FEDERAL COURT OF AUSTRALIA

Axent Holdings Pty Ltd t/a Axent Global v Compusign Australia Pty Ltd [2020] FCA 1373

ORDERS

THE COURT ORDERS THAT:

1.     On or before 4:30 pm on 9 October 2020 the respondents/cross-claimants file and serve:

(a)    a proposed minute of orders giving effect to these reasons for judgment; and

(b)    written submissions on costs (not exceeding 7 pages).

2.    On or before 4:30 pm on 23 October 2020 the applicant/cross-respondent file and serve written submissions (not exceeding 10 pages) in response to:

(a)    the proposed minute of orders of the respondents/cross-claimants; and

(b)    their written submissions on costs.

3.    On or before 4:30 pm on 30 October 2020 the respondents/cross-claimants file and serve any submissions in reply to the written submissions of the applicant/cross-respondent (not exceeding 3 pages).

4.    Unless determined otherwise, issues relating to the form of final orders or costs be determined on the papers, without oral hearing.

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

REASONS FOR JUDGMENT

KENNY J:

Introduction

1    This proceeding involves the construction, validity and, if valid, the alleged infringement of a patent titled “Changing Sign System” (Patent). The Patent is Australian Patent No. 2003252764. For the reasons stated hereafter, Axent has not made out its case of infringement by the respondents. The respondents established that the Patent was wholly invalid for lack of inventive step.

2    Axent Holdings Pty Ltd (trading as Axent Global) is the registered proprietor of the Patent. It is the applicant/cross-respondent in these proceedings. Axent is an electrical engineering company specialising in the design, manufacture, supply and support of LED-based visual communication systems, including electronic speed signs on Australian roads. Axent operates from a purpose-built facility in Clayton in metropolitan Melbourne.

3    Compusign Australia Pty Ltd and Compusign Systems Pty Ltd (together referred to as Compusign) also manufacture and install LED-based displays for the traffic control industry in Australia. In the proceedings, the two companies are the first and third respondents, and Compusign Australia is the first cross-claimant. Compusign Systems was incorporated on 15 January 2013 some years after the incorporation of Compusign Australia. Compusign, which has a factory in Victoria, also provides service and maintenance for Compusign products throughout Australia.

4    Hi-Lux Technical Services Pty Ltd, which is the second respondent and the second cross-claimant in the proceedings, provides a range of products to the traffic signal industry and government departments throughout Australia. Hi-Lux has a purpose-built office and manufacturing facility in Thomastown in metropolitan Melbourne.

5    In an originating application and statement of claim filed on 2 December 2016, Axent alleged that Compusign Australia and Hi-Lux had infringed all the claims of the Patent. Compusign Systems was joined as a respondent on 24 May 2017. Axent sought declaratory, injunctive and other relief, including damages or an account of profits.

6    In cross-claims filed on 14 February 2017, Compusign Australia and Hi-Lux alleged that all the claims of the Patent were invalid. Both respondents pleaded that the invention as claimed was not novel or fairly based on the matter described in the specification, and lacked inventive step. They pleaded non-compliance with s 40(3) of the Patents Act 1990 (Cth) in that the claims were not clear and succinct. Hi-Lux also alleged that the Patent was invalid on the ground that the invention as claimed had been secretly used by the patentee in Australia before the priority date of the claims. Only some of these grounds were, however, pursued at the hearing, and Axent denied that the Patent was invalid in any respect.

7    In its Amended Defence, Compusign admitted that: (1) between 22 April 2004 and July 2013, Compusign Australia had imported into Australia components for, and had manufactured, promoted, sold, supplied, repaired and replaced in Australia, variable speed limit signs for traffic control on roadways; (2) from July 2013, Compusign Systems had undertaken the same activities; and (3) it did not have any licence, authority or consent from Axent to supply these products. Compusign also alleged that, if the Patent were valid:

(1)    any infringements before 2 December 2010 were statute-barred by virtue of s 120(4) of the Patents Act;

(2)    by reason of the amendment of the complete specification of the Patent, by operation of s 115(1) of the Patents Act, no pecuniary relief is available for any alleged infringements of the Patent before the amendment (i.e, 22 August 2011);

(3)    Compusign Australia was making or had taken definite steps to make a product as claimed, by reason of its use of the Compusign prototype before the priority date and, accordingly, pursuant to s 119 of the Patents Act, Compusign would not infringe the Patent;

(4)    Compusign was not aware that the Patent existed before about 16 September 2016, when it received a letter of that date from Axent’s solicitors enclosing a copy of the Patent, with the result that any damages for infringement before that date ought to be refused under s 123 of the Patents Act;

(5)    any exploitation of the Patent by Compusign was by, or authorised in writing by, an authority of a State for the services of that State, such that the exploitation was not an infringement of the Patent by reason of s 163 of the Patents Act;

(6)    due to Axent’s non-payment of fees, the Patent ceased on 7 October 2015 and was not restored until 15 September 2016, with the effect that by operation of ss 223(10) and 143(a) of the Patents Act and reg 13.6(1) of the Patents Regulations 1991 (Cth), Axent was unable to bring infringement proceedings in respect of the period when the Patent had ceased.

8    In its Amended Defence, Hi-Lux admitted that: (1) in Australia, it had manufactured, sold and supplied, offered to sell and supply, and kept for those purposes, products that it described as variable speed limit signs (including versions with pre-programmed displays and that its customers programmed); and (2) it had no licence, authority or consent from Axent to supply these products.

9    In its Amended Defence, Hi-Lux relied on ss 119, 120(4), 143(a), 163 and ss 223(10) of the Patents Act, and reg 13.6(1) of the Patents Regulations with respect to Axent’s non-payment of fees. Besides this, its Amended Defence also included the following, at [18(c)-(e)]:

(c)    It says that Axent has pleaded in the alternative that each of claims 1 to 28 is a product claim, and a method claim, and that the proper construction of each claim remains unclear …

(d)    It says further that various integers of claims 1 to 28 are unclear, as detailed in its cross-claim; and

(e)    It sets out in Annexure A to this defence a list of features that it admits that its Hi-Lux VSL Signs have.

10    In a Reply filed on 15 March 2017, Axent specifically denied that Compusign’s exploitation of the Patent was an exploitation by a State or an exploitation authorised in writing by a State for the services of the State, although it admitted that:

… VicRoads or the Roads Corporation of Victoria:-

a)    was at all relevant times until 1 July 2010 a statutory corporation established under the Transport Act 1983 (Vic);

b)    is and has been since 1 July 2010 a statutory corporation established under the Transport Integration Act 1983 (Vic); and

c)    is and has at all relevant times been an authority of a State within the meaning of that phrase in section 163 of the Patents Act[.]

11    On 24 May 2017, the Court ordered that issues of liability be heard and determined separately from and in advance of issues of the quantum of any pecuniary relief. Only issues of liability therefore arose at the hearing, which was held on 23, 24, 26, 27 and 30 April 2018, 1 and 2 May 2018, and on 17 October 2018.

12    In an attempt to identify and resolve the parties’ ongoing difficulties with one another’s conduct of the litigation, the court made orders on 24 May 2017 for the filing of position statements, first on infringement and secondly on invalidity. Axent filed an amended position statement on infringement on 28 July 2017, while Compusign filed a position statement in response on infringement on 18 July 2017. Hi-Lux filed its position statement in response on infringement on 17 July 2017. The parties also exchanged position statements on invalidity.

13    Compusign’s responsive position statement on infringement clarified its position as follows:

4.    From about 22 April 2004 and until about July 2013, [Compusign Australia] imported into Australia components for and manufactured, promoted, sold, supplied, repaired and replaced in whole or in part in Australia variable speed limit signs for traffic control on roadways (the Compusign Products).

5.    From about July 2013, [Compusign Systems] has imported into Australia components for and manufactured, promoted, sold, supplied, repaired and replaced in whole or in part in Australia the Compusign Products.

6.    The Compusign Products were so designed, made and/or supplied from time to time by the Compusign Parties for specific traffic works and projects in accordance with technical specifications of road authorities and other third parties. The products are made specifically for each such project in accordance with the technical requirements of that project.

…

23.    As shown in the table in Annexure 1, the supply of the Compusign Products for the listed road projects occurred before 2 December 2010 (being six years before these proceedings were commenced). … [T]he Applicant asserts that supplies of signs for the Clem 7 project occurred in 2011 and 2012. However, contrary to that assertion, Compusign Australia supplied the Compusign Products in around March 2009 and not in 2011 or 2012.

24.    Accordingly, any alleged infringements of the claims of the Patent by [Compusign Australia] before 2 December 2010 are statute-barred by operation of section 120(4) of the Act.

25.    As Compusign Systems was not incorporated until January 2013 and did not commence selling Compusign Products until about July 2013, this time-bar only applies to alleged infringing exploitation of Compusign Products by Compusign Australia before 2 December 2010.

Annexure 1 set out the various projects for which Compusign had designed and supplied the relevant signage products.

14    The parties filed an agreed statement of issues on infringement (agreed infringement issues) and an agreed statement of issues on invalidity (agreed invalidity issues) on 17 April 2018. The agreed infringement issues listed some but not all the issues that were the subject of argument in submissions and at the hearing.

15    I note here that in the agreed infringement issues document, Axent also identified issues that it said had not previously been raised and that its evidence did not address, but it did not in substance renew this complaint at the hearing. Rather, Axent addressed the issues in dispute between the parties in opening and closing submissions. There was no apparent basis for any contention to the effect that Axent was unfairly prejudiced in doing so.

Overview of the patent

16    The Patent claimed an earliest priority date of 4 October 2002 (priority date), being the date on which a provisional application was filed. The application for the Patent was filed on 6 October 2003. The Patent was granted on 26 June 2008.

17    Save for any issues that may arise under s 138 of the Patents Act, issues of infringement and validity are to be determined under the Patents Act, in the form in which it existed on the date of application. This was prior to, among other Acts, the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth) (Raising the Bar Act). So far as any issue under ss 22A and 138 of the Patents Act is concerned, these provisions apply in their form as at the date on which application is actually made for the revocation order: see AstraZeneca AB v Apotex Pty Ltd [2014] FCAFC 99; 226 FCR 324 at [182]-[184] (AstraZeneca FCAFC); Apotex Pty Ltd v Warner-Lambert Company LLC (No 2) [2016] FCA 1238; 122 IPR 17 at [7].

18    In 2009, after the Patent was granted, Axent applied to amend the specification, including some of the claims of the Patent. The Roads Corporation (a predecessor to VicRoads) unsuccessfully opposed the application. IP Australia granted Axent’s amendment application on 29 June 2011: see Roads Corporation v Axent Holdings Pty Ltd [2011] APO 43.

19    Axent did not pay the renewal fees for the Patent by 6 October 2015, as it was required to do. Nor did Axent pay these fees within the additional period of grace for which the Patents Regulations provide. The fees were treated as paid in September 2016. As will be seen below, the parties contested the duration of the period in which the Patent ceased to be registered for non-payment of fees.

The background to the invention

20    The invention the subject of the Patent is said to relate to a changing sign system for use as a variable speed limit sign on roadways. The specification explains:

Existing speed signs, which are typically static, have to be a black number on a white background with a red outer circle (annulus) using reflective material. (In accordance with Australian Standards, as incorporated herein by reference.) This style of sign is important and particularly the annulus. If speed sign structures were allowed to have varying forms, users of the roadways would not be able to identify the sign as a speed sign. … It is therefore imperative to retain speed signs within this narrow defined structure.

The applicant has recently developed new technology and manufactured and operated variable speed limit signs (VSLS) in Australia, which incorporate a flashing annulus to comply with the Australian Standards and the law in respect of a regulatory traffic device. The VSLS are electronic and typically incorporate the use of white light emitting diodes (LEDs) to form the number, red LEDs to form a plurality of outer rings which together form the annuls [sic] and a static black background.

VSLSs can be used alongside roadways or bridges … where there is a likelihood of a change in road condition, such as high wind or sun glare. Instead of a normal maximum safe speed indication of, say, 100 kilometres per hour a hazard lower maximum speed can apply. The VSLS would be switched to the lower maximum speed when a certain wind speed is detected or the sun happens to be at the most distracting level.

21    The specification emphasised the need for the driver of a vehicle on a roadway to be “not only aware of the lower determined speed limit but also aware that this is a lower limit due to a hazard so that the driver also drives with extra caution in case of the lower determined speed limit not being sufficiently low”. The specification noted possible solutions included “a second light such as a flashing amber hazard light where the flashing is caused by a rotating shield around the light such as often used on towing vehicles or used with blue and red lights on emergency vehicles”. Another possible solution “is to use variable message signs (VMS) to display speed related messages”. As to the first possible solution, the specification stated:

[T]he use of a second light increases the installation wiring and costs. Further there is the high likelihood of a misunderstanding by the driver since there is no shown connection between the two lights. This misunderstanding is increased since the two lights must be sufficiently spaced to be clearly seen separately and will need to be spaced sufficiently to avoid the glare of one blocking the other.

Regarding variable message signs, the specification stated:

This will need a much larger sign so that it can display a plurality of alphanumeric characters and must be programmed. Further it is necessary to scroll through a message and therefore must be repeated. The timing of the scroll might not be sufficient for all roadway users to read at the time they are passing the sign.

Further, the reading of the sign is a distraction to driving in a similar manner to the use of mobile telephones while driving, this distraction could be increasing the number of road accidents rather than the intention of the sign advising of hazards to decrease the number of road accidents. Still further, the costs of variable message signs can be ten times the costs of single image signs.

22    The specification advised that the object of the invention was:

.. to provide an improved variable speed limit sign, which fulfils the requirements of showing a lower maximum speed limit but also advising of the hazard while maintaining the restrictive requirements of being identifiable as a speed limit sign.

23    The specification described embodiments of the invention, which find expression in claims 1, 17 and 20. There is also an independent omnibus claim in claim 28.

24    In respect of the embodiments, the specification explained:

It is to be understood that one of the possible speed limit displays is a “blank” sign, indicating no fixed speed limit other than the maximum in the given jurisdiction.

In one aspect the annulus is formed by three to five outer rings of light emitting structures and the change of conditions is indicated by flashing some of those outer rings while always retaining one ring on to fulfil the criteria of being a speed display sign by always showing a number in a circle on a display panel. Generally the central numeric displaying area is formed by a plurality of white light emitting diodes while the annulus is formed by red light emitting diodes and the display panel forms a black background. Preferably, the display panel is included with a frame.

The criterion to which the control means responds can be an external sensor such as a wind sensor, light sensor or the like. In another form there can be a programmed time and speed limits such as usable at time-defined hazards such as schools or sunset. In a further embodiment, the criterion could be receipt of an external signal from a control centre such as a freeway control centre or the like. The response is then made according to the input criteria and selects one of at least two possible speed limits and varies part of one or more of the display panel, the central numeric displaying area or the annulus.

25    The embodiments were described in the specification by way of two drawings.

Figure 1 was said to be a diagrammatic view of a changing sign system in accordance with an embodiment of the invention in one state of display. Figure 2 was a diagrammatic view of a changing sign system in accordance with the embodiment of Figure 1 in a second state of display.

26    With reference to Figure 1 and Figure 2, the specification continued:

Referring to the drawings there is shown a changing sign system for use as variable speed limit sign (11) on roadways. The sign includes a frame having a front square display panel (21). A central numeric displaying area (25) is formed on the display panel (21) by a plurality of light emitting structures (29) which when activated can display a selected one of at least two possible speed limits.

An annulus (27) is formed by a plurality of outer circles on the display panel (21) around the central numeric displaying area (25) by a plurality of light emitting structures.

A control means (not shown) is included in the changing sign system (11) for selecting the selected one of at least two possible speed limits which is 80 kilometres per hour in Figure 1 and 50 kilometres per hour in Figure 2. This speed limit is changed according to an input criterion and varies in this embodiment the annulus (27).

The annulus (27) is formed by four outer rings of light emitting structures and the change of conditions is indicated by flashing some of those outer rings while always retaining one ring on to fulfil the criteria of being a speed display sign by always showing a number in a circle on a display panel.

The central numeric displaying area (25) is formed by a plurality of white light emitting diodes while the annulus (27) is formed by red light emitting diodes and the display panel (21) forms a black background.

The changing sign system (11) thereby fulfils the criteria of being a speed display sign by always showing a number in a circle on a display panel while being able to indicate a selected one of at least two possible speed limits and while simultaneously indicating a change of speed limits and therefore a change in conditions by the varying of part of one or more of the display panel, the central numeric displaying area or the annulus.

27    The specification further stated that:

The fabrication and supply of all components for the changing sign system of the invention shall be in accordance with all relevant Australian Standards or, in the absence of same, with appropriate international standards. All installation works, where necessary, shall conform to the relevant road authority specifications that are in force from time to time. Examples of such specifications include VicRoads specifications for installations in Victoria, Australia. The following related specifications and standard drawings are defined and incorporated herein by reference:

i.    Manual of uniform traffic control devices, Part 2: Traffic control devices for general use AS 1742.2 and particularly Regulatory Sign R4-1

ii.    Road Signs – Specifications AS 1743

iii.    Degrees of Protection provided by enclosures for electrical equipment (IP code) AS 1939 and particularly IP55

iv.    SAA Wiring Rules AS 3000

v.    Colour Displays Section 2 and section 3.2.2 of AS 2144

vi.    Electromagnetic Compatibility – Generic Emission Standard AS/NZS 4251

vii.    Approval and test specification – Electric cables – Thermoplastic insulated for voltages up to and including 0.6/1kV AS 3147

viii.    Approval and test specification – General requirements for electrical equipment AS 3100

ix.    Retroreflective materials and devices for road traffic control purposes, Part 1: Retroreflective materials AS 1906.1

x.    Road Rules – Victoria and particularly Rule 21

xi.    VicRoads Guidelines “Variable Speed Limits on Freeways (Draft)

xii.    VicRoads Traffic Engineering Manual, Volumes 1 and 2.

28    The specification described the materials from which the sign and support structure were to be constructed, including that the “display face”:

… consists of a red annulus on a black background with white numerals within the annulus. The numerals are centrally located within the red annulus. When displaying other than the normal speed i.e., 100 km/h the sign is capable of flashing part of the inner diameter of the red annulus.

An accompanying table set forth the approximate amount of the annulus capable of flashing by reference to the dimensions of the sign.

29    The specification further stated:

While the inner diameter of the annulus is flashing, the remaining portion of the outer diameter of the annulus shall remain on to retain the regulatory status of the sign. The flash rate of the annulus is fully programmable and preferably is between 50 and 60 cycles per minute. The off time is the same as the on time.

The required display technology is either fibre optic display matrix or light emitting diodes (LEDs). … The sign control system permits total flexibility in the selection of time functions such as blanking times. These times are selectable through the sign controller’s system configuration menu, available both locally and remotely.

30    Finally, apart from the claims, the specification affirmed that:

Although this invention has been described in its preferred forms with a certain degree of particularity, it is understood that the present disclosure of the preferred form has been made only by way of example and numerous changes in the details of construction and combination and arrangement of parts can be resorted to without departing from the spirit and scope of the invention.

It should be understood that the above is a description of the preferred embodiments of the invention but the disclosure of the invention is not limited to those embodiments. Clearly other variations that would be understood by people skilled in the art without any inventiveness are included within the scope of the invention.

The claims

31    As already noted, the three principal independent claims of the Patent are claims 1, 17 and 20. These claims are broadly similar in wording and structure, and describe an electronic variable speed limit sign, which has a plurality of lights forming the central speed limit numerals and the annulus rings around those numerals. The three principal independent claims also specify that there must be a variation of that display when a speed limit other than a “normal speed limit” is being displayed. Claim 2 is dependent on claim 1. As stated already, claim 28 was an independent omnibus claim.

32    Claims 3-16 are dependent on claims dependent on claim 1 or claims within this group, which themselves are dependent on claim 1. Claim 18 is dependent on claim 17. Claim 19 is dependent on claim 18. Claim 21 is dependent on claim 20. Claim 22 is dependent on claim 20 or 21. Claim 23 is dependent on claim 20 or other claims dependent on claim 20. Claims 24, 25 and 26 are dependent on claim 23, which is in turn dependent on claim 20 or on other claims dependent on claim 20. Claim 27 is expressed as a changing sign system according to any one of claims 20 to 26, in which the display system is included with a frame.

33    These twenty-four dependent claims describe a range of variations in the signs. For example:

claims 2, 3, 18, 19, 21 and 23:    specify that the relevant variation of the display is to be a flashing of a portion of the annulus;

claims 4, 6 and 8:                       specify the proportion of the annulus thickness that is flashed;

claims 5, 7 and 24 to 26:            specify the dimensions of the sign face;

claims 9 and 10:                        specify the frequency of the flashing;

claims 11 and 22:                      specify the colours of the display components, and the use of light emitting diodes;

claims 12 and 13:                      specify the use of an external sensor to provide an input to the control means;

claims 14 to 16:                        specify the nature of an external signal; and

claim 27:                                  specifies the inclusion of a frame.

Overview of evidence

Axent’s evidence

34    Axent filed the following affidavits, which, save for successful objections, were admitted in evidence: the three affidavits with annexures of Geoffrey Francis Fontaine affirmed on 18 September 2017, 12 December 2017 and 19 April 2018; the four affidavits of Stephen Bean sworn on 11 October 2017, 1 December 2017, 28 February 2018 and 19 April 2018; the two affidavits of Peter Slavko Cestnik sworn on 18 September 2017 and 13 December 2017; the two affidavits of Michael Zammit sworn on 12 December 2017 and 19 April 2018; the three affidavits of Charles Leonidas sworn on 18 September 2017, 2 February 2018 and 12 April 2018; and the four affidavits of Sachin Prasad affirmed on 16 November 2017, 28 February 2018, 12 April 2018 and 25 April 2018. The respondents chose not to press their objections to Mr Leonidas’s affidavits of 2 February 2018 and 12 April 2018, “as a matter of expediency”. There was limited additional evidence in chief given at the hearing. Mr Fontaine, Mr Bean, Mr Cestnik, Mr Zammit, and Mr Prasad were cross-examined.

