FEDERAL COURT OF AUSTRALIA

Dometic Australia Pty Ltd v Houghton Leisure Products Pty Ltd [2018] FCA 1573

ORDERS

THE COURT ORDERS THAT:

1.    The matter be adjourned to a date to be fixed for submissions with respect to the orders which are appropriate to give effect to these reasons.

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

REASONS FOR JUDGMENT

WHITE J:

Introduction

1    Since about July or August 2016, the Second Respondent (Finch) has imported into Australia and sold reverse cycle air conditioning units for recreational vehicles such as caravans, branded as the Houghton Belaire 3200 (the Belaire Unit).

2    The Applicants (collectively Dometic) contend that, by that conduct, Finch has infringed certified Australian Innovation Patent No 2016101949, entitled "Improved Air Conditioning System" filed on 7 November 2016 (the Patent). They allege that the First Respondent (Houghton) is also liable for the infringement because it authorised the relevant conduct or because it is a joint tortfeasor with Finch.

3    The Second Applicant (Dometic Sweden) is the registered proprietor of the Patent. On 16 February 2017, Dometic Sweden granted an exclusive licence to the First Applicant (Dometic Australia) to exploit the Patent. The commencement date for the licence was stated to be 6 March 2015.

4    An air conditioning unit, known as the IBIS 3, is a commercial embodiment of the Patent. Aircommand Australia Pty Ltd (referred to by the parties as New Aircommand) imports the IBIS 3 into Australia. Since October 2014, New Aircommand has been a wholly owned subsidiary of Dometic Sweden.

5    Finch and Houghton (collectively the Respondents) deny the allegation of infringement. They contend that the Belaire Unit does not embody at least four of the essential integers of the claim stated in the Patent.

6    The Respondents then allege that, if the Belaire Unit does constitute an infringement of the Patent, the Patent is invalid. By cross-claim, Houghton (but not Finch) seeks an order pursuant to s 138 of the Patents Act 1990 (Cth) (the Act) for the revocation of each of the five claims in the Patent. Its Amended Particulars of Invalidity contain the following grounds:

(a)    Priority Date – To the extent that Dometic relies on a construction of the term "centrifugal fan" as including an axial fan, it is is not entitled to a Priority Date before 7 November 2016 and, in particular, is not entitled to the claimed Priority Date of 6 March 2014;

(b)    Lack of Novelty – Houghton contends that the Patent was not patentable within the meaning of s 18(1)(b)(i) of the Act because it was not novel. Houghton relies on this ground on a disclosure of information said to have occurred by the exploitation by a bus manufacturer in China since November 2013 of an air conditioning system made by Haier;

(c)    Lack of enablement – Houghton contends that the Patent does not comply with s 40(2)(a) of the Act in that it does not disclose the invention in a manner which is clear and complete enough for the invention to be performed by a person skilled in the relevant art;

(d)    Lack of clarity – Houghton contends that the specification for the Patent does not comply with s 40(3) of the Act in that it does not describe the claimed invention clearly and succinctly;

(e)    Lack of support – Houghton alleges that the specification for the Patent does not comply with s 40(3) of the Act in that the invention claimed is not supported by matters disclosed in the specification;

(f)    Lack of best method – Finally, Houghton claims that the specification in the Patent does not disclose the best method known to the "patent applicant" of performing the invention and therefore was not compliant with s 40(2)(aa) of the Act.

7    On the application of Dometic, a Judge of this Court ordered an expedited trial of the proceedings. The Judge also ordered that the issues of quantum were to be determined separately from, and following, the determination of all other issues in the proceedings.

8    During the course of the final submissions, Houghton abandoned a further pleaded ground of invalidity, namely, lack of innovative step. The principal grounds of invalidity which it pursued were grounds (b) (lack of novelty) and (f) (lack of best method).

9    For the reasons which follow, I consider that both Dometic's claim of infringement and the Respondents' claim of invalidity fail.

The Parties

10    The matters which I record under this heading were uncontroversial and may be regarded as findings of fact.

11    From at least 2003-2004, a company then known as Aircommand Australia Pty Ltd (to which the parties referred to as "Old Aircommand") sold air conditioning units suitable for use in recreational vehicles, caravans, crane cabs and the like. One such unit was known as the "IBIS". Old Aircommand is owned, or at least substantially owned, by members of the Henshall family, including Mr David Henshall but not his son, Bruce Henshall, to whom I will refer shortly.

12    In or around 2009, Old Aircommand commenced selling an upgraded air conditioning unit referred as the "IBIS 2". An upgraded model, the IBIS 3, was released to the market in Australia in about March 2014, although its manufacture had commenced in China in November 2013.

13    On 15 July 2013, Old Aircommand sold its business to Atwood Investment Holdings LLC by means of an asset sale to a new company, also known as Aircommand Australia Pty Ltd. This was New Aircommand, which is a subsidiary of Atwood Australia Holdings Pty Ltd (Atwood). As part of that sale, Old Aircommand agreed to change its name so as to remove altogether the name "Aircommand". It did so with effect from 18 July 2013.

14    On 17 October 2014, Dometic Sweden acquired all of the shares in Atwood. As a result, New Aircommand became an indirect subsidiary of Dometic Sweden. The Australian Competition and Consumer Commission (ACCC) granted approval for the acquisition on 10 April 2015.

15    On 1 January 2016, New Aircommand sold its business to Dometic Australia as a going concern, this being the distribution of air conditioners and hot water services for the mobile accommodation market, together with the assets owned by New Aircommand relating to, or necessary for, the conduct of that business. These included New Aircommand's rights under the Provisional Patent and the PCT Application which are the subject of this litigation.

16    Houghton is a wholly owned subsidiary of Ningbo Hongdu Electrical Appliance Co Ltd (DayRelax). DayRelax was previously known as Ningbo DayRelax Electrical Appliance Co Ltd and was established in China in 2000 by Mr Shihong Bei. Mr Bei is President of the DayRelax Group of Companies and the sole director and secretary of Houghton.

17    DayRelax had traded with Old Aircommand from 2004. From about 2007, DayRelax had supplied air conditioners and air conditioning parts to Old Aircommand pursuant to a Supply Agreement. In addition, DayRelax distributed in China, Taiwan, Hong Kong, Thailand and Korea products which it had manufactured on Old Aircommand's behalf.

18    It was an agreed fact that, following the acquisition of New Aircommand by Dometic, DayRelax had become concerned that Dometic and the companies under its control, including New Aircommand, would over time cease to acquire goods from it. It considered developing, manufacturing and supplying its own air conditioning products under a name of its own directly to original equipment manufacturers (OEMs) and after market (AM) channels in Australia. DayRelax commenced developing its own range of branded products in 2014. It discussed these plans with representatives of Dometic and, in February 2016, invited Dometic to become a distributor of the products. Dometic declined that invitation.

19    In about 2015, DayRelax determined to brand its product range "Houghton". It incorporated Houghton in November 2015 with a view to it being the importer and distributor to OEMs and AMs in Australia of Houghton-branded products. In December 2015, Houghton filed Australian Trademark Applications 1742574 and 1740765 for "HOUGHTON + DEVICE" and "BELAIRE".

20    However, Houghton did not become the importer and distributor. Instead, DayRelax entered into an agreement with Finch, pursuant to which Finch purchases Houghton-branded products from DayRelax in China, imports them into Australia, and promotes and sells them to OEMs and AMs and to another distributor of products for recreational vehicles.

The Patent and its history

21    On 6 March 2014, New Aircommand had filed Provisional Patent Application No 2014900754 (the Provisional Patent Application). Then, on the last day of the period prescribed pursuant to s 38 of the Act, ie, 6 March 2015, New Aircommand filed International Application PCT/AU2015/000126 (the PCT Application) with the World Intellectual Property Organisation (WIPO). In the PCT Application, New Aircommand claimed priority from 6 March 2014, being the date on which it had filed the Provisional Patent Application.

22    The PCT Application was published as a national phase application on 11 September 2015.

23    On 18 March 2016, Dometic Sweden assigned the PCT Application to Dometic Australia. A Confirmation of Assignment document was lodged with WIPO on 22 March 2016.

24    The Patent identifies Dometic Sweden as the applicant. It was filed on 7 November 2016 and certified on 8 February 2017. It also records that it is a divisional patent of the PCT patent. The inventors are shown as David Henshall, Andrew Karas and Bruce Henshall.

25    The statement of the field of the invention is:

The present invention relates generally to air conditioning systems and in particular to air conditioning systems that are located in a compact slim line housing that is suitable for use in a confined area.

26    The Patent then records some difficulties commonly experienced in providing air conditioning to recreational vehicles such as caravans, motor homes and the like. The first difficulty arises from the desirability of keeping the weight and overall size of the air conditioning unit as low as possible. This has the consequence that the power of the air conditioning system is limited. The second difficulty arises from the short path between the cooling chamber and conventional outlets. The difficulty is in distributing the conditioned air (and thereby enhancing the cooling effect) and avoiding the air being drawn almost immediately back into the air conditioning unit to be conditioned further. In buildings, ducts can be used to distribute the conditioned air away from the inlet port but there are a number of problems in using ducting in recreational vehicles.

27    The background statement then continues:

[0013]    It is an object of the present invention to overcome, or at least substantially ameliorate, the disadvantages and shortcomings of the prior art.

[0014]    It is an object of the present invention, in at least one preferred form, to provide an air conditioning system for use in a recreational vehicle that provides a greater distribution of air without the need for ducting.

28    This feature of the Patent is elaborated in the detailed description statement in the Patent:

[0044]    The present invention also provides the unexpected benefit of better managing the flow of air back into the return air inlet port 32. One of the known problems with traditional vehicle air conditioning units is that conditioned air is often ejected relatively closely to the return air inlet port without having travelled far enough to cool the air space generally or the occupants. Whilst air conditioning systems that use ducts to take the conditioned air away from the return air inlet port partially address this problem, they introduce the complexity of having ducting work in the roof space of the vehicles cabin area as well as reducing the capacity of the air conditioner due to the decrease in air flow and thermal losses through the ducts.

[0045]    The system of the present invention, which includes a substantially flat layer of airflow adjacent to and along the interior roof surface, allows the conditioned air to travel further away from the return air inlet port 32 and so the air being drawn into the return air inlet port 32 is less likely to be recently conditioned air, which greatly enhances the effect of the conditioned air within the vehicle's cabin by ensuring that the conditioned air is being used effectively to take heat out of the vehicle.

29    In summary, the patented invention consists of a combination of integers affecting the movement and distribution of air flow, both within and outside the air conditioning unit. The system causes the conditioned air to travel a substantial distance from the outlet, thereby increasing the areas which will be cooled and reducing the amount of recently conditioned air which is drawn into the unit's inlet. This increases the cooling effect of the unit.

The Patent claims

30    The claims defining the Patent pursuant to s 40(2)(c) of the Act are stated as follows:

(1)    An air conditioning system for a vehicle having a roof, the air conditioning system having at least one air conditioning unit, including:

at least one centrifugal fan;

at least one return air entry port;

at least one outlet port;

at least one evaporator coil operatively connected to a compression refrigeration system;

a chamber formed by the at least one evaporator coil substantially surrounding the at least one centrifugal fan, the at least one centrifugal fan being operable to draw in indoor air via the return air entry port and eject the indoor air in a substantially horizontal plane such that it is forced into the at least one evaporator coil; and

a conditioned air flow path adapted to direct conditioned air from the chamber in a downward direction and towards the at least one return air entry port and then redirecting the air flow path outwards and away from the at least one return air entry port to exist the at least one outlet port in a substantially horizontal plane adjacent to the roof.

(2)    The air conditioning system of claim 1, wherein the airflow path is "S" – shaped.

(3)    The air conditioning system of claim 1 or claim 2, wherein in the at least one outlet port is configured to direct the air flow path in a substantially horizontal plane adjacent to the roof and away from the return air entry port by at least one louver.

(4)    The air conditioning system of claim 3, wherein the at least one louver is pivotable between an open position and a closed position.

(5)    The air conditioning system of any one of the preceding claims, wherein the fan is located directly above the return air entry port.

31    The Patent also includes schematic drawings of an air conditioner constructed in accordance with the invention. Figures 3, 4 and 9 are helpful in understanding the issues which arise for determination.

32    Figure 3 shows the air conditioner with its outer cover removed. The compressor 18 is connected to a condenser 20, which substantially surrounds the fan 15. Air drawn in from the outside by the fan 15 (referred to by the parties as "the condenser fan") is forced through the condenser 20 to cool the refrigerant within it. That air is then forced out through openings 13. The cooled refrigerant passes through an expansion valve into the evaporator 25 to absorb heat from the indoor heat which passes over it. The refrigerant then returns back to the condenser to be cooled once again.

33    Figure 4 shows that air is drawn into the air conditioning unit by the centrifugal fan 34 and into the enclosure formed by the evaporator cover 28 and the base 42. The centrifugal fan (sometimes referred to as "the evaporator fan") then forces the air in substantially horizontal directions into and around the evaporator 25. It is thereby cooled. The air is then forced into adjacent chambers, along the path 31, through the opening 33, down and away from the air inlet port 32, and is ultimately ejected through the outlets 40. The louvres 45 on these outlets are shaped to direct the outgoing air stream substantially horizontally, adjacent to the interior roof surface of the area being cooled.

34    Figure 9 is a cross section view of the invention showing the air paths through its interior.

35    As is apparent, the Patent is a combination patent of the kind described by Aickin J in Minnesota Mining and Manufacturing Co Ltd v Beiersdorf (Australia) Ltd [1980] HCA 9; (1980) 144 CLR 253 at 266:

The patent thus claimed is a combination patent in the proper sense of that term, i.e. it combines a number of elements which interact with each other to produce a new result or product. Such a combination may be one constituted by integers each of which is old, or my integers some of which are new, the interaction being the essential requirement.

See also Aktiebolaget Hässle v Alphapharm Pty Ltd [2002] HCA 59; (2002) 212 CLR 411 in which Gleeson CJ, Gaudron, Gummow and Hayne JJ said:

[6]    The tablet or pellet thus claimed is a combination in the proper sense of that term, combining three elements which interact with each other to produce the new product; it is the interaction which is the essential requirement of invention and such a combination may be constituted by integers each of which is old or some of which are new. Thus, for example, in the present case, it is not to the point that of the three integers it may be said that omeprazole was known as an acid labile compound and that it was known that enteric coatings were resistant to acids. The question for decision concerns the ingenuity of the combination, not of the employment of any one or more integers taken individually.

The Integers

36    It was common ground that the integers arising from the five claims are as follows:

Claim 1

1.1    an air conditioning system for a vehicle having a roof;

1.2    the air conditioning system having at least one air conditioning unit, including;

1.3    at least one centrifugal fan;

1.4    at least one return air entry port;

1.5    at least one outlet port;

1.6    at least one evaporator coil operatively connected to a compression refrigeration system;

1.7    a chamber formed by the at least one evaporator coil substantially surrounding the at least one centrifugal fan;

1.8    the at least one centrifugal fan being operable to draw in indoor air via the return entry port and eject the air in a substantially horizontal plane such that it is forced into the at least one evaporator coil;

1.9    a conditioned airflow path adapted to direct conditioned air from the chamber in a downward direction and towards the at least one return air entry port;

1.10    and then redirecting the air flow path outward and away from the at least one return air entry port;

1.11    to exit the at least one outlet port in a substantially horizontal plane adjacent to the roof.

Claim 2

2.1    the air conditioning system of claim 1;

2.2    wherein the airflow path is S-shaped.

Claim 3

3.1    the air conditioning system of claim 1 or claim 2;

3.2    wherein in the at least one outlet port is configured to direct the airflow path in a substantially horizontal plane adjacent to the roof and away from the return air entry port by at least one louver.

Claim 4

4.1    the air conditioning system of claim 3;

4.2    wherein the at least one louver is pivotable between an open and closed position.

Claim 5

5.1    the air conditioning system of any one of the preceding claims;

5.2    wherein the fan is located directly above the return air entry port.

The expert evidence

37    The Court heard expert evidence from three independent experts: from Mr Robert Tiller who was called by Dometic, and from Mr William Hunter and Dr Allan Wallace who were called by Houghton.

38    Dr Wallace is a well-qualified and well-experienced professional engineer. His academic qualifications comprise a Bachelor of Technology (Mechanical Engineering) from the University of Adelaide in 1971, a Bachelor of Engineering (Honours) from the University of Adelaide in 1975, and a Doctor of Philosophy in the field of Fluid Mechanics from the University of Adelaide in 1981. He has worked as a Mechanical Engineer for more than 45 years, including working on several occasions in the fields of air conditioning and fluid dynamics. I am satisfied that Dr Wallace has extensive working knowledge of the use, design and operation of fans, in particular of axial and centrifugal fans, including in air conditioning applications. I consider that Dr Wallace is able to speak authoritatively about these matters.

39    Mr Hunter is also well-qualified and well-experienced, although not to the same extent as Dr Wallace. He obtained a Degree in Mechanical Engineering Science at the University of Melbourne in 1982. A core subject in his degree was fluid mechanics, which he studied for three years. It was common ground that the subject of fluid dynamics (which is a subset of fluid mechanics) includes the movement and behaviour of air in air conditioning systems of the kind in question in the present case. In the course of his work as an Engineer, Mr Hunter has obtained considerable experience with both centrifugal and axial fans. Dometic did not challenge his expertise in relation to the matters in issue in this litigation.

