involving an inventive step. In this respect, Mr Schindler relied on ss 7(2), and 18(1) (b) (ii) and 138(3) of the 1990 Act, set out earlier. In view of his conclusion on the issue of novelty against the validity of claims 1, 3, 4, 5, 6, 7 and 9, his Honour did not find it necessary to deal with this ground of attack, except in respect of claims 2, 10, 11 and 12. In relation to claims 2, 10 and 12, he was not persuaded that there was not an inventive step. However, in relation to claim 11, he thought that the addition of “a regular pattern of tongues and grooves along the peripheral edges of the structure to allow numerous modules to be assembled together in an interlocking fashion” (at 7) was “a workshop improvement which does not involve an inventive step” (at 8).

His Honour thought that there was nothing in the Smarook patent which disclosed the application of the Invention the subject of that patent to sub-surface drainage of the kind which he had held to be incorporated in the claims of the Patent. Accordingly, he concluded that none of the claims were deprived of novelty by the Smarook patent.

Lastly, his Honour referred to evidence of the promotion in Australia between 1982 and 1986 of the product “Norcore” manufactured in accordance with the Smarook patent, including the distribution of samples to plastics producers and furniture manufacturers. Noting that there was no suggestion that “Norcore” was promoted or used in Australia for any purpose associated with drainage, his Honour considered that the marketing of it in Australia did not affect the question of the novelty of the Patent claims to any greater extent than the Smarook patent itself did.

His Honour’s reasoning left claims 2, 8, 10 and 12 of the Patent as valid claims. However, in his view, the alleged infringing product, “Nordrain” (also known as “Nortec”), did not infringe those claims. We need not discuss his reasons for reaching this conclusion, because Atlantis-Urriola do not challenge it on the appeal.

His Honour ordered that the Patent be revoked in so far as it related to claims 1, 3, 4, 5, 6, 7, 9 and 11, that the cross-claim be otherwise dismissed, and that Atlantis-Urriola’s summons be dismissed.

REASONING ON THE APPEAL

Construction of the Patent claims

In our opinion, the Patent claims should be construed in the manner which is now common ground between the parties, that is to say, as “apparatus” or “product” claims, not confined by reference to the purpose of drainage found in the body of the specification. The learned trial Judge, no doubt because of the position taken by Atlantis-Urriola before him, “read down” the claims by reference to that purpose. But in our view, there is no ambiguity or lack of clarity in the claims to make resort to the body of the specification permissible; cf Electric and Musical Industries Ltd v Lissen Ltd (1939) 56 RPC 23 (HL) at 39, 41-42; Ingersoll Sergeant Drill Co v Consolidated Pneumatic Tool Co Ltd (1908) 25 RPC 61 (HL) at 82-3; Poseidon Industri AB v Cerosa Ltd [1982] FSR 209 (CA) at 212-3; Ransburg Co v Aerostyle Ltd [1968] RPC 287 (HL) at 297 (“ ... the forbidden field must be found in the language of the claim and not elsewhere”); Welch Perrin & Co Pty Ltd v Worrel (1961) 106 CLR 588 at 610; Interlego AG v Toltoys Pty Ltd  (1973) 130 CLR 461 at 479; Sunbeam Corporation v Morphy-Richards (Aust) Pty Ltd (1961) 180 CLR 98 at 104-5; Decor Corporation Pty Ltd v Dart Industries (1988) 13 IPR 385 (FCA/FC) at 391, 397-400.

It will be recalled that the concluding integer of claim 1 is as follows:

“the perforate nature of both surfaces and the disposition of spacer members being such that gases or liquids may freely pass through the composite structure around the spacer means in any direction.”

