FEDERAL COURT OF AUSTRALIA
PATENT - Whether patentee was assignee of original inventor - Combination patent - Infringement and validity - Whether the claims in the complete specification were fairly based on the provisional specification- False suggestion - Novelty - Obviousness - Inventive Step
Patents Act 1952 (Cth)ss 34,(1)(b), 34(1)(fa), 45(1), 45(2), 64, 100(1)
Patents Act 1990 (Cth) ss 7, 18(1)(b), 40(2),40(3), 45(2), 138(3), 233(4)
Property Law Act 1974 (Qld) ss 55, 199
Re Compaction Systems Pty Ltd and the Companies Act [1976] 2 NSWLR 477, applied
Minnesota Mining and Manufacturing Company and Another v Beiersdorf (Australia) Limited (1980) 144 CLR 253, applied.
Martin v Commissioner of Patents (1953) 89 CLR 381, distinguished
Carters Application (1932) 49 RPC 403, distinguished
George C Warner Laboratories Pty Limited v Chemspray Pty Limited (1967) 41 ALJR 75, followed
Nicaro Holdings Pty Ltd v Martin Engineering Co. (1990) 91 ALR 513, applied
Wellcome Foundation Ltd v V R Laboratories (Aust) Pty Ltd (1981) 148 CLR 262, applied
Elconnex Pty Ltd v Gerard Industries Pty Ltd (1992) 25 IPR 173, considered
Graham Hart (1971) Proprietary Limited v S.W. & Hart & Company Proprietary Limited (1977) 141 CLR 305, applied
Prestige Group (Australia) Pty Ltd v Dart Industries Inc (1990) 26 FCR 197, considered
NV Philips Gloeilampenfabrieken v Mirabella International Pty Limited (1993) 44 FCR 239, followed
Acme Bedstead Co. Ltd v Newlands Bros Ltd (1937) 58 CLR 689, applied
SPEEDY GANTRY HIRE PTY LIMITED & Anor v PRESTON ERECTION PTY LIMITED
QG 182 of 1995
EMMETT J
SYDNEY
13 MARCH 1998
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IN THE FEDERAL COURT OF AUSTRALIA |
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QG 182 of 1995 |
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JUDGE: |
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DATE: |
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PLACE: |
REASONS FOR JUDGMENT
HIS HONOUR: The applicant, Speedy Gantry Hire Pty Limited (“Speedy Gantry”), is the registered proprietor of Australian Patent 578,176 entitled “Improvements to Scaffolding” (“the Patent”). In these proceedings, Speedy Gantry alleges infringement of the Patent by the first respondent, Preston Erection Pty Limited (“Preston Erection”). Speedy Gantry also alleges that the infringement was procured and authorised by and occurred with the knowing involvement of the second respondent, John Clement Preston (“Mr Preston”). Speedy Gantry claims an injunction to restrain further infringement, damages for infringement, an account of profits and an order for delivery up or destruction of goods which infringe the Patent.
Preston Erection denies that there has been any infringement of the Patent, assuming it to be valid. However, Preston Erection has also cross-claimed seeking revocation of the Patent and damages said to have been suffered by reason of Speedy Gantry’s threats of infringement proceedings.
THE PATENT
On 20 February 1986, Speedy Gantry lodged a provisional specification under the Patents Act 1952 (Cth) (“the 1952 Act”). The final version of the complete specification relating to that application is dated 19 August 1988. The publication date of the accepted application was 13 October 1988. A copy of the complete specification as accepted is set out in Appendix 1 to these reasons. While the application for and grant of the Patent were regulated by the 1952 Act, the Patents Act 1990 (Cth) (“the 1990 Act”) applies, by the operation of section 233 of that Act, in relation to the Patent as if it had been granted under the 1990 Act.
The complete specification in respect of the Patent contains 16 claims as follows:
1. A gantry assembly for use as a temporary pedestrian thoroughfare adjacent a site such as a construction site, demolition site or the like, said gantry assembly comprising a plurality of independently movable gantry modules, each said gantry module comprising, a plurality of spaced legs, a roof assembly supported by the legs, said roof assembly having a roof panel extending between the upper ends of the legs, a side wall between adjacent legs and extending from an edge of the roof assembly to adjacent the lower ends of said adjacent legs, a pedestrian passageway extending through each said module adjacent said side wall and beneath said roof panel so that the wall and roof panel provide a protective barrier between the pedestrian passageway and the site, said roof assembly and said side wall being aligned with a roof assembly and side wall of an adjacent module to form a continuous roof assembly and side wall for said gantry.
2. A gantry assembly as defined in claim 1 wherein each said roof assembly is formed as an integral construction including the roof panel and respective upper leg portions, said upper leg portions being rigidly secured to said roof panel at one end and rigidly secured to a lower leg portion at the other end thereof to thereby form each said leg.
3. A gantry assembly as defined in claim 1 or claim 2 wherein each said leg includes a foot assembly, and means mount [sic] each said foot assembly pivotably to a respective leg to account for surface undulations adjacent said site.
4. A gantry assembly as defined in claim 2 wherein each said module is generally rectangular in plan and includes a hand rail extending along a side opposite said side wall and means are provided to change the length of the legs.
5. A gantry assembly as defined in claim 4 wherein said module includes a detachable hand rail engaged in said roof assembly and extending above and along a side of the roof assembly.
6. A gantry assembly as defined in any one of the preceding claims wherein each said gantry module is secured to an adjacent said gantry module.
7. A gantry module for use in the construction of a temporary gantry assembly adjacent a site such as a construction site, demolition site or the like from a plurality of said modules to provide a thoroughfare for the protection and unimpeded passage of pedestrians, said module comprising a plurality of spaced legs, a roof assembly secured to and supported by the legs, said roof assembly having a roof panel extending between the upper ends of the legs, a side wall between adjacent legs and extending from a location adjacent their respective lower ends up to the roof assembly, a pedestrian passageway extending through the module adjacent the side wall and beneath the roof panel, said module in use being alignable with adjacent roof assemblies and side walls of adjacent modules to provide a protective barrier between the pedestrian passageway and the site.
8. A gantry module as defined in claim 7 wherein the roof assembly is formed as an integral construction including the roof panel and respective upper leg portions, each said upper leg portion being rigidly secured to said roof panel at one end and being rigidly securable to a respective lower leg portion at the other end thereof to thereby form each said leg.
9. A gantry module as defined in claim 7 wherein means are provided for changing the length of the legs.
10. A gantry module as defined in claim 7 further including mounting means on said module for detachably receiving a hand rail.
11. A gantry module as defined in any one of claims 7 to 9 wherein each said leg includes a foot assembly and means mount [sic] each said foot assembly pivotably to the lower end of a respective leg to account for surface undulations adjacent said site.
12. A gantry module as defined in any one of claims 7-10 wherein said legs include hinge means, said legs being foldable about their respective hinge means.
13. A gantry module substantially as described with reference to the drawings.
14. A method of constructing a temporary gantry assembly for use as a pedestrian thoroughfare about a site including the steps of:
a) providing a plurality of independently movable gantry modules each gantry module having a plurality of spaced legs, a roof assembly secured to and supported by the legs, a side wall between adjacent legs and extending from a location adjacent their respective lower ends up to the roof assembly and;
b) arranging the gantry modules in mutual alignment about the site so the sidewall of each module is located adjacent the site and so the roof assembly and sidewall provide a protective barrier between the site and the thoroughfare.
15. The method of claim 13 [sic] including the further step of adjusting the length of at least one leg to assist aligning of the modules.
16. The method of claim 15 including the further step of securing the legs of adjacent modules together.
The reference to claim 13 in claim 15 should, it appears, be a reference to claim 14. Thus, claims 2 to 6 are cumulative on claim 1, claims 8 to 12 are cumulative on claim 7 and claims 15 and 16 are cumulative on claim 14. Claims 7 to 12 are concerned with gantry modules of the kind dealt with in claims 1 to 6. Claims 1 to 6 are concerned with the assembly together of such modules. Claims 14 to 16 are methods of construction which really do no more than describe the way in which the gantry modules are assembled as contemplated in claims 1 to 6. Claim 13 is an “omnibus” claim in respect of any matter which might be supported by the attached drawings.
The claims are not felicitously expressed and exhibit a degree of confused thinking. It may be, for example, that claims 7 to 12 should not be separate claims. Claims 7 and 12 simply describe the modules which, by themselves, are of no significance. The essence of the invention is the assembling together of substantially identical modules in order to form a pedestrian walkway under a hoarding or gantry which affords protection, both on the side and above, from the dangers of operations on a construction site. The invention is essentially a means for speedy erection of such a hoarding or gantry.
Claim 12 introduces the concept of folding legs. No allegation of infringement in respect of that claim has been made. It would follow that if, for example, claim 12 were the only claim which was held to be valid, there would have been no infringement notwithstanding that claims 1 to 11, if valid, would have been infringed. In addition, no allegation of infringement has been made in respect of claims 14 to 16.
THE ISSUES ON THE CROSS CLAIM
The effect of section 138(1) of the 1990 Act is that any person may apply to the Federal Court for an order revoking a Patent. Under section 138(3), the Court may revoke the Patent on one or more of the grounds there specified, but on no other ground. However, under section 233(4) of the 1990 Act, a patent granted under the 1952 Act is not invalid on any ground that would not have been available against the Patent under the 1952 Act.
Preston Erection contended that the Patent should be revoked on various grounds. The grounds specified in section 138(3) of the 1990 Act which were relied on by Preston Erection are as follows:
(a) that the patentee is not entitled to the patent;
(b) that the invention is not a patentable invention;...
(d) that the patent was obtained by fraud, false suggestion or misrepresentation;...
(f) that the specification does not comply with subsection 40(2) or (3).
Under section 18(1)(b) of the 1990 Act, an invention is not a patentable invention unless it is an invention that, when compared with the prior art base as it existed before the relevant priority date:
(i) is novel; and
(ii) involves an inventive step.
Under section 100(1) of the 1952 Act, a patent could be revoked on one or more of the grounds there specified but on no other ground. Those grounds included the following which correspond to the grounds contained in section 138(3) of the 1990 Act which are relied on by Preston Erection:
(a) that the applicant was not a person entitled to apply for the patent...;
(e) that the invention... was obvious and did not involve an inventive step having regard to what was known or used in Australia on or before the [relevant] priority date....;
(g) that the invention... was not novel in Australia on the [relevant] priority date...;
(k) that the patent was obtained on a false suggestion or representation;
(c) that the complete specification...does not comply with the requirements of section 40.
Thus, the equivalent in the 1990 Act of sections 100(1)(e) and 100(1)(g) of the 1952 Act is section 138(3)(b) as explained by section 18.
The allegations made by Preston Erection which are said to constitute the grounds relied on may be summarised as follows:
1. Speedy Gantry is not entitled to the Patent because the alleged inventor was a Mr Deniel Mathairs Nielsen (“Mr Nielsen”) and no assignment from Mr Nielsen to Speedy Gantry was executed or brought into existence.
2. In connection with the application for the Patent, Speedy Gantry asserted that it was the assignee of Mr Nielsen and that assertion was false.
3. Certain claims of the Patent assert, as essential integers, integers which were not disclosed as essential integers in the provisional specification filed by Speedy Gantry. Alternatively, those essential integers are not integers fairly based upon the material and matters disclosed in that provisional specification. Accordingly, the correct priority date of all claims is the date of filing the complete specification, rather than 20 February 1986, the date of filing the provisional specification. It is common ground that if the correct priority date is the date of filing the complete specification, there was prior use and publication of the subject matter of the Patent such as would render the Patent invalid.
4. The complete specification filed in respect of the Patent does not comply with sections 40(2) and 40(3) of the 1990 Act in that the claims contained in it:
(a) do not define the invention;
(b) are not clear and succinct;
(c) are not fairly based on the matter described in the specification.
5. The invention which is the subject of the Patent is not a patentable invention because:
5.1 when compared with the prior art base as it existed before 20 February 1986, it was not novel;
5.2 it did not involve an inventive step, in that the invention would have been obvious to persons skilled in the art of design, manufacture and construction of temporary scaffolding before 20 February 1986.
Logically, the validity of the Patent is the first question to be determined. Accordingly, I shall deal first with the various grounds of alleged invalidity and then subsequently with the question of infringement.