40    Mr Tiller describes himself as an "Industrial Design and Engineering Consultant". He is the Chief Executive Officer of two companies, Tiller Design Pty Ltd and Tiller Manufacturing Pty Ltd, both of which specialise in providing consultant services in relation to the development, design and engineering of a broad range of consumer, industrial and medical products. Mr Tiller's academic qualification is a Bachelor of Industrial Design which he obtained from the University of South Australia in 1988. Between 1988 and 1997, Mr Tiller was employed as an Industrial Designer. Since then, he has been engaged in his own consultancies. Mr Tiller acknowledged that he has had no formal training in fluid dynamics or in mechanical engineering. He did not claim to have had formal training in relation to the operation of air conditioning units. He has, however, acquired some knowledge of these matters by reason of his experience in working on projects with other professionals which did involve air conditioning and/or refrigeration systems. Mr Tiller said, and I accept, that fluid dynamics has played an important role in a number of the projects on which he has worked. I accept that Mr Tiller has thereby acquired some expert knowledge of these matters. I note however that on more than one occasion in his consultancy, Mr Tiller has engaged specialists in the analysis of fluid dynamics, rather than attempting to provide that service himself. This seemed to reflect a recognition by him of limitations on his expertise in fluid dynamics. In fact, Mr Tiller claimed only that his collaboration with other professionals had given him "a good basic solid understanding of how fluids move through systems". This level of understanding contrasts with Mr Hunter's evidence (which I accept) that "[f]luid dynamics is a highly-complex subject" for which he had studied "the foundational theory exclusively for 3 years during [his] 4 year undergraduate mechanical engineering degree".

41    The Respondents challenged the ability of Mr Tiller to provide expert opinion evidence. I overruled that objection, accepting that Dometic had established that Mr Tiller had some expertise in relation to air conditioning units and fluid dynamics sufficient to entitle them to lead opinion evidence from him. I am satisfied, however, that Mr Tiller's qualifications and experience are less than those of Dr Wallace and Mr Hunter and that this limits the weight which can be attached to his opinions. Although I accept that Mr Tiller gave his evidence honestly and in an attempt to assist the Court, I have, in general, attached greater weight to the evidence of Dr Wallace and Mr Hunter when Mr Tiller's evidence has been in conflict with theirs.

42    In addition, Houghton led some evidence of an expert opinion kind from Mr Bruce Henshall. From 2004 until July 2013, Mr Henshall was employed by Old Aircommand as Project Co-ordinator. Initially, Mr Henshall was engaged to oversee the manufacture and assembly of mobile air conditioners but, over time, his role evolved. From about 2007-2008, he was more involved in the design and development of Old Aircommand's products and his oversight of the manufacturing and assembling of products became a minor part of his role.

43    Mr Henshall's formal qualification is an Advanced Certificate in Chemical Technology from the University of South Australia, obtained in 1994.

44    After New Aircommand took over the conduct of the business of Old Aircommand in July 2013, Mr Henshall continued in the same role as he had previously. In fact, his role did not change before he resigned from New Aircommand with effect from 6 December 2015.

45    By 2012, it was apparent to Mr Henshall and to his father (David Henshall) that updating of the IBIS 2 model was required. Together with Mr Karas, they established a design team in Old Aircommand for that purpose. They continued in that role after New Aircommand took over the business in July 2013. Mr Henshall made, or was instrumental in, a number of the design decisions concerning the IBIS 3 model and which culminated in the invention which is the subject of the Patent. These included the decision to use a centrifugal fan, the decision concerning the airflow path, and the decision concerning the shape and form of the outlets so as to achieve the Coandă effect, to which I will return later.

46    I accept that Mr Henshall has, by reason of his experience, acquired expertise in the design of mobile air conditioning units. To an extent, the expressions of opinion by Mr Henshall based on his expertise were intrinsically involved in his evidence regarding more factual matters about which he was entitled to give evidence. Having regard to that consideration and to Mr Henshall's expertise, I considered that the Respondents were entitled to lead evidence of expert opinion from Mr Henshall.

47    However, when evaluating Mr Henshall's evidence, I have kept firmly in mind that he is not an independent expert witness. It is apparent that, at least from late 2016, Mr Henshall has actively supported Houghton and its owner Mr Bei. I mention in this respect that, when Mr Henshall resigned from New Aircommand with effect from 6 December 2015, he regarded himself as subject to a restraint of trade obligation which precluded him acting in competition with New Aircommand for a period of 12 months. During that 12 months, Mr Henshall established his own business, QDOT Pty Ltd (QDOT). Since the end of 2016, QDOT has consulted to Houghton, so much so that it derives approximately 80-90% of its revenue from Houghton. Mr Henshall acknowledged that it is in his interests for Houghton to succeed in Australia. There were times when I considered that Mr Henshall's alignment with Houghton and Mr Bei did affect the completeness and accuracy of his evidence.

48    At the end of the opening submissions, I heard Dometic's interlocutory application seeking leave to adduce evidence from Dr Carlos Gonzalez Toro in the form of a 97 page affidavit (inclusive of annexures but excluding spreadsheets) made on 22 June 2017. Exhibit CGT-6 to the affidavit was a USB stick containing data. I refused that leave and said that I would provide reasons for doing so in this judgment.

49    Dr Gonzalez is a Mechanical Engineer with a Doctorate of Philosophy in "Thermo Dynamic and Fluid Dynamic Processes in Diesel Engines". Between 18 and 20 April 2017, he undertook, at the request of Dometic's solicitors, an "experimental study" of the Belaire Unit to analyse "the volume of flow exiting the Evaporator Fan in the axial and radial directions". Earlier, on 11 April 2017, Dometic's solicitors had met Dr Gonzalez to discuss the testing which Dometic sought. Dr Gonzalez did not prepare a written report of his analysis until 22 June 2017. That report was annexed to his affidavit of 22 June 2017 which was the subject of Dometic's application.

50    On 27 March 2017, a Judge of this Court made case management orders which fixed the trial to commence in the week beginning 10 July 2017 and required Dometic to file and serve its lay and expert evidence by 1 May 2017. Dometic complied with that order by filing and serving the affidavit of Mr Tiller made on 1 May 2017.

51    Dometic's solicitors deposed that Dometic had not included a report from Dr Gonzalez on the results of his testing in the evidence filed on 1 May 2017 for two reasons:

(a)    the solicitors considered that the results of Dr Gonzalez's testing were consistent with the opinions of Mr Tiller; and

(b)    Dometic did not have sufficient time to comply with r 34.50(1) of the Federal Court Rules 2011 (Cth) (FCR) before filing the evidence in support of its claim of infringement on 1 May 2017.

52    Rule 34.50 provides:

34.50    Experimental proof as evidence

(1)    If a party (the proponent) proposes to tender, as evidence in a proceeding, experimental proof of a fact, the proponent must apply for orders in relation to the experimental proof, including orders about any of the following:

(a)    the service on other parties of particulars of the experiment and of each fact that the proponent asserts is, will or may be proved by the experiment;

(b)    any persons who must be permitted to attend the conduct of the experiment;

(c)    the time when, and the place where, the experiment must be conducted;

(d)    the means by which the conduct and results of the experiment must be recorded;

(e)    the time by which any other party (the opponent) must notify the proponent of any grounds on which the opponent will contend that the experiment does not prove a fact that the proponent asserts is, will or may be proved by the experiment.

(2)    Evidence of the conduct and results of the experiment is admissible in the proceeding, only:

(a)    if the proponent has complied with subrule (1) and any orders given under that subrule; or

(b)    with the leave of the Court.

(3)    If an order mentioned in paragraph (1) (e) has been made, and the opponent has not complied with the order in relation to a ground, the opponent may rely on the ground only with the leave of the Court.

53    Rule 34.50 concerns the proof of experimental evidence. Its evident purpose is to ensure that other parties have an adequate opportunity to challenge the validity of the experiment or test and to avoid wasteful duplication by that party of an experiment which can be seen to be valid: Lucent Technologies Inc v Krone Aktiengesellschaft (No 2) [1999] FCA 1462; (1999) 94 FCR 124 at [8].

54    Following its receipt of Mr Hunter's affidavit made on 13 June 2017 and the draft of Dr Wallace's report, Dometic changed its mind about adducing evidence from Dr Gonzalez. The solicitors took the view that the reports of Mr Hunter and Dr Wallace contained evidence of an experimental kind to which they wished to respond with evidence from Dr Gonzalez. The solicitors then requested Dr Gonzalez to prepare a written report on his analysis, and Dr Gonzalez did so on 22 June 2017.

55    At a case management hearing on 27 June 2017, Dometic made an oral application for leave to rely on Dr Gonzalez's affidavit. However, it provided a copy of Dr Gonzalez's report to the Court only part-way during the hearing with the consequence that the Court could not deal with the application at that time. Counsel for Dometic accepted that that was so.

56    Later on 27 June 2017, Dometic's solicitors filed Dr Gonzalez's affidavit and, on 4 July 2017, filed the interlocutory application seeking leave to be able to rely on his evidence.

57    My reasons for declining the grant of leave included:

(a)    although Dometic had the carriage of the case on infringement, it had made a strategic decision before 1 May 2017 not to request Dr Gonzalez to prepare a report, so that it would be able to file and serve the report in accordance with the Court's orders of 27 March 2017. Dometic was content to proceed with Mr Tiller being the only expert witness from whom it would adduce evidence in chief. The belief of Dometic's solicitors that, in the event that the Respondents sought to adduce experimental proof, Dometic would then be able to adduce experimental proof in response involved an unreasonable assumption on their part;

(b)    the explanation that Dometic had had insufficient time after 21 April 2017 in which to make an application pursuant to r 34.50 was inadequate. That application could have been made at any time after Dometic commenced the proceedings on 17 February 2017 and, in particular, after it decided to proceed with the request to Dr Gonzalez to undertake his analyses. It was Dometic's own decision not to make that application. It was apparent that Dometic chose to find out the results of the proposed experimentation before engaging in the process contemplated by r 34.50;

(c)    the fact that Mr Hunter and Dr Wallace's evidence involved some reports of experimentation was not a sufficient justification for Dometic being entitled, despite its earlier strategic decision, to lead the substantial evidence from Dr Gonzalez. The experimentation of Mr Hunter and Dr Wallace was of a relatively simple, and even unsophisticated, kind. It was of a kind which Mr Tiller could (and later did) replicate. Dr Gonzalez's experimentation and analysis was much more detailed; and

(d)    the grant of leave to Dometic would have caused prejudice to the Respondents and to the conduct of the trial. Both Mr Hunter and Dr Wallace had indicated that they may, having regard to their other work commitments, need a period of three to four weeks in which to consider Dr Gonzalez's report, the data attached to it, Dr Gonzalez's assumptions and methodologies, and to attempt to replicate what Dr Gonzalez had done. Even if these were over estimates, it was plain that the grant of leave to Dometic to adduce evidence from Dr Gonzalez would derail the trial.

58    These are my reasons for the refusal of Dometic's interlocutory application of 4 July 2017.

Infringement

59    Infringement occurs when a person exercises any of the exclusive rights of the patentee without the patentee's authorisation: Eli Lilly & Co v Pfizer Overseas Pharmaceuticals [2005] FCA 67; (2005) 218 ALR 408 at [222]-[223]. If the alleged infringement differs materially from an essential feature of the applicant's claim, there is no infringement: Commonwealth Industrial Gases Ltd v M.W.A. Holdings Pty Ltd [1970] HCA 38; (1970) 180 CLR 160 (CIG v MWA) at 168.

Does the Belaire Unit have a centrifugal fan?

60    A principal basis on which the Respondents dispute that the Belaire Unit infringes the Patent concerns Integers 1.3 and 1.8, namely, that the air conditioning system have an air conditioning unit including at least one centrifugal fan which is "operable to draw in indoor air via the return air entry port and eject the indoor air in a substantially horizontal plane such that it is forced into the at least one evaporator coil". The Respondents contend that the evaporator fan in the Belaire Unit is an axial fan and that this, by itself, indicates that the Belaire Unit does not infringe the Patent.

61    Mr Henshall said, and I accept, that, when designing the IBIS 3, he had thought that a centrifugal fan had three advantages over an axial fan. First, generally the noise produced by a centrifugal fan is less than that of an axial fan moving an equivalent volume of air. This is because of the higher speed required of an axial fan to move an equivalent volume of air. Secondly, a centrifugal fan has the advantage of ejecting the air horizontally directly to the surrounding evaporator coil. Thirdly, he had thought that the shape of a centrifugal fan would require little or no clearance above the fan to allow for the ejection of the air to the evaporator coil. This meant that the air conditioning unit would have a lower overall profile.

62    The dispute between the parties arises from Dometic's contention that the term "centrifugal fan" in the meaning of the Patent would be understood by a skilled addressee as "an apparatus that has the effect of taking in air axially and ejecting it radially". Its submission was that any "apparatus" which has that effect would be understood to be a centrifugal fan. For this reason, Dometic contended that the identification of a fan as centrifugal or otherwise can only be made by observation of the fan in operation.

63    Much of the evidence and submissions in the trial was directed to the construction of the term "centrifugal fan" in the Patent, and as to whether the evaporator fan in the Belaire Unit is such a fan.

64    It is appropriate to address first the proper construction of the term "centrifugal fan" in the meaning of the Patent.

Construction: principles

65    The parties were in agreement as to the principles to be applied in resolving the issues of construction in the case. Those principles are, in any event, well-settled. The authorities in which they have been stated include Welch Perrin & Co Pty Ltd v Worrel [1961] HCA 91, (1961) 106 CLR 588 at 610; Minnesota Mining at 286; Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd [2001] HCA 8, (2001) 207 CLR 1; H Lundbeck A/S v Alphapharm Pty Ltd [2009] FCAFC 70, (2009) 177 FCR 151 at [118]; Inverness Medical Switzerland GmbH v MDS Diagnostics Pty Ltd [2010] FCA 108, (2010) 85 IPR 525 at [12]-[15]; Streetworx Pty Ltd v Artcraft Urban Group Pty Ltd [2014] FCA 1366, (2014) 110 IPR 82 at [57]-[69]. The principles which are particularly pertinent in the circumstances of this case include the following.

66    The proper construction of a patent is a question of law but may nevertheless be assisted by evidence. The question is what a hypothetical non-inventive person skilled in the relevant art (the skilled addressee) would have understood the language used by the patentee to mean, having regard to the whole of the patent, the specification and the claims and taking account of the matters of common knowledge at the priority date and the context in which the words appear: Kimberly-Clark at [24]. The claims in the patent are to be construed in the context of the specification as a whole. The meaning of terms in a claim may be clarified by reference to the specification but not so as to restrict, expand or qualify the terms of the claims which are clear. The Court adopts a purposive construction and avoids an overly technical or narrow construction of claims: Populin v HB Nominees Pty Ltd (1982) 59 FLR 37 at 43. A specification is to be read in a practical and common sense way: Tramanco Pty Ltd v BPW Transpec Pty Ltd [2014] FCAFC 23; (2014) 105 IPR 18 at [175].

The skilled addressee

67    In Streetworx at [67], Beach J identified the following principles as being applicable to the Court's consideration of the understanding of the skilled addressee:

•    First, to identify the characteristics of the skilled addressee, the field to which the invention relates must be identified.

•    Second, the skilled addressee is taken to be a person of ordinary skill (as opposed to a leading expert) in that field and equipped with the relevant common general knowledge including the art before the priority date (Minnesota Mining & Manufacturing Co v Beiersdorf (Aust) Ltd (1980) 144 CLR 253 (Minnesota Mining) at 293; Kimberley-Clark Australia Pty Ltd v Arico Trading International Pty Ltd (2001) 207 CLR 1 at [24]; Jupiters at [67]).

•    Third, the qualifications and experience of the skilled addressee will depend on the particular case, having regard to the nature of the invention and the relevant industry. Formal qualifications are not essential. Practical skill and experience in the field may suffice (Britax Childcare at [239] per Middleton J). A patent specification is addressed to those having a practical interest in the subject matter of the invention; such persons are those with practical knowledge and experience of the kind of work in which the invention is intended to be used.

•    Fourth, the hypothetical person skilled in the art may possess an amalgam of attributes drawn from a team of persons whose combined skills, even if disparate, would normally be employed in interpreting and carrying into effect instructions such as those contained in the specification (The General Tire & Rubber Co v The Firestone Tyre & Rubber Co Ltd [1972] RPC 457 (The General Tire) at 485).

•    Fifth, as the skilled addressee comes to a reading of the specification with the common general knowledge of persons skilled in the relevant art, they read it knowing that its purpose is to describe and demarcate an invention. But the person skilled in the art is not particularly imaginative or inventive (or innovative) (NSI Dental Pty Ltd v University of Melbourne (2006) 69 IPR 542 at 570).

68    In the present case, I consider the skilled addressee to be a person with an understanding, whether gained by education or experience or both, of fluid dynamics and of the issues that arise in the movement of air in air conditioning systems. Such a person does not require the formal qualifications of the kind possessed by Dr Wallace and Mr Hunter. I consider that Mr Henshall can be regarded as fitting the description of the hypothetical skilled addressee to be considered in construing the Patent.

69    Dometic was inclined to disparage reliance on Dr Wallace's evidence for the purpose of informing the understanding of the skilled addressee. It referred to Carter Holt Harvey v Weyerhaeuser Co HC Wellington [2010] NZHC 573 at [56] wherein it was said:

[I]t makes sense to look at the reasons given for an opinion as they should reveal whether the expert has drawn on highly refined sophisticated concepts known only to those with his or her high level qualifications, or on more basic knowledge.

The submission was that Dr Wallace's opinion was based on his high level knowledge of sophisticated concepts and did not reflect the knowledge and understanding of a skilled addressee.

70    I do not accept that submission. It is very apparent that, in addition to his academic qualifications and knowledge, Dr Wallace has considerable practical experience. His opinions were informed both by his academic training and that experience. I also note that Dometic itself sought to rely in numerous instances on the opinions expressed by Dr Wallace.

The meaning of the term "centrifugal fan" in Claim 1

71    The evidence indicated that there are various types of fans, of which centrifugal and axial fans are two principal kinds.

72    At a level of generality, the experts were in agreement as to the effect of centrifugal fans and axial fans. A centrifugal fan takes in air axially (parallel to the rotational axis of the impeller) and ejects it radially (90o to the axial direction) or at least tangentially, whereas an axial fan takes in air axially and ejects it in the same direction. There is a qualification to those propositions because a small amount of radial movement of air is a necessary incident of the operation of an axial fan and a small amount of axial movement is a necessary incident of the operation of a centrifugal fan. However, those small incidental movements can be ignored for the purposes of the issues in these proceedings.

