FEDERAL COURT OF AUSTRALIA

Australian Mud Company Pty Ltd v Coretell Pty Ltd (No 4) [2015] FCA 1372

THE COURT ORDERS THAT:

1.    The Applicants file and serve a minute of orders reflecting these reasons within 30 days.

2.    The Respondents file any responsive material within a further 21 days.

3.    A further directions hearing be scheduled in late February 2016 to make and/or program the making of orders consequent upon these reasons and directions as to the future conduct of the proceeding.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1.    THE DISPUTE

1    This proceeding commences, in this iteration at least, as a claim for relief in respect of infringement of two innovation patents. The Patents relate to a system and method for orienting core samples extracted from the ground, commonly used in connection with geological surveying operations and other drilling operations.

2    Underground samples of ore bodies are collected by a drill which extracts a core. The core samples so collected can be analysed for their geological content. The quality of that analysis depends in part on identifying the orientation of the core sample relative to the host material from which the core has been extracted. Tools have been invented to enable the core sample orientation to be identified. This case involves consideration of such tools, practices and, particularly, the Patents in suit.

3    For the applicants, the primary participants are Australian Mud Company Pty Ltd (AMC) and Reflex Instruments Asia Pacific Pty Ltd. They are respectively the patentee and exclusive licensee of the Patents. In turn, they are wholly owned subsidiaries of the publicly listed company, Imdex Limited.

4    The tool which has been developed and commercialised by AMC for the orienting of core samples is described in the evidence as being the ‘ACT Tool’ or the ‘Ace Core Tool’.

5    The respondent corporations are a group of associated companies. Mr Nicky Kleyn is the sole shareholder in, director and company secretary of the first respondent, Coretell, and the fourth respondent, Kleyn Investments Pty Ltd. He is one of two shareholders in, and directors of, the second respondent, Mincrest Holdings Pty Ltd (the other being his wife). Mr Kleyn is the third respondent. Coretell causes to be made and thereafter hires or causes to be hired, core orientation apparatus known or described as the ‘ORIshot’ or ‘ORIShot Tool’, both in Australia and in countries outside of Australia. The ORIshot apparatus is used by exploration drillers under hiring arrangements with Coretell. According to the respondents, Mincrest does not carry out trade or business in Australia, but acts as a trustee for a third party unconnected with the present proceedings or with any trade or business concerned with the ORIshot apparatus. The respondents say that Kleyn Investments is not involved in any exploitation of the ORIshot apparatus. It trades in a different apparatus known as the ‘Camteq Pro-Shot Multi shot Survey Instrument’.

6    The applicants’ case is that the respondents have infringed the Patents by making, selling, supplying and otherwise dealing in various tools for orienting core samples and have done so flagrantly, with knowledge of, and in disregard of, the applicants’ rights under the Patents, such as to support an award of additional damages for patent infringement under s 122(1A) of the Patents Act 1990 (Cth).

7    However, by order made by Justice Nicholas on 4 May 2012 all of the issues as to the quantum of pecuniary relief, if any, have been reserved for later determination.

8    The applicants also seek post-expiry injunctive relief consequent upon the alleged infringements that were committed during the term of the Patents.

9    AMC contends that the ORIshot Tool infringes its Patents. The respondents refute this on several grounds.

10    Coretell (independent of the other respondents) also advances cross-claims which allege the invalidity of the Patents on numerous grounds, including lack of novelty on the basis of prior art and prior use. In about September 1990, Messrs Skopec, Mann, Jeffers and Grier published a conference paper entitled ‘Horizontal Core Acquisition and Orientation for Formation Evaluation’ at a 1990 Conference in New Orleans, which was later published: Skopec et al, “Horizontal Core Acquisition and Orientation for Formation Evaluation” (1992) 7(1) Society of Petroleum Engineers Drilling Engineering 47 (Skopec Paper). In January 2004, Mr Chris Bradford, an employee of Imdex, collected two ACT Tools from Mr Parfitt of the entity Chardec Consultants Limited in the United Kingdom. Those ACT Tools were alleged to have been used subsequently at operations conducted by:

(a)    Mosslake Drilling at Manjimup in April 2004;

(b)    Drill Corp in Kalgoorlie in April 2004; and

(c)    Barminco in Kalgoorlie in May 2004.

2.    THE PATENTS

11    The two Patents are no 2010101356, which is the System Patent and no 2011101041, which is the Method Patent. They are in similar terms.

12    I will refer first to the content of the System Patent.

13    The System Patent explains that the field of the invention relates to an orientation device, which is used for providing an indication of the orientation of a core sample relative to a body of material from which the core has been extracted, and also to a method of core sample orientation identification.

2.1    Background art

14    There is a brief section dealing with ‘Background Art’, which explains the need for core sampling in geological surveying operations and the fact that core samples are obtained through core drilling operations. Those operations, it is said, are typically conducted with a core drill comprising outer and inner tube assemblies. A cutting head is attached to the outer tube assembly so that rotational torque applied to the outer tube assembly is transmitted to the cutting head. A core is generated during the drilling operation, with the core progressively extending along the inner tube assembly as drilling progresses. When a core sample is acquired, the core within the inner tube assembly is fractured. The inner tube assembly and the fractured core sample contained in the inner tube are then retrieved from within the drill hole, typically by way of a retrieval cable lowered down the drill hole. Once the inner tube assembly has been brought to the ground surface, the core sample can be removed and subjected to the necessary analysis.

15    In discussing the background art, the System Patent explains that typically core drilling operations are performed at an angle to the vertical because it is desirable, for analysis purposes, to have an indication of the orientation of the core sample relative to the ground from which it was extracted. It is therefore important there be some means of identifying the orientation of the core sample relative to the ground prior to it having been brought to the surface. So, the System Patent explains that core orientation devices have been used to provide an indication of the orientation of the core sample.

16    The System Patent explains that a common way of obtaining an indication of the orientation of a core sample is through the use of an orientation spear comprising a marker, such as a crayon projecting from one end of a thin steel shank, the other end of which is attached to a wire line (Spear Method). The spear is then lowered down the drill hole prior to the inner tube assembly being introduced. The marker on the orientation spear strikes the facing surface of material from which the core is to be generated, leaving a mark on it. That mark is on the lower side of the drill hole because of the operation of gravity. The inner tube assembly is then introduced into the outer tube assembly in the drill hole. As drilling proceeds, a core sample is generated within the inner tube assembly. The core sample so generated continues to carry the mark which was previously applied. Upon completion of the core drilling run and retrieval of the core sample, the mark gives an indication of the orientation of the core sample at the time it was in the ground. In addition to this method, there are other mechanical core orientation devices for marking a core sample prior to its extraction from the drill hole. Those devices are typically adapted to be incorporated in the inner tube assembly for marking the core.

2.2    Disclosure of the invention

17    Under the heading ‘Disclosure of the Invention’, there is then a description of the way the invention operates as against the background of problems and difficulties associated with previous methodology. In the disclosure of the invention, it is explained that in accordance with an aspect of the present invention, a core orientation system is provided for use with a core drill, the core drill having an inner tube and the system comprising:

means for providing signals associated with the physical orientation of the inner tube of the core drill during drilling;

means for measuring a time measurement indicative of the time during drilling when the core sample is detached from the body of material from which it is taken and held in fixed relation to the inner tube;

input means for imputing the time measurement into the system;

one or more processing means for processing the signals to produce data indicative of the orientation of the inner tube;

one or more processing means for processing the data produced and the inputted time measurement to produce an indication of the orientation of the core sample relative to the material from which it is detached; and

display means for the indication of the orientation of the core sample relative to the material from which it is detached.

(The consistory statements.)

18    There are several preferences indicated in the System Patent, specifically under the disclosure of the invention:

Preferably, the system comprises one or more means for storing the data produced and the indication of the orientation of the core sample.

Preferably, the means for storing the data comprised memory, the system comprising interface means having first means for storing the data in the memory and second means for accessing the memory to produce the indication of the orientation of the core sample when detached when required.

Preferably, the means for storing data comprises memory, the system comprising a timer for determining predetermined time intervals relative to a reference time, and a means for storing the data in the memory upon each of the predetermined time intervals terminating.

Preferably, the physical orientation of the core sample comprises: a rotational orientation about a longitudinal axis of the core sample; and/or an angular orientation of a longitudinal axis of the core sample above or below a horizontal plane.

2.3    Best mode for carrying out the invention

19    There is then a ‘Brief Description of the Drawings’, which describes one specific embodiment of the invention and accompanying drawings. The drawings are annexed to these reasons.

20    Figure 1 in the drawing is a schematic view of a core drill with an orientation device according to the embodiment. Figure 2 is a schematic side elevation view of the arrangement shown in Figure 1. Figure 3 is a further schematic side elevation view of a lower part of the arrangement shown in Figure 2. Figure 4 is a schematic side elevational view in section of the orientation device. Figure 5 is a block diagram illustrating various components of the orientation device. Figure 6 is a schematic plan view of a keypad and display provided at one end of the orientation device.

21    Still continuing with the preferred embodiment, the System Patent goes on to describe the ‘best mode(s) for carrying out the invention’ by reference to the drawing figures which are annexed to these reasons. The numbers in the following text correspond to the numbers in the annexed drawings of Figures. The best mode shows, by referring to Figure 1, that there is a core orientation device 10 for a core drill 12. The device 10 comprises an arrangement 14 for providing signals 16 associated with a physical orientation of the core orientation device 10. According to the preferred embodiment, the physical orientation of the core orientation device 10 comprises rotation orientation 18 about a longitudinal axis 20 of the core orientation device 10. The device includes processing means 22 for processing the signals 16 provided by the arrangement 14 so as to provide processed data 23 from which a measure 24 of the rotational orientation 18 of the core orientation device 10 can be established. The measure 24 is associated with the rotational orientation 18 of the device 10 at a particular moment in time.

22    Continuing with the preferred embodiment discussion of the best mode for carrying out the invention, the System Patent indicates that a memory 26 is coupled to the processing means 22 for storing the processed data 23. To this end there is provided an interface means 27 comprising first means 28 for storing the processed data 23, processed by the processing means 22 in the memory 26 and the second means 30 for accessing the memory 26 to provide the measure 24 of the rotational orientation 18 of core orientation device 10. This allows the measure 24 to be obtained when required.

23    Figure 2 shows the core drill 12 comprises an outer tube assembly 34 and an inner tube assembly 36 of ‘generally conventional construction’. The orientation device 10 according to the embodiment is accommodated along the length 38 of the inner tube assembly 36, as shown in Figure 2.

24    Under that arrangement, the inner tube assembly 36 comprises upper and lower parts 36a, 36b between which the orientation device 10 is fitted. The upper part 36a includes a bearing 40, with the portion above the bearing 40 being rotatable with the outer tube assembly 34 and the portion below the bearing 40 being restrained against rotation because of frictional engagement with the core being generated. Thus, in this manner, the bearing 40 allows the core orientation device 10 to rotate relative to the outer tube assembly 34 but not relative to the core sample when the core is received.

25    It is explained that incorporating the orientation device 10 in the inner tube assembly 36 increases the overall length of the inner tube assembly 36, a consequence of which is that the overall length of the outer tube assembly 34 needs also to be increased. A spacer 42 is provided in the outer tube assembly 34 for this purpose. Apart from the modification to the inner tube assembly 36 to accommodate the orientation tool 10, and also the spacer 42 provided in the outer tube assembly 36, the core drill is of conventional construction and operates in a conventional way.

26    Then by reference to Figure 3, it can be seen that the inner tube assembly 36 comprises a back end assembly 33, a replacement grease sub 35, the core orientation device 10, three metres of inner tube 37 and core lifter case 39.

27    Figure 4 shows that the orientation device comprises a housing 44 of general cylindrical construction thereby defining the central longitudinal access 20. The housing 44 has a general cylindrical side wall 46 and two opposed ends 48 and 50. The end 48 is open and internally threaded to provide a female thread formation. A male threaded formation 52 is provided on the cylindrical side 46 of the housing 40 inwardly spaced from the other end 50. The effect of these two formations is that the orientation device 10 can be installed between, and in threaded engagement with, the upper and lower parts, 36a and 36b of the inner tube assembly 36, as shown in Figure 2. The inner tube assembly 36 has complementary threaded portions which provide means for accommodating the core orientation device 10 along the length of the inner tube assembly 36.

28    There is also an internal chassis 54 shown in the housing 44. That chassis 54 has a cavity 56 which accommodates shock absorbing material 57 encasing a triaxial accelerometer means 58. The shock absorbing material 57 comprises several layers of cushioning and there is an outer cushioning layer, an immediate cushioning layer and an inner cushioning layer embracing the triaxial accelerometer means 58. The robustness of cushioning progressively decreases from the outer layer to the inner layer.

29    Figure 5 shows the housing 44 accommodating a main printed circuit board 60 and an electrical power source 62 in the form of a lithium battery pack. The processing means 22 comprises an electronic circuit with chip on the main printed circuit board 60. The processing means 22 incorporates an analogue to digital converter 64, a low power microcontroller 66, which provides a processor, a timer and non-volatile memory 70, as illustrated in Figure 6. Thus, in this embodiment the memory 26 forms part of the processing means 22.