 

It was by reference to these words that his Honour resorted to the body of the specification. The integer makes it clear that two features must combine to produce a result. The two features are “the perforate nature of both surfaces” and “the disposition of spacer members”. The result is “that gases or liquids may freely pass through the composite structure around the spacer means [sic - members] in any direction.” This “limitation by reference to result” makes it clear, for example, that it would lie outside the claimed monopoly to have the spacer members of such thickness, at such angles and in such proximity to one another that gases or liquids could not “freely pass through the composite structure around the spacer means in any direction”. Indeed, the “ideal” contemplated by the integer is, perhaps, one of “evenness”: evenness of distribution of spacer members and evenness of distribution of perforations in the two planar surfaces, with resultant evenness of distribution of clear space around and between the spacer members. A limitation by result such as that indicated is, upon analysis, no more than a “description of the physical characteristics of the article”: Mullard Radio Valve Co Ltd v British Belmont Radio Ltd (1938) 56 RPC 1 (CA) at 16 (Sir Wilfrid Greene MR); and cf Interlego AG v Toltoys Pty Ltd (1973) 130 CLR 461 at 480 (Barwick CJ, Mason J); Rescare Ltd v Anaesthetic Supplies Pty Ltd (1992) 111 ALR 205 (FCA/Gummow J) at 213-4.

 

We agree with his Honour that the reason why gases or liquids must be able to pass freely through the composite structure and around the spacer members in any direction is left unclear by claim 1, but we do not agree with him that this is a “lack of clarity [which] may legitimately be resolved by reference to the specification as a whole” ((1995) 33 IPR 91 at 98) for the purpose of identifying the boundaries of the claimed monopoly. Moreover, even if it were permissible to go to the body of the specification, it would be permissible to do so only for the limited purpose of resolving an ambiguity or lack of clarity in the words of the claim. The distinction, in the present context, is between referring to the purpose of drainage so as to ascertain the meaning of “freely pass through the composite structure around the spacer means in any direction”, and introducing, by reference to the purpose of drainage found in the body of the specification, a restriction in the extent of the monopoly claimed for the apparatus. To do the latter would be to convert what is truly an apparatus claim into a method or process claim. There is no method claim in the present case, although the body of the specification foreshadows one.

Construction of claim 1 without reference to the purpose of drainage has considerable significance for the issues argued on the appeal. Atlantis-Urriola accept that their case stands or falls on claim 1.

Sections 40(2) and (3); 138(3) (f) - failure of specification to define invention fully and lack of fair basing of claims in matter described in the specification.

The law as to “fair basing” was extensively and authoritatively discussed by Full Courts of this Court recently in CCOM Pty Ltd v Jiejing Pty Ltd (1994) 51 FCR 260 at 275-82 and Leonardis v Sartas No 1 Pty Ltd (1996) 35 IPR 23 at 37-42. There is a relationship between the statute’s requirements that an inventor fully describe his or her invention in the complete specification (cf s 40(2) (a)) and that the claims define the invention disclosed and are fairly based on the specification (cf ss 40(2) (b), (3)).

In the present case, the specification gives the title of the Invention as “Drainage Cell”. The body of the specification begins with this paragraph:

“The present invention relates to the provision of adequate drainage by artificial means and has particular application in the area of landscape gardening.”

The document continues by referring to shortcomings in “known methods of draining.” The words “methods” and “system” are used.

The paragraph from the body of the specification set out earlier, commencing “According to the present invention there is provided a rigid cell structure comprising ...”, describes, in terms, the apparatus of claim 1. But the paragraph which follows it is:

“The present invention also teaches a method of providing drainage utilising the lastmentioned apparatus.”

In our view, the former paragraph should not be allowed to disguise the fact that the invention disclosed in the body of the specification is truly “a sub-soil drainage method based on a particular apparatus” or “a particular apparatus in its application to sub-soil drainage.” The claims, however, are “pure apparatus claims”. They are not subject to any limitation as to use. They travel beyond, and are not fairly based on, the matter described in the specification.

The primary Judge, correctly in our respectful view, held that if the claims purported to define an invention not limited to use for the purpose of drainage, they would be invalid (see (1995) 33 IPR 91 at 97). Accordingly, but for his construction of the claims as being limited by reference to that purpose, his Honour would have held that they offended s 40 (3) and were invalid.