VALIDITY OF THE PATENT
Preston Erection bears the onus of establishing that the Patent is invalid (see Ryan v Lum (1989) 14 IPR 513, 518-520 and George C. Warner Laboratories Pty Ltd v Chemspray Pty Ltd (1967) 41 ALJR 75). I shall deal separately with each ground relied on by Preston Erection to establish that the Patent is invalid.
1. Entitlement to the Patent
The first ground of revocation is that Speedy Gantry was not a person entitled to apply for the Patent. Section 34(1) of the 1952 Act relevantly provided as follows:
34(1) Any of the following persons... may make an application for a patent:
(a) the actual inventor;
(b) the assignee of the actual inventor;
.................................................................................................................
(fa) a person who would, if a patent were granted upon an application made by a person referred to in any of the preceding paragraphs, be entitled to have the patent assigned to him.
It is common ground that Mr Nielsen was the actual inventor in respect of the invention which is the subject matter of the Speedy Gantry specification. Preston Erection contended that, in the absence of an assurance of any kind from Mr Nielsen to Speedy Gantry, reliance could not be placed upon section 34(1)(b). Preston Erection sought to establish that Speedy Gantry was not the assignee of Mr Nielsen because there was no evidence of any juridical act which could constitute an assignment by Mr Nielsen. There was no evidence of any express assurance, either oral or written, of the invention or the right to apply for a patent in respect of the invention.
It might be thought that such a ground of objection is one which ought not be open to a third party. In the Patents Act 1977 of the United Kingdom, there is a ground of revocation similar to that found in sections 100(1)(a) and 138(3)(a). Section 72(1)(b) of that Act provides that, subject to other provisions of the Act, the Court may on the application of any person revoke a patent for an invention on the ground that the patent was granted to a person who was not entitled to be granted that patent. However, section 72(2) provides that an application for revocation on that ground may only be made by a person found to be entitled to be granted the patent and may not be made if the action to determine that question is commenced more than 2 years after the grant of the patent unless it is shown that the person registered as proprietor knew at the time of the grant that he was not entitled to the patent.
There is no equivalent of section 72(2) of the United Kingdom Act in either the 1952 Act or the 1990 Act. It appears, therefore, that, while the ground might be thought to be lacking in merit in the present case, there is no impediment to the ground being raised by a third party such as Preston Erection.
Circumstances analogous to those in this case have been considered in the past. In Martin v Commissioner of Patents (1953) 89 CLR 381 an applicant for a patent inadvertently declared in his application that he was the actual inventor of the invention concerned, whereas in fact he was the assignee. The majority of the High Court held that the amendment of documents was not appropriate to meet the situation which had arisen. On the other hand, the majority was not prepared to determine the question of whether or not the letters patent were invalid by reason of that circumstance. In the case of Carters Application (1932) 49 RPC 403, an application had been made, through a mistake, by a person who described himself as the true and first inventor. In fact, he was not, merely having a financial interest in the invention. It was held that the application was void and that the application form could not be amended by substituting the name of the real inventor and joining him as a co-applicant. In one sense, the situation which arose in those cases is the reverse of that involved in the present case. I do not think they assist with the question which arises in the present case.
Speedy Gantry maintained that it was the assignee of Mr Nielsen. It contended that no particular form was required for the assignment of an invention and the right to apply for a patent in respect of an invention. Section 64 of the 1952 Act provided that where an applicant has agreed in writing to assign the patent when granted, the patent may, upon proof of the agreement to the satisfaction of the Commissioner, be granted to the assignee. That section only applies to an assignment after an application has been lodged. Further, section 152(1) provided that the rights granted to a patentee by a patent are personal property and are capable of assignment and of devolution by operation of law. Section 152(2) provided that an assignment of a patent must be in writing signed by or on behalf of the assignor and assignee. That section applies to an assignment after grant.
On the other hand, section 34 specifies no formalities as being necessary for an applicant to be effectively the assignee of the actual inventor. It follows, so it is said, that, while an assignment in writing is to be preferred to avoid difficulties of proof, an assignment may be effected orally. It has been suggested that an assignment may even be implied from the conduct of the parties (see Terrell on the Law of Patents, 12th Ed, Sweet & Maxwell, London, 1971, p30). Speedy Gantry contended, therefore, that an assignment could be effected by conduct and that the conduct of Mr Nielsen and Speedy Gantry constituted an assignment in the present case. Alternatively, it was contended that by reason of that conduct Speedy Gantry was entitled to have the Patent assigned to it and could rely on section 34(1)(fa). It is necessary, therefore, to examine the conduct relied on by Speedy Gantry.
Mr Nielsen gave evidence that in about 1985 he won a tender to demolish the Redcombe silos in Roma Street, Brisbane. That was a major project which would require gantries on the footpath around the site. Mr Nielsen said that he began thinking about the problem of gantries and how best to provide them. He thought that the problem could probably be solved if he could devise some system with fewer parts than would be required for conventional scaffolding systems. He said that in the course of a journey to Sydney he thought of an idea of how to make up gantries. He thought of using the idea of a table with four legs which could fold up or be removed.
After his return from Sydney, he started to work on the concept and asked Mr David Norman Richards (“Mr Richards”) to help him by preparing a set of proper technical drawings. He and Mr Richards had worked together previously and Mr Richards was then his consulting engineer. Mr Richards said he thought that the idea was possible and he prepared a drawing to give effect to Mr Nielsen’s concept. Mr Richards wrote to the Queensland Division of Occupational Safety to obtain approval for the concept and that approval was subsequently obtained.
Mr Nielsen said that soon after that approval was obtained he had a conversation with Mr Richards, in which he said to Mr Richards:
Dave, instead of charging me fees for the work you have done, how about we set up a company in which we will both be shareholders? The company can own the rights to the invention. You do the engineering word [sic] for the project and I will manage the company and help fund the business.
Mr Nielsen said that Mr Richards said that he accepted that proposal.
Mr Richards also gave evidence. He said that when he prepared the original drawing and made the application for approval to the Division of Occupational Safety he was acting as a consulting engineer for Mr Nielsen. At the time he expected to charge for his services but had a conversation with Mr Nielsen after approval was obtained, in which Mr Nielsen said as follows:
Instead of being paid fees, how about you take a 20% interest in the joint venture... we can incorporate a company in which we are both shareholders and the company can own and develop the invention.
Mr Richards says that he told Mr Nielsen that he accepted that proposal and that, as a result, he did not render an account for his services in connection with the preparation of the drawings.
Speedy Gantry was incorporated on 16 August 1985. Mr Nielsen was one of two directors of Speedy Gantry and one of its two shareholders. The other director and shareholder was Mr Richards. At the first meeting of shareholders held on 19 August 1985, the two shareholders resolved that their appointment as directors be confirmed. The following also appears in the minutes of that meeting:
CLASSES OF WHEREAS in accordance with Article 4 of the Articles
SHARES: of Association of the Company the shares are under the control of the Directors IT IS RESOLVED that the shares issued in accordance with the Memorandum of Association namely:
One (1) share issued to DENIEL MATHAIRS NIELSEN shall be classified as an “A” class share and One (1) share issued to DAVID NORMAN RICHARDS shall be classified as a “B” class share.
IT WAS FURTHER RESOLVED that:
“A” class shares shall be voting shares and the holders thereof shall be entitled to receive notice of general meeting and reports and balance sheets and to vote thereat, and the holders shall be entitled to receive 80% of such dividends as the Directors in their absolute discretion may from time to time declare.
“B” class shares shall be non-voting shares and the holders thereof shall be entitled to receive balance sheets and financial accounts annually, and the holders shall be entitled to receive 20% of such dividends as the Directors in their absolute discretion may from time to time declare.
It is to be noted that no reference is made to the invention or to any proposal to apply for a patent. Further, it is common ground that there does not exist any minute of a meeting of either the directors or shareholders of Speedy Gantry which either records or refers to any assignment of the invention which is the subject of the Patent, or of the right to apply for a patent in respect of the invention or of the Patent itself.
It has been suggested that the right to apply for a patent may be a chose in action which is capable of assignment in Equity for consideration and at law subject to compliance with certain statutory requirements. Section 199 of the Property Law Act 1974 (Qld) applies to the legal assignment of “a debt or legal thing in action”. It is difficult to characterise the right to apply for a patent as a thing or chose in action. Such an assignment requires express notice in writing to be given to “the debtor, trustee or other person from whom the assignor would have been entitled to claim such debt or thing in action”. Before an application for a patent has been lodged, however, there is no person to whom any such notice can be given. In particular, the Commissioner is not a person to whom relevant notice could be given in terms of section 199. The right to apply for the grant of a patent, therefore, is not something which is amenable to section 199 of the Property Law Act.
There may be doubt as to whether an invention is itself a species of property. An invention may, of course, constitute information protected in Equity against misuse. Thus, if an invention is disclosed in circumstances which give rise to a duty of confidence on the part of the recipient of the relevant information, Equity will protect the discloser from a breach of that confidence. However, the rational basis for that protection does not lie in any proprietary right. It lies in the notion of an obligation of conscience arising from the circumstances in or through which the information was communicated or obtained (per Deane J in Moorgate Tobacco Co. Limited v Philip Morris Limited [No. 2] (1984) 156 CLR 414 at 437).
An invention which may be the subject of a successful patent application may, however, be in a different category and could constitute property of some kind. In any event, there is probably little utility in determining whether such an invention is property since that merely requires further analysis of what is meant by the concept of property.
Section 34(1)(b) of the 1952 Act clearly contemplated the possibility of the assignment of rights relating to the grant of a patent prior to the making of any application for such a grant. (see George C Warner Laboratories Pty Limited v Chemspray Pty Limited (1967) 41 ALJR 75). However, the nature of the subject matter of such an assignment and the formalities, if any, required for such an assignment are by no means clear. The 1952 Act appears to assume that, under the general law, an invention is capable of assignment. Thus, section 34(3) refers to “the assignee of a part interest in an invention”, indicating that an assignee under section 34(1)(b) is the assignee of the whole of the interest in “the invention”. That suggests that an invention is to be regarded as a form of property capable of assignment.
Section 34(1)(b) clearly contemplates that there is something which is capable of assignment. It may be that the subject matter of any assignment contemplated by section 34(1)(b) is nothing more than the right to have a patent granted in respect of an invention. In so far as patents are the creatures of statute, rights in relation to patents, and inchoate rights in relation to inventions which might be the subject of a patent, must depend upon the statute under which their existence is recognised. If the statute treats an invention, or the right to apply for a patent, as something which is capable of assignment, it will be necessary to recognise any juridical act or conduct which might effect such an assignment.
Section 34(1)(a) entitles the actual inventor to make an application for a patent. Following an assignment, the actual inventor may still be entitled to make an application for a patent. If an enforceable agreement had been entered into between the actual inventor and another party to the effect that the actual inventor would assign to that other party all rights in relation to the invention, it may be that the other party would be entitled to compel assignment of the patent upon grant. Such an arrangement could be characterised as an agreement for the assignment of future property.
If Speedy Gantry were able to demonstrate an agreement between it and Mr Nielsen for the assignment of the invention, or the right to apply for a patent in respect of the invention, being an agreement supported by consideration, that may be sufficient to constitute an assignment in Equity. Such an agreement could be written or oral, or might be implied from the conduct of the parties. Nevertheless there must be something which is capable of constituting such an agreement.
I find that there were conversations between Mr Nielsen and Mr Richards prior to the incorporation of Speedy Gantry which I have set out above. The effect of that conversation was that they agreed to join together in the formation of a company and that, in consideration of Mr Nielsen contributing the invention, time and funding and Mr Richards contributing the engineering services, including technical drawings, necessary in relation to the invention and the application for patent, they would be entitled to participate in the benefits to be derived from such a company in the proportions 80 per cent and 20 per cent respectively. They intended those conversations to constitute a binding agreement between themselves. Speedy Gantry was formed pursuant to that agreement between Mr Nielsen and Mr Richards and, in pursuance of that agreement, they participated in the meeting whereby they became entitled to participate in such dividends as the directors declare, in the agreed proportions.
However, while there may have been such an agreement between Messrs Nielsen and Richards, there was no evidence before me capable of supporting a conclusion that there was an express agreement between Mr Nielsen on the one hand and Speedy Gantry on the other for the assignment by Mr Nielsen to Speedy Gantry of anything. Nor was there any evidence of any express assignment, either written or oral, from Mr Nielsen to Speedy Gantry.