73    A common feature of axial fans is that the blades are attached to, and radiate from, the rotating hub. Mr Hunter provided the following depiction of a typical axial fan:

The domestic pedestal fan is a common example of an axial fan.

74    Mr Hunter also provided a depiction of a centrifugal fan which he described as "typical".

75    In his affidavit of 1 May 2017, Mr Tiller gave the following description of the difference between the two types of fans:

[31]    … I understand a centrifugal fan to be a type of fan that draws air into the fan in an axial direction (that is, parallel to the axis on which the blades (or impellers) of the fan rotate) and pushes the air out in a perpendicular direction (that is, at 90 degrees to the axis of the fan). Centrifugal fans are also referred to as 'radial' fans because they direct air in an outward direction from the centre of the fan. By contrast, axial fans such as domestic fans and those used in computer hard-drives do not change the direction of the air – that is, air enters in the axial direction of the fan and exits linearly in that same axial direction. Therefore, the distinction between an axial fan and a centrifugal fan is based on the direction at which the air exits the fan, when contrasted with the direction at which the air enters the fan.

76    Mr Hunter and Dr Wallace gave evidence of a broadly similar kind (although they disagreed with the proposition in the last sentence) and their accounts were more technically detailed. Mr Hunter said that the term "centrifugal fan" is a common term which has been used by mechanical engineers over a long period of time. It refers to a fan with an impeller which draws in air axially and ejects it radially. The fan is described as centrifugal because the centrifugal forces generated by the rotating impeller throw air outwardly in a radial direction.

77    Mr Hunter said that the impellers of centrifugal fans typically have three features:

(a)    the roots of the fan blades are not attached to the hub;

(b)    the blade's two dimensional profile is constant in the axial direction; and

(c)    the impeller has a solid back plate so that the air flow cannot leave the impeller in the axial direction, but must be ejected radially.

78    In the course of the joint expert conference, Mr Tiller presented Mr Hunter with some examples of centrifugal fans which did not have back plates. In the light of those examples, Mr Hunter modified his position a little and said that the presence of a back plate was not essential in order that a fan be characterised as centrifugal. He said that he had referred to centrifugal fans with a back plate because, without such a plate, the air would not be distributed uniformly so as to achieve its purpose. Mr Hunter also said that the back plate prevents leakage of air and thereby adds to the efficiency of the centrifugal fan.

79    Dr Wallace said that:

For a fan to be a centrifugal fan, the blades are required to be disposed nominally parallel to each other and to the axis of rotation of the impeller. The blades are configured to spin the air, promoting centrifugal forces in a radial direction. For a fan to be an axial fan, the blade axes are disposed radially from the axis of rotation. The blades are configured to lift the air in an axial direction.

What a fan comprises

80    There was disagreement between the experts as to what constitutes a fan and how one determines whether a fan is axial or centrifugal.

81    All agreed that a fan comprises, at the least, a motor and an impeller. The motor drives the impeller. Mr Tiller considered that the terms "impeller" and "blades" are interchangeable, whereas Mr Hunter and Dr Wallace considered that the blades form part of the impeller. They both agreed that the term "impeller" describes the whole of the rotating part of the fan which moves the air, and does not comprise only the fan blades. On my understanding, not a lot turns for present purposes on the resolution of this difference.

82    Mr Tiller was of the view that, in addition to the motor and impeller, a fan comprises the enclosure or mounting used by a manufacturer in conjunction with the fan. That enclosure or mounting may affect the direction in which the ejected air moves and is, accordingly, to be taken into account in the characterisation of a fan as either axial or centrifugal. Each of Dr Wallace and Mr Hunter disagreed with that view, although they accepted that a fan may include the mounting to which the motor is attached. As will be seen, I prefer the views of Dr Wallace and Mr Hunter on this topic and do not think that the skilled addressee would understand a fan as including the apparatus associated with the fan, even if that apparatus may influence the flow of air produced by the fan. This difference of views is significant in the present case because the Belaire Unit includes an evaporator fan deck, to which I will return shortly.

83    Mr Tiller accepted that the structural design and features of a fan may provide "an indication" as to the likely effect of the fan in moving air but maintained that the character of a fan can be determined only by observation of the fan in operation (and specifically, how air enters and exits the fan). Mr Henshall provided some support for this view:

XXN:    Do you say that you're able to recognise something [as] an axial or [a] centrifugal fan immediately by looking at it?

A:    It certainly gives you a very good lead as to the family, yes.

XXN:    But the only way to satisfy yourself as to whether it's an axial fan or a centrifugal fan is to put it into operation, is that right?

A:    It would be a combination of both inspection and looking at the performance characteristics of the fan.

84    The evidence of Mr Hunter and Dr Wallace was to different effect. Mr Hunter said that the impeller is the key differentiator between the two types of fans.

85    Dr Wallace gave similar evidence, saying that, in his experience, it is the physical form of the impellers which differentiates axial and centrifugal fans. He said that "[u]niversally, the distinction between axial and centrifugal fan types is made on the physical form of the impeller". That is because the blades of centrifugal fans are configured to produce centrifugal forces. In axial fans, the blades are configured differently so as to force the air in an axial direction, that is, parallel to the direction of the rotational axis. The particular configuration of the blades in a fan is a matter of choice and design.

86    Dr Wallace likened a centrifugal fan to a squirrel cage wheel, and an axial fan to an aeroplane propeller. This means that the assessment of whether a fan is axial or centrifugal may be made by observation, before the fan is operated. Dr Wallace attached less significance to observations of the actual airflow produced because that airflow may be influenced by extraneous factors, including the equipment in which the fan is mounted.

87    The opinions of Mr Hunter and Dr Wallace are supported by other evidence.

88    The Respondents adduced evidence from Mr Hu Guojun principally, as I understood it, for the purposes of establishing that the manufacturer's description of the evaporator fan used in the Belaire Unit as a centrifugal fan was incorrect. I will refer to that evidence later. Mr Hu is a well-qualified and experienced engineer. He graduated in 2005 from the University of Shanghai for Science and Technology with a Bachelor of Engineering degree, having majored in Refrigeration and Cryogenic Engineering. In 2008, he received a Master's Degree, also from the University of Shanghai for Science and Technology, having studied Fluid Machine Engineering.

89    Since October 2015, Mr Hu has worked with Hangzhou Dunli Electric Appliances Co (Dunli) as the Vice-Manager of its Technical Department. Dunli is a major manufacturer of fans and blowers used in the ventilation, air conditioning and refrigeration industries. Mr Hu described Dunli as being one of the top manufacturers of fans in China with substantial export markets. Dunli manufactures the evaporator fan used in the Belaire Unit.

90    The Respondents arranged for Mr Hu to give evidence only shortly before the trial commenced, when the witness they had intended to call became unavailable. He gave his evidence through an interpreter. I considered that he was a careful, honest and reliable witness. I have confidence in accepting his evidence.

91    Mr Hu deposed that, by reason of his studies and experience, he knows that there are recognised categories of fans, of which centrifugal and axial fans are two principal kinds. Each of these types of fans has distinctive features and each is featured separately in the Dunli catalogue of its fans. Mr Hu annexed a copy of the catalogue to his affidavit. Each of the 26 principal models of axial fans manufactured by Dunli and shown in its catalogue comprise fan blades radiating from a hub. I have described these as the principal models because it is apparent that there are variations or sub-models of each of the principal models. The fan blades in those sub-models also radiate from the hub. None of the 49 principal forms of centrifugal fans shown in the Dunli catalogue have this configuration.

92    Pertinently, for present purposes, the Dunli catalogue depicts many fans without an indication that mountings or enclosures (other than safety guards) comprise part of the fan. Instead, in most instances, fans are presented as free standing units. The extracts of catalogues or promotional material provided by two companies in the United States, Buffalo Fan and Cincinnati Fan, which Dometic tendered, are to the same effect.

93    Dometic referred to evidence which Mr Hu gave to the effect that some customers acquire Dunli motors and impellers without any housing because they wish to use their own housing. To my mind, that evidence tended to support the proposition that the housing is not an intrinsic part of a fan but, instead, something which can vary according to a particular customer's needs or desires.

94    Dometic sought to diminish the significance of the evidence from manufacturers' catalogues, promotional materials and the like by submitting that these showed only the "rotor" and not the fan. That submission cannot be accepted. The apparatus depicted in the promotional material produced by Buffalo Fan are described as fans, and not as rotors. Likewise, all of the apparatus shown in the Dunli catalogue are described as fans (whether axial or centrifugal) and not simply as rotors.

95    It is significant that, while there is documentary evidence in the form of catalogues and other literature which supports the views of Dr Wallace and Mr Hunter, Dometic did not adduce any evidence in the literature which supports the view that the character of a fan is to be determined having regard to the apparatus surrounding the impeller, let alone that that character may vary according to the effect which that apparatus has on the airflow produced by the impeller. Nor did Mr Tiller point to any such evidence.

96    I also note that Mr Tiller acknowledged that, without turning the evaporator fan on, he would have assumed that it was axial and that he would take at face value a manufacturer's description of a fan as axial or centrifugal. This acknowledgement was unsurprising as one would not ordinarily expect that a fan made and sold by a manufacturer as either axial or centrifugal, as the case may be, had to be operated before its type could be determined.

97    I mentioned earlier the example of a centrifugal fan without a backing plate which Mr Tiller produced in the joint expert conference. In addition to that fan not having a backing plate, its blades radiated from the hub so that it was similar in appearance to an axial fan. However, as Dr Wallace pointed out, the blades on the example fan have a particular form and profile. He considered that the blades were placed so as to be still nominally parallel to the axis of rotation of the fan. In addition, Mr Hunter thought that a centrifugal fan of this kind would only be used with a scroll casing. Dometic produced another example of a centrifugal fan which was quite distinctive in appearance. However, this was a compressor fan designed to develop high pressure and its configuration is attributable to that purpose. Both of the examples appear to be special purpose fans. In my view, even if skilled addressees were aware of these examples it would not affect their understanding of the term "centrifugal fan" in the meaning of the Patent.

98    Dometic referred to evidence from the experts that the structure, housing or casings surrounding a fan may affect the direction of the airflow produced by the fan. Plainly, such structures may have some effect. It does not follow however, that such structures are to be regarded as part of the fan, so that the character of the fan can be identified only by observation of the fan in operation. The structures of the kind to which Dometic referred affect the airflow only after the impeller, which produces the forces moving the air (whether axially or radially), has completed its work. They do not form part of the impeller itself. The skilled addressee would, in my opinion, understand that some structures serve particular functions (such as providing safety) or adding to the efficiency of the fan (such as the inclusion of a back plate on a centrifugal fan) but unless forming part of the impeller are not part of the fan itself.

99    Both Mr Hunter and Dr Wallace were firmly of the view that the apparatus surrounding a fan does not form part of the fan. Mr Hunter said:

[T]here's no magic wand here. We can't turn an axial fan into a centrifugal fan. It's not – that's not possible.

100    Dr Wallace said:

During a long participation in the fan industry I have never come across the suggestion that fan type changes according to the perceived airflow directions which are frequently distorted by installation in a compact air conditioning unit. Universally, the distinction between axial and centrifugal fan types is made on the physical form of the impeller. Evidence for this view can be found when surveying the images presented in many manufacturers' catalogues, in engineering text books, in engineering standards (such as ISO 5801) and on the internet.

101    I accept that evidence. In particular, I am satisfied that it also reflects the understanding of the hypothetical skilled addressee on the relevant date. Such a person would understand that it is possible for the apparatus surrounding a fan to be so shaped as to alter the direction of the airflow produced by the fan. I am satisfied, however, that a skilled addressee would not regard the potential for modification of the airflow to mean that the characterisation of a fan of one type may be changed to that of a different type, or that the character of a fan may be determined only by observation of the fan in operation.

Dometic's reliance on the evidence of Dr Wallace

102    Dometic sought to rely on evidence from Dr Wallace to support the submission that the direction of the airflow produced by a fan can be determined only by observation of the fan in operation. However, in my opinion, Dometic sought to read more into Dr Wallace's evidence than is appropriate, as the following passages, including those on which Dometic relied, indicate:

XXN:    But generally speaking it's called a "centrifugal fan" by people because of the way that the airflow comes in and goes out.

A:    I would say it's called a centrifugal fan because it looks like a centrifugal fan …

XXN:    Sure. And you can make a prediction.

A:    Yes.

XXN:    But to actually work out whether something is a centrifugal fan – it's where the airflow is going. You would agree with that, wouldn't you?

A:    Yes, but we – the blades are configured to – to create that, but doesn't necessarily say that – because it has got radial flow, that it has to be a centrifugal fan.

XXN:    Sure. Thank you. But just in terms of terminology, the fact that you call something a "centrifugal fan" is a reference to – rough, perhaps, of the way the air is flowing.

A:    I would say of a centrifugal fan, it has got an arrangement of blading which promotes that – that mode of operation. (Transcript at 237)

…

XXN:    What I was simply putting to you is that based on the text books that you have annexed, whether something is "centrifugal" or "axial" in general terms, is governed by the airflow characteristics of the fan.

A:    Only partially. Certainly when – when I look at fans as an engineer and I design these fans, I have to apply certain design principles and rules. And – and there are, in fact, some fundamental equations which are used by fan-designers. And these can be formulated in two ways, one – one way for axial fans and one way for centrifugal fans. And you can't really mix the two up. So when – when I – I see a rotor, I can tell that it's axial, centrifugal, on the basis of which set – which formulation of these questions will I use. (Transcript at 238)

(Emphasis added)

…

XXN:    Going to your paragraph 12, where you explained how it's to be defined, you – the sentence is:

The axis of the blade can be considered to be a line on one of the blade's surfaces which is nominally perpendicular to the airflow over that surface.

    And it's right, isn't it, that inherent in your definition is an observation as to how the air is flowing over the blades?

A:    That's correct, yes. Yes. (Transcript at 241)

…

XXN:    But I think what this fan shows is that the structural definitions that you've put forward are general and non-exhaustive, which is your evidence in your affidavit?

A:    That's correct. Yes.

XXN:    Yes. Thank you. And I would suggest to you that this emphasises the point that whether a fan is properly classified as centrifugal depends upon the airflow characteristics of that fan.

A:    No. I – I disagree with that. (Transcript at 245)

(Emphasis added)

…

XXN:    And I think the effect of your evidence is that the airflow characteristics of a fan are affected by the structural characteristics of the impeller and also the presence of any obstruction within the airflow field immediately adjacent to that impeller. That's the effect of your …

A:    Yes. That's what I'm saying. Yes.

XXN:    Thank you. And so what I'm – what I suggest to you is that those two matters, being the structural characteristics of the impeller as well as the presence of any obstruction – those two matters enable a prediction to be made, with varying levels of confidence, as to the resulting airflow.

A:    Yes. I think what you're saying is that the – the direction of – the flow-field shape is affected by both the rotor and whatever equipment you have it installed in.

XXN:    Yes. And I have a further point, which is that you can look at the shape of the rotor and you can look at the obstructions in the airflow field near that rotor, and you can make the prediction, with varying degrees of confidence, as to how the airflow is going to be affected?

A:    Yes. With the right tools and the right equations, one can, yes, make predictions about what the flow-field would look like and roughly how much flow has been – has been … and so on.

XXN:    Thank you. And – but it's actually necessary to confirm what the airflow characteristics are by observing the apparatus in operation.

A:    No. No. You can simulate it, for instance. (Transcript at 247)

(Emphasis added)

…

XXN:    Based upon the two matters, being the structural characteristics of an impeller and also the presence of any obstructions within the airflow field immediately adjacent to that impeller – those two matters enable you to make a prediction about the directionality of the resulting airflow?

A:    Yes. That's standard engineering technique to predict what happens in … including when it includes rotors and boundaries and so on.

XXN:    Yes. Thank you. And – but whether – to actually confirm the directionality of the airflow created, it's necessary to either observe the apparatus and operation or alternatively, if you're skilled enough, to simulate that in a computer?

A:    Yes. If you – yes, want to. (Transcript at 248)

103    In the first of these passages, I consider that Dr Wallace was confirming that it is the arrangement of the blades which determines the character of the fan and that the mere fact that a fan placed in a particular situation may produce a radial flow of air does not mean, of itself, that it is a centrifugal fan.

104    In the second of these passages, Dr Wallace confirmed that the character of a fan as centrifugal or axial is indicated by its design. To my mind, that is persuasive because it is to be expected that a manufacturer setting out to produce either an axial or centrifugal fan will use a design adapted for that purpose.

105    The third of the passages upon which Dometic relied does not do the work for which it contended because, on my understanding, Dr Wallace was there identifying the manner in which one determines the axis of a fan blade, rather than the character of the fan itself.

106    As can be seen from the passage extracted from the Transcript at 245, Dr Wallace disagreed expressly with the proposition that the classification of a fan as centrifugal depends upon its airflow characteristics. In the passages extracted from the Transcript at 247 and 248, Dr Wallace again confirmed that observation of the airflow is not necessary in order to identify the airflow characteristics of a fan but, if one wished to confirm it, one could do so by simulation or by observation.

Conclusion on the issue of construction

107    I consider that the skilled addressee reading the Patent would know that there are various kinds of fans and that axial fans and centrifugal fans are the two principal types. The skilled addressee would know the effect on air movement produced by each type of fan. In particular, such a person would know that a centrifugal fan has the effect of taking in air axially and ejecting it radially. The skilled addressee would understand that the invention involved the requirement for the air drawn in vertically through the return inlet to be forced horizontally through the evaporator. That being so, the skilled addressee would understand the requirement for the fan to be centrifugal.

108    The skilled addressee would also be able to identify a centrifugal fan by its appearance. Such a person would not need to see the fan operating in order to assess its effect on the air.

109    In these circumstances, the skilled addressee would understand the adjective "centrifugal" (appearing three times in the first claim) to have been used deliberately so as to identify the kind of fan required for the invention. That is to say, the skilled addressee would understand that the Patent is not contemplating the use of any fan at all, providing that the ultimate effect of the fan in conjunction with other apparatus is that air is forced horizontally into the evaporator coil.

