FEDERAL COURT OF AUSTRALIA

PATENTS – combination patent – improved scaffolding gantry – modular prefabricated units – whether obvious – Standing to apply for patent – Assignee of the actual inventor.

Patents Act 1952 (Cth) s 100(1)(e)

Wellcome Foundation Ltd v V R Laboratories (Aust) Pty Ltd (1981) 128 CLR 262 mentioned

Re Beecham Group Ltd’s (Amoxycillin) Application [1980] RPC 261 mentioned

Re Coopers Animal Health Australia Limited v Western Stock Distributors Ltd (1986) 67 ALR 390 mentioned

Biogen v Medeva plc [1997] RPC 1 at 45 discussed

Esso Australia Resources Limited v Commissioner of Taxation (1998) 98 ATC 4768 at 4779mentioned

S & I Publishing Pty Limited v Australian Surf Life Saver Pty Limited (unreported, 20 November 1998) mentioned

Britain v Hersch (1885) 5 RPC 226 followed

Winner v Ammar Holdings Pty Ltd (1993) 41 FCR 205 applied

Sunbeam Corporation v Morphy-Richards (Australia) Pty Ltd (1961) 35 ALJR 212 applied

Precision Plastics Pty Ltd v Demir (1975) 132 CLR 363 applied

PRESTON ERECTION PTY LIMITED and JOHN CLEMENT PRESTON v SPEEDY GANTRY HIRE PTY LIMiTED

NG 485 of  1998

WILCOX, HEEREY and LINDGREN JJ

18 DECMEBER 1998

SYDNEY

THE COURT ORDERS THAT:

1.         The appeal be allowed.

2.         The orders made on 13 May 1998 be set aside and in lieu thereof it be ordered that:

            (i)         the application be dismissed

            (ii)        Letters Patent 578,176 be revoked.

3.         The respondent pay the costs of the appellants of the appeal and of the proceedings at first instance.

4.         The cross-appeal be dismissed with no order as to costs.

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

REASONS FOR JUDGMENT

THE COURT:  The trial judge upheld a claim by the respondent (“Speedy Gantry”) that the first appellant (“Preston Erection”) had infringed its patent.  His Honour dismissed Preston Erection’s cross-claim for revocation.  His Honour however also dismissed Speedy Gantry’s claim for infringement against the cross-respondent Mr John Preston, a director of Preston Erection, and Speedy Gantry cross-appeals against that order.

The principal issues before his Honour were obviousness, novelty, entitlement to the patent and false representation.  The last two issues arose out of what was said to be the absence of an assignment of the invention by the inventor to Speedy Gantry.

The priority date is 20 February 1986.  All issues of patentability are governed by the Patents Act 1952 (Cth) (“the Act”).

The patent in suit

The patent in suit is entitled  “Improvements to Scaffolding”.  It is said to be related to an improved scaffolding gantry suitable particularly for erection on a footpath so as to allow pedestrians to pass while being protected from falling debris associated with building construction or demolition on an adjacent building site.

The specification states that scaffolding gantries are commonly formed from a plurality of elements including upright pipe members and horizontal members (“ledgers”) which are assembled on the site.  The footpath area has to be hired from the relevant local authority from the commencement of erection.  High labour costs are involved in both assembly and disassembly.  The specification states:

“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.”

In essence, the invention involves a table-like structure with four legs and a roof and a wall on the side adjacent to the building site.  Each unit is brought ready-made to the required position on the footpath and joined with similar units to form a continuous gantry over the required length.  When the gantry is no longer required, the units are separated and removed.  A variation of the design involves legs whose lengths may be altered by a screw mechanism, thus enabling units to be erected on a sloping or uneven footpath.

The claims of the patent fall into two groups.  Claims 1 to 6 claim a gantry assembly comprising a plurality of “independently movable gantry modules”.  Those claims deal with a number of variations including (claim 3) means of changing the length of the legs.  Claims 7 to 11 deal with the individual units or modules.

Prior art

There was a body of evidence as to prior art.  That which was the subject of debate on the appeal was as follows.