On the other hand, there was evidence which was said by Preston Erection to indicate that the invention and the right to the Patent were not initially intended to belong to Speedy Gantry at all. A balance sheet as at 31 May 1987 and profit and loss account for the eleven months ended on 31 May 1997 were prepared on behalf of Speedy Gantry. Those accounts disclosed no asset of Speedy Gantry comprising the Patent or any expenditure and costs in relation to the Patent. No accounts were available in respect of the period ended 30 June 1986 or any other period.
Further, a balance sheet as at 31 May 1987 of Denivel Manufacturing Enterprises Pty Ltd (“Denivel”), a company with which was associated with Mr Nielsen, included an item of “Patent and Design Costs - $11,582” under the heading “Other Assets”. Mr Nielsen agreed in cross-examination that that sum represented costs of the Patent. In addition, a copy of part of a draft income tax return of Mr Nielsen for the year ended 30 June 1987 showed as a deductible expense an item for “Patent and Design Costs” in the sum of $11,582.
There are of course possible explanations of that evidence which might be consistent with Speedy Gantry being the applicant for the Patent. However, Mr Nielsen was unable to explain the significance of those identical figures. Those figures tend to suggest that expenses were being incurred in connection with the patent application by Mr Nielsen and Denivel after the time when the application had been lodged in the name of Speedy Gantry.
The accounts in question were in fact annexed to an agreement dated 11 June 1987 (“the Sale Agreement”). The parties to the Sale Agreement were Mr Nielsen and Mr Richards as vendors and Gainguard Pty Ltd (“Gainguard”) as purchaser. The Sale Agreement recited that Mr Nielsen and Mr Richards each owned one of the two issued shares of Speedy Gantry and of Denivel and that Speedy Gantry was the applicant for the Patent. The Sale Agreement also recited that Mr Nielsen had filed an application for patent in the United States of America in respect of the invention and acknowledged that he held any patent granted in the United States of America on behalf of Speedy Gantry and would transfer such patent to it.
By the Sale Agreement, Mr Nielsen and Mr Richards agreed to sell shares in Speedy Gantry and Denivel to Gainguard. They also warranted to Gainguard that Speedy Gantry would be entitled to the use of the Patent for the Commonwealth of Australia, if and when the patent was granted to Speedy Gantry. Mr Nielsen also agreed, “as inventor”, that he would sign all documents and do all things reasonably required to ensure that Speedy Gantry received and enjoyed the benefit of the Patent:
...if and when the same is granted conditionally upon it paying all costs, charges and expenses properly incurred after the date hereof in connection with the granting of the said Patent in the Commonwealth of Australia and in the United States of America...
It is curious that the Sale Agreement recites that Mr Nielsen is the registered owner of two “B” class shares in Speedy Gantry of which he and Mr Richards own one each. That is not consistent with the minutes of the first meeting of shareholders held on 19 August 1985 to which I have referred above. By the Sale Agreement, Mr Nielsen agreed to sell 500 “A” class shares in Speedy Gantry for $495,000 and Mr Richards agreed to sell one “B” class share in Speedy Gantry for $5,000. There was no evidence before me to explain the different entitlements of Messrs Nielsen and Richards when compared with the oral agreement for the formation of Speedy Gantry to which I have referred above.
The Sale Agreement appears to have contemplated the issue of additional shares to Mr Nielsen which were to be sold to Gainguard. However, there was no evidence before me concerning the circumstances in which further shares were issued to Mr Nielsen. More shares appear to have been issued and then transferred to Gainguard such that the present shareholders of Speedy Gantry are:
Mr Nielsen: 73001”A” class and 2340 “B” class shares
Gainguard: 29201 “A” class shares
G A and F M Hassall 42340 “B” class shares
The facts which I have just recounted may tend to cast doubt on the precise terms of the agreement said to have been entered into between Messrs Nielsen and Richards relating to the formation of Speedy Gantry and making Speedy Gantry the owner of the invention. The Sale Agreement suggests that there may have been some doubt as to whether Speedy Gantry would be entitled to the Patent when granted. Otherwise the promise by Mr Nielsen to sign all documents and do all things reasonably required to ensure that Speedy Gantry enjoys the benefit of the Patent would be otiose. On the other hand such a provision may have been included simply for more abundant caution.
The Sale Agreement was not entered into until 11 June 1987, some 16 months after the patent application had been lodged in the name of Speedy Gantry with the clear acquiescence of Mr Nielsen. The draft tax return would not have come into existence until after 30 June 1987. There is no evidence as to whether a tax return was in fact lodged in those terms. On the other hand, the patent application was lodged in the context of the agreement between Messrs Nielsen and Richards to which I have referred above. Accordingly, I do not consider that the evidence of the Sale Agreement precludes a conclusion that Speedy Gantry was “the assignee” of Mr Nielsen.
Further, the patent application was pursued on the basis that Speedy Gantry was the assignee of Mr Nielsen. In particular, section 35(3) of the 1952 Act provided that a declaration setting out the facts relied on to support an application for a patent must be lodged before acceptance of the application. Such a declaration was in fact lodged on behalf of Speedy Gantry on or about 23 February 1987. It was in the form prescribed by the regulations and provided as follows:
DECLARATION IN SUPPORT OF AN
APPLICATION FOR A PATENT OR PATENT OF
ADDITION
In support of the Application made by SPEEDY GANTRY HIRE PTY. LTD. for a patent for an invention entitled: “IMPROVEMENTS TO SCAFFOLDING”.
I, NEIL MATHAIRS NIELSEN of 636 Progress Road, Wacol, in the State of Queensland, 4076, Commonwealth of Australia do solemnly and sincerely declare as follows:
1. I am authorized by SPEEDY GANTRY HIRE PTY. LTD. the applicant for the patent to make this declaration on its behalf.
2. Neil Mathairs Nielsen, of 636 Progress Road, Wacol, in the State of Queensland, 4076, Commonwealth of Australia, is the actual inventor of the invention, and the facts upon which SPEEDY GANTRY HIRE PTY. LTD. is entitled to make the application are as follows:-
The said SPEEDY GANTRY HIRE PTY. LTD. is the assignee of the said NEIL MATHAIRS NIELSEN
DECLARED at Brisbane this Twenty-Third day of February, 1987...
(my emphasis)
Because of the time which has elapsed since the patent application was lodged, there were difficulties in obtaining material which may have thrown light on the circumstances under which the patent application came to be lodged in the name of Speedy Gantry. The files of the patent attorney who acted and the files of Speedy Gantry and its other advisers were not available. Thus, it is difficult to reach any firm conclusion as to the significance to be attached to the Denivel balance sheet and the draft tax return.
Mr Nielsen’s conduct in causing the application to be lodged in the name of Speedy Gantry, coupled with his signing of the declaration, is consistent only with assignment to Speedy Gantry of the invention and the right to apply for a patent in respect of it. The declaration cannot of itself be an act or conduct effecting assignment because it was brought in existence after the lodging of the application. However, it confirms Mr Nielsen’s intention that Speedy Gantry was his assignee in respect of the invention.
I consider that, having regard to the intention of Messrs Nielsen and Richards that the company of which they were the only directors and shareholders should be the applicant for a patent, Mr Nielsen’s conduct, in causing the application to be made in the name of Speedy Gantry, amounted to the assignment to Speedy Gantry of his invention and of the right to apply for a patent in respect of it. In any event, I am certainly not persuaded, on the balance of probability, that Speedy Gantry was not “the assignee of the actual inventor” within the meaning of section 34(1)(b). It follows that this ground is not made out. It is not strictly necessary, therefore, to consider section 34(1)(fa). However, I shall deal briefly with the arguments advanced on that issue.
Paragraph 34(1)(fa) was inserted in the 1952 Act by Act No. 107 of 1960. The amendment was made as a consequence of a recommendation contained in the Report of the Committee Appointed by the Attorney-General to Consider what Further Alterations were Desirable in the Patent Law of the Commonwealth. The Committee was appointed on 21 January 1957 and reported in April 1959. The report contained the following in relation to section 34:
7. Section 34 in its present form sets out those persons who are entitled to apply for a patent. It does not provide that a person who is entitled to the benefit of a patent when granted may make an application.
8. We think that the section should be amended to provide that any person who is entitled to the benefit of a patent when granted may make an application for a patent. For example, the amendment will allow an employer to apply in his own name for a patent for an invention made by his employee, (being an invention to the benefit of which the employer is entitled) without the necessity of the formal assignment by the employee to his employer. We thought it proper also, that the legal representative, the attorney or agent of such a person should be entitled to apply for a patent.
Those observations suggest that paragraph 34(1)(fa) was intended to accommodate the situation which could arise where, by operation of law or, presumably, by agreement, a person will have an interest in a patent even though the action necessary to constitute that person an assignee under section 34(1)(b) has not occurred. Section 34(1)(fa) appears to complement section 64 which, as I have indicated above, applies only after a patent application has been lodged. Its purpose appears to be to enable a person who has, for example, the benefit of an agreement to assign a patent when granted, as distinct from the assignee of an invention or right to apply for a patent, to make an application in his or her own name rather than to require the patent application to be lodged by the inventor and then make an application under section 64.
Speedy Gantry advanced a number of possible bases upon which reliance could be placed on section 34(1)(fa) if Speedy Gantry was not the assignee of Mr Nielsen. First, reliance was placed on section 55 of the Property Law Act of Queensland. Section 55(1) provides that a promisor who, for a valuable consideration moving from the promisee, promises to do an act for the benefit of a beneficiary, shall, upon acceptance by the beneficiary, be subject to a duty enforceable by the beneficiary to perform that promise. Under section 55(3) upon acceptance, the beneficiary is to be entitled in the beneficiary’s own name to such remedies and relief as may be just and convenient for the enforcement of the duty of the promisor.
Under section 55(6), “beneficiary” means a person other than the promisor or promisee, and includes a person who, at the time of acceptance, is identified and in existence, although that person may not have been identified or in existence at the time when the promise was given. Under section 55(6) “acceptance” means an assent by words or conduct communicated by or on behalf of the beneficiary to the promisor within a reasonable time of the promise coming to the notice of the beneficiary.
Speedy Gantry contended that a promise was made by Mr Nielsen to Mr Richards to transfer ownership of the invention to a company to be formed by them and that Speedy Gantry accepted that promise after its incorporation. That promise was said to be for the benefit of Speedy Gantry, a person who was in existence at the time of acceptance. It was also said that the promise by Mr Nielsen to Mr Richards was given for valuable consideration, namely, the foregoing by Mr Richards of fees for the engineering services which he provided. The contention raises several issues.
There may be a doubt as to whether or not the discussions between Messrs Nielsen and Richards constituted a promise by Mr Nielsen to do an act for the benefit of Speedy Gantry. Neither version of the relevant conversation referred to entitlement to the proposed patent, although it is must be implicit in the discussion that the proposed company would acquire any patent granted in relation to the invention. I conclude from the evidence that, notwithstanding the absence of any evidence of an assurance or assignment and the absence of any evidence of an express promise, there was a common intention on the part of Messrs Nielsen and Richards that Speedy Gantry would be the owner of a patent in respect of the invention if and when it was granted. However, that does not constitute a promise if section 55 requires an express promise.
On the other hand, section 55 will be satisfied, in my view, by an implied promise. I have found that there was an enforceable agreement entered into between Messrs Nielsen and Richards. The agreement was for the formation of a company to exploit the invention and for the contribution to the company by each of them of certain benefits. One of the benefits which Mr Nielsen was to contribute was the invention and the right to apply for a patent in respect of the invention. I consider that it must be an implied term of that agreement that Mr Nielsen would assign to the company, when formed, the benefit of the invention and the right to apply for a patent in respect of that invention. That is necessary in order to give commercial efficacy to their agreement.
Second, there may be a question as to whether Speedy Gantry was capable of being a beneficiary within the meaning of the section. The beneficiary is not simply any person who, in the event, would have been benefited had the promise been fulfilled. Acceptance must be made by a person who, from the terms of the promise, can be identified as a beneficiary capable of accepting the benefit of the promise (see Northern Sandblasting Pty Ltd v Harris (1997) 71 ALJR 1428 at 1433 per Brennan CJ). I consider that the company to be formed pursuant to the agreement made between Messrs Nielsen and Richards was the precise entity intended to be benefited by any promise to assign the benefit of the invention and the right to apply for a patent in respect of the invention.
