FEDERAL COURT OF AUSTRALIA

Williams Advanced Materials, Inc v Target Technology Company LLC

[2004] FCA 1405

INTELLECTUAL PROPERTY – PATENTS – novelty – reverse infringement – no suggested advantage or difference between materials in possible range – reverse infringement – equal in practical utility – clear directions in prior art to work within claimed ranges or proportions – no suggestion that specified proportions or ranges other than arbitrary – claim construction and disclosure in prior art a matter for expert evidence only to the extent of special meaning to skilled reader – obviousness – reliance on evidence of skilled worker with no common general knowledge in Australia for inventive step – mental logic of the notional team constituting the skilled addressee – evidence given without knowledge of the patent – no hindsight analysis – test in Astra – not a question of worthwhile to try – inventive step is the choice of metal alloys in the combination that was otherwise common general knowledge and acknowledged as known in the specification – no suggestion that initiation of inventive step in other than the choice of the new alloys for use in the reflective layers by reference to known requirements – dependent and omnibus claims – incorporates the invalidity of the independent claims to the extent of dependence on that claim – lack of sufficiency of description

COSTS – O 62 r 11(2) – gross sum – evidence of detailed bill of costs – no appearance by respondent – further expense and delay – success by applicant – award of costs – amount logical, fair and reasonable

PRACTICE AND PROCEDURE – default judgment – revocation of patent – patentee chooses not to defend patent monopoly – Federal Court Rules O 10 r 7(1)(b) – O 11 r 23(1)(b) – O 33 r 3 (repealed) – s 190(3) Evidence Act – discretion in s 190(3) applied – relevance of O 33 r 3 (repealed) to s 190(3) – translations of prior art Japanese patent not a certified translation

Federal Court Rules O 10 r 7(1)(b); O 11 r 23(1)(b); O 33 r 3 (repealed); O 62 r 11(2)

Evidence Act 1995 (Cth) s 190(3)

Patents Act 1990 (Cth) ss 7(2), 40(2)(a)

Aktiebolaget Hassle v Alphapharm Pty Ltd [1999] FCA 628

Aktiebolaget Hassle v Alphapharm Pty Limited (2002) 212 CLR 411

Aus Fence Hire Pty Ltd v Thomas [2004] FCA 557

Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119

Datadot Technology Ltd v Alpha Microtech Pty Ltd [2003] FCA 1449

Eichengrun’s Application [1932] 49 RPC 435

Gambro Pty Limited v Fresenius Medical Care Australia Pty Limited [2004] FCA 323

General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd [1972] RPC 457

Hill v Evans (1862) 6 LT 90; (1862) 1A IPR 1

Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd (2001) 207 CLR 1

Maxims Entertainment Pty Ltd v Chinatown Enterprises Pty Ltd [1998] FCA 1707

Meyers Taylor Pty Ltd v Vicarr Industries Ltd (1977) 137 CLR 228

Minnesota Mining and Manufacturing Co v Beiersdorf (Australia) Ltd (1980) 144 CLR 253

My Distributors Pty Ltd v OMAQ Pty Ltd (1992) 36 FCR 578

Nicaro Holdings Pty Ltd v Martin Engineering Co (1990) 91 ALR 513

NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd (1993) 44 FCR 239

NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd (1992) 24 IPR 1

Ramset Fasteners (Aust) Pty Ltd v Advanced Building Systems Pty Ltd (1999) 44 IPR 481; (1999) 164 ALR 239

Lahore: Patents, Trade Marks and Related Rights Volume 1

WILLIAMS ADVANCED MATERIALS, INC v TARGET TECHNOLOGY COMPANY LLC

NSD944 OF 2004

BENNETT J

29 OCTOBER 2004

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD944 OF 2004

BETWEEN:	WILLIAMS ADVANCED MATERIALS, INC APPLICANT
AND:	TARGET TECHNOLOGY COMPANY LLC RESPONDENT
JUDGE:	BENNETT J
DATE OF ORDER:	29 OCTOBER 2004
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD944 OF 2004

BETWEEN:

WILLIAMS ADVANCED MATERIALS, INC

APPLICANT

AND:

TARGET TECHNOLOGY COMPANY LLC

RESPONDENT

JUDGE:	BENNETT J
DATE:	29 OCTOBER 2004
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1 In this application to revoke certain claims of a patent (Australian Patent No 742907) (‘the patent’), Williams Advanced Materials, Inc (‘the applicant’) alleges, in the amended particulars of invalidity, lack of novelty, lack of inventive step, no manner of manufacture, lack of sufficiency and lack of clarity. The applicant now relies upon lack of novelty and lack of inventive step, lack of clarity and seeks to rely, in addition by way of amendment to the particulars of invalidity, lack of sufficiency (s 40(2)(a) of the Patents Act 1990 (Cth) (‘the Act’). I will deal with the grounds of invalidity as pressed at the hearing. The applicant moves on a notice of motion seeking declarations that certain claims of the patent are invalid and an order that those claims be revoked or amended.

The patent

2 The patent relates to metal alloys, in particular silver-based and copper-based alloys, comprising the reflective or semi-reflective layer of optical storage media such as compact disc (CD’s) and digital video discs (DVD’s). The claims which the applicant seeks to revoke concern silver-based alloys.

3 The patent application was filed on 14 June 1999. It claims a priority date of 22 June 1998.

Procedural matters

4 Target Technology Company LLC (‘the respondent’) is a US corporation organised under the laws of Delaware and has its principal place of business in Irvine, California (‘the California address’). The California address is its current address on the relevant US register of companies and the address stated for the respondent on the patent. The patent application was lodged by Spruson & Ferguson, patent attorneys. They are the designated Australian attorney and agent. The patent also designates the respondent’s US attorney, Mr Kurt Jones and his firm as agents.

5 The application, statement of claim and particulars of invalidity were filed on 8 August 2003. They were served on Spruson & Ferguson and Mr Jones and at the California address. No appearance was filed by the respondent. Orders have been made for service during the preparation for hearing and all substantive affidavits have been served in accordance with those orders, as well as notice of the date of hearing. Two affidavits, one correcting typographical errors and one dealing with a small quantum in additional costs sought, were not served.

6 The respondent did not appear. The applicant and its legal representatives have received no correspondence or other communication from the respondent. The applicant submits that the respondent has abandoned the challenged claims of the patent. That seems to be the case. In circumstances where the respondent has not responded to substantive affidavits, I allowed the applicant to read the additional two unserved affidavits.

Default judgment

7 On 10 November 2003, Beaumont J ordered that the respondent file and serve its defence by 1 December 2003. Service of the defence was effected in compliance with his Honour’s orders, as subsequently varied by Registrar Hedge.