110    Dometic submitted that the term "centrifugal fan" would be understood by the skilled addressee as indicating the effect which the fan is to produce, that is, "to draw in indoor air via the return air entry port and eject the air in a substantially horizontal plane such that it is forced into the at least one evaporator coil". That is to say, Dometic submitted that the term "centrifugal" would be understood as referring to effect rather than structure. I do not accept that submission. In my view, the skilled addressee would know that the effect of the centrifugal fan is to draw in air through the return air entry port and to eject it horizontally. Such a person would not need the words on which Dometic relies to understand that that is the intended purpose of the fan. Instead, I consider that the skilled addressee would understand those words to indicate that the particular centrifugal fan selected must be capable (that is, of sufficient capacity) to draw in and eject the air so that it is forced into and through the evaporator coil.

111    Acceptance of Dometic's submission would deprive the adjective "centrifugal" of meaning. The claim in the Patent is not to be read as though that term is not present.

112    I have not been able to discern any indication in the Patent, read as a whole, which supports the construction for which Dometic contends. On the contrary, as Mr Hunter observed, the type of fan shown in the description of the invention in Figure 3 appears to be a centrifugal fan with a closed backplate impeller. Mr Hunter also said that "[e]ven without having read the detailed description of the invention contained in the specification, I would have automatically inferred that the type of fan being referred to was the commonly known centrifugal fan described by me in the paragraphs 17-21 above". That fan, and the depiction provided by Mr Hunter, have been set out earlier. I consider that the hypothetical skilled addressee would understand the term "centrifugal fan" in the terms of the Patent in the same way.

113    It follows that I reject Dometic's submission that the Patent is "agnostic" as to which of the many different ways by which the air can be forced to travel horizontally through the evaporator coil. To the contrary of being agnostic, the Patent states specifically that the invention involves the use of a centrifugal fan.

114    In my view, the present case is analogous with Baygol Pty Ltd v Foamex Polystyrene Pty Ltd [2005] FCA 624; (2005) 66 IPR 1. The claim in the patent under consideration in that case referred to the placement of "concrete" spacers in a method of forming a building foundation. The question was whether the respondents' use of the method but with plastic spacers infringed the patent. Tamberlin J answered that question in the negative:

[52]    The word "concrete" is not one which has been shown to be ambiguous or to raise questions of fact and degree within a spectrum as to its interpretation, as was the case in Catnic in relation to the word "vertical". No reasonable connotation of the word "concrete" could include "plastic". The word "concrete" is one of ordinary English usage. … The applicant's submission is that the word "concrete" should be ignored and the express requirement of "concrete" spacers should be replaced with a requirement which simply provides for the spacers to be made of plastic or of any material which could make the invention work. There is no contextual justification for doing such violence to the language of the claim or ignoring the language chosen to express the claim.

115    The immediately following paragraph in Baygol is also apposite in the present case:

[53]    As a matter of first impression, one would expect a person directed to implement the method set out in the claim to follow the wording and use concrete spacers. If the patentee had intended to refer to spacers made of other materials, then, given the simplicity of the requirement, it would have been easy to simply omit the reference to "concrete" or to designate a range of other suitable materials. This step was not taken by the patentee. The evidence does not disclose any reasons for the patentee not taking such an obvious course if he regarded the word "concrete" as too restrictive. It must be borne in mind that patent claims are not drafted by inexperienced or unqualified authors. They are usually the result of considered and deliberate choice, using the English language, with all its subtleties and precision, to delimit the boundaries of the claimed monopoly. The drafting of patent claims is an arcane and sophisticated art. As Lord Hoffman pointed out in Kirin-Amgen at [34], it will be an infrequent case in which it can be said that a patentee departed from the conventional use of language by including an element which was not meant to be essential.

(Emphasis added)

116    In the present case, had the patentee wished the claim to refer to any fan, including a fan which, in conjunction with other apparatus, produced the effect of a centrifugal fan, it would have been easy to say so. The fact that it did not do so appears to reflect a deliberate choice.

The evaporator fan in the Belaire Unit

117    Mr Tiller considered that the evaporator fan in the Belaire Unit is a centrifugal fan. He did so for three reasons.

118    First, he considered that the evaporator fan had the effect of drawing air into the unit vertically via the return air entry port and then ejecting that air horizontally (as distinct from forcing the air vertically along the axis of the fan). Mr Tiller said that he had observed that this was so after the external cover of the air conditioning unit and the polystyrene cover over the evaporator coil had been removed. He had placed his hand at the sides (that is, between the fan and the evaporator coils) and had felt the horizontal movement of the air. Secondly, he had held 20 mm wide stripes of A4, 80 GSM paper above and in the centre of the fan and had not noted that they had been forced in an upward direction. Mr Tiller said that he had noted a minimal degree of uplift but he attributed this to turbulence. When Mr Tiller placed the piece of paper at the circumference of the fan, he observed a stable horizontal airflow supporting the piece of paper. Mr Tiller observed some air moving vertically around the inside perimeter of the evaporator coil but considered that this was a consequence of the air ejected from the fan in a horizontal direction being diverted upwards when it met the evaporator coil.

119    Mr Tiller's second reason rested on his comparison of the evaporator and condenser fans. He noted that the latter was an axial fan because it ejected air in the axial direction. The former, although having blades which were of similar shape, pitch, depth and orientation, had the effect of causing the air to move in a horizontal direction. Mr Tiller attributed this to the different plastic shrouds around each fan. In both cases the shrouds form part of the plastic structure supporting the fan hub. The shroud around the condenser fan is closed, leading Mr Tiller to conclude that that fan had been designed to permit the ejection of air only in the axial direction. The shroud around the evaporator fan is open (or at least substantially open). This enabled the evaporator fan (which Mr Tiller described as a centrifugal fan) to eject the air in a horizontal direction.

120    Mr Tiller's third reason was that the marking by the manufacturer (Dunli) on the underside of the evaporator fan described it as a "Single-Phase Centrifugal Fan" (emphasis added).

121    Mr Hunter described the evaporator fan in the Houghton unit as being "clearly of an axial fan type, and not of a centrifugal fan type". This was because it comprised a rotating axial fan impeller drawing air inwardly from the axial direction and directing it outwardly in the axial direction. Dr Wallace expressed the same view, saying that both the condenser fan and the evaporator fan have the characteristics of an axial fan.

122    In my opinion, there are a number of reasons why the opinions of Mr Hunter and Dr Wallace should be preferred and that of Mr Tiller on this point rejected.

123    First, I indicated earlier my general preference for the evidence of Dr Wallace and Mr Hunter over that of Mr Tiller.

124    Secondly, I have already indicated earlier my satisfaction that the surrounding encasing of the fan should be ignored in the determination of its character. The effect of such surrounds can be seen in the comparison which Mr Tiller himself made between the evaporator fan and the condenser fan. The blades on both fans are identical in shape, pitch, depth and orientation. The hubs to which the blades were attached in each case are also identical. It is accordingly natural to regard both fans as being of the same character, that is, axial fans. It is not reasonable to suppose that the character of fans which are identical may vary according to the nature of the plastic shroud with which a particular manufacturer chooses to surround them.

125    In order to assess the effect on the airflow produced by the apparatus surrounding the evaporator fan, the Respondents caused Mr Henshall to assemble two test units. Mr Henshall removed the lower part of the evaporator assembly from a Belaire Unit. This comprised the evaporator fan, its mounting and the evaporator fan deck to which the mounting is attached. The evaporator fan deck is a piece of flat plastic which is essentially rectangular in shape (425 mm x 315 mm). It is bolted to the floor of the air conditioning unit. The evaporator coils are mounted at its perimeter and form a continuous enclosure within which the evaporator fan is located. There is a circular aperture in the evaporator fan deck with a diameter of about 200 mm. The mounting containing the evaporator fan and the surrounding shroud is bolted onto the evaporator fan deck so that the centre of the aperture aligns with the centre of the hub of the fan. As the diameter of the blades (including the hub) is approximately 300 mm, the evaporator fan deck overlaps approximately the outer 40% of each blade. That overlap partially obstructs the intake of air into the evaporator fan.

126    In establishing this assembly (Assembly No 1), Mr Henshall removed the evaporator coils. He bolted the evaporator fan deck to a bench into which a circular aperture below the aperture in the evaporator fan deck had also been cut.

127    Mr Henshall then prepared a second assembly (Assembly No 2). This comprised the same elements as Assembly No 1, but without the evaporator fan deck. In this assembly, the mounting containing the fan was attached directly to a bench top into which a circular aperture with a diameter of approximately 300 mm had been cut.

128    The effect was that, in Assembly No 2, the movement of the air produced by the fan could be assessed without it being influenced by the evaporator fan deck. In the case of Assembly No 1, the movement of the air could be assessed without being influenced by the surrounding evaporator coil (and for that matter, the evaporator cover).

129    The Belaire Unit and the two assemblies prepared by Mr Henshall were in Court and the experts gave evidence by reference to them, including with the fans in operation.

130    Mr Hunter gave evidence, and it was apparent on the demonstration, that the fan in Assembly No 2 operated as an axial fan. The air produced by the fan in Assembly No 1 moved in a horizontal, or at least tangential, direction. The inference that it is the presence of the evaporator fan deck which accounts for this difference is obvious, and I accept that that is so.

131    Accordingly, for the reasons already given, I do not accept Mr Tiller's opinion that the evaporator fan should be characterised as a centrifugal fan by reason of the influence which the evaporator fan deck has on the movement of the air which it produces.

132    The third difficulty with Mr Tiller's opinion is that the impellers for both the condenser fan and the evaporator fan in the Houghton unit appear to be identical. It was common ground that the condenser fan was an axial fan and Mr Tiller accepted that it is of similar shape, pitch, depth and orientation as the evaporator fan. As Dr Wallace observed, there is an inconsistency in this circumstance in describing one fan as axial and the other as centrifugal. In my opinion, the skilled addressee would not understand the Patent as giving rise to such an inconsistency.

133    Fourthly, the evidence from Mr Hu Guojun indicates that no significance at all should be attached to the Dunli label on the underside of the evaporator fan, which describes it as a centrifugal fan.

134    Mr Hu recognised the evaporator fan in the Houghton unit as an axial fan manufactured by Dunli. He said that it was an axial fan because the fan blades are attached to the rotor of the motor around a central shaft. Its design and configuration meant that the fan blades would force air to move parallel to the shaft around which they rotate. Mr Hu said that the description of the evaporator fan as a "single-phase centrifugal fan" was not correct as it was "clearly an axial single phase fan and not a centrifugal fan". He produced a copy of Dunli's product specification for the evaporator fan. That product specification indicates that such fans should be marked as a "single-phase axial fan".

135    Mr Hu also proffered an explanation for the evaporator fan having been marked as a centrifugal fan despite the specification requiring it to be marked as an axial fan. He said:

The marking of details on the nameplate of Dunli fans is work undertaken at Dunli by non-technical labelling employees. The incorrect presence of the words "single-phase centrifugal fan" on [the two fans in the Houghton unit] appears to me to be the result of inadvertent error by employees in the labelling department applying the wrong embossing to the [two] fans.

136    Mr Hu acknowledged that he did not know the circumstances in which the label had been applied to the evaporator fan in the Belaire Unit and, in effect, that his proffered explanation amounted to surmise. However, he also said that, the error having now come to Dunli's attention, it had been discussed in a meeting, and the process changed (I infer so as to correct the error).

137    As already indicated, I considered Mr Hu to be an impressive witness. It was very apparent that he has the capacity for attention to detail. Much of his oral evidence was also confirmed by the documentary evidence which he adduced. I accept his evidence.

138    In short, I satisfied that the label fixed to the evaporator fans describing it as a centrifugal fan is a mistake and that, for present purposes, no significance should be attached to it.

Conclusion as to the evaporator fan in the Belaire Unit

139    For these reasons, I am not satisfied that Dometic has established that the evaporator fan in the Belaire Unit is a centrifugal fan. Nor has it established that the Belaire Unit contains Integer 1.8, namely, "the at least one centrifugal fan being operable to draw in indoor air via the return entry port and eject the air in a substantially horizontal plane such that it is forced into the at least one evaporator coil". This means, subject to what I say below, that Dometic does not establish that the conduct of Finch in importing and selling the Belaire Unit infringes the Patent.

Integer 1.11: an exiting airflow in a substantially horizontal plane

140    For convenience, I repeat Integers 1.9 to 1.11:

1.9    a conditioned air flow path adapted to direct conditioned air from the chamber in a downward direction and towards the at least one return air entry port;

1.10    and then redirecting the air flow path outward and away from the at least one return air entry port;

1.11    to exit the at least one outlet port in a substantially horizontal plane adjacent to the roof.

141    The Respondents contended that the Belaire Unit does not contain Integer 1.11 because the air does not exit it via at least one outlet port in a substantially horizontal plane adjacent to the roof. For essentially the same reasons, the Respondents also contend that Integer 3.2 is not present in the Belaire Unit.

The issue of construction

142    The parties differed as to nature of the airflow which is necessary in order for it to be in a "substantially horizontal plane".

143    There were some differences between the experts as to the construction of Integer 1.11. Mr Hunter initially said that he understood the Patent to mean that all of the air leaving the outlet ports must do so in a manner whereby the airflow path is horizontal (or close to horizontal). He also said that the term "adjacent to the roof" must mean slightly spaced apart from the roof and not co-planar with it. This is because the air velocity at the precise roof surface boundary will be zero. The submission was that this is the way in which the skilled addressee would understand the integer.

144    Mr Tiller disagreed with the view that the claim should be construed as meaning that all of the air leaving the outlet ports must have an airflow path which is horizontal or close to horizontal. This was because the flow dynamics of the space into which the air moves would have some effect on that air. In his written report, he also disagreed that "adjacent to" must mean slightly spaced apart and not co-planar with the roof.

145    In relation to the first of these differences, Mr Hunter modified his position slightly in the oral evidence by saying that he understood Integer 1.11 to mean that the air leaving the outlet ports is generally all in the horizontal plane. I understood Mr Tiller to be of the same view, and so will proceed on that construction. It accords with my understanding of the term "substantially horizontal plane".

146    In relation to the second issue, Mr Hunter explained that, as a matter of physics, the air or fluid immediately adjacent to a stationary surface over which air and fluid moves will be stationary. For that reason the air which moves must be spaced slightly apart from the roof of the caravan or other place in which the air conditioning unit is located. Dr Wallace confirmed Mr Hunter's opinion concerning the movement of air over a stationary surface. He gave the example of water moving in a creek with its velocity being highest at the surface, zero at the creek bed and with varying velocities in between.

147    In his oral evidence, Mr Tiller deferred to Mr Hunter's opinion, saying that he could not disagree with Mr Hunter's opinion on this topic ("I don't know, is the short answer, but I wouldn't disagree, because I'm sure he [Mr Hunter] knows what he's saying").

148    Thus, the differences in the views of the experts about the proper construction were not significant. I proceed on the basis of Mr Hunter's views.

Does the air exit the Belaire Unit in a substantially horizontal plane?

149    Mr Tiller said that he expected that the airflow described in the Patent would, when exiting the air conditioning unit outlet ports, be laminar in nature. Mr Hunter agreed with that assessment.

150    A laminar horizontal flow of air comprises a series of horizontal planes. Laminar airflow is distinguished from airflow which is turbulent, in which case the air is swirling and chaotic. Mr Hunter provided the following depiction of the two types of airflow:

151    Mr Tiller regarded the structural arrangement in the Belaire Unit containing the airflow path as likely to create turbulence. He said, however, that a "U-turn" in its structural arrangements would result in a laminar airflow, saying that the U-turn:

[W]ill cause the air to exit the outlet port in a horizontal direction that is parallel to the roof and reduce turbulence. Further, the horizontal plane and narrow, elongated opening of the outlet port will assist in creating laminar flow parallel to the roof.

(Emphasis added)

Mr Tiller also said that he observed the air from the Belaire Unit move in a substantially horizontal plane after exiting the louvres.

152    Mr Hunter, on the other hand, considered that the airflow exiting the outlet ports in the Belaire Unit would be turbulent, rather than laminar. This would have the consequence that the air would be in an "outwardly-diverging wedge shape". He said that movement of air of this kind does not satisfy the requirement that the air move in a "substantially horizontal plane".

153    Mr Hunter explained that, generally, laminar flow occurs at relatively low air speeds and the flow transitions to turbulent flow at higher air speeds. Because axial fans generate high air flow and lower pressure than centrifugal fans, the airflow produced by axial fans is more commonly turbulent than laminar. The axial fan in the Belaire unit was therefore likely to produce turbulent air movement.

154    Mr Hunter also explained that, in fluid mechanics, the transition from laminar flow to turbulent flow is defined by a dimensionless parameter called the Reynolds Number. It is a number which can be calculated and is directly proportional to the velocity of the airstream. There is a specific Reynolds Number at which the airflow starts to transition from a laminar flow to a turbulent flow. In ducts, that number is 2,300. If the Reynolds Number is substantially above 2,300, the airflow will be turbulent. If it is below that number, it will be laminar.

155    Mr Hunter calculated the Reynolds Number for the airflow exiting the four outlets of the Belaire Unit opening in a horizontal direction as being 10,208 and said that, with that number, the airflow exiting the outlet ports of the Belaire Unit would be "a fully turbulent flow". That being so, it could not be expected that the airflow exiting the outlet ports in the Belaire Unit would be in a substantially horizontal plane as it would be in the outwardly diverging wedge shape. On this basis Mr Hunter considered that Integer 1.11 was not present in the Belaire Unit.

156    Dr Wallace was not as definite about the shape of the moving air after it left the outlets. He said that turbulence does not preclude an average streamline of air from being planar, but turbulence will have the effect that the boundaries of the airflow will be convoluted. Dr Wallace also said that turbulence does not preclude airflow from having "directionality". He did not, however, say that the "directionality" would be horizontal and co-planar with the roof.

157    Mr Hunter considered that the turbulence of the airflow exiting the outlet ports was confirmed by the tests he carried out on the Belair Unit. He also said that the narrow elongated opening of the outlet ports had the function of accelerating the air speed within the ports. This in turn would lead to a higher Reynolds Number and therefore a more fully developed turbulent flow exiting the ports than would otherwise have been the case.