Finally, the beneficiary’s entitlement to remedies and relief arises upon acceptance. There was no evidence of any words of assent on behalf of Speedy Gantry. Indeed, there is no written evidence of the promise coming to the notice of Speedy Gantry as such. On the other hand, of course, the only directors of Speedy Gantry, Messrs Nielsen and Richards, were aware of the promise. In so far as the corporate mind of Speedy Gantry was constituted by the minds of its only directors, Speedy Gantry must be taken to have been aware of the promise forthwith upon its incorporation. Further, by making the application for the patent in its own name, Speedy Gantry must be taken, so it is said, to have assented by conduct. Mr Nielsen was clearly aware of the application for the patent.
In so far as any assent or knowledge was required on the part of Speedy Gantry, that assent or knowledge may be capable of being established by reference to principles stated in Re Compaction Systems Pty Ltd and the Companies Act [1976] 2 NSWLR 477. If all the shareholders of a company are present together in a meeting and signify their assent to a transaction which is within the powers of the company, their decision will be effective as if a resolution to that effect had been passed at a properly constituted meeting. That may be so, notwithstanding that those at the meeting thought they were conducting a directors’ meeting and the necessary formalities required for calling the general meeting had not been observed (per Bowen CJ in Eq. at 484).
Notwithstanding that there was no formal resolution passed at a meeting of the directors of Speedy Gantry resolving to accept a transfer or other assurance of the invention, together with the right to apply for a patent in respect of the invention, the evidence enables me to conclude for the reasons which I have outlined above that the only shareholders and directors of Speedy Gantry intended that that consequence follow. The making of an application for a patent by Speedy Gantry in its own name was consistent only with an intention to accept any promise that it be entitled to do so (see, for example, Hyatt Australia Limited v LTCB Australia Limited [1996] 1 Qd R 260 at 266).
It follows that, if Speedy Gantry was not the assignee of Mr Nielsen, there would be a reasonable basis for concluding that Speedy Gantry became entitled to enforce the promise given by Mr Nielsen to Mr Richards. Accordingly, under section 55(3) of the Property Law Act Speedy Gantry would have been entitled to relief by way of specific performance and, accordingly, was entitled, within the meaning of section 34(1)(fa) of the 1952 Act, to have the Patent assigned to it when granted.
Reliance was also placed on the principles discussed by the High Court in Trident General Insurance Co. Limited v McNiece Bros Proprietary Limited (1988) 165 CLR 107. If section 55 has the effect contended for, consideration of the principles of Trident becomes unnecessary. On the other hand, if section 55 does not have the effect contended for, it is difficult to see how the principles in Trident would take the matter any further. That is to say, if there were no promise by Mr Nielsen intended to benefit a third party such as Speedy Gantry, the principles would not be attracted.
Next, it was contended that Speedy Gantry had the benefit of a constructive trust in its favour of all rights to the invention, including the right to apply for a patent. It was contended that the arrangement between Messrs Nielsen and Richards was such that it would have been unconscionable for Mr Nielsen to assert retention of the right to apply for the Patent. Reference was made to the observations made by Deane J in Muschinski v Dodds (1985) 160 CLR 583 at 613-614.
However, unconscionability as between Messrs Nielsen and Richards does not of itself create any entitlement on the part of a third party in the position of Speedy Gantry. As between Mr Nielsen and Mr Richards, it may well be that the conduct of Mr Nielsen was such as to give rise to an estoppel whereby he could not, in proceedings between Messrs Nielsen and Richards, deny that Speedy Gantry was the owner of the invention and the rights arising from that ownership. However, such an estoppel would not necessarily create any right in a third party such as Speedy Gantry. The relief which might be granted to Mr Richards could depend upon equitable defences or could be limited to equitable compensation. Mr Nielsen, of course, is not a party to these proceedings.
2. False Suggestion
Section 100(1)(k) of the 1952 Act provided that a ground of revocation was that the patent was obtained on a false suggestion or representation. The second ground of revocation relied on by Preston Erection is based on section 100(1)(k) and arises in relation to the alternative contention of Speedy Gantry that it was entitled to have the Patent assigned to it.
The declaration under section 35(3) referred to above stated that the facts upon which Speedy Gantry was entitled to make the application were that Speedy Gantry was the assignee of Mr Nielsen. Preston Erection contended that there had not been any assignment from Mr Nielsen to Speedy Gantry and that, accordingly, that statement in the declaration was false. In the light of the conclusion which I have reached on the first ground, this question does not strictly arise. However, I shall deal briefly with the arguments.
While section 100(1)(k) uses the words “false suggestion”, the authorities do not support the proposition that fraud in the sense of deliberate intent to deceive is necessarily involved. The cases speak of the relevant conduct in terms akin to equitable fraud. The proper test is whether the conduct constituting the false suggestion or representation materially contributed to the Commissioner’s decision to grant the relevant patent, even if other circumstances or causes also played a part in the making of that suggestion. It is sufficient if the conduct is a material, inducing factor which led to the grant. The words “obtained on” suggest a causal link between the false suggestion or representation and the grant of the patent, although they do not necessarily suggest that without the false suggestion or representation the patent would not have been granted (see per Lockhart J in Prestige Group (Australia) Pty Ltd v Dart Industries Inc (1990) 26 FCR 197 at 201).
In so far as Speedy Gantry relies on section 34(1)(b) as entitling it to make the application for the Patent, the ground in section 100(1)(k) would not arise. In other words, if Speedy Gantry was the assignee of Mr Nielsen, a statement that it was such an assignee was not a false suggestion or representation. On the other hand, if Speedy Gantry was not such an assignee, then section 34(1)(b) would not apply and the ground of revocation in section 100(1)(a) would be made out.
However, in so far as Speedy Gantry relies on section 34(1)(fa) as entitling it to apply for the Patent, section 100(1)(k) could have some significance. That is to say, the facts upon which Speedy Gantry was entitled to make the application would, in that case, not be that Speedy Gantry was the assignee of Mr Nielsen but that the conduct of Mr Nielsen in relation to Speedy Gantry was such that Speedy Gantry would be entitled to have the Patent assigned to it when it was granted. In such a case, it was false to suggest that Speedy Gantry was the assignee of Mr Nielsen.
Further if I had concluded that Speedy Gantry was not assignee and was not entitled to have the patent assigned to it, there would be no need to consider the possible application of section 100(1)(k). The question of the application of section 100(1)(k) would arise in the present case only if I concluded that Speedy Gantry was not the assignee of Mr Nielsen and that Speedy Gantry would have been entitled to have the patent assigned to it if it had been granted to Mr Nielsen.
On that hypothesis, the question is whether the statement that Speedy Gantry was the assignee of Mr Nielsen materially contributed to the Commissioner’s decision to grant the Patent in circumstances where the declaration should have stated the circumstances which would have given rise to the entitlement of Speedy Gantry to have the patent assigned to it. If the relevant statement in the declaration was false, I do not consider that such a false suggestion or representation would have contributed materially to the Commissioner’s decision to grant the Patent. So long as Speedy Gantry was entitled under section 34 to apply for the Patent, the particular grounds upon which that entitlement arose were immaterial. It did not affect Speedy Gantry’s right to the grant (see The Queen v Commissioner of Patents; Ex parte Martin (1953) 89 CLR 381 per Fullagar J at 404-5).
It was suggested that in so far as Speedy Gantry relied upon some equitable assignment of the invention, it should be met with the application of the principle that he who comes to Equity must come with clean hands. However, that argument ignores the requirement that the impropriety complained of must have an immediate and necessary relation to the equity sued for (see Dewhurst v Edwards [1983] NSWLR 34 at 51). There was no impropriety alleged in relation to the assignment of the invention as between Mr Nielsen and Speedy Gantry.
Accordingly, I do not consider that this ground of revocation would have succeeded.
3. Priority Date
Section 43(1) of the 1990 Act provides that each claim of a specification must have a priority date. Section 43(2)(b) provides that where the Regulations provide for the determination of a different date from the date of filing of the specification, the priority date is the date determined under the Regulations. Regulation 23.18(b) provides that in the case of a claim of a specification to which section 45(2) of the 1952 Act applies, the priority date is determined under section 45 of the 1952 Act.
Under section 45(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 lodgement of the provisional specification. A provisional specification was lodged on 20 February 1986, although the first form of the complete specification was not lodged until 20 February 1987. The complete specification was subsequently amended. The final version of the complete specification in respect of the Patent was not lodged until 19 August 1988.
Accordingly, it is necessary to consider whether the claims in the final version of the complete specification are fairly based on matters disclosed in the provisional specification. The essence of the submission made on behalf of Preston Erection is that the claims in the complete specification for the Patent include an essential element or integer which was not apparent in the provisional specification.
The provisional specification commences as follows:
THIS INVENTION relates to improvements to scaffolding and in particular to an improved scaffolding gantry suitable particularly for erection on a footpath say to allow pedestrian passage thereunder but to protect pedestrians from possible falling debris associated with building construction or demolition.
The provisional specification outlines some difficulties commonly found with scaffolding gantries and goes on to say:
The present invention aims to overcome or alleviate at least some of the above disadvantages by providing an improved scaffold gantry assembly and in particular a gantry assembly of modular form which may be arranged on site rapidly and efficiently and which therefore requires minimum costs for assembly.
..........................................................................................................................
In one preferred form, the gantry assembly of the present invention comprises a plurality of gantry modules each being preferably of a rectangular form and comprising a plurality of upstanding support members or legs and a roof assembly secured to and supported by the upstanding legs. Suitably a plurality of such gantry modules are arranged in end to end relationship with suitable means provided to interconnect the adjacent legs.
The provisional specification then makes reference to accompanying drawings and proceeds as follows:
Referring to the drawings and firstly to Figs. 1 to 3, there is illustrated a scaffolding module 10 according to a preferred form of the present invention. The module in this instance is of generally rectangular form and includes four upright preferably hollow rectangular cross sectioned support members 11 at the corners thereof which support at their upper end a deck framework 12 which is covered by a sheeting material 13 such as steel sheet or the like... The operative rear wall of the module is also closed in by sheeting 15 such as steel sheeting which may be supported by a central bracing member 16 extending between the rear upstanding support members 11.
In the accompanying figures 1, 2 and 3, the numeral “15” appears as signifying a wall on one side of the rectangular module.
The principal claims in the final form of the complete specification are claims 1 and 7. The contention of Preston Erection is that in each of those claims the side wall is an essential integer or element but that, in the description of the invention in the provisional specification, that is not apparent. It is said that, therefore, the complete specification and the claims are not fairly based on matter disclosed in the provisional specification.
Accordingly, it is said, section 45(2) does not apply. Rather section 45(1) of the 1952 Act applies and the priority date of the claims in the complete specification is the date of lodgement of the complete specification. As I have said, it is conceded by Speedy Gantry that if that contention is made out, the Patent should be revoked because of the exploitation of the invention by Speedy Gantry after 20 February 1986 and before lodgment of the final form of the complete specification.
The provisional specification is not expressed as felicitously as it might have been. There is no reference to the wall except in the narrative referring to the accompanying drawings. Even then, it is referred to as the rear wall rather than the side wall. Counsel for Preston Erection also drew attention to the adjective “operative” and what was said to be some obscurity in referring to the wall being “closed in by sheeting”.
While the reference to rear wall tends to create some confusion, it is clear what is intended. The diagrams show the wall as being adjacent to the building site, creating a barrier between the site and the pedestrian footway. Further, I consider that a fair reading of the provisional specification does not require any particular significance to be attached to the adjective “operative”. It signifies no more than that it is an effective wall, being protection for pedestrians from possible falling debris associated with building construction or demolition. The wall is created by the sheeting and, in that sense, it is “closed in”.
In other words, the wall of the module, which affords protection for pedestrians from the construction site, is fairly disclosed as an important element of the invention. Accordingly, I consider that in so far as the challenge to the patent is based on the ground that the claims in the complete specification are not fairly based on matter disclosed in the provisional specification, the challenge should fail.
4. Non-compliance with section 40
Section 40 of the 1990 Act relevantly provides as follows:
(2) A complete specification must:
(a) describe the invention fully, including the best method known to the applicant of performing the invention; and
(b) ...end with a claim or claims defining the invention; and
........................................................................................................................
(3) The claim or claims must be clear and succinct and fairly based on the matter described in the specification.
Sections 40(2)(a) and (b) and 40(3) of the 1990 Act are in relevantly identical terms to sections 40(1)(a) and 40(1)(b) and 40(2) of the 1952 Act.