35    Issues concerning the admissibility of other evidence are discussed at the end of these reasons. These issues include the admissibility of a 3 November 2017 affidavit of Axent’s solicitor, Mr Leonidas, which Axent sought to tender during the hearing on 1 May 2018. The affidavit had originally been filed in support of an application by Axent for further and better discovery, and its tender at the hearing was subject to the respondents’ objection. As will be seen, Axent ultimately sought to tender annexures to the affidavit as in a list that it prepared. For the most part, these annexures comprised letters passing between the parties’ solicitors. A further issue arose in relation to the admissibility of a 30 April 2018 affidavit sworn by Mr Leonidas, which is also discussed below.

36    I also note that, on 30 April 2018, midway through the hearing, Axent tendered four affidavits of discovery that had been sworn by Mr Sozio, on behalf of Hi-Lux, on 25 September 2017, 11 October 2017, 4 December 2017, and 1 March 2018 respectively, without objection by the respondents. Nothing apparently turns on any of these four affidavits.

37    The following is a necessarily incomplete overview of the evidence in the proceedings, set out by reference to the principal witnesses.

Geoffrey Fontaine

38    Mr Fontaine, who was Axent’s managing director and sole director, claimed to be the inventor of the invention the subject of the Patent. His evidence was that, as at September 2017, he had been running companies supplying electronic signage for over 30 years, although he had no formal qualifications as an engineer. From 1998 until the establishment of Axent in March 2001, his “principal trading entity” was Symon Australia Pty Ltd.

39    Mr Fontaine’s evidence was (and I accept) that Symon Australia designed, engineered and supplied signage for various roads and railways in Victoria, New South Wales and Queensland. Symon Australia also supplied LED lighting for road signage. Mr Fontaine’s evidence was that the business of Symon Australia was transferred to Axent when Axent was established in March 2001. At its Clayton facility, Axent designs and constructs the signage and visual communication systems that it sells, including the variable speed limit signage system that is the subject of the Patent.

40    In his 18 September 2017 affidavit, Mr Fontaine explained, and I accept, that the market for speed sign systems in Australia included supply to government authorities, such as VicRoads, and non-government authorities. In relation to VicRoads, Mr Fontaine deposed, and I accept as consistent with the evidence of other witnesses, that:

… funding is often project based, for example, for the building or upgrading of a road or freeway, or for the installation of school zone signage throughout Victoria. For such projects VicRoads seeks competitive tenders. It also has preferred suppliers.

VicRoads prepares various specifications for the products and systems that it seeks to have supplied to it. …

VicRoads has internal processes for the approval of the products and systems supplied to it as well as for the approval of its suppliers themselves. It is possible for a supplier to obtain a type approval for their product or system, so that they can supply it on an ongoing basis without having to go through an individual approval for every tender or contract. The process of obtaining type approval involves submitting a range of technical documentation and often product testing also. If a type approval is not in place then the relevant documentation is usually a requirement of the tender or contract itself, including certification that the relevant VicRoads technical requirements are met.

41    Mr Fontaine acknowledged in cross-examination that he was aware in 2000-2001 that VicRoads had the type approval system to which he referred in this passage. He accepted that in order to supply a product to VicRoads it was “advantageous” to have a type approval for the product, and that there was generally a need to demonstrate that the product met the relevant VicRoads specifications in order to gain type approval. Mr Fontaine deposed that, in his experience, the supply of variable speed limit sign systems involved: (a) the initial manufacturer or supplier of the signage system; (b) a third party or parties (with whom that manufacturer contracts) supplying the system to an end user; and (c) end users (such as VicRoads) that own or manage the roads on which the signage system operates.

42    Mr Fontaine gave evidence that he had developed a variable speed limit sign using LED lights from around June 2000, and that this had involved the design and construction of a prototype sign from the “ground up”, beginning with the desired features and functions it needed to perform. This was, he said, a time-consuming process given the software and manufacturing conditions of the day. His evidence was that all the various components of the sign had to be located, obtained, made and tested in order to ensure the sign’s effectiveness and visibility. He deposed that:

Designing the layout and software, putting all the physical components together and connecting everything to the central processing unit (CPU) within the sign that controls the system and allows it to display differently depending on signals that the CPU receives was a very time-intensive process. The later part of the prototype’s development focused more intensively on software development, after the physical components had been decided upon.

There was, Mr Fontaine said, a large amount of experimentation around the width of the annulus, as well as around the positioning and brightness of the LEDs.

43    In cross-examination, Mr Fontaine accepted that Axent had supplied signs described as variable speed limit signs for the CityLink project, which went live prior to November 2001. He accepted that these were LED signs that could vary the displayed speed limit, and could be controlled by the front-end computer at the Transurban control centre. This worked in much the same way as a VicRoads control centre. He also accepted that there were communication protocols used to communicate between the signs.

44    Also in cross-examination, Mr Fontaine’s attention was drawn to the following statement in Axent’s November 2001 tender documents for the Western Ring Road project:

Our experience and history with signs has shown us that the advantages of using an aXent product are extremely valuable. For instance, our signs are capable of having synchronised dimming, flashing and display, purely based on our Citylink experience where we provided the same and far exceeded the presentation of the product to the motorist.

(Bold, italics in original)

As a consequence, he accepted that some of the signs supplied by Axent for the earlier CityLink project had a flashing feature, although he went on to express some uncertainty about this after an intervention by Ms Gatford, counsel for Axent. The result was the following exchange between counsel for the respondent, Mr Smith, and Mr Fontaine:

Mr Smith:    Are you saying that you are certain now that the signs that you             supplied for the CityLink project did not have a flashing feature?

Mr Fontaine:    Which signs in particular are you referring to?

Mr Smith:    The variable speed limit signs?

Mr Fontaine:     I can’t recall.

Mr Smith:    Okay. But do you agree that your recollection would have been – of         those matters would have been better in November 2001 when you         approved this document?

Mr Fontaine:    I think that’s fair to say.

45    In later cross-examination, Mr Fontaine denied that Axent had a variable speed limit sign prior to June 2000. Mr Smith asked Mr Fontaine to explain this further:

Mr Fontaine:    We’re software and electronic engineers. It’s – they’re not – they were completely different products, and you’re trying to make a correlation which doesn’t exist.

Mr Smith:    How do you say that the signs you were developing from June 2000 differed precisely from the LED signs that you had supplied to the CityLink project that showed more than one speed?

Mr Fontaine:    Different controller, different printed circuit boards, different LEDs, different software, different firmware. The … advancement is ongoing, even today were just prolific.

Subsequently, in re-examination, Mr Fontaine gave evidence that none of the signs supplied to the CityLink project had a partly flashing annulus.

46    I interpolate here that Mr Fontaine’s uncertainty about whether the variable speed limit signs Axent supplied for the CityLink project had a flashing feature does not detract from his prior acceptance that some of the signs Axent provided for that project had a flashing feature (which included the lane use signs and possibly the variable speed limit signs). Prior to Ms Gatford’s intervention, Mr Fontaine stated that the lane use signs provided for the CityLink project did flash, that he was unsure whether the variable speed limit signs provided for the project flashed, and that he could recall that some of the signs provided did have a flashing feature. Mr Fontaine’s acceptance that some signs had a flashing feature was prompted by the reference to Axent’s November 2001 tender documents, which indicated that Axent had signs with a flashing feature and demonstrated this by its provision of such signs to the CityLink project. After Ms Gatford’s intervention, Mr Fontaine’s statement that he could not recall whether the variable speed limit signs had a flashing feature repeated his previous answer. It did not extend to all the signs Axent provided for the CityLink project, nor to Axent’s capability to provide variable speed limit signs that had a flashing feature; and, as already indicated, Mr Fontaine subsequently accepted that his recollection of whether the variable speed limit signs had a flashing feature would have been better in November 2001 when he approved Axent’s tender documents. I found Mr Fontaine’s answers in this instance to be evasive and that, taken as a whole, it did not seem to me that Mr Fontaine’s evidence was entirely reliable, possibly because his recollection of pertinent matters had dimmed with the passage of time.

47    Mr Fontaine’s evidence was that at the time Axent’s variable speed limit sign in LEDs was being developed he was in contact with Mr Bean, then at VicRoads. Mr Fontaine’s evidence was that Mr Bean visited Axent’s premises on several occasions during this period and told Mr Fontaine that:

VicRoads [was] interested in upgrading their variable speed limit signs to full LED if a suitable product could be developed …

Mr Fontaine agreed in cross-examination that VicRoads had variable speed limit signs before June 2000, although these signs were fibre optic signs. He also agreed that his understanding at the time was that VicRoads required a flashing feature for the variable speed limit sign.

48    In around September 2000, so Mr Fontaine said (and I accept), Mr Bean representing VicRoads attended Axent’s premises, with another VicRoads employee (who he believed was Mr Priest) to view the prototype for Axent’s variable speed limit sign. Mr Fontaine said that Axent’s production manager, Mr Cestnik, was also at the meeting. Mr Fontaine’s evidence was that at the meeting they discussed the sign, the need for the sign to warn drivers that the speed was changing, and that there were various existing signage products with warning devices. Mr Fontaine’s evidence was (and again I accept) that he told Mr Bean (who corroborated his evidence) and Mr Priest that Axent’s signage could be programmed to warn the driver of the speed zone change by flashing some but not all of the rings of the annulus around the speed limit number. Mr Fontaine’s evidence was that Mr Cestnik then demonstrated the modified partly flashing annulus feature and said that in future this could be controlled through software. Mr Fontaine indicated that this modification did not take a long time when he said:

We had from – switches that were hardwired to the sign, and we could demonstrate a myriad of different display patterns at that time and see which one looked the best and was most effective.

I interpolate here that Mr Cestnik’s evidence was also broadly consistent with the evidence of Mr Fontaine at this point, although he could not recall whether the partly flashing annulus was demonstrated on that day or subsequently. It does not seem to me that anything turns on this difference.

49    According to Mr Fontaine, Mr Bean and his colleague said that they liked Axent’s solution, but that VicRoads would need to be satisfied that a speed sign with that proposed feature complied with the Road Rules, and that they wanted to be sure by checking with their legal team that the sign would be regulatory (i.e., that the displayed speed limit was enforceable). Mr Bean later contacted Mr Fontaine to say that VicRoads’ lawyers had advised that Axent’s proposed variable speed limit sign would be regulatory. Mr Fontaine’s evidence at this point is corroborated by Mr Bean. In cross-examination, in the context of the September 2000 meeting, Mr Fontaine was asked whether he was “seeking to have that product approved as an option for [the Western Ring Road] project”. Mr Fontaine answered “I had a desire to have it included, but I didn’t press the point”.

50    In March 2001 Mr Bean told Mr Fontaine that VicRoads would shortly be advertising for expressions of interest to tender for signage for the Western Ring Road in The Age newspaper. Mr Fontaine saw the advertisement and subsequently spoke with a VicRoads representative about the tender. In early April 2001, shortly after VicRoads had called for expressions of interest for the Western Ring Road Project, Mr Fontaine met with Mr Bean, showing him the prototype variable speed limit sign and demonstrating the brightness of the white LEDs in full sunlight. Around the same time, Mr Fontaine delivered a prototype variable speed limit sign to Mr Bean at the VicRoads office, although the prototypes at the time were not connected or fully operational and still had switches on the side. At a subsequent stage in the development of the sign, these switches were reprogrammed to allow part of the annulus to flash. Mr Fontaine said that he recalled that Axent had tested various flash rates on the prototypes to see what was the most effective flash rate prior to this reprogramming.

51    Mr Fontaine deposed that sometime shortly after his meeting with Mr Bean in March 2001, a VicRoads representative told him that Axent would need to comply with a VicRoads specification for the supply and installation of electronic variable speed restriction signs; that further testing would need to be done on Axent’s variable speed limit sign; and that the sign’s legend had to comply with the Australian Standard and the Road Rules in place at that time. About the same time Mr Fontaine was provided with the “VicRoads Specification for the supply and installation of electronic variable speed restriction signs TCS-037-2-2001” dated April 2001 (April 2001 specification). This specification did not refer to any portion of the annulus flashing or to any need to warn of a change in speed.

52    In September 2001, Mr Fontaine met with Mr Bean and another VicRoads representative to view a demonstration of Axent’s proposed variable speed limit sign with a partly flashing annulus. Mr Fontaine stated that he subsequently received the tender documents for Contract 5273 from VicRoads for a variable speed limit system on the Western Ring Road (the VicRoads Contract), which included the VicRoads specification No: TCS 037-5-2001. This specification, which I refer to hereafter as the September 2001 specification, contained a requirement, in section 4.6, that part of the inner diameter of the red annulus should be capable of flashing on and off. Mr Fontaine deposed that he had never before seen this requirement in a VicRoads specification and that he “had not been asked by VicRoads if they could include [his] invention in the 2001 specification before [he] received the tender documents”. I accept Mr Fontaine’s evidence in this regard, since it is consistent with Mr Bean’s evidence and the two relevant specifications.

53    In relation to the inclusion of the flashing red annulus requirement in the September 2001 specification, Mr Smith, for the respondents, and Mr Fontaine had the following exchange:

Mr Smith:    And you knew at that time that there would be other tendering parties receiving the same specification?

Mr Fontaine:     I believe two others were shortlisted.

Mr Smith:    … And you made no complaint at that time to VicRoads about the specification of a partially flashing annulus in that specification?

Mr Fontaine:    No.

…

Mr Smith:    You’ve never asked VicRoads to remove that requirement from their specification?

Mr Fontaine:     No.

…

Mr Smith:    You knew that a document such as the one you just saw was not specific to a project?

Mr Fontaine:     Correct.

Mr Smith:    And it could form the basis of other companies’ applications for type approval, for example?

Mr Fontaine:    Possibly.

Mr Smith:    And at that time you didn’t consider, did you, that the partially flashing annulus was confidential to Axent?

Mr Fontaine:    I did.

Mr Smith:    In fact, you were happy that VicRoads had included it in their specification for the Western Ring Road project, weren’t you?

Mr Fontaine:     I wasn’t unhappy.

54    In his 12 December 2017 affidavit, Mr Fontaine deposed that Axent and VicRoads entered into the VicRoads Contract on 21 February 2002. The contract was relevantly for Axent to supply a complete traffic management system for the Western Ring Road, including the supply to VicRoads of its variable speed limit signs, and the development and supply of a system linking the signage and other hardware such as speed cameras to the VicRoads traffic centre in metropolitan Melbourne. Mr Fontaine further deposed that the sign had been developed prior to Axent entering into the VicRoads Contract, and was used in public for the first time at the launch of the Western Ring Road Project by VicRoads, which “went live” in December 2002. This latter evidence was contested, and I return to it hereafter.

55    Mr Fontaine’s evidence was that by the time he came to supply Axent’s variable speed limit sign, Axent had undertaken substantial work to optimise the performance of the sign with a partially flashing annulus. This work was undertaken to address “the size, the neatness, clarity, power consumption”, and to optimise the circuit board. He affirmed that it was correct to say:

[A]lthough the outward appearance of the sign did not change the Axent VSLS became much more complex in its internal workings once the partly flashing annulus was included into it. The creation of a variable flashing annulus system required numerous hardware, firmware and control software changes that took significant time, resources and cost to implement, test and fine tune by experienced and qualified electrical engineers. It required complex circuit design and changes to the SY98012B PCB, dedicated software code in C and C++ and a full understanding of complex electronic componentry including driver chips, microprocessors, power switching, connectors and LED’s. The design work was intricate at that time in regard to uniformity, synchronisation, brightness control, variable flash rates on different rings, protocol changes, and much more difficult that [sic] if the equivalent task were undertaken today.

56    Mr Fontaine said in cross-examination that:

… the SY98012B, which I tendered a photo [sic] in my affidavit was … the size of two cigarette packets whereas a few years earlier, it would have been the size of two shoe boxes.

His evidence was that this not only made the sign more compact, it also reduced the manufacturing cost. He explained that the hardware improvements were improvements principally to the electronic printed circuit board (PCB) design, but included power supplies, cables, and connectors. It was, Mr Fontaine said:

…a whole host of things that go into a new product and new PCB design and microprocessors. They were evolving rapidly during that time.

….

LEDs were being refined and …. our job was to keep testing and trialling the product until we found a product that we believe was suitable for outdoor use.

Mr Fontaine’s evidence was that he believed these sorts of things (although not the LEDs selected) “came with the creation of the product and the software” and that the improvements that Axent developed such as the PCB design, and the software design, were confidential to Axent at the time.

57    Mr Fontaine deposed that he told VicRoads representatives about Axent’s patent application in 2003. His evidence in this regard was corroborated by an email that he sent to Mr Dean Zabrieszach of VicRoads in September 2003. Mr Fontaine said that some time later Mr Zabrieszach and others from VicRoads attended Axent’s manufacturing facility where Axent’s variable speed limit sign was shown to them and, according to Mr Fontaine, “we spoke about the patent”. When giving evidence about this matter in chief, Mr Fontaine added, self-servingly it seemed to me, “I didn’t think that there wasn’t anybody who didn’t know about the patent, to be honest, thereafter”. Mr Fontaine went on to say:

… I don’t think there would be one person within VicRoads over a period of a decade that didn’t know I had a patent either by way of telephone call, email, letter, tender submission, document, manual and general industry knowledge.

58    Mr Fontaine’s evidence was that Axent had successfully tendered for a number of other VicRoads contracts after the Western Ring Road Project, including Contract 5822 (for the supply of the signage in school zones throughout Victoria). He also said that Axent supplied its variable speed limit sign to other parties from 2003 onwards, although sales decreased from 2008 coincident with other suppliers releasing competing variable speed limit signs.

59    Mr Fontaine’s evidence was that he did not ask Mr Bean or anyone from VicRoads to sign a written confidentiality agreement before he showed the prototype to Mr Bean or anyone else at VicRoads. In his 18 September 2017 affidavit, he said that he had previously told Mr Bean that anything that he saw or was provided with in the way of an Axent sample or product was for VicRoads’ purposes only and was not to be talked about or shown outside VicRoads, including to any suppliers. In cross-examination he agreed, however, that he could not recall the date or topic of any such conversation. Instead Mr Fontaine said:

From the minute he [Mr Bean] walked in the front door, I didn’t want him to discuss any product or any VicRoads employee discuss any of my products to any other people in the industry.

60    In evidence in chief Mr Fontaine reiterated that during the 30-plus years he had worked with VicRoads “many documents, contracts, tenders were all provided on a confidentiality basis clearly marked on drawings”. He added that it was:

[c]learly understood mutually that when they come into my factory that we respect each other’s premises and effectively it was to some extent an unwritten understanding, over and above what was already in situ, that there was confidentiality every time they visited our premises or every time we emailed them drawings and the like.

61    In his 12 December 2017 affidavit, Mr Fontaine took issue with Mr Sozio’s evidence (outlined below) including with Mr Sozio’s evidence about the manufacture and supply of a variable speed limit sign with a partly flashing annulus before October 2002 and about Hi-Lux’s supply of a school zone sign on the Warburton Highway at Yarra Junction in 2002-2003. In the same affidavit, Mr Fontaine agreed with Mr Zammit about what Mr Sozio had referred to as “a fibre optic variable speed sign made by Hi-Lux” containing control boards marked as manufactured in 1998 recovered from Hi-Lux’s warehouse, although in cross-examination Mr Fontaine agreed that fibre optic speed limit signs had not been supplied in Victoria since well before 2014.

62    Also in his 12 December 2017 affidavit, Mr Fontaine contested some of the evidence of Mr Priest (discussed below) including Mr Priest’s account of the steps taken to commission the signs for the Western Ring Road Project. Mr Fontaine’s evidence was that Axent checked the functionality of each sign in Axent’s factory before the signs were installed, not after they were in place on the Western Ring Road. His evidence was that Axent had designed a program that simulated all of the signs as they were in the field, and that software was used to test the overall system. In his 19 April 2018 affidavit, Mr Fontaine deposed that he went to the opening of the Western Ring Road Project in December 2002. He referred to an email dated 20 November 2002, which was sent to him by Mr Petridis at VicRoads (who, according to the evidence was primarily responsible on VicRoads’ side for the Project) indicating that the system would go live the next day, 21 November 2002, although Mr Fontaine could not recall whether the system went live on 21 November 2002 or a little later.

63    In his 12 December 2017 affidavit. Mr Fontaine also contested parts of Mr Jan’s evidence, including that variable speed limits signs using LEDs were developed during the 1990s and that if the sign dimensions were minimised, there would be sufficient space in each corner for yellow flashing lights. Mr Fontaine also disagreed with Mr Jan and Mr Sozio concerning trials at the VicRoads Mulgrave facility, deposing that he had often visited the Mulgrave premises, with a clear view of the gantry, and that at no time did he see a peg board, a trial fibre optic speed sign, with or without multiple and variable flashing annuluses, or a 90 km/h sign.

Stephen Bean

64    Mr Bean had worked for VicRoads and its predecessors from 1981 until September 2017, most recently as the Manager of VicRoads Traffic and Incident Management. From the mid-1990s, Mr Bean was part of the VicRoads Intelligent Transport Systems (ITS) Branch in charge of traffic signal controls, CCTV, electronic signage and other intelligent transport systems.

65    At the time he joined VicRoads, Mr Jan (who also gave evidence in the proceeding: see below) was the leader of ITS, a role which Mr Bean took over when Mr Jan left. While at ITS, Mr Bean also worked closely with suppliers, including Mr Fontaine and Mr Sozio (see below), although he did not recall working with anyone from Compusign. Mr Bean deposed that VicRoads had a modest research and development budget, and relied on its suppliers to develop and source innovative products for it. His evidence was that the ITS group was also relatively small within VicRoads, with the bulk of funding going to road and bridge construction.

66    Mr Bean gave evidence that, in his experience, although VicRoads occasionally held meetings with multiple suppliers if VicRoads wanted them all to be aware of an issue, VicRoads and its suppliers did not come together to discuss and share ideas for new products. Mr Bean’s evidence was that suppliers would approach him or his staff separately on a confidential basis, seeking information about whether VicRoads was interested in any of their proposed new initiatives. Although Mr Bean, as the ITS manager, did not sign confidentiality agreements with suppliers, he worked closely with them, on the basis that whatever they told him about their new products or innovations would not be disclosed by VicRoads to a third party, particularly not to other suppliers.