8 The applicant seeks judgment pursuant to O 10 r 7(1)(b). This was the appropriate rule rather than O 11 r 23(1)(b) of the Federal Court Rules, as an order was made by the Court and not complied with (Aus Fence Hire Pty Ltd v Thomas [2004] FCA 557; My Distributors Pty Ltd v OMAQ Pty Ltd (1992) 36 FCR 578 at 581). Both rules have been repealed since the hearing.

Section 190(3) of the Evidence Act

9 It is necessary for the applicant to support its motion for judgment with evidence to prove the facts necessary but the court may exercise its discretion to dispense with the rules of evidence. Section 190(3) of the Evidence Act 1995 (Cth) sets out matters relevant to the exercise of that power:

‘(a) the matter to which the evidence relates is not genuinely in dispute; or

(b) the application of those provisions would cause or involve unnecessary expense or delay.’

Relevantly, s 190(4) provides for the taking into account of:

‘(a) the importance of the evidence in the proceeding; and

(b) the nature of the cause of action… and the nature of the subject matter of the proceeding; and

in exercising the court’s discretion.

10 In the exercise of the discretion, comments that have been made in respect of O 33 r 3 of the Federal Court rules, now repealed, are apposite. Factors such as notice to the respondent and the opportunity given to the respondent to appear, the fact that the respondent has chosen not to appear to dispute the matters raised in the affidavits, facts not genuinely in dispute and unnecessary and unreasonable expense and delay that would be occasioned by compliance with all of the rules of evidence are all relevant matters.

11 It is also relevant that the subject matter of this application is a patent, giving the respondent a monopoly over the subject matter of the claims, a right that the respondent has chosen not to defend. There is also a public interest in ensuring that only valid patents remain in force and that a challenge to a patent not be delayed and a monopoly continue because a patentee has chosen not to defend the claim for revocation. While there may be a number of reasons why such a choice is made, including, for example, commercial considerations, it may also be the case that the patentee considers that no defence can be raised to the claim for revocation. Such an inference may be drawn where, as here, the patentee has been given ample opportunity to present its case and has, without explanation, chosen not to comply with the order to file a defence (Eichengrun’s Application (1932) 49 RPC 435).

12 The patentee has subsequently filed a further patent application, No 765849, also claiming certain silver-based alloys but of a composition different to those within the claims of the patent. That is a fact that may provide some explanation for the failure by the patentee to defend the patent.

13 It is not suggested by counsel for the applicant that it is not necessary for the applicant to prove its case. To the contrary, counsel submits that as an applicant for default judgment, under the then existing rule, such proof is necessary. That is clearly correct.

The nature of the evidence to which the discretion is to be applied

14 The applicant relies upon, for example, translations of Japanese patents which are not certified translations in Australia. The reliability of the translations are asserted in an affidavit and text books said to be standard text books. The availability of those books in libraries is proved by hearsay evidence which is, in turn, not in proper form.

15 It seems to me that it is entirely appropriate to exercise the discretion in s 190(3) of the Evidence Act to permit the evidence to be read. I note that an uncertified translation is the very example given by Burchett J in Maxims Entertainment Pty Ltd v Chinatown Enterprises Pty Ltd [1998] FCA 1707 as appropriate for the exercise of discretion under O 33 r 3.

The patent

The background of the invention

16 The alleged invention relates to reflective layers or semi-reflective layers used in optical storage media. Pages 1 to 7 of the patent set out the background of the invention and matters said to have been known as at the priority date.

17 The patent states that four layers are generally present in the construction of a single layer conventional, pre-recorded, optical disc (a CD) as follows:

(a) the first layer is made from optical grade polycarbonate resin;

(b) an optically reflective layer is placed over the first layer. This is usually made of aluminium or an aluminium alloy and is deposited by a vapour deposition technique such as sputtering or thermal evaporation;

(c) next, a solvent-based or ultraviolet curing-type resin is applied over the reflective layer to protect it from handling and the ambient environment;

(d) the fourth layer is a highly reflective coating on the disc to reflect the laser light (used to read the disc) from the disc in order to read the presence of changes in light intensity which form the basis of stream of digital data. This reflective layer is usually aluminium, copper, silver or gold, all of which have an optical reflectivity of more than 80 per cent. Aluminium and aluminium alloys are commonly used because of their lower cost and adequate corrosion resistance.

18 The patent states that, although gold satisfies all the functional requirements for a highly reflective layer, it is comparatively more expensive than aluminium.

19 The background of the invention, having recited the use of gold as a reflective or as a semi-reflective layer says:

‘Therefore, what is needed are some new alloys that have the advantages of gold when used as a reflective layer or as a semi-reflective layer in an optical storage medium, but are not as expensive as gold. This invention addresses that need.’

20 Recordable compact discs, or CD-Rs, have a similar structure to a single layer disc, but have a layer of organic dye between the polycarbonate layer and the reflective layer. The key component of the CD-R is the organic dye. As the dye may contain halogen ions or other chemicals that can corrode the reflective layer, many commonly used reflective layer materials, such as aluminium, may not be suitable to give the CD-R disc a reasonable life span. Gold has therefore been frequently used to manufacture CD-Rs as it satisfies all of the functional requirements of CD-Rs, but it is a very expensive solution.

21 Digital video discs or DVDs are pre-recorded optical discs. These discs have two halves, each of which is made of polycarbonate resin that has been injection or compression moulded and then sputter coated with a reflective layer. The two halves are then bonded or glued together with a UV curing resin to form the whole disc. The disc can then be played from both sides.

22 A variation of the DVD family of discs is the DVD-dual layer disc. This also has two information layers but both are played back from one side. In this disc, the highly reflective layer is the same as for the other types of disc but the second layer is only semi-reflective. The semi-reflective layer can be formed from the same alloys as the highly reflective layer but is of reduced thickness. Gold has all the necessary qualities for the semi-reflective layer but it is very expensive. Silicon has been used but creates a number of problems.

23 The problem posed and allegedly solved by the patent is the creation of ‘some new alloys that have the advantages of gold when used as a reflective layer or a semi-reflective layer in an optical storage medium, but are not as expensive as gold’. As page 1 of the patent states, the invention relates to reflective layers or semi-reflective layers used in optical storage media that are made of silver-based alloys or copper-based alloys.

Summary of the invention

24 The patent specification then continues with a summary of the invention. The relationship between the amount of silver and the amount of palladium is set out without explanation. The relationship is defined by the stated range. There is nothing in the background of the invention that suggests that the relationship between these metals is other than well-known or understood by those skilled in the art. There is reference to other, prior art, patents that apparently give details of ‘the manufacture and operation of an optically readable storage system’ and ‘the operation and construction’ of recordable discs.