In our opinion claim 1 and all the other claims (since they are dependent on it) are invalid for failure to define the invention as required by s 40(2) (b) and to be fairly based on the matter described in the body of the specification as required by s 40 (3). This conclusion alone requires that Atlantis-Urriola’s appeal be dismissed and that, at least in part, Mr Schindler’s cross-appeal be allowed. We will, however proceed to address some of the further issues that were debated on the appeal.

Lack of novelty - prior publication of the structure itself

There was evidence before the trial Judge that Mr Urriola, a landscape architect, first conceived of an idea for a better drainage system in about 1983 and that he worked on it between 1983 and 1986. By April 1986, work was under way on a provisional specification. In that month, in the presence of Mr Fona Fong, a landscape designer who worked with him, Mr Urriola found a broken piece of a plastic paddle bat in rubbish on a site at 10 Myall Avenue, Vaucluse. He realised immediately that it had been manufactured by injection moulding. As noted earlier, the find gave Mr Urriola the idea that it might be possible to manufacture the drainage system on which he had been working by injection moulding, rather than, as he had previously contemplated, by joining, whether by means of welding, riveting or otherwise, two separate planar surfaces, manufacture by injection moulding being cheaper and productive of a stronger article. Accordingly, Mr Urriola added to his existing draft provisional specification, the words:

“or alternatively the cell may be constructed in a unitary fashion as depicted in figures 6-10 hereof.”

Figures 6-10 illustrated the “out of register” characteristic of an injection moulded product according to which the perforations of one planar surface would be opposite the filled in parts of the other. There was evidence before the trial Judge that Mr Fong had drawn the earlier figures 1-5 to which the original draft had referred, and that, following the discovery, he drew figures 6-9 at Mr Urriola’s request to adopt the injection moulded design revealed by the broken off piece of plastic paddle bat.

The provisional specification was dated 7 April 1986. The issue whether the priority date of the Patent is that date or the date of the complete specification, namely, 27 March 1987, has been referred to earlier. But even if it be, as Atlantis-Urriola contend, the earlier date, the evidence of the finding shows that the apparatus described in claim 1 was part of public knowledge in Australia by then and was not invented by Mr Urriola at all.

Before the trial Judge, Dr Hugh Lithgow Stark, Senior Lecturer in Mechanical Engineering at the University of New South Wales, gave uncontroverted evidence of measurements and tests which he had performed in relation to what he described as specimens of a “Checkerbat”. There was no dispute before his Honour that the broken piece of paddle bat found by Mr Urriola was, for present purposes, of the same structure as the Checkerbat. Dr Stark found that the perforations on each planar surface of the Checkerbat represented 53 per cent of the surface area and that the intervening “filled-in” areas had a load bearing capacity of more than 20 kilograms per square metre. Dr Stark also gave evidence that the “out of register” design of both the Atlantis Drainage Cell and the Checkerbat resulted from the injection moulding process employed in their manufacture.

In our opinion, the plastic object of which the broken piece of plastic structure found by Mr Urriola formed part, anticipated the structure described in claim 1 and deprived it and, therefore, the other claims of novelty. On this alternative basis, the appeal should be dismissed and, at least in part, the cross-appeal allowed.

Priority date

As noted earlier, by reason of Patents Regulation 23.18 and s 45 of the 1952 Act, the priority date of all the claims is the date of lodgement of the specification (27 March 1987) except in the case of a claim which is “fairly based on matter disclosed in the provisional specification”, in which case the priority date of that claim is the date of lodgement of the provisional specification (9 April 1986).