30    It is explained further in the System Patent that the interface means 27 forms part of the processing means 22 while having first means 28 for storing the process data 23 and second means 30 for accessing the memory 26 to provide the measure 24 of the rotational orientation 18 of the core orientation device 10 at the associated time. There is a ‘watchdog circuit’ 71 provided for watching the system. In instances where the device 10 shuts down, it can be reset at the surface.

31    The triaxial accelerometer means 58 comprises three internal silicon accelerometers operating along orthogonal directions X, Y and Z. The three accelerometers measure components of the earth’s gravitational field. Mathematically transforming the outputs from the three accelerometers allows the rotational orientation 18 of the device 10 about its longitudinal axis 20 to be determined. More particularly, the signals 16 produced by the triaxial accelerometer means 43 are determinative of the change in orientation of the device 10 and are transmitted to the analogue to digital converter 64, which in turn transmits signals or signal data to the microcontroller 66.

32    The timer 68 is provided for ensuring that the processing means processes signals from the arrangement over predetermined time intervals. In this embodiment, the processor means 22 includes integration means for integrating signals over a particular predetermined time interval of one minute. When device 10 is operating, the relative operation of the device is determined at regular intervals as determined by processing means 22. The processing means 22 employs the interface means 27 and second means 30 to store the processed data 23 and memory 26. In this embodiment, the time intervals at which the orientation is determined and stored comprise intervals of one minute. In this way, there is a stored record of the orientation of the device 10 at minute intervals. The orientation of the device 10 corresponds to the orientation of the lower part 36b of the inner tube assembly 36, which in turn corresponds to the orientation of a core sample progressively entering the inner tube assembly 36, as the lower part 36b does not rotate relative to the core sample.

33    In the operation of the core orientation device and the core drill, a first step comprises moving the core drill 12, having the core orientation device 12 forming part thereof from a first location to a drilling location. After this, the core drill is operated to drill a core sample. When the core drill is moved from the first location to the drilling location, the core orientation device generates acceleration signals associated with the rotational orientation 18 of the core orientation device 10. The processing means 22 then processes the signals 16 to provide processed data 23 from which the measure 24 of rotational orientation 18 of the device 10 at a drilling location can be established. The processed data 23 is stored in memory 26 for later recall such that the measure 23 of the rotational orientation of the device 10 can be obtained from it. By using integration means and time intervals of one minute, the processed data 23 indicates the change orientation of the device 10 in one minute intervals commencing from the reference time that corresponds to the time at which the orientation device 10 was started.

34    In this embodiment, as shown in Figure 6, the core orientation device includes a membrane keypad 72 and an LCD display 74, both of which are provided at end 50 of the device 10. With this arrangement, the keypad 72 is accessible for operation from the end 50 and the display 74 is also visible from that end, but of course only when the orientation device 10 is not connected to the upper part 36a of the inner tube assembly 36. The keypad 72 incorporates a window section 76 through which the LCD display 74 is visible. In this embodiment, the keypad has four keys identified in Figure 4 as ‘N’, ‘R’, ‘+’ and ‘-’ keys. The membrane keypad 72 and the display 74 are protected by the inner tube assembly 36 when accommodated in the female threaded portion.

35    In this particular embodiment, the orientation device 10 is started by pressing the ‘N’ key on the keypad 72. It is also necessary to record the time duration between starting the core orientation device 10 and extracting the core sample. Typically, that is achieved by starting an external stopwatch at the time of starting the orientation device 10. The System Patent states that the ‘[o]ther arrangements are, of course, possible’.

36    In this embodiment, the stopwatch is started at the time that the orientation device 10 displays a signal on the display 31 indicating that the operation of the orientation device has started. This provides for added accuracy. Once the orientation device has been started and recording of the subsequent time duration has commenced, the inner tube assembly 36 is inserted into a drill hole for reception in the outer tube assembly 13. The core drilling operation is then commenced. During the drilling operation, a core is progressively generated within the inner tube assembly. When it is ready to be extracted, the core drill operator refers to the timer and notes the time duration involved. Specifically, the operator will note either the full minute that has previously elapsed or waits until the next full minute elapses, and then records that time (as it must be recalled later). The operator then initiates the procedure for breaking the core from the body of material, ensuring that no rotation of the inner tube assembly 36 occurs.

37    The inner tube assembly 36 is retrieved from the drill hole in the conventional manner. Once it is at the surface, the upper part 36a of the inner tube assembly 36 is unscrewed from the orientation device 10, so as to expose the end 50 to provide access to the keypad 72 and the display 74. The frictional engagement of the core and the inner tube assembly 36b along with bearing 40 allows the lower part 36b to rotate relative to the outer tube assembly 34, but not relative to the core sample.

38    The device 10 includes means 80 for relating the measurement of the orientation of the core orientation device 10 with the current rotational orientation. It allows for the core orientation device to consequently be rotated to reflect the measure of the device.

39    In this embodiment, this is achieved by imputing the time duration as measured by an external stop watch into the orientation device 10 through the keypad 72. That is done by pressing the ‘R’ key to display numbers ‘00’ and then pressing the ‘+/-’ keys to display the relevant time duration in minutes. Once that time has been entered, the ‘R’ key is pressed once causing the means 80 for relating the core orientation device to the current rotational orientation thereof, to determine a current rotational orientation 81 from the processing means 22 and display a graphical indication 83 of the direction in which the orientation device 10 and the lower part 36b of the inner tube assembly 36 attached to it should be rotated. Rotating the device and lower part 36b in this direction causes the core contained within the inner tube assembly 36b to move into an orientation corresponding to its orientation at the time that it was in the ground before extraction. At this time, there is a symbol 85 displayed to alert the operator.

40    Once the required orientation has been established, the core sample can be marked as necessary and removed from the lower part of the inner tube assembly 36b with the upper part 36a being fitted onto the orientation device 10 and the inner tube assembly 36 used for the next core sample drilling stage.

41    The process by which the device determines and provides a graphical indication of the direction in which it should be rotated, together with the lower part 15b of the inner tube assembly 36 in order to be at an orientation corresponding to the orientation of the core sample in its original position within the ground, operates on the following basis.

42    The time measurement measured by the operator and entered into the keypad 72 represents the duration of time between starting the orientation device 10 and the point at which the particular drilling process was terminated in order to fracture the core sample from the body of material to which it is attached so that the core sample could be retrieved from the drill hole and brought to the surface level.

43    The orientation is determined at predetermined intervals of a minute in this embodiment. The timer simply allows identification of the particular minute interval at which the appropriate reading was taken and recorded.

44    Inputting of the time measurement into the keypad 72 allows the controller 66 to compare the inputted reading to the various stored readings, and identify the relevant orientation reading. The triaxial accelerometer means 58 provides signals responsive to the orientation of the orientation device 10 at any instant in time, including when operating at surface level. Such signals allow the controller 66 to process the signals and determine orientation of the device at any instant. The controller 53 can compare the instant of the device at surface level at any instant in time to the particular recorded reading corresponding to the orientation of the device at the time that the core sample was separated from the body of material to which it was previously attached. This comparison is processed to provide data which is outputted to the display 74 to provide a visual indication of the direction in which the orientation device should be rotated.

45    What this means is that in this orientation device, the orientation device does not require physical marking of a core sample prior to extraction from the ground. Indeed, the orientation device according to the embodiment is particularly convenient for an operator to use, it is said, because all that is required is for the operator to start the device prior to the inner tube assembly 36 being inserted into the drill hole, and contemporaneously start a timer for recording the time duration before the drilling operation ceases to allow the core sample to be retrieved.

2.4    The claims

46    There are then the claims of the invention which correspond with the consistory statements, being in the following terms:

1.    A core orientation system for use with a core drill, the core drill having an inner tube, the system comprising:

means to providing signals associated with the physical orientation of the inner tube of the core drill during drilling;

means for measuring a time measurement indicative of the time during drilling when the core sample is detached from the body of material from which it is taken and held in fixed relation to the inner tube;

input means for inputting the time measurement into the system;

one or more processing means for processing the signals to produce data indicative of the orientation of the inner tube;

one or more processing means for processing the data produced and the inputted time measurement to produce an indication of the orientation of the core sample relative to the material from which it is detached; and

display means for the indication of the orientation of the core sample relative to the material from which it is detached.

2.    A system as claimed in claim 1, comprising one or more means for storing the data produced and the indication of the orientation of the core sample.

3.    A system as claimed in claim 2, wherein the means for storing the data comprise memory, the system comprising interface means having first means for storing the data in the memory and second means for accessing the memory to produce the indication of the orientation of the core sample when detached when required.

4.    A system as claimed in claim 1 or 2, wherein the means to storing the data comprises memory, the system comprising a timer for determining predetermined time intervals relative to a reference time, and means for storing the data in the memory upon each of the predetermined time intervals terminating.

5.    A system as claimed in any one of the claims 1 to 4, wherein the physical orientation of the core sample comprises: a rotational orientation about a longitudinal axis of the core sample; and/or an angular orientation of a longitudinal axis of the core sample above or below a horizontal plane.

47    The Method Patent is in very similar terms, with the attached diagrams being the same. Of course it relates to a method rather than a system.

2.5    Dates of grant

48    The System Patent and the Method Patent were granted on 16 December 2010 and 15 September 2011 respectively. The date of each Patent, however, is earlier because they were granted on divisional applications filed pursuant to s 79B of the Act and are associated with a series of earlier patent applications.

49    The Patents are a divisional of standard patent application no 2010200162, filed on 15 January 2010, which, in turn, is a divisional of standard patent application no 2005256104 filed on 5 September 2005 (Complete Application). Each claims priority from the Provisional Patent Application no 2004905021 filed on 3 September 2004. This is a key date in Coretell’s invalidity case.

50    As a result, although the System Patent and the Method Patent were applied for and granted in 2010 and 2011, prima facie, the date of the Patents is 5 September 2005, as this was the date of the filing of the Complete Application.

51    Thus, the eight year term of the Patents under s 68 of the Act commenced on 5 September 2005 and ended on 5 September 2013. As a result, the Patents had expired at the time of trial. Although the Patents have expired, the applicants seek relief in respect of infringements that allegedly occurred up to and including 5 September 2013.

52    In summary then, the System Patent was:

(a)    granted on 16 December 2010;

(b)    certified on 5 September 2011; and

(c)    claims priority from the Provisional Application filed on 3 September 2004.

53    The Method Patent was;

(a)    granted on 15 September 2011;

(b)    certified on 1 November 2011; and

(c)    claims priority from the Provisional Application filed on 3 September 2004.

54    The priority date claimed under the Patents is 3 September 2004, being the date of filing of the Provisional Application. Although this is not relevant to the applicants’ infringement contentions, it goes to the question as to the validity of the Patents raised by Coretell, which will be discussed below.

3.    KEY FACTS

55    As noted, each of AMC and Reflex are wholly owned subsidiaries of Imdex. They were incorporated in 1987 and 2007 respectively. While AMC is the registered owner of the Patents, Reflex, which supplies digital surveying core orientation equipment to the mineral exploration drilling industry, is the exclusive licensee of the Patents.

56    Coretell was incorporated in 2006. It is associated, within the meaning of s 50AAA of the Corporations Act 2001 (Cth) (CA), with Mincrest, which trades as Camteq Instruments. Coretell’s business address is at 6 Davison Street, Maddington, Western Australia (Maddington Warehouse).

57    Mincrest was incorporated in 1995 and is also associated, as is Coretell, with Kleyn Investments pursuant to s 50AAA CA. Mincrest is also the trustee of the Kleyn Family Trust ABN 39 593 588 385. Mincrest ceased trading in approximately February 2010.

58    Kleyn Investments was incorporated in 2006 and is the owner of the business name ‘Camteq International Services’ and is the trustee of the Kleyn Investment Trust ABN 71 981 737 047. The business address of Kleyn Investments is the Maddington Warehouse.

59    In respect of Coretell, Mincrest and Kleyn Investments, the third respondent, Mr Kleyn, is realistically the controlling mind and will in that he is:

(a)    the sole shareholder in, and director and company secretary of, Coretell;

(b)    one of two shareholders in, and directors of, Mincrest (the other being his wife who did not give evidence); and

(c)    the sole shareholder in, and director and company secretary of, Kleyn Investments.

60    As noted, the equipment under consideration in this proceeding involves core orientation tools, which indicate the orientation of core samples, and also in survey instruments which determine the geo-spatial properties of down-hole environments. These pieces of equipment are complementary products. Typically drilling rig operators require the supply of both before commencing drilling and mineral exploration activities.

61    The applicants’ core orientation tool, the ACT Tool, was, from the date of its release on the Australian market until mid-2007, marketed by Ace Drilling Supplies, a business division of Imdex. Imdex acquired Reflex’s parent company on 1 August 2006 and merged Ace Drilling’s business into Reflex in July 2007.

62    There are two relevant models of Coretell equipment, the first being the Coretell Orientation Tool (First Tool) as described in the document entitled ‘Camteq-Orientation Tool quick user guide’ (Camteq User Manual); and secondly, the core orientation tool known as the ‘ORIshot’ referred to above. This is described in the documents entitled ‘ORIshot Tool – quick user guide’ and ‘ORIshot multifunction Orientation Instrument’ (together the ORIshot User Manual). The ORIshot Tool is comprised of a probe (part no CNPS100), and a handset (part no CNH 100). Coretell updated, amongst other things, the ORIshot Tools’ handset design and wireless communication means in about May 2012.