25 The relevant aspect of the claimed invention is an optical storage medium, with a first substrate having a pattern of features in at least one major surface and a first reflective layer adjacent the feature pattern. The reflective layer includes a metal alloy which contains silver and palladium in particular proportions. That invention is claimed in claim 9 of the patent.

26 The objectives of the invention are set out as follows:

(a) to provide a new metallic alloy for thin film reflective layers that have high reflectivity and similar sputtering characteristics as gold, and is corrosion resistant and yet inexpensive. When a layer of this invention is made thin enough, it can be semi-reflective and transmissive to laser light for the application of DVD-dual layer;

(b) to create a new class of copper containing alloys for thin reflective layers with moderate to high reflectivity and good corrosion resistance.

The embodiments of the invention and the examples

27 The preferred embodiments of the invention are set out on pages 13 to 25 of the patent. The uniqueness of each embodiment is expressed to be related to the presence of one of the metal alloys.

28 In the part of the specification that provides a description of the preferred embodiments, there is a reference to the principles of the invention and a statement: ‘[a]lso included are any alterations and modifications to the descriptions that should normally occur to one of average skill in this technology’. The language used in describing the embodiments, before specific compositions and ranges are mentioned, is in general qualitative terms such as ‘silver is alloyed with a comparatively small amount of gold’ and ‘the silver is alloyed with a comparatively small amount of palladium’ and ‘[t]he reflectivity of the above-described binary or ternary alloy systems can be adjusted by changing the concentration of each element. Because this ternary alloy system is isomorphous, there is no metallurgical difficulty in mixing the metals in any combination of concentrations to keep all the solutes in a single-phase solid solution.’

29 The specification repeatedly refers to the creation of new alloys for the reflective or semi-reflective layers of the optical storage media.

30 Seven examples are set out on pages 25 to 30 of the patent. The only example made relevant to this application is example 1, being an alloy composition of silver with approximately 8 to 10 atomic per cent (‘atm %’) palladium. This example relates to claims 9, 10 and 11. The other examples contain gold (examples 2 to 6) or are copper based (example 7).

The challenged claims

31 The applicant’s challenge to the validity of the claims is based upon the composition of the metal alloy. The applicant seeks a declaration that:

(a) claims 9 to 13 and 16 (insofar as claim 16 is dependent upon claims 9 tp 13) are invalid

(b) claim 38 is invalid to the extent that it is refers to example 1 and it is dependent upon any of claims 9 to 13 or 16 (insofar as claim 16 is dependent upon claims 9 to 13)

(i) claims 9 to 13 or 16 (insofar as claim 16 is dependent upon claims 9 to 13); or

(ii) claim 38 insofar as it is dependent upon example 1 and any of claims 9 to 13 or 16 (insofar as claim 16 is dependent on claims 9 to 13).

The applicant seeks an order that:

(a) claims 9 to 13 be revoked;

(b) claim 16 be amended as set out in Schedule 1, that is, that reference to claims 9 to 13 be deleted; and

32 Claim 9 is:

‘An optical storage medium, comprising:

a first substrate having a pattern of features in at least one major surface; and

a first reflective layer adjacent the feature pattern, the reflective layer including a metal alloy, said metal alloy including silver and palladium wherein the relationship between the amounts of silver and palladium is defined by Ag_xPd_t where 0.85

33 In the claims, x=silver and t=palladium. The formula is explained in the introduction to the description of preferred embodiments as follows:

‘the term “atomic percent” or “a/o percent” refers to the amount of a particular metal or the amount of a group of particular metals that is present in a particular alloy based upon the number of that metal’s atoms that are present, or the number of that group’s atoms that are present, whichever the case may be. For example, an alloy that is 15 atomic percent metal “A” and 85 atomic percent metal “B” could also be referenced by a formula for that particular alloy: A_0.15B_0.85.’

34 Claims 10 to 13 are:

‘10. The medium of claim 9, and wherein 0.05£ t£ 0.10.

11. The medium of claim 9 or claim 10, and further including:

a second substrate having a pattern of features in at least one major surface;

a second reflective layer adjacent the feature pattern of said second substrate; and

a space layer, located between said first and second substrates.

12. The medium of any one of claims 9 to 11, wherein said metal alloy includes a third metal that is copper, and wherein the relationship between the amounts of silver, palladium, and copper is defined by Ag_xPd_tCu_z where 0.0001

13. The medium of any one of claims 9 to 11, wherein said metal alloy includes a third metal that is copper, and wherein the relationship between the amounts of silver, palladium, and copper is defined by Ag_xPd_tCu_z where 0.0001

That is:

· Claim 10 narrows the proportion of palladium claimed in claim 9 to between 5 and 10 atm %.

· Claim 11 adds a second substrate, a second reflective layer and a space layer located between the first and second substrates but the alloys claimed remain those in claims 9 and 10.

· Claim 12 adds a third metal, copper, in proportions of 0.01 atm % to 10 atm %.

· Claim 13 narrows the proportion of copper claimed in claim 12 to between 0.01 atm % and 5 atm %.

35 Claim 16 is:

‘The medium of any one of claims 9 to 15, and wherein said metal alloy further comprises a precious metal selected from the group consisting of ruthenium, osmium, iridium, platinum, beryllium and mixtures thereof, and wherein said precious metal is present from about 0.01 a/o percent to about 5.0 a/o percent of the amount of silver present.’

36 This adds a third metal (to claims 9 to 11) or a fourth metal (to claims 12 and 13), being a precious metal from a group that includes platinum. The proportion of the precious metal claimed is between 0.01 and 5 atm % of the amount of silver in the alloy.

37 Claim 38 is:

‘An optical storage medium, substantially as hereinbefore described with reference to any one of the examples.’

38 The applicant is relying upon example 1.

39 Claim 39 is:

‘An optical storage medium, substantially as hereinbefore described with reference to the accompanying drawings.’

Novelty

The applicant’s submissions

40 The applicant submits that claims 9, 10, 12, 13, 16 and 39 lack novelty.

41 Claim 9, the independent claim, has the following five essential integers

(1) optical storage medium;

(2) substrate having a pattern of features in at least one major surface;

(3) adjacent reflective layer including a metal alloy;

(4) metal alloy containing silver and palladium; and

(5) the amount of palladium is greater than 0.1 atm % and less than 15 atm % of the total alloy.

42 Ms Bowne SC, who appears with Mr Small of counsel for the applicant, submits that claim 11 is also anticipated insofar as it is dependent on claims 9 and 10. Ms Bowne submits that the additional integer of claim 11, which is not described as part of the invention in the body of the specification, is an inessential integer. It is also submitted that claim 38 is anticipated. It is an “omnibus” claim, relying on earlier claims and the examples, and the applicant asserts that it lacks novelty in respect of example 1. The particulars of invalidity do not assert lack of novelty of claims 11 and 38, so that the respondent has not been given notice of that assertion, although it is on notice that revocation of those claims is sought. In those circumstances and where there has been a total lack of response from the respondent, I will consider the allegations of lack of novelty of those claims.