67    Mr Bean deposed that at the time he joined ITS in the mid-1990s electronic signage for speed signs was principally fibre optic signage and relatively rare. His evidence was that Hi-Lux supplied fibre optic signage to VicRoads at that time. Mr Bean’s evidence was that among the first of such signage installed by VicRoads was at a road crossing at a primary school in Yarra Glen “about 1999”. His evidence was that the Yarra Glen sign was memorable as it was the first time VicRoads had put a variable speed limit sign in front of a school. According to Mr Bean, the signs were manually operated by a crossing supervisor to display a 40 km/h speed limit. When the supervisor was not on duty, the signs were switched off or changed to display a 60 km/h speed limit. Mr Bean said that the red annulus on these signs did not flash, although they may have had a flashing yellow light. In cross-examination, he accepted that there may have been other examples of electric variable speed limit signs from this time, such “the flap-style sign”, and a prism-style sign on the West Gate Bridge, both of which were electronically controlled although they had physical sign plates.

68    In cross-examination, Mr Bean readily agreed that he was wrong when he had deposed in his 11 October 2017 affidavit that the Western Ring Road Project was the first time that variable speed limit LED signage was used on a Melbourne freeway. He agreed that such signage had been used in the Burnley Tunnel for the CityLink Project. He also agreed that a significant factor, so far as the Western Ring Road Project was concerned, was the fact that it was the first time that road speeds were programmed to change based on real time traffic flow data.

69    Mr Bean deposed that in the mid-1990s he met Mr Fontaine, who at that time was involved in supplying variable message signs and trip information systems to VicRoads (as indeed was its competitor, Hi-Lux). Mr Bean’s evidence was that Mr Fontaine was “a market leader in introducing LED signage”, which he said had considerable benefits so far as VicRoads was concerned, observing that VicRoads mandated the use of LEDs for all new traffic light installations from 1999 and began replacing existing traffic signals from that time.

70    Mr Bean deposed that, sometime in 2000, he spoke with Mr Fontaine about Mr Fontaine developing a LED variable speed limit sign. He accepted that at the time there was a recognised need for some conspicuity feature if the speed limit was to drop. His evidence was that the then common practice in road signage was to include a separate amber warning beacon as a warning device alerting a driver to a speed or condition change or both, and referred in this connection to the NSW Road Traffic Authority, whose practice was to include two flashing amber warning lights at the top of the display panel. Also at this time, Mr Bean was aware of the variable speed limit signs used in the tunnel as part of the CityLink project and he was aware that the Road Rules “had relatively recently been changed to allow for those … variable electronic speed limit signs”.

71    Throughout 2000 and 2001, Mr Bean visited Mr Fontaine’s factory perhaps once a month or two months, often with Mr Priest. Mr Bean deposed (and I accept) that, at two such meetings, he was shown a sample of the LED variable speed limit signs under development. This sign did not use flashing amber warning lights, but rather had a red annulus with numbers in white in the centre. Mr Bean’s evidence was that he and Mr Fontaine discussed how to avoid putting separate amber flashing lights on the sign and, although he could not recall the exact date, at one meeting, someone from Mr Fontaine’s side (he could not recall precisely who) put forward the solution of flashing part of the annulus. Mr Bean could not recall whether this was demonstrated by Mr Cestnik or Mr Fontaine. Mr Bean said that:

It had not occurred to me to do this. I recall being impressed by it. To the best of my knowledge at the time no one had done this before. I thought that it was a good solution and said so. To me at the time it seemed a simple and clean solution, but not an obvious one.

Mr Bean added in cross-examination:

… they actually showed me that they could flash the full annulus on, off, or they could flash one ring or two rings or three, so it appeared to be just programmable. They could do what they like … and that was new.

72    Mr Bean’s evidence was (and I accept) that he told Mr Fontaine he would need to check that such a sign complied with the Road Rules. He said that he was subsequently advised that such a device would be regulatory and that he communicated this to Mr Fontaine.

73    Mr Bean accepted that Mr Fontaine had emailed him on 21 June 2000 about the requirements for a variable speed limit sign with LEDs and that he had responded by email the same day setting out those requirements. Unsurprisingly, given the passage of time he had no recollection of the email exchange. Mr Bean stated that the draft specification for the supply of changeable fibre optic speed restriction signs that was an attachment to his email would have been used for the Yarra Glen Primary School. When taken to the reference in clause 6.3 of that specification to a variable flasher unit, Mr Bean said that this unit would have been used with other equipment to cause the display to flash in order to attract motorists’ attention.

74    Mr Bean was responsible for managing the tender process for the Western Ring Road Project. He accepted in cross-examination that he started to think about using the partially flashing annulus as a possible conspicuity feature for the signs for the Western Ring Road “closer to seeking expressions of interest”. He agreed that Mr Fontaine was not unhappy about having Axent’s variable speed limit sign included in the September 2001 specification and that Axent’s product continued to develop “through until April 2001 and through until September 2001 … with at least some form of encouragement from [him]”.

75    Mr Bean was clear that Mr Fontaine had proposed the flashing annulus solution to VicRoads before this feature was made a requirement in the September 2001 specification for the signage on the Western Ring Road Project. Mr Bean added that:

I do not recall specifically ask[ing] Geoff for permission to include the requirement of a partly flashing annulus in the VicRoads specification. As best as I recall I simply asked Stephen Purtill to include it without asking anyone else.

Mr Bean said in cross-examination that he “could see no reason why they wouldn’t” be happy with the inclusion of the product in the specification for use on the Western Ring Road Project and that he believed he acted reasonably in including it. He added:

Bear in mind, of course, that I assume that if one company can build a sign that can do this, then others could come along and say, “I can do that too.”

Mr Bean said that, after receiving expressions of interest for the Western Ring Road Project, VicRoads invited the shortlisted companies to tender and, in the course of so doing, sent them a bundle of documents including the September 2001 specification. Axent was awarded the tender based on its ability to meet the tender requirements and on price.

76    Mr Bean accepted in cross-examination that he viewed the prototype of Axent’s variable speed limit sign sometime around September 2001, to see whether it was going to work well for the specification for the project. Mr Bean conceded in cross-examination that shortly before the tender was to be issued he would have told Mr Fontaine that VicRoads was going to use the partially flashing annulus option for the specification for the project, although he could not recall precisely when he said this.

77    Mr Bean’s evidence was clear that the specification was not confined to the Western Ring Road Project but was a general specification for other applications requiring a variable speed limit sign. In cross-examination, Mr Bean agreed that any supplier would be required to incorporate the partly flashing annulus feature in future products where the specification applied.

78    Mr Bean’s evidence was that his involvement in the Western Ring Road Project substantially diminished after the tender was awarded and that he had limited involvement in the onsite testing of the signage prior to the “go live date” in late 2002. He deposed that:

The signage was installed before then, but, in line with standard practice, was covered and not visible to oncoming traffic.

… Throughout my time at VicRoads, however, I observed that VicRoads was always careful to take whatever steps are possible during acceptance testing of any newly installed signals or signage to ensure that road users do not see the new signs or become confused as to what signals or signage to obey and also to avoid any safety issues. For this reason new signage or traffic signals are, wherever possible, and particularly if in conflict with the existing signage or signals, turned away from being visible by drivers when being tested.

Mr Bean and Mr Priest agreed that Mr Petridis (who, so Mr Bean said, was still working for VicRoads in April 2018) was primarily responsible for the implementation of the Western Ring Road Project and would be the person within VicRoads most likely to know “exactly what happened during the commissioning”.

79    Mr Bean was unsure when he became aware of the Patent and said that it was well after the Western Ring Road Project had been completed.

80    Mr Bean deposed that, after the Western Ring Road Project, demand for the partly flashing annulus signage “became high on other freeways and also in strip shopping centres and school zones”. Mr Bean added that in 2003 VicRoads put out a tender for a state-wide school zone variable speed limits signage project (school zones project), for which Axent and Hi-Lux submitted tenders. By that time, Mr Bean said that Axent had demonstrated compliance with the VicRoads specification; it had a type approval for its variable speed limit LED sign; and it was successful in its tender. By the same time, Hi-Lux had not demonstrated compliance with the specification and did not have a type approval.

81    In cross-examination, Mr Bean clarified his affidavit evidence regarding a Hi-Lux variable speed limit product. He accepted that Mr Sozio, for Hi-Lux, submitted a variable speed limit sign to VicRoads on 22 October 2003 for VicRoads to look at, but he said at that point Mr Sozio did not have type approval for the product. Mr Bean also deposed that he had advised Hi-Lux that VicRoads would assess the fibre optic signage previously installed in Yarra Glen as part of the process. He deposed that although it was by then too late for Hi-Lux signage to be considered for the school zones project, type approval would mean that that signage could be considered for future tenders. At the time, type approval decisions were made by a committee within VicRoads, which would consider any ITS recommendation. Mr Bean explained that once type approval had been given, it was VicRoads’ practice to require all signage of that type supplied to it by that supplier to comply with the type approval. Mr Bean also said in cross-examination that type approval was generally but not necessarily referable to a VicRoads specification.

82    Mr Bean disputed the accuracy of Mr Sozio’s recollection that VicRoads required signs to have a partly flashing functionality in 1991. Mr Bean said that he had never seen a Hi-Lux variable speed limit sign with a partly flashing annulus in 2003 or earlier. Mr Bean deposed that VicRoads did not require the flashing of part of a speed sign until the September 2001 specification and that, until that time, separate amber flashing lights or other signage were used to warn of a speed change.

83    Regarding Mr Sozio’s evidence about Bastow Place, Mulgrave, Mr Bean said that at different times there was a variety of signage around VicRoads’ Mulgrave offices. He added that following the closure of the Bastow Place premises in 1995, there was another VicRoads facility in Mulgrave where traffic lights and other signs were tested. In response to Mr Jan’s affidavit evidence, Mr Bean said:

… I never saw a sign with a partly flashing annulus at any VicRoads facility before the time of my meetings at Geoff Fontaine’s premises …

… I never observed any testing or trialling of speed sign prototypes with a partly flashing annulus occurring at VicRoads while Barry [Jan] was working with me in the ITS Group. ... I joined the Group in 1995. At that time, I don’t recall that we had any electronic style speed signs at that time. When I joined, we set up the new test facility at South Eastern Freeway Mulgrave. I visited the premises on may [sic] occasions and would have been aware if we were testing an electronic speed zone sign. We weren’t.

…

… I agree that wind detectors operated in the Westgate Bridge at the time that Barry was at VicRoads. The signs on the bridge at that time were mechanical tri-signs. These signs were replaced with electronic signs after the success of the Western Ring Road project.

Mr Bean also deposed that he had never seen the gantry to which Mr Jan referred in his affidavit evidence (see below).

84    Mr Bean also disputed Mr Sozio’s description of the Yarra Glen variable speed signs, stating that these signs did not flash the rings as Mr Sozio described. He also said that he had never seen a sign in Bendigo with a flashing annulus such as Mr Sozio claimed to have seen. Mr Bean’s evidence was that:

… [A]t that time the signs that VicRoads was using in fibre optic were things like GIVE WAY TO PEDS signs, where the whole message might flash. The variable flasher unit is what would enable this.

His evidence was that the changeable fibre optic speed limit restriction signs also required a variable flasher unit.

85    Mr Bean deposed that a benefit of the invention involving a partly flashing annulus was as a warning to motorists “both of the presence of something that called for a change in speed … and the change in the speed limit itself”. A further benefit was, so he deposed, that it removed the need for flashing amber warning signals. He concluded that “this solution in the Patent is more compact, more elegant, cheaper and arguably more effective than anything that had been used by VicRoads or anyone else at the time”. In cross-examination, he conceded that he did not know what costs might be involved, and it was merely his opinion that the flashing annulus was more effective than another solution. He went on to say “the motorist needs to recognise there has been [a] change and I think [the partly flashing annulus is] effective in doing that”, whilst conceding that if motorists were used to seeing flashing yellow lights as indicating caution was needed, then this would also be effective.

86    Mr Bean also clarified in cross-examination that although VicRoads had a specification for variable speed limit signs from around September 2001, which was applicable to the Western Ring Road Project, it was not the case that VicRoads wanted other variable speed limit signs brought into compliance with that specification. Mr Bean said:

... [W]e didn’t want to change what people were doing. The specification at that time allowed for fibre optic signs as well.

87    In response to the affidavit evidence of Mr He and Mr Riquelme (see below), Mr Bean subsequently deposed that he was unaware of any variable speed limit sign prototype being developed by Compusign during the tender process for the Western Ring Road Project; that he did not recall going to Compusign’s premises to look at passenger information display signs in early 2002, although it was possible that he had done so; and that he did not recall seeing the letter annexed to Mr He’s 28 March 2018 affidavit and marked ZQH-4 (see below). Regarding this letter, Mr Bean deposed that he had seen an email sent to him by Mr Thurairatnam at Hi-Lux, which indicated that this letter had been forwarded to him on 8 January 2002. The letter proposed that VicRoads pay Compusign to adapt passenger information display technology for a variable speed limit sign that had pixel failure detection, LED driver circuitry not requiring resistors, and a sign controller. Mr Bean’s evidence was that he did not approve the project that the letter proposed and that, to his knowledge, the project did not receive VicRoads approval and did not proceed.

Peter Cestnik

88    Mr Cestnik was the General Manager of Axent at the time of the hearing. From 1998, he had worked for Symon Australia. From March 2001, he worked for Axent, including as Production Manager in 2001.

89    Mr Cestnik deposed that during 2000 and 2001 Symon Australia and then Axent were working to develop a variable speed limit sign using LED lighting, and that Mr Bean and other VicRoads personnel had visited Axent’s premises on a few occasions to discuss what Axent was doing. In particular he recalled that, with Mr Fontaine, he had demonstrated the prototype variable speed limit sign to Mr Bean in September 2000 and Mr Bean had said that he liked the size and neatness of how it was made. He also recalled that Mr Bean and Mr Fontaine had discussed the need to warn drivers of the change in speed, and that Mr Bean said “something like a separate warning light of some kind would need to be added for this purpose”.

90    Mr Cestnik deposed that he and Mr Fontaine discussed alternatives to a separate set of warning amber lights, and ultimately made a proposal to Mr Bean along the lines of “what about if we were to make it flash part of the annulus?”. Mr Cestnik said that Mr Bean indicated that he really liked this solution but that he would need to confirm that it met the requirements of the Road Rules. Mr Cestnik arranged for changes to the prototype sign so that the partly flashing annulus could be demonstrated.

91    In cross-examination, Mr Cestnik accepted that VicRoads was “[p]otentially” one of the contemplated customers for Axent’s variable speed limit sign, and that Axent might “[p]otentially” wish to know whether they would approve the product. Mr Cestnik said in evidence that he could not recall whether he was involved in any meetings with VicRoads in around April 2001 in relation to a prototype variable speed limit sign or any meetings with VicRoads in relation to the variable speed limit signs at any time before Axent tendered for the Western Ring Road Project.

92    In cross-examination, Mr Cestnik said that Symon Australia had developed variable speed limit signs in the late 1990s for the CityLink Project. He described them as “basic LED signs” and “the basic version of a variable speed limit sign”. His evidence was that these signs could display two different speeds using LED lighting, but did not have a flashing annulus or dimming features, and could not otherwise flash.

93    In respect of Mr Priest’s evidence about the commissioning process for Axent’s variable speed limit sign along the Western Ring Road, Mr Cestnik’s evidence was that he was present when night-time works were undertaken in late 2002. His evidence was that the testing was needed to set the appropriate night-time lighting levels in the signs, and not to test the flashing of the annulus components of the signs. In cross-examination, he said that the testing occurred on only one night, disagreeing with Mr Priest that the testing occurred over multiple nights (see below). Mr Cestnik’s evidence was that during the night of the testing Mr Zammit was in a “communications hut” and unable to see the sign faces and what was displayed. He agreed that the signs were uncovered on the night that testing occurred and insisted that the system was not yet live. His evidence was that VicRoads had previously approved the functionality and the operation of Axent’s variable speed limit sign in factory testing at the Axent factory prior to installation. He accepted that the control of the signs from the VicRoads control centre was a deliverable for the Project but said that this was not verified by VicRoads before practical completion.

Michael Zammit

94    At the time of the hearing, Mr Zammit was Axent’s production manager/project manager. He had been employed by Axent in this capacity since March 2001. Previously from 1994, he had worked for Symon Australia, initially as a software programmer and later as a design engineer, project engineer, service manager and technical specialist before taking up his current position. In particular, during 2001 and 2002, he was Axent’s project manager and production manager for various projects across Victoria and Australia.

95    Mr Zammit worked on the development and installation of the Axent system for the Western Ring Road Project. His evidence was that Axent’s task in relation to the Project was to implement a system to dynamically read information regarding traffic volumes, and feed that information into an algorithm, which would then calculate the required speeds in a dynamic mode of operation. That algorithm would then determine what the recommended speeds for traffic in the area were and then adjust the traffic flow accordingly.

96    Mr Zammit’s evidence was (and I accept) that the Western Ring Road Project involved the installation of approximately 80 of Axent’s variable speed limit signs on the Western Ring Road in late 2002. Mr Zammit said that these signs commenced operating in December 2002. In 2002, there were 15 groups of the Axent signs, linking back to a communications hut, which was in turn linked to the VicRoads traffic control centre at Camberwell (not Kew as Mr Priest deposed: see below). Mr Zammit said (and I accept having regard to all the evidence) that it was only later that the traffic control centre at Camberwell moved to Kew.

97    Mr Zammit was involved in the development, commissioning and testing of the traffic management system and Axent’s variable speed limit signs for the Western Ring Road, although Mr Petridis from VicRoads, with whom he dealt on a regular basis, was primarily responsible for the Project on VicRoads’ side. Mr Zammit’s evidence was (and I accept, noting that it was corroborated by others at Axent) that each of Axent’s signs was tested at Axent’s factory during and after manufacture and, when installed along the Western Ring Road, each was covered and/or turned away from oncoming traffic. The signs were not tested on site. Rather, Axent designed a program that simulated all the signs as they were in the field, and the software for the traffic management system itself was developed and tested using a simulator program. Mr Zammit’s evidence was the sign simulator software module simulated the operation, reporting and all display modes without having the signs installed in the field or operating in real time. His evidence was that he was not involved in any live testing where the system was controlled from either the traffic control centre at Camberwell or the traffic management centre at Kew, and that he had not observed any live testing via CCTV.

98    Once the variable speed limit signs were installed, Mr Zammit’s evidence was (and I accept: see below) that the signs were, at some point shortly before the system went live in December 2002, turned towards the oncoming traffic but were programmed only to display a speed of 100 km/h. His evidence in this regard was consistent with a copy of a letter dated 19 August 2002 from Mr Cestnik to Mr Petridis of VicRoads, an email of the same date between Mr Cestnik and Mr Petridis, and an email of 23 August 2002 between Mr Petridis and Mr Zammit (all of which were MZ-2 to Mr Zammit’s 12 December 2017 affidavit).

99    Mr Zammit agreed with Mr Priest (see below) that Mr Priest and Mr Cestnik had undertaken the night-time testing of the signs. In this testing, Mr Priest and Mr Cestnik were located at the signs, while Mr Zammit was controlling the system remotely via the communications hut. Mr Zammit said that they adjusted the signs for brightness, and that the speed display was not varied and the annulus was not flashed. The purpose of the testing was, so he said, to set the appropriate brightness levels of the signs for their specific locations, which depended on the ambient lighting in each area. Mr Zammit added that the VicRoads testing and commissioning process took much longer than the several days mentioned by Mr Priest, although it did not involve testing the partly flashing annulus. In cross-examination, Mr Zammit stated that during these tests he was unable to see the sign faces themselves because he was in the communications hut but that he had reviewed the data that was going to the signs and that he was “the only point of control for those signs at the time”.

100    Mr Zammit deposed that each variable speed limit sign for the Western Ring Road Project was programmed so that the annulus could flash only if the speed dropped, and that a partly flashing annulus was not possible if the displayed speed was a constant 100 km/h. He added that the speed could be dropped only if the system was operational or if the programming of the signs was manually overridden. Mr Zammit said that Mr Priest’s evidence to the contrary (see below) was incorrect, and there was no facility to control that annulus from the back of the sign.

101    Mr Zammit’s evidence was that Axent’s signs went live (in the sense that the dynamic system was turned on) in late November 2002 (although the system went live in December 2002). He referred to an email dated 20 November 2002 from Mr Petridis to Mr Fontaine (and copied to Mr Zammit, Mr Bean, Mr Priest, and another VicRoads employee), which included the statement that “we will go live with the VSLS tomorrow, however we will also require Michael [Zammit] to train the TCCC officers” (emphasis added). In cross-examination, Mr Zammit stated (and I accept) that until late November 2002, the VicRoads operators at the traffic control centre were not trained in and did not have the software to control the signs; and that the only console access was protected by a password. His evidence was that there was no electronic communication with the signs in dynamic mode (i.e., at more than one speed) until late November. An email dated 28 November 2002 from Mr Petridis to Mr Zammit (copied to Mr Bean and Mr Cestnik) indicated that the traffic control centre at Camberwell did not take control until 5 December 2002.

102    Mr Zammit’s evidence was, and I accept, that Axent was the first company to have a product with type approval from VicRoads to supply and install signs such as Axent’s variable speed limit sign, and that at the time all other suppliers used flashing beacons. At this time, Mr Zammit was aware of the use of flashing beacons with variable speed limit signs in Victoria on the West Gate Bridge, and that the use of flashing beacons was Australia-wide. His evidence was that Axent wanted to have a product that was different to existing products, specifically in relation to variable speed limit signs. In cross-examination, Mr Zammit accepted that type approval for Axent’s sign with the partly flashing annulus gave Axent a commercial advantage. He did not recall, however, whether Axent had received type approval at the point of the Western Ring Road system going live. His evidence was that VicRoads might be willing to source products if type approval was underway, even if it had not yet been obtained.