The law as to fair basing on a provisional specification is conveniently set out in CCOM Pty Ltd v Jiejing Pty Ltd (1994) 51 FCR 260 (FC) at 275-82, and Leonardis v Sartas No 1 Pty Ltd (1996) 35 IPR 23 (FC) at 37-42; see also Re Mond Nickel & Co Ltd’s Application [1956] RPC 189 at 194; F Hoffman-La Roche & Co AG v Commissioner of Patents (1971) 123 CLR 529 (Gibbs J) at 538-9, 542; Opsvik v Bad Back Centre Pty Ltd (1987) 8 IPR 641 (NSWSC/Bryson J) at 657-8; Coopers Animal Health Australia Pty Ltd v Western Stock Distributors Pty Ltd (1987) 15 FCR 382 (FC) at 389 (Fox J), 399 (Beaumont J); (1986) 6 IPR 545 at 558 et seq (FCA/Wilcox J).

 

The matters to be considered in the present context are, again, the issue of the purpose of sub-soil drainage and, in addition, claim 1’s requirements that the perforations comprise at least 40 per cent of each planar surface (“40 per cent perforations”) and that the areas between the perforations be capable of bearing a load of at least 20 kilograms per square metre (“20 kg/m² load”).

Generally, for the reasons which we gave for concluding that claim 1 was not fairly based on the matter described in the specification itself for the purpose of s 40(3) of the 1990 Act, the claim was also not “fairly based on matter disclosed in the provisional specification” for the purpose of s 45(2) of the 1952 Act, that is to say, for the purpose of identifying the priority date. In the provisional specification, the title of the Invention is given as “Drainage System”. The opening paragraph of the provisional specification is:

“The present invention relates to the provision of adequate drainage by artificial means and has particular application in the area of landscape gardening.”

The next three paragraphs describe already known methods of drainage and their shortcomings. Then there follows this:

“According to the present invention there is provided a planar perforate member including spacer means adapted to co-operate with spacer means on a second planar perforate member and maintain both members in a spaced substantially parallel relationship suitable for use as a drainage cell.” (emphasis supplied)

Two paragraphs further on we find:

“The present invention also teaches a method of providing drainage utilising the last mentioned apparatus. In addition to roof-top garden applications it is envisaged that the invention may be of use to provide drainage under roadways, under embankments and elsewhere where surface erosion would otherwise be a problem.” (emphasis supplied)

The provisional specification concludes:

“It will thus be appreciated that this invention at least in the form of the embodiment described provides an exceptionally novel and unique drainage cell which is suitable in a wide variety of applications. Clearly however the particular example disclosed is only one form of this invention and a wide variety of modifications may be made without departing from the scope of this invention. For example the shape, number and orientation of the apertures and spacer means may be varied according to the application or design preference or alternatively the cell may be construed in a unitary fashion as depicted in figures 6 - 10 hereof. Figure 11 depicts one possible application of the drainage cell in accordance with figures 6 - 10 hereof.” (emphasis supplied)

Like the body of the specification itself, the provisional specification does not disclose the invention of an apparatus independent of the purpose of sub-soil drainage, and, for this reason, claim 1 and the other claims are not fairly based on it. Of course, the present point did not arise before the trial Judge because he construed the claims as limited by reference to the purpose of drainage.

The conclusion just expressed makes it unnecessary to address the 40 per cent perforations integer or the 20 kg/m² load integer. But we will do so, dealing with them together. There is no mention of either of them in the provisional specification. The learned trial Judge thought, however, that some minimum area of perforations and some minimum load bearing capacity were necessarily implied in the apparatus forming part of the system of sub-soil drainage described in the provisional specification. We agree. His Honour went on:

“In my opinion the inclusion in claim 1 (incorporated in claims 2-11) of the complete specification of minimum areas of perforations and minimum load bearing capacity cannot be said to preclude those claims from being regarded as fairly based on the provisional specification. Similar considerations apply to claim 12.” ((1996) 33 IPR 91 at 103)