43 The applicant relies upon three prior art patents, each of which were open to public inspection in Australia before the priority date of the patent:

· European Patent No. EP0594516 (‘the European patent’): ‘High Stability Silver Based Alloy Reflectors for Use in a Writable Compact Disk’

· Japanese Patent Publication No. 07-105575 (‘the first Japanese patent’): ‘Optical Recording Medium’

· Japanese Patent Publication No. 10-011799 (‘the second Japanese patent’): ‘Optical Recording Medium’.

44 The disclosures in the prior art patents relied upon are set out in the amended particulars of invalidity as follows:

(i) The European patent, published 27 April 1994, discloses:

(A) an optical recording medium, comprising a substrate and an adjacent reflective layer which includes a metal alloy, said metal alloy including silver and palladium, and wherein the palladium is present in an amount less than 10 or 15 atomic percent of the amount of silver present. These disclosures anticipate claims 9 and 10 of the patent such that none of these claims are novel.

(B) an optical recording medium comprising a substrate and an adjacent reflective layer which includes a metal alloy, said metal alloy including silver, palladium and copper wherein the palladium is present in the amounts referred to in paragraph (A) above and the copper is present in an amount less than 30 atomic percent of the amount of silver present. This disclosure anticipates claims 12 and 13 of the patent such that neither of these claims are novel.

(ii) The first Japanese patent, published 5 May 1995, discloses an optical recording medium, comprising a substrate and an adjacent reflective layer which includes a metal alloy, said metal alloy including silver and further comprises a metal selected from the group consisting of, amongst other metals, palladium, platinum and mixtures thereof, and wherein the said metal is present from 0.1 to 5 atomic percent of the amount of silver present. This disclosure anticipates claims 9, 10 and 16 of the patent such that none of these claims are novel.

(iii) The second Japanese patent, published 16 January 1998, discloses an optical recording medium comprising a substrate and an adjacent reflective layer which includes a metal alloy, said metal alloy including silver and further comprises a metal selected from the group consisting of, amongst other metals, palladium, platinum, copper and mixtures thereof, where the said metal is present from 0.1 to 5 atomic percent of the amount of silver present. These disclosures anticipate claims 9, 10 and 16 of the patent such that none of these claims are novel.

The evidence

45 The applicant relies on the affidavit of Mr Lichtenberger, the Vice-President, Technology and Chief Technical Officer of the applicant. Mr Lichtenberger is an experienced metallurgist, familiar with the technology and patents relating to metal alloys in the field of optical recording media.

46 Mr Lichtenberger has identified in each of the European patent, the first Japanese patent and the second Japanese patent, each of the essential integers of claim 9 and claim 10. He has identified the additional essential integers of claims 12 and 13 in the European patent and the additional essential integers of claim 16 in each of the first Japanese patent and the second Japanese patent.

Consideration

47 The evidence of Mr Lichtenberger includes an analysis of the European patent, the first Japanese patent and the second Japanese patent, in that it identifies in each of the prior art documents disclosures or descriptions of compact discs that are said to satisfy the reverse infringement test for the claims in question, that is, disclosures or descriptions of reflective layers containing each of the essential integers of the claim (Nicaro Holdings Pty Ltd v Martin Engineering Co (1990) 91 ALR 513 at 527-8; Ramset Fasteners (Aust) Pty Ltd v Advanced Building Systems Pty Ltd (1999) 44 IPR 481, (1999) 164 ALR 239 at [22]). Where that integer is a range of possible materials, such as the group of precious metals identified in claim 16, Mr Lichtenberger points to a medium containing, inter alia, one of the members of that group. Where, as here, there is no suggestion that there is any advantage or any difference between the members of the group or any reason for the particular range of compounds chosen as set out in the claim, the prior art disclosure constitutes a reverse infringement of the claim (Meyers Taylor Pty Ltd v Vicarr Industries Ltd (1977) 137 CLR 228 at 235). That disclosure is, for the purposes of practical utility, equal to that given by the patent (Hill v Evans (1862) 6 LT 90; (1862) 1A IPR 1 at 7). The prior art patents contain directions which would clearly lead persons who put those disclosures into practice into working within the ranges or proportions selected by the patentee (General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd [1972] RPC 457 at 485-6).

48 As was the case in NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd (1992) 24 IPR 1 (‘Philips’), neither the patent nor the evidence suggest that the proportions or ranges ‘reflect any discovery or new scientific insight by the patentees…[n]o doubt the choices were carefully calculated….but the stipulated figures are arbitrary, in the non-perjorative sense of depending upon the will or discretion of the patentees’ (per Wilcox J at 35). Indeed, there is nothing in the specification that suggests that the proportions or the ranges of the metals in the alloys are in any way part of the invention, other than the mere reference to them. It is a case of ‘parameteritis’.

49 Mr Lichtenberger has, conveniently, set out the relevant prior art disclosures. To the extent that the language used does not convey a special meaning to those skilled in the art, the question of whether the prior art discloses the necessary integers is a matter for the court, not for expert evidence. To the extent that the disclosure is of special meaning to a skilled reader, that is a matter for expert evidence.

50 Ms Bowne has carefully taken me through each of the essential integers in the claims and the prior art relied on.

Claim 9

51 I am satisfied that the invention as claimed in claim 9 is not novel over the European patent, the first Japanese patent or the second Japanese patent.

Dependent claim 10

52 I am satisfied that the invention as claimed in claim 10 is not novel over the European patent, the first Japanese patent or the second Japanese patent.

Dependent claim 11

53 In my view, one cannot characterise the second substrate and second reflective layer of claim 11 as inessential integers. They are not inessential in the claim as drafted. These integers have not been identified in the prior art. Claim 11 does not lack novelty.

Dependent claim 12

54 Claim 12 is dependent on each of claims 9, 10 and 11. As such it is, in effect, three claims with the additional integer in each. Claims 9 and 10 are not novel, being anticipated by the European patent. The additional integer of claim 12 is also disclosed in the European patent. To the extent that claim 12 is dependent on claims 9 and 10, it is not novel. It incorporates any invalidity of the earlier claim (Lahore: Patents, Trade Marks and Related Rights Volume 1 paragraph 15,160). To the extent that it is dependent on claim 11, it is novel.

Dependent claim 13

55 The same applies to claim 13. The additional integer is disclosed in the European patent, as are the integers of claims 9 and 10. Insofar as it claims the media of claims 9 and 10, the claimed invention is not novel. To the extent that it is dependent on claim 11, it is novel.