103    In his 12 December 2017 affidavit, Mr Zammit gave evidence representing the Hi-Lux sign as depicted in SVS-17 to Mr Sozio’s 8 September 2017 affidavit and what he observed at an inspection of the sign at Hi-Lux’s premises on 13 November 2017. His evidence was that the marking on the control board (or PCB) did not necessarily indicate the date on which the sign was made since such boards were not stamped with the date of production but with any information that was requested to be printed on them; and, in any event, it was unusual for the word “DATE” to be printed on a control board. Rather, where a control board did bear a date, the general practice was to have no more than the date itself printed on the board. He also said that an unusual feature of the sign was that it had two PCBs, rather than one. He noted that some of the components packages serving the same purpose on the first and second PCB were different, and that this was unusual for boards made at the same time. His evidence was that some of the components were manufactured in 2003. On inspection of the sign, Mr Zammit’s evidence was that he observed features indicating that the two PCBs were made by different processes, one by hand and the other by machine. He also observed that one of the boards had a serial number sticker attached while the other did not, and that the colours of the boards indicated they were fabricated at different times or by different suppliers, but definitely in different batches. Based on this inspection, he expressed an opinion that the sign was assembled sometime after 2014, an opinion which was challenged in cross-examination in which he accepted that components, including PCBs and globes, within a sign can be replaced over time; that fibre optic technology, as had been used in the sign, was relatively old technology; that he had not heard of VicRoads seeking a supply of fibre optic variable speed limit signs within recent years; and that it was inherently unlikely that such a sign would have been manufactured after 2014 for commercial sale.

Sachin Prasad

104    At the time of the hearing, Mr Prasad was an Associate Director of Irwinconsult engineering consultants, with over 15 years’ experience as an engineer on traffic and transport planning projects. He was also a VicRoads accredited senior road safety auditor. Axent relied on his evidence as that of an expert witness in traffic engineering. His reports were annexed to his affidavits.

105    Mr Prasad commenced his professional career in January 2002, as a traffic engineer at Moreland City Council. Mr Prasad gave evidence that traffic engineering was a branch of civil engineering focused on such things as traffic management and operations, signage and included the operation and positioning of traffic signals. His evidence was that he had never worked in any capacity for a manufacturer of signs and had not undertaken any study relating to electronics. He said that he had only a general understanding of the internal components of an electronic speed limit sign, gained through working on traffic signal projects.

106    Mr Prasad’s first report dated 16 October 2017 (annexed to his 16 November 2017 affidavit) stated that before October 2002, electronic variable speed limit signs:

… typically … would remain blank and only activate when the reduced speed limit was in place. These signs were typically black with a white illuminated number and red annulus. Some of these signs had flashing yellow lights, which would activate when the speed limit sign activated. There was also an ability for some variable signs to display different speed limits on the display.

In cross-examination, he referred to variable message signs, for example, those mounted on speed trailers. He said that he had no specific memory that as at October 2002 there were electronic speed limit signs that would display different speeds at different times. He did not recall the signs in the CityLink tunnel, and he was not aware of the ability to control a speed limit sign remotely prior to October 2002.

107    Mr Prasad expressed the opinion that the invention in the Patent was:

-    the flashing annulus, with some of the annulus flashing;

-    the ability to change the speed and annulus on an external sensor such as wind, light, pre-programmed time or control centre.

In his opinion, the benefits of the invention were:

-    The retaining of one ring of the annulus ensures that the sign retains its statutory status while the flashing of the other rings draws a motorist’s attention to the sign. This enables the sign to be conspicuous to approaching motorists whilst retaining its status as a statutory speed limit sign.

-    Lack of additional lights to draw attention to the sign, thus providing a simpler, more legible sign that, to the average motorist, looks the same size and shape as a traditional speed limit sign. This provides a more consistent message to motorists.

-    The lack of additional lights results in a smaller, more compact sign. This allows the sign to be a more practical option for use on freeway gantries and bridges.

The provision of a sign with the ability to change the speed and annulus on an external sensor such as wind, light, pre-programmed time or control centre has the following benefits:

-    Immediate changes to the signs without the need for intervention.

-    Integration in managed roads programs where significant safety and time saving benefits can be achieved by managing speeds and traffic flow along roads.

108    In cross-examination, Mr Prasad conceded that when referring to the first identified benefit, he was comparing the use of the sign to a fixed metal plate sign, and the second and third identified benefits involved a comparison with flashing yellow lights. He also conceded that there was nothing in terms of the control of the sign that would not apply equally to a sign with flashing yellow lights.

109    Mr Prasad’s first report also referred to a benefit of using the sign as enabling speeds to be reduced at different times of the day or in the event of road works, or an incident. He considered that the sign could provide improved conspicuity in school speed zones and shopping centre strips. He also considered that “the use of these signs enable[s] the use of Freeway management technology so that traffic speeds can be modified along the road to control congestion and traffic flows”.

110    Mr Prasad’s second report dated 3 November 2017 (also annexed to his 16 November 2017 affidavit) stated that:

The most common method used for drawing a motorist’s attention to a sign was flashing yellow lights. This was done for speed signs, with four flashing lights, and also for other warning signs …

He explained that warning messages and separate lights were commonly used across a variety of signs, such as speed limit signs with 4 flashing yellow lights; tram safety zones signs with a single flashing light; traffic signal ahead or ice/frost warning signs with double flashing lights; and speed trailers with speed radars indicating a motorist’s speed, which flashed the speed and variable messages.

111    In answer to the question, “[w]as flashing the numerals themselves or the whole of the speed sign ever done? Why or why not?”, Mr Prasad’s second report stated that:

This was only done on warning signs such as speed trailers. This was not done for speed signs. …

112    Mr Prasad’s second report stated that speed signs were required to comply with AS1743 and AS1742.4, and that most traffic engineers would have been aware of these standards. Further, in his experience up to October 2002, warning devices were required to comply with AS1742.4’s requirement that single or twin flashing yellow lights be used to alert motorists of a reduction in speed. Mr Prasad’s second report concluded that:

I believe that the ability to flash the annulus and have the change in the sign sufficiently conspicuous to approaching motorists would not have been an obvious thing to do. The idea is simple, however, it is also ingenious as it enables the removal of all external signs/devices and allows the sign to be used in isolation.

113    In cross-examination, Mr Prasad accepted that there was no reference in Schedules 2 or 3 to the Road Rules to Australian Standard 1742, and that he relied on the reference to the Standard in the Reader’s Guide to the Road Rules. This was the only reference to the Standard that he was aware of and read when in local government. He accepted, however, that the requirements of that Standard did not need to be strictly complied with in order for the sign to be regulatory, and that some variance was permitted, such as in relation to size.

114    Mr Prasad’s third report dated 28 February 2018 (annexed to his 28 February 2018 affidavit) repeated and augmented some parts of his earlier reports. Mr Prasad commenced his third report by stating that “[a] variable speed limit sign is an electronic sign which displays a regular speed limit, however can also display an alternate speed limit when required”. He repeated that the most important consideration for a sign was that it complied with the relevant Australian Standard. He said that the other important consideration was the sign’s conspicuity under changed conditions. He reiterated that the invention in the Patent in his opinion was “the flashing annulus, with some of the annulus flashing” and “the ability to change the speed and annulus in response to a signal from an external sensor such as wind, light, pre-programmed time or control centre but always with at least one continuously illuminated annulus ring”. This report also set out a description of each claim in the Patent, as well as Mr Prasad’s opinion as to whether the respondents’ signage systems “fit within the description in the Patent of being a changing sign system, and … a system for use as a variable speed limit system on roadways”; and whether the respondents’ signs have the components that Mr Prasad had identified in claim 1 of the Patent. It addressed similar questions for each of the other claims in the Patent.

115    Mr Prasad’s third report concluded by restating his opinion of the features of the invention and listed the respondents’ signs with a partially flashing annulus. For Hi-Lux, these were the A, B, and C size VSLS, as well as the C size lane use sign. For Compusign Australia, these were the A, B, C and D size VSLS provided to the RTA; the C size advanced lane use sign (observed at Compusign’s office); the A and C size advanced lane use signs (in the Airport Link document); and the clip in/clip out B size advanced lane use sign. For Compusign Systems, these were the B and D size VSLS. Mr Prasad added that:

All of these signs have the ability to change the speed and annulus using an external sensor such as wind, light, pre-programmed time or control centre.

According to the information provided, the invention in the patent is found to be in the signs.

In my opinion each of the claims in the patent are found in each of the signs I have referred to in this report. …

116    Mr Prasad also summarised his conclusions in a table attached to this report, which was subsequently updated in a table annexed to Mr Prasad’s 25 April 2018 affidavit. In cross-examination, Mr Prasad stated that the original table did not include all of the documents forming the basis of his opinion because he had not known that he had to include every one. When asked why the updated table did not refer to some of the documents he had previously mentioned in the original table, Mr Prasad said he had received “a lot of documentation” and that much of it was “very similar”, but that he was confident that the updated table identified all the documents and page numbers for the relevant features that he considered to support his findings, as far as possible “in the time available”.

117    Mr Prasad’s fourth report dated 11 April 2018 was annexed to his 12 April 2018 affidavit and said to be “an update” on his previous report, with additional observations noted by textual underlining. It is unnecessary to set out these observations here. It suffices to note that Mr Prasad’s conclusions were unaltered, and the basis for his opinions in his fourth report were further explained in his 25 April 2018 affidavit. Also in his 25 April 2018 affidavit, Mr Prasad deposed that in his opinion “the patent claims a sign that responds to an input that changes the speed and annulus on the display, and it is the display control card that does this”.

118    In cross-examination, Mr Prasad was taken to his statement in his affidavit of 25 April 2018 that he had not elaborated on his understanding of claim features that were self-evident in their meaning (such as “display panel”), although he had sought to explain the features that were not “like this”, based on his reading of the patent as a whole. In cross-examination, Mr Prasad accepted, by way of example, that he had explained his understanding of the expression “normal speed limit” as “[a] speed limit different to the normal speed limit refers to typically the temporary reduction on speed limit along a section of road”.

119    In cross-examination, when taken to his fourth report, Mr Prasad accepted that he had reasoned that a type approved sign had to meet the requirements of the relevant VicRoads specification, and had considered on this basis whether the specification had the features of the claim. Mr Prasad also conceded that his conclusion regarding the “variable speed limit sign (VSLS) to RTA” signs made by Compusign Australia that the inner annulus of this sign would flash was an inference drawn from the requirement that the inner ring be flashed, to retain regulatory status.

120    In respect of his statements at 3.1.1 of his fourth report concerning claim 1, Mr Prasad stated in cross-examination that he had listed what he thought were the inventive features of the claim, instead of listing the key features of the claim. His evidence was that he had sought to identify these inventive features in the relevant products, and that his approach had been to consider whether the products were capable of displaying a number in a circle, and whether the products were capable of flashing part of the annulus of the display.

121    In considering whether any of the signs had a “control means”, Mr Prasad’s evidence in cross-examination was that he had looked for a reference to something that changed or modified or controlled the sign, saying that such a control means was obvious from all the specifications. With respect to Compusign’s signs where the group controller was located externally to the signs, or Hi-Lux’s signs where the serial interface unit (SIU) was located externally, Mr Prasad stated that, as the sign still had an internal controller or display card, he had considered that the internal controller or the display card was the control means.

122    For the integers of claim 9 (flash rates) and claim 13 (external sensor), Mr Prasad said in cross-examination that he had approached this analysis in terms of whether the sign was capable of displaying or being controlled in such a manner. For claim 13, because there was a light sensor that could control the brightness or dimming, he considered that the requirements of claim 13 were satisfied. For claims 14 and 15, Mr Prasad said that he approached these claims in terms of whether the signs were capable of varying the display in response to an external signal, such as a control centre.

123    Also in cross-examination, Mr Prasad stated that his conclusion in respect of claim 16 regarding the ability to vary the annulus according to pre-programmed times was not based on specific documentation but was based on a website. He conceded that he had drawn an inference that, as the Hi-Lux sign had been used in the type of projects that used pre-programmed signs, then the signs were changed as described in claim 16. He also conceded that he could find nothing in the documentation for Compusign, but that he had concluded that it fell within the meaning of claim 16 because it would need to do so in order to comply with the relevant Standard. Mr Prasad accepted that this had been his process of reasoning for a number of the claims. Mr Prasad further said that his conclusion about Hi-Lux’s lane use sign was based upon a brochure relating to it.

124    In memoranda annexed to his 12 April 2018 affidavit, Mr Prasad addressed affidavits of Mr Jan, and an affidavit from each of Mr Sozio, Mr Riquelme, Mr Taranto, and Mr He. In addressing Mr Jan’s 8 March 2018 affidavit, Mr Prasad stated:

It is my opinion that the flashing annulus provides a more legible and practical option as a conspicuity device as it removes the flashing yellow element from the sign. As a single sign, there may be little difference between the two options. When fitted in a freeway gantry for example, the provision of 4 flashing yellow lights on each sign has the potential to be distracting to approaching motorists.

I do not agree with Mr Jan that the sign has sufficient provision for the flashing yellow lights in the corners and the flashing annulus may not have any relationship to sign size.

…

For a sign with no flashing annulus, the flashing yellow lights are a very important component of the sign. This forms the conspicuity device for the sign and indicates to approaching motorists that there is a different speed limit displayed on the sign.

…

I agree that extensive human factors testing would be required to determine with certainty as to the preferred conspicuity option by motorists. However, anecdotally the flashing annulus appears to be the preferred option, as it appears to be a commonly used sign.

…

I was unaware of the VicRoads control centre having the ability to change the speed and annulus of a variable speed sign in 2002.

I understand that there was the ability to change traffic signals and associated intersection signs (no left turn etc) and Variable Message Signs.

I was also unaware, in October 2002 that VicRoads control centre could make the changes to the speed signs on the Westgate Freeway.

Mr Jan also says that the Westgate Bridge signs were tri signs. I do not recall this signage but this accords with my recollection as of October 2002, I was aware of LED lights being used in signs such as message signs and traffic lights.

125    In cross-examination, Mr Prasad accepted that the conclusion that the flashing annulus appeared to be the preferred option was based on the requirement in the current VicRoads specification, and that he did not know the reason for that requirement. In cross-examination, Mr Prasad also accepted that his conclusion in this regard was not based on any actual study.

126    With respect to Mr Riquelme’s evidence that the end user determined the instructions that were to be provided to the sign via the group controller, Mr Prasad stated:

The Compusign specifications (Advanced Lane use Sign Size C for example) outlines that the sign has both a device controller and a sign controller located internally (page 10 and 11).

Further, the specification outlines the installation of componentry between the controller and the group controller, indicating that the internal controllers are still required to change the sign even when the sign is used with a group controller.

As such, it is my opinion that the sign impinges the patent, specifically,

“a control means for selecting the selected speed limit display according to an input criterion and for varying part of one or more of the display panel, the central numeric displaying area or the annulus to display, when selected, the selected one of the at least two possible speed limit displays”

It is my opinion that the device controller is a control means for selecting the selected speed limit display and the external controller provides the input criterion from the end user.

127    In response to Mr Taranto’s evidence that the end user determines what instructions to provide to the sign by the group controller, Mr Prasad said:

The Hi-Lux specifications (Variable Speed Limit Sign C Size Master/Slave Pair for example) outlines that the master sign has a 485Master which receives communication from an external source and transmits control signals to the Display Control Card which is located in each sign (page 6).

As such, it is my opinion that the sign infringes the patent, specifically,

“a control means for selecting the selected speed limit display according to an input criterion and for varying part of one or more of the display panel, the central numeric displaying area or the annulus to display, when selected, the selected one of the at least two possible speed limit displays”

It is my opinion that the Display Control Card is a control means for selecting the selected speed limit display.

The sign has various configurations of the sign that can be displayed or not displayed at any given time. However, when the speed limit sign is displayed, it is considered that the sign infringes the claims of the patent, as outlined in our traffic report.

128    In substance, Mr Prasad’s opinion was that the Hi-Lux signs infringed the Patent as there was a “control means” because the DCC received instructions from the SIU, which in turn received instructions from a group controller. In cross-examination, however, Mr Prasad conceded that his knowledge concerning the group controller was no more specific than his understanding that they controlled the signs in some way. As to how the sign was controlled in 2002 to show a different display, he said that he understood that some signs were controlled by timers and some were controlled manually.

Charles Leonidas

129    Mr Leonidas is the principal of Comlaw, Barristers & Solicitors, the solicitors for Axent. In his 18 September 2017 affidavit, Mr Leonidas provided a description of the inspections of certain signs, which he attended at Hi-Lux’s and Compusign’s premises on 8 June 2017. Annexures to this affidavit included correspondence between the parties’ solicitors, photographs and video of the signs viewed by Mr Leonidas during the inspections, and copies of the respondents’ brochures and websites. In this affidavit, Mr Leonidas deposed, with respect to Hi-Lux signs at the Hi-Lux premises:

9.     Each of the signs that I inspected utilised light emitting diode (LED) technology for its lights.

10.    Each included an annulus formed by many red LED lights that appeared as outer circles on the display panel around the central numeric displaying area. The numbers in the centre were formed using white LED lights.

11.    Each sign was demonstrated varying part of the annulus in response to an external sensor, and each was activated to display different speed limits.

12.    For all of the three signs it was the outer portion of the annulus that was constantly illuminated and the inner portion that was flashing when the numbers changed. For one of the signs there was an annulus made up of four outer circles of LEDs, three of which flashed, and for another two circles of red LEDs flashed and two were fixed. For the third sign, it was possible to change how many of the LED rings of the annulus were fixed and how many flashed.

130    Mr Leonidas deposed that the sign inspected at Compusign’s premises used LED technology for the lights. The display panel included the central numeric displaying area, formed by white LED lights, and the annulus, formed by red LED lights. The sign was activated to change different parts of the display panel, demonstrated varying part of the annulus in response to an external sensor, and was also activated to display different speed limits. Mr Leonidas observed that the outer portion of the annulus stayed constant while the sign was showing a speed limit, while the inner portion flashed when the numbers changed. The sign was also demonstrated as being capable of displaying only a red “X” and yellow dots, without numbers or an annulus. Mr Leonidas was not shown the internal workings of the sign. He was shown a computer board labelled “tsignCONTROLL” and told by a Compusign representative that such a board was inside the sign being inspected.

131    Axent also relied on Mr Leonidas’ 2 February 2018 affidavit, with annexures, which had originally been made in support of Axent’s application for further discovery, and on Mr Leonidas’ 12 April 2018 affidavit, with annexures (including some documents produced under a subpoena and some correspondence between Axent’s solicitors and the solicitors for VicRoads from September 2016 to March 2018). Issues relating to Mr Leonidas’ 3 November 2017 and 30 April 2018 affidavits are discussed below.

The respondents’ evidence

132    The respondents relied on the following affidavits, with annexures, which, save for successful objections, were admitted in evidence: the two affidavits of Barry Denis Jan affirmed on 8 September 2017 and 8 March 2018; the three affidavits of Robert William Priest affirmed on 8 September 2017, 28 February 2018 and 7 March 2018; the three affidavits of Salvatore Vincent Sozio sworn on 8 September 2017, 8 March 2018, and 28 March 2018; the affidavit of Peter Mark Taranto affirmed on 28 March 2018; the affidavit of Rodrigo Rafael Riquelme affirmed 28 March 2018; and the two affidavits of Zhi Qiang He affirmed on 28 March 2018 and 18 April 2018. Each of Mr Jan, Mr Priest, Mr Sozio, Mr Taranto, Mr Riquelme and Mr He were subject to cross-examination. There was limited additional evidence in chief.

Barry Jan

133    The respondents relied on the evidence of Mr Jan, partly as an expert witness whose opinion was admissible under s 79 of the Evidence Act 1995 (Cth), but mostly on the basis that he had direct knowledge of relevant matters, including the signs under development or in use by VicRoads before the priority date, which knowledge was acquired in the course of his then employment. I discuss Axent’s submissions about his evidence at the end of these reasons. For the most part, as will be seen, Mr Jan’s evidence was admissible as direct evidence about what he had seen or perceived at the relevant time.

134    At the time of the hearing, Mr Jan was a farmer. From 1973 until late 1999, however, Mr Jan had worked for VicRoads and its predecessor entities (the Roads Safety and Traffic Authority and the Road Traffic Authority). At the time of retiring from VicRoads, he held the position of Section Leader – Traffic Signals Installation and Maintenance. He had received a number of awards while working at VicRoads, including a Public Service Medal in June 1995. From 2000 to 2011 he was the Manager – Business and Marketing for the Australian Road Research Board (ARRB). In this position, he was responsible for, or involved in, the marketing of ARRB products, including a range of Australian-developed traffic management systems.

135    While at VicRoads and the ARRB, Mr Jan represented his employer on various Australian Standards committees for traffic signals and traffic management devices. He was the chair of the Australian Standards Committee LG/6, Road Traffic Signals for approximately 20 years, from the late 1980s/early 1990s until he retired in 2011. That Committee covered traffic signals and electronic field devices. He was also a member of the Australian Standards Committee MS/12, responsible for signs and manuals of uniform control devices, including for AS1742 and AS1743. Although he could not recall the exact period during which he was a member of that latter Committee, he indicated that it was during the 1980s and 1990s.

136    During his time at VicRoads in the 1990s, Mr Jan was responsible for installing, remodelling and maintaining traffic signals and electronic traffic management devices. At the same time, he was also involved in VicRoads’ research and development in the areas of road safety and traffic flow. This included development and testing in relation to changeable speed limit signs (such as “flap signs” and “tri-signs”); long-life pavement marking materials; solar-powered LEDs; fibre-optic displays for changeable overhead lane marking signs; worksite safety initiatives, including “too fast/slow down signs” activated by speed detection; a school speed zones project; the introduction of quartz halogen and LED optics for traffic signals; a freeway incident detection system; and a dynamic freeway information system to display estimated travel times based on real-time information about traffic conditions.

137    Mr Jan deposed that, by the end of 1999, there were a number of different traffic signals that incorporated flashing elements designed to attract motorists’ attention, including pedestrian crossing lights (with flashing amber lights); some variable speed limit signs (with orange lights in the corners); some school zone speed signs (with flashing orange beacons indicating a 40km/h speed limit; traffic signals indicating they were faulty by a flashing amber mode; and “no right turn” and “give way to pedestrians” signs that were flashed in their entirety.

138    Mr Jan deposed that, at least during the 1990s, VicRoads always went through a tender process for the supply or installation of traffic signals and signs, save for samples, prototypes, or other small or one-off orders that might be bought from the supplier. The tendering process would commence with the generation of either a specification or a technical note, neither of which were treated as confidential. VicRoads would invite approved suppliers to tender and then review the tenders. Mr Jan added in cross-examination that for smaller jobs, or “type approval jobs” where VicRoads wished to get a device to assess its effectiveness, VicRoads may not have used a tender process, although he was clear that a tender process was used for any major purchases and the majority of jobs.