158    I did not understand Mr Tiller to contest the accuracy of Mr Hunter's calculations of the Reynolds Number of the air leaving the Belaire Unit or the appropriateness of the inferences which he drew from the calculated number. Ultimately, Mr Tiller conceded that his opinion about the laminar nature of the airflow was in the nature of speculation, as the following passage of evidence indicates:

XXN:    Mr Tiller, are you aware of the Reynolds Number and how to calculate it?

…

A:    Turbulent or laminar, it's still flow through a pathway, and am I expressly familiar with the Reynolds Number, not mathematically, but theoretically, yes.

XXN:    But you, in parts of your affidavit, you talk about whether the flow would be laminar or turbulent.

A:    I surmise, I don't – I don't say it is or not, but I – I have an expectation in circumstance that it may be more laminar towards the end than it is at the start, for example.

XXN:    And that's speculation on your part without …

A:    It is.

(Emphasis added)

159    I regarded Mr Hunter's evidence about these matters as being more authoritative than Mr Tiller's, especially as Mr Hunter's evidence was, for the most part, supported by Dr Wallace. I accept Mr Hunter's opinions. The consequence is that I am satisfied that the Belaire Unit does not have Integer 1.11 of the Patent. Nor does it have Integer 3.2. For these reasons too, the Belaire Unit does not infringe the Patent.

Integer 2.2: an S-shaped airflow path

160    Integer 2.2 ("wherein the airflow path is S-shaped") derives from Claim 2. That claim provides:

The air conditioning system of claim 1, wherein the airflow path is "S"-shaped.

Construction of the term "airflow path"

161    Mr Hunter and Mr Tiller disagreed about the meaning of "airflow path" in this integer. It was, however, common ground that the airflow path to which the integer refers is an airflow path of "conditioned" air. This is borne out by [0041] of the specification, which is set out below.

162    Mr Tiller said that he understood Integer 2.2 to refer to an unspecified assembly forming a path for the conditioned air such that the air travels in a downward direction towards the roof of the caravan and the return air entry port, and then outwardly adjacent to the roof. In his second report, he said that the "'S'-shaped air flow path substantially contributes to the working of the invention claimed in the Patent because it ensures that cooled air travels further into the cabin so as to produce a more dispersed cooling effect".

163    Mr Hunter said that he understood the return airflow path in Integer 2.2 to be the streamline of the path that "airflow would take in approximately the centre of an airflow passageway". With respect to the path being "S-shaped", he said:

This means a serpentine shape, such that air flow firstly leaves the evaporator coil with a radially outwards portion, then secondly curves to a downward portion, then thirdly curves to a radially inwards portion, then fourthly curves to another downward portion, then fifthly curves to another radially outwards portion.

He said that Figure 4 in the Patent, set out earlier in these reasons, shows the airflow as 31, with the "S" comprising the stream commencing on the outer side of the coil and continuing to (approximately) the point at which the stream leaves the louvre.

164    Dr Wallace was not asked for an opinion on this issue.

165    The difference between Mr Tiller and Mr Hunter is that Mr Hunter considered the airflow path in Integer 2.2 to be in "the form of a streamline or a flow vector", that is, how the air will flow, whereas Mr Tiller considered it to be "the volumetric pathway" or the "physical path" through which the conditioned air must flow. That is to say, Mr Tiller drew a distinction between the airflow, on the one hand, and the structure through which it flows, on the other. He regarded Integer 2.2 to be referring to the latter.

166    As Dometic pointed out, either construction is open on common definitions of the word "path". Depending on context, "path" may mean "the way, course or line along which a person or thing moves, passes or travels" or the track established to facilitate movement.

167    In the present context, I consider Mr Hunter's construction to be appropriate, First, it is indicated by [0041] in the specification:

[0041]    Once the indoor air has been cooled, or conditioned, by passing through the evaporator 25 it enters a further chamber formed by the cover 28 and the base portion 42, the conditioned air flow plenum, which directs the conditioned air along path 31 through an opening 33 that directs the air flow down and back towards the return air inlet port 32 where it is then further directed down and away from the air inlet port 32, ultimately ejecting the conditioned air through a louver 45 of the outlets 40 shaped to direct the outgoing air stream substantially horizontally, adjacent to the interior roof surface 46. The air path 31 is an "S"-shape which provides for a more compact arrangement of the openings 40 relative to the return air inlet port 32, however a more elongated "S"-shaped port may be employed although this would require a larger plenum cover 48 or alternatively a larger sized opening into which the air conditioning unit would reside.

168    As is apparent, [0041] refers to a path of the airflow and of the outgoing stream of air. If the Patent intended that the airflow path should refer to the physical structure, it is to be expected that there would be more detail in [0041] about that structure. Considered overall, [0041] seems to be couched in the language of description of a moving stream of air, rather than describing a structure.

169    Secondly, the path 31 in Figure 4 set out earlier in these reasons, suggests that it is the stream or vector flow which is the subject of the claim.

170    Thirdly, it is not easy to reconcile the embodiment of the invention in Figure 9 with an understanding that the airflow is an S-shaped physical structure. On that understanding, one would need to see a structure creating a path at the top of the "S", keeping in mind that the air becomes conditioned only when it passes through the evaporator coil. That problem does not exist if the path is understood instead as referring to the stream of the air. As Mr Hunter pointed out, it would be "odd" that the embodiment of the invention in the Patent does not match the claim. Mr Tiller sought to avoid this difficulty in his construction by suggesting that the "conditioned" air could be understood as referring to previously or partially conditioned air re-entering the air conditioning unit for further conditioning. This was an implausible suggestion, and it was understandable that, in the final submissions, counsel for Dometic expressly disavowed reliance on it.

171    For these reasons, I prefer Mr Hunter's construction of this integer. I add that, even if one did accept Mr Tiller's construction, it is unlikely that it would avail Dometic. That is because of the difficulty in identifying in the Belaire Unit a physical structure which would provide the horizontal or radial path of the structure at the top of the "S".

The airflow path in the Belaire Unit

172    The issue then is whether the airflow stream in the Belaire Unit is S-shaped. The experts recognised the difficulty, without expensive experimentation, in determining the airflow path in the covered unit.

173    An understanding of the different views of the experts is assisted by the diagrammatic illustration provided by Mr Hunter.

174    Mr Tiller regarded the airflow path as S-shaped because the evaporator fan causes an increase in pressure in the chamber inside the evaporator coil which has the effect of forcing air through the coil into the space between the evaporator coil and the polystyrene cover (C to D), then in a downwards direction until meeting a plastic moulding (D to E), then in a horizontal direction towards the return air inlet shroud (E to F), and then in a downwards and reverse horizontal direction (F to G) before the air exists through the outlet port (G to H).

175    Mr Tiller's opinion that the airflow path in the Belaire Unit was S-shaped rested on his view that the path of the air before it reaches the evaporator coils (C and D) is part of the airflow path of the conditioned air. That part of the path formed the top of the S.

176    Mr Hunter considered that the movement of the air from C to D should be disregarded because the airflow paths to which Integer 2.2 refers is the airflow path of conditioned air, and the air does not become conditioned until it passes through the evaporator coil.

177    As already noted, Mr Tiller sought to meet that challenge by pointing out that, in normal operation, the air conditioning unit will take air from the space being conditioned (eg, the inside of a caravan) by the return air entry port and condition it further. In this sense, the movement of air from C to D may be described as a movement of "conditioned air" because it had been conditioned in a previous cycle. It was understandable that in its closing submissions Dometic did not seek to rely on this reasoning.

178    Mr Tiller did not claim that it was the movement through the walls of the evaporator coil itself which constituted the top of the "S". Given the relative thinness of the walls, that would have been a difficult position to sustain.

179    Once the air in the Belaire Unit exits the evaporator coils, it is almost immediately forced in a downward direction, leaving little scope for a horizontal movement forming the top of the S.

180    For these reasons, I am not satisfied that it has been shown that the Belaire Unit contains Integer 2.2.

The substance of the invention

181    Counsel for Dometic submitted that it was not open to the Respondents to take "the substance" of the invention unless it was clear that an aspect had been left deliberately outside the claim. He referred, in particular, to Minnesota Mining at 286 at which Aickin J (with whom Barwick CJ, Stephen, Mason and Wilson JJ agreed) said:

[I]t remains the law that a defendant may not take the substance of an invention unless the wording of the claims makes it clear that the relevant area has been deliberately left outside the claim.

182    Counsel also referred to the statement of Menzies J in CIG v MWA at 167 that "[p]atent rights are not to be set at nought by … a subterfuge which … added nothing to the equipment and was made merely in an attempt to take full advantage of the invention while avoiding infringement of the plaintiff's letters patent by a modification so small as to be insignificant". See also Radiation Ltd v Galliers & Klaerr Pty Ltd [1938] HCA 17; (1938) 60 CLR 36 at 51-52 (Dixon J).

183    In my opinion, this approach does not assist Dometic presently. On my findings, there are three integers in the Patent which are not found in the Belaire Unit. Further, as noted earlier, the claim in the Patent is confined to centrifugal fans. It would have been very easy for the Patent applicant to have indicated that the invention included any fan at all providing that there was an additional apparatus directing the air in a radial direction. As Gibbs J noted in Olin Corporation v Super Cartridge Co Pty Ltd [1977] HCA 23; (1977) 180 CLR 236 at 246:

[T]he principle that there may be infringement by taking the "pith and marrow" or the substance of an invention does not mean that there will be an infringement where the patentee has by the form of his claim left open that which the alleged infringer has done. And it does not affect the fundamental rule that there will be no infringement unless the alleged infringer has taken all of the essential features or integers of the patentee's claim.

Conclusion on infringement

184    I have found that the Belaire Unit does not contain three of the integers of the patented invention. That being so, Dometic's claim of infringement must fail.

185    However, in case that conclusion be wrong, I will consider briefly Dometic's claim concerning the liability of Houghton. In addition, I will address the claim of the Respondents that the Patent is invalid, that claim being particularised in the cross-claim of Houghton.

The claim against Houghton

186    As noted at the commencement of these reasons, Dometic claimed that Houghton was liable for the infringement of the Patent because it authorised the infringing conduct of Finch it alleged or because it is a joint tortfeasor with Finch.

187    Dometic's claim that Houghton had authorised the alleged infringement was based on s 13(1) of the Act. In Streetworx Pty Ltd v Artcraft Urban Group Pty Ltd [2014] FCA 1366; (2014) 110 IPR 82, Beach J summarised the applicable principles:

(a)    the term "authorise" in s 13 has the same meaning as in s 101 of the Copyright Act 1968 (Cth), at [390];

(b)    generally, to "authorise" is to "sanction, approve or countenance", at [391];

(c)    a person may not be said to "authorise" conduct unless the person has the power at least to prevent that conduct. Although a necessary condition for "authorise", the power to prevent may not be a sufficient condition, at [392];

(d)    authorising infringing conduct does not require an intention to infringe, or even knowledge that the conduct will, or is likely to, infringe. Knowledge of the acts constituting the infringement and their legal characterisation as infringing acts, will be sufficient, at [394]-[395]; and

(e)    the term "authorise" does not mean "give authority or legal power to", at [396].

188    To these may be added the further principles that express or formal permission is not essential and that inactivity or indifference may reach a degree from which authorisation may be inferred: Inverness Medical Switzerland GmbH v MDS Diagnostics Pty Ltd [2010] FCA 108; (2010) 85 IPR 525 at [203].

189    The principles concerning joint tortfeasorship in the present context have been considered in a number of authorities, including Thompson v Australian Capital Television Pty Ltd [1996] HCA 38, (1996) 186 CLR 574 (Thompson); Caterpillar Inc v John Deere Ltd [1999] FCA 1503, (1999) 48 IPR 1; Universal Music Australia Pty Ltd v Cooper [2005] FCA 972, (2005) 150 FCR 1 (Universal Music); Aristocrat Technologies Australia Pty Ltd v Global Gaming Supplies Pty Ltd [2016] FCAFC 22, (2016) 329 ALR 522 (Aristocrat Technologies); and Playgro Pty Ltd v Playgo Art & Craft Manufactory Ltd [2016] FCA 280, (2016) 335 ALR 144.

190    I understand the principles relevant presently to include:

(a)    joint tortfeasorship requires that there be "a concurrence in the act or acts causing damage" and not merely a coincidence of separate acts which by their conjoined effect, cause damage. That is, to be joint tortfeasors, two or more persons must act in concert in committing the tort: Thompson at 580;

(b)    persons act in concert when they act in furtherance of a common design. There must be something in the nature of concerted action or agreed common action: Thompson at 600; Universal Music at [135];

(c)    the agreement to act in concert need not be explicit. Tacit agreement between the parties is sufficient: Universal Music at [135];

(d)    persons who aid, counsel, direct or join in the commission of a tort will be joint tortfeasors: Thompson at 600; and

(e)    it is not necessary that the parties to the common design intend to infringe. It is a common design to do the act, and not to infringe, which is sufficient: Aristocrat Technologies at [142].

191    Dometic submitted that Houghton's authorisation of Finch's conduct and its joint tortfeasorship with Finch in the infringement of the Patent it alleged should be inferred from a number of matters, considered in combination:

(i)    Houghton is a wholly owned subsidiary of Dayrelax, which manufactures the Belaire Unit. Mr Bei, the Managing Director of Dayrelax, has been the sole director and secretary of Houghton at all material times;

(ii)    Dayrelax incorporated Houghton in November 2015 with a view to it being the importer into and distributor in Australia of Houghton-branded products;

(iii)    Houghton is and has at all material times been the registered owner of Australian Registered Trade Mark Nos 1740765 for BELAIRE and 1742574 for HOUGHTON + DEVICE. Dayrelax brands its product range in Australia as Houghton;

(iv)    Houghton's full name and its address in Adelaide are printed on the outside of the carton in which the Belaire Unit is delivered from China. In addition, the words "by Houghton" are printed on the carton;

(v)    Mr Henshall's company, QDOT, is retained by Houghton to provide consultancy services to it, and that work accounts for 80-90% of QDOT's revenue;

(vi)    Mr Henshall has a workshop in Houghton's office in Adelaide. The other person working in that office is Houghton's employed sales manager;

(vii)    Mr Henshall's work includes assisting installers and customers of Houghton units; and

(viii)    Houghton has, since 2016, held certification from the Australian authority in relation to the Houghton unit.

192    Dometic also relied on some other matters which I regard as being of no consequence presently. These included Houghton's refusal to provide an undertaking not to import, sell, offer for sale, supply or offer to supply, the Belaire Unit pending the resolution of the litigation, and that Mr Henshall had travelled to China, at Houghton's expense not long before the Belaire Unit was launched in Australia.

193    Houghton submitted that some of the matters listed above on which Dometic relied should be disregarded. The fact that its name appeared on the cardboard box of the Belaire Unit was a matter of no consequence, it submitted, because, self-evidently, Houghton had not placed its name on the box (it being shipped directly from Dayrelax to Finch). Houghton submitted further that to authorise the use of a trademark is not to authorise the use of a patent.

194    In my opinion, the evidence summarised above does not warrant the conclusion that Houghton has authorised the infringing conduct of Finch in the sense discussed in the authorities. It is also unclear that Houghton has engaged in a common design with Finch in relation to the infringing conduct. However, I am satisfied that Houghton has, at the least, aided and joined in the conduct of Finch said to comprise the infringing conduct. That conclusion is justified having regard to Houghton's relationship with Dayrelax, the use of its trademarks, the use of its name and address on the cartons in which the Belaire Units are delivered, and Houghton's conduct in retaining Mr Henshall to provide services in relation to the sale of the Belaire Unit in Australia. Had I been satisfied that Dometic's claim of infringement was established, I would have found that Houghton was a joint tortfeasor with Finch in relation to that infringement.

Invalidity

195    As indicated at the commencement of these reasons, the Respondents alleged that the Patent is invalid and, by its cross-claim, Houghton sought, on multiple grounds, the revocation of each of the claims in the Patent.

The best method

196    The requirement that a complete specification of a patent describe the invention fully, including the best method known to the applicant of performing the invention, is contained in s 40(2) of the Act:

A complete specification must:

(a)    disclose the invention in a manner which is clear enough and complete enough for the invention to be performed by a person skilled in the relevant art; and

(aa)    disclose the best method known to the applicant of performing the invention; and

…

197    Houghton submitted that the Patent's specification does not comply with the requirement in subpara (aa) because it does not disclose the best method for inducing and maintaining the Coandă effect. Mr Henshall described this as "a physical effect which causes a fluid jet to stay attached to a surface over which it is flowing" and "the tendency of a jet of fluid emerging from an orifice to follow an adjacent flat or curved surface to entrain fluid from the surroundings so that a region of low pressure develops". It is this effect which has the airstream travel substantially horizontally and adjacent to the interior roof surface, as provided for in [0045] of the specification.

198    Mr Henshall explained that, when developing the IBIS 3, he had sought to employ the Coandă effect so as to produce the consequence that the air ejected by the air conditioning unit travelled some distance horizontally in close proximity to the roof of the caravan, thereby enhancing the dissemination of the cooler air. He said that he had experimented with a number of configurations of air outlets, but none had achieved the distance and distribution of air out of, and away from, the outlets which he was seeking. It was in the course of considering alternatives that the Coandă effect had come to his attention as a possible solution. He had theorised that, if he could create a design which would induce and maintain the Coandă effect at the outlets of the IBIS 3, he could have the conditioned air move along the ceiling of a caravan in a focused path. By a process of trial and experimentation, he had found that the Coandă effect could be achieved by having complementary curvature on the upper and lower surfaces of the outlets, and configuring the recess adjacent to the air outlets to induce a substantially flat layer of airflow. These features were incorporated into the IBIS 3, and it thereby achieved the distribution of the air which he sought. This also resulted in the air moving a substantial distance away from the air conditioning unit to the extremities of the vehicle, adding to its efficiency.

199    Houghton's contention that the Patent's specification did not disclose the best method known to Dometic Sweden gave rise to a number of subsidiary issues.