63    Mincrest manufactured, or caused to be manufactured, the First Tool between 5 September 2005 and November 2006, and kept stocks of the First Tool at Lot 4 Reservoir Road, Orange Grove, Western Australia (Orange Grove Premises). Mincrest supplied six of the First Tool to MTL Philippines on 31 October 2006. In or about July 2007, all dealings in relation to the First Tool ceased.

64    Since January 2009, Coretell has made and thereafter supplied, hired, offered for supply and hire, and kept for the purposes of supply and hire, ORIshot Tools to customers and distribution agents in Australia and countries outside Australia. It has kept ORIshot Tools at the Orange Grove Premises and, since September 2010, at the Maddington Warehouse. Coretell has also supplied ORIshot Tools to customers and distribution agents in Australia and in countries outside Australia, together with the ORIshot User Manual, and such ORIshot Tools have been used in accordance with the ORIshot User Manual.

65    The First Tool and the ORIshot Tool were the subject of a claim by Imdex, AMC and Reflex of patent infringement of Innovation Patent no 2006100113, which claim was dismissed, both at first instance by Justice Barker in Australian Mud Company Pty Ltd v Coretell Pty Ltd (2010) 88 IPR 270 (AMC No 1) and on appeal by the Full Court (Bennett, Gilmour and Yates JJ) in Australian Mud Company Pty Ltd v Coretell Pty Ltd (2011) 93 IPR 188 (AMC Full Court).

66    The ORIshot Tool comprises three components:

(a)    a pair of down-hole orientation tools;

(b)    two adaptors; and

(c)    a handset controller.

67    An expert, Dr Anton Kepic, called by AMC explained that in general terms the ORIshot Tools are sent down a drilling exploration hole with a core drill. Two such tools are provided so that one can be down the hole while the other is on the surface with information being read from it by the operator.

68    The down-hole component of the ORIshot Tool continuously logs orientation data at set intervals while drilling proceeds. After the core sample is obtained, that component is retrieved and taken to the surface. By using the handset, orientation data is then displayed. It is the data recorded immediately prior to the core sample being broken away from its in situ location. Instructions on how to place the retrieved core in that in situ orientation are displayed on the handset.

69    The ORIshot Tool works by way of time synchronisation between two time keeping devices. One is located in the down-hole orientation tool and the other is located in the handset controller. Once the two time keeping devices are synchronised, the down-hole orientation tool is attached to the inner tube assembly of the core drill and sent down the hole. Drilling is then commenced and a core sample is generated. The inner tube assembly attaches to the rock core so that it cannot rotate relative to the core sample. Because the orientation tool is firmly attached to the inner tube assembly, which is in turn attached to the core sample, the orientation of the down-hole orientation tool corresponds to that of the core sample. Orientation data then is generated and recorded at set time intervals during this process in the manner described above. The data is generated by means of accelerometers.

70    When the operator is ready to break the core sample away from its in situ location, a ‘TAKE MEASUREMENT’ button is pressed on the handset controller. That function logs the elapsed time from the synchronisation time or reference time to the point of taking the measurement. This is recorded in the handset controller.

71    The down-hole orientation tool, which is attached to the inner tube, which is in turn attached to the core sample, is then retrieved to the surface along with a core sample. At the surface, the down-hole orientation tool and the handset controller then communicate with each by way of radio frequency modules.

72    There is then a display of orientation data on the handset controller. This is achieved by pressing appropriate buttons on the handset controller obtained through communication with the down-hole orientation tool. By pressing a button entitled ‘VIEW DATA’ on the handset controller, the core sample can be placed in its original in situ orientation when the ‘TAKE MEASUREMENT’ button is pressed immediately prior to the core being broken away from its in situ location. Symbols are then displayed on an LCD display of the handset controller showing which way the core should be rotated to coincide with its in situ orientation. For example, ‘>>>>’ indicates that the core should be rotated clockwise and ‘<<<<’ indicates that it should be rotated anti-clockwise. The display also indicates the ‘dip’ or ‘inclination’ at which the core sample was taken.

4.    THE ISSUES

73    The following are the areas of dispute in relation to infringement.

4.1    Infringement

4.1.1    Exclusive licensee and priority dates

74    The parties are in dispute regarding whether:

(a)    Reflex is and was at all times the exclusive licensee of the Patents; and

(b)    the Patents take the priority date of the Provisional Application filed on 3 September 2004; and

(c)    the Patents expired on 5 September 2013 so that the applicants’ entitlement to relief ceased at that date.

4.1.2    Claims of direct infringement

75    The applicants’ claims relate to alleged acts of any of the respondents between 5 September 2005, being the date on which the Complete Application was filed and, in the alternative, since 16 December 2010 being the day after the divisional parent application was filed. The applicants allege direct infringement of both of the Patents by all of the corporate respondents.

76    Coretell admits to making and supplying the ORIshot Tools from 16 December 2010, and that customers used those tools in accordance with instructions provided, but the respondents otherwise deny the allegations of infringement.

77    The respondents further dispute that the applicants could be entitled to any relief consequent on any activities by the respondents in countries outside Australia.

4.1.3    Proper construction

78    The respondents contend, and the applicants dispute, that on a proper construction of the claims of the Patents, having regard to their respective specifications, the claimed ‘system’ of each of claims 1 to 5 of the System Patent, and the claimed ‘method’ of each of claims 1 to 5 of the Method Patent, are each relevantly confined in their scope to a system and method carried out by an integrated unitary electronic apparatus in one piece as described and as illustrated in the Patents so that, by reason of that construction, the ORIshot Tools do not infringe the Patents.

79    Coretell further contends, and the applicants dispute, that:

(a)    if, as the applicants contend (but Coretell rejects) the integers of ‘input means’ and ‘inputting’ as they variously appear throughout the claims of the System Patent and the Method Patent, exclude activities or operations carried out by the driller/operator at the surface such as to record the time of detachment of the core sample, then there can be no infringement by the ORIshot Tools which has such activities carried out ‘externally’ on the surface by the operator in conjunction with a handset; and

(b)    the integer ‘indication of the orientation’ as it variously appears throughout the claims which is said by the applicants to require a visual indication of the direction in which the core sample should be rotated is not present in the ORIshot Tools in the “Real-time Roll” method of display as that method displays only the current roll angle and roll angle at the time of detachment of the core sample

4.1.4    Infringement of System Patent

4.1.4.1    Making ORIshot Tools

80    As already noted, the applicants allege that since 16 December 2010, and further since 5 September 2005, the corporate respondents made core sample orientation tools. The respondents admit that Coretell has made, and offered for that purpose, the ORIshot Tools since 16 December 2010.

81    The respondents deny that Mincrest or Kleyn Investments made or offered to make any core sample orientation tools as alleged.

4.1.4.2    Sales and supply of ORIshot Tools, supply of ORIshot Tools for use

82    The applicants allege that since 16 December 2010, and further since 5 September 2005, the corporate respondents sold, or otherwise disposed of, offered to sell or otherwise dispose of the ORIshot Tools. The respondents admit that since 16 December 2010 Coretell has supplied, hired and offered for supply and hire core orientation tools.

83    The respondents deny that Mincrest or Kleyn Investments supplied, hired and offered for supply and hire core orientation tools as alleged.

4.1.4.3    Features of claims

84    The applicants allege that the ORIshot Tools include the features of each of the claims of the System Patent.

85    The respondents deny these allegations about the ORIshot Tools.

86    The respondents further allege that the applicants had no granted and published patent rights on 16 December 2010.

4.1.5    Infringement of Method Patent

87    The applicants allege that the ORIshot Tools are:

(a)    capable of being used in a method including the features of each of the claims of the Method Patent; and

(b)    are only capable of that one reasonable use having regard to their nature or design.

88    The respondents deny these allegations about the ORIshot Tools.

89    The applicants allege that the ORIshot Tools are:

(a)    not staple commercial products; and

(b)    the corporate respondents had reason to believe that the persons to whom they were supplied would use them in a method including each of the claims of the Method Patent.

90    Coretell admits that it had reason to believe that its customers would use the ORIshot Tools in accordance with the instructions provided with those tools. Otherwise, the respondents deny these allegations.

91    The applicants allege that the corporate respondents have given, or published advertisements containing, instructions or inducements for the use of the ORIshot Tools and use of the ORIshot Tools in accordance with those instructions or inducements will involve them being used in a method including the features of the claims of the Method Patent.

92    Coretell admits that it supplied and hired the ORIshot Tools with instructions for the use of those tools. Otherwise, the respondents deny these allegations.

93    The applicants allege that since 16 December 2010, alternatively since 5 September 2005, the respondents have authorised, procured, induced or joined in a common design with persons to whom the ORIshot Tools have been supplied to use those ORIshot Tools in a method including the features of the claims of the Method Patent and those persons have so used the ORIshot Tools.

94    Coretell admits that it supplied and hired ORIshot Tools with instructions with reason to believe that the tools would be used in accordance with the instructions. Otherwise, the respondents deny these allegations.

4.1.5.1    Sale etc of ORIshot Tools

95    The applicants allege that the respondents have infringed the claims of the Method Patent by reason of:

(a)    their unauthorised acts since 16 December 2010, alternatively since 5 September 2005, of making, selling, supplying or otherwise disposing of, or offering for those purposes, ORIshot Tools;

(b)    their supply since 16 December 2010, alternatively since 5 September 2005, of ORIshot Tools for use;

(c)    the use of ORIshot Tools since 16 December 2010, alternatively since 5 September 2005, in a method including the features of each of the claims in the Method Patent.

96    These claims are denied by the respondents.

97    The respondents further allege that the applicants had no granted and published patent rights in respect of the Method Patent prior to 29 September 2011 and had no granted and published patent rights on 16 December 2010.

4.1.6    Accessorial liability

4.1.6.1    Mincrest and Kleyn Investments

98    The applicants allege that Mincrest or Kleyn Investments authorised, procured or induced, or joined in a common design with Coretell to do the acts alleged to amount of infringement.

99    The respondents deny the above allegations and contend further that:

(a)    Mincrest did not carry on any trade or business in Australia at all material times after 16 December 2010; and

(b)    Kleyn Investments’ business has been solely concerned since 16 December 2010 with exploitation of the Pro-Shot and not with any exploitation of the ORIshot Tools.

100    The applicants dispute the contentions in (a) and (b) above.

4.1.6.2    Mr Kleyn

101    The applicants allege that Mr Kleyn has authorised, procured or induced or joined in a common design with the corporate respondents to do the acts alleged to amount of infringement.

102    The respondents deny these allegations.

4.1.6.3    Priority dates

103    The applicants allege that:

(a)    the Patents are entitled to claim priority from the Provisional Application filed on 3 September 2004;

(b)    the Complete Application, filed on 5 September 2005:

(i)    is the divisional parent of the divisional parent application filed on 15 January 2010; and

(ii)    therefore the divisional grandparent of the Patents.

104    This is denied by the respondents.

105    The applicants allege that the System Patent was granted to AMC on 16 December 2010. The respondents allege that the System Patent was granted to AMC on 6 January 2011.

106    The applicants allege that the Method Patent was granted to AMC on 15 September 2011. The respondents allege that the Method Patent was granted to AMC on 29 September 2011.

107    Coretell contends that:

(a)    it is for the applicants to establish the ‘fair basis’ for their claim to a priority date for the Patents of 3 September 2004 based on the asserted disclosure in the Provisional Application; and

(b)    if the Court construes the scope of the claims of the System Patent and the Method Patent as being broad enough to comprehend the Coretell tools involving two separate devices which are in dynamic electronic communication, there is no requisite disclosure in the priority documents to support the claims as so broadly construed and consequently denies the applicants’ entitlement to rely on that priority date of 3 September 2004.

108    Coretell also contends (and the applicants dispute) that:

(a)    an essential feature of the invention as variously claimed in the Patents is that the core sample as a unitary piece, that is, unfractured, be held in fixed relation to the inner tube at the time of detachment from the body of material;

(b)    further essential features are the feature to the effect of ‘removing the inner tube, with the core sample held therein in fixed relation to it, from the body of material’ and/or the feature to the effect of ‘means for measuring a time measurement indicative of the time during drilling when the core sample is detached from the body of material from which it is taken and held in fixed relation to the inner tube’;

(c)    neither the provisional specification nor the complete specification disclose these essential features and, accordingly, the Patents are not entitled to any earlier priority date than the respective dates of filing of the Patents.

4.1.7    Innocent infringement

109    The respondents rely on s 123(1) of the Act and contend that, if the Court finds that Coretell or any of the other respondents infringed the Patents, or one of them, then the respondents were not aware, and had no reason to believe, that a patent for the invention existed or that their acts constituted infringement. Accordingly the applicants would be disentitled to relief for any such infringement.