139    Mr Jan gave evidence about conducting VicRoads’ first field trials of LED traffic lights in the mid-1990s and about his work at this time with the Australian Standards committees to make cognate changes to the relevant standards. His evidence was that during the 1990s variable traffic signs generally used fibre optics to create the variable electronic display, but in the late 1990s some variable message signs began to use LEDs. He explained that LEDs were not dependent on a single light source (which could fail) and that LEDs used less power and became cheaper than fibre optics. His evidence was that by the time he left VicRoads new traffic lights were commonly using LEDs. Mr Jan said that he or anyone familiar with electronic signs, such as a variable speed limit signs, would be able to tell what light source was being used from the exterior display surface of the sign.

140    Mr Jan gave evidence that the early versions of variable speed limit signs included “flap signs” and “tri signs”, which operated by rotating the physical display (not an illuminated display) to show a different speed. Later, during the 1990s, VicRoads began to develop variable speed limit signs that used fibre optics and LEDs. Mr Jan’s evidence was that there were a number of such prototype signs set up on a gantry at the VicRoads facility at Mulgrave (in Bastow Place) which allowed the effectiveness of different signs under day and night conditions to be compared. He said that VicRoads had a “mock-up” board at Mulgrave on which different displays could be generated. His evidence was that VicRoads trialled flashing any of one, two or three rings of red dots to form the red annulus, although he accepted in cross-examination that in the photograph of the gantry (BDJ-2 to his 8 September 2017 affidavit) the fibre-optic speed signs had an annulus with only two rings. Mr Jan said that each ring had its own light source and that the lights could be separately flashed. His evidence was that VicRoads had at least one variable speed limit sign displaying the speed using white fibre optics and an annulus formed of two rings of red fibre optics, where either the inner ring or both annulus rings could be flashed. Mr Jan recalled doing a trial at night of a variable speed limit sign with a flashing annulus. He said that VicRoads had sourced the fibre optics materials from Mr Trebilcock, of Futura Controls, a VicRoads supplier: see below. Mr Jan deposed that he remembered “doing this work as I wanted to start developing some parameters as to what would be suitable for electronic speed signs”.

141    Mr Jan also gave evidence that there was an electronic speed limit sign on the Western Highway during his time at VicRoads. He said that that sign had “to the best of [his] memory” a flashing component. He could not recall whether the sign flashed the annulus, the numerals, or both.

142    In cross-examination, Mr Jan agreed that, during the 1990s, VicRoads mostly sought to encourage industry and private suppliers to develop suitable devices pursuant to a brief or draft provided by VicRoads, since VicRoads “didn’t have a lot of money to do our own manufacturing”. He reiterated, however, that, notwithstanding staff retrenchments in the 1980s, VicRoads retained some engineers and some electricians, as well as the facilities in Mulgrave, where there was an electronics workshop in which VicRoads staff developed devices.

143    Mr Jan deposed that, during the 1990s, he held many meetings with representatives from a number of different suppliers at the Mulgrave facility where the test gantry (identified in BDJ-2) was located, to demonstrate and discuss prototype signs and to generate interest in developing prototypes for new types of signs. He also said that he held meetings at the Mulgrave facility with the Australian Standards committees, in the course of which he demonstrated prototype signs. His evidence was that two of the photographs in BDJ-2 were taken in the early 1990s as indicated by the signs to be seen on the gantry, and that the third photograph “looks likely to have been taken at a different time”.

144    Mr Jan’s evidence was that some of the products on a VicRoads product sheet dated May 1992, which he recalled from the early 1990s, had been on the gantry and that he had conducted some field tests with those products. His evidence was that the field tests had included the electronic illuminated speed limit signs, which were left installed for a week or two so as to receive comments on the signs’ operation from the local councils and the public. Mr Jan also gave evidence that a number of the fibre optic signs mentioned in a VicRoads letter dated 26 August 1991 to a potential tendering supplier (BDJ-5 to his 8 September 2017 affidavit) were also manufactured for VicRoads, and that several of them had been prototypes installed on the gantry at the Mulgrave facility. In cross-examination, Mr Jan accepted that he identified the signs on the gantry by reference to that letter. He recalled that VicRoads had a number of test signs on the gantry but that he could not remember the level of detail he had provided concerning the photographs without reference to BDJ-5.

145    Further, in cross-examination with respect to his evidence about variable speed limit signs, Mr Jan accepted that at the time AS1742 did not prescribe a flashing annulus or number; rather it prescribed separate amber flashing lights or beacons, notwithstanding any VicRoads experimentation with a flashing number or annulus. He accepted that the introduction of a flashing annulus did away with the need for flashing lights or beacons.

146    Regarding the Patent, Mr Jan’s evidence was that claims 12 and 13 referred to the control of the sign displays by an external sensor such as a wind sensor or light sensor. Mr Jan deposed that during his time at VicRoads there were wind detectors measuring the wind speed on the West Gate Bridge, and when wind speeds were considered to be too high, speed signs on the bridge displayed a lower speed, although he could not recall the sign system used. He also deposed that “[l]ight sensors were generally used to detect low ambient light conditions and were used on some signs to adjust the intensity of the output light from the sign during day to night operations”. He referred to ice sensors in use or being trialled in his time at VicRoads, which could be linked to signs to alert motorists to icy conditions.

147    Mr Jan further deposed that the references in claims 5, 7, and 24 to 26 (inclusive) to the approximate dimensions of the signs, annulus and numerals were similar to the dimensions he recalled were prescribed in the relevant Australian Standards, having four standard sizes for speed limit signs (sizes A through D). He observed that three of these sizes were referred to in the Patent. Mr Jan deposed that the flash rate for the annulus in claim 9 and the on-to-off time ratio in claim 10 were the same as defined by VicRoads as a result of trials conducted during his time there. Regarding these trials, he deposed that the trials were “trying to find a flashing rate that gave good visibility to a motorist – not too fast that the flashing may not be observed, nor too slow that a motorist looking only briefly at the sign might miss the flashing feature”.

148    Mr Jan said in evidence that claim 15 referred to “the control of the sign displays by a ‘control centre’”. His evidence was that during his time at VicRoads, staff in the traffic control room could switch on or off or override many of the electronic field devices.

149    In his 8 September 2017 affidavit, Mr Jan stated as follows:

75    Overall, I do not consider that there is anything described in the Patent that     was surprising or other than routine as at 1999, which is when I finished     working at VicRoads. All of the features that are described in the claims     existed and had been used in the field, and I had been involved in trialling the     flashing annulus aspects while I was at VicRoads. Having part of the sign     flash so as to draw a motorist’s attention to the sign was, moreover, an     approach that had been used with many other types of road signs…

76    If a decision has been made to temporarily reduce the speed limit, then there     will be a safety reason for that decision – this may be more congested traffic     conditions, which presents the risk of more sudden stops and hence accidents,     or wind, which may cause a vehicle to leave its lane because of the increased     difficulty in controlling the vehicle, or the presence of a hazard such as young     children (such as in school zones), an accident, or a spill.

77    Since a motorist may be accustomed to driving on that road when it has a     higher, and more commonly displayed speed limit, it is clearly desirable to     draw the motorist’s attention to the fact that there has been a reduction in the     speed limit. The use of a flashing light to do this was known, and I     consider that this was, moreover, a commonly used approach for attracting a     motorist’s attention. One option was to use flashing amber or conspicuity     lights. But the flashing of the annulus was another straightforward option, and     one that I was aware of, and had moreover trialled, before 1999. Because of     the fact that a speed sign has to be similar to a physical speed sign, there was     a need to keep at least one red annulus ring constantly illuminated so as to     maintain that similarity. If a road sign does not meet the requirements of the     road rules and road regulations, then it would not be a legally enforceable sign,     but could be an advisory sign.

150    In cross-examination, Mr Jan stated that he did not recall where a partly flashing annulus had been used in the field, but recalled that some fibre-optic speed limit signs had been installed on the Western Highway, and what had become known as the Monash Freeway, and that some had been installed outside a school zone at Yarra Glen. He said that he went out to one sign, a 60km/h sign, at night on the Western Highway, and that he would have gone to the sign at Yarra Glen. He accepted, however, that he was not sure which of these signs had a flashing annulus, and that he could not disagree with Mr Bean’s recollection that the sign at Yarra Glen did not flash.

151    Mr Jan also gave evidence about whether the September 2001 specification disclosed the features of the claims of the Patent. Mr Jan deposed that:

80    The document describes in some detail the requirements of VicRoads for the supply of a relevant variable speed limit system. The specification describes an entire system, comprising of variable speed limit signs, as well as the sign support structures and control and communication network to integrate the system into VicRoads’ network.

…

82    On page 5, in section 3.0 it says that the variable speed limit sign shall be based on regulatory sign R4-1 as defined in Australian Standard AS1742-1999. …

83    Page 13 of the standard illustrates sign R4-1, which shows a standard speed restriction sign. Table 3.1 above it shows the standard outer dimensions, including for sizes A to D.

84    Page 8 of the 2001 Specification, section 4.2 specifies that while the red annulus of the R4-1 sign is to be used, the numerals are to be white against a black background. Page 20 of AS1742-1999, at paragraph 3.5.2(b)(ii) similarly provides for white numbers to be used against a black background for an electronic sign.

85    In sections 4.2 and 4.6 on pages 8 and 9 of the 2001 Specification it provides that when displaying a speed other than the ‘normal’ speed, the sign is to be capable of flashing part of the inner diameter of the red annulus, and a frequency and on-off time is prescribed.

86    I note that the reference to ‘normal’ speed is specifically to 100kph, which may be applicable to a location where the usual speed limit is 100kph and where there is an occasional reduction in that speed limit.

87    The 2001 Specification states that there are to be a ‘plurality’ of light emitting structures – see page 3 section 1.0 (‘made up from a series of spaced elements’), and page 8 section 4.3 which describes the use of either a fibre optic display matrix or LEDs (which are further described on pages 11 to 13).

88    The 2001 Specification requires the annulus to be comprised of a number of circles – see page 8 section 4.2 and page 9 section 4.6 – the table there contemplates there being two rings for a size A sign (50% would involve flashing 1 of 2 rings, or possibly 2 of 4 rings), four rings for a size B sign (25% is 1 ring and 50% is 2 rings being flashed), and five rings for a size C sign (20% is 1 ring and 40% is 2 rings being flashed). The rest of the rings of the annulus are to remain on during the ‘off’ phase of the flashing sequence, as described in sections 4.2 and 4.6.

89    These references describe the basic features of claims 1, 17 and 20 of the Patent … As for the control of the signs, there needs to be either an internal controller built into the sign, or an external controller that sends a signal to the sign, or both. This is needed to tell the sign which numerals to display, and whether to flash part of the annulus or not. There are various references in the 2001 Specification to the control of the system.

152    Mr Jan deposed that the sign dimensions specified for sizes A, B and C in AS1742-1999 were similar to those specified in claims 5, 7, 24, 25 and 26 for the size of the Patent, with some limited variation. His evidence was that the additional width in the claim dimensions was likely in order to provide a more even border area for pixel displays. The limits for the height of the numerals and the outer dimensions of the annulus, as specified in AS1743-2001 (published in 2001) were the same as for claim 7. Mr Jan further deposed that the flashing rates and on-off times described in the September 2001 specification were the same as those described in claims 9 and 10.

153    Mr Jan gave evidence that there was no reference in the September 2001 specification to the flashing of part of the annulus being varied by reference to a wind sensor or a light sensor, as described in claims 12 and 13. The reference to a light sensor in this specification was in relation to its use to adjust the brightness of the sign display rather than to vary the speed and to flash part of the annulus. Mr Jan said, however, that he considered that:

[T]he use of an external sensor, such as a wind or light sensor, would be a straight-forward variation of what is described in the 2001 Specification – … a variable speed limit system that was linked to wind speed was already in operation on the West Gate Bridge before 2001.

154    In relation to claims 14 and 15, Mr Jan deposed that the September 2001 specification referred to the signs being incorporated into a system, and that he understood the specification to require that the signs could be controlled by an external signal from VicRoads’ traffic control centres. He understood the description of interfacing with control equipment and with a central computer also to be a reference to those traffic control centres or an equivalent command centre.

155    Mr Jan’s evidence was that in field systems where more than one changeable sign is being used, one of the signs may be used as a “master sign” that sends commands to switch on or off concurrently to one or more “slave signs” via electronic or radio signal to ensure the “slave signs” are concurrent with the “master signs”. This would entail only the master sign being connected to a central or external control. This method was particularly important where two or more changeable speed signs faced the same oncoming traffic, and was often used at school speed zones.

156    Mr Jan deposed that he could not see an express reference to claim 16 in the September 2001 specification, but that his understanding was that the simplest scenario for varying a system of speed signs, and one which created predictability for motorists, was a time-based system. He said that:

Based on my experience with any variable signs, the most common form of control was an in-built time clock which was set for pre-determined changes (day-of-week and/or time-of-day). This would be the simplest implementation of a variable speed limit system, and I therefore understand that the 2001 [September] Specification is addressed to this scenario as a minimum scope of operation.

157    In relation to claim 27, Mr Jan deposed that the September 2001 specification contained a description of a supporting frame and supporting structure, at pages 5 to 7, section 3.

158    Mr Jan’s 8 March 2018 affidavit responded to Mr Prasad’s first and second reports (see above). Mr Jan deposed that he understood the reference in Mr Prasad’s first report to manual speed limit signs being “rotated” as a reference to the “flap-signs” to which he referred in his own evidence, which could be manually or electronically changed. He said that the “tri signs” were always electronically changed.

159    Mr Jan specifically disagreed with Mr Prasad’s statement that the use of a flashing feature, specifically the use of certain rings of the annulus as a flashing feature, to attract a motorist’s attention was inventive or other than obvious. Rather, his evidence was that the use of flashing features for this purpose was widely used, including in relation to speed signs before the priority date of the Patent. In Mr Jan’s opinion, while the flashing inner annulus ring or rings and the flashing yellow lights were different means of incorporating a flashing component into the electronic speed sign, he could not see any reason why either option was necessarily better than the other. His evidence was that the use of flashing annulus rings had no relationship to the size of the sign. He said that there was sufficient space in each corner of a sign to locate yellow flashing lights, especially in a sign of the dimensions required in the Australian Standards. His assessment was that any difference between the two solutions in terms of complexity was minimal. Mr Jan continued:

16    …Yellow flashing lights had generally been used to warn motorists of danger or a need to slow down — they were, for example, used for pedestrian crossings, to warn motorists of the start of tram stop barriers, and they were the fall-back mode for traffic signals (traffic lights), as well as being used on tow-trucks and roadworks vehicles. The use of flashing yellow lights may therefore be more effective in attracting a motorist’s attention, and in simultaneously communicating that there is either a danger ahead or a need to slow down, or both.

17    On the other hand, flashing the internal annulus rings may be less distracting for a motorist, and may focus their attention more effectively on the speed numerals within the annulus rings.

18    While it is possible to theorise as to which design choice is more effective for a majority of motorists, a proper assessment would require a trial to gauge motorists’ actual responses and perceptions. Such an assessment would involve different lighting conditions, and motorists of different ages, with different levels of eyesight and different levels of driving experience.

160    Mr Jan disagreed with Mr Prasad’s evaluation that it was inventive to have the speed limit change by reference to a signal from an external sensor, or a pre-programmed signal to change the speed, or from a signal from a control centre. Mr Jan’s evidence was that the use of pre-programmed controls were known and used for a range of signs, including variable speed limit signs before 2000. He instanced the options for control of the “flap sign” indicated in the 1992 VicRoads Product Sheet, to which he had referred: see [144]. He added that since prior to 1999, and from about the late 1980s or early 1990s, VicRoads had a control centre capable of remotely controlling electronic signs, including variable speed limit signs; that the control centre could change signs to a flashing amber setting on request; and that it could also change the speed limit displayed on the “tri signs” on the West Gate Bridge. He added that the use of sensors to control electronic speed signs, such as the use of the wind speed sensors to control the “tri signs” on the West Gate Bridge, was also known prior to 1999. Mr Jan’s view was that the benefits listed by Mr Prasad related to the fact that electronic signs were being controlled remotely. That benefit, Mr Jan deposed, was already being achieved with variable speed limit signs that existed by 1999 when Mr Jan left VicRoads.

161    In response to Mr Prasad’s second report, Mr Jan deposed that some electronic speed limit signs may have had only two yellow lights, rather than four. He could not specifically recall whether warning signs on trailers flashed the speed numerals or not. In response to Mr Prasad’s reference to the removal of “external signs/devices”, Mr Jan said that the yellow flashing lights could be within the sign itself and were not necessarily external. He said that he did not otherwise understand what was meant by the sign being “used in isolation” as stated by Mr Prasad.

162    In response to Mr Bean, Mr Jan deposed that VicRoads’ Products Sheet was circulated outside VicRoads as well as distributed internally, including being distributed and discussed in Australian Standards committee meetings. He considered that it was very likely that copies were made available to suppliers, given VicRoads’ interest in making suppliers and consultants aware of new products being developed.

163    Mr Jan’s evidence was that it was entirely possible Mr Bean was not present during the trials of the variable speed limit signs mentioned at [140] above, and that he had not seen the variable speed limit sign using white fibre optics to display the speed with an annulus formed of two rings of red fibre optics. Mr Jan said that this sign was “one that [he] had [VicRoads’] technicians prepare using a peg board, and it was therefore temporary in nature”.

Notice to produce of 28 April 2018

164    I would note at this point that some emails said to relate to Mr Jan’s evidence (and other documents said to relate to the evidence of Mr He: see [237] and following) were produced during the hearing pursuant to a Notice to Produce dated 19 April 2018 served by Axent on the respondents. It is convenient to discuss this Notice to Produce in the following paragraphs.

165    The Notice to Produce was served on the respondents by Axent on 19 April 2018 and subsequently filed on 2 May 2018. It sought five different categories of documents. In the first category were Mr Sozio’s red ledger books (red ledgers), which he said he had recovered from storage: see [200] below. In the second category were documents “provided to or viewed by” Mr Jan in the course of preparing his affidavit evidence and not referred to in those affidavits. In the third category were documents recording any oral instructions given to Mr Jan in the course of preparing his affidavit evidence.

166    The fourth category related to Mr He, but it is convenient to mention this category here. In this category were the original electronic files from which ZQH-5, ZQH-6, ZQH-7, ZQH-8 and ZQH-9 were derived, some of which are referred to below: see [243].

167    There was a fifth category that covered “all emails and notes of communications” passing between the respondents’ solicitors and the solicitors for VicRoads in connection with the Patent in suit.

168    The respondents did not object to production of the documents in the first and fourth paragraphs. They did, however, object to production of the documents in the second, third and fifth categories, and applied to set aside these paragraphs of Axent’s notice to produce. I accepted that the notice to produce should be set aside with respect to the fifth category, but not with respect to the second and third categories: see Axent Holdings Pty Ltd v Compusign Australia Pty Ltd (No 4) [2018] FCA 674 (Axent (No 4)). On 26 April 2018, the respondents produced the documents in the second category and informed Axent and the Court that there were no documents in the third category.

169    The respondents subsequently produced further documents that they had initially not understood to fall within the second category. These further documents were emails, with attachments, sent to Mr Jan by the respondents’ solicitors, and were produced by way of a USB on 27 April 2018. To obviate the need to re-call Mr Jan, the parties agreed to file the document “List of email communications with Barry Jan produced pursuant to the Applicant’s Notice to Produce”. This document was filed on 30 April 2018. The parties did not, however, further indicate the status of this list of emails. It should be borne in mind that none of these listed emails was otherwise in evidence, a fact that the Court brought to the parties’ attention in its email of 10 May 2018. The Court proposed that the parties address this issue in closing submissions.

170    In response to an email from my associate dated 16 October 2018, in which Axent was requested to clarify whether the list mentioned at paragraph [41] of its submissions as to admissibility issues filed on 16 May 2018 was a reference to the agreed list of the emails sent by the respondents’ solicitors to Mr Jan, Axent advised that this was not a reference to that list but to a different list. Axent stated that the list mentioned in paragraph [41] of its reply submissions was the list of annexures to Mr Leonidas’ affidavit of 3 November 2017, which had been previously given to the Court. This is discussed below. The agreed list of emails was eventually addressed at [19]-[21] of Axent’s reply submissions regarding admissibility. These submissions are also discussed below.

171    During the hearing Axent’s counsel indicated that Axent had encountered difficulties with accessing the documents in the fourth category of the notice to produce of 19 April 2018 in the form the respondents had produced them. Axent’s solicitor, Mr Leonidas, made an affidavit dated 30 April 2018 said to touch some of these issues: see below.

Robert Priest

172    At the time of the hearing, Mr Priest was the Technical Liaison Officer between VicRoads and the Department of Justice and Regulation, working within the ITS group. This group was responsible for implementing electronic traffic technology to help reduce traffic congestion and improve traffic flow on roads in Victoria. Mr Priest commenced working with VicRoads in about 1989 as a labourer in what was then called the Traffic Systems Operation group. Since then, he has held various roles at VicRoads, including Contract Manager and Project Officer. In 2002, he was the Project Officer for the ITS group. In this role he was involved with the preparation of tender documents, contract management, inspection of electronic products during factory acceptance testing, and commissioning of the installed electronic products.

173    Mr Priest was familiar with Axent and its facilities prior to his involvement in the Western Ring Road Project. He had periodically attended Axent’s premises as a contract manager for other VicRoads contracts awarded to Axent in the mid-1990s and early 2000s for the manufacture and installation of variable message signs. As a contract manager he had attended Axent’s premises to inspect those signs prior to their installation. In cross-examination, Mr Priest accepted that, when he visited suppliers’ premises, he understood that what he saw there should not be communicated to other suppliers.

174    Mr Priest was Project Officer for the Western Ring Road Project in 2001 and 2002 and, for the purposes of the VicRoads Contract with Axent (see [178] below), Mr Priest was a Superintendent’s Representative. In this capacity he was able to instruct Axent to perform work in accordance with the VicRoads Contract, rectify issues arising during the project, inspect work performed by Axent under the VicRoads Contract, and authorise payment of invoices issued to VicRoads by Axent under the VicRoads Contract.