Relevant principles

200    It was common ground that the principles articulated in the authorities concerning the iteration of s 40(2)(aa) in the Act before the amendment of the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth) (the Raising the Bar Act) were applicable in the present case. Those principles and their history were reviewed by the Full Court in Les Laboratoires Servier v Apotex Pty Ltd [2016] FCAFC 27; (2016) 247 FCR 61 (Servier) and in Sandvik Intellectual Property AB v Quarry Mining & Construction Equipment Pty Ltd [2017] FCAFC 138, (2017) 348 ALR 156 (Sandvik), and need not be repeated in detail.

201    In the context of s 40(2)(aa), the "invention" is the embodiment which is described and around which the claims are drawn: Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd [2001] HCA 8; (2001) 207 CLR 1 at [21].

202    The specification in the Patent, including the claims, must be read as a whole: ibid at [16]. In Firebelt Pty Ltd v Brambles Australia Ltd [2000] FCA 1689; (2000) 51 IPR 531, the Full Court said at [53]:

The requirement of s 40(2) of the Act is that the patentee is required to give the best information in his power as to how to carry out the invention. That requirement is ordinarily satisfied by including in the specification a detailed description of one or more preferred embodiments of the invention offered, with reference to drawings of specific mechanisms or structures or examples of specific process conditions or chemical formulations, depending on the field of the invention and the nature of the instruction to be conveyed. It is necessary to have regard to what is the invention claimed in the petty patent.

(Emphasis in the original)

203    The requirement that an applicant disclose the best method known to it of performing the invention safeguards against an applicant holding back information with a view to getting the benefit of the patent monopoly without conferring on the public the full consideration for the grant of that monopoly: Pfizer Overseas Pharmaceuticals v Eli Lilly & Co [2005] FCAFC 224; (2005) 225 ALR 416 at [374]. In Firebelt, the Full Court referred with approval to the following passage from Fletcher Moulton LJ in Vidal Dyes Syndicate Ltd v Levenstein Ltd (1912) 29 RPC 245 at 269:

It is settled law that a patentee must act towards the public uberrima fide, and must give the best information in his power as to how to carry out the invention. He is therefore bound to tell the public all the steps that can advantageously be taken in carrying out the invention. But he is not limited to claiming only the best way of carrying it out.

204    Thus, the disclosure of the best method known to an applicant of performing the invention is part of the quid pro quo for the grant of the patent monopoly.

205    The nature and extent of the disclosure required to satisfy the best method requirement depends on the nature of the invention itself: Servier at [108]. A patentee acting uberrimae fidei must give the most complete information in its power on how best to carry out the invention: Servier at [98]. The inventor is not limited to claiming only the best way to carry out the invention: ibid. What must be disclosed is the best practical method of carrying out the invention as distinct from the best method in theory: Servier at [106]. That requires the patentee to disclose the most effective means of carrying out the invention known to it at the relevant time: ibid.

206    The disclosure should relieve the skilled addressee of having to make choices as to the achievement of the invention's purpose, that is to relieve "the skilled addressee of confronting blind alleys and pitfalls which may not be uncommon in a general sense [and] also, and importantly, [to] tell the skilled addressee the methodology to achieve the form that obtains the result which constitutes the invention": Servier at [134].

207    The best method of carrying out an invention does not have to be claimed or identified as such, but it does have to be described: Sandvik Intellectual Property AB v Quarry Mining & Construction Equipment Pty Ltd [2016] FCA 236, (2016) 118 IPR 421 at [227]; Pfizer at [374]; GlaxoSmithKline Consumer Healthcare Investments (Ireland) (No 2) Limited v Apotex Pty Ltd [2016] FCA 608, (2016) 119 IPR 1 (GlaxoSmithKline) at [758].

208    In Sandvik, at [115], the Full Court summarised the key principles concerning the requirement under s 40(2)(aa) (noting that the summary was given for the purposes of the issues which arose in that appeal):

(a)    The purpose of the requirement in s 40(2)(a) to disclose the best method known to the applicant of performing the invention is to allow the public the full benefit of the invention when the monopoly expires: Servier at [108].

(b)    Although a patentee might not be explicitly required to act in good faith, principles of good faith underlie the best method requirement: Servier at [108].

(c)    The nature and extent of the disclosure required to satisfy the best method requirement will depend on the nature of the invention itself: Firebelt at [52]-[53]; Servier at [108].

(d)    The key to understanding the obligation of the patentee is to understand that the section is directed to the method of performance of the invention. The monopoly is circumscribed by the claims, but the nature of the invention is as described in the whole of the specification: Servier at [124].

(e)    The requirement to describe the best method of performing the invention is ordinarily satisfied by including in the specification a detailed description of one or more preferred embodiments of the invention: Firebelt at [53]; Servier at [104]. See also Blanco White T.A., Patents for Inventions, (5th ed, Stevens & Sons Limited, 1983) at [4-516]; Bodkin C, Patent Law in Australia (2nd ed, Thomson Reuters, 2014) at [5280].

The admissibility of Mr Henshall's evidence concerning the best method

209    Dometic submitted that the Respondents should not be permitted to rely on Mr Henshall's evidence "insofar as it related to best method". This was so, it was said, because Mr Henshall was estopped from giving evidence to the effect that the Patent did not disclose the best method of performing the invention. The submission was first made by way of objection to the admissibility of a portion of Mr Henshall's affidavit of 13 June 2017. However, Dometic sensibly agreed that the Court should determine the objection as part of its final judgment. Hence, this part of Mr Henshall's evidence was received subject to objection.

210    Dometic's objection was based on the fact that Mr Henshall was one of the inventors of the Patent and, as his own evidence suggests, one of the principal inventors.

211    Dometic sought to invoke the principle precluding inventors who have assigned the rights to a patent from derogating from their grant. For this purpose, Houghton referred to three authorities.

212    In Chambers v Crichley (1864) 33 BEAV. 374, Romilly MR said at [376]:

But this is certain, that the Defendant sold and assigned that patent to the Plaintiffs as a valid one, and having done so, he cannot derogate from his own grant. It does not lie his mouth to say that the patent is not good.

213    In Pandrol USA, LP v Airboss Railway Products, Inc (2005) 424 F. 3d 1161, the United States Court of Appeals (Federal Circuit) said:

[9]    "Assignor estoppel is an equitable doctrine that prevents one who has assigned the rights to a patent (or patent application) from later contending that what was assigned is a nullity". …. Thus, an assignor and parties in privity with the assignor are estopped or barred from asserting invalidity defenses. …

[10]    Courts frequently mention four justifications for the doctrine of assignor estoppel: "(1) to prevent unfairness and injustice; (2) to prevent one [from] benefiting from his own wrong; (3) [to adopt the] analogy [of] … estoppel by deed in real estate; and (4) [to adopt the] analogy to a landlord-tenant relationship." …

[11]    [A]ssignor estoppel prevents an assignor from asserting that its own patent, for which it may have received value upon assignment, is invalid and worthless. The district court properly excluded Mr. Young's testimony on this basis.

214    In JLCS Pty Ltd v Squires Loft City Steakhouse Pty Ltd [2008] FCA 867; (2008) 78 IPR 319, Finkelstein J said:

[29]    There is an old principle that a grantor must not derogate from his grant: he must not seek to take away with one hand what he has given with the other. This is "a principle which merely embodies in a legal maxim a rule of common honesty" … Sometimes it is said that the principle rests on an implied promise … but it is in truth an independent rule of law …

215    In my opinion, the principles stated in these cases are inapplicable in the present circumstances. First, Mr Henshall was not an assignor of the patent. He is not acting inconsistently with his previous grant, because there has been no such grant by him. Secondly, Mr Henshall is not the person challenging the validity of the Patent.

216    In these circumstances, there is no basis upon which the Court should hold that Houghton is estopped from leading evidence from Mr Henshall concerning the best method.

Identifying the invention

217    The invention which is the subject of the Patent is an air conditioning system for use in confined areas such as caravans, motor homes and the like with a means of obtaining greater distribution of conditioned air without the need for ducting – see [0014] of the specification set out earlier in these reasons. Further, the system allows better management of the flow of air back into the return air inlet port, by avoiding the air being drawn back into the return air inlet port without having travelled far enough to cool the air space or the occupants – see [0044] of the specification, also set out earlier in these reasons.

218    The system achieves this by the use of a centrifugal fan to draw in air through the return air inlet port, to direct it through the evaporator coils and then down (and away from the return air inlet port) before ejecting it through louvres on outlets which are shaped "to direct the outgoing airstream substantially horizontally, adjacent to the interior roof surface 46", at [0041].

219    The system is described in [0045] of the specification which, again for convenience, I repeat:

[0045]    The system of the present invention, which induces a substantial flat layer of airflow adjacent to and along the interior roof surface, allows the conditioned air to travel further away from the return air inlet port 32 and so the air being drawn into the return air inlet port 32 less likely to be recently conditioned air, which greatly enhances the effect of the conditioned air within the vehicle's cabin by ensuring that the conditioned is being used effectively to take heat out of the vehicle.

The relevant time

220    Earlier in these reasons, I set out some of the history of the Patent. It is convenient to repeat some of it presently. Mr Henshall commenced development of the IBIS 3 model in 2012, while an employee of Old Aircommand. He, together with his father and Mr Karas, continued as the design team for the IBIS 3 after New Aircommand took over the business in July 2013. Mr Henshall's evidence indicates that he either made himself, or was instrumental in making, a number of the design decisions concerning the IBIS 3 model which culminated in the invention which is the subject of the Patent. It also indicates that he was the one who found the means of deploying the Coandă effect to achieve the desired result.

221    Mr Henshall's work in developing the invention was performed during his employment by Old Aircommand and later by New Aircommand. He recorded his work in files, including CAD files. Those files contained various iterations of the design, including a design of the outlet with a hinged flap which was last modified in August 2013. Mr Henshall did not pursue the use of a hinged flap.

222    The design which he did pursue was referred to as "Lorikeet plenum Assy A". It was contained in a CAD file last modified in December 2013. Mr Henshall also prepared flow simulations of the design. These included a video, dated 28 August 2013, which was played during the trial. Mr Henshall said that he prepared the video to demonstrate the Coandă effect to sales people, given the difficulty he had experienced in explaining the concept. In his evidence, he explained how the video showed the operation of the Coandă effect. It was this design which proceeded to final production with only minor (and presently immaterial) changes between August and December 2013.

223    New Aircommand filed the PCT Application with WIPO on 6 March 2015. By that time, it had become an indirect subsidiary of Dometic Sweden. Collison & Co, the Patent Attorneys, filed both the application for the Provisional Patent on 6 March 2014 and the PCT Application with WIPO. I accept that it is likely that Mr Henshall had disclosed the details of the invention, including the best method, to Collison & Co for these purposes.

224    New Aircommand assigned the PCT application to Dometic Sweden in March 2016. Mr Henshall was no longer an employee of New Aircommand at that time or when Dometic Sweden lodged the application for the Patent on 7 November 2016. It was the patent attorneys Shelston IP Pty Ltd, who filed the application on behalf of Dometic Sweden.

225    When Mr Henshall ceased his employment with New Aircommand (with effect from 6 December 2015), he left with it the research and development file he had maintained while undertaking the IBIS 3 project. That file included the results of the testing which he had carried out in the course of developing the IBIS 3.

226    Having regard to this history, Houghton made a number of submissions in the alternative as to the time which is relevant for the purposes of s 40(2)(aa):

(a)    6 March 2015, this being the date on which the Patent's parent application, the PCT Application, was filed with WIPO and the date from which the Patent monopoly runs. Houghton relied on the knowledge of New Aircommand as to the best method as at that date. It submitted that New Aircommand had actual knowledge of the best method as at that date by virtue of it having been the applicant and the employer of Mr Henshall;

(b)    6 March 2015, essentially for the same reasons as in (a) but on this alternative on the basis that Dometic Sweden had actual knowledge of the best method as at that date because it had under its control three sources of knowledge: Mr Henshall himself, Mr Henshall's files and the files of Collison & Co;

(c)    7 November 2016, being the date of filing of the application for the Patent by Dometic Sweden. The Respondents contended that Dometic Sweden had actual knowledge of the best method as at that date, its sources being the files of Mr Henshall and of Collison & Co;

(d)    6 March 2015, on the basis that Dometic Sweden had constructive knowledge of the best method as at that date, relying on the same sources as in (b); and

(e)    7 November 2016, on the basis that Dometic Sweden had constructive knowledge as at that date, relying on the same sources of knowledge as in (c).

227    Dometic submitted that the correct date on which to assess compliance with s 40(2)(aa) is the date on which the complete specification was filed, namely, 7 November 2016.

228    Houghton relied on the decision in Rescare Ltd v Anaesthetic Supplies Pty Ltd (1992) 111 ALR 205. In that case, after tracing the history of the requirement of disclosure of the best method, Gummow J concluded at 223:

Sections 67 and 68 of the 1952 Act provided for a term of a standard patent of 16 years, reckoned from the date of the patent, this being the date on which the complete specification was lodged. The adequacy of the disclosure should be judged by reference to the time from which dated the monopoly granted the applicant in exchange for the disclosure. In the present case that is the international filing date, 23 April 1982. This is the date from which the term of the patent runs.

229    However, the position stated in Rescare was clarified by French and Lindgren JJ in Pfizer. Their Honours noted a distinction between the date at which the best method known to the applicant is to be identified, on the one hand, and the date by which the specification's full description of the invention must include a disclosure of it, on the other, at [375]. Later, at [378], French and Lindgren JJ noted that in Rescare, Gummow J had been concerned with the first of these dates, namely, the date at which the best method known to the applicant for the patent was to be identified. Their Honours went on to confirm that it is the best method known to the applicant at the filing date which must be disclosed in the complete specification, at [375], [379]:

Lest there be any doubt, we would make it clear that s 40(2)(a) requires an applicant for a patent to disclose in the complete specification at the time of filing it the best method of performing it known to the applicant at that time: compare C Van Der Lely NV v Ruston's Engineering Co Ltd [1993] RPC 45 at 56 and Rediffusion Simulation Ltd v Link-Miles Ltd [1993] FSR 369 at 405, which were decided on ss 4(3)(b) and 32(1)(h) of the Patents Act 1949 (UK).

In each of Rediffusion Simulation and Van Der Lely NV, it had been held that the English counterpart of s 40(2)(aa) required disclosure of the best method known to the applicant at the time when the complete specification was filed.

230    There are other matters supporting the conclusion that the relevant date is the date of filing of the application for the patent with the complete specification. First, the Full Court in Servier referred at [114], with apparent approval, to the passage in Pfizer at [379] set out above.

231    Secondly, the statutory scheme supports the conclusion. By s 29(1) of the Act, a person may apply for a patent for an invention by filing in accordance with the regulations a patent request and such other documents as are prescribed. By s 29(4), a patent request in relation to a complete application must be in an approved form and accompanied by "a complete specification". The term "complete specification" is defined in the Dictionary in Sch 1 to the Act to mean "a specification filed in respect of a complete patent application or, if the specification has been amended, the complete specification as amended". Section 40(2) is concerned with the content of a complete specification. The remaining subsections in s 40 also impose obligations with respect to the complete specification. They do so in a manner suggesting that compliance is required at the time of filing of the specification. That scheme suggests naturally that, putting to one side the possibility of subsequent amendment, the disclosure required by s 40(2)(aa) must occur in the complete specification when it is filed.

232    Thirdly, in respect of the requirements of s 40, the High Court in Kimberly-Clark said:

[5]    [G]rounds such as lack of fair-basing, inadequate disclosure, ambiguity and the like are to be determined in this litigation … under the Patents Act … and by reference to the terms of the Patent as granted.

(Emphasis added)

233    Houghton accepted that the date at which the knowledge of an applicant is to be assessed is the filing date but submitted that this was to be understood as the date which provides the "date of the patent", that is, the date from which the exclusive rights commence to run. This would mean in the present case that it is the knowledge of the Patent by the person lodging the PCT application which is to be assessed. In the light of the decisions in Pfizer and in Servier and the matters referred to above, I do not accept Houghton's submission.

234    Accordingly, I proceed on the basis that the relevant date for determining the compliance of Dometic Sweden with s 40(2)(aa) is 7 November 2016.

Was the best method disclosed?

235    I am satisfied that the complete specification filed on 7 November 2016 did not disclose the best method. It did not refer at all to the upper and lower surfaces of the outlets having complementary curvature, or the design of the recess adjacent to the air outlet. There is no reference to the Coandă effect or of the means by which the invention produces it. Paragraph [0041] of the specification set out earlier, referred only to air being injected "through a louver 45 of the outlets 40 shaped to direct the outgoing air stream substantially horizontally, adjacent to the interior roof surface 46" (emphasis added). However, the shape of the outlets is not described. Some impression of their shape can be seen in Figures 4, 7, 8 and 9 attached to the specification but, in my opinion, that does not amount to a description of the best method. There is no description of the desirable radius of the curvature, the desirable angle at which the louvres should be located or of the width of the louvres. Both Mr Henshall and Mr Hunter said that the specification did not disclose these matters, and that evidence was not contested by Dometic. This means that a person seeking to replicate the invention would have to engage in a process of trial and error similar to that undertaken by Mr Henshall in order to achieve an airflow of a flat layer of air adjacent to and along the interior roof surface.

236    I reject Dometic's submission that the matters not disclosed did not involve a method of performing the invention. Plainly they did, as Mr Henshall had found that, without them, he could not obtain the flat airflow which he desired and the consequent advantages of the invention.

The knowledge requirement

237    Houghton submitted that Dometic Sweden should be found to have known of the best method of producing the Coandă effect in the invention as at 7 November 2016. As already seen, it submitted that this was so because Dometic Sweden had either "actual" or "constructive" knowledge. It used the latter term to encompass knowledge which may be imputed to Dometic Sweden.

238    In my view, the terms in which s 40(2)(aa) is expressed indicate that it refers to the actual knowledge of the applicant of the best method of performing the invention or, as Beach J expressed it in GlaxoSmithKline at [758], "the patent applicant's relevant subjective state of mind". Ordinarily, one cannot disclose what one does not know, although there may be circumstances in which a person can be taken to have knowledge of matters to which the person has ready access. The fact that the law, in some circumstances and for some purposes, deems a person to be imputed with knowledge does not alter the capacity in fact of the person to disclose matters of which he or she is unaware.