4.2    Invalidity

110    Coretell, while denying any infringement, also contends by cross-claim that the Patents are invalid on numerous grounds, which will be developed fully in the section concerned with Coretell’s cross-claims. Those grounds involving consideration of:

    the priority date;

    lack of novelty - prior art;

    lack of novelty - prior use;

    lack of innovative step;

    lack of fair basis;

    patents obtained by false suggestion or misrepresentation;

    lack of utility;

    insufficiency of description;

    inadequate definition;

    inadequate clarity;

    prior secret use; and

    no manner of manufacture disclosed.

111    Coretell also claims in relation to unjustified threats and/or statutory breaches of the Australian Consumer Law, which is contained in Sch 2 of the Competition and Consumer Act 2010 (Cth) (ACL).

112    The applicants take issue with all of these allegations.

5.    SOME GUIDING PRINCIPLES ON CONSTRUCTION

113    I intend at this point only to touch lightly upon principles of construction for two reasons. First, the principles are not contentious and not being contested in this proceeding. Secondly, I have dealt with the authorities below, topic by topic in relation to each of the specifically disputed areas.

114    It is impermissible for either the Court or the witnesses to approach the issues of construction with any regard to the alleged infringing articles: Fresenius Medical Care Australia Pty Limited v Gambro Pty Limited (2005) 67 IPR 230 per Wilcox, Branson and Bennett JJ (at [95]). As observed by Heerey J in Welcome Real-Time SA v Catuity Inc (2001) 51 IPR 327 (at [21]):

All that needs be added is the perhaps trite observation that the alleged infringement is to be ignored when construing the patent. Although the forensic contest will throw up the particular construction issues to be resolved, a patent must, as the saying goes, be construed as if the infringer had never been born.

115    This was also confirmed in Danisco A/S v Novozymes A/S (No 2) (2011) 91 IPR 209 per Bennett J (at [38]) and Sanofi-Aventis Australia Pty Ltd v Apotex Pty Ltd (No 3) (2011) 281 ALR 705 per Jagot J (at [135] and [153]).

116    Overall, the question of construction of a patent specification is a question for the Court. The specification is a public document and not a document operating inter partes. However, the Court is to place itself in the position of a person acquainted with the state of the art and manufacture at the relevant time and educate itself about the meaning of the technical terms, if any: Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd (2001) 207 CLR 1 (at [24]).

117    Justice Hely in Flexible Steel Lacings Co v Beltreco Ltd (2000) 49 IPR 331 (at [81]) said:

…the construction of the specification is for the Court, not for the expert witness. Insofar as a view expressed by an expert depends upon a reading of the patent, it cannot carry the day unless the Court reads the patent in the same way. …

118    The specification, including the claims, is not to be read in the abstract but construed in light of the common general knowledge and the art as at the priority date: Kimberly-Clark.

119    The words of a specification should generally be given their ordinary English meaning, unless a person skilled in the art would, in the context of the claims, give the words a special meaning, or unless the specification ascribes a special meaning to them: Britax Childcare Pty Ltd v Infa-Secure Pty Ltd (2012) 290 ALR 47 per Middleton J (at [224]).

120    As a general proposition, patent specifications should be construed with a view to validity and making the patent work: H Lundbeck A/S v Alphapharm Pty Ltd (2009) 177 FCR 151 per Emmett J (at [52]-[53]).

121    The specification and claims must be construed in light of the common general knowledge of a worker in the field before the priority date. Traditionally, such a person (or persons) come within the description of a hypothetical, non-inventive worker in the relevant field of technology in Australia, who is equipped with the common general knowledge in the art: Minnesota Mining and Manufacturing Company v Beiersdorf (Australia) Limited (1980) 144 CLR 253.

6.    AN OVERVIEW OF THE ORAL EVIDENCE

122    As will be apparent, I will address the applicants’ case first and, secondly, Coretell’s cross-claim. This accords with the order in which the cases were presented. Both cases were put very strenuously. There were, in some instances, strong credit attacks in respect of various witnesses. The respondents, through Coretell, put numerous defence and cross-claim allegations against the applicants’ case or as senior counsel for the applicants described it, ‘every imaginable defence’. The applicants’ case was, by comparison, relatively focused.

123    Many rulings were made in the course of the trial on objections. The rulings did not warrant separate recording in these reasons, with the possible exception only of one ruling, and one anticipated ruling, which I have discussed in Appendix B to these reasons.

124    I propose to say something now of the role played by various witnesses in connection with the issues in the case and the extent to which I regarded the evidence of those witnesses, in a general sense, as assisting the case advanced by the party calling the witness.

125    It should be emphasised that I am presently dealing with general observations on some of the more important witnesses. More detailed attention to the evidence of those and other witnesses appears topic by topic.

6.1    Infringement

126    Insofar as infringement was concerned, the applicants called Dr Kepic as an independent expert. Dr Kepic is an Associate Professor of the Department of Exploration Geophysics at Curtin University, Western Australia. He, along with virtually all witnesses in the case, has provided one or more witness statements or affidavits on which he was examined and cross-examined.

127    Dr Kepic has substantial practical and academic experience in the exploration drilling industry, including direct experience with core sampling operations, although he had not himself been involved in the operation of core orientation tools at an operational drilling rig. Dr Kepic gave evidence relevant to the construction of the claims of the Patents and the features of the respondents’ tools.

128    I accepted the evidence of Dr Kepic, including concessions that he made which were potentially of assistance to the respondents. He has practical and academic experience in the exploration industry, including experience in dealing with core samples.

129    Dr Kepic was well placed to give evidence on the Patents from the perspective of a person skilled in the art. By that expression, I mean a person with a ‘practical interest in the subject matter of the invention’: see, for example, Root Quality Pty Ltd v Root Control Technologies Pty Ltd (2000) 49 IPR 225 per Finkelstein J (at [40] and [46]). The relevant subject matter for present purposes in which a practical interest is required is the subject matter of the techniques and technology used in core sample orientation. Dr Kepic has considerable experience in the hard rock exploration industry. He designed and operated bore hole survey instruments from 1997 to 2002. Although he has not, himself, been an operator of core orientation tools at an operational drilling rig, nevertheless, his knowledge of the technology was substantial. During his professional duties at Australian mining sites, he has been involved in inspecting recovered drill core and making measurements of the core immediately after the drilling sequence. Only qualified drillers are permitted to use core orientation tools and other drilling equipment, so it is unsurprising that Dr Kepic has not operated a drill himself.

130    The respondents did not file any directly responsive expert evidence commenting on that of Dr Kepic. They relied upon their cross-examination of him. They have not, in my view, called any skilled person with greater or more direct experience in relation to the technology, which is the subject of the Patents. The respondents did not rely upon any positive evidence on the infringement case advanced by the applicants. Rather they sought to extinguish the applicants’ case. I will not at this point comment in detail as to all of the evidence of Dr Kepic, other than to identify that he gave detailed evidence in his first affidavit in relation to the construction of the Patents and the features of the respondents’ ORIshot Tool. He concluded, and I accept, that the ORIshot Tool, in each of its three versions, incorporates the features of each of the claims of the System Patent and the Method Patent.

131    A significant feature of Dr Kepic’s cross-examination was devoted to the respondents’ argument that the ORIshot Tool is a two part device, unlike the ACT Tool. Dr Kepic adhered to the views expressed in his first affidavit in cross-examination. He said:

Well, Dr Kepic, that’s a matter for his Honour, but can I just make this last observation, that – I’m going to put this to: that when you gave the evidence in the earlier trial when we were involved in this handset issue – I will quote it to you. That part of your evidence was that you would – that one would have to be literal in the meanest sense to say that the Coretell equipment is excluded from claim 1 of the patent. Paragraph 74 of his Honour’s judgment. Now, I’m going to put this to you, Dr Kepic, that the whole approach that you’re taking to your evidence here is precisely that. That you’re motivated by saying that you would have to be the meanest person not to have the Coretell equipment within these claims?---Well, again, quoted – it seemed to me, and it still seems to me, the word “mean”, “narrow”, “literal” – if I step back and away from the detail and the wording and such, and I look at the equipment that I was given and said “Here is a patent. Here is the equipment. Does this equipment look like it acts as you might expect something out of that patent would be developed?” And when I looked at, it ticks nearly every box. That’s why I consider this whole handset peripheral, moving functionality in or out of the thing, it – it’s sort of a sideshow. If I look objectively and think to myself, “Okay” – and as you pointed out, we’ve just gone at length – if we decide to have a scheme where we have a data logger in the hole, we have synchronisation at the surface, etcetera, etcetera, what’s the logical progression? All the logical elements are there and, as I see it, they’re in the patent. So when I step back and just look at it, it’s – it seems to me, as an expert, that you could almost read the patent and develop that tool as I saw it in there. It largely has – all the elements are there. Again, whether or not I’m the expert, to be honest, the whole device/devices thing is – is just something that’s very foreign to me as a scientist, as a – and such. It’s just a minor part of something that is – so obviously translates one to one from the claims in its functionality and what it does, when I could design two or three variants that would not even transgress this patent. 2004, right now, whatever. So I just find it very hard to sympathise, if you will, on the great details when it’s – it’s relative easy, to be honest, to tick the boxes and see this tool looks pretty much like what the patent says.

132    I accept Dr Kepic’s evidence that the process which was undertaken is a relatively straightforward one of comparing the features of the ORIshot Tool and its mode of operation with the features of the claims as he understood them. This was a conventional approach. Specifically, on the main line of cross-examination, Dr Kepic consistently rejected the contention that the claims did not contemplate a ‘two part device’. He also rejected the argument put to him in cross-examination that pressing the ORIshot Tool’s ‘TAKE MEASUREMENT’ button was an ‘input means’ or ‘inputting’ and, further, that its ‘Real-Time Roll’ display was not an ‘indication of orientation of the core sample’. I accept Dr Kepic’s answers and the explanations for them.

133    Another expert witness called for the applicants on the infringement case was Mr Andrew Ross, a chartered accountant. Mr Ross addresses the financial and operational involvement of the respondents in the Camteq business, and the extent to which Mr Kleyn and others have, or have not, benefitted from that business.

134    The evidence of Mr Ross was compelling. It entirely accorded with what will be seen to be my rejection of the evidence given by Mr Kleyn. He presented two expert reports, which will be discussed at greater length below, but I note that the evidence is that, apart from a brief period in late 2012, Coretell did not employ any of the numerous staff working for the Coretell business, did not incur operational expenses, such as wages, plant and equipment, office expenses and such, associated with its multi-million dollar core tool business and, apart from a single motor vehicle, did not own any of the plant or equipment at the business premises at the Maddington Warehouse. Rather, the evidence shows that it was Kleyn Investments which engaged the staff and paid certain operational expenses associated with Coretell’s core tool business. Prior to moving to the Maddington Warehouse, Mincrest bore these expenses. No rent was paid to the related company, Goldview Assets Pty Ltd in certain periods and, accordingly, Mr Ross concluded that ‘Coretell was not operating as an independent entity’ during the periods for which he was supplied with accounting records.

135    Rather, Kleyn Investments and Mincrest provided significant financial assistance to Coretell, namely, $185,000 from Mincrest, $433,427 from Mincrest as trustee of the Kleyn Family Trust, and $437,000 from Kleyn Investments as trustee of the Kleyn Investment Trust. These amounts were necessary for Coretell to conduct its core tool business. Accordingly, Mr Ross gave evidence that had Coretell not received distributions from trusts administered by Mincrest and Kleyn Investments as trustees, it would have reported significant cumulative losses for the financial years ending 2007 to 2011.

136    The explanation provided by the respondents for the distribution of funds was that the trust distributions were made to Coretell to avoid adverse tax consequences, and that it made rational economic sense for the businesses to move staff from one business to another as required and to use a single warehouse. Mr Ross accepted these propositions and, indeed, observed that they supported his thesis that Coretell was not acting independently. He gave evidence that if those events took place in the context of a group of related entities, they would make commercial sense, but if they were not related, then those arrangements would not make commercial sense. In large measure I accepted the evidence of Mr Ross.

137    Mr Robert Kleyn was not required for cross-examination, but his affidavit was tendered. He is the brother of the third respondent, Mr Nicky Kleyn. He gave evidence regarding aspects of the development of the respondents’ first generation ORIshot Tool and discussions with his brother. Mr Robert Kleyn swore an affidavit in which he said that Mr Nicky Kleyn informed him that he was developing a core orientation tool with the assistance of Ashley Barker in about 2005 and that ‘we’ve copied it from Ace’s new core tool but we’re planning to make one or two changes to it’. Mr Robert Kleyn purportedly asked him ‘won’t Ace know you copied it?’ to which Mr Nicky Kleyn said ‘maybe, but they’ll have to prove it’.

138    In addition, in his affidavit, Mr Robert Kleyn said that Mr Nicky Kleyn said to him:

The shit might hit the fan with this orientation tool. So what I’ve set up is a company that will have no assets and take the fall if things go wrong in court. I’m setting up another company called Goldview Asset that will hold all the assets of the business. You will be one director of one of them. Don’t worry you won’t have to do anything. They won’t come after you because you’ve got no money.

139    Mr Robert Kleyn said he later rejected that proposal.

140    Mr Nicky Kleyn described his estranged brother, Mr Robert Kleyn, as being an habitual liar. Despite this, Mr Robert Kleyn was not required for cross-examination on his affidavit. In due course I will discuss the weight, if any, to be given to these statements.

