FEDERAL COURT OF AUSTRALIA

Airsense Technology Limited v Vision Systems Limited [2007] FCA 828

AIRSENSE TECHNOLOGY LIMITED v VISION SYSTEMS LIMITED

SAD59 OF 2005

JESSUP J

31 MAY 2007

MELBOURNE

THE COURT ORDERS THAT:

1.                  The proceeding be listed for directions at 9.30am on 29 June 2007.

2.                  If either party intends to advance a proposal for the future conduct of the proceeding, it file and serve a memorandum stating what that proposal is, together with any affidavit upon which it intends to rely in that regard, on or before 22 June 2007.

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

REASONS FOR JUDGMENT

1                     This proceeding is an appeal pursuant to s 60(4) of the Patents Act 1990 (Cth) (“the Act”) against a decision of a delegate of the Commissioner of Patents given on 2 March 2005 under s 60(1) of that Act.  By that decision, the delegate allowed, in part, the respondent’s opposition to the grant of the applicant’s patent application No. 689484.  The respondent has filed a cross-appeal with respect to those parts of the delegate’s decision which favoured the applicant, and a notice of contention with respect to certain points which, it contends, ought to have been decided in its favour by the delegate. 

2                     The applicant’s invention relates to data processing apparatus and methods, and to apparatus and methods for detecting the content of impurity in a gaseous medium.  It seems that the main practical utility of the invention would be in smoke detection systems used to warn of the outbreak of fire in buildings etc.  At the time of the delegate’s decision of 2 March 2005, the applicant made the following claims in relation to the invention:

1.                  A method of detecting content of an impurity in a stream of air flowing through main duct means in the form of sampling duct means of a smoke detection system, comprising causing only part of said stream to flow into secondary duct means, filtering said part of said stream through a particles filter disposed in said secondary duct means, and detecting, by detecting means downstream of said filter, the content of said impurity in the air in said secondary duct means. 

2.                  A method according to claim 1, wherein the whole of said stream passes through a detection module through which extends said main duct means and which contains said secondary duct means, said filter and said detecting means.

3.                  Apparatus for detecting content of an impurity in a stream of air, comprising main duct means in the form of sampling duct means of a smoke detection system and through which said stream can flow, secondary duct means communicating with said main duct means for receiving only part of the said stream, detecting means serving to detect the content of the impurity in the air in said secondary ducts means, and a particles filter disposed in said secondary duct means and upstream of said detecting means for said part of said stream to flow through said filter.

4.                  Apparatus according to claim 3, wherein said main duct means extends through a detection module through which extends said main duct means and which contains said secondary duct means, said filter and said detecting means.

5.                  Apparatus according to claim 3 or 4, wherein said powered means is located upstream of said secondary duct means.

6.                  A method of detecting the content of an impurity in a stream of air, substantially as hereinbefore described with reference to the accompanying drawings.

7.                  Apparatus for detecting the content of an impurity in a stream of air, substantially as hereinbefore described with reference to the accompanying drawings.

In his decision, the delegate held that claims 1 and 3 were bad for want of an inventive step.  He also found that there was a problem as to fair basis and clarity, and consequently with the applicant’s entitlement to the claimed priority date, in relation to claim 5.  He allowed the applicant 60 days to correct these deficiencies by amendment. 

3                     It is the steps taken by the applicant in response to the delegate’s decision that have given rise to the issues with which these reasons are concerned.  On 22 March 2005, the applicant lodged the appeal which is the subject of this proceeding.  In so doing it was proceeding according to a view of the jurisprudence recognised by Ex parte Mole Engineering Pty Ltd (1981) 147 CLR 340 and Iluka Midwest Ltd v Technological Resources Pty Ltd (2002) 116 FCR 218 which the respondent substantially accepted, namely, that, although the delegate’s decision did not finally dispose of the opposition proceedings, the applicant’s only opportunity to appeal as of right against that decision arose at that time.  But the applicant also desired to amend its claims, and on 2 May 2005 it sought the Commissioner’s leave to amend pursuant to s 104 of the Act.  In that request, the applicant sought to amend claim 5, but did not deal with claim 1 or claim 3.  In addition, it sought to introduce a number of additional claims that had not been considered by the delegate in the hearing leading to his decision under s 60(1) of the Act.  The amendments as then proposed were not allowed by the Commissioner, after which the applicant made further requests for leave to amend under s 104 of the Act, the ultimate result of which was that, on 26 September 2006, the amendments in their then form were allowed.