175    Mr Priest explained that Mr Petridis and Mr Bean were also Superintendent’s Representatives for the Western Ring Road Project. The Superintendent for the VicRoads Contract was the VicRoads Regional Manager of the Metropolitan North West Region. Mr Priest said that he reported to Mr Petridis, who was the Team Leader and the VicRoads employee primarily responsible for the project. Mr Priest agreed with Mr Bean that Mr Bean’s involvement in the Western Ring Road Project substantially decreased after the VicRoads Contract was awarded to Axent.

176    Mr Priest’s evidence was, and I accept, that the Western Ring Road Project was designed to improve the traffic flow on the Western Ring Road by providing the capability to adjust maximum speed limits by reference to existing traffic flow conditions. VicRoads’ traffic control centre could decide to reduce the speed limit, or the computer system could determine to do this by reference to the system’s programming based on data obtained from existing freeway data stations.

177    Mr Priest gave evidence, and I accept, that, in conformity with its standard practice for significant projects, VicRoads invited a number of suppliers to tender for the Western Ring Road Project, and spent time planning the project and developing the specifications. These specifications were provided to contractors to inform them of the functional requirements of the system they were tendering to supply. The successful tenderer was required to supply and install approximately 80 variable speed limit signs and their bases, and connect the signs to a power source and local communication system. The successful tenderer was also required to develop and implement a sign management system to control the signs, which would be capable of interacting with VicRoads’ existing computer network.

178    By letter dated 21 February 2002, Axent was advised that it was the successful tenderer for the Western Ring Road Project and was awarded the VicRoads Contract “for the design, manufacture, installation, commissioning, maintenance and warranty of a Variable Speed Limit System on the Western Ring Road”. Mr Priest’s evidence was that the project delivery included: (1) the provision by Axent of its detailed designs, including details of proposed technology; (2) Axent’s working with VicRoads to ensure the proposed design would meet VicRoads’ requirements, including for interoperability with VicRoads’ systems; (3) the provision by Axent to VicRoads of some variable speed limit signs for factory acceptance testing prior to installation to ensure they met all functional and structural requirements; (4) installation and wiring of sign pedestals; (5) installation of the signs on the pedestals; and (6) commissioning of the installed signs.

179    Mr Priest said, and I accept, that he was involved in the Western Ring Road Project from the preparation of tender documents to practical completion. He specifically refuted Mr Fontaine’s statement to the effect that he did not have any involvement in the preparation of tender documents or related correspondence for the project. Mr Priest said that, as Project Officer, he attended the majority of the project meetings held at Axent’s offices in Notting Hill, at which Mr Fontaine, Mr Cestnik, Mr Bean and Mr Petridis were also in regular attendance. I accept Mr Priest’s evidence in this regard. There is no basis shown to doubt his own account of his duties and activities at VicRoads in the relevant period. I would reject Mr Fontaine’s evidence to the contrary, bearing in mind that Mr Fontaine was not privy to the internal allocation of duties within VicRoads.

180    Mr Priest’s evidence was, and I accept, that during the factory acceptance testing stage, he went to Axent’s offices on several occasions to inspect a number of variable speed limit signs manufactured by Axent for installation as part of the project. Both VicRoads and Axent employees were present at these inspections. Factory acceptance testing involved turning the signs on and testing that they functioned as required prior to installation. This included ensuring that when turned on and controlled to display 100 km/h, the white LEDs illuminated to display “100” clearly and the red LEDs illuminated to form a solid annulus, and when controlled to display a reduced speed, the numerals were similarly clearly displayed and the red LEDs formed an annulus, one ring of which remained solid and another flashed.

181    Mr Priest’s evidence was that during the commissioning phase, Mr Priest and Mr Cestnik of Axent (together with, for some stages, Mr Zammit) completed a series of checks on each of approximately 80 signs on the Western Ring Road over several nights. Commissioning involved turning each sign on and adjusting its brightness to take account of the ambient light levels; and checking the functionality of each sign by manipulating the controls locally and remotely.

182    Mr Priest’s evidence was, in substance, that local commissioning entailed varying the speed on each sign incrementally, ensuring that the correct speed was displayed, and that the annulus of each sign flashed when the speed was reduced below 100 km/h, and varying the displayed speed on each group of signs incrementally, ensuring the group changed speed together and that the annulus of each sign flashed in unison when the speed limit was reduced below 100km/h. I note that, in cross-examination, Mr Priest accepted that it was possible that Mr Cestnik was correct in his recollection that VicRoads did not test the partly flashing annulus feature as part of local testing in the commissioning process. I return to this last-mentioned matter below.

183    Mr Priest also gave evidence that remote commissioning included checking that the signs communicated with VicRoads’ traffic management centre (traffic management centre). Mr Priest deposed that in this commissioning it was necessary to check that the traffic management centre could remotely vary the speed limit displayed on the signs and that each group of signs reacted accordingly, using the software developed by Axent (Axent Platform) as part of the Western Ring Road Project. Mr Priest’s evidence was that he observed locally to ensure that a group of signs changed speed together, and that the annulus of each sign in the group flashed in unison. It also involved checking that when the traffic management centre returned the speed limit to 100km/h (which was the default limit), the signs returned to displaying the default speed limit and the annulus of each sign in the group stopped flashing. This further involved checking that the simulated communication faults (through the Axent Platform) were received by the traffic control centre and that the Axent Platform communicated with VicRoads’ freeway data station software (VicRoads Platform). Mr Priest’s evidence was that:

[T]his step in the commissioning process was performed from the [traffic management centre] and observed remotely in the [traffic management centre] using CCTV cameras positioned along the Western Ring Road that were connected to monitors in the [traffic management centre].

184    I interpolate here that, in giving his evidence, Mr Priest described the traffic management centre as being in Kew and, in cross-examination, it was put to Mr Priest that the traffic management centre was in Camberwell at the time of the commissioning. Mr Priest’s evidence was in substance that the traffic management centre moved from Camberwell to Kew at some time during the Western Ring Road Project but that he could not recall the date. Mr Priest accepted that the traffic management centre may still have been in Camberwell as at 27 November 2002 when taken to an email of that date indicating that this was a possibility. He also accepted that it was possible that the traffic management centre was still at Camberwell in December 2002, as Mr Zammit deposed. With the passage of time, it is unsurprising that details of this kind fade from an individual’s memory: see [651] below.

185    Mr Priest refuted Mr Fontaine’s statement that the commissioning was undertaken at Axent’s factory prior to the installation of the signs on the Western Ring Road. Mr Priest’s evidence was that it was not possible to conduct all aspects of the checking process, for example, ensuring that the traffic management centre was able to vary the speed limit of groups of signs remotely, until the signs were installed on the Western Ring Road. He added that it was important to check that the signs functioned as specified after installation but before practical completion of the VicRoads Contract to ensure the safety of motorists and that the system functioned correctly. I return to this below.

186    Mr Priest accepted that it was correct to say, as Mr Zammit did, that the Axent Platform had a functionality to test the signs without displays in the field and that this testing had occurred, although he could not recall the timing of that simulation testing. His evidence was that it would most likely have occurred prior to commissioning and that on site or in the field testing formed part of the commissioning process as he described it.

187    In cross-examination, Mr Priest did not dispute that when the signs were installed on the Western Ring Road, they were covered or turned away from oncoming traffic. Mr Priest deposed, however, that the signs were uncovered and visible to traffic on at least some occasions prior to practical completion of the Western Ring Road Project.

188    Mr Priest was unable to comment on Mr Zammit’s statement that the software was written in such a way that the signs could not flash the annulus if they displayed a speed of 100 km/h, although he agreed that Mr Petridis had instructed that the variable speed limit signs were not to drop below 100 km/h until the necessary media and education program was put in place. Mr Priest also said that that Mr Bean’s description of the commissioning activities was accurate for traffic signals and message signs, but not for speed limit signs and that Mr Bean was not involved in the commissioning process.

189    Mr Priest’s evidence was, moreover, that:

15    Due to the amount of signs that each had to be commissioned on the Western     Ring Road and the number of checks that had to be completed for each sign,     commissioning took several nights to complete the brightness adjustments, and     to ensure that each sign was operating correctly, and was communicating     correctly with VicRoads’ systems.

16    The Western Ring Road remained open while we undertook commissioning of     each sign and the commissioning was visible to motorists who were driving on     the road at the time. I have a recollection that VicRoads required that Axent     position portable variable messaging signs in advance of the signs being     commissioned to inform motorists that the signs were undergoing     commissioning.

17    The commissioning process took several days because part of the process     involved driving by each group of signs whilst operational to simulate what     motorists would see as they were passing the signs, rather than only observing     the signs in operation by the side of the Western Ring Road. Once we had     completed the drive-by, we then had to exit the Western Ring Road, come     back, and repeat the drive-by process as part of the commissioning process for     the next group of signs.

18    The completion of this testing to VicRoads’ satisfaction was one of the steps     that had to occur before the project reached the stage of ‘practical completion’.

190    Given the passage of time, it was unsurprising that Mr Priest had no independent recollection of the date when the commissioning process was completed, and needed to refer to various contemporary documents (including the master schedule (RP-2)), the minutes of a meeting on 13 September 2002 (RP-3), and Axent invoices (RP-4 and RP-5) to identify the relevant date. Referring to RP-2, RP-3 and RP-4, he said:

[The] commissioning of the signs on the Western Ring Road Project occurred over nine days between 26 August 2002 and 3 September 2002. This indicates to me that commissioning of the signs was delayed from 24 June 2002 to 22 July 2002, as reflected in the master schedule, to 26 August 2002 to 3 September 2002...

191    Axent’s invoice RP-5, issued to him as contract manager by Mr Cestnik, led him to conclude that practical completion had occurred by 3 October 2002. I interpolate here that an email sent on 21 October 2002 by Mr Priest to Mr Cestnik (and copied to Mr Petridis and Mr Bean) indicated that in fact the practical completion date for the variable speed limit system was 1 October 2002.

192    Mr Priest’s evidence was (and I accept) that practical completion did not mean the system was operational. Mr Priest accepted (and it seems to be the case) that, having regard to some subsequent emails to which he was taken in cross-examination, including an email sent on 20 November 2002 by Mr Petridis to Mr Fontaine (and copied to Mr Zammit, Mr Bean, Mr Priest and another VicRoads employee) the system was “live” on or shortly after 21 November 2002.

193    In response to Mr Fontaine, Mr Priest did not recall that he was shown a prototype of Axent’s variable speed limit sign during any meeting at Axent’s offices during 2000, and he had no recollection of attending a meeting at Axent’s office in September 2000 or around that date, where he observed a demonstration of such a prototype. On being shown a photograph of Mr Fontaine, Mr Cestnik, Mr Bean and himself in front of a variable message sign at Axent’s offices in cross-examination, Mr Priest reiterated that he did not recall being shown a prototype of the sign at such a meeting. His evidence was that the photograph showed a variable message sign, which he believed was originally made by Alite, a company that manufactured and supplied signs to VicRoads in the mid-1990s, and was retrofitted by Axent for VicRoads at a later date. Mr Priest said that he believed that he was at Axent’s office to inspect the retrofitted variable message sign in his capacity as a VicRoads contract manager.

Salvatore Sozio

194    Mr Sozio is the sole director of Hi-Lux. At the time of the hearing, he had worked in the traffic signalling industry for almost 50 years, with almost 30 years running the company now known as Hi-Lux. Hi-Lux had worked with VicRoads on maintenance contracts since the 1990s, including the retrofitting of quartz halogen lamps into traffic lights and the manufacture of fibre optic signs. Mr Sozio had been aware of the Patent since at least 26 November 2009.

195    Mr Sozio deposed that as early as 1991 VicRoads had requested suppliers of fibre optic speed signs to supply signs with the functionality to flash part of the sign display in order to denote a change in speed. He referred to a VicRoads Request for Quotation (RFQ) for fibre optic speed signs dated 26 August 1991, noting there were to be two “display segments” on the sign in question (the digits segment and the red annulus segment). With respect to the 90 and 60 km/h speed limit signs, the RFQ required that:

The sign shall incorporate the facility to connect both, either or none of the two display segments … to the flasher unit.

196    In this context, Mr Sozio deposed that a drawing of a Hi-Lux speed sign dated 15 December 1991 showed a mechanism for a “flasher relay” on the red annulus consistent with the RFQ. He gave evidence that a number of these signs were installed on a rack at the VicRoads premises at Bastow Place, Mulgrave, and that such signs included a 90 km/h sign and a 60km/h sign with flashing annulus. He added that, on occasions, at VicRoads’ request, Hi-Lux made alterations to existing prototype signs on the rack to enable VicRoads to test the variations. Mr Sozio further deposed that, in 1992, VicRoads contracted with Hi-Lux to install the 90km/h sign on the Western Ring Road Freeway. His evidence was that this sign contained a flasher unit that could have been used to flash the annulus, but that VicRoads had not asked to use that feature when it was installed.

197    In response to Mr Fontaine’s evidence concerning the 15 December 1991 drawing (see [196] above) Mr Sozio deposed that the drawing was of “Sign No 5”, as described in the RFQ. The RFQ description of this sign stated that it was a standard 60 km/h speed plate sign “with black letters within a red annulus, all on a white background” and that the “‘red’ annulus portion of the display shall be highlighted using fibre-optic pixel technology”. In response to Mr Fontaine’s statement that fibre optic signs would be flashed in their entirety, Mr Sozio deposed that fibre optic signs before 2002 could and did utilise more than one lamp box to enable different parts of the sign to be illuminated. This permitted one part of a sign to be flashed while the rest was not. Mr Sozio’s evidence was that this was the case for, among other signs, the Yarra Glen Primary School signs.

198    Mr Sozio deposed that in 1992 VicRoads produced a product sheet featuring some of the newer signs then being trialled by VicRoads, which included two speed limit signs manufactured by Hi-Lux and supplied to VicRoads. Mr Sozio deposed that features of the sign could be flashed by flasher units inside the housing, located within separate compartments, so that different features could be flashed independently. Mr Sozio annexed a copy of the VicRoads product sheet (SVS-3) to his 8 September 2017 affidavit, which regarding “Fibre Optic Speed Signs” stated that “[v]isual impact is improved by continuous flashing of the sign legends. Both the annulus and speed legend are illuminated, giving excellent visibility during day and night conditions”.

199    Mr Sozio also deposed that around this time, in producing experimental speed signs for VicRoads trialled at Mulgrave, Hi-Lux made the changeable “tri sign”, which could change the speed limit at a signed location to “one of up to three possible variants” via the use of rotating panels. A sign of this type was, so Mr Sozio said, installed on the West Gate Bridge during the 1990s, which operated so as to reduce the speed limit if the wind was too strong. Mr Sozio also deposed to the production of a “flap speed sign” in the early 1990s, which was also pictured in the 1992 VicRoads product sheet.

200    Mr Sozio said in evidence that he had recovered several red ledger books from storage. His evidence was that the red ledgers dated back to 1992 and contained pencil entries in which Hi-Lux had recorded all jobs for which it invoiced, including product sales, repairs and maintenance jobs. He said that the red ledgers recorded the progress of jobs from quote through to invoice, and included an entry dated 11 March 1999 for the supply and installation of two speed signs for VicRoads, listed as Order No. R04037. Although this entry did not list the installation site, Mr Sozio deposed that the date in the entry fitted with his memory of the timing of Hi-Lux’s installation of variable speed limit signs at the Yarra Glen Primary School. In cross-examination, however, Mr Sozio was taken to a VicRoads Purchase Order record, which he accepted showed that order number R04037 as recorded in the red ledgers did not concern the Yarra Glen school installation.

201    Nonetheless Mr Sozio gave evidence that he attended the signs that Hi-Lux had installed at the Yarra Glen Primary School on a number of occasions, including in relation to some faults. He deposed that the signs had two rings, with the inner ring flashing when the sign displayed a speed of 40 km/h, and not flashing when the sign displayed a speed of 60 km/h. Mr Sozio deposed to the fact that, at the time, VicRoads required that there always be at least one solid ring that did not flash. He said that the school crossing attendant could use a key to switch between the 40km/h and 60km/h modes. When Mr Bean’s evidence about the Yarra Glen Primary School signs was put to him, Mr Sozio specifically disagreed, reiterating that the signs had a flashing red annulus and no flashing yellow lights. Mr Sozio said that Hi-Lux did not supply any signs with yellow flashing lights on them to this location.

202    Mr Sozio deposed to having located other entries in the red ledgers including: (1) an entry dated 12 July 2002 for a retrofit of a 60/40 km/h speed sign at the request of Mike Paterson of VicRoads; and (2) an entry dated 16 July 2002 for a retrofit of a 60/40 km/h speed sign for Nilsen Electrical. He recalled that the retrofits involved modifying the signs so that they would display each of 40 km/h and 60 km/h and flash the inner annulus for the lower speed limit display consistently with the September 2001 specification. In cross-examination, Mr Sozio accepted that these records did not state that the retrofits contained a partly flashing annulus, but he maintained that retrofitting signs meant incorporating a partly flashing annulus, noting that after September 2001 all variable speed limit signs required a partly flashing annulus. He ultimately accepted, however, that it was possible that the retrofit might have involved merely changing a standard fixed sign to a variable speed limit sign, without the addition of the partly flashing annulus.

203    Mr Sozio further deposed that he had also recovered from Hi-Lux’s records a VicRoads document marked “Fibre Optic Display Signs (General Requirements) Revised March 1995” (SVS-5 to his 8 September 2017 affidavit) which set out the requirements for a variety of types of signs including speed signs, and specifically mentioned a “variable flasher unit” to be incorporated within the sign.

204    Mr Sozio gave evidence that he had located a quotation that Hi-Lux provided to VicRoads dated 28 February 2001 for “seven 50/60 Fibre Optic Changeable speed signs” that were “fully compliant to VicRoads specification”. He stated that the specification referred to was a VicRoads Specification for Changeable Fibre Optic Speed Restrictions Signs dated January 2000, which he had also recovered from Hi-Lux’s records. His evidence was that, although dated January 2000, the specification number (containing the year “1999”) indicated that this specification was likely to have been first available in 1999. This specification detailed requirements concerning the presence of a variable flasher unit and variable lamp dimming capability for times of low ambient light. Mr Sozio said that a variable speed limit sign shown in a photograph on page 6 of the specification was a sign manufactured by Hi-Lux. Mr Sozio’s evidence was that VicRoads required Hi-Lux to keep the speed limit digits and the annulus visible at all times and, in consequence, the only conspicuity option to denote a change in speed (without adding external beacons) was to flash part of the annulus. Mr Sozio remained firm when he said in cross-examination that, contrary to the evidence of Mr Bean, the flasher unit in this specification was a general unit for all types of flashing signs, and was not limited to variable message signs as Mr Bean had said.

205    In his 8 September 2017 affidavit, Mr Sozio deposed that Hi-Lux began trialling LEDs in signs in about 1995, and in 1997 was manufacturing LED signs. His evidence was, and I accept, that the LED signs were featured in an article, “Signs of the times”, authored by him and his then co-director, Archie Russell, in the trade magazine, Traffic Technology International ‘97. An advertisement at the end of the article advertised Hi-Lux traffic systems and products, including a variable speed limit sign, in which the 60 km/h limit was displayed in LEDs within an annulus consisting of two LED rings. Mr Sozio also relied on a quotation and an invoice from a Japanese company (Nichia Chemical Industries Ltd) that he had located in Hi-Lux’s records, recording that Hi-Lux had ordered LEDs from Nichia in October 1998. He also relied on a further Hi-Lux record dated 26 May 1997 recording the supply of two LED speed signs for VicRoads in Geelong.

206    Mr Sozio deposed that Hi-Lux used LED technology in a range of its signs in the late 1990s, including what he understood to be the first ever trip information sign in Kings Way in Melbourne in or about 1999, and in an LED “strip-map” prototype supplied to Mr Jan at VicRoads for evaluation showing estimated travel times (although Mr Sozio did not believe this prototype was ever installed). He said that Hi-Lux began using LEDs in the mid-1990s because it was the next technological advancement in signage illumination, and an attractive alternative to fibre optic technology, due to the increased life and energy efficiency of LEDs and the fact that they required less depth in the housing box. Mr Sozio said that fibre optic signs were gradually phased out until they were taken out of the VicRoads specification completely in around 2003.

207    Mr Sozio’s evidence was in effect that Hi-Lux had been developing its capabilities in manufacturing electronic variable speed limit signs prior to October 2002, and had been offering electronic variable speed limit signs since prior to October 2002 as part of its product range. His evidence was that from the time Hi-Lux received the September 2001 specification he had decided that Hi-Lux would include as part of its product range signs that would meet the specification’s requirements. Specifically, these signs would be able to display more than one speed in white speed numerals against a black background using LEDs, and have red annulus rings that the customer could control so that the inner annulus rings flashed when displaying lower speed limits. His evidence was that since prior to October 2002 Hi-Lux had consistently offered such signs as part of its product range.

208    Mr Sozio’s evidence was that he had received an advance copy of the September 2001 specification before receiving the tender documents for the Western Ring Road Project in mid-October 2001. Hi-Lux had given VicRoads an expression of interest in April 2001, as part of a joint bid for the contract for the Project, and the tender documents had included that specification as well. Mr Sozio’s evidence was that Hi-Lux had ultimately decided to supply pricing to various tenderers for the variable speed limit sign component of the Project instead of proceeding to tender.

209    Mr Sozio gave evidence that he had recovered a number of disused speed signs from a Hi-Lux warehouse, including a fibre optic variable speed limit sign that had been made by Hi-Lux at some earlier time. His evidence was that the sign had the capacity to change from 60km/h to 40km/h and, when changed to 40km/h, it had an inner annulus ring flashing while the outer annulus ring remained illuminated. He said the sign had a control board marked as manufactured in 1998. His evidence was that the sign was the same as the signs that Hi-Lux installed for the Yarra Glen Primary School, in that these were fibre optic variable speed limit signs that flashed part of the annulus. His evidence was that the sign was consistent with the fibre optic variable speed limit sign that Hi-Lux had produced from early 2000 until late 2003 or early 2004 and that had been installed at various sites in Melbourne until replaced by LED signs from 2004.