141    Mr Stephen Budiselic, general manager in the Asia Pacific region for Reflex, dealt with the market for core orientation and survey tools, and instances of the promotion by the respondents and of their supply and distribution of the ORIshot Tool, including at the Maddington Warehouse.

142    I placed limited reliance on the evidence of Mr Budiselic. I formed the impression that Mr Budiselic was something of an advocate for the applicants’ case. His enthusiasm to champion the cause of the applicants might be explained by the fact of his position as an employee of Reflex. Equally, however, I think that senior counsel for the respondents overstated the matter considerably in describing Mr Budiselic as being ‘a great mischief maker … who is duplicitous, to say the least. He purports to have been a friend of Mr Kleyn over many, many years and he advances evidence which is at best misleading, if not wrong’. I rate Mr Budiselic, in witness terms, somewhere between that description by senior counsel for the respondents and the favourable embrace received by senior counsel for the applicants. Much of Mr Budiselic’s evidence was borderline in terms of admissibility.

143    Mr Budiselic has had long experience in the mining industry. He has known Mr Kleyn for almost 17 years and had always understood him to be representing the ‘Camteq’ business. He gave evidence which supports the applicants’ case, but on which I do not need to rely in order to reach the finding that in 2009, whilst employed for a customer of Camteq, Supply Force International, he was told by Mr Kleyn that he had split his business into Camteq and Coretell divisions to ‘alleviate legal issues later on’. Mr Budiselic’s evidence was directed to overcoming the fact that, as I subsequently find, Mr Kleyn moved his business arrangements in such a way as to minimise any capacity for liability to the applicants in this or any subsequent proceeding. The evidence of Mr Budiselic was not particularly helpful in reaching that conclusion. I reached the conclusion that these are the steps he took based on Mr Kleyn’s own evidence in cross-examination and the objective facts.

144    Mr Kelvin Brown was an impressive witness. At the time of giving evidence, he was the ‘Global Products Manager’ for Reflex. Mr Brown has over 19 years of experience in the supply and use of equipment in mineral exploration drilling, including experience in core sample operations at hard rock drilling rigs. Mr Brown’s first affidavit dealt with a design feature of the respondents’ tool, and instances of the respondents’ promotion and supply of the ORIshot Tool. He also gave evidence on the topic invalidity, to which I will refer to below.

145    The respondents also accept that Mr Brown was truthful and reliable witness. Mr Brown also assisted the respondents’ case. He readily admitted that he had no formal training in aspects of core orientation technology. Notwithstanding this, he had extensive knowledge and practical experience with procedures and equipment involved in core orientation as at 3 September 2004. He gave evidence relevant to several issues in the case, including the alleged prior disclosures in the Skopec Paper, his experience with testing procedures for prototype equipment at drilling rigs, and prior art methods for orienting core samples in mineral exploration in Australia before 3 September 2004. He explained three methods in use, namely, the Spear Method, the ‘Ball-Mark’ method and the ‘Ezy-Mark’ method. Mr Brown identified functional and accuracy issues with those respective methods in use prior to 3 September 2004.

146    For the respondents, evidence was given by Mr Kleyn. His evidence addressed the activities of the corporate respondents and his involvement in selling, supplying and offering the ORIshot Tool to customers in Australia.

147    I regret to say that I found Mr Kleyn’s evidence unsatisfactory. The applicants submit that Mr Kleyn was:

[a] combative and dishonest witness whose evidence should not be accepted on any issue adverse to the respondents’ case unless it is corroborated by a credible witness or contemporaneous document.

148    The applicants’ attack on Mr Kleyn was very forceful. Equally, I feel that the applicants’ submissions in relation to Mr Kleyn are somewhat more strenuous than warranted. I should stress, however, Mr Kleyn’s evidence that the ORIshot Tool was transferred by Mincrest to Coretell and the Pro-Shot from Mincrest to Kleyn Investments, as part of undocumented transfers was, in my assessment as I will later explain, a fabrication.

149    Mr Kleyn does appear to have specifically avoided disclosing in his affidavit evidence that he had given instructions to Mr Barker, the inventor of the ORIshot Tool, which included references to taking the ACT Tool into account and his advice to Mr Barker that he was introducing Coretell into the business to quarantine any liability for patent infringement. I do note that Mr Kleyn exercised his right to be present in court for each day of the hearing prior to his own oral testimony.

150    I have no doubt that Mr Kleyn structured his affairs to minimise his financial exposure should this litigation, or subsequent patent litigation against the respondents, succeed. I totally reject the evidence he gave of the transfers of the various businesses. I accept the submission for the applicants that the evidence of Mr Kleyn should be accepted only if it is independently corroborated by other credible witnesses or documents.

151    The respondents also called Mr Zane Kenny on infringement. At the time of giving evidence, Mr Kenny was an accountant and director of the firm of accountants who prepare financial statements for the respondents. His evidence was directed, amongst other things, to the relationship between the corporate respondents.

152    I consider Mr Kenny was a good witness and gave evidence to the best of his ability.

153    Mr Kenny was not an expert as such, but simply the external accountant for the corporate respondents. He did not give expert evidence and made it clear that he knew nothing of the professional obligations which are involved in giving expert evidence.

154    Without being critical in any way of Mr Kenny, on the topic of the relationship within the group, I firmly prefer the evidence of Mr Ross who was called for the applicants. This is as much a reflection on Mr Kenny’s briefing as anything else. In substance, Mr Kenny’s evidence was reduced to identifying the financial statements of the corporate respondents, which had been prepared on instructions given from Mr Kleyn and his employees. To the extent that his evidence purported to go further than that, it did not have an adequate evidentiary basis upon which to do so.

155    It was clear that Mr Kenny had not been supplied with any written instructions and had not been supplied with a range of documents which would enable him to better understand the terms of operation of a business and, as conceded by the respondents, Mr Kenny ‘[did not] know how the business is conducted at the management level or an operational level’. Mr Kenny made it clear that he did not know about the relationship between Coretell and Mincrest, particularly in respect of how they operated their business. The statement in his affidavit to the effect that Coretell was the sole operator of the business supplying the ORIshot Tool from November 2006 does not have an adequate evidentiary basis. It was based, first on the solicitor for the respondents’ undisclosed oral instructions, and secondly, on the respondents’ taxation returns and financial statements and, thirdly, on discussions which took place between Mr Kenny and Mr Kleyn. Mr Kenny had not been provided with sufficient information, nor given an adequate opportunity in order for him to express a view, such as that in his affidavit regarding the need for Mincrest to compensate Kleyn Investments for services.

156    Mr Kenny was not in close contact with Mr Kleyn, nor with Mr Kleyn’s wife, notwithstanding the suggestion in his affidavit that he was in regular contact with them. In fact, he met with Mr Kleyn only a couple of times a year if everything was going well, or a few more if it was not. Similarly, Mr Kenny only met with Mrs Kleyn two or three times a year.

157    I did not attach weight to Mr Kenny’s evidence in chief, but I am not critical of his attempts to give evidence to the best of his ability.

158    From the foregoing brief discussion, although there were numerous witnesses on both cases, those I have mentioned collectively strongly supported the case of infringement by all of the respondents.

6.2    Invalidity

159    On the invalidity case for the respondents, evidence was given by Mr Bradford, a purchasing officer at an engineering and constructions firm. In January 1995 to January 2005, Mr Bradford was the ‘rental and repair coordinator’ with Ace Drilling Supplies business, a business unit of Imdex. Mr Bradford gave evidence regarding alleged prior use of the prototype ACT Tool before the filing of the Provisional Application, including at test sites in Kalgoorlie and Manjimup.

160    I found Mr Bradford to be an unimpressive witness and I was unable to accept much of his evidence. He was neither an ‘executive’ nor an ‘accredited executive’. Indeed, he did not know what that term meant even though this was the basis on which he was described in opening by the respondents. One of the difficulties with the evidence from Mr Bradford was that, although he worked with the Ace Drilling business from about January 1995 to January 2005, Imdex terminated his employment due to his unsatisfactory performance and concerns that he was dishonest. He has known Mr Kleyn since at least 1995 when he commenced employment with Ace Drilling.

161    The unreliability Mr Bradford poses is a central difficulty for the respondents as central aspects of the cross-claim brought by Coretell are heavily dependent upon Mr Bradford’s evidence, in particular in relation to prior use. In the first of his two affidavits, he gave an account of events surrounding the development and release of the ACT Tool. In giving that evidence he:

(a)    challenged Mr Parfitt’s status as the sole inventor of the ACT Tool, which was an allegation going to entitlement to grant, which allegation was abandoned by the respondents the day before the hearing commenced;

(b)    contended that from early 2004, that is, before the Priority Date of 3 September 2004, the ACT Tool prototypes were ‘demonstrated’ to customers for the purpose of promoting and marketing the ACT Tool, which was the central allegation behind his evidence; and

(c)    alleged that the first batch of 50 ACT Tools arrived in Australia in July 2004 and were supplied to customers immediately and thus before the Priority Date.

162    As it transpired, this critical evidence was seriously inaccurate on a number of counts, but it appears that Mr Bradford did not have the benefit of examining all of the documentation which should have made clear to him that his recollection was obviously incorrect.

163    I find it difficult to conclude that Mr Bradford’s evidence was given objectively. He admitted being offended and hurt by the fact that Imdex had terminated his employment.

164    The applicants filed affidavits from seven witnesses in response to the contentions raised by Mr Bradford in his first affidavit. In every instance, his version of events was contradicted. I do not believe that they could all be wrong. The evidence in response made clear that Mr Bradford and the respondents had, as the applicants’ submit, ‘overreached this aspect of the case’. The evidence from the witnesses for the applicants was essentially confirmed and corroborated by contemporaneous documents.

165    Notwithstanding this, the respondents attempted to negotiate around those difficulties by preparing and filing a second affidavit by which Mr Bradford maintained his account of events often by offering speculation to answer the evidence from the witnesses who contradicted his accounts. Certain paragraphs of his ‘evidence’ were struck out in his second affidavit.

166    Ultimately, the important issues arising from Mr Bradford’s evidence were the three central topics on which there was a deal of focus on the invalidity argument. The first one was whether the operation of the prototypes on the applicants’ customers’ drilling sites prior to 3 September 2004, the Priority Date, was for the purpose of trialling or, whether it was for marketing and promotion. The second issue on which Mr Bradford gave evidence was the question of whether the first batch of 50 ACT Tools to be commercially released in Australia arrived in July 2004 or in September 2004. There is no cogent reliable evidence to displace the evidence, which I accept, which is that the first commercial shipment arrived after the Priority Date. The third issue was whether the first batch of ACT Tools were, in fact, promoted and released into the market in July or October 2004.

167    I will, of course, return to these issues, which are of significant importance to the invalidity case.

168    Mr Alun Thomas, a patent attorney and consultant, gave evidence, amongst other things, on patent attorney practice regarding the filing of a provisional or complete patent application. I consider that Mr Thomas was an honest expert witness who did his best given the circumstances of his briefing. For example, he worked on the assumption, which I reject, that Mr Parfitt had assured Mr Bradford in January 2004 that the ACT Tool and its method of working was completed in its development. He was also informed, which I reject, that the ACT Tool had been publicly disclosed and exploited commercially by April 2004. These two fundamental errors in his briefing undermined the entirety of his evidence. Naturally, he worked on the assumption that the information he was given was correct and based his evidence on that expectation.

169    Mr Thomas was willing to qualify and modify a number of the opinions that he had expressed in his affidavit in the course of cross-examination and he fully accepted, as would be expected, that the inventions claimed in the Patents would be required to work in real world field conditions and that the testing for that purpose need not be confined to a single drilling site. I accept the submissions for the applicants that Mr Thomas was not a person skilled in the art. While he expressed some opinions in his affidavits about the level of complexity of the inventions, he accepted unequivocally that he would not put himself forward as a person skilled in the art in the sense in which that phrase is used in the Act relevant to this invention. He also accepted unequivocally that his characterisation of the subject matter of the Patents’ specifications was not intended to be from the perspective of a person skilled in the art of core orientation devices, being someone to whom the Patents’ specifications are addressed.

170    Mr Scott is a former employee of Barminco and at the time of giving evidence was the rental manager with Camteq International Services. Mr Scott gave evidence that during his employment as drill supervisor with Barminco, he operated the ACT Tool at Sunrise Dam. He also gave evidence about aspects of the Camteq business.

171    An independent expert called for the respondents, Mr Raul Ballantyne, is a sales manager for Sandvik Mining and a former employee of Reflex. Mr Ballantyne’s evidence concerned the background knowledge of a drilling rig operator as at 3 September 2004. He carried out an assessment of what the operation of the ACT Tool would have disclosed to him at the Priority Date. Mr Ballantyne was called by the respondents to explain that the operating instructions for the ACT Tool disclosed the inventions claimed in the Patents.