Several grounds were relied upon by Preston Erection in support of its contention that the specification does not fully describe the alleged invention as required by section 40. The grounds are as follows:
(i) The claims do not describe or alternatively do not adequately describe the mode by which, and the degree to which, the constituent parts of the module are joined one to the other so as to render the module independently moveable.
I consider that the reference to “independently movable [sic] gantry modules” in Claim 1 does no more than state that each module has a separate existence and is capable of being moved independently of each other module which might, at any time, make up the assembly. A module is one of a series of standardised parts or units from which a complex structure is or can be assembled (Shorter Oxford English Dictionary, 2nd Ed., Clarendon Press, Oxford). The expression to which I have referred does no more than state that each module is independent of each other module. This ground should fail.
(ii) The claims do not adequately describe how the operative rear wall is closed in by the sheeting.
I have addressed above the criticism made of that phrase in a different context. I consider that, while the language is not felicitous, it does no more than state that the rear or side of the module is closed in by sheeting. This ground should fail.
(iii) The claims failed to disclose completely the properties or elements of the side wall or walls which are necessary to provide a protective barrier.
This criticism appears to be related to that in (ii) above. The essence of the invention is that there is a side wall. No particular property of the wall is required other than that it will provide a protective barrier. So much is clear from the description in the specification. This ground should also fail.
(iv) Claims 1 to 6 do not describe any method by which the gantry assemblies may be secured one to another so as to provide protective pedestrian thoroughfare.
This criticism does not appear to me to have any substance. The invention is that there are modules, each of which will be substantially identical and all of which will be secured together, by whatever means might be appropriate to make up an assembly. It does not matter how each module is secured to another module. This ground should fail.
(v) In respect of Claim 9, the specification does not describe how the vertical extent of the side wall is adjustable.
The criticism is that in Claim 1 reference is made to “a side wall between adjacent legs and extending from an edge of the roof assembly to adjacent the lower ends of the said adjacent legs”, but that the claim does not specify how, when the legs are adjusted, the wall is to be adjusted.
I do not consider that there is any substance in the criticism. The wall can be adjacent to the lower ends of the legs, notwithstanding that the lower ends of the legs might be different lengths because they have been adjusted to different extents. This ground should fail.
Criticism was also directed to Claims 2 and 8. However, in the course of the hearing, counsel for Speedy Gantry indicated that the criticism of claims 2 and 8 is accepted and that those claims should be revoked together with the other claims which are wholly dependent upon them. Accordingly, it is unnecessary to deal with the criticism. Subject to that concession, and to the matter referred to below, it follows that, in so far as Preston Erection relies on non-compliance with section 40, the ground fails.
The Speedy Gantry invention is essentially the concept of constructing a gantry or hoarding from a plurality of modules manufactured off site which have adjustable legs and a protective side and roof. Identifying the invention in that manner indicates that claims 7 to 13 may not be properly regarded as distinct or separate claims. The substantial duplication of claim 7 in claim 1 is unsatisfactory. In addition, claim 3 involves an essential integer of that concept. Further, claims 14 to 16 contain no inventiveness by themselves. Rather, the relevant parts of claims 7 to 13 simply describe the modules which are to be linked together as contemplated in claim 1.
While those matters were not specifically raised as grounds arising under section 40, they are matters which require attention. Although they may not be matters which go to the overall validity of the Patent, some amendment of the claims may be necessary and some claims may be invalid. It appears to me, therefore, that orders under section 105 of the 1990 Act should be considered.
5. No Patentable Invention
There are two distinct grounds which arise under this head. The equivalent in the 1990 Act, of section 100(1)(g) and section 100(1)(e) of the 1952 Act, is section 138(3)(b). Section 138(3)(b) specifies as a ground for revocation that the invention is not a patentable invention. A patentable invention is relevantly defined in section 18(1) of the 1990 Act as an invention that:
(a) is a manner of manufacture within the meaning of section 6 of the Statute of Monopolies; and
(b) when compared with the prior art base as it existed before the priority date...:
(i) is novel; and
(ii) involves an inventive step; and
(c) is useful...
Under section 7(1) of the 1990 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 kinds of information referred to in that section. Under section 7(2) of the 1990 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. Those provisions were first introduced in the 1990 Act and they have no equivalent in the 1952 Act.
5.1 Novelty
Preston Erection contends that the subject matter of the application for the Patent was not a patentable invention in that it was not novel. Section 138(3)(b) provides that a ground for revocation is that the invention is not a patentable invention. The effective difference between section 100(1)(g) of the 1952 Act and the combined effect of sections 138(3)(b) and 18(1)(b)(i) of the 1990 Act is the effect of the provisions of section 7(1) of the 1990 Act which determines when an invention is to be taken to be novel. It is accepted that section 7(1) of the 1990 Act does not change the general law as to the question of novelty as it was in force under the 1952 Act.
Section 7(1) provides that for the purposes of the 1990 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 mentioned in paragraph (c)) made publicly available in a single document, or through doing a single act;
(b) any prior art information (other than mentioned in paragraph (c)) made publicly available in two or more related documents, or through doing two 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 filed in respect of a complete patent application where:
(i) the claim has a priority date earlier than that of the claim under consideration;
(ii) the specification was published after the priority date of the claim under consideration; and
(iii) the information was contained in the specification on its filing date and when it was published.
The prior art must disclose all features of the invention embodied in the patent in suit and must do so in clear, unequivocal and unmistakable terms. The prior art must enable the notional skilled addressee at once to perceive and understand and be able practically to apply the discovery without the necessity of making further experiments. Whatever is essential to the invention must be read out of or gleaned from the prior publication. The prior publication must disclose all of the integers with the possible exception of the substitution of “mechanical equivalents to perform analogous purposes” (per Lockhart J in Nicaro Holdings Pty Ltd v Martin Engineering Co. (1990) 91 ALR 513 at 517). That is to say, while it is possible that some detail may be supplied by the skilled reader of the patent, it is not permissible for an essential element not disclosed in the prior art to be supplied by common knowledge.
The prior art information relied on by Preston Erection is as follows:
(1) United States Patent 2,5931,22.
The specification in that Patent describes the invention as follows:
Our invention constitutes an improvement on the scaffold disclosed in the prior United States Letters Patent No. 2,335,046 to Carl C. Droeger. The scaffold unit disclosed in that Droeger patent is of the knock-down type and comprises a pair of vertical, ladder-like end frames which are held in parallel spaced relation by a horizontal bracing structure serving as a support for a platform, the bracing structure being adjustable on the end frames to support the platform at various elevations.
It is an object of the present invention to improve the construction of the Droeger scaffold-unit and to simplify and lessen the cost of its manufacture. A further object of the invention is to increase the flexibility of the unit by adapting a plurality of units for superposition one on the other and by providing for the rigid interconnection of laterally spaced units. Still another object of the invention is to prevent accidental disassembly of each scaffold unit such as might result from a reversal of load.
In carrying out our invention, we form the end frames of each scaffold unit as ladders having parallel, vertically extending uprights; and we provide such uprights at their ends with provisions by which the end frames of a plurality of scaffold units may be supported one on the other and held in proper condition of alignment.
A gantry might be described as a spanning framework (Macquarie Dictionary 2nd Ed.) or a supportive structure (Shorter Oxford English Dictionary, 2nd Ed.). The US specification may be considered as describing such a structure. However, it is apparent that the structure was not designed for use in the context of the construction or demolition of buildings. There is no element of protection for pedestrians. In particular, there is no side wall. The essence of the invention is to provide support and no more. I do not consider that the specification discloses all features of the invention embodied in the Speed Gantry specification.
(2) Preston Scaffolding System.
Mr Preston devised a system of modular folding scaffolding. The scaffolding was publicly displayed prior to 1986 and, ultimately, was the subject of the grant of a patent. However, the publication date in respect of the complete specification was 27 March 1986, the priority date being 20 September 1984. The folding scaffold is described in the diagram attached to the patent and is also described in detail in brochures published by Mr Preston or some predecessor in title of Preston Erection and in photographs which were in evidence. The first such brochure is set out in Appendix 2 to these reasons.
The specification for Mr Preston’s patent states that the object of the invention was to provide a scaffolding module and a method of scaffolding which would overcome or substantially ameliorate certain disadvantages described, being that known scaffolding systems require considerable time and man power to erect or take down which causes significant costs to be incurred and delays commencement of work. Reference is also made to the fact that because there are so many individual components required in such scaffolding systems, it is extremely easy for parts to be misplaced. The specification contained the following:
According to one aspect of the present invention there is disclosed a scaffolding module comprising at least two substantially planar and generally rigid platforms adapted to receive building materials and bear the weight of workmen; each of said platforms being supported, in use, in a substantially horizontal position by a plurality of substantially vertical and coextensive support members; wherein each of said platforms is pivotably secured to each of said support members and at vertically spaced locations along said support members, to permit said module to be folded between a reduced volume storage configuration in which said platforms lie alongside said support members, and an operational configuration in which said platforms extend substantially perpendicularly to said support members;
The following observations can be made about the Preston Scaffolding System:
· It did not have a side wall to protect pedestrians from a construction or demolition site, but rather a mesh which left the module open to the construction or demolition site.
· There was no suggestion of a satisfactory passageway for pedestrians.
· The device contained a deck to stand on, not a protective roof.
· It did not have adjustable legs.
Most importantly, in its primary use, it was not a gantry but a scaffold. So much was confirmed by the evidence of Mr Allan Norman Black, a retired consulting engineer, who was called by Preston Erection to give evidence. Mr Black, throughout his career, had been engaged in engineering details and design details for scaffolding systems, particularly during his time of employment at G.K.N. Building and Engineering from 1970 to 1984. G.K.N. Building and Engineering specialised in the design and supply of scaffolding and shoring materials. He was responsible for the design of scaffolding systems and it was part of his duties to become familiar with other scaffolding systems and methods utilised throughout Australia.
Mr Black agreed, in cross examination, that a scaffold is designed to do a different job from a gantry or hoarding. In particular, the idea of scaffolding is a system whereby workers can obtain access to a site, whereas a gantry or a hoarding is designed to provide protection to people who are not involved in the site. There are different design requirements, both from an engineering point of view and from a regulatory point of view, for each of the two types of system.
Examination of the Preston Scaffolding system indicates that it is clearly of the former category and is not a hoarding or gantry at all. I do not consider that the folding scaffolding disclosed all of the essential integers of the Speedy Gantry invention. However, the specification for the Preston Scaffolding System contains the following:
In addition, it is also preferable, where a module is to be used as a street hoarding which provides a pedestrian thoroughfare with overhead protection around urban construction sites, that appropriate counterweighting and bracing of the module be provided to ensure stability thereof and safety therefrom for the public.
In addition claim 19 is in the following terms:
A scaffolding module as claimed in any one of the preceding claims wherein the lowermost one of said modules in a stack of like said modules is adapted to be used as a street hoarding module, the lowermost ends of said support members of said lowermost module being counter weighted and having additional bracing means adapted to engage said support members to thereby ensure stability of said lowermost module.
Even so, there is no side wall shown in the specification and drawings.
In any event, while the application was first lodged on 20 September 1984 and the complete specification was first lodged on 17 September 1985, the publication date was 27 March 1986, the final specification is dated 30 March 1988 and publication date of the Accepted Application was not until 2 June 1988. Accordingly, it could not be said that the patent for the Preston Scaffolding System was part of the prior art as at 20 February 1986. Its existence as at 20 February 1986 does not preclude a finding that the Speedy Gantry invention was novel.
However, Preston Erection also placed reliance on public display of the Preston Scaffolding System prior to January 1985. Mr Preston said that after the provisional specification had been lodged on 20 September 1984, he organised a demonstration of two prototypes of the collapsing scaffolding module on a property next to his office in Derby Street, Silverwater. For the purposes of the demonstration he prepared brochures about the system and sent those under cover of letters to a number of people he knew in the building industry. However, he has no independent recollection of who those persons were or what he said to them. The demonstration took place on a date late in 1984 when about 15 persons inspected the two modules.
After the demonstration, the two prototype modules and 18 other modules produced by Mr Preston’s company shortly thereafter remained on display at the same location. People looked at the modules from time to time and Mr Preston continued to speak to persons who might be interested in investing in the invention. Mr Preston said that he had communications with a Japanese business and with Lend Lease concerning the collapsible scaffolding during February and March 1985. The modules remained on display until about 24 March 1985.