Mr James Lockrey is the Managing Director of Lockrey Hoardings Pty Limited, a company he founded in about 1962.  His company is one of the leaders in the field of overhead protective structures in New South Wales.  Mr Lockrey’s successful career comes from a practical rather than theoretical background.  As a young man he worked for oaHoaH

some seven years as a bus driver. 

In about 1981 or 1982 Mr Lockrey’s company constructed a timber hoarding at a building site in Woolloomooloo.  The hoarding was about three metres in length.  He prepared for the purposes of his evidence a rough sketch of the hoarding as follows.  (The view is from above and to the right of the structure.)

The unit consisted of four timber legs, a timber roof and a plywood side wall attaching 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.  The hoarding was a complete unit which had been custom built for the particular site.  Later the unit was used on a building site in Mort Street, Balmain.  That site was uneven so the company’s employees cut down the legs to suit the site.  The unit was “much too high” to carry around in its existing form as a fully built hoarding structure.  The legs were cut down again and the units used as a work platform on the back of a truck. 

In his affidavit Mr Lockrey deposed:

“Although we did not construct other units, it occurred to me in or about 1981 or 1982 that it would save a lot of time in labour to erect hoardings if we constructed a number of these modules, transported them to site and then attached them together on building sites.”

He was not cross-examined on this passage.  It is not mentioned in his Honour’s judgment. 

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 would be transported to a site and there joined to other modules to form a complex.  He prepared the following diagram at the time.

It was accepted in evidence that, when this drawing was made by Mr Preston, it did not contain what appears to be a line drawn behind the rearmost legs of the module.  If that line indicates a wall between the module and the building site, this was not indicated on the plan that Mr Preston drew.

The judgment below

On the issue of  novelty his Honour said as to the Lockrey unit

“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.”

As to the Preston drawing his Honour thought that it did not:

“disclose a gantry or protective hoarding for pedestrians at all.  The Preston Drawing depicts no more than offices on legs”.

As to obviousness, his Honour noted Speedy Gantry’s contention that the patent was a combination patent.  Its invention was said to be:

“… the conception and execution of ‘a new thing’, namely, an assembly of independently movable 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."  [Emphasis in original]

After referring to Wellcome Foundation Ltd v V R Laboratories (Aust) Pty Ltd (1981) 128 CLR 262 at 270 his Honour noted that the issue was "whether anyone skilled in the relevant art but lacking inventive capacity would consider that trying [the respondent’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”:  Re Beecham Group Ltd’s (Amoxycillin) Application [1980] RPC 261 at 290-1, Re Coopers Animal Health Australia Limited v Western Stock Distributors Ltd (1986) 67 ALR 390 at 410.  His Honour then said:

“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.”

His Honour thought that the evidence did not suggest a failure to satisfy a “long felt want” although the problem and needs described in Speedy Gantry’s specification were real.  He referred to cross-examination of the inventor, Mr Nielsen, to the effect that, before the priority date, he had seen scaffolding which combined legs, roofs, side wall and adjustable legs.  Mr Nielsen 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.  He effectively conceded that there existed before the priority date gantry assemblies which included all the elements he observed in the module described in claim 7 of the patent in suit.  His Honour then said:

“However, that does not, in my view, go far enough.  The modules together may well have resembled parts of hoarding and gantries custom built for a particular site.  The essence of Speedy Gantry’s 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.”

His Honour then referred to the evidence of Preston Erection’s expert Mr Black who said that, had he been asked prior to the priority date to consider a pedestrian gantry design, he would have chosen a modular gantry 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.  His Honour pointed out the dangers of applying hindsight and observed that Mr Black’s expertise was in relation to scaffoldings rather than hoardings or gantries. 

The conclusions of his Honour on the issue of obviousness are contained in the following passage:

“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 one 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.”

Having regard to the conclusion we have reached on this appeal, we need mention the remaining issues only briefly.  His Honour found there had been infringement by Preston Erection in supplying modular gantry units by way of hire at a Westfield Shopping Centre construction site in Parramatta and in selling such units to one T A Taylor, which units were being used at a site in Petersham.  His Honour further held that a final injunction was appropriate.