4                     As allowed by the Commissioner on 26 September 2006, the claims for the invention are as follows:

1.                  A method of detecting content of an impurity in a stream of air flowing through main duct means in the form of sampling duct means of a smoke detection system, comprising causing only part of said stream to flow into secondary duct means, filtering said part of said stream through a particles filter disposed in said secondary duct means, and detecting, by detecting means downstream of said filter, the content of said impurity in the air in said secondary duct means.

2.                  A method according to claim 1, wherein the whole of said stream passes through a detection module through which extends said main duct means and which contains said secondary duct means, said filter and said detecting means.

3.                  Apparatus for detecting content of an impurity in a stream of air, comprising main duct means in the form of sampling duct means of a smoke detection system and through which said stream can flow, secondary duct means communicating with said main duct means for receiving only part of said stream, detecting means serving to detect the content of the impurity in the air in said secondary duct means, and a particles filter disposed in said secondary duct means and upstream of said detecting means for said part of said stream to flow through said filter.

4.                  A method of detecting content of a particulate impurity in a stream of air flowing through main duct means in the form of sampling duct means of a smoke detection system, comprising causing only part of said stream to flow into secondary duct means, filtering said part of said stream through a particles filter disposed in said secondary duct means and employed to remove larger particles than those intended to be detected, and detecting, by detecting means downstream of said filter, the content of said impurity in the air in said secondary duct means.

5.                  A method according to claim 4, wherein the whole of said stream passes through a detection module through which extends said main duct means and which contains said secondary duct means, said filter and said detecting means.

6.                  Apparatus for detecting content of a particulate impurity in a stream of air, comprising main duct means in the form of sampling duct means of a smoke detection system and through which said stream can flow, secondary duct means communicating with said main duct means for receiving only part of said stream, detecting means serving to detect the content of the particulate impurity in the air in said secondary duct means, and a particles filter disposed in said secondary duct means, and upstream of said detecting means for said part of said stream to flow through said filter to remove from said part of said stream larger particles than those intended to be detected.

7.                  Apparatus according to claim 6, wherein said main duct means extends through a detection module which contains said secondary duct means, said filter and said detecting means.

8.                  Apparatus according to claim 6 or 7 wherein mechanical powered means is located in said main duct means and upstream of said secondary duct means for forcing air through said main duct means, said secondary duct means, said particles filter and said detecting means.

9.                  Apparatus according to any one of claims 6 to 8, wherein said sampling duct means includes a plurality of sampling pipes.

10.              Apparatus according to any one of claims 6 to 9, wherein said detecting means is a single detector.

11.              Apparatus according to claim 10, wherein said detector includes a tubular housing.

12.              Apparatus according to any one of claims 6 to 11, wherein said detecting means comprises a semiconductor optical emitter.

13.              Apparatus for detecting content of an impurity in a stream of air, comprising main duct means in the form of sampling duct means of a smoke detection system and through which said stream can flow, secondary duct means communicating with said main duct means for receiving only part of said stream, detecting means serving to detect the content of the impurity in the air in said secondary duct means, and a particles filter disposed in said secondary duct means and upstream of said detecting means for said part of said stream to flow through said filter, in which apparatus said main duct means extends through a detection module which contains said secondary duct means, said filter and said detecting means.

14.              Apparatus according to claim 13, wherein mechanical powered means is located in said main duct means and upstream of said secondary duct means for forcing air through said main duct means, said secondary duct means, said particles filter and said detecting means. 