On 27 March 1985, Mr Preston displayed three of the modules at an engineering and building construction field day on a site in Park Lea. Mr Preston caused about 200 copies of the brochure referred to above to be available at the field day and they were distributed to persons who were present.
Mr Preston said that approximately 40 to 50 modules of the collapsible scaffolding were manufactured before 1986 and that many of them were leased and used on building sites over the course of 1985. He said that the modules so manufactured were in the format depicted in the diagrams which formed part of a brochure which was prepared at the time.
Mr Preston said that the modules were stored at the premises of Preston Erection and that, upon being hired, they were lifted on to trucks and transported to the building site. He said it was his practice to watch the placement of the modules, to ensure that they were safely installed and that when they were erected on pavements, he always sought to satisfy himself that pedestrians could walk unimpeded under the roof of the bottom module and that the side would shield them from the building site.
Mr Preston was cross-examined about the use to which the modules were put. In particular, he was asked about the mesh on the side of the modules when they were folded out. He agreed that the idea of the mesh was to stop the worker on the scaffolding from falling backwards or dropping paint or tools. He agreed that when the module was being used as a scaffolding the barrier was always on the outside. He said, however, that detachable walls were put on the ends. When the modules were used as scaffolding a mesh panel was affixed. A worker laying bricks would remove the mesh panel and then put it back after he had done his work. However, none of the brochures in evidence pictured such an arrangement.
Mr Preston agreed that the system was only ever approved as a scaffold and not as a hoarding or gantry. The scaffolding was 1.2 metres in width and if it was to be used to create a gantry or hoarding, it had to be turned sideways and the side mesh had to be removed. Mr Preston agreed that in such a case it was necessary to pull the scaffolding apart to some extent and “rack them up in a row sideways”. In other words, when the folding scaffolding was turned sideways the legs were used as legs for a hoarding.
For the reasons which I have indicated above when dealing with the specification in the patent for the Preston Scaffold System, I consider that the modules publicly demonstrated by Mr Preston or companies controlled by him were scaffolding systems and not systems designed to create a hoarding or gantry. While, with some adaptation, they could be employed to create a gantry hoarding, that was not their function. I do not consider that the use of the modules which I have described above deprives the Speedy Gantry invention of novelty as at 20 February 1986.
(3) Mr Preston’s drawings
Mr Preston gave evidence that in about 1983 he commenced work on a design for what he described as “a combination modular office and pedestrian gantry”. He said that the design was for a number of prefabricated modules which could be transported to a site and there joined to other modules to form a complex. He said that he prepared a diagram at that time. A copy of the diagram, as originally relied on by Preston Erection, is set out in Appendix 3 to these reasons (‘the Preston Drawing”).
The Preston Drawing shows a line drawn between the far legs of the modules which may indicate a wall. However, that line was not part of the drawing when it was originally made and the circumstances in which the line came to be placed on the drawing are obscure. Mr Preston said that he did not put the line on the drawing and that it could have been put there by anyone in his office. He also said that he did not have the faintest idea when the line was drawn and, for all he knew, it might have been drawn in 1995.
Mr Norman Beamish also gave evidence on behalf of Preston Erection. He said he saw the Preston Drawing but he did not know, when he first saw it, whether the line was on it. However, he said that he was sure “it would have been there”. Mr Beamish swore an affidavit concerning a conversation which he said he had with Mr Preston in January 1983. He says that Mr Preston, when showing him the Preston Drawing, said:
Besides overhead protection it would have a metal side for further protection from passing vehicle traffic... [I]t’s got a steel plate to prevent pedestrians from coming into contact with the traffic...
Mr Beamish was adamant that he was not reconstructing such a recollection from the drawing in its present form. However, on two occasions, when questioned about evidence which he gave, he explained what appeared to be some inconsistency in his evidence by saying “It’s just a figure of speech”. I was not impressed by Mr Beamish as a reliable witness and do not regard his evidence as establishing that the line was placed on the Prestons Drawing before 1987.
Mr Barry Arthur Richards had numerous dealings with Mr Preston in his capacity as an employee of a company which hired equipment from Mr Preston. Mr Richards swore an affidavit in which he said that he had seen the Preston Drawing before 1985. He was not cross-examined. However, it was accepted by Preston Erection that Mr Richards would not recall whether or not the wall line was on the drawing at the time when he saw it.
Without the line, the Preston Drawing does not, in my opinion, disclose a gantry or protective hoarding for pedestrians at all. The Preston Drawing depicts no more than offices on legs. Without the line, I do not consider that it depicts a modular gantry. I am not satisfied, on the balance of probabilities, that a drawing in the form of the Preston Drawing existed prior to 20 February 1986. Accordingly, it was not part of the prior art at that time.
Reliance was also placed by Preston Erection on other drawings said to have been made by Mr Preston. He referred to them in an affidavit in which he said that his recollection was that the drawings originated between 1981 and 1984. Copies of those drawings appear in Appendix 4 to these reasons. Those drawings depict protective passageways which appear to be constructed from cargo containers. Quite apart from anything else, the containers have a floor upon which pedestrians would walk. That could interfere with access to services under the footpath, which leave the footpath exposed. They do not appear to me to bear any resemblance to the modules described in Speedy Gantry’s specification.
In addition, there is considerable doubt as to when the drawings were brought into existence. In the course of cross-examination, Mr Preston conceded that the drawings could have been drawn at any time between 1983 and 1993. He in fact applied for a patent for the idea of containers as hoardings or gantries at some stage in the 1990s although he said that that did not suggest the drawing might have been done in the 1990s. I am not satisfied that any of the drawings existed before 20 February 1986. It appears to me to be more likely than not that they were brought into existence at the time of and in connection with the patent application made during the 1990s.
Mr Preston also gave evidence about a further drawing which he said he made in January 1983. Mr Preston said that the drawing represented a design for a hoarding with folding legs. It was contended that that drawing, together with the Preston Drawing, anticipated claim 12 of the Speedy Gantry specification. Since I have already concluded that the Preston Drawing did not exist with the additional line drawn before 20 February 1986, this further drawing cannot constitute an anticipation of any claim in the Speedy Gantry specification.
(4) Bidner Scaffolding System.
Mr Paul Joseph Sydes is the managing director of E.M. Miller Structural Co. Pty Limited (“E.M. Miller”). E.M. Miller has a substantial share of the “traditional hoarding market” as Mr Sydes described it. Mr Sydes has been exposed to building sites since 1978. Mr Sydes gave evidence that his father’s former partner, Mr Bob Bidner, had made a steel overhead protection structure or hoarding in the first half of the 1980s, probably in or about 1984 or 1985. Mr Sydes said that the system comprised of an assembly which provided a temporary pedestrian thoroughfare adjacent to a construction site or demolition site and had a number of independently moveable parts. He annexed to his affidavit a recent drawing which he said depicted the structure as he recalled it. Also he said that he recalled that the assembly had a side wall because that was a requirement for all hoardings. He could not recall how the side walls were fixed but recalled that it was made of metal cladding.
Mr Sydes explained that by modular he meant that it was designed to be erected in 3 metre segments. It is not totally clear what was meant by that. It does not appear that the structure was modular in any sense other than that some of the components were pre-cut to size. The modular items appeared to be the various components such as the legs and the cross-sections.
Mr Sydes said in cross-examination that he did not see how the structure was transported to the site, but assumed it came in pieces. He did not see how the structure had been assembled, but assumed that it was “sort of put together like a meccano set on site”. In the light of that evidence, I do not consider that the structures observed by Mr Sydes in any way anticipated the modules described in the Speedy Gantry specification.
(5) Sydes Modular System
Mr Sydes also said that in the early 1980s it had occurred to him to build a modular system for overhead protection structures. He said that before Australia Day 1985 he had drawn a design for a fully transportable modular overhead protection structure. He no longer had copies of those drawings but, in connection with his evidence, made a drawing of the system which he said he had then designed. The drawing is set out in Appendix 5 to these reasons.
He said that the modules were to be made of timber because he wanted to reuse timber which had already been used as hoardings on construction sites. They were to be constructed with adjacent pairs of legs spaced at 3 metres lengths to the next leg assembly with a self-contained roof. He said that he had not at that time thought about how he would make the side wall but says it would have been obvious to him to make a fully contained module including a side wall connecting between the roof assembly and adjacent sets of legs.
In the course of cross-examination, it became apparent that the system which Mr Sydes had in mind was not of the same character as that described in the Speedy Gantry specification. The system was modular but only to the extent that each module was like “a little archway”. Thus, a two legged archway or bridge would be set up on the footpath then, 3 metres further down, another little bridge would be set up and tie beams would be fixed between the two archways, each tie beam being cut in 3 metre lengths. They would then be bolted on top of or at the sides of the archways. Planks would then be laid on top to form a roof, or alternatively a single panel 3 metres long would make up the roof. Such a proposal is clearly quite different from the Speedy Gantry specification.
While these ideas were being considered in the early 1980’s, they were not proceeded with. It was not suggested that the idea which Mr Sydes said he had was ever published. Accordingly, Mr Sydes evidence in relation to his idea does not preclude a finding that the Speedy Gantry invention was novel.
(6) Lockrey Scaffolding Hoarding
Mr James Boyd Lockrey gave evidence that in about 1981 or 1982, Lockrey Hoardings constructed a timber hoarding at a building site in Woolloomooloo. He said that the hoarding was a complete unit which had been custom built for that particular site. However, at the time when it was necessary to remove the hoarding from the site, Mr Lockrey arranged to have the concrete counter-weight removed from the unit and for it to be lifted by crane on to a truck. From that time until about 1996, Lockrey Hoardings used the unit on a building site by transporting it as a complete 3 metre hoarding from one site to the next.
Mr Lockrey attached to his affidavit a drawing. He said that the unit consisted of four timber legs, a timber roof and a plywood side wall attached to the leg assemblies on the building site side. Timber beams attached each of the four legs and the timber roof was secured to those beams. Because the legs were made of timber and the levels on the subsequent site were not even, the legs were cut down to suit the second site. It was not suggested that the legs were otherwise adjustable.
Mr Lockrey agreed in cross-examination that the structure was used on only one other occasion as a hoarding. He said that it was much too high to carry around in its existing form as a full built hoarding structure. After its second use, the legs were cut down and it was used as a work platform on the back of a truck. In other words, it ceased to be a hoarding.
Thus, it is apparent that the structure was not reusable as a gantry module without alteration. It does not, in my view, anticipate the module described in the Speedy Gantry specification. It certainly does not possess adjustable legs or pivotable feet.
(7) Prior Disclosure by Speedy Gantry
Preston Erection also contended that there had been disclosure of the invention prior to the lodging of the provisional specification on 20 February 1986. Not all of the allegations made in the cross claim were persisted in. Those which were pursued were as follows:
· Queensland Division of Occupational Safety - As I have indicated above, officers of the Division of Occupational Safety were shown plans by Mr Richards in 1985 in order to obtain statutory approval for the proposed hoarding or gantry. However, all such applications were treated as being confidential. Under section 158(1)(i) of the 1952 Act, a patent was not invalid by reason only of the publication of the invention by some person with the consent of the person from whom the patentee derives his title, being a publication to an authority of a State. That provision would exclude the disclosure to the Division of Occupational Safety as a relevant publication of the invention.
· Mr Robert Vern Small - Mr Nielsen accepted that he had a conversation with Mr Small in January 1986 concerning Mr Small speaking to prospective customers of Speedy Gantry. In addition, Mr Small assisted in the production of a prototype of the proposed gantry module. However, I accept Mr Nielsen’s evidence that he disclosed details of the invention in circumstances where he had asked Mr Small not to say anything about it at that stage “because we are not ready to run with it”. I am not satisfied that Mr Small disclosed any information before 20 February 1986.
I do not consider that any of the matters relied on by Preston Erection detracted from the novelty of the invention described in the specification for the Patent. It follows that this ground of revocation fails.
5.2 Inventive Step
Section 138(3)(b) of the 1990 Act, in conjunction with section 18(1)(b)(ii), provides that a ground for revocation is that the invention, so far as claimed in any claim, when compared with the prior art base as it existed before the priority date of that claim, involves no inventive step. By the operation of section 7(2) of the 1990 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.