172    This argument did not, as the applicants submit, survive cross-examination. This is, again, by no means an adverse reflection on Mr Ballantyne, whom I consider to be an honest witness, but the events concerned took place at least 10 years ago. He explained that he had experience as a drilling assistant, a drilling offsider and a driller with two drilling contractors before September 2004, namely, Ausdrill and Barminco. He was involved in drilling in both above ground and underground operations. As such, he was involved in obtaining core samples in the context of mineral exploration and drilling in hard rock environments. I accept the applicants’ case that this is the context of core drilling with which the Patents are concerned, notwithstanding the lack of specific reference in the Patents to hard rock. The only orientation method of which Mr Ballantyne was aware as at 3 September 2004 was the Spear Method, which was commonly used in such drilling operations before that time. The Spear Method was, of course, one of the prior art methods expressly described in the ‘Background Art’ section of the Patents.

173    Mr Ballantyne’s evidence was that down-hole survey tools or cameras are different from core orientation tools because they cannot be used to orient core samples. Nevertheless, he gave evidence that the two are complementary in the sense that they are typically to be found in the same type of drilling operations and used by the same companies. The tools go hand in hand with the day to day running of a drilling operation.

174    Mr Ronald Munro was called for the respondents. He was born in 1943 and is now retired. He was the branch manager of Ace Drilling’s Kalgoorlie’s office from 1997 to 2007. He gave evidence concerning a demonstration of the ACT Tool at the Sunrise Dam and at Ausdrill’s office in Kambalda. Mr Munro was certainly an honest witness, but was not of assistance to the respondents.

175    Mr Munro had worked at Barminco from 1994 to 1996. While he was there, Mr Koushappi was his foreman and Mr Koushappi succeeded him after his departure. As a sales manager acting for Ace Drilling, Mr Munro enjoyed a good relationship with Barminco and Mr Koushappi. He was able to open doors at Barminco in relation to the supply of products. Mr Weston had identified these factors as relevant to Ace Drilling’s decision to request Barminco to assist it by trialling the ACT Tool prototypes. Unassisted by materials, unsurprisingly, Mr Munro had difficulty in recalling the events. Mr Munro was unaware, as an example, that it was clear that he had participated in the trial of the ACT Tool prototypes with Barminco personnel in May 2004. This was in contrast to his recollection.

176    The first documented Barminco purchase order is 31 December 2004, but it appears that this was not drawn to Mr Munro’s attention prior to giving his evidence. In contrast, the document which Mr Munro was shown before swearing his affidavit was Mr Scott’s affidavit which erroneously recalled that he had seen the ACT Tool in ordinary commercial operation at Sunrise Dam in July or August 2004. (Mr Scott was also not shown the materials which would have demonstrated that this fairly distant recollection was erroneous.)

177    It was only in the course of cross-examination that Mr Munro was happy to accept that if he had been shown a copy of Barminco’s purchase order at the time his affidavit was prepared, that document would have assisted him in recalling the time of which the demonstration at Sunrise Dam occurred.

178    From a timing point of view, Mr Munro does not assist the respondents’ case on invalidity. Neither on his evidence, nor the evidence generally, do I accept that there was any commercialisation of the ACT Tool prior to 3 September 2004.

179    Mr Raymond Hill is an independent expert who was called for the respondents. He is a consultant and former employee of Sandvik Mining with experience in product development in the automotive, solar hot watering, and reverse circulation drilling industry. During this time he assisted in the preparation of patent specifications. Mr Hill gave evidence concerning, amongst other things, Sandvik Mining’s protocols and procedures for testing new products.

180    The applicants submit that Mr Hill’s evidence should be given no weight on the basis that it is irrelevant as much of what he said was directed to the position of Sandvik Mining, which was in a very different position to AMC as at 3 September 2004.

181    I had no concerns about the credit or reliability of Mr Hill, but I did have misgivings as to the helpfulness of the evidence which he was asked to give and, in saying this, I certainly direct no criticism to Mr Hill.

182    He described himself as being an ‘independent consultant’, but, in fact, he had orally accepted an offer of employment from Global Tech Corporation at the time he made his affidavit. While that acceptance required confirmation, nevertheless, he had a relationship with Global Tech which was not disclosed in his affidavit evidence. He indicated that he had informed a member of the respondents’ legal team of the prospective employment position. Notwithstanding the fact that his employment had not been confirmed, he had made known in his publically available profile on the LinkedIn website that he had commenced employment with Global Tech in September 2013.

183    Global Tech is a competitor of the applicants, including in relation to core orientation technology. This is significant because Global Tech has a product called the ‘ORI Finder’ which the applicants have also alleged infringes the Patents presently in suit. The applicants and Global Tech are involved in a dispute about this issue. Mr Hill confirmed that he was aware of those matters when he gave his evidence, at least in general terms, if not as to the fine details. Essentially this means that Mr Hill, while purportedly an independent expert was, in fact, engaged to be employed by a competitor who is also the subject of a patent infringement allegation in respect of the same Patents.

184    There are other difficulties. Mr Hill was not actually working in the mining industry in 2004 and had only ever worked for one company in the industry when he made his affidavit, namely, Sandvik, with whom he did not commence until 2007. He had previously had no involvement in the management practices of other mining products companies during the period from 2007 to 2013. It followed that his experience in the management practices of other companies in relation to the development and protection of inventions in the material years was non-existent.

185    I hasten to add that Mr Hill did not suggest otherwise. He made it clear that he had no experience in core orientation technology as at 3 September 2004, nor when he made his affidavit. It is clear that Sandvik, as with other companies with which Mr Hill had been employed, adopted a more sophisticated intellectual property approach than that of many companies. I accept that it is the case, as submitted for the applicants and, as Mr Hill readily agreed, that not all companies in the mining industry have an approach as sophisticated to patenting as Sandvik, and certainly not all of them have in-house patent departments.

186    In any event, in matters of substance rather than form, it seems to me that the approach taken by the applicants, which is discussed elsewhere, to protect their invention, largely accorded with the approach taken by Sandvik.

187    Mr Hill also expressed views on the Patents in the context of inventive step or novelty. He contended that the technology was ‘straightforward’, ‘basic’ and ‘kindergarten stuff’ as at 3 September 2004 and that he ‘could have come up with something like that’. I give these observations little weight. Mr Hill was not a person skilled in the relevant art. He was not experienced in core orientation technology as at 3 September 2004 or at the time of giving evidence. He did not direct his review of the Patents to the Priority Date and did not, and could not, read them in light of the common general knowledge as 3 September 2004.

188    Further, the views expressed by Mr Hill on this topic were after he had reviewed the Patents, rather than being confronted with a problem and devising a solution. The ex post facto, or benefit of hindsight, observations should be accorded little weight in context of inventive step: Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (2007) 235 CLR 173 (Lockwood No 2) (at [46]) and in the context of novelty: Fieldturf Tarkett Inc v Tigerturf International Limited [2014] FCA 647 per Jagot J (at [42]).

189    Dr Robert Skopec was the lead expert for the respondents. He is a petrophysicist geologist with Petrophysical Applications International Inc. He is a co-author of the Skopec Paper. Dr Skopec gave evidence concerning, amongst other things, the construction of the claims in the Patents and the extent to which his paper and prior uses said to have been made by him disclosed the feature of the claims in the Patents. He also gave evidence regarding the workability of the patented invention.

190    While I found aspects of Dr Skopec’s explanation as to core orientation very helpful, I found that parts of his evidence in cross-examination were unhelpful. Generally speaking, I prefer the evidence of Dr Kepic, who I considered was more suitably qualified. It was clear that Dr Skopec had little or no familiarity with hard rock drilling and mineral exploration of the kind with which the Patents are concerned. Obviously I will discuss his evidence in greater detail below, but while Dr Skopec is undoubtedly both experienced in core sampling in the context of petroleum exploration, he is not as experienced, if at all, in the context of mineral exploration to which I consider the Patents in suit are directed. The respondents would challenge this and would say that this matters not, but in the context of this litigation, I consider that it is an important distinction. For example, Dr Skopec was not familiar with either of the commercially available orientation tools produced by the parties, being the ACT Tool and the ORIshot Tool, before being given information about them for the purposes of giving evidence in this case. Nor was he aware of the three prior art mechanical core orientation methods described in the ‘Background Art’ section of the Patents or used in Australia before 3 September 2004. This would be inconsequential if there was no difference relevant to this proceeding between core sampling in the context of petroleum exploration and core sampling in the context of mineral exploration. In my view, there are important differences for the purposes of this case.

191    While Dr Skopec emphasised that petroleum exploration may include drilling in hard rock environments, an important distinction is that hard rock is of necessity in those environments in order to support an environment for the existence of petroleum, and is highly fractured. Hydrocarbon reservoirs do not exist in unfractured hard rock. They are present in loose sediments or in hard rock which is highly fractured. In contrast, mineral exploration typically takes place in hard rock environments where fractures are unlikely to occur. As the evidence makes clear, this is an important difference because it affects the nature of the techniques that will be suitable for use in core sampling operations. It explains why it is appropriate in the context of hard rock drilling in mineral exploration to work on the assumption that a sample of the core will usually be found in a single piece. Alternatively, if the core is actually fractured the pieces will be such that it will readily be able to put them back together at the surface. The Patents and the mechanical prior art methods used in mineral exploration, including those described in the Patents, rely on an assumption to that effect.

192    For the applicants on invalidity, evidence was given by Mr Noel Desmond Forde, an operations manager at Boart Longyear Pty Ltd. In April 2004, Mr Forde was employed by Drill Corp as an operations coordinator.

193    I accepted Mr Forde’s evidence. Mr Forde gave evidence that Mr Bradford visited Drill Corp’s Wangara premises in Perth in April 2004 to organise field testing of the ACT Tool prototype, and that field testing was subsequently conducted at a Drill Corp rigs outside of Kalgoorlie. Mr Forde gave evidence that he had provided feedback to Ace Drilling regarding possible alterations to the ACT Tool following the field test. After Mr Forde had provided that feedback, he said that it was ‘several months before the [ACT Tool] come [sic] into production’. This evidence is more consistent with the applicants’ account that there was no commercialisation of the ACT Tool prior to early September 2004.

194    Mr Forde also gave evidence that it was clear to him that the purpose of the meeting with Mr Bradford in April 2004 was to discuss testing of the prototype at a working rig to assess performance and identify any technical improvements before commercial release. He said that he appreciated that, at the time, the field testing would have been important for a tool like the ACT Tool, which operated electronically.

195    Mr Forde gave evidence that it was standard practice for developers of new technology to be involved with, and attend a meeting with, the management team of Drill Corp at Wangara before a prototype was allowed onsite for testing. This also involved having a ‘verbal rundown’ about how the equipment would work, which was necessary and ‘standard procedure’ in such meetings.

196    Contrary to the evidence of Mr Bradford, he said, and I accept, that he did not believe Mr McConachy, Mr Shine or Mr Blackburne-Kane attended the meeting.

197    I also accept the evidence from Mr Forde about the limited accessibility of mining sites in Western Australia. He gave evidence that ‘[t]here’s no open sites in Western Australia. You have to get permission to go on a site, and you have to do the appropriate paperwork’. Evidence was given about the Wigi-Malta site, which was used during testing. Mr Forde explained that this site was remote with relatively few people, on average about four or five.

198    As to the commercial implications of this field testing, Mr Forde gave evidence that Drill Corp had never received any direct benefit from agreeing to trial the ACT Tool prototype. He said that, rather, Drill Corp agreed to participate in the trial of the prototype because it was in everyone’s interest that the workability of the ACT Tool be determined and established before its commercial release. He described it in the following terms:

You do it for the industry. If there’s something new on the market and you need to put it onto your clients, then you have to test it. You don’t give it to your clients if it doesn’t work properly, so it would be in any drilling company’s interest to make sure it actually worked, which is why the visual look and the field test.

199    Most significantly, Mr Forde gave evidence, which I accept, that Drill Corp was first contacted about potential hiring of the ACT Tool in late September 2004.

200    Mr David Miitel was, at the time of giving evidence, employed by Barminco as the general manager for diamond drilling. In 2004, Mr Miitel was the human resources and operations manager at Mosslake. He gave evidence that he arranged for the field testing of Ace Drilling’s prototype core tool at Mosslake’s Manjimup site in rural southwest, Western Australia, in April 2004, and gave evidence in relation to the testing that was conducted.

201    Mr Miitel was a good witness. He demonstrated a sound recollection of events in September 2004.

202    Mr Miitel made it clear that the ACT Tool was never on hire to Mosslake in March 2004, and that it was his understanding that the ACT Tool required testing. According to Mr Miitel, Manjimup had been selected as an appropriate site because it had shallow holes that made the testing more efficient. He gave evidence that the trial site in Manjimup was at an isolated location, which was a 45 minute drive from Manjimup. It was difficult to access and only had a few authorised personnel onsite. He confirmed that Mr Bradford was present throughout the testing.

203    Following the testing, Mr Miitel said that he had provided feedback to Ace Drilling on the delays which drillers at Manjimup had experienced due to the length of the chassis. He suggested to Ace Drilling that modifying the tool length could be a way to remedy the problems which had been encountered at Manjimup.