15.              Apparatus according to claim 13 or 14, wherein said sampling duct means includes a plurality of sampling pipes.

16.              Apparatus according to any one of claims 13 to 15, wherein said detecting means is a single detector.

17.              Apparatus according to claim 16, wherein said detector includes a tubular housing.

18.              Apparatus according to any one of claims 13 to 17, wherein said detecting means comprises a semiconductor optical emitter.

19.              A method of detecting the content of an impurity in a stream of air, substantially as hereinbefore described with reference to the accompanying drawings.

20.              Apparatus for detecting the content of an impurity in a stream of air, substantially as hereinbefore described with reference to the accompanying drawings. 

It will be seen that claims 1 and 3 remain in the terms rejected by the delegate on 2 March 2005, that claim 5 has been re-configured and now finds substantive expression in claim 14, and that a number of quite new claims are now put forward.

5                     Normally, an amendment having been allowed under s 104 during the course of opposition proceedings under Ch 5 of the Act, those proceedings would resume by reference to the specification and claims as amended.  However, in the present case the Commissioner apparently takes the view that, an appeal having been lodged against the delegate’s decision of 2 March 2005, the whole matter of the applicant’s entitlement to a patent is now before the court, (for the reason that the appeal is a hearing de novo: Frederickshavn Vaerft A/S v Stena Rederi Aktiebolag (2002) 124 FCR 243, [10]-[15]) and the delegate should take no further action under Ch 5 of the Act.  The applicant thus finds itself in a position in which the terms of the claims by reference to which it has filed the present appeal differ from those which now exist on the Commissioner’s file, and yet in which the Commissioner herself has declined to proceed further in relation to the latter.

6                     In the circumstances, the applicant moves by notice dated 11 May 2007 (filed on 14 May 2007) for a direction that:

… the trial and determination of the appeal in this proceeding and all evidence in this appeal be directed to the patent application with the form of the specification as amended.

The applicant submits that the only way of avoiding a multiplicity of proceedings is for the court, in effect, to convert the present proceeding into one in which the specification and claims in their now form, rather than in the form in which they came before the delegate, are the focus for consideration. 

7                     The respondent resists the applicant’s motion.  It accepts that an appeal under s 60(4) of the Act involves a hearing de novo, but submits that the subject matter of the appeal must be the same as the subject matter of the hearing before the delegate, namely, whether a ground of opposition to the grant of the patent then applied for was made out.  It resists the suggestion that the availability of an appeal under s 60(4) of the Act might in effect be used as a means of bringing a form of the specification and claims before the Federal Court in the first instance, without those matters having been considered under Ch 5 of the Act. 

8                     Dr Emmerson QC, who appeared with Dr Rothnie for the respondent, submitted that opposition under s 59 of the Act is confined to the grounds there stated, including (critically in the present circumstances) the ground that the invention is not a patentable invention.  That in turn takes one to s 18, which provides that an invention is patentable if the invention “so far as claimed in any claim” is novel etc.  He submitted that the focus of opposition under s 59, and of a decision under s 60, is, therefore, the claims in their then form.  When s 60(1) says “decide the case”, it means decide whether to uphold the opposition to one or more claims on the grounds allowed under s 59.  Although accepting that an appeal under s 60(4) was by way of hearing de novo, Dr Emmerson submitted that the basis of the appellant’s notional title to relief in the court – effectively its cause of action – is the claims as they existed in the Ch 5 proceedings. 

9                     Mr Hess SC, who appeared with Dr Duncan for the applicant, submitted that it was the application for the grant of a patent which was the subject of appeal under s 60(4) of the Act, and that the specification is no more than part of the evidence by reference to which the court will decide the matter.  The opposition for which s 59 provides is to “the grant of a … patent”.  That was “the case” which the delegate was required to decide under s 60(1).  The delegate having refused to grant the patent on 2 March 2005, the whole matter of whether a patent should be granted came before the court once the applicant filed its appeal on 22 March 2005.  Subject only to any amendments having been allowed under s 104 of the Act, it is both within the power of the court and generally appropriate that the question whether the patent should be granted proceed by reference to the form of the specification now sought by the applicant. 