Dependent claim 16

56 Claim 16 is dependent on each of claims 9, 10, 11, 12 and 13, and also claims 14 and 15. The essential integers of claim 16 to the extent that it is dependent on claims 9 and 10 are disclosed in the first Japanese patent and the second Japanese patent. Insofar as claim 16 claims the media of claims 9 and 10, the claimed invention is not novel. No single prior art document relied on discloses integers of claim 16 and those of claims 11, 12 or 13. Claims 14 and 15 are unchallenged and there is no evidence of lack of novelty. Accordingly, to the extent that claim 16 is dependent on claims 14 and 15, lack of novelty is not established.

Claim 38

57 Claim 38 is an “omnibus” claim and claims an optical storage medium with reference to the examples. The scope of the claim is, therefore, limited to the optical storage media of the examples. The applicant relies only upon example 1. Example 1 is in the following terms:

‘An alloy composition of silver with approximately 8 to 10 atomic percent palladium will have a reflectivity of approximately 89 to 91 percent at the wavelength of 800 nanometers and a reflectivity of approximately 83 to 85 percent at the wavelength of 650 nanometers and a reflectivity of approximately 78 to 80 percent at the wavelength of 500 nanometers with the film thickness at about 50 to 100 nanometers.’

58 The applicant has established that an optical storage medium in which the metal alloy is a composition of silver with approximately 8 to 10 atomic percent palladium is obvious. That is a composition that falls within claim 9.

59 As an “omnibus” or cumulative claim, claim 38 incorporates into it any invalidity of an earlier claim. Accordingly, the invention as claimed in claim 38 is not novel insofar as it claims the optical storage medium of example 1, which is within the scope of claim 9.

Claim 39

60 Claim 39 is an “omnibus” claim. By referring to the ‘optical storage medium, substantially as hereinbefore described’, the claim is limited to the essential integers of the invention as described and claimed. Clearly, it does not refer to optical storage media acknowledged to be known. The drawings to which it refers do not, of themselves, add an essential integer. The drawings are pictorial representations of the integers of the claims. The specification does not suggest otherwise. To the extent that claim 39 claims the optical storage media of claims 9 and 10, those of claims 12 and 13 to the extent that they are dependent on claims 9 and 10 and those of claim 16 to the extent that claim 16 is dependent on claim 9, the scope of the claim encompasses the prior art and the invention claimed is, to that extent, not novel.

Obviousness or lack of inventive step

61 The applicant claims that claims 9 to 13, 16, 38 and 39 did not involve an inventive step when compared to the prior art base as it existed before the priority date.

62 The applicant relies on the evidence of Mr Lichtenberger. I am satisfied that he is a person with knowledge of the common general knowledge in the field as at the priority date but not in Australia. That does not prevent him from giving an opinion, which will assist the Court in deciding whether there was in inventive step, having regard to the state of common general knowledge in Australia (Aktiebolaget Hassle v Alphapharm Pty Ltd [1999] FCA 628; (1999) 44 IPR 593 at [92]). However, he bases his conclusions on inventive step in part on the prior art patents, which have not been shown to be part of common general knowledge. Accordingly, his evidence in this regard is not relevant.

63 The applicant submits that the skilled addressee is a team represented by (a) a person who has experience in and knowledge of optical data storage systems and the technology involved in such systems and is familiar with the design and structure of such systems; and (b) an experienced metallurgist or materials scientist.

64 It is the selection of the integers of the claim that must be shown to be obvious. It is also necessary to ascertain what is said to be invention and whether the testing of various integers is part of the inventive step claimed in the patent or of a routine character to be tried as a matter of course (Aktiebolaget Hassle v Alphapharm Pty Limited (2002) 212 CLR 411 (‘Hassle’) at [41] and [50]-[53].

65 The patent does not suggest that the choice of layers is anything other than conventional. This includes the optical reflective layer as ‘placed over the information pits and lands’. The background of the invention refers to the importance of a highly reflective coating on the disc which ‘in general’, ‘is usually’ aluminium, copper, silver or gold. Reference is also made to the requirement of adequate corrosion resistance, cosmetic effect, cost and life span. It is not suggested that recognition of those requirements was other than well-known in the art or part of the invention. Indeed, Ms Bowne submits that the specifications and the evidence establish that the components of the alloys and the percentages of them are dictated by the structure of the optical storage media.

66 The background of the invention also describes as a disc ‘that has become popular’, the pre-recorded optical disc called the digital video disc or “DVD”, which has two halves, each with a reflective layer. A variation of the DVD is described as the DVD-dual layer disc, with a highly reflective layer and a second, semi-reflective layer. The potential choice of the semi-reflective layer is said “currently” to be either gold or silicon, neither of which is described as satisfactory. In the case of gold, this is because of expense.

67 The claimed invention, as taken from the patent, is the choice of an alloy as a reflective layer or as a semi-reflective layer in an optical storage medium that fulfils the requirements of high optical reflectivity, adequate corrosion resistance, sufficient life span, non-corrosive activity, appropriate “sputtering behaviour” and lower cost than gold.

68 It is apparent that the choice of a first or second substrate with a pattern of features in at least one major surface and the choice of one reflective layer or a second reflective layer are not part of the claimed invention or inventive step. The specification makes it clear that the invention claimed does not relate to the structure of the optical storage medium.

Dr Day and Professor Young

69 The applicant relies upon the evidence of Dr Day and Professor Young as representatives of the notional team.

70 Dr Day has considerable experience in the field of optical data storage systems. As at the priority date of the patent, 22 June 1998, he had completed the proposal for his PhD thesis in the optical data storage field and was actively engaged in considerable research in that area. He had a depth of experience in that area, including different designs of optical storage systems, both pre-recorded and recordable. He clearly had, as at the priority date, a detailed understanding of optical data storage systems, the design and improvements to such media and technology and scientific principles involved.

71 Professor Young was, as at the priority date of the patent, the Head of the School of Materials Science and Engineering at the University of New South Wales (‘UNSW’). He was asked to give his opinion on the metal or metals that would be most suitable to use for the reflective layer on a recordable CD as at June 1998.

72 The affidavit evidence of each of Dr Day and Professor Young was given without having been shown the patent. Dr Day’s evidence is that a designer of reflective layers for optical storage media would have routinely consulted a metallurgist or materials scientist for specific advice on the metals that could be used in the reflective layers. I am satisfied that the person skilled in the art would, in this case, be a notional team, exemplified by Dr Day and Professor Young.