210    In cross-examination, Mr Sozio readily accepted that the date on the control board did not establish that the sign was made on that date, but disagreed with Mr Zammit’s evidence that it was unusual to have the word “date” on the control board and more than one PCB. Mr Sozio acknowledged that some of the components on the boards were different, but said in evidence that “[t]hey could have been changed at any time”, adding “they’re consumable items, if they’ve got a fault on them”. Mr Sozio accepted that a second board could have been added in order to make the sign partly flash the annulus, “anywhere between 2000 and when we found it”.

211    Mr Sozio disputed Mr Fontaine’s and Mr Bean’s evidence to the effect that Hi-Lux was late in developing LED speed signs and did not have a sign in 2003 that complied with the September 2001 specification. Mr Sozio’s evidence was that Hi-Lux made an electronic speed sign in 2003 and provided it to VicRoads (referring to an email chain from October 2003 between himself and Mr Bean in which Mr Bean confirmed that a Hi-Lux “LED ESLS” sign had been delivered to the VicRoads office on 22 October 2003). Although his evidence was that Hi-Lux had not received VicRoads’ type approval by 31 October 2003, Mr Sozio said that its sign was being assessed by then.

212    In his 8 September 2017, 8 March 2018 and 8 March 2018 affidavits, Mr Sozio gave evidence about receiving a number of computer aided drawings, with an index, from Mr Trebilcock of Futura Controls in 2008 following Mr Trebilcock’s retirement. The drawings and index indicated that Futura Controls had prepared drawings depicting a proposed layout of a variable speed limit sign with an illuminated annulus in May 2000, November 2001 and, for Hi-Lux, in July 2002. Axent challenged the admissibility of the drawings and an index that related to them. I discuss Axent’s objection and the evidence relating to it below.

213    I note that, in his 8 March 2010 affidavit, Mr Sozio also gave evidence in support of Hi-Lux’s s 163 defence, which is discussed below.

Peter Taranto

214    At the time of the hearing, Mr Taranto was a software developer at Hi-Lux. He had been employed at Hi-Lux since July 2008, and earlier he had worked on software development for approximately 12 years, first on a project at La Trobe University and subsequently at Datalink Technologies. At Hi-Lux he was responsible for writing software for different types of signage and control systems. Mr Taranto deposed that he had a good knowledge of the components and design of Hi-Lux’s signs, this being necessary for his work as a software developer.

215    Mr Taranto’s evidence was relevant to whether Hi-Lux had directly infringed any of the claims of the Patent. He was an honest and relevantly knowledgeable witness, whose evidence I accept.

216    Mr Taranto deposed that between 2 December 2010 and 28 March 2018 (when he affirmed his affidavit) Hi-Lux had sold or offered for sale four types of variable speed limit signs: school zone/shopping strip signs, South Australian signs, trailer signs and lane use signs. He added that, categorised by their method of control, these four sign types fell into four categories: school zone/shopping strip signs, “master” variable speed limit signs, “slave” variable speed limit signs, and lane use signs. He said that the school zone/shopping strip signs, the South Australian signs and the trailer signs were all supplied with an in-built light sensor to measure the ambient light in the surrounding area, and adjust their display accordingly.

217    Mr Taranto’s evidence was that the school zone/shopping strip signs had only been sold in the “B” size and in Victoria. These signs were configured to display two speeds, where the upper speed was shown within four solid rings and the lower speed generally within three flashing rings and an outer solid ring. Within each such sign was a SIU, which was the control module for the sign and communicated with the display control card (DCC) in the sign, directing the DCC as to how the DCC controlled the operation of the LED matrices. The DCC turned the LEDs on and off, regulated their intensity, and monitored their operation (including reporting faulty LEDs). To communicate with the DCC, the SIU used a communication protocol developed by Hi-Lux, known as the HTS protocol. The SIU interfaced externally with the control system operated by the relevant roads authority, known as a network management system (NMS), using a protocol developed by Hi-Lux and known as the Electronic Speed Limit Sign Protocol.

218    Although Hi-Lux’s SIU was programmed with a range of commands that could be sent to the DCC, Mr Taranto’s evidence was that, in order for the sign to display a particular display, the SIU needed to be configured by the customer. The customer would upload a “calendar” into the SIU directing it as to the display configuration required at various times of day; the SIU would then send the appropriate command to the DCC; and the DCC in turn would direct the corresponding LED matrices to illuminate.

219    Mr Taranto’s evidence was that the SIU stored up to eight operating schedules, each or any combination of which may be scheduled on a 365-day calendar to operate for the current date. He said that a calendar may only be uploaded to the sign by using the NMS. Once the calendar has been uploaded to the sign, the sign will then run autonomously as directed by the calendar until the calendar runs out or the sign receives a manual override. The operator of the signs may use the NMS to manually override the display from the control centre, and may also change the number of rings that are flashed, from zero to four of the four rings, if the lower speed limit is displayed.

220    Mr Taranto gave evidence that the DCC for the school zone/shopping strip sign is configured with two “maps” (being one for each speed limit) corresponding to a different visual display. In order to activate the display, the SIU sends an HTS protocol command to the DCC that specifies which map to activate, as well as the number of annulus rings to flash. His evidence was that the signs will only display a speed limit after having been connected to the NMS and having received a calendar from the NMS that tells the sign when to operate. Communication occurs based on the sign number allocated to that sign and the IP address of the sign. Mr Taranto’s evidence was that Hi-Lux did not operate or program the NMS. Rather, the NMS was operated by the roads authority or by contractors engaged by the roads authority.

221    Respecting the “South Australian” signs, Mr Taranto deposed that these signs had only been sold in South Australia for two projects: the Southern Expressway duplication project (C-size signs) and the Adelaide Entertainment District project (B-size signs). Again, Mr Taranto’s evidence was that before the signs would display anything, they needed not only to be connected to a power source, but also the SIU needed to receive a command from the road authority’s control centre, telling it what to display. The SIU would then send a corresponding command to the DCC. If the SIU ceased to receive these commands, the sign would turn off after a period of one minute.

222    Mr Taranto’s evidence was that each of the South Australian signs had an inbuilt DCC, containing maps and “sequences” (a series of maps set to display for a period of time in succession) that had been loaded onto them. The SIUs for the Southern Expressway signs were located in a cabinet on the side of the road, with each SIU used to send commands to a group of three signs, to communicate with the roads authority control system, and to ensure that the signs in the group were all showing the same speed. Communication with the control system operated by the roads authority (STREAMS) used a protocol known as the RTA protocol (TSI-SP-003) developed by Roads and Maritime Services in New South Wales. In order to have the signs display a speed, the road authority used STREAMS to communicate the required sequence number to the SIU.

223    The system for the Adelaide Entertainment District was the same except that the signs were B-size, and generally located in pairs, with the SIU being in one sign (the “master” sign) which controlled the other (the “slave” sign).

224    The signs located in trailers were similar to the C-size signs supplied in South Australia. Some of the signs provided were “master” signs having an SIU, while others were “slave” signs controlled by the SIU within the paired “master” (by radio signal). The SIU for these signs communicated with the roads authority using STREAMS and, as with the South Australian signs, they would turn off if they received no signal. Mr Taranto’s evidence was that around thirty of these signs were built.

225    Mr Taranto deposed that Hi-Lux had not supplied a lane use sign. In about 2009 or 2010, Hi-Lux made three or four prototype lane use signs with varying displays in order to demonstrate capabilities for the M80 project, but the signs had been subsequently dismantled. In cross-examination, Mr Taranto stated that the only existing documentation regarding lane use signs of which he was aware was a Hi-Lux marketing brochure.

Rodrigo Riquelme

226    Mr Riquelme was, at the time of the hearing, the director of Compusign Systems – a company incorporated since 15 January 2013 and conducting the Compusign business since July 2013. Mr Riquelme had begun working at Compusign Australia in September 2002 as its sales and projects manager and continued to hold this role for Compusign. In this role he had been responsible for marketing Compusign products and managing their delivery for Compusign’s projects. He deposed that he first became aware of the Patent in suit on receiving a letter of demand in September 2016.

227    Mr Riquelme deposed that when he began working at Compusign Australia, Mr He told him about the products that Compusign Australia supplied and was developing; and that the previous sales manager, Mr Thurairatnam, had updated him on Compusign products and opportunities. Mr Riquelme said that, as at 2002, Compusign was supplying a range of traffic signs and passenger information signs, including variable message signs, call centre displays, travel time information signs for VicRoads, and LED displays for commercial advertising.

228    Mr Riquelme’s evidence was that, on his first day at Compusign Australia, Mr He showed him a prototype variable speed limit sign. On a second occasion, both Mr Thurairatnam and Mr He showed him the prototype variable speed limit sign and explained that it could be used to demonstrate Compusign’s general capability to make such signs to customers. Mr He explained that the sign was a prototype only and that modifications would be made in order to suit a customer’s particular needs. About the same time, Mr Thurairatnam had told him about the variable speed limit sign that Compusign had quoted to supply for the Western Ring Road Project, and also mentioned that there were opportunities to supply those signs in New South Wales. The prototype had a 24 x 14 matrix display with a circular annulus, capable of displaying different messages including numerals, arrows and words. Mr Riquelme said that he had demonstrated the prototype to a number of customers in late 2002 or early 2003, including to representatives of Alstom and Transurban. He said that he demonstrated the features of the sign using the software interface that Mr He had developed, including showing that either 25% or 50% of the annulus rings could flash. The prototype also had four beacon lights in the corners, since this feature was sought by customers in New South Wales.

229    In September 2002 or a few months thereafter, Mr Riquelme deposed that he travelled with Mr He to Sydney to demonstrate the prototype variable speed limit sign to Downer Engineering for the Cross City Tunnel Project. Compusign won the contract for that project in late 2003 or early 2004. Compusign developed its own external controller capable of separately controlling a group of signs (or a “group controller” as it would come to be known) to control the images displayed on its signs for the project.

230    Mr Riquelme’s evidence in cross-examination was that “DCM Specification RVSLS” for the Cross City Tunnel Project dated February 2001 (RRR-2 to his 28 March 2018 affidavit) called for the annulus to flash and did not call for a partly flashing annulus. While accepting at one point that, as a consequence, it was unlikely that he and Mr He would have demonstrated a partly flashing annulus for the Cross City Tunnel Project, he withdrew this evidence shortly afterwards, saying that “[w]hen we went to Sydney, we showed the sign in its full entirety”. Mr Riquelme’s evidence was that he took photographs of signs at the Sydney display on 23 May 2003, and that they included a 50 km/h sign in a red annulus made up of a number of rings, with four yellow beacons in each corner. He identified these photographs as ZQH-11 to Mr He’s 28 March 2018 affidavit. His evidence was that “the software allowed you to control that [sign] any way you wanted to”.

231    Mr Riquelme deposed that Compusign Australia supplied its first variable speed limit signs for installation in Victoria about 2004-2005. These were a set of four signs installed on Pascoe Vale Road in Glenroy at either end of the shopping strip. They were supplied to Alstom (now known as United Group) who installed the signs. Once installed and commissioned, these signs flashed the inner annulus rings only when the lower speed limit of 40 km/h was displayed, and did not flash the annulus rings when 60 km/h was displayed.

232    Mr Riquelme’s evidence was that, in about 2004 or 2005, Alstom approached Compusign Australia to provide a quotation for the supply of variable speed limit signs only (without a group controller) for the M7 freeway in Sydney. Alstom developed its own group controller for that project. Compusign Australia went on to supply variable speed limit signs (but not group controllers) for the Eastlink, Clem 7, Airport Link and CityLink projects. The controllers for these projects were configured by United Group.

233    Mr Riquelme deposed that the group controller was always external to the signs supplied by Compusign. A single controller would typically control a group of signs to ensure their operation was synchronised. He deposed that the United Group controllers could be configured with a VSLS configuration, an ALUS configuration, or a VMS configuration. In a VSLS configuration, the controller was loaded with frames that corresponded with all of the speed numerals, and with a series of annulus rings. In an ALUS configuration, the controller was loaded with all of the frames for a VSLS configuration and each of the frames specified in appendix B to Australian Standard 5156 (RRR-3 to his 28 March 2018 affidavit) such as arrows, messages and figures indicating the closure of lanes. In a VMS configuration, the controller was loaded with frames that correspond with the different messages that the sign’s display screen was to display.

234    Mr Riquelme further deposed that it was the end user who determined what specific instructions to provide to the sign via the group controller. For example, using the VSLS configuration, the group controller could have the sign show speed numerals alone, either flashing or not; the annulus rings alone, or in any combination, flashing; or the speed numerals with any number or none of the annulus rings flashing. Each of these combinations could also be combined with the four flashing beacons in each corner of the sign (if installed). Mr Riquelme’s evidence was that Compusign’s variable speed limit signs would not operate without a signal from the group controller. His evidence was that the road authorities use a particular protocol (RTA-TSI-SP-003) to communicate with electronic signs. Since this protocol could not be used to control the Compusign signs, another function of the group controller was to convert between the RTA protocol and the Compusign protocol.

235    Mr Riquelme’s evidence was that, from December 2010, Compusign had supplied signs for four variable speed limit projects, but had not installed any of these signs. These projects were the Airport Link Motorway in Brisbane, the M80 and Transurban CityLink projects in Victoria, and the Transurban WestConnex project in New South Wales. For the Airport Link project, Compusign Australia supplied its signs to United Group, and United Group configured the controllers. Mr Riquelme’s understanding was that the project signs were configured to use flashing beacon lights, and not a flashing annulus. For the M80 project, Compusign Australia and Compusign Systems obtained the group controllers from United Group, and supplied its signs together with the group controllers to another company, Visionstream Australia, which configured the controllers with an ALUS configuration and installed the signs. For the CityLink project, Compusign supplied signs to Transurban together with group controllers obtained from United Group and configured with a VSLS configuration. Transurban in turn contracted AMG Pty Ltd to install the signs, which were then controlled by Transurban using its own control system. Further signs have been supplied by Compusign to Transurban for use on the CityLink Tullamarine widening project, again with the controllers sourced from United Group, configured with an ALUS configuration, and then installed by United Group. These signs were also controlled by Transurban using its own control system.

236    Mr Riquelme deposed that Compusign was also to supply signs for a New South Wales project called WestConnex, for which Compusign would supply its own controllers, which it intended to configure with an ISLUS configuration (a lane use configuration that meets the new RTA protocol, including all the lane use frames from appendix B to Australian Standard 5156 and the lane control symbols in RTA Specification TSI-SP-011 V3.1). These signs were to be installed by a contractor. Mr Riquelme further deposed that, until April 2014, the RTA specification for variable speed limit signs required signs in New South Wales to use flashing beacons. After April 2014, the specification provided for a flashing annulus. His evidence was, however, that as at 14 March 2018 signs in New South Wales continued to use flashing beacons (such as the Compusign signs on the M7 freeway in Sydney) and not flashing annulus rings.

Zhi Qiang He

237    Mr He is the sole shareholder of Compusign Australia and up until 30 June 2017 was the company’s sole director. He described himself at the hearing as a manager at Compusign. Mr He graduated in Navy Architecture and Ocean Engineering from Shanghai Jaotong University in 1982 and until 1989 worked in computer-aided design and manufacture of ships. In 1989 he moved to Australia and, after his qualification was recognised in 1991, he worked for Mr Fontaine as an electronics engineer before starting Compusign Australia in 1994. Mr He had been responsible since then for the technical design of all Compusign’s products. Mr He’s evidence was that Compusign Australia’s assets were leased to Compusign Systems from 2013 and then transferred in 2017. Mr He stated that he was not aware of any patent in relation to the display of a variable speed limit sign prior to receiving a letter of demand from Axent in September 2016.

238    Mr He’s evidence was that, in around October 2001, Mr Thurairatnam, who worked for Compusign Australia as its sales and marketing manager showed him a copy of a Transfield specification dated 24 October 2001 (a copy of which was annexed to his 28 March 2018 affidavit) for the supply of variable speed limit signs for the Western Ring Road Project, in respect of which Transfield sought his company’s quotation. Mr He said that he worked with Mr Thurairatnam to review the technical specifications and to consider what would be required for the supply. Mr He’s evidence was that Compusign Australia provided a quotation to Transfield, although he could not locate a copy of the quotation. Mr He also gave evidence that Compusign provided a quotation to Alstom for the supply of variable speed limit signs for the Western Ring Road Project (ZQH-3 to his 28 March 2018 affidavit).

239    Mr He’s evidence was that also around October 2001 Mr Thurairatnam (who had since left Compusign and whose whereabouts were unknown to Mr He) suggested that Compusign should develop a prototype electronic variable speed limit sign for demonstration to customers. Mr He gave evidence that he began designing the prototype in late 2001. Mr He deposed:

Instead of developing a sign with fixed display options, I worked on developing a variable message sign that could be used to display different speed limits, as well as other messages, by using a matrix of LED’s. The sign was a further development from the variable message display signs that I had previously designed for Compusign.

240    A meeting was arranged with VicRoads to discuss Compusign’s general capabilities, and Mr Thurairatnam sent a letter to VicRoads dated 7 January 2002, on Compusign’s behalf, offering to develop a variable speed limit sign (ZQH-4 to Mr He’s 28 March 2018 affidavit).

241    Mr He deposed that, in January 2002, he completed designs for both a matrix circuit board for a variable speed limit sign and a circuit board design for a sign with four annulus rings, requiring four such circuit boards per sign. Mr He’s evidence was that the circuit board design contained a feature permitting the different annulus rings to be separately controlled. Mr He deposed to annexing a copy of a drawing of the prototype sign to his 28 March 2018 affidavit (ZQH-10) and a copy of three photographs of the prototype sign (ZQH-11).

242    Mr He’s evidence was that Compusign produced a variable speed limit sign with a partly flashing annulus based on his discussions with Mr Thurairatnam, although the proposal for Compusign’s development of a variable speed limit system (which was set out in Mr Thurairatnam’s 7 January 2002 letter to VicRoads) did not proceed. Mr He’s evidence was that Compusign eventually won a contract for the Cross City Tunnel Project in Sydney, for which Compusign produced a prototype capable of displaying various numerals and messages and bearing flashing amber beacons. Mr He accepted that the photographs (ZQH-11) taken by Mr Riquelme most likely in May 2003 showed the amber lights on when the lower speed was showing.

243    It suffices to say at that point that Mr He gave evidence and was cross-examined about the annexures ZQH-3, ZQH-5–ZQH-10; ZQH-12 and ZQH-13, which are discussed below in connection with Axent’s objection to their admissibility.

Principles of patent construction

244    In Jupiters Ltd v Neurizon Pty Ltd [2005] FCAFC 90; 222 ALR 155; 65 IPR 86 at [67], a Full Court of this Court summarised the principles for the construction of patents as follows:

(i)    the proper construction of a specification is a matter of law: Décor Corp Pty Ltd v Dart Industries Inc (1988) 13 IPR 385 at 400;

(ii)    a patent specification should be given a purposive, not a purely literal, construction: Flexible Steel Lacing Co v Beltreco Ltd (2000) 49 IPR 331; [2000] FCA 890 at [81]; and it is not to be read in the abstract but is to be construed in the light of the common general knowledge and the art before the priority date: Kimberley-Clark Australia Pty Ltd v Arico Trading International Pty Ltd (2001) 207 CLR 1 at [24];

(iii)    the words used in a specification are to be given the meaning which the normal person skilled in the art would attach to them, having regard to his or her own general knowledge and to what is disclosed in the body of the specification: Décor Corp Pty Ltd at 391;

(iv)    while the claims are to be construed in the context of the specification as a whole, it is not legitimate to narrow or expand the boundaries of monopoly as fixed by the words of a claim by adding to those words glosses drawn from other parts of the specification, although terms in the claim which are unclear may be defined by reference to the body of the specification: Kimberley-Clark v Arico at [15]; Welch Perrin & Co Pty Ltd v Worrel (1961) 106 CLR 588 at 610; Interlego AG v Toltoys Pty Ltd (1973) 130 CLR 461 at 478; the body of a specification cannot be used to change a clear claim for one subject matter into a claim for another and different subject matter: Electric & Musical Industries Ltd v Lissen Ltd [1938] 56 RPC 23 at 39;

(v)    experts can give evidence on the meaning which those skilled in the art would give to technical or scientific terms and phrases and on unusual or special meanings to be given by skilled addressees to words which might otherwise bear their ordinary meaning: Sartas No 1 Pty Ltd v Koukourou & Partners Pty Ltd (1994) 30 IPR 479 at 485–6; the court is to place itself in the position of some person acquainted with the surrounding circumstances as to the state of the art and manufacture at the time (Kimberley-Clark v Arico at [24]); and

(vi)    it is for the Court, not for any witness however expert, to construe the specification; Sartas No 1 Pty Ltd at 485–6.

245    It is fundamental that a specification be read as a whole and in light of the common general knowledge in the art before the priority date. It is important to read a patent specification in a practical way, and to use a “generous measure of common sense” in construing the claims of the specification: see Product Management Group Pty Ltd v Blue Gentian LLC [2015] FCAFC 179; 240 FCR 85; 116 IPR 54 at [36]; and GlaxoSmithKline Consumer Healthcare Investments (Ireland) (No 2) Ltd v Generic Partners Pty Ltd [2018] FCAFC 71; 264 FCR 474; 131 IPR 384 at [106].

Regarding the skilled addressee

246    The construction of a patent specification is the responsibility of the Court, since it is a matter of law. To construe a specification, however, the Court must place itself in the position of the skilled addressee in Australia to whom the specification is addressed: see W R Grace & Co v Asahi Kasei Kogyo Kabushiki Kaisha (1993) 25 IPR 481 at 496. The words of the specification are to be given the meaning that the skilled addressee would give them in light of the common general knowledge immediately prior to the priority date, and what is disclosed in the specification itself: see Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd [2001] HCA 8; 207 CLR 1 (Kimberly-Clark v Arico) at [24] and Jupiters at [67]. See also General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd [1972] RPC 457 at 485:

[S]ince documents of this nature are almost certain to contain technical material, the court must, by evidence, be put in the position of a person of the kind to whom the document is addressed, that is to say, a person skilled in the relevant art at the relevant date. If the art is one having a highly developed technology, the notional skilled reader to whom the document is addressed may not be a single person but a team, whose combined skills would normally be employed in that art in interpreting and carrying into effect instructions such as those which are contained in the document to be construed.