10                  Mr Hess relied upon the judgment of Heerey J in Genetics Institute Inc v Kirin-Amgen Inc (1996) 67 FCR 527.  In that case, his Honour answered in the affirmative the question whether, if the court were of the view that any of the claims were bad but could be cured by amendment, the court had the power to direct that the patent application proceed to grant, together with any amendment.  His Honour held that “the case” to which s 60(1) of the Act refers “comprehends all issues relating to the grant of the patent, including amendments.” (at 529).  His Honour said (at 529):

An appeal under s 60(4) can involve evidence quite different from that which was before the commissioner. New arguments may be advanced and new insights obtained. There may be totally new grounds for concluding that, speaking hypothetically of course, a decision to proceed to grant a patent was correct but that amendments not considered by the commissioner (perhaps because they arise from new arguments or new evidence) should be directed by the court.

In F Hoffman-La Roche AG v Commissioner of Patents [2000] FCA 1845, Emmett J expressed the tentative view, by way of obiter, that, in an appeal pursuant to s 60(4) of the Act, the court did not have a general power to direct the amendment of the specification.  While acknowledging the judgment of Heerey J in Genetics Institute, Emmett J observed that the only express power of amendment given to the court was to be found in s 105 of the Act, a provision which, his Honour considered, could have no application in an appeal pursuant to s 60(4).  His Honour said (at [8]):

It would be a departure from the scheme of the Act to say that the Court may direct amendment prior to grant, without the advertisement that would be required by the Regulations if an application to amend had been made to the Commissioner pursuant to s 104.

11                  It is implicit in the applicant’s position that it desires to anticipate the situation which would arise if it were to proceed with the present appeal but ultimately to seek a direction of the kind to which Heerey J referred, namely, one in which the application would proceed to grant, but where the claims take the form allowed by the Commissioner on 26 September 2005.  For that to happen, the respondent would have to be given the opportunity to oppose such a course (ie during the appeal in the court), on at least the grounds that would be open to it under s 59.  The applicant contends that there is no reason why such a course should not be adopted, particularly since the appeal is a hearing de novo. 

12                  It is also implicit in the applicant’s position that, whatever happens about the amendments which it has made with the leave of the Commissioner, it will not be granted a patent, by her or her delegate, in the form of the as-amended specification.  That is because the applicant has not amended, and apparently does not propose to amend, claims 1 and 3.  It is to the present appeal that the applicant looks to reverse the delegate’s decision in relation to those claims.  It follows that, if the normal course were followed of taking the amended claims back to the delegate under Ch 5 for the resumption of the opposition proceedings, whatever view the delegate took of the new claims the inevitable result would be that the application for the grant of a patent would be rejected.

13                  While I recognise that the applicant finds itself in a procedural bind of a kind, I am inclined to accept the respondent’s characterisation thereof as something wholly of the applicant’s own making.  That is not, of course, an answer to the applicant’s motion, but it does provide a context against which the motion should be considered.  The applicant appears to have proceeded somewhat unconventionally, albeit entirely within its rights.  Had it made the amendments to its claims necessitated by the decision of the delegate – or some only of those amendments – it might then, having received a final adverse decision from him, have appealed to the court.  However, it has secured the Commissioner’s leave to make amendments by which new claims were introduced which were never the subject of the hearing under Ch 5.  In these circumstances, I think the position is quite different from that dealt with by Heerey J in Genetics Institute.  The new claims are not, it seems, justified solely on the basis that they would cure, in anticipation, defects which the court might find in the existing claims.  In those circumstances I do not think it would be wise for me to enter upon questions of the kind to which Emmett J referred in Hoffman-La Roche.