Dr Day

73 Dr Day's evidence is that the common general knowledge in Australia as at the priority date of the patent included the following facts, which are not in dispute in these proceedings:

(a) pre-recorded single layer optical data storage media;

(b) in relation to single layer optical data storage media, the metallic coating should be as reflective as possible in order to achieve the lowest possible rate of errors at the detector;

(c) it was desirable to choose metals that could be deposited satisfactorily on the transparent substrate and which bonded to that substrate by, for example, evaporation, sputtering and wet silvering;

(d) it was desirable to choose metals that were relatively stable in the environments that CDs and DVDs were typically exposed to over a lifespan of around 30 years;

(e) aluminium was the primary metal used as a reflective coating on single layer pre-recorded CDs and DVDs prior to 1998;

(f) aluminium is an inexpensive material to use as a reflective coating. Cost was an important factor at the time for companies such as Philips and Sony, because they were trying to encourage people to swap over from tapes to CDs;

(g) recordable CDs;

(h) recordable CDs had silver reflective coatings and others had gold reflective coatings. Recordable CDs were commercially available before June 1998 (prior to that date Dr Day was himself using recordable CDs in order to store information for his honours thesis and PhD proposal);

(i) silver and gold have good reflective properties at the appropriate wavelength and are each relatively simple to coat onto the dye layer as they have good adhesion properties;

(j) silver and gold had been used as reflective coatings in applications other than optical storage media, for example they have both been used as the reflective coating on mirrors used in laser experiments and commercial white light microscopes;

(k) silver is more reflective than gold, however, it is less stable than gold. Silver may be more likely than gold to have an adverse reaction with other materials because gold is an inert metal. The problem, however, with using gold as a metallic coating is that it is more expensive than silver;

(l) the same metals may be used in the reflective layers of recordable CDs and single layer pre-recorded discs and multi-layer DVDs;

(m) multi-layer DVDs;

(n) the same metals may be used to create the semi-reflective layer as those metals used to create the highly reflective layer, but the thickness of the metallic coating is reduced. Reducing the thickness of the metallic coating reduces its reflectivity.

74 Dr Day's evidence was also that, if he had been asked to design a recordable CD before the priority date, equipped with the knowledge he possessed then, he would have consulted a metallurgist or material scientist who also had some knowledge of coating methods to assist in identifying a metal or metals which were:

(i) sufficiently reflective;

(ii) able to bond with the polycarbonate substrate;

(iii) otherwise stable in typical environmental conditions for a period of around 30 years;

(iv) able to be deposited using the methods available at June 1998; and

(v) economical in that the recordable CD is to be commercialised.

75 Dr Day would have explained how recordable two-dimensional optical data storage systems work and asked that person to assist in identifying a metal or metals with the required characteristics. He would also have informed that metallurgist, as part of the background, that aluminium was used in reflective coatings in two-dimensional optical data storage media, in pre-recorded discs and that silver and gold were being used in reflective coatings in recordable CDs. He would have stated that the same metals may be used to create a dual-layer DVD as those used to create a single layer DVD and the same metals may be used for the highly reflective and semi-reflective layers.

76 Dr Day would have given the metallurgist or materials scientist a polycarbonate substrate that was coated with the organic dye, and asked him or her to assist in identifying a metal or metals that were suitable to use in reflective coatings in recordable CDs. He would have conducted, individually or together with the metallurgist or materials scientist, accelerated environmental tests on the metal or metals identified to determine how the metallic coatings reacted to different environments; and would have identified a lacquer to coat the metallic layer.

77 Dr Day’s evidence confirms that the integers of claims 9 to 13 and 16, other than those integers which relate to the choice and proportions of metals in the alloy were, alone and in combination, part of common general knowledge in Australia. This includes the second reflective layer of claim 11.

Professor Young

78 Professor Young was asked to give his opinion, based upon his knowledge on or before June 1998, as to which metal or metals he would have advised prior to June 1998 to be most suitable to use to comprise the reflective layer in a recordable CD and, specifically:

‘(a) if the metallic coating was composed of 100% silver whether all of the specifications in relation to the reflective layer set out [below] would be satisfied;

(b) if the metallic coating was composed of 100% gold whether all of the specifications in relation to the reflective layer set out [below] would be satisfied; and

(c) if neither 100% silver nor 100% gold satisfies all of the specifications set out [below], then please provide your expert opinion as to suitable alternatives for the composition of the metallic coating; ie what metal or metals we could use to form the reflective layer so that all of the characteristics set out [below] above are satisfied.

79 Professor Young was given the following specifications:

(a) The metallic coating should be as reflective as possible and at least 95% reflective at the required wavelength of light.

(b) The metal or metals comprising the metallic reflective layer should be able to be deposited using deposition methods that were commonly used as at June 1998 (eg evaporation or sputtering).

(c) The metal or metals comprising the metallic reflective layer should be stable, that is not corrode or otherwise change its physical properties when being exposed to sunlight, heat, normal atmospheric conditions and other environmental conditions to which CDs or DVDs may typically be exposed. Optical recording media optimally has a life span of around 30 years.

(d) The metal or metals comprising the reflective layer should be as economical as possible, as the discs are to be commercialised.

80 Professor Young was given a series of assumptions. In the absence of evidence to the contrary, I accept that those assumptions represent the information he would have been given by Dr Day of the notional team.

81 In accordance with the given assumption, Professor Young first considered whether reflective layers comprising 100% silver and 100% gold would meet the required specifications. He concluded that neither 100% silver or 100% gold would meet the required specifications.

82 Professor Young then set out his evidence in great detail. He referred to reference books which he had in his possession and which he states were commonly known and used in the materials science/metallurgist field and kept in university libraries. He gave his reason for referring to each book, for example, to ascertain the percentage reflectivity of a metal. He explained the techniques of which he was aware prior to the priority date, such as sputtering and those he had used prior to the priority date, such as deposition methods. He also explained problems that were well-known to him and to other metallurgists and materials scientists prior to the priority date, such as corrosion and the susceptibility to corrosion of silver.

83 Professor Young had taught the strategies of alloying metals to counteract corrosion to undergraduate university students since at least 1980 and had carried out research on alloying for corrosion since 1971. He was also aware of the cost of various metals such as gold, silver and platinum.

84 Prior to June 1998, he was aware that permutations of differing amounts of constituents in any one kind of alloy could be expressed in suitable ranges. For example, an iron chromium alloy containing from 12 to 25 percentage weight chromium can be specified by the atomic formula Fe(a) Cr(b) where 0.74£ a £ 0.87 and 0.13 £b £0.26. The values of (a) and (b) specify the fractions of the atoms in the alloy which are, respectively, iron and chromium. Prior to June 1998, this was a commonly used method of expressing ranges of constituents in alloys and was one that he frequently used.