204    This observation and feedback of Mr Miitel, when viewed objectively, is consistent with the nature of testing of a product or a prototype of a product. Indeed, Mr Miitel, importantly confirmed that the difficulties experienced with the tool while on trial in Manjimup meant that further testing was not viable at Mosslake. He also confirmed that Mosslake did not have the facilities at Manjimup to transport the ACT Tool to Kalgoorlie, which was a distance of 800 kilometres. In his oral evidence Mr Miitel said:

… he took the tool back out, because we really didn’t have a way or means of taking the tool from there, 800 kilometres to Kalgoorlie. It would have had to come back through Perth and we didn’t have the facilities to do that. And that’s why I asked them, make sure you’ve got a guy to do it, because otherwise, not only do we perform the test for these guys, we’re actually out of pocket transporting it around the place and it’s not what we do.

205    Consequently, I find that it is highly unlikely that Mr Bradford did not take the tool with him when he left the Manjimup site. I reject Mr Bradford’s evidence that the ACT Tool was left at the Manjimup site.

206    Mr Duncan McConachy was, at the time of giving evidence, employed as an operations manager at DDH1 Drilling Pty Ltd. He gave evidence that he had no recollection of ever having a core orientation tool demonstrated to him as alleged by Mr Bradford.

207    Mr Brown, previously referred to in relation to infringement, gave evidence that he had carried out in excess of 90,000 metres of core drilling and orientation operations, and had participated in about six field trials of drilling equipment at core drilling rigs. He also gave evidence that the prior disclosures alleged by Dr Skopec did not disclose various features of the claims of the Patents. His evidence also addressed the requirement of orienting core samples during mineral exploration drilling, his experience with testing procedures with prototype equipment at drilling rigs, and the mechanical techniques in equipment in use in Australia for retrieving and orienting a drill core at the Priority Date.

208    Mr Richard Parfitt, was an impressive witness. He was the chief electronic engineer at Imdex Technology UK, which was formerly known as Chardec. Mr Parfitt gave evidence that he had over 20 years of experience in the field of electronics, sensors and down-hole instrumentation. Originally, there was a challenge by the respondents as to whether Mr Parfitt was the sole inventor of the methods and systems claimed by the Patents. That challenge was abandoned. Nonetheless, his evidence addressed, amongst other things, the nature of the field testing of the two ACT Tool prototypes in April and May 2004, and his relationship with the applicants at, and prior to, that testing.

209    Mr Parfitt’s affidavit evidence was initially directed to the respondents’ challenge on the grounds of lack of entitlement, that is, the contention that Mr Parfitt was not the inventor. As noted, this assertion was abandoned shortly before commencement of the trial. Nevertheless, Mr Parfitt’s evidence addressed his development of the inventions claimed in the Patents, the release of the prototype ACT Tool for field testing in April and May 2004, the need for such fielding testing, the negotiation of a distribution agreement with the applicants, and the subsequent dispatch by Chardec of the first commercial shipment of 10 units of the ACT Tool in late September 2004.

210    I accepted the evidence of Mr Parfitt and, in particular, accept his denial of the proposition put to him in cross-examination that there was some commercial arrangement documented or otherwise for purchase of the ACT Tool prior to September 2004. I accept that Mr Parfitt was particularly careful, as was Chardec, that there was no commercialisation prior to 3 September 2004.

211    Professor Jonathan Tapson, an independent expert, at the time of giving evidence was the deputy dean of the school of computing, engineering and mathematics at the University of Western Sydney. He gave evidence that he had over 20 years of academic and practical experience in the field of electronics, sensors and instrumentation, including designing orientation systems in drilling environments. He gave evidence that the prior disclosures alleged by Dr Skopec did not disclose all features of the claims of the Patents, and that these differences make a substantial difference to the working of the inventions claimed by the Patents.

212    Professor Tapson was an impressive witness. His evidence was directed to the asserted prior disclosures contained in the Skopec Paper, and other alleged prior art, as well as Dr Skopec’s assertions about the inutility of the inventions, and certain matters relevant to infringement. I will discuss this evidence in greater length below. I accept the evidence of Professor Tapson. He also explained the context of the Patents and the differences between core sampling in mineral and petroleum exploration.

213    Mr Gary Weston was a part-time consultant with Imdex, which is the parent company of the applicants. At the relevant time, Mr Weston was general manager of the Ace Drilling business division of Imdex, and head of the project team that tested the prototype ACT Tool and its method of operation before filing for patent protection. He gave evidence about the field testing of the ACT Tool and his responsibility in negotiating the distribution agreement with Chardec to commercialise the new tool in Australia.

214    Mr Weston was a good witness. I considered that his account was entirely credible and truthful and accorded with the documentary record. As with other witnesses, Mr Weston’s evidence will be discussed further below in relation to specific issues.

215    This general overview only of some key witnesses shows that Coretell’s invalidity cross-claim had a very weak foundation. In particular, the prior use claim upon which Coretell relied heavily was seriously flawed on the evidence as found.

7.    AMC’S CLAIM - INFRINGEMENT

7.1    Previous proceeding

216    The parties were involved in a previous proceeding in this Court which was determined by Justice Barker in AMC No 1, and on appeal in AMC Full Court where the first instance decision was upheld by the Full Court.

217    The applicants stress that the prior proceedings involved a different patent, which was part of the same family as the System Patent and the Method Patent but had differently worded claims directed to a core orientation ‘device’ (Device Patent). The reasoning of Barker J and the Full Court reveals that the differences in wording by reference to ‘a device’ were material for the purposes of the present case. Both Barker J and the Full Court held that the Device Patent was not infringed by the respondents’ core orientation tools because the claims were directed to a single or ‘unitary’ device, whereas the respondents’ tools included two physically separate components that operated in conjunction with each other.

218    The applicants argue, and I accept, that the earlier decisions of Barker J and the Full Court do not bear upon the issues of infringement in issue in this proceeding because the decisions involved an issue of construction that does not arise in this case. The Full Court acknowledged (at [74]-[81]) that the case turned on the construction of the word ‘device’ as used in the claims of the Device Patent.

219    The word ‘device’ is not used in the claims of the System Patent or the Method Patent in this proceeding. The applicants assert, and I accept, that the claims in the Patents are clearly not limited to the use of a unitary device in which all of the defined components are in one physical unit.

7.2    The respondents’ arguments on infringement

220    It is necessary to say a little more about the respondents’ core orientation tools. There are three versions of the ORIshot Tool, each manufactured by the respondents at different times. The first is the ‘Camteq ORIshot Tool’, which was supplied from November 2006 to July 2007 (Version 1). The second is the ‘ORIshot’ tool, which was supplied from November 2008 (Version 2). The third is a revised version of the ORIshot Tool, which was supplied from May 2012 (Version 3).

221    The ORIshot Tool comprises three components being: first, a pair of down-hole orientation tools; secondly, two adaptors; and thirdly, a handset controller. The orientation tools are intended to be sent down the hole with a core drill. Two of them are provided so that one can be down the hole while the other is on the surface so that information can be read from it by the operator. The adapters are for attaching the orientation tools to the inner tube assembly of the core drill, and the handset control is used to interact with, and read information from, the orientation tools when they are on the surface, that is, after the core sample has been extracted.

7.2.1    The structure of the argument on infringement

222    The way that the respondents deal with the infringement aspect of the claim is to identify four arguments, any one of which, they say would defeat the infringement claim.

223    It is implicit, if not express, but in any event I so find, that but for these four suggested differences between the ORIShot Tools and the claims of the System or Method Patents, the ORIshot Tools otherwise satisfy the claims and perform essentially identical functions in an extremely similar manner and by the same system and method as that specified in the respective Patents in suit. But for those four suggested differences, infringement could not otherwise be contested.

7.2.2    A ‘unitary’ device

224    The respondents’ contention is that the only invention described in the Patents is an invention which uses an integrated unitary, or one piece, electronic device attached to the inner tube back end assembly. They submit that this device directly receives orientation information and has direct user input via a keypad and visually displays that orientation information to an operator by an integrally operated visual display. They argue that, if fairly based and conforming with the evidence, the claims of the System Patent and of the Method Patent, properly construed, must be read in conjunction with an orientation device of the kind described and illustrated in the Patents. According to the respondents, they do not comprehend a system and method for orientating a core sample involving the dynamic interchange of electronic data between two separated devices as occurs with ORIshot down-hole unit and separate handset, and no such two part device is described. Nor has the inventor or the patentee ever described a core orientation apparatus and its ‘system’ or ‘method’ of operation involving the dynamic interchange of electronic data between two separate electronic devices to orientate a core sample, as done with the Coretell apparatus.

225    The respondents stress that any system or method carried out by operation of Coretell ORIshot apparatus cannot be an infringement of the claims of the Patents because when properly construed, the claims must be confined to a ‘system’ and a ‘method’ carried out by an integrated unitary electronic apparatus in one piece as described and illustrated in the Patents. It is contended that the non-infringement consequence is entirely consistent with the policy of the patent system, which in return for publication of the invention confers a monopoly for a described invention so as to encourage innovative development around the monopoly with the dual aims of advancing and learning in the art and encouraging competitive technology during the term of the patent. The respondents contend that that is what has happened here with the development of Coretell’s ORIshot apparatus.

226    There is no doubt that the Coretell ORIshot apparatus is a two part device, but the Patents do not disclose any such limitation in the claims to a unitary device. To suggest there is such a limitation involves a misconstruction of the claims. The correct approach is simply to examine the actual words of the claims of the Patents and to construe them in the context of the specifications and common general knowledge. Once this exercise is pursued, the claims in the Patents are not limited in the manner which the respondents contend. Specifically, for example, in relation to the Method Patent, there is no use of any particular ‘device’ indicated. Rather, a method is described. There is no requirement that any such device must not be a two part device, nor is there any requirement that a so-called ‘unitary device’, to which the respondents point, must be used. Indeed, no particular device, whether unitary, two part or otherwise, is required. There is nothing in the Patents which give rise to the limitation for which the respondents contend. By reference to the Patents, I expressly focus on the claims which define the monopoly. Claim 1 matches the description which is set out in the ‘Disclosure of the Invention’ section.

227    If there is any support for the respondents’ claim, it would be best found in the description of the preferred embodiment contained in the specification under the heading ‘Best Mode(s) for Carrying Out the Invention’. But again, it is impermissible to rely upon the preferred embodiment rather than the wording of the claims themselves.

228    In Welch Perrin & Co Pty Ltd v Worrel (1961) 106 CLR 588 the High Court held (at 610):

…The specification must be read as a whole. But it is a whole made up of several parts, and those parts have different functions. Courts have often insisted that it is not legitimate to narrow or expand the boundaries of monopoly as fixed by the words of a claim by adding to those words glosses drawn from other parts of the specification. …

229    I accept the submission for the applicants that, in addition to the preceding reasoning on which I rely for rejecting the unitary device argument, there was evidentiary support which also confirms this.

230    Dr Kepic made clear in his cross-examination that he maintained the view that the claims encompassed the use of a ‘two part device’, such as the ORIshot Tool. Dr Skopec also, in my view, correctly, conceded that in his cross-examination, during the course of which he accepted that, on the one hand, there is a difference between the ORIshot orientation system and the device described in the specifications, but that difference did not lead him to conclude that the ORIshot orientation system was outside the scope of the claims of the Patents. Dr Skopec gave evidence that ‘[t]he same objectives are there for both systems. They just operate differently’. He went on to accept that the features of the claims were there for both systems.

231    There is a substantial difference between this proceeding and that determined by Justice Barker in the prior proceedings, which turned on claims which were differently worded and which were directed to a particular ‘device’. It was the usage and construction of that particular word which led to the conclusion that the claims were limited to the use of a so-called ‘unitary’ device. That conclusion is not applicable to the Patents in suit.

232    I reject the respondents’ construction of the claims so as to exclude the use of a ‘two part device’.

7.2.3    ‘Input means’ or ‘inputting’

233    The respondents point out that with the ORIshot Tool, the operator at the relevant time of the cessation of the drilling sequence will press the ‘TAKE MEASUREMENT’ button at the time of cessation of drilling. Thereafter, the down-hole unit is returned to the surface. The down-hole unit and the handset then electronically communicate with each other and the processing activity takes place to thereby achieve the requisite visual display of the desired core orientation in the display of the handset. The respondents argue that the operator on the surface only does one ‘input step’ and that is by the operator pressing the ‘TAKE MEASUREMENT’ button. Once the down-hole unit returns to the surface there is no input activity undertaken by the operator and there is no input of any elapsed time in the sense described in the Patents as a separate action or task to be undertaken by the operator once the down-hole unit returns to the surface.

234    The respondents contend that a distinction is drawn, however, in each of the System Patent and the Method Patent descriptions and claims between the means of measuring an elapsed time at which the core sample is detached (by say a stopwatch) and the keypad on the device as an input means by which the measured or elapsed time is input thereafter into the system or method.

235    It is clear, the respondents contend, that the time measurement action and the inputting action are two separate features or integers, and necessarily must be so because:

(a)    the measured or elapsed time occurs by an operator pressing the stopwatch at the surface at the time the drilling sequence has ceased and when the device is still down the hole and recording that time; and

(b)    the recorded measured or elapsed time can be input into the device only after the device is retrieved from the bottom of the hole and returned to the surface. It is a step done by the operator separately and subsequently to the elapsed time measurement.