14                  Rather, I consider that the present situation is most directly addressed by the judgment of the Full Court in New England Biolabs Inc v F Hoffman-La Roche AG (2004) 141 FCR 1.  In that matter, the court dismissed an appeal from a judgment of a Judge of the court providing a negative answer to the question whether the court had a discretion to refuse to allow an amendment request under s 104(1) of the Act in an appeal under s 104(7).  In the course of expressing their reasons for dismissing the appeal, the Full Court extensively canvassed the history of various provisions of the Act under which appeals lay to this court (and to its jurisdictional predecessors).  The court recognised that such appeals involve the exercise of original, not appellate, jurisdiction, and that they proceed by way of hearings de novo.  However, their Honours continued (at [45] - [46]):

Implicit, however, within the use of the word “appeal” and the phrase “appeal against the decision of the Commissioner”, and without any other description of the controversy to be quelled by the exercise of judicial power, is the identification of the matter or controversy — the subject matter of the deployment of the respective powers — being the same in each case. The simplicity of the enunciation of what the court is doing: hearing an appeal against a decision of an administrator by exercising for the first time the judicial power of the Commonwealth in the original jurisdiction leads one to conclude that the court is dealing with the same subject matter as was dealt with by the Commissioner.

To the extent that the Act and regulations delimit the boundary of the subject matter for decision by the Commissioner by restricting the decision to certain criteria or grounds, or by limiting what is permitted to be raised by an opponent in the application, or by eliminating any element of discretion in the making of the decision, they plainly confine the controversy before the Commissioner. We are of the view that the notion of an appeal to the court in this context evinces a parliamentary intention that the same subject matter be dealt with by the court as was dealt with by the Commissioner (but this time by the deployment of judicial power).Thus, in order to conclude that the court has a wider task by reference to different or wider criteria than that undertaken by the Commissioner one would need to identify some factor either from the nature of the judicial power or from some statutory provision upon which to base such a conclusion.

On the question of the subject matter of an appeal, their Honours said (at [49]):

The subject matter of any appeal against a decision of the Commissioner is limited by the Act and regulations as is also the decision or function that was previously before the Commissioner (the “decision” against which the appeal is sought). This is not to give any restricted or restrictive interpretation to otherwise ample powers in s 106 of the Act or ss 19, 22 and 23 of the Federal Court Act: cf the numerous High Court decisions referred to in Hewlett Packard Australia Pty Ltd v GE Capital Finance Pty Ltd (2003) 203 ALR 51 at 103 [187]; 47 ACSR 589 at 640–1. Rather, it is to recognise that the provision for an appeal to the court against a decision of an administrator in this statutory context is to confer judicial power on the court to hear and decide the same subject matter as was before the administrator, such subject matter having the same boundaries and limits as existed under the statute before the administrator.

Their Honours referred also to the judgment of Heerey J in Genetics Institute, and observed (at [50]) that that case was “an appeal under s 60(4) of the Act being an appeal … from a decision which could include a direction that amendments be made”.  In this respect, I take it that the Full Court was making a distinction between the subject matter of an appeal, which was defined by reference to the case as it was constituted in the proceedings under appeal, and the ability of the court, like the original delegate, to order amendments necessary to cure defects in the specification or claims which were identified in the course of, or as a result of the disposition of, such an appeal.

15                  Although New England Biolabs was directly concerned with an appeal under s 104(7) of the Act, their Honours on the Full Court discussed the content and history of relevant provisions of the Act in terms which make it clear that, under s 60(4) no less than under s 104(7), the subject matter of the appeal is the same subject matter as was before the original decision maker.  Their conclusion in that regard expressly took account of the different kinds of powers exercised by each (first executive, then judicial) and of the nature of such an appeal (by way of hearing de novo).  It follows that, under s 60(4), an appeal is limited to the subject matter which was before the delegate under s 60(1).  In the present case, I consider that the effect of granting the applicant’s motion would involve a change of subject matter, and would introduce claims in relation to which the proceeding could not be considered to be an “appeal” in the sense explained in New England Biolabs.