We respectfully disagree with this passage. It is well accepted that some development, and in particular, “greater definition” is permitted in a complete specification beyond that to be found in the provisional: cf Coopers Animal Health Australia Ltd v Western Stock Distributors Pty Ltd (1987) 15 FCR 382 (FC) at 389 (per Fox J, with whom Spender J agreed); CCOM Pty Ltd v Jiejing Pty Ltd (1994) 51 FCR 260 (FC) at 278. In the present case, greater definition fairly based on the provisional specification would remain limited to greater definition of the method of sub-soil drainage described in it. Moreover, Atlantis-Urriola, from whom such evidence was to be expected, did not adduce evidence suggesting that either the 40 per cent perforations or the 20 kg/m² load requirement was arrived at as a result of a process of experimentation and refinement subsequent to the filing of the provisional specification or any other evidence as to the derivation of the two integers. So far as the evidence reveals, they represent an artificial “carving out” of part of the area of monopoly of the Rosemeier patent.

The “normal” priority date prevails, that is to say, the date of lodgement of the complete specification, 27 March 1987.

Lack of novelty - publication by Mr Urriola down to 27 March 1987.

We gave an account above (under the heading “Lack of novelty - prior publication of the structure itself”) of the finding by Mr Urriola in the presence of Mr Fong of the broken piece of plastic paddle bat, of Mr Urriola’s amendment of his draft of the provisional specification with the drawing assistance of Mr Fong, and of the lodgement on 9 April 1986 of the provisional specification amended by the addition of words and figures based on the idea of injection moulding derived from that finding. According to uncontroverted evidence before the trial Judge, in “about April 1986”, Mr Urriola took the piece of plastic paddle bat to Mr Ted Burton of Burton Plastics Pty Ltd (“Burton Plastics”). He asked Mr Burton whether he could produce the same kind of thing in a larger size. They discussed cost. Mr Burton contacted Messrs Hoffman and Naber of Centre Tooling Pty Ltd (“Centre Tooling”), a company which manufactured metal dies.  Later in April, Mr Burton took to Messrs Hoffman and Naber the broken piece of plastic bat which Mr Urriola had left with him, and asked them whether they could manufacture a metal die for use by his company in a plastic injection moulding machine. Centre Tooling quoted Mr Burton a price for making a die, and Burton Plastics, in turn, issued a quotation dated 22 April to Mr Urriola’s company, Delta Landscaping Pty Ltd, for Mr Urriola’s attention.

Some weeks later, Mr Burton met with Mr Urriola who introduced him to Mr Fong. Messrs Urriola and Fong handed to Mr Burton a schematic drawing which Mr Fong had drawn, under instructions from Mr Urriola, based on the broken piece of plastic paddle bat. Mr Burton agreed to re-quote a price based on the drawing, which he took away with him. On 23 May, he issued a fresh quotation which Mr Urriola accepted on 29 May. On 3 June, Mr Burton attended again upon Centre Tooling, delivered to Messrs Naber and Hoffman the same broken piece of plastic bat and the drawing, and issued a purchase order to Centre Tooling giving specifications for the die required. As well, he paid Centre Tooling a deposit of $6,000. The purchase order referred to a price of $21,500 and to a balance outstanding of $15,500. After about 10-12 weeks, the die was completed and delivered to Mr Burton together with the sample and drawing which Mr Burton returned to Mr Urriola shortly afterwards. Burton Plastics paid the balance of $15,500 to Centre Tooling.

Burton Plastics then commenced manufacturing injection moulded product from the die for Mr Urriola’s companies. The product was already being sold and used for drainage purposes by 27 March 1987.

Whether these events anticipated the Invention depends, in the first instance, on the priority date of the Patent claims. As noted earlier, in our view that date is 27 March 1987. The Invention was therefore anticipated, not only, as noted earlier, by the broken piece of plastic structure found by Mr Urriola in the presence of Mr Fong at Vaucluse a little before 9 April 1986, but also by the disclosure of the structure to Messrs Burton, Naber and Hoffman subsequently in 1986; by the manufacture by Burton Plastics of the Atlantis Drainage Cell; and by the sale and use of the Atlantis Drainage Cell for drainage purposes, all prior to 27 March 1987. The commercial manufacture and supply of the Atlantis Drainage Cell anticipated the Invention, whether it is understood as we suggest or in accordance with the trial Judge’s construction of the claims.