It is at least arguable that section 7(2) of the 1990 Act has made slightly easier the test of obviousness or lack of inventive step. Preston Erection accepts that it would be necessary, in order to succeed on this ground, to establish not only obviousness or lack of inventive step within section 7 but also that the subject matter of the Patent was “obvious and did not involve an inventive step” within the meaning of section 100(1)(e) of the 1952 Act (see NV Philips Gloeilampenfabrieken v Mirabella International Pty Limited (1993) 44 FCR 239).
Section 100(1)(e) of the 1952 Act provided as a ground for revocation that the invention, so far as claimed in any claim of the complete specification, was obvious and did not involve an inventive step, having regard to what was known or used in Australia on or before the priority date of that claim. The question raised by section 100(1)(e), of course, is a different question from that raised by section 100(1)(g) concerning novelty. Even if I am satisfied that the material relied upon by Preston Erection as constituting prior disclosure does not detract from the novelty of the invention, if Speedy Gantry’s conception was obvious and did not involve an inventive step, a ground of revocation will be made out.
Speedy Gantry contended that the Patent was a “combination patent”. A combination patent is one granted in respect of a combination, every integer of which may be both old and simple. However, if the combination is new, a patent may be granted in respect of the combination (Fallshaw Holdings Pty Ltd v Flexellow Castors and Wheels PLC (1993) 26 IPR 565 at 568). Such a combination may be one constituted by integers, each of which is old, or by integers, some of which are old and some of which are new, the interaction being the essential requirement (per Aickin J in Minnesota Mining and Manufacturing Company v Beiersdorf (Australia) Limited (1979) 144 CLR 253 at 266). If the combination of well known and simple mechanical integers is such that they are not a mere collocation of separate parts, but interact to make up a new thing this ground of revocation will not be established (Welch Perrin and Company Proprietary Limited v Worrel and Another (1961) 106 CLR 588 at 611). A combination may be an invention if the combination is substantially a new thing (May v Higgins (1916) 21 CLR 119 at 122 per Isaacs J).
Speedy Gantry contended that its invention was the conception and execution of “a new thing”, namely, an assembly of independently moveable gantry modules, each possessing in combination the various integers of the claims. The inventive step was combining each of the integers described in the claims in a way which previously had not been done. Each of the integers described in the claims may have been obvious and it may be that one by itself could not be said to involve an inventive step. Indeed, it was not contended that any of the separate elements was not common place. The essential question, however, is whether the combination of all of those elements was obvious having regard to what was then common general knowledge.
In Wellcome Foundation Ltd v V R Laboratories (Aust) Pty Ltd (1981) 148 CLR 262Aickin J (with whom Gibbs CJ, Stephen, Mason, Wilson JJ agreed) said (at 270):
...the question of obviousness involves asking the question whether the invention would have been obvious to a non-inventive worker in the field, equipped with the common general knowledge in that particular field at the priority date, without regard to documents in existence but not part of such common general knowledge.
It is necessary to determine whether anyone skilled in the relevant art but lacking inventive capacity would consider that trying Speedy Gantry’s combination of the plurality of components or integers in a module form would be something worth trying in order to solve recognised problems or needs (see per Buckley J in Re Beecham Group Ltd’s (Amoxycillin) Application [1980] RPC 261 at 290-1 which was cited by Wilcox J in Re Coopers Animal Health Australia Limited v Western Stock Distributors Ltd (1986) 67 ALR 390 at 410).
Recognised problems or needs were set out in Speedy Gantry’s specification as follows:
Commonly, scaffolding gantries are formed from a plurality of scaffolding elements including a number of upright pipe members and a plurality of ledgers which are interconnected in such a fashion as to form on a footpath a passageway or tunnel through which pedestrians may pass. The conventional type of scaffolding gantry as above has a number of disadvantages. In particular, the footpath area upon which the scaffolding is to be erected has to be hired from the relevant Local Authority from the commencement of the erection of the gantry and as erection often takes up to four weeks, four weeks’ hire of the footpath is required before erection or demolition of a building can commence. Furthermore as an extended erection period is required, labour costs are particularly high and the scaffolding gantry if not satisfactory to the relevant authorities, may require to be disassembled and re-erected after inspection.
Normally scaffolding gantries of the above form are assembled from a plurality of scaffolding components which are simply dumped on site and after completion of a building work, those components are required to be disassembled, repaired if necessary and delivered back to the hirer thereof and costs are often associated with repair of such components or replacement thereof in the event of missing components.
The present invention aims to overcome or alleviate at least some of the above disadvantages by providing an improved scaffold gantry assembly and in particular a gantry assembly of modular form which may be arranged on site rapidly and efficiently and which therefore requires minimum costs for assembly. The present invention also aims to provide a gantry which is safe in use and constructed of a minimum number of components so as to avoid losses associated with the conventional type of gantry.
The contention of Preston Erection was that, having regard to the matters which constituted common general knowledge, the step of combining a plurality of components into modular form was one which was obvious in the sense that it was “worth trying” in order to solve those needs identified in the specification. It was said that no inventiveness whatsoever was required to effect the combination in modular form and then to combine the individual modules into a gantry assembly.
Preston Erection placed reliance on evidence which, it was said, showed that in fact a number of persons did consider that combining the plurality of components in modular form was something worth trying and in fact tried it. The evidence relied on by Preston Erection was part of that summarised above under the heading Novelty. In particular, reliance was placed on the Preston Scaffolding System, Mr Preston’s drawings, the Bidner system, the Sydes modular system and the Lockrey timber hoarding.
In addition, reliance was placed by Preston Erection on a project relating to modular scaffolding called “Spiderscaf” which was undertaken by Mr Preston. Mr Preston said that he designed the Spiderscaf system in or about 1974 and caused an advertising brochure to be prepared which described the system. That brochure and a photograph of the system were in evidence before me. Mr Preston said that the system involved a module with four vertical members, called standards, attached to a roof. There were also horizontal members, called ledgers or transoms. A unit could be fitted to adjustable screw jacks which could be raised or lowered to match the contours of the land.
Mr Preston said that the Spiderscaf was manufactured with a detachable protective wall although the brochure makes no mention of the wall. He also said that he often attached walls to Spiderscaf modules to protect members of the public prior to January 1986. He said that the side walls were typically made from plywood attached to the four corners of the side by bolting or wiring or steel mesh panels that hooked on the ledger or transom. Mr Preston said that the system was constructed between 1975 and 1979 and over that period of time a thousand modules were manufactured.
In cross-examination, however, Mr Preston acknowledged that by referring to the system as modular, he meant that it could be made up into frames. It was not in fact sold or advertised as made up in frames. He said that it was possible to make the pieces up into frames or boxes or anything. He agreed that the fitting consisted of a complicated little joint into which ledgers and transoms could sit. Thus, instead of having a piece of tube with a number of fittings on it, an individual fitting for one or two ledgers or transoms, there was a small fitting on its own into which pipes would fit. Thus, it was modular only in the sense that there were a number of components which could be put together level by level or width by width.
Preston Erection contended that the elements which were part of common general knowledge in Australia included:
· a roof composed of either wood or steel as an overhead protective structure;
· a side wall made up of wood, steel or plywood;
· legs made up of wood or steel to support the roof;
· sufficient space between the legs to allow pedestrian access;
· adjustable screw jacks or legs;
· a combination of all the above.
All of those elements were clearly enough part of common general knowledge because they are the elements of any gantry or hoarding. I accept that on the evidence before me, the following matters were part of common general knowledge as at 20 February 1986:
· a gantry could provide a protective passageway for pedestrians walking next to a building site;
· gantries were custom built structures which comprised a roof structure, legs and solid wall on the site side of the gantry, erected on site and dismantled on site;
· some of the parts of a gantry could be modular in the sense that wall panels, beams, joists and leg members were precut to size;
· the modular parts and other custom built parts would be delivered to the site and a gantry would be erected from the parts and subsequently dismantled on the site.
The question, however, is whether the following combination was obvious at 20 February 1986 or whether such combination was inventive:
· a module comprising pairs of spaced legs supporting a roof assembly, having a roof panel extending between the upper ends of the legs, a side wall between adjacent legs and extending from an edge of the roof assembly to adjacent the lower ends of adjacent leg;
· such gantry module being moveable as a unit but independently of other modules;
· the aligning of the roof assembly and side wall of such gantry module with a roof assembly and side wall of an adjacent module to form a continuous roof assembly and side wall for the gantry;
· such gantry module having adjustable legs and pivotable feet.
The question is whether the subject of the Patent as so described was so obvious that it would at once occur to anyone acquainted with the subject, and desirous of accomplishing the end (Elconnex Pty Ltd v Gerard Industries Pty Ltd (1992) 25 IPR 173 per Lockhart J at 182 citing Vickers, Sons & Co. Ltd v Siddell (1890) 15 App Cas 496 at 502). While a simple idea may be inventive, it is nevertheless essential for the validity of a patent that there be inventiveness. However, a mere spark may be sufficient (see Allsop Inc. v Bintang Ltd (1989) 15 IPR 686 at 701).
Where there is evidence of the failure of attempts to solve a well known problem or to satisfy a “long felt want”, evidence in support of the inventive nature of the successful solution to such problem may be a powerful indication that the invention is not obvious (per Lockhart J in Elconnex v Gerard Industries at 182). The evidence in this case does not suggest a failure to satisfy a long felt want. However, in the light of the evidence of Mr Preston, the problem and needs described in the Speedy Gantry specification were real. Mr Preston identified substantially such problems as being the genesis of his scaffolding patent. The preamble in the patent for the Preston Scaffolding System confirms that to be the case. In so far as gantry hoardings were constructed from the same components as scaffolding, the same problems existed in relation to the time for erection and dismantling and the large numbers of components which had to be supervised.
Preston Erection, relying on Lockhart J in Elconnex v Gerard Industries (at 183 to 184), contended that the present case is one of an old combination which had been subjected to slight variation. It was said that scaffolding and gantry hoardings were essentially the same art and that the Speedy Gantry module system was simply a variation of the scaffolding systems described above. It was said that those variations are not other than obvious.
If Speedy Gantry has done no more than apply well known things to an article to which they had not formerly been applied, there is no element of ingenuity (see Acme Bedstead Co. Ltd v Newlands Bros Ltd (1937) 58 CLR 689 at 700 per Latham CJ). If an invention, though possessing the advantages of being an excellent design, is simply the application of a well known and well understood piece of mechanism to achieve an obvious advantage, it is not the proper subject of a patent (per Latham CJ in Acme Bedstead Co. at 701). It was contended by Preston Erection that Speedy Gantry’s system is simply the application of a well known, well understood piece of mechanism to achieve an obvious advantage.
In cross-examination, Mr Nielsen agreed that prior to February 1986 he had seen scaffolding which combined legs, roof, side wall and adjustable legs. He agreed that seeing scaffolding in that form, it could be looked at effectively as a table with four legs, the legs being adjustable in length. However, he said that, prior to February 1986, he had not seen that as an “independent thing just with four legs and a top on it”. What he had seen before February 1986 “had more legs and braces otherwise it would not stand up, but would fall over”.
Mr Nielsen accepted that scaffolding in such a form has a number of elements, namely a number of legs which are spaced, a roof assembly which is supported by the legs, such roof panel extending between the upper ends of the legs from end to end and a side wall between legs which are adjacent to that wall. He agreed that before February 1986 he had seen such structures and that it could have been possible to build another and put it beside it. The thrust of the cross examination was that Mr Nielsen effectively conceded that there existed before February 1986 gantry assemblies which included all the elements to be observed in the module described in claim 7 of the Speedy Gantry specification.
However, that does not, in my view, go far enough. The modules together may well have resembled parts of hoardings and gantries custom built for a particular site. The essence of the Speedy Gantry invention is the concept of having separate substantially identical modules which are fabricated in advance with adjustable legs and which are transported to a site erected and joined together much more quickly than would be possible if all the elements of each module had to be assembled and erected at the site. That was the inventive spark.
I have referred above to the evidence of Mr Black. He was called to give evidence as to the features which he would have considered a pedestrian gantry design would require, had he been asked, prior to January 1986, to consider a form of design for such a pedestrian gantry. The first requirement for consideration, would, he said, be a modular gantry. He said that he would have chosen that form because it would enable a scaffolding construction company to prepare the gantry off site and have it transported to the site either as a whole or with elements to be fitted in on site. That, of course, is the essence of the Speedy Gantry invention.