236    Although Professor Tapson initially considered that recording and inputting were two separate actions, he subsequently took a different view, which the respondents contend was a ‘contrived and unconvincing recantation’. I reject that submission.

237    The respondents argue that Dr Kepic avoided dealing with this issue in his written evidence. The respondents maintain that Dr Kepic conceded in cross-examination that there were two different steps involved in the claims, that is, that the elapsed time measurement step was a separate and different step to the inputting step, and they were separate actions, separate steps and separate tasks.

238    The real question, in my view, is whether there is any requirement in the claims that two separate actions be taken by the operator in order to input, and then to separately record, the data into the system. In my view, there is not. Once again, the respondents’ argument does not point to any specific words which identify the necessity that there be two separate actions involved. It is difficult to conceive of why it would be thought that two actions would or should be required, rather than one. The claims encompass the possibility that there could be two actions or one action. For that reason, Professor Tapson refuted the idea that the inputting and the recording must be separate actions in all circumstances. His evidence was that the relevant features were present in the ORIshot Tool. He noted that the ‘TAKE MEASUREMENT’ button was an input means for inputting the time measurement into the system as required by claim 1 of the System Patent. Moreover, the pressing of the ‘TAKE MEASUREMENT’ button constituted, in his view, the step of inputting a time measurement as required by claims 1- 4 of the Method Patent. It was immaterial, in his view that, unlike the device in the preferred embodiment of the Patents, the ORIshot Tool did not require above ground surface logging. That was because the ORIshot Tool still contained the ‘input means’ as required by the claims of the System Patent. Professor Tapson adhered to his views when he was pressed on this topic at considerable length in cross-examination. Professor Tapson was clear that he did not agree that the only way he could read the claims of the Patents was that the recording of the time step was a separate and discrete action which was removed in time from the inputting time step.

239    Although the respondents were emphatic that Professor Tapson had changed his evidence, he was equally emphatic that he had not. In either event, insofar as the claims themselves are concerned, the proposition that the only way that they can be interpreted is that the recording of the time is a separate and discrete action removed in time from the inputting of the time is incorrect, as a matter of construction. There could be two actions or one action.

240    This contention for the respondents in response to the applicants’ infringement argument therefore fails.

7.2.4    Context of the Patents – hard rock

241    Before turning to the next infringement defence, it is important to reiterate the context of the claims.

242    As noted, the claims must be construed in the context of the specification in which they appear. Looking to, amongst other things, the field in which the inventions are directed as indicated from the specification, it is quite clear that the context of the Patents is mineral exploration. The evidence is that the claimed inventions are directed to core sampling and rock formations where exploration has been carried out for minerals. Such formations are hard rock, in which fractures are unlikely to occur and which include unfractured igneous and metamorphic rock formations.

243    In contrast, the formations, as the expert evidence clearly established, in petroleum exploration were likely to be soft, brittle or highly fractured. These features are requisite features in order for hydrocarbons supporting the existence of petroleum to be present. It is clear that the claimed inventions are not intended for use in orienting core in such formations and, indeed, they would not work in such formations. I am satisfied on the expert evidence that the person skilled in the art would clearly understand that such inventions would not be expected to be used other than in mineral exploration. The specifications of the Patents themselves describe the prior art methods. They are peculiar to the context of mineral exploration and drilling in hard, unfractured or solid rock. The references to the prior art methods in the ‘Background Art’ sections of the Patents are plainly directed to that context.

244    The Skopec Paper deals with different and more sophisticated techniques than the prior art in the context of petroleum exploration, but there is no discussion in the Patents of such techniques at all. This is because the Patents are not directed to drilling in the context of petroleum exploration in soft, brittle or highly fractured formations.

245    There is ample evidence on this point, including that of Professor Tapson, who indicated in his second affidavit, after referring to the requirement that the core sample be ‘held in fixed relation’ to the inner tube assembly (being a requirement of both the description and the claims in both Patents) said:

The presence of these words tells me based upon my experience that this is an invention intended for use in hard rock drilling. In hard rock environments it is possible to fixedly hold a core sample within an inner barrel at the time of detachment because of the integrity of the core generated in those environments makes it possible to frictionally engage the final piece of core and therein the entire sample. As [the Skopec Paper] makes clear, it is not possible to fixedly “hold” a core sample in petroleum bearing environments consisting of, amongst other things, liquid or gas enclosures and loose or unstable sediment. This is because sections of the core generated in such geology will move irrespective of any holding mechanism at the base of the drill for holding the final piece of core.

246    Professor Tapson also said that:

… anyone reading [the claims] would make the reasonable assumption that they will not work in 100 per cent of conditions. For example, they would not work in a very soft medium like clay…

247    Although Dr Skopec raised the question of whether the description of ‘hard rock’ environments was inherently ambiguous, I accept Professor Tapson’s response to this in which he acknowledged Dr Skopec’s point in his cross-examination:

… I believe we would have had more clarity, both Dr Skopec and I, from the beginning, if it had referred to “brittle” or “fractured” formations as opposed to – and “solid” formations because we have been using “hard rock” as a shorthand for rock which will not break or in which fracture will not occur in “soft rock” as a shorthand for formations in which fracture may occur and those are not – that’s terminological in its aptitude (sic-in-exactitude).

248    Professor Tapson continued that it was ‘intrinsic in a petroleum environment that you would be looking at fractured formations because you don’t get the presence of oil or gas in solid rock, you get it in fractured formations’. This evidence was also supported by Mr Brown.

249    These Patents relate to hard rock drilling.

7.2.5     ‘Held in fixed relationship’

250    The third infringement defence related to the fixing of the core sample.

251    The claims deal with the core sample being held ‘in fixed relation to the inner (core) tube’, and the removal of the inner tube from the body of material from which the core sample has been extracted.

252    The respondents contend that there was no infringement of this integer as the only support for it came from Dr Kepic, who formed his opinion solely on his inspection and working of the equipment at offices of the solicitors. He never went to a drilling site where the Coretell orientation apparatus was working, and never operated any Coretell orientation apparatus at any drilling site. Dr Kepic never saw it being operated or used other than in the demonstration. According to the respondents, it is important that in the demonstration at the solicitors’ offices, there was no core tube and there was no retained core sample, and Dr Kepic did not scientifically test whether or not the core was held in fixed relation. It did not occur to him to test it and he was never asked to be given the opportunity to do so.

253    The respondents argue that, in truth, all that Dr Kepic has tested was that the handset and down-hole unit would work in the solicitors’ offices, and all that he had established was that the two separate devices would communicate to each other. The respondents argue that the ‘held in fixed relationship’ point is important because, Dr Kepic and the other witnesses have all recognised that there could be relative movement between the inner tube and the core as the operational sequence is taking place or as the core sample and inner tube are being returned to the surface. The Coretell document named ‘Coretell Apparatus – Makeup and Manner of Working’ has no disclosure of the relevant feature and there is no other material before the Court, the respondents contend, which deals with the question of whether or not the core is held in fixed relationship to the inner tube. Dr Kepic also recognised that there was no explicit disclosure in that document. In the context of the requirement that infringement must be strictly proven, the respondents say that the applicants have fallen well short.

254    I set out above the passages of Dr Kepic’s evidence as to the operation of the ORIshot Tool which make it quite clear that it was necessary that the core be held in fixed relation when it was brought to the surface. That aspect of his evidence has not been challenged and although this topic was faintly raised in closing by the respondents, in my view, the evidence of Dr Kepic is to be accepted. It is clear that the ORIshot Tool does in fact keep the core in fixed relation to the inner tube.

7.2.6    ‘Real time roll mode’

255    Finally, although it was not expressly raised in closing submissions for the respondents, there appeared to also be a ‘real time roll mode’ argument, which related only to one of the three modes.

256    As I understood the argument, it was that as the ORIshot Tool did not provide a graphical or visual indication of the direction of rotation to a drill operator, the system would not fall within the claims.

257    In the relevant mode, the ORIshot tool would provide a digital reading of the down-hole roll in terms of degrees which enables the drill operator to rotate the surface ORIshot Tool to match the down-hole angle.

258    It is not clear to me that this argument is still pressed by the respondents, but in any event, in my view, it is incorrect. I accept the submissions for the applicants that by displaying the angles referred to, the real time roll mode provides a visual indication of the orientation of the core sample to the operator. This means that the features of the claims directed to this topic are present in the ORIshot Tool. There is support for this from the expert evidence of Dr Kepic, who was pressed on the topic in cross-examination.

259    Dr Kepic noted that the method provided in the ORIshot Tool ‘would be completely useless if there was not a … sort of zero degree mark on the tool’, so that the information achieved by the aligning the bars was the most useful visual identification for the way in which the tube had to be rotated.

260    Professor Tapson was also pressed on the point. The following was put to him in cross-examination:

And I’m putting to you, therefore, that a mere indication of an angle is not an indication of orientation of the nature about which you have previously given your

evidence …

261    In response, Professor Tapson said that he absolutely failed to see what the issue was, and said:

[I]f one …wants to know how fast one’s car is going. One could have needle speedometer or a number. They are both visual indications, and they both provide the information one is seeking, and it seems to me that that’s the same case here. But where – if it’s merely a number, how does it tell you any indication of orientation? And you say, I think further than that, it’s got to be an indication – visual indication of orientation. It’s also got to be an indication of the direction in which the inner tube should be rotated…any engineer would know …how to use an angle to rotate an object to – to bring it to the, you know, to zero that angle or to place it at that particular position.

262    In my view, the respondents’ argument on this topic fails. However, this is a peripheral issue because the ORIshot Tool includes two other display modes which involve directional arrows and use of bars which, even the respondents accept, incorporates this feature of the claims of the Patents.

7.3    Conclusion on infringement

263    Accordingly, on the basis indicated above in 7.2.1, as to the manner to which the case was argued, as none of the respondents’ arguments in response to the applicants’ infringement claims has succeeded, infringement of the Patents has been established.

7.4    Liability of each of the respondents

264    Infringement having been established, the question is which respondent has infringed the Patents. The answer to that question, for reasons which follow, is that all respondents have infringed the Patents.

265    The applicants have advanced intricate and detailed arguments, both on the evidence and at law, in relation to the involvement of all the respondents in the infringement.

266    I have endeavoured to deal with the arguments by the parties in relation to most of those intricate arguments. But before dealing with that detail, the following fundamental factual findings need to be recorded to make the position quite clear.

267    First, I have found that Mr Kleyn deliberately set out to produce a tool which embraced or copied the features of the tool designed in accordance with the Patents in suit.

268    Having achieved that objective in design, production, sale and promotion of such a tool through corporate vehicles, he subsequently became aware of a real risk of exposure to damages for patent infringement.

269    Mr Kleyn then set about attempting to organise his corporate affairs through the respondent companies, of which he was the sole directing mind and will, so as to shelter and protect assets within the corporate structures. To this end he purported to assign and transfer assets from the primary infringing company to another company. This assignment or transfer was entirely fictitious and never occurred. His subsequent attempts to isolate and segregate the activities of the respective corporations to at least create the impression that only the corporation with no assets was involved with infringement have failed. There is ample evidence to show that all of the respondents, including Mr Kleyn personally, participated in the activities which infringed the Patents. They all participated directly as a result of his personal control, decisions and actions.

270    The respondents’ attempt to show otherwise, either through the evidence of Mr Kleyn or the evidence of Mr Kenny, has failed.

271    Having summarised the above findings on the basis of oral evidence and documentation adduced in the trial which I have discussed previously, and in the passages to follow in these reasons, I turn then to the more elaborate and detailed arguments advanced by the applicants.

272    The applicants’ case is that each of the respondents is liable for infringement of the Patents, although the details of the allegations against each respondent differ according to the nature and role of the particular respondent and the claims of the Patents under consideration.

273    As explained by the applicants, direct infringement occurs where a person exploits, within the meaning of the Act, the invention claimed in any claim of the Patents. In the case of a claim to a product, such as those in the System Patent, this includes making, selling or otherwise disposing of the product, as well as using the product. For a claim to a method, such as those described in the Method Patent, it includes using the method.

274    Infringement may also be indirect. Indirect infringement may arise on several bases. These bases include where a person authorises another to exploit the invention, is a joint tortfeasor in such exploitation, or pursuant to the specific contributory infringement provisions set out in s 117 of the Act. Section 117 of the Act provides as follows:

117    Infringement by supply of products

(1)    If the use of a product by a person would infringe a patent, the supply of that product by one person to another is an infringement of the patent by the supplier unless the supplier is the patentee or licensee of the patent.

(2)    A reference in subsection (1) to the use of a product by a person is a reference to:

(a)    if the product is capable of only one reasonable use, having regard to its nature or design-that use; or

(b)    if the product is not a staple commercial product-any use of the product, if the supplier had reason to believe that the person would put it to that use; or

(c)    in any case-the use of the product in accordance with any instructions for the use of the product, or any inducement to use the product, given to the person by the supplier or contained in an advertisement published by or with the authority of the supplier.

275    Mr Kleyn gave evidence that he transferred the proprietary and intellectual property rights in the ORIshot Tool from Mincrest to Coretell in November 2006. The transfer is uncorroborated by documentary or other evidence.