239    This understanding is supported by the approach in the authorities concerning s 21(1) of the Insurance Contracts Act 1984 (Cth) to which the Respondents referred. That subsection imposes an obligation on insureds to disclose to insurers before entering into an insurance contract every matter "known" to the insured being a matter that:

(a)    the insured knows to be a matter relevant to the decision of the insurer whether to accept the risk and, if so, on what terms; or

(b)    a reasonable person in the circumstances could be expected to know to be a matter so relevant, having regard to factors including, but not limited to:

(i)    the nature and extent of the insurance cover to be provided under the relevant contract of insurance; and

(ii)    the class of persons who would ordinarily be expected to apply for insurance cover of that kind.

240    In Permanent Trustee Australia Ltd v FAI General Insurance Company Ltd [2003] HCA 25; (2003) 214 CLR 514, McHugh, Kirby and Callinan JJ referred to the two types of knowledge contemplated by these subparagraphs as "actual" and "constructive", at [30]. See also Hammer Waste Pty Ltd v ABE Mercantile Mutual Ltd [2002] NSWSC 1006 at [56].

241    Dometic referred to Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2017] FCAFC 50 in which, in relation to a pleading of accessorial liability, the Full Court said that "[a] mental state such as knowledge can only be attributed to a corporation by attributing it to one or more of the corporation's officers or employees", at [60]. Its submission was that it had not been shown that any officer or employee of Dometic Sweden had known of the Coandă effect or how that effect had been deployed in the invention.

242    On my understanding, the principle is wider than that stated in CFMEU v BHP Coal. In Krakowski v Eurolynx Properties Ltd [1995] HCA 68, (1995) 183 CLR 563 at 582-3, the majority (Brennan, Deane, Gaudron and McHugh JJ) approved the following statement by Bright J in Brambles Holdings Ltd v Carey (1976) 15 SASR 270 at 279:

Always, when beliefs or opinions or states of mind are attributed to a company it is necessary to specify some person or persons so closely and relevantly connected with the company that the state of mind of that person or those persons can be treated as being identified with the company so that their state of mind can be treated as being the state of mind of the company. This process is often necessary in cases in which companies are charged with offences such as conspiracy to defraud.

243    That is to say, the attribution of knowledge of a person to a company depends on whether the person is "so closely and relevantly connected" with the company that his or her state of mind can be treated as the state of mind of the company. That such a person need not be an officer or employee of the company is illustrated by the decision in Krakowski v Eurolynx itself, as one of the persons whose knowledge was attributed to Eurolynx in connection with its sale of real estate was a selling agent. The majority said that the knowledge of the selling agent and of an officer of Eurolynx "was the knowledge of Eurolynx, for they were the persons who were responsible for the initial negotiations and who had set the scene in which the representation had been made", at 582.

244    Some of the cases concerning s 21 of the Insurance Contracts Act support the view that, in some circumstances, the knowledge of agent may be the knowledge of a corporate entity. See Hammer Waste at [56]; Commercial Union Assurance Co of Australia Ltd v Beard [1999] NSWCA 42, (1999) 47 NSWLR 735 at [37] (Davies AJA); Deaves v CML Fire and General Insurance Co Ltd [1979] HCA 12, (1979) 143 CLR 24 at 69 (Jacobs J); Ford Excavations Pty Ltd v Do Carmo (1981) 2 NSWLR 253 at 266 (Hutley JA); NIML Ltd v Man Financial Australia Ltd [2006] VSCA 128 at [38] (Nettle JA), but cf Permanent Trustee v FAI at [30].

245    Dometic also sought to support its submission that s 40(2)(aa) refers to the actual knowledge of an applicant by reference to authorities concerning the nature of the "knowing" assistance requirement in accessorial liability: Giorgianni v The Queen [1985] HCA 29, (1985) 156 CLR 473 at 504-7; Pereira v Director of Public Prosecutions (1982) 82 ALR 217 at 219-20, and by reference to Australian Competition and Consumer Commission v Safety Compliance Pty Ltd (in liq) [2015] FCA 211 in which Farrell J said, at [156], that the requirement is for actual, rather than constructive, knowledge. I do not regard these authorities as being particularly helpful in the present context, and need not refer to them further.

246    Given my finding that the relevant date for the purposes of s 40(2)(aa) is 7 November 2016 when Dometic Sweden filed the application for the Patent, the critical question is whether it had knowledge of the best method of performing the invention as at that date.

247    Houghton's pleaded case was that Dometic Sweden had actual knowledge of the best method at that date because it had sources of that knowledge under its control, being the files of Mr Henshall and the files of Collison & Co. This was so, Houghton submitted, because New Aircommand was Dometic Sweden's predecessor in title and because Dometic Sweden is the ultimate holding company of New Aircommand.

248    I will consider those grounds shortly but before doing so, will address two different bases which Houghton advanced in the final submissions. These were that, as at 7 November 2016, Dometic Sweden had the knowledge of New Aircommand because the knowledge of the proprietor of an invention is to be imputed to an assignee and, or in the alternative, because the knowledge of a subsidiary company is to be imputed to its parent.

249    In relation to the first of these bases, Houghton relied on the decision of Beach J in GlaxoSmithKline. In that case, the circumstances were that SmithKline Beecham PLC had applied for the patent on 12 April 2001 and had been granted it on 5 January 2007. SmithKline Beecham PLC assigned the patent to GlaxoSmithKline Dungarvan Ltd on 20 September 2013, and it then assigned the patent to GlaxoSmithKline. Thus, GlaxoSmithKline was the successor in title to the patent. The early development work for the patent had been carried out by another entity, Sterling Winthrop Pty Ltd but, from April 1995, the development work had been carried out by SmithKline Beecham. Beach J proceeded on the basis that the knowledge of Sterling Winthrop would be taken to be part of the knowledge of the patent applicant, SmithKline Beecham, even though the corporate relationship, if any, between Sterling Winthrop and SmithKline Beecham had not been disclosed in the evidence.

250    Houghton submitted that GlaxoSmithKline was a case in which the Court had held it appropriate for the knowledge of the proprietor of an invention to be imputed to the assignee of that invention. I do not regard GlaxoSmithKline as containing a decision to that effect. On my understanding, in the passage on which Houghton relied, Beach J found only that the entity taking over the development of a patent from another could be taken to have the knowledge concerning the development acquired by its predecessor. That appears to have been a finding of fact concerning only the knowledge of the subsequent developer of the invention based on the evidence in GlaxoSmithKline. Beach J did not address the question of whether a later assignee of the patent had acquired the knowledge of the assignor.

251    In relation to the knowledge of Dometic Sweden as the ultimate holding company of New Aircommand, Houghton referred to Australian Securities and Investments Commission v P Dawson Nominees Pty Ltd [2008] FCAFC 123; (2008) 169 FCR 227. The proceedings giving rise to that decision concerned a claim by P Dawson Nominees Pty Ltd (PDN) for losses alleged to have been suffered by reason of the claimed failure of Multiplex Limited to comply with its continuous disclosure obligations under the ASX Listing Rules. PDN sought the production of documents held by ASIC arising from its investigation of the conduct of the Multiplex Group. Multiplex Group contended that public interest immunity precluded ASIC from producing the documents. In determining that issue, the Full Court considered that PDN should be able to obtain the documents it sought directly from Multiplex Group. Its reasoning on that topic included the following passage:

[60]    The public announcements Multiplex made, or failed to make, to the ASX and others over the relevant period will be a matter of public record, the proof of which should present no difficulty to PDN. The construction problems in the United Kingdom, particularly those concerning the Cleveland Bridge subcontract, should be the subject of the usual massive documentation that accompanies major construction projects. The internal reporting and recording documents of Multiplex should be discoverable in the ordinary course of this litigation. In any case, it is alleged that the company constructing Wembley Stadium, Multiplex Constructions (UK) Ltd, was a wholly owned subsidiary of the Multiplex Group, which group included the first respondent to the main proceeding, the ASX listed Multiplex Ltd. It seems inconceivable that Multiplex Ltd would not be fixed with the knowledge of its subsidiary contractor. So the case really boils down to an objective assessment of what in fact was happening at Wembley and whether or not that assessment should have been disclosed by Multiplex, so as to properly inform the market.

(Emphasis added)

252    Houghton submitted that this passage provides authority for the proposition that knowledge held by a subsidiary may be imputed to the parent company.

253    I do not regard the Full Court as enunciating a general principle to that effect. The emphasised sentence in the passage quoted indicates that the Court was expressing a view about the particular circumstances then under consideration, namely, that in those circumstances it was "inconceivable" that Multiplex would not have the knowledge of its subsidiary. The passage in Dawson Nominees should be understood as expressed in the context that the law recognises that subsidiary companies are separate and independent legal entities (Walker v Wimborne [1978] HCA 7, (1976) 137 CLR 1 at 6-7) and that generally the law does not impute to a parent company the knowledge of a subsidiary by reason only of the corporate relationship: BHP Billiton Finance Ltd v Federal Commissioner of Taxation [2009] FCA 276 at [100]; Morwood v Chemdata Pty Ltd (1995) 17 ATPR 41-429 at 40,838; Chandler v Cape PLC [2012] 1 WLR 3111, [2012] 3 All ER 640 at [69].

254    Houghton did not point to any feature of the relationship between New Aircommand and Dometic Sweden other than their corporate relationship to warrant the attribution of New Aircommand's knowledge to Dometic Sweden. Accordingly, both of the alternative bases advanced by Houghton in the final submissions are rejected.

255    I return to Houghton's pleaded case. It was apparent that Houghton used the expression "source of knowledge" as a reference to a medium containing the relevant information. In effect, its claim was that Dometic Sweden was in control of the mean of access to the relevant information and thereby had that knowledge.

256    There are a number of difficulties with Houghton's submission. First, although there may be some circumstance in which a person's control of a means of access to information may be equated with knowledge of the information (see, for example, Hammer Waste at [56]), there is no general principle to that effect. Control of a source of knowledge cannot be equated with knowledge of the information contained in that source. One's possession of an encyclopaedia does not mean that one knows the content of the encyclopaedia. The question is instead a factual one, turning on the nature of the information in question and the nature of the access to it, including the surrounding circumstances.

257    Secondly, Dometic discovered Mr Henshall's files and Houghton was able to tender those parts of it which they considered pertinent. These comprised four pages of CAD drawings, and two pages relating to the video to which reference was made earlier. One of these two pages was a still shot from the video and the other contained data concerning the creation and use of the video. Two pages of the CAD drawings contained designs which Mr Henshall did not persist with in the development of the IBIS 3, and are of limited assistance presently. Two pages showed drawings of the outlets and of the adjacent recess used in the IBIS 3. However, they did not include any accompanying description of the design, let alone an explanation concerning the requirement for the upper and lower surfaces of the outlets to be complementary. The two pages were a limited source of information only and, in my view, insufficient to indicate to the reader that the particular profile of the outlets had any significance in the performance of the air conditioning system. I consider that they would have been inadequate to convey to Dometic Sweden knowledge of the best method of performing the invention.

258    The third difficulty is that files of Collison & Co were not tendered. Dometic claimed privilege with respect to those files – s 200 of the Act: Trade Practices Commission v International Technology Holdings Pty Ltd (1995) 31 IPR 466; Australian Mud Co Pty Ltd v Coretell Pty Ltd [2014] FCA 200, (2014) 106 IPR 49. That being so, the Court cannot make findings as to their content.

259    Fourthly, the Respondents did not identify any individual whose knowledge was, in accordance with the principles set out earlier, to be regarded as the knowledge of Dometic Sweden.

260    I record that Houghton did not contend that the knowledge of Mr Henshall should continue to be attributed to Dometic Sweden after his employment had ceased. Nor did Houghton contend that the knowledge of the patent attorney within Collison & Co who carried out the work on the Patent application on behalf of Dometic Sweden should be attributed to it.

261    For these reasons, I am not satisfied that Houghton has shown that Dometic Sweden knew, as at 7 November 2016, the best method of performing the invention. That being so, this ground of alleged invalidity fails.

Priority date

262    Houghton's claim of invalidity concerning the claimed priority date was as follows:

To the extent that [Dometic] rely on a construction of the term "centrifugal fan" as including an axial fan (including a fan as embodied in the Belaire Unit) (axial fan), claims 1 to 5:

(a)        are not entitled to the claimed priority date of 6 March 2014, and

(b)        are not entitled to a priority date before 7 November 2016.

Particulars

(a)    To the extent that [Dometic] rely on a construction of the integer "centrifugal fan" as including an axial fan, the alleged invention claimed in claims 1 to 5 of the Patent is not clearly disclosed in the documents from which the Patent purports to claim priority, namely PCT/AU2015/000126 Australian Provisional Application No 2014900754.

263    Ultimately, Houghton did not advance any submissions in support of this particular, and it may be taken to have been implicitly abandoned. In any event, as already seen, Dometic did not contend that the integer "centrifugal fan" should be construed as including an axial fan. It contended instead that the term "centrifugal fan" was to be understood as including the surrounding apparatus, with the consequence that the characterisation of the fan as centrifugal or otherwise turned on the direction in which it forced the air to move. I have rejected that contention.

Novelty

264    As noted at the commencement of these reasons, Houghton contends that the Patent was not patentable within the meaning of s 18(1)(b)(i) of the Act because it was not novel. It relies on a disclosure of information said to have occurred by the use of an air conditioning system with the name "Haier" (the Haier unit) by the Yutong Bus Company in China since November 2013.

Want of novelty – principles

265    An invention is a patentable invention if (relevantly), when compared with the art base existing before the priority date of the claim, it is novel and involves an inventive step (s 18(1) of Act). Section 7(1) of the Act governs the manner in which the novelty of an invention is to be assessed. The Court considers the prior art information made "publicly available" in a single document or through doing a single act (subs (1)(a)).

266    Again, there was no issue between the parties as to the principles to be applied concerning this particular of the alleged invalidity. In Meyers Taylor Pty Ltd v Vicarr Industries Ltd [1977] HCA 19; (1977) 137 CLR 228, Aickin J said at 235:

The basic test for anticipation or want of novelty is the same that for infringement and generally one can properly ask oneself whether the alleged anticipation would, if the patent were valid, constitute an infringement.

267    In Bristol-Myers Squibb Co v FH Faulding & Co Ltd [2000] FCA 316; (2000) 97 FCR 524, Black CJ and Lehane J said:

[65]    Similarly, in Canadian General Electric Co Ltd v Fada Radio Ltd [1930] AC 97 at 104; (1930) 47 RPC 69 at 90, the Privy Council approved of the following statement by the trial judge:

"Where the question is solely one of prior publication, it is not enough to prove that an apparatus described in an earlier specification could have been used to produce this or that result. It must also be shown that the specifications contain clear and unmistakable directions so to use it."

[66]    Senior counsel for the respondent relied on the decision of the Court of Appeal in General Tire & Rubber Co v Firestone Tyre and Rubber Co Ltd [1972] RPC 457, particularly two passages in the judgment (at 485):

"If the earlier publication … discloses the same device as the device which the patentee by his claim, so construed, asserts that he has invented, the patentee's claim has been anticipated, but not otherwise. In such circumstances the patentee is not the true and first inventor of the device and his claimed invention is not new …

… If the prior inventor's publication contains a clear description of, or clear instructions to do or make, something that would infringe the patentee's claim if carried out after the grant of the patentee's patent, the patentee's claim will have been shown to lack the necessary novelty, that is to say, it will have been anticipated."

It is important to remember, however, that the Court also said this (at 486):

"If, on the other hand, the prior publication contains a direction which is capable of being carried out in a manner which would infringe the patentee's claim, but would be at least as likely to be carried out in a way which would not do so, the patentee's claim will not have been anticipated, although it may fail on the ground of obviousness. To anticipate the patentee's claim the prior publication must contain clear and unmistakable directions to do what the patentee claims to have invented … . A signpost, however clear, upon the road to the patentee's invention will not suffice. The prior inventor must be clearly shown to have planted his flag at the precise destination before the patentee."

[67]    What all those authorities contemplate, in our view, is that a prior publication, if it is to destroy novelty, must give a direction or make a recommendation or suggestion which will result, if the skilled reader follows it, in the claimed invention. A direction, recommendation or suggestion may often, of course, be implicit in what is described and commonly the only question may be whether the publication describes with sufficient clarity the claimed invention or, in the case of a combination, each integer of it. But in this case medical practitioners hardly needed to be told that it was possible to infuse a particular dose of taxol over three hours, or how to do it. Nor, equally obviously, is that the point of the claims. The claims of the earlier of the petty patents are for a method for administration of taxol to a patient suffering from cancer; the claims of the later one are for a method of treating cancer. In each case the method involves a particular regimen for the infusion of taxol. The context was that great difficulties had been encountered in using taxol, despite its known anti-carcinogenic properties, in the treatment of cancer, because of the drug's side effects. Each of the trials reported in the articles referred to was an investigation directed towards finding a solution of the difficulties: directed, particularly, to ascertaining safe dosage levels. But, though methods falling within the claims of the patents were used in each trial, none of the reports can be said to teach (a word which in this context encompasses direct, recommend and suggest) that which the petty patents claim.

268    In Insta Image Pty Ltd v KD Kanopy Australasia Pty Ltd [2008] FCAFC 139; (2008) 239 FCR 117, the Full Court (Lindgren, Bennett and Logan JJ) summarised the principles developed by the Court concerning whether information was "publicly available" before the priority date:

•    The information must have been made available to at least one member of the public who, in that capacity, was free, in law and equity, to make use of it …

•    It is immaterial whether or not the invention has become known to many people or a few people … As long as it was made available to persons as members of the public, the number of those persons is not relevant. Availability to one or two people as members of the public is sufficient in the absence of any associated obligation of confidentiality …

•    The question is not whether access to an invented product was actually availed of but whether the product was made available to the public without restraint at law or in equity ...