The claim against Mr Preston was based on s 13 of the Patents Act 1990 (Cth).  His Honour rejected this claim.  He considered there was no question of Mr Preston giving authority to Preston Erection to act on his behalf.

Conclusion on the appeal

In Biogen v Medeva plc [1997] RPC 1 at 45, with the agreement of the other members of the House of Lords, Lord Hoffmann said:

“The question of whether an invention was obvious had been called “a kind of jury question” (see Jenkins L.J. in Allmanna Svenska Elektriska A/B v. The Burntisland Shipbuilding Co. Ltd. (1952) 69 R.P.C. 63, 70) and should be treated with appropriate respect by an appellate court.  It is true that in Benmax v. Austin Motor Co. Ltd. [1955] A.C. 370 this House decided that, while the judge’s findings of primary fact, particularly if founded upon an assessment of the credibility of witnesses, were virtually unassailable, an appellate court would be more ready to differ from the judge’s evaluation of those facts by reference to some legal standard such as negligence or obviousness.  In drawing this distinction, however, Viscount Simonds went on to observe, at page 374, that it was ‘subject only to the weight which should, as a matter of course, be given to the opinion of the learned judge’.  The need for appellate caution in reversing the judge’s evaluation of the facts is based upon much more solid grounds than professional courtesy.  It is because specific findings of fact, even by the most meticulous judge, are inherently an incomplete statement of the impression which was made upon him by the primary evidence.  His expressed findings are always surrounded by a penumbra of imprecision as to emphasis, relative weight, minor qualification and nuance (as Renan said, la vérité est dans une nuance), of which time and language do not permit exact expression, but which may play an important part in the judge’s overall evaluation.  It would in my view be wrong to treat Benmax as authorising or requiring an appellate court to undertake a de novo evaluation of the facts in all cases in which no question of the credibility of witnesses is involved.  Where the application of a legal standard such as negligence or obviousness involves no question of principle but is simply a matter of degree, an appellate court should be very cautious in differing from the judge’s evaluation.”

The part of this passage commencing “The need for appellate caution …” has already been cited with approval by at least two Full Courts of this Court:  Esso Australia Resources Limited v Commissioner of Taxation (1998) 98 ATC 4768 at 4779 (tax) and S & I Publishing Pty Limited v Australian Surf Life Saver Pty Limited (unreported, 20 November 1998) at 7 (s 52 of the Trade Practices Act 1974 (Cth) and passing off).  We too consider that Lord Hoffman’s observation provides a valuable insight into the nature of the appellate process.  Moreover his Lordship was discussing obviousness, with which the present case is also concerned.

However it needs to be kept in mind that Biogen was concerned with a genetic engineering patent.  The technical evidence was highly complex and the House of Lords sat with two scientific advisers.  By contrast, the present case does not involve sophisticated technology.  The essence of the claimed invention is not a gantry to protect pedestrians from work on a building site, nor the prefabrication of such a gantry off site, nor screw devices for adjusting the lengths of legs, nor any particular mechanical componentry.  Rather the inventive spark, or the scintilla of invention, is said to lie in application of the concept of modularity.

That something has not been done before is not conclusive against a plea of obviousness.  As Cotton LJ said in Britain v Hersch (1885) 5 RPC 226 at 232:

“I do not agree with the view … that when anything is done which has not been done before, that is sufficient to justify a patent being obtained for it.  In my opinion, it must be a question of whether there is sufficient invention to justify a monopoly being granted by the Crown for the particular thing.”

Indeed as Windeyer J pointed out in Sunbeam Corporation v Morphy-Richards (Australia) Pty Ltd (1961) 35 ALJR 212 at 217-218, a consideration of obviousness necessarily assumes that the alleged invention has not been produced before the priority date – were this otherwise the patent would fail on the ground of want of novelty.  The authorities on obviousness are reviewed by Davies J (with whom Morling J agreed) in Winner v Ammar Holdings Pty Ltd (1993) 41 FCR 205 at 208-214.  We adopt what his Honour there said.