16                  For the foregoing reasons I propose to dismiss the motion.  As will be clear, I do so because of my understanding of the nature of an appeal under s 60(4) of the Act, and not in the exercise of a discretion.  However, I would add that, had some discretionary element been involved in the decision I am required to make, I would have been disposed to accept the broad thrust of the respondent’s case that it would be antithetical to the achievement of the objects of Ch 5 of the Act that appellate proceedings under s 60(4) should be used as the vehicle for the primary testing of substantive claims against such legitimate grounds of opposition as there may be, without those claims first having been dealt with by the Commissioner or her delegate.  The significance of that consideration is in no sense diminished by the undoubted fact that an appeal must proceed as a hearing de novo.  Even in such a case, I would have considerable reservations about an approach which had the practical effect of collapsing the distinction, well-recognised in the Act, between the role of the primary decision maker and the appellate role of the court.  It is not for me to opine that that is a useful distinction:  the fact is that it is one which has been made by the legislation, and must be respected.  Neither should I assume, in the present case, that the resumed hearing before the delegate under s 60(1) of the Act would be tokenistic.  To the contrary, I am bound to treat such a hearing as the primary means established by the legislation for resolving such grounds of opposition as are raised. 

17                  That leaves the question as to what should happen next.  The applicant makes the point that it does not wish to endure the expense and delay of a hearing in this court which is not referable to what it describes as the specification “in its now form”.  On the other hand, as I pointed out earlier, the Commissioner apparently takes the view that she should not proceed any further while the appeal is on foot.  It will be apparent, however, from my reasons above, that the only subject matter of the proceeding before the court is the application in the form in which it was dealt with by the delegate.  By its recent amendments – beyond anything required to rectify the deficiencies he identified – the applicant has introduced new subject matter into its application for a patent.  The legal basis for the Commissioner declining to deal with that subject matter in the normal course – as though no appeal had been lodged – is not apparent to me, and none was suggested by either of the parties.

18                  In the event that its motion were unsuccessful – as it has been – the applicant expressed a preference for a course which allowed it the opportunity to have its application in its now form tested in opposition proceedings under Ch 5.  Its contemplation is that, because of its retention of claims 1 and 3, the delegate will inevitably reject the application, but will have ruled upon such grounds of opposition as there may be to the new claims.  The applicant then contemplates that it will lodge a further appeal against the rejection, and have that appeal joined to the present proceeding.  For this reason, the applicant proposes that the present proceeding wait in the lists of the court until such time as the contemplated further appeal arrives on the scene, as it were.

19                  Although recognising the apparent convenience of the applicant’s proposed course to an extent, the respondent nonetheless opposes any deferral of the hearing of the present proceeding.  It anticipates that the further opposition proceedings which the applicant contemplates would be lengthy in themselves, and points out that some of its intended witnesses in the present proceeding are already near, or beyond, retiring age.  Its preferred course is for the present proceeding, which is said to be in an advanced stage of preparation, go forward to trial in the normal way.

20                  In these circumstances, I think the better course is for me to take no step other than to list the proceedings for directions at an early date.  I do so without any disposition either to defer, or to proceed with, the trial, but the applicant should regard itself as the moving party, in effect, for any course of action other than what I would regard as the normal one of moving the proceeding to trial in its present configuration.  Procedural questions of this kind were not the primary focus of the parties’ attention on the hearing of the applicant’s motion, and it may be that their arguments in this respect were less than fully developed.  There may also be facts relevant to such questions that the parties would wish to place on affidavit, particularly in the light of my disposition of the applicant’s motion.  The applicant requested, that I publish my reasons without formal order at this stage, and the respondent ventured no opposition to that course.   I am prepared to follow that course, but I propose to make such an order on the occasion that the matter is listed for directions.  If either party has a proposal for the future conduct of this proceeding, I will require that a memorandum of that proposal, together with any supporting affidavit, be filed and served seven days before the directions date. 

Associate:

Dated:         31 May 2007