On this further alternative ground, the appeal should be dismissed and, at least in part, the cross-appeal allowed.

Lack of novelty - the Rosemeier and Smarook patents

 

Having regard to the conclusions already expressed, it is not necessary for us to consider the trial Judge’s finding in favour of Mr Schindler on lack of novelty based on the Rosemeier patent or his finding against Mr Schindler in respect of the Smarook patent.

 

 

False suggestion and misrepresentation

Subsection 15(1) of the 1990 Act provides, so far as relevant:

“15.(1)            Subject to this Act, a patent for an invention may only be granted to a person who:

                        (a)        is the inventor; ...”

The word “inventor” is not defined. The word bears its ordinary English meaning. Mr Urriola may have “invented”, in the sense of having seen the potential application of a structure like the piece of plastic paddle bat to drainage purposes. But the inventor of the apparatus itself was not Mr Urriola. By representing, in his application for the Patent, that he was the inventor of the structure, Mr Urriola misrepresented to the Commissioner of Patents his status as a person entitled to apply for a patent in respect of the apparatus. It should be inferred that if he had disclosed the true position to the Commissioner, the Patent would not have issued: see Martin v Scribal Pty Ltd (1954) 92 CLR 17 at 67-8 (Dixon CJ), 93 (Fullagar J).

On this further alternative ground, the appeal should be dismissed and, at least in part, the cross-appeal allowed.

CONCLUSION

 

For the foregoing reasons, we would make the following orders:

1.         The appeal be dismissed.

2.         The cross-appeal be allowed.

3.         Order 1 made on 22 December 1995 in proceeding No 1327 of 1994 in the Equity Division of the Supreme Court of New South Wales (“the Supreme Court proceeding”) be set aside and in lieu thereof it be ordered as follows:

            “1.        The Court records, pursuant to Pt 31 r 5 of the Supreme Court Rules that the separate questions ordered on 30 June 1995 to be determined separately, are decided as follows:

                        Question 1        yes;

                        Question 2        unnecessary to decide;

                        Question 3        yes;

                        Question 4        unnecessary to decide;

                        Question 5        yes;

                        Question 6        unnecessary to decide; and

                        Question 7        yes.”

4.         Orders 2 and 3 made on 22 December 1995 in the Supreme Court proceeding be set aside.

 

5.         Orders 1, 4 and 7 made on 27 March 1997 in the Supreme Court proceeding be set aside.

6.         Australian Patent No 593085 be revoked.

7.         The matter be remitted to the Supreme Court of New South Wales for the purpose of

            (a)        assessing whether any and, if so, what damages should be awarded to the respondents;

            (b)        dealing with any notices of motion that are outstanding or require reconsideration in the light of the decision of this Court, in which respect, in particular, order 9 below applies.

8.         The appellants pay the costs of the respondents of the proceedings at first instance and of the appeal and cross-appeal.

9.         Liberty to apply be reserved.

 

I certify that this and the preceding  twenty-nine (29) pages are a true copy of the Reasons for Judgment herein of the Honourable Justices Wilcox and  Lindgren

Associate:

Dated:              24 October 1997

Counsel for the Appellants and Cross-Respondents (Atlantis Corporation Pty Ltd and Humberto Urriola):	Mr D K Catterns QC with Ms K J Howard
Solicitor for the Appellants:	Banki Palombi Haddock & Fiora
Counsel for the Respondents and Cross-Appellant:	Mr D M Yates with Ms A Silink
Solicitor for the Respondents:	Victor A Bizannes
Date of Hearing:	11, 12 September 1997
Date of Judgment:	24 October 1997