A gantry of the kind under consideration is a simple structure for a simple purpose.  The only two particular features that were discussed in argument were the adjustable legs and the side wall.  It is not suggested that the former involves an inventive step.  It was common ground that the latter was at all material times a mandatory requirement of local authorities in the Sydney metropolitan area.

Since a gantry that is small enough to be pre-fabricated and transported through city streets to a building site will often not be long enough to protect the length of footpath adjoining the building site, the idea of bringing two or more such gantries and joining them together on site seems to us obvious, within the meaning of the authorities.

And the evidence is that such an idea was in fact considered.  We refer to the passage from Mr Lockrey’s affidavit already quoted.  This evidence was not inherently incredible, and was given by a witness whose honesty was not challenged and who was not cross-examined on it.  It should be accepted:  Precision Plastics Pty Ltd v Demir (1975) 132 CLR 363 at 371 per Gibbs J.  This passage did not fall out unpredictably in the course of evidence but was contained in the affidavit of an important witness.  So it is reasonable to infer that the failure to cross-examine was a matter of conscious choice, based on an assessment that the witness was unlikely to be shaken.

Entitlement to the Patent and false suggestion or misrepresentation

The conclusion which we have reached above on the issue of obviousness makes it unnecessary for us to address further issues.   But we think it appropriate to make some brief observations on the issues whether Speedy Gantry was entitled to the Patent and whether it obtained the Patent by false suggestion or misrepresentation.   These two grounds of revocation are provided for by s 138 (3) (a) and (d) of the Patents Act 1990 (Cth) respectively.

Section 34 (1) of the Patents Act 1952 Act provided, relevantly, 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.”

(The “assignee of the actual inventor” basis of standing to apply was not retained in s 15 of the Patents Act 1990.) 

It was common ground that Mr Nielsen was the actual inventor.  There was not before the primary judge, any evidence of an express written or oral assignment from Mr Nielsen to Speedy Gantry.   His Honour held, nonetheless, that Speedy Gantry was the assignee of Mr Nielsen (s 34 (1) (b)) “by conduct”, or, in the alternative, was a person who, if the Patent had been granted upon an application made by Mr Nielsen, would have been entitled to have the Patent assigned to it (s 34 (1) (fa)).  On the appeal, Speedy Gantry submitted that his Honour had erred in both respects.  We are disposed to agree with the primary judge (i) that s 34 (1) (b) contemplates the possibility of an assignment by the actual inventor of the benefit of the invention and, in particular, of the right to apply for a patent in respect of it (see George C Warner Laboratories Pty Ltd v Chemspray Pty Ltd (1967) 41 ALJR 75 and Hepples v Federal Commissioner of Taxation 90 ATC 4,497 at 4,511); (ii) that the assignment need not be express and may be implied from conduct (see Terrell on the Law of Patents 12th ed, 1971 at par 89, p 30); and (iii) that there was available to Speedy Gantry, not only the standing of assignee of the actual inventor provided for in s 34 (1) (b), but also the standing afforded by s 34 (1) (fa), the latter on the ground that Speedy Gantry would have been entitled under s 55 of the Property Law Act 1974 of Queensland to specific performance of Mr Nielsen’s contractual promise made to Mr Richards.

Finally, in relation to the issue of the obtaining of the Patent by false suggestion or misrepresentation, again we are inclined to agree with his Honour that on the hypothesis that Speedy Gantry’s application for the Patent was sustained on ground (fa) and not ground (b) in s 34 (1), the resultant “false suggestion or misrepresentation” that Speedy Gantry was the assignee of the actual inventor, did not “materially contribute” to the Commissioner’s decision.

Orders

The appeal will be allowed.  The orders of the trial judge made on 13 May 1998 will be set aside and in lieu thereof it will be ordered that the application be dismissed and Letters Patent 578,176 be revoked.  There will be an order that Speedy Gantry pay the costs of the appellants of the appeal and of the proceedings at first instance.  The cross-appeal will be dismissed with no order as to costs.

Associate:

Dated:              December 1998