85 For reasons that he gives, Professor Young’s evidence is that, prior to the priority date he would, by a process of logic, have concluded that gold would be sufficiently stable to use in the reflective layer of recordable CDs but that silver would not be sufficiently stable because of its susceptibility to tarnishing in typical urban atmospheres and to corrosion in the presence of halogen ions in the organic dye. He would not have considered gold appropriate on economic grounds.

86 Professor Young says that, as silver was satisfactory save for its susceptibility to corrosion, he would have considered metal alloys. As the silver alloy was to be designed for corrosion resistance, he would have chosen the dilution method for alloying silver and he would have alloyed the silver with palladium, rejecting his first consideration of platinum for cost reasons. He gave reasons for the choice of palladium on the basis of characteristics of that metal that were part of common general knowledge. He would have kept the palladium content in the silver palladium alloy sufficiently low to meet the reflectivity requirements, as palladium has a relatively low reflectivity compared with silver and gold, but at a high enough level to counteract the silver tarnishing. He would have started with a range of palladium being 1% to 20% by weight. When described in atomic fractions, this is Ag(a)Pd(b) where 0.80 £ 0.99 and 0.01 £ 0.20. It would have been customary to provide a number of appropriate ranges for the respective amounts of silver and palladium present in the alloy and to determine those by routine accelerated exposure testing.

87 Prior to June 1998, having considered an appropriate starting range for the amount of palladium comprising the silver palladium alloy, Professor Young would have then run accelerated exposure tests on reflective layers, starting at the lower limits of the range (1 atomic percent palladium). Such tests were routinely used to test materials for their relative ability to resist corrosion.

88 The upper threshold limit of the suitable amount of palladium would be determined by whether the silver palladium alloy was at least 95% reflective, as required.

89 In recommending the amounts of silver and palladium to be used in the alloy, he would have provided a number of appropriate ranges for the amounts. He says that it was customary for metallurgists and materials scientists to do so prior to June 1998 as it is now.

90 If asked to continue to recommend suitable alloys, Professor Young would have, for reasons which he gave based on well-known brazing alloys, recommended silver palladium copper alloys. In order to bond two metals, a brazing alloy is melted and used as a “glue” to join the two metals. He would have started with 23 atomic percent of copper. It was commonly known that these alloys could be deposited using routine methods such as evaporation or sputtering.

91 Professor Young would also have considered other inert metals which had properties similar to palladium and, in particular platinum and rhodium. They could be added in small amounts to silver palladium and to silver palladium copper alloys.

92 Professor Young selected the proportions of the metals by reference to a set of known and desirable criteria and by reference to textbooks that formed part of common general knowledge.

93 The evidence is that a silver-based alloy was an obvious choice because it was well known that silver has high optical reflectivity. It was also well known that corrosion was a problem, so that any metals combined with silver would need to assist in corrosion resistance.

94 Professor Young’s evidence is that the qualities of various metals were matters of ordinary knowledge by metallurgists or materials scientists. Such persons armed with knowledge of the requirements of optical storage media as specified by a designer of reflective layers for optical storage media would have chosen the alloys claimed.

95 Professor Young’s evidence represents the mental logic that would have been applied by him, had be been consulted prior to the priority date to recommend metals for use in an optical storage medium with the properties required. He would have chosen silver palladium alloys and the addition of precious metals. He also explains how and why particular proportions and ranges would have been chosen. The way in which his evidence was obtained, without knowledge of the patent and in response to questions which asked for recommendations based upon the required properties that would have been specified by Dr Day, satisfies me that his evidence does not reflect a hindsight analysis with knowledge of the subject matter of the claims.

consideration

96 The question is whether the combination claimed in the claims is obvious. The applicant, in its submissions, has relied upon evidence that establishes that the claimed combination would be worthwhile to try, relying on authority that pre-dates the decision of the High Court in Hassle and is inconsistent with it.

97 In Hassle, the claim was for a combination, the interaction between the integers of which is the essential requirement for the presence of an inventive step (Hassle at [41]). In the present case, the essential requirement for the presence of an inventive step, as disclosed by the specification, is the choice of metal alloys in the reflective layer or layers. In circumstances where metallic and, in particular, silver-based reflective layers were known, as acknowledged in the specification and as established in the evidence, the requirement for an inventive step in the claims under consideration is in the choice of silver and palladium or silver, palladium and platinum. There is also the consideration of the claimed ranges and proportions of those metals.

98 The present case is to be determined under the Act. Section 7(2) of the Act provides:

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

99 The person skilled in the relevant art is, in this case, a ‘team’ of the person experienced in the development of optical storage systems and the materials scientist. That has been established by Dr Day, himself an expert in such systems as at the priority date who would have consulted a person such as Professor Young in order to develop reflective layers. The evidence establishes that, to such a ‘person’, in the light of the common general knowledge as it existed in Australia before the priority date, the choice of the combination of integers in the claims was obvious and, therefore, did not by reason of s 7(2) of the Act, involve an inventive step. The patent does not suggest that there was any invention or inventive step in the idea of looking for new alloys to use in reflective layers. As the patent says, new alloys were sought that have the advantages of gold but are not as expensive as gold. There is no suggestion that such a realisation was part of the inventive step (cf Gambro Pty Limited v Fresenius Medical Care Australia Pty Limited [2004] FCA 323).

100 The evidence, given with no knowledge of the patent, shows the logical steps that would have been taken by the person skilled in the relevant art to select the particular combination that was in fact chosen by the patentee (Minnesota Mining and Manufacturing Co v Beiersdorf (Australia) Ltd (1980) 144 CLR 253 at 293 per Aickin J). The steps were taken as a matter of routine analysis. The only experiments referred to were experiments for the purpose of checking and testing the alloys chosen. There is, of course, no suggestion in the patent that any experimentation was part of the inventive step. The evidence establishes that Dr Day and Professor Young, as the notional research group, would have been led as a matter of course to the claimed alloys in the expectation, as explained in the evidence, that they would produce satisfactory, cheaper alloys for use in the reflective layers. As such, the applicant has established that the invention as claimed in the relevant claims is obvious and lacking an inventive step (Hassle at [50]-[53]).

101 The evidence of Dr Day and Professor Young shows that the alleged invention, so far as claimed in claims 9 to 13 and 16, does not involve an inventive step. Specifically, with respect to claim 11, the evidence establishes that there was no inventive step in an optical storage medium comprising a first or a first and second substrate having a pattern of features in at least one major surface and a first and second reflective layer comprising metals. I also note that there is no requirement in claim 11 for any specific composition of the second reflective layer.

102 Claims 38 and 39 merely relate the earlier claims to the examples and drawings in the specification. Insofar as they relate to the above challenged claims, they add nothing by way of invention or inventive step. There is no suggestion in the specification that they do. Each of these earlier claims would have been obvious to the team representing the person skilled in the art in the light of common general knowledge in Australia before the priority date of those claims.