It is easy for Mr Black to say what he would have considered, having the benefit of hindsight and having had the benefit of seeing the Speedy Gantry patent. It is important to remember and to keep in mind the danger of applying hindsight. When a court comes to consider whether a claimed invention was obvious, it comes to the question with the benefit (in one sense the disadvantage) of then existing knowledge and practice. One therefore needs to take the greatest care to endeavour to see that hindsight plays no part in the decision making process (see the comments made by Sheppard J in Colgate Palmolive v. Cussons (1993) 26 IPR 311 at 355).
Further, the expression “common general knowledge” refers to that which is part of the ordinary equipment of all persons engaged in the relevant art, i.e. part of their general background knowledge which they put to use in the exercise of that branch of industry or manufacture (see per Aickin J. in Graham Hart (1971) Proprietary Limited v S.W. & Hart & Company Proprietary Limited (1977) 141 CLR 305 at 329). It is of relevance that Mr Black’s expertise is in relation to scaffolding and not hoardings or gantries. I have already referred to the distinction between those two ideas which Mr Black himself recognised.
Speedy Gantry says that the relevant art or trade is the erection of overhead protection structures known as hoardings or gantries and not scaffolding generally. On the other hand, the specification describes the Speedy Gantry invention as “Improvements to Scaffolding”. Although it must be accepted that the two fields of endeavour have been related to each other, I am not persuaded by Mr Black’s evidence that the concept of separate modules being joined together to make up a hoarding or gantry was obvious to all in the trade, whether the trade be the construction industry generally or the construction of hoardings and gantries.
The recognised problems or needs identified in the Speedy Gantry specification must have existed for some time prior to 1986 as Mr Preston’s evidence confirmed. As I have held above, the idea of modules in relation to gantry hoardings of the nature shown in the Speedy Gantry specification was not, on the material before me, advanced in Australia, or elsewhere for that matter, prior to the lodging of the provisional specification on 20 February 1986. The evidence relied on by Preston Erection to support its contention that the Speedy Gantry invention was obvious and did not involve an inventive step indicates that there was a need for a system which would overcome the difficulties arising from a plurality of scaffolding elements, being the time to erect and dismantle, coupled with the risk of loss of some of the numerous parts involved. The evidence indicates that attempts were made to provide a solution for those problems. No attempt produced the answer which Mr Nielsen produced. None of the systems described above fulfilled the need identified in relation to gantry hoardings. That indicates that Mr Nielsen’s concept was inventive.
Clearly, the concept of modularity alone is not, of itself, adequate to constitute an invention. There must be any number of instances where modules, being a series of standardised parts or units from which a complex structure can be assembled, have been employed. The question, however, is the nature of the “modules”. I have referred above to the evidence of Mr Sydes concerning the Bidner Scaffolding System. In the course of cross-examination, Mr Sydes was asked whether he ever saw a modular hoarding. His response was that it depends on what is meant by “modular”. The Bidner Scaffolding System was modular in the sense that sets of beams and joists were modular. However, he agreed that before he saw the Speedy Gantry system, he had never seen a modular hoarding system where all of the components were assembled off-site. In circumstances where Mr Sydes’ company, E.M. Miller, was an important participant in the hoarding market, it might be considered surprising that he did not devise a system similar to the Speedy Gantry one if it was obvious. Even his own system described above, while modular, did not involve a module of the kind seen in the Speedy Gantry specification.
The Speedy Gantry invention is the concept of constructing a gantry assembly from a plurality of modules manufactured off-site which have adjustable legs and a protective wall and roof. While the question of obviousness is a difficult one in the present case, which I regard as very much a borderline one, I consider on balance that that concept was not obvious and involved an inventive step. In other words, it was not so obvious that it would at once occur to anyone acquainted with the subject of gantry hoardings who was desirous of accomplishing a solution to the need identified. Accordingly, the ground in section 100(1)(e) is not made out. On the other hand, as I have indicated above in dealing with section 40, the Patent should not be upheld in relation to all claims.
INFRINGEMENT
Speedy Gantry alleges that the Patent has been infringed by Preston Erection and that Preston Erection threatens and intends to continue to infringe the patent. The facts concerning the alleged infringements are not in dispute. In the statement of claim, two instances are particularised.
First it was said that between May and July 1994 Preston Erection supplied modular gantry units by way of hire for use at the Westfield Shopping Centre construction site at Parramatta Sydney. Second, it was alleged that in or around October 1995, Preston Erection sold modular gantry units to T.A. Taylor and that those units were being used at Millers Self Storage, Parramatta Road, Petersham.
An interlocutory injunction was granted by Spender J on 13 February 1996, prior to the transfer of the proceedings to the Sydney Registry. Accordingly, the claim for infringement is limited to the instances to which I have just referred. Nevertheless, Preston Erection accepts that it intends, unless restrained, to continue to supply modular gantry units in the manner of those supplied at the Westfield site and the Millers site. Accordingly, if Speedy Gantry succeeds, its principal relief will be a final injunction.
Assuming the validity of the Patent, there are two basis upon which Preston Erection contend that there was no infringement. The first concerns the manner in which the supporting legs are attached to the roof assembly. The second concerns the absence of a side wall in some of the modules involved in the alleged infringements.
The gantry assembly at the Westfield site extended along the western side of the shopping centre and provided pedestrian access to two entrances to the shopping centre. The assembly was made up of generally box like modules, each module having four legs and a roof assembly. Some modules had a single wall, some modules had two opposed walls and some modules did not have any walls at all. Some modules had an integrally formed steel wall secured between adjacent legs and some modules had a plywood wall fitted to a frame formed by adjacent legs. There were seventeen modules in the assembly, eleven of which had walls. The other six modules had no walls. On 6 October 1995, seven modular gantry units were in situation in front of the Millers site. It was suggested that the units were the same as those which had previously been situated at the Westfield site in May 1994. On 16 November 1985, three additional units were included in the assembly at the Millers site.
Preston Erection contended that there was no infringement of Claim 1 relating to a gantry assembly if there are included in the assembly modules which do not have side walls. Claim 1 requires that there be a plurality of gantry modules, each module comprising the module which is described in claim 7. An essential element in each module is a side wall. Such a contention would not be an answer to infringement of claim 7 alone, but only to the claims involving a gantry assembly.
In any event, I do not consider that the absence of a wall in some of the modules has the consequence contended for by Preston Erection. To the extent that there is a plurality of modules assembled together, each of which has a side wall, there will be an infringement of claim 1. It will be a question of fact as to whether a particular assembly forms a continuous roof assembly and side wall for any given site. There was no explanation as to why some modules had no wall. It could be, for example, that at the part of the construction site opposite those modules, there was no need for protection for the public. Accordingly, I consider that there would have been an infringement of claim 1 in relation to the Parramatta site. There is no reason to come to any different conclusion in relation to the Millers site.
The second basis upon which Preston Erection contends that there was no infringement concerns the attachment of a roof assembly to the supporting legs. The module is described in claim 1 as comprising, inter alia, “a plurality of spaced legs, a roof assembly supported by the legs, said roof assembly having a roof panel extending between the upper ends of the legs”. A drawing of a module at the Westfield site suggested that the roof and legs were “an integral construction”. In other words, there was no support of the roof assembly by the legs because the legs and the roof assembly were the same thing. Other evidence indicated that the roof assembly was welded to the legs. It was said that, since welding is a form of fusion, the roof assembly and the legs were not attached to each other but were an integral construction.
Claim 7 describes the module in slightly different language from claim 1. Claim 7 relevantly provides that the module comprises “a plurality of spaced legs, a roof assembly secured to and supported by the legs, said roof assembly having a roof panel extending between the upper ends of the legs”. It seems clear that there was no intention to draw any distinction between the module described in claim 7 and the plurality of modules which were to comprise the gantry assembly in Claim 1. However, the reference to the roof assembly being secured to, as well as being supported by, the legs is relied upon by Preston Erection as distinguishing the modules at the Westfield site from those described in the Patent.
While it may be correct to say that welding entails the uniting of pieces of metal into a homogenous mass by pressure or hammering or by fusion with electric arc, I do not consider that the consequence of welding the roof assembly to the legs is that the roof assembly is not secured to or supported by the legs. Welding is the means whereby the roof assembly is secured to the legs. It is clearly supported by the legs. Accordingly, I consider that if the Patent is valid, there was an infringement by Preston Erection. Further, it is clear that Preston Erection will, unless restrained, continue to infringe by the sale or hire of modules substantially similar to those used at the Westfield site and at the Millers site. Therefore, Speedy Gantry is entitled to a final injunction restraining infringement if the Patent is valid.
RELIEF AGAINST MR PRESTON
In the statement of claim it is alleged that the infringement by Preston Erection of Speedy Gantry’s monopoly in the Patent was procured and authorised by and occurred with the knowing involvement of Mr Preston. It is alleged that therefore Mr Preston also infringed the Patent. Speedy Gantry contended, in essence, that, because Mr Preston was the guiding mind of Preston Erection, and authorised the conduct of Preston Erection which is alleged to have constituted infringement of the Patent, Mr Preston himself infringed the Patent.
There is a difficulty with that contention. The contention is said to be based on section 13 of the 1990 Act which provides that a patent gives the patentee the exclusive rights during the term of the patent to exploit the invention and to authorise another person to exploit the invention. It was said that the notion of authorisation is to be imported into conduct said to constitute infringement. Because Mr Preston authorised Preston Erection to engage in the conduct which constituted infringement, he was himself infringing.
It was said that it was Mr Preston’s role as the governing mind of Preston Erection which rendered him guilty of the infringement. It was accepted that it was not simply his role as an employee which constituted infringement. It was contended that by authorising some other entity, such as a corporation, to exploit in a way which infringes, then the authoriser also infringes.
The conduct complained of was the conduct of the corporation, Preston Erection. Preston Erection is a separate legal entity which, because it is a legal fiction, can act only through its agents. A corporation has no mind other than the minds of its directors. The infringement relied on was exploitation on the part of Preston Erection by selling and hiring the items that infringed the Patent. It was the company which did the exploiting.
The contention appears to me to involve a confusion of the concepts of principal and agent. A principal who authorises an agent to engage in conduct on behalf of the principal will be liable if that conduct constitutes infringement of the rights granted by a patent. A mere employee directed to act in the interests of his employer will not be liable for conduct which constitutes infringement if he was simply acting as the agent of his employer. However, there is no question of Mr Preston giving authority to Preston Erection to act on behalf of Mr Preston. Mr Preston’s mind is the mind of Preston Erection. In the circumstances, I do not consider that the evidence before me justifies a conclusion that Mr Preston himself has been guilty of conduct which constitutes infringement of the Patent.
An injunction against Preston Erection would restrain Preston Erection by itself, its servants or agents. A servant or agent who knowingly engaged in conduct on behalf of a respondent so restrained which was in breach of the injunction, would be guilty of contempt. Of course, if Mr Preston knowingly participated in an infringement in contravention of an injunction, he would be guilty of contempt. Accordingly, even if there should be relief against Preston Erection, I do not consider that there is any basis for an injunction against Mr Preston.
It has not been suggested that Mr Preston has gained any benefit by reason of any alleged infringement such as would render him liable to an order for an account of profits. I do not consider that any conduct of Mr Preston in his capacity as director or executive officer of Preston Erection is capable of rendering him liable for any damages suffered by reason of the infringement of the Patent. It follows that the proceedings as against Mr Preston should be dismissed.
CONCLUSION
It follows from the above that subject to the matters raised above in relation to section 40, the cross claim for revocation should fail and that the claim for an injunction restraining infringement should succeed against Preston Erection. However, having regard to the matters concerning section 40, and to the concessions made by Speedy Gantry in relation to certain of the claims in the complete specification, I will not formulate orders at this stage. Some reformulation may overcome any challenge to validity and it may be that orders pursuant to section 105 amending the Patent could be appropriate. Accordingly, I propose to stand the proceedings over to enable the parties to consider my conclusion and the reasons for them and for further argument, if necessary, as to the appropriate relief.
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I certify that this and the preceding fifty-six (56) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett |
Associate:
Dated: 13 March 1998
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Counsel for the Applicant: |
D. K. Catterns QC |
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Mrs D. A. Mullins |
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Solicitor for the Applicant: |
Bennett & Phillip |
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Counsel for the Respondent: |
M.R. J . Ellicott |
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B. P. Jones |
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Solicitor for the Respondent: |
Hazan Solicitors |
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Dates of Hearing: |
1-5, 9-11 December 1997 |
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Date of Judgment: |
13 March 1998 |