•    In order to be "available", information said to destroy novelty must be of a kind that would disclose to a person skilled in the relevant art all of the essential features or integers of the invention …

•    In order to be "available", information said to destroy novelty must "enable" the notional person skilled in the art at once to perceive, to understand, and to be able practically to apply the discovery, without the need to carry out further experiments in order to arrive at that point …

269    The onus of showing that the information was made "publicly available" is on the person seeking to revoke the patent: NSI Dental Pty Ltd v University of Melbourne [2006] FCA 1216; (2006) 69 IPR 542 at [124]. It has been said that an allegation of prior public use should be strictly proved: Windsurfing International Inc v Petit (1983) 3 IPR 449 at 489; Arrow Pharmaceuticals Ltd v Merck & Co Inc [2004] FCA 129, (2004) 60 IPR 548 at [37].

The Haier unit

270    Houghton contends that the Haier unit includes each of Integers 1.1-1.11, 2.2, 3.2, 4.2 and 5.2.

271    Houghton made this contention with reference to the priority date claimed by Dometic (6 March 2014) and with respect to the date of filing (7 November 2016). Given my findings, it is necessary to consider only the first of these alternatives.

272    I commence with findings about the Haier unit. Houghton led evidence from two witnesses about its origin. They were Mr Zhang Kai and Mr Lan Hang Zhou.

273    Mr Zhang is a Production Manager employed by Zhengzhou Yutong Bus Co Ltd (Yutong Bus Co). From July 2012 until July 2016, he was employed by Yutong Bus Co as a Design Engineer. Mr Zhang gave evidence from China via a videolink and through an interpreter. I regarded his evidence as honest and reliable.

274    On the basis of Mr Zhang's evidence, I am satisfied that, in 2013, Yutong Bus Co manufactured to order a special purpose bus for use for medical purposes. Other evidence indicated that Eyeis Medical Services Co Ltd (Eyeis) was the purchaser. The bus (the Eyeis bus) had two roof mounted air conditioners. The manufacture of the bus was completed in November 2013 and it was then ready for delivery to the purchaser. Mr Zhang said that purchasers of special purpose vehicles manufactured by Yutong Bus Co usually took delivery of the vehicle immediately after completion of the manufacture. He could not say, however, whether that had occurred with the Eyeis bus.

275    Mr Lan is employed by Eyeis. In accordance with the usual practice of Eyeis, Mr Lan was allocated primary responsibility for the Eyeis bus and has been its driver since it was new. He commenced driving the bus in the early part of 2014 ("by no later than May 2014"). Mr Lan said that Eyeis bus is not used every day. He has driven it on average on two days each week. Although the bus has undergone routine maintenance, no parts have been replaced or removed. I am satisfied that that includes the air conditioning units. Mr Lan also said that, before the removal of the Haier unit for the purposes of this litigation, the air conditioning system had not been repaired, modified or opened during his time as a driver of the bus.

276    I considered that Mr Lan's evidence was honest and reliable and accept it.

277    On the basis of the evidence of Mr Zhang and Mr Lan, I am satisfied that the manufacture of the Eyeis bus was completed in November 2013 by the Yutong Bus Co, and that it was ready for delivery to Eyeis at that time. I find that Eyeis had taken delivery of the bus by early 2014 and that it had commenced using it for its intended purpose shortly thereafter. Although Mr Lan said that he had driven the Eyeis bus by at least May 2014, I think it probable that he had driven it before 6 March 2014.

278    At the time Eyeis took delivery of the bus, it had the two air conditioning units, both manufactured by Haier. I am satisfied that it is improbable that, until one of the Haier units was removed from the Eyeis bus for the purposes of this litigation, either of the two units had been opened for inspection.

279    Both Mr Tiller and Mr Hunter (but not Dr Wallace) gave evidence concerning the Haier unit and the Court was shown it during the trial. Unlike the Belaire Unit, the Haier unit could not be operated. Neither Mr Tiller nor Mr Hunter had been able to observe it in operation.

280    Houghton did not attend to formal proof that the Haier unit which was the subject of the experts' evidence had been removed from the Eyeis bus. I consider that this was an oversight, occurring when Houghton took the view that evidence from the witness who was, in part, to provide that proof, was not required for other purposes. It seemed to be accepted by Dometic that the Haier unit inspected by Mr Tiller and Mr Hunter had been removed from the Eyeis bus and I proceed on that basis.

Was there enabling disclosure?

281    Houghton must establish that the placement of the Haier unit on the Eyeis bus would have enabled a skilled addressee to understand the essential integers of the invention: Damorgold Pty Ltd v JAI Products Pty Ltd [2015] FCAFC 31; (2015) 229 FCR 68 at [58] (Bennett J). It is not sufficient for this purpose to show that the unit itself was publically available, or that it had been used in public: Damorgold at [96] (Yates J). As noted at the commencement of this section of the reasons, public availability requires that the persons to whom the relevant disclosure has been made be free to use the information, without being subject to any duty of confidence restricting disclosure and without there being an inference of confidentiality. Houghton bears the onus on these matters.

282    Mr Zhang's evidence, which I accept, indicates that the Yutong Bus Co sells buses to purchasers without any obligations of confidence attaching to the bus or to its components. He said that purchasers are free to deal with their purchased bus in any manner they desire, including taking it, or its components apart. Purchasers have a disincentive against replacing, repairing or dealing with any components of a Yutong bus because doing so may void their entitlement to free servicing of the bus for either two years or the first 150,000 km.

283    It is apparent that nearly all of the essential features of the Haier unit would be apparent (in the sense of available) only by the removal, at the least, of the outer cover of the unit and, possibly, on some further disassembly. On the basis of Mr Lan's evidence, I consider it improbable, and so find, that the outer cover of the Haier units on the Eyeis bus had been removed and that any other disassembly had occurred. As noted however, in the principles summarised at the commencement of this section, the fact that disassembly had not, in fact, occurred does not have the consequence that information concerning the Haier unit had not been made publicly available. Damorgold, on which Dometic relied, is to be distinguished because, in that case, the product had only been shown to prospective customers without them having any opportunity to disassemble it.

284    Given that the Eyeis bus including the Haier unit had been delivered to Eyeis in late 2013, I accept that Houghton has shown that the information concerning the Haier unit had been made publically available by that time. There remains the question, however, of whether a skilled addressee, removing the outer cover and engaging in some disassembly, could thereby have ascertained all the essential integers of the Patent.

What did the Haier unit disclose?

285    Although neither Mr Tiller nor Mr Hunter had been able to observe the Haier unit in operation, each considered that he was able, on the basis of observations of its structure and configuration and by reference to their experience, to express conclusions concerning its features and manner of operation.

286    Mr Tiller and Mr Hunter agreed that the majority of the integers of the Patent's claims were present in the Haier unit. They were in disagreement about the presence of nine integers but, having regard to the commonality of several, these were only Integers 1.10, 1.11, 2.2, 3.2 and 4.2. With the exception of Integer 4.2, all of these integers concerned the airflow path.

Integer 1.10

287    I refer again Integers 1.9 to 1.11 set out earlier in these reasons, at [36].

288    An understanding of the conflicting views of Mr Hunter and Mr Tiller concerning the disputed integers is assisted by the diagrammatic depictions of the Haier unit which they prepared. Mr Hunter's depiction was as follows:

289    Mr Tiller took Mr Hunter's depiction as a starting point, omitted some detail, and added further detail:

290    Mr Tiller added the purple coloured blocks in the depiction to reflect polystyrene inserts present in the Haier unit. He acknowledged in his evidence that the depiction of the larger purple blocks attached to the outer walls of the units is misleading, as those inserts are flush with the whole of the outer wall. That is to say, they do not protrude into the chamber space in the manner indicated in his depiction.

291    Mr Hunter considered that the curved profile of the louvres would (when opened) redirect ("scoop") the air travelling vertically downwards so that it travelled outwardly and away from the return air entry port. Mr Tiller relied principally on two features in expressing the contrary view.

292    The first was the presence of the gap behind the rear edge of the louvre. This was a gap of approximately 1 cm in width and comprised approximately 25% of the space between the inner and outer walls of the chamber in which the louvre sits. Mr Tiller said that downward travelling air could travel through that gap without being directed away from the return air port. The presence of the polystyrene insert above the gap is likely to limit the volume air passing through the gap but at least some air is likely to do so.

293    Secondly, Mr Tiller attached significance to the shallowness of the curved profile of the louvres. He said that they were "nearly flat". The consequence is that when the louvres are fully open or close to fully open, they would not "scoop" the air leaving the unit so as to redirect it. This meant that the direction of the downward path of the airflow would be affected only minimally.

294    I accept Mr Tiller's opinion concerning the shallowness of the curvature of the louvres. The shallowness is apparent in the photographs of the Haier unit provided by Mr Tiller and Mr Hunter and was evident on the Court's inspection of the unit during the experts' evidence. The curvature is less than that suggested in the diagrammatic depictions set out above. I consider Mr Tiller's description of the louvres as being "nearly flat" to be appropriate.

295    I also accept Mr Tiller's opinion about the effect which the shallow curved louvres are likely to have on the direction of the airflow, when they are fully open or close to fully open. The louvres would then be in a position which is close to vertical and, accordingly, unlikely to alter significantly the direction of the airflow. In particular, they would not redirect the airflow path outward and away from the return entry port. When the louvres are closed, or close to the closed position, they would be more horizontally inclined and then likely to alter the airflow path away from the return air inlet port. However, even when the louvres are in that position, some conditioned air could still leave the chamber through the gap at the rear of the louvres. That air would not be directed away from the return air entry port.

296    For these reasons, I am not satisfied that Houghton has shown that the Haier unit disclosed Integer 1.10.

Integer 1.11

297    For essentially the same reasons, I consider that Integer 1.11 is not present in the Haier unit. I consider that the following aspects of Mr Tiller's assessment is appropriate:

[24]    In my view, in operation, it is also likely that air would exit the outlet port in a partially, but not substantially, horizontal plane. That is, some of the air exiting the Haier unit would exit the outlet port in a horizontal plane adjacent the roof, but most of the air would continue to travel vertically downwards away from the outlet port (rather than exiting in a horizontal plane). This is because … the curvature of the louvers of the Haier Unit is minimal. That is, the louvers are largely flat. Further … [with] the louvers at around half their maximum pivot … only around half of the air exiting the louvers would be exposed to the partially curved surface. As such, when air exits through the louvers, it would likely be directed away from the vertical direction (that is, at least partially towards a horizontal direction) through the opening furthest from the centre of the unit whilst air directed through the opening closest to the centre of the unit would exit at an angle that is closer to vertical.

[25]    [T]he more vertical the louver (in a position of minimum pivot) in the Haier unit, the less horizontal the air flow exiting the outlet port. If the louvers are pivoted at their minimum pivot (that is, when the louvers are close to vertical), there would be no redirection of conditioned air after the air has entered the second chamber and been directed downwards, such that the air would exit the outlet port in a vertical plane.

298    I accept those opinions and, for the reasons given in relation to Integer 1.10, do not accept Mr Hunter's opinion on this topic. In particular, I do not accept his opinion that the air would curve through an approximately 90° arch as it traverses the inside face of the louvres and out of the duct. The shallowness of the curved profile of the louvres does not support that conclusion.

Integer 2.2: - "wherein the airflow path is S-shaped"

299    Mr Hunter considered that this integer was present in the Haier unit. With reference to his diagrammatic depiction set out above, Mr Hunter said:

[W]hen the air exiting the evaporator coil in a horizontal direction strikes the outer edge of the EPS air guide it is likely to reverse the horizontal component of its velocity while still travelling downwardly. The air would then strike the concave surface of the open louvers … and exit the unit horizontally as shown. As a result, the air flow path is likely to follow an S-shaped trajectory … which is the same as described in the Patent.

300    Mr Tiller, on the other hand, described the airflow in the Haier unit as following "an upside-down L shape".

301    Mr Hunter's opinion depended to a large extent on his view of the airflow path from time the air meets the louvres in the outlet ports. He considered that the louvres cause the air to travel in a substantially horizontal direction adjacent to the roof of the compartment being cooled and this forms the bottom horizontal part of the "S".

302    For the reasons given above, I do not consider that the louvres have that effect. As indicated, I accept Mr Tiller's opinion as to the effect of the louvres when in a fully open (or close to fully open) position. They could not have the effect of directing the air substantially in a horizontal direction. It is improbable that, even when the louvres are only minimally pivoted, that they would have the effect of redirecting the air in a substantially horizontal direction. The shallowness of the curvature of the louvres makes that unlikely. Further, and in any event, there is the air which leaves the chamber through the gap at the rear of the louvres. That air is not directed in a horizontal direction.

303    For these reasons, I am not satisfied that the Haier unit contains Integer 2.2.

Integer 3.2

304    This integer concerns the configuration of the outlet port. It requires the outlet port to be configured to direct the airflow path in a substantially horizontal plane adjacent to the roof and away from the return air entry port by the at least one louvre.

305    Mr Hunter said that this integer did exist in the Haier unit. However, he relied for this conclusion on the louvres, saying that "the open louvers are the key component in [the Haier unit] which direct air from the outlet port horizontally away from the air entry port". For the reasons given above in relation to Integers 1.10 and 1.11, I do not accept that opinion. Mr Hunter did not point to any other aspects of the configuration of the outlet port to warrant the conclusion that Integer 3.2 is present in the Haier unit.

Integer 4.2

306    Integer 4.2 provides "wherein the at least one louver is pivotable between an open and closed position".

307    It was common ground that the louvres in the Haier unit are pivotable. Mr Hunter said that the louvres could be open, or could be closed to a position in which "they appear to substantially block the air duct".

308    Mr Tiller considered that the term "closed" in this integer would be understood as indicating that the louvres could be closed so as to stop, or at least restrict, the airflow. He considered that the louvres in the Haier unit were not capable of being closed in this sense because "there's just too many gaps around the louvre to think that it's ever going to stop the airflow". Mr Hunter accepted that there were gaps and that the airflow could not be wholly restricted. He said, however, that he understood the claim in the Patent to use the term "closed" to mean "substantially blocks most the air".

309    The difference between the two experts seems to be one of degree. In my opinion, the meaning attributed by Mr Hunter is the more obvious meaning, and I prefer it. On that basis, I accept his opinion that the Haier unit does not contain louvres which are pivotable between an open and "closed" position.

Conclusion concerning the Haier unit

310    For these reasons, I am not satisfied that the Haier unit did disclose all of the integers of the Patent's claim. Houghton's claim that the Patent is invalid on the grounds of lack of novelty accordingly fails.

Disclosure, clarity and support

311    These three grounds of invalidity can be addressed together. As will be seen, it is not necessary to do so in detail.

312    Paragraph [4] of the amended particulars of the invalidity concerning the lack of disclosure commences:

Lack of enablement

[4]    The specification of the Patent does not comply with s 40(2)(a) of the Act in that it does not disclose the invention in a manner which is clear enough and complete enough for the invention to be performed by a person skilled in the relevant art, and each of claims 1 to 5 are therefore liable to be revoked on the ground of s 138(3)(f) of the Act.

Particulars

[a]    If a "centrifugal fan" in claim 1 includes an axial fan, then the specification does not disclose the invention in a manner which is clear enough and complete enough for the invention to be performed by a person skilled in the relevant art, and therefore, does not comply with s 40(2)(a) of the Act …

(Emphasis added)

313    Paragraph [5] of the amended particulars of invalidity, which raises the ground of lack of clarity, commences:

Lack of clarity

[5]    The specification of the Patent does not comply with s 40(3) of the Act in that it does not describe the alleged invention claimed in claims 1 to 5 of the Patent clearly and succinctly, and each of claims 1 to 5 are therefore liable to be revoked on the ground of s 138(3)(f) of the Act.

Particulars

[a]    If "centrifugal fan" includes an axial fan, each of the claims of the Patent are not clear and do not comply with s 40(3) of the Act because the following integers are not clear:

…

(Emphasis added)

314    Paragraph [6] of the amended particulars of invalidity, which raises the ground of lack of support, commences:

Lack of support

[6]    The specification of the Patent does not comply with s 40(3) of the Act in that the alleged invention claimed in claims 1 to 5 of the Patent is not supported by matter disclosed in the specification, and each of claims 1 to 5 are therefore liable to be revoked on the ground of s 138(3)(f) of the Act.

Particulars

[a]    If a "centrifugal fan" in claim 1 includes an axial fan, the following integers are not supported by disclosure in the specification:

…

(Emphasis added)

315    As is apparent, each of the matters upon which Houghton relies for these grounds of alleged invalidity depend on a conditional premise, namely, "if a centrifugal fan includes an axial fan".

316    In my opinion, this conditional premise introduces something of straw man into the proceedings. Neither party contended that the term "centrifugal fan" in the Patent includes an axial fan. Counsel for Dometic expressly disclaimed such an assertion:

And we do not and did not assert that your Honour will find that "centrifugal fan" includes "axial fan". Never a case we put.

317    My summary of the evidence of the experts set out earlier in these reasons when addressing the issue of infringement supports the correctness of that submission. The Court was not asked to construe the term "centrifugal fan" in the meaning of the Patent as including an axial fan. The underlying issue instead was whether account was to be taken of the shroud and other surrounding apparatus influencing the direction of the airflow produced by a fan in determining whether it was centrifugal or axial.

318    Accordingly, the determination by the Court of the matters raised by Houghton by particulars 4, 5 and 6 rests on a matter which in the proceedings is only hypothetical. For that reason alone, it is unnecessary and inappropriate for the Court to determine them.

319    That conclusion makes it unnecessary to consider Dometic's submission that the matters raised by particulars 4, 5 and 6 had been introduced into the proceedings so late that it had not had a reasonable opportunity to prepare evidence in answer to them.

Conclusion on particulars of invalidity

320    For the reasons given above, the claim that the Patent is invalid fails. Houghton's claim for revocation of the claims will be dismissed.

Summary

321    For the reasons set out above, I conclude that both Dometic's claim of infringement and Houghton's cross-claim seeking revocation of the claims should be dismissed. I will hear from the parties as to the orders which are appropriate to give effect to these conclusions, as well as any consequential matters.

Associate:

Dated:    19 October 2018