103 With respect to claim 38, there is no suggestion that there is any invention or inventive step in determining the reflectivity of the composition of example 1. It is apparent that the characteristics as set out in the example are the inherent characteristics of the composition. They do not provide an inventive step or an invention (NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd (1993) 44 FCR 239 at 265)

104 To the extent that claim 39 claims the optical storage media of claims 9 to 13 and of claim 16 to the extent that it is dependent on claims 9 to 13, the invention does not involve an inventive step.

Lack of CLARITY/LACK OF sufficiency

105 The allegation of lack of clarity is better characterised as an allegation of want of sufficiency of description. The applicant submits that the specification does not comply with s 40(2)(a) of the Act in that it does not give sufficient instructions to enable ‘the skilled reader’ to make the optical storage medium in accordance with claim 11 nor any instruction to ‘the skilled reader’ in relation to the second reflective layer, its composition or the extent of its reflectivity. I understand the reference to ‘the skilled reader’ in this context to be ‘the person of ordinary skill in the art’.

106 This aspect of claimed invalidity was included by way of amended particulars of invalidity sought to be filed during the course of the hearing. The respondent was notified of the proposed amendment and also notified that, if it failed to respond to the facsimile notification, the court would consider that the amendment was not opposed. No response was received and the amendment allowed.

107 Claim 11 adds to the requirement of claims 9 or 10 a second substrate, a second reflective layer and a space layer located between the first and second substrates. The specification does describe two types of optical storage media which have two reflective layers: DVDs which have two halves (with two reflective layers) and DVD-dual layer discs (with a second, semi-reflective layer). Unlike the description of the content of the first reflective layer, there is no teaching in the specification of the composition of the second reflective layer, other than a reference to the fact that the semi-reflective layer in the DVD-dual layer disc can be formed from the same alloys as the highly reflective layer but with reduced thickness. The applicant has identified a number of factors, of which the reader has not been informed, as follows:

(a) whether its composition is to be the same as or different from that of the first reflective layer;

(b) whether it has the same specifications (other than for components) or different specifications from that of the first reflective layer;

(d) whether the second reflective layer is comprised of 100% of a metal or comprised of an alloy;

(e) the metals that comprise the alloy and their proportions; or

(f) the extent of the reflectivity of the second layer.

108 If the addition of the second reflective layer is part of the inventive step and in the circumstances where the invention is said to be in respect of the metal alloys of the second reflective layer, there is nothing in the specification to give sufficient instruction to enable the person of ordinary skill to work the invention in that such a person would not be able to make an optical storage medium in accordance with claim 11. The same comment applies to a consideration of the proportions and ranges of metals in the metal alloys. If there is any invention or inventive step in ascertaining the composition of the metal alloy or the relationship between the amount of the metals present in the second reflective layer, the disclosure does not enable the addressee of the specification to produce an optical storage medium within the claim without new invention or additions (Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd (2001) 207 CLR 1 at [25]).

109 Accordingly, as I have formed the view, for the reasons I have given, that there is no inventive step in the invention as claimed in the challenged claims, including claim 11, the specification does not fail to comply with s 40(2)(a) of the Act. If there were an inventive step there would be a failure to comply with s 40(2)(1) and the specification would be liable to be revoked for failure to describe the invention fully, insofar as the invention is reflected in claim 11.

Costs

110 The applicant seeks costs a “gross sum” for costs as provided for in O 62 r 4(2) of the Federal Court rules, instead of taxed costs.

111 The applicant’s evidence establishes that the applicant’s accrued and anticipated costs of the proceedings is, as at the time of hearing, $284,160.50 on a party-party basis. The evidence, from Mr Gonsalves, a senior, experienced litigation solicitor and a partner in the firm of solicitors representing the applicant, is in the form of a detailed bill of costs, including disbursements. There were three such affidavits, one affirmed approximately three weeks prior to the hearing, the second a few days prior to the hearing and the third during the course of the hearing. The first of these affidavits, referring to a total of anticipated costs of $246,651.53 was served on the respondent in the United States. The annexure to the third affidavit, containing the updated bill of costs and latest invoices, was faxed to the respondent’s lawyers in New York. There has been no response.

112 The respondent has failed to appear or to take any part in the proceeding. The applicant has incurred considerable expense and delay in bringing this case to court. The issues and the technology are complex and, in the absence of the respondent and of any consent approach, the applicant had to ensure that the evidence covered each necessary aspect. The applicant has been put to considerable effort to adduce evidence, including export evidence. Further, there have been additional costs incurred to serve the respondent with the originating process in the United States in accordance with United States law and to ensure ongoing service of documents. The requirement to tax costs would only result in further cost and delay. Importantly, the applicant has been successful in respect of those claims of the patent that it has challenged. It is, in my view, appropriate to award costs in a gross or lump sum (Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 (‘Beach’)). I note that this course has been adopted in a number of cases in the Court and was adopted by Emmett J in Datadot Technology Ltd v Alpha Microtech Pty Ltd [2003] FCA 1449, an action for patent infringement where the respondent did not appear at the hearing.

113 I am mindful of the comment of von Doussa J in Beach that the court must be astute to prevent prejudice to the unsuccessful party by overestimating the costs but also to prevent prejudice to the successful party by applying too great a discount. The amount should be ‘logical, fair and reasonable’ (Beach at 123). There is also no submission by the respondent as to the extent of any reduction from the actual costs incurred.

114 Mr Gonsalves’ experience is that the applicant would be successful on taxation in obtaining 50-75% of its bill of costs. The applicant submits that an appropriate order would, in the circumstances, be $184,704.32, being 65%. I note that, in Datadot, Emmett J, on the evidence before him, determined that 60% of the total costs was appropriate. However, in the present case, there were additional costs by reason of the requirements of service in the United States and the additional complexity of a revocation proceeding. Accordingly, in my view, it is appropriate to make an order for costs in the sum of $184,704.32.

Conclusion

115 Claims 9 to 13 are invalid. Claims 16, 38 and 39 are invalid to the extent that they depend on the invalid claims. Claims 9 to 13 are liable to be revoked. The applicant seeks orders that claims 16 and 38 be amended to delete the subject matter of claims 9 to 13. The applicant does not seek any order in respect of claim 39. I direct counsel for the applicant to forward to my associate short minutes of order to give effect to these reasons within seven days.

I certify that the preceding one hundred and fifteen (115) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett.

Associate:

Dated: 29 October 2004

Counsel for the Applicant:	A Bowne SC with M Small

Solicitor for the Applicant:	Mallesons Stephen Jaques

Counsel for the Respondent:	No appearance

Solicitor for the Respondent:	No appearance

Date of Hearing:	7 June 2004

Date of Judgment:	29 October 2004

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