247    The “skilled addressee” is essentially a hypothetical construct equivalent to a person “acquainted with the surrounding circumstances as to the state of [the] art and manufacture at the time”: Kimberly-Clark v Arico at [24], citing with approval British Dynamite Co v Krebs (1879) 13 RPC 190 at 192. As French CJ said in AstraZeneca AB v Apotex Pty Ltd [2015] HCA 30; 257 CLR 356 (AstraZeneca HCA) at [23], the skilled addressee is not a manifestation of or “avatar” for the expert witness whose testimony is accepted by the court. Rather, the notion of the skilled addressee is a tool of analysis that is given form and content by the testimony of the expert and other evidence.

248    In Root Quality Pty Ltd v Root Control Technologies Pty Ltd [2000] FCA 980; 177 ALR 231; 49 IPR 225 at [71] Finkelstein J said that the skilled addressee is, generally speaking, “the person who works in the art or science with which the invention is connected”. In Catnic Components Ltd v Hill & Smith Ltd [1982] RPC 183 at 242, Lord Diplock said that the skilled addressee is “likely to have a practical interest in the subject matter of [the] invention”. In Root Quality at [71], Finkelstein J went on to say:

A variety of people may have that interest. There are those who might wish to make or construct the invention, those who may wish to compound the invention and those who may wish to use the invention. The skilled addressee seems to me to be a relative expression which does not identify any specific person. Because the patent is directed to a person interested in making, constructing, compounding or using the invention … this hypothetical person … may be required to be skilled in more than one art. … It may be preferable not to search for a composite addressee but a team whose combined skills are to be employed.

249    As we have seen, the Patent relates to a “changing sign system for use as variable speed limit sign on roadways”, and a variety of people will have a practical interest in the subject matter of the invention. Axent submitted that the Patent was “addressed to those who work with traffic systems and their associated regulatory and safety issues at a high level – people whose task it is to ensure the safe and efficient movement of people and goods on roadways, and who are alive to issues such as traffic flow, traffic signs and traffic lights”.

250    It may be accepted that a person with a practical interest in the subject matter of the invention includes someone with practical knowledge and interest in managing and controlling traffic flows and road safety, who would use the variable speed limit sign in a changing sign system in these activities. It may therefore be accepted that, as Axent submitted, the skilled addressee would include a traffic engineer, such as Mr Prasad (see [104] above) and Mr Jan (see [133]). Indeed, in substance all the parties accepted as much. Furthermore, as the respondents submitted, and I accept, the skilled addressee would also include a person with practical knowledge and skill in the control and operation of electronic variable speed limit signs, with an understanding of their components (such as a control means, input signal, or sensors) and how they work.

251    Different aspects of the construct of a skilled person will be relevant, depending on the nature of the inquiry. This is consistent with the authorities. It is, for example, accepted that different aspects of a skilled person may be relevant for different claims (Alphapharm Pty Ltd v H Lundbeck A/S [2008] FCA 559; 76 IPR 618 at [200]) and for different grounds of invalidity (Otsuka Pharmaceutical Co Ltd v Generic Health Pty Ltd (No 4) [2015] FCA 634; 113 IPR 191 at [127]).

Regarding the claims

252    It is the exclusive right of the patentee to exploit the invention of the patent and to authorise another to exploit that invention: see Patents Act, s 13. Schedule 1 to the Patents Act defines the word “exploit” as follows:

exploit, in relation to an invention, includes:

(a)    where the invention is a product – make, hire, sell, or otherwise dispose of the     product, offer to make, sell, hire, or otherwise dispose of it, use or import it, or     keep it for the purpose of doing any of those things; or

(b)    where the invention is a method or process – use the method or process or do     any act mentioned in paragraph (a) in respect of a product resulting from such     use.

The patentee’s monopoly rights are enforceable by an action for infringement: see Patents Act, s 120.

253    With respect to the claims in a patent specification, as Lord Russell explained in Electric and Musical Industries, Ltd v Lissen, Ltd [1938] 4 All ER 221 at 224; (1939) 56 RPC 23 at 39:

The function of the claims is to define clearly and with precision the monopoly claimed, so that others may know the exact boundaries of the area within which they will be trespassers. Their primary object is to limit and not to extend the monopoly. What is not claimed is disclaimed. The claims must undoubtedly be read as part of the entire document, and not as a separate document; but the forbidden field must be found in the language of the claims and not elsewhere.

See also Otsuka Pharmaceutical Co Ltd v Generic Health Pty Ltd (No 2) [2016] FCAFC 111; 120 IPR 431 (Otsuka FCAFC) at [94] (Besanko and Nicholas JJ).

254    As stated in Product Management Group at [37], in construing a claim, the body of the specification may be used as follows:

•    The claim should be construed in the context of the specification as a whole even if there is no apparent ambiguity in the claim (Britax Childcare Pty Ltd v Infa-Secure Pty Ltd (2012) 290 ALR 47 at [222] per Middleton J and more generally Welch Perrin and Co Pty Ltd v Worrel (1961) 106 CLR 588 at 616); even the ordinary meaning of words may vary depending on the context, which the specification may provide;

•    Nevertheless, it is not legitimate to narrow or expand the boundaries of the monopoly as fixed by the words of a claim by adding to these words glosses drawn from other parts of the specification (Jupiters Ltd v Neurizon Pty Ltd (2005) 65 IPR 86 at [67]; Kinabalu Investments Pty Ltd v Barron & Rawson Pty Ltd [2008] FCAFC 178 at [44]); and

•    More particularly, if a claim is clear and unambiguous, to say that it is to be read in the context of the specification as a whole does not justify it being varied or made obscure by statements found in other parts of the specification.

Ordinary words should be given their ordinary meaning unless a person skilled in the art would give them a technical meaning or the specification ascribes a special meaning: Product Management Group at [36].

255    Having regard to the above, generally speaking, the first question to arise in an action for infringement is whether what the respondent has done falls within the claims of the patent specification. Section 117 provides that if the use of a product by another would infringe a patent, the supply of that product by one person to another is an infringement of the patent by the supplier unless the supplier is the patentee or licensee of the patent. There is no dispute that Compusign has supplied various allegedly infringing variable speed limit signs for traffic control on roadways. In the case of Compusign Australia, this is admitted to have occurred between 22 April 2004 and July 2013, and in the case of Compusign Systems, from about July 2013. Hi-Lux has also admitted the manufacture and sale of allegedly infringing variable speed limit signs since 7 December 2010.

Whether product or method claims

256    A preliminary question arises as to whether the claims of the specification are product claims or method claims. This is important for determining infringement. If the claims are product claims, then the product that each respondent has supplied or offered to supply must be shown to have all the integers of each claim allegedly infringed. If, however, the claims are method claims, then the products as used must be shown to have all the integers of each claim allegedly infringed. In order to decide whether the invention is as to a product or as to a method, it is necessary to examine the substance of the invention. As has been held, if a claim drafted as a product claim is in truth a ‘disguised’ process claim, it will be treated as such: see D’Arcy v Myriad Genetics Inc [2015] HCA 35; 258 CLR 334 at [145] (Gageler and Nettle JJ).

257    Axent pleaded that the claims were to a product, and maintained in closing that this was the correct characterisation of the claims. Axent submitted that a person skilled in the art would consider the essential features of the invention of the Patent in suit to be: (a) the flashing annulus, with some of the annulus flashing; and (b) the ability to change the speed and the annulus in response to an external sensor (such as wind, light, pre-programmed time or a signal from a control centre). It submitted that claim 1 could be separated into four parts: (1) what the system is used for (a variable speed limit sign); (2) what the component parts of the system are (display panel, numerical displays, annulus and control means); (3) what criteria the system fulfils and its capability (a regulatory speed limit sign that also warns of a change in conditions); and (4) how the system works (by varying its component parts). As will be seen, the respondents did not agree with this approach.

258    Building on this, Axent submitted that if claim 1 is separated into its component integers in accordance with ordinary language, then the claim is for a product. Further, Axent submitted that it was incorrect to say, as the respondents did, that a reference to the sign “always showing a number in a circle on the display panel, when the system is in use” is a reference to how the product is to be used. Rather, so Axent submitted, these words are a reference to the regulatory requirements of a speed limit sign. Axent submitted:

Just as [in] Interlego the claim was for blocks that incorporated the coupling method referred to in the claim, here the claim is for signs that incorporate a partly flashing annulus. Applying the principles discussed in Rescare, that part of claim 1 referable to the product’s criteria … is a description of the physical characteristics of the sign, just as the reference to the fact that [it] has a display panel is.

Axent’s Patent claims an article suitable for use as a speed limit sign that has the characteristics set out in the claims i.e. a speed limit sign that shows a partly flashing annulus when a lower than normal speed is displayed …

The Patent does not lay claim to all speed limit signs, or to all combined lane use/speed limits signs. It is specifically confined to signs that, when operating as speed limit signs, are capable of showing a partly flashing annulus when a lower than normal speed is displayed. Given the strict constraints as to a regulatory speed limit signage this is a narrow category. Lane use signs that are not capable of operating as speed limits signs with a partly flashing annulus will not infringe, and nor will speed limit signs that are capable of flashing yellow warning lights but not part of the annulus.

(Emphasis added)

259    The respondents submitted that the nature of the alleged invention being claimed points away from the patentee intending that the integers of claim 1 (for instance) were to operate as functional limitations, or limitations by result, and favours a conclusion that the claim integers form part of a method of using a variable speed limit sign. The respondents accepted that claim 1 commenced with language that was apt to describe a product, referring to a “changing sign system for use…”, and including certain features. They also accepted that the description of those features from lines 2 to 14 of claim 1 was also apt to describe the physical integers of a product. The respondents submitted, however, that the final paragraph of claim 1 gave rise to a constructional difficulty, in particular, in its use of the following language:

(a)    the sign system fulfils the criteria of being a speed display sign by always showing a number in a circle on the display panel, when the system is in use; and

(b)    and while simultaneously indicating a change of speed limits when a speed limit different to the normal speed limit is displayed on the a (sic) central numeric displaying area, and therefore a change in conditions, by the varying of part of one or more of the display panel, the central numeric displaying area or the annulus.

260    The respondents contended that the integer set out in (a) above most naturally described how the product is to be used, as opposed to a functional limitation of the product. They further contended that the integer in (b) prescribed what must occur when the sign is being used in a particular way, namely that it is being operated so as to display a “speed limit different to the normal speed limit” (in addition, necessarily, to prescribing what must occur when the sign is being used to display a “normal speed limit”). The respondents contended that the claim language was inapt to describe a functional limitation of the “sign system”, and that this language more naturally described a mode of use. The respondents highlighted that this claim integer commenced with the word “and”, which, so they said, reinforced that it was a separate requirement. The respondents further submitted that the phrase “normal speed limit” was indicative of a method claim since the concept of “normal speed limit” was specific to a particular location and time of use for a relevant sign.

261    The respondents contended that essentially the same analysis applied to independent claims 17 and 20, and to all claims dependent on claims 1, 17 and 20. They further submitted that the dependent claims were also relevant in assessing whether the independent claims were product or method claims, although they acknowledged that an independent claim could be a product claim while a dependent claim could be a method claim. In this regard, they submitted that a number of the dependent claims (for example, claims 4, 6 and 8 to 10) were ambiguous as to whether they described a method integer, or a functional limitation for a product. There was in their submission, however, no such ambiguity in dependent claims 12, 14 and 16. The respondents submitted that claims 12, 14 and 16 described the operation of the sign system, and were not, as Axent submitted, framed in terms of capabilities. Rather, so the respondents submitted, they described the actual variation of the annulus: (a) in response to an external sensor; (b) in response to an external signal; and (c) according to pre-programmed times.

262    The parties’ competing submissions may be resolved by reference to the authorities and the specification of the claims of the Patent in suit. As will be seen, the authorities draw a distinction between a product claim containing a limitation by result (or functionality limitation) and a method (or process) claim. In Blanco White’s Patents for Inventions and the Protection of Industrial Designs (5th ed, 1983) (Blanco White) at 4-413, the author stated:

To amount to a limitation by result, what is in the claim must at least be a limitation: something that draws a line between two classes of things that would otherwise fall within the claim: with the implication that conditions of the manufacture can be adjusted, by the reader of the specification, to secure the specified result. It is, of course, a matter of construction to determine whether words in the claim effect a limitation or merely assert that complying with the claim will secure a certain result, and this like other questions of construction affecting validity is likely in present-day conditions to be decided in favour of an otherwise meritorious patentee.

263    A claim will be construed as a method or process claim if it employs a method of definition appropriate only to a method or process claim: see Rescare Ltd v Anaesthetic Supplies Pty Ltd (1992) 111 ALR 205; 25 IPR 119 at 126, citing Mullard Radio Valve Co Ltd v British Belmont Radio Ltd (1938) 56 RPC 1, at 10-11.

264    In Mullard, at 10-11, Greene MR gave some guidance about what this may mean in practice:

Unlike Claim 1, which is a process claim, the amended Claim 2 is, as was the original Claim 2, an apparatus claim and it must stand or fall as such. In such a claim it is permissible in a proper case to define the physical characteristics of the article by a suitable reference to the results which it is to achieve. It is no objection to such a method of definition in cases where it is appropriate that experiment may be required in order that a worker in the art may know whether an article which he has made does or does not infringe the patent. A permissible reference to results is in truth as much a description of the physical characteristics of the article as a reference to its size or strength or chemical composition would be, and in many cases such a reference is the only practical method of describing the article or some characteristic which it possesses. On the other hand, it is not permissible to import into an apparatus claim a method of definition which is appropriate only to a process claim. Thus an article which is not in itself patentable cannot be made the subject of a good apparatus claim merely by pointing out that, if it is used in a particular way or in a particular collocation, it will produce novel and useful results. This does not, of course, mean that there may not be a patentable piece of apparatus in which such an article forms one element, for the combination of the article with other elements may be novel and useful and may require an exercise of the inventive faculty to produce it. Nor does it mean that there cannot be a good claim for a process in which user of the article in a particular way or in a particular collocation may produce or help to produce a novel and useful results. … I may take an example which is simple and perhaps absurd, but not the less apt, to illustrate my meaning. Let it be supposed that someone has invented an improvement in the game of cricket which involves the placing of a peg between the middle and off stumps. There is nothing novel about the peg, and the stumps in conjunction with which it is to be used are the ordinary stumps. The inventor might (let me suppose) make a valid claim for the use of the stumps in combination with the peg in the manner indicated—such a claim would be a process claim—but he could not make a valid apparatus claim for a set of stumps with the peg. If he tried to make his apparatus claim good by introducing into it the element of novelty in his invention (videlicet, the placing of the peg between the middle and off stumps) and for this purpose referred to one of the stumps as the middle stump, he would be introducing into the definition of his apparatus a differentiation between the stumps depending entirely on user, for all the three stumps as they lie in the box are alike and it is impossible to say of any one of them that it is the middle stump or the off stump; it is only when the stumps come to be used in a particular way that they acquire those characteristics.

See also Anaesthetic Supplies Pty Ltd v Rescare Ltd (1994) 50 FCR 1; 122 ALR 141; 28 IPR 383, at 23-24.

265    In the case of a product claim, as indicated in the above passage, a limitation by result is, in effect, no more than a “description of the physical characteristics of the article”: see also Atlantis Corp Pty Ltd v Schindler (1997) 39 IPR 29 at 48-49 (Wilcox and Lindgren JJ). Rescare provides an example of claim of this kind, the claim at issue being as follows (at 125):

Apparatus comprising: a nose piece including a cavity adapted for insertion of a patient’s nose therein and to be releasably sealingly attached to a patient’s face in an airtight manner; inlet tubing connecting to said nose piece with an aperture providing fluid communications with said cavity, the inlet tubing being adapted to be connected to an air source; outlet means in fluid communication with and connected to, said inlet tubing proximate the region of said aperture air pressure and providing resistance to airflow therethrough so as to maintain in the region of said aperture air pressure slightly greater than atmospheric while air is passed therethrough throughout the breathing cycle of the patient whereby the patient will have administered to the nasal passages air of slightly increased pressure sufficient to maintain the nasal passages open throughout the breathing cycle.

(Emphasis in original)

266    Gummow J held that this was a product claim, with a limitation by result. Regarding the claim, his Honour said, in Rescare at 126:

The result is that by means of the apparatus as claimed air of a slightly increased pressure sufficient to maintain the nasal passages open throughout the breathing cycle will be administered to the nasal passages of the patient. Apparatus not providing for this result is not claimed, and the attainment of the result limits the area of the claim. I accept the submission by the applicant that so understood claim 1 is a claim limited by result and is not a “disguised” process claim.

In its terms the claim provided a limitation that was part of the construction of the apparatus.

267    In a similar way, in Interlego AG v Toltoys Pty Ltd (1973) 130 CLR 461 Barwick CJ and Mason J rejected the proposition that the following claim was a claim for a method (at 462):

A toy building set comprising a plurality of hollow blocks open at one face and adapted to be connected together by means of projection extending from the bottom faces of said blocks, and wherein some of the blocks are provided with at least one projection (primary projection) at the bottom face opposite the open face, and some of the blocks are provided with at least one projection (secondary projection) arranged within the cavity of the block, characterised in that the positions and dimensions of the secondary projections relatively to the positions and dimensions of the primary projections are such that, in a pair of assembled blocks the lateral face of faces of at least one primary projection of one block will be clamped against the lateral face or faces of at least one secondary projection of the adjacent block.

268    Their Honours held that this claim was for a product containing a limitation by result, saying, at, 478-479:

We venture to think that no one would conclude, on reading the specification as a whole, that the invention as described makes claim to a method of assembly of blocks which depends on the insertion of primary projections into the recesses of secondary projections in an adjacent block. However, the settled rule is that in ascertaining the width of a particular claim it is not permissible to vary or qualify the plain and unambiguous meaning of the claim by reference to the body of the specification …

…

Read in isolation or in the light of those parts of the specification which precede it, claim 1, as we understand it, asserts a monopoly in blocks which incorporate the coupling method referred to in the claim and elsewhere described. It is a claim by reference to result in the sense that it indicates how the projections are placed when assembly takes place, and does not explicitly specify other means of clamping, that is, the use of the side and end walls of the blocks, when assembly takes place.

The definition of the invention in the claim, which is framed by reference to the result achieved when assembly takes place, lends itself to criticism in that it does not state explicitly the means by which at least one primary projection is to be clamped against at least one secondary projection. … Although the claim does not set out the detailed explanation of the invention contained in the body in the specification, it is to be understood in the light of that explanation. When it is so read, the reader will perceive that, when two blocks are assembled, a single primary projection will be kept in place against a single secondary projection by the wall or walls of the block containing the secondary projection, and that when there is more than one secondary projection the primary projection will be kept in its appointed place by the walls of the other block or by another or other secondary projections.

(Emphasis added)

269    Citing Mullard and No-Fume Ltd v Frank Pitchford & Co Ltd (1935) 52 RPC 231, Barwick CJ and Mason J concluded, at 480:

The claim asserts a monopoly limited by reference to the result of incorporating in the construction of the hollow blocks the suggested relationship between primary and secondary projections, the result being that at least one primary projection is “clamped against” at least one secondary projection. It is permissible to limit a claim by reference to result … so long as, in the case of an article, the limitation is “sufficient to characterize the construction of the article claimed”…

270    For more recent applications of these principles, see, for example, GlaxoSmithKline Consumer Healthcare Investments (Ireland) (No 2) Ltd v Apotex Pty Ltd [2016] FCA 608; 119 IPR 1 (GlaxoSmithKline (No 2)) at [700]-[706] (Beach J) and Doric Products Pty Ltd v Asia Pacific Trading (Aust) Pty Ltd [2017] FCA 849; 125 IPR 182 at [121] (Burley J).

271    The three independent claims of the specification in Patent in suit were:

Claim 1:

A changing sign system for use as variable speed limit sign on roadways including:

a display panel;

a central numeric displaying area formed on the display panel by a plurality of light emitting structures which when activated can display a selected one of at least two possible speed limit displays, each of the at least two possible speed limit displays corresponding to a respective speed limit of at least two possible speed limits, the at least two possible speed limits including a normal speed limit;

an annulus formed by a plurality of outer circles on the display panel around the central numeric displaying area by a plurality of light emitting structures;

a control means for selecting the selected speed limit display from the at least two possible speed limit displays according to an input criterion and for varying part of one or more of the display panel, the central numeric displaying area or the annulus to display the selected one of the at least two possible speed limit displays;

wherein the sign system fulfils the criteria of being a speed display sign by always showing a number in a circle on the display panel, when the system is in use, with the circle being illuminated by the light emitting structures of the annulus, while being able to indicate a selected one of the at least two possible speed limits and while simultaneously indicating a change of speed limits when a speed limit different to the normal speed limit is displayed on the a [sic] central numeric displaying area, and therefore a change in conditions, by the varying of part of one or more of the display panel, the central numeric displaying area or the annulus.

Claim 17:

A changing sign system for use as variable speed limit sign on roadways including:

a display panel;

a central numeric displaying area formed on the display panel by a plurality of light emitting structures which when activated can display a selected one of at least two possible speed limit displays, associated with at least two possible speed limits each indicating change of conditions and which when activated can display a normal speed limit display associated [sic] a normal speed limit indicating normal conditions;

an annulus formed by a plurality of outer circles on the display panel around the central numeric displaying area by a plurality of light emitting structures;

a control means for selecting the selected speed limit display according to an input criterion and for varying part of one or more of the display panel, the central numeric displaying area or the annulus to display, when selected, the selected one of the at least two possible speed limit displays;

wherein the sign system fulfils the criteria of being a speed display sign by always showing a number in a circle on the display panel, when the system is in use, with the circle being illuminated by the light emitting structures of the annulus, while being able to indicate a selected one of the at least two possible speed limits, when selected, while simultaneously indicating a change of speed limits from the normal speed limit, and therefore a change in conditions, by the varying of part of one or more of the display panel, the central numeric displaying area or the annulus.

Claim 20:

A changing sign system for use as variable speed limit sign on roadways including:

a display panel;

a central numeric displaying area formed on the display panel by a plurality of light emitting structures which when activated can display a selected one of a number of possible speed limit displays;

an annulus formed by a plurality of outer circles on the display panel around the central numeric displaying area by a plurality of light emitting structures;

a control means for selecting the selected speed limit display according to an input criterion and for varying part of one or more of the display panel, the central numeric displaying area or the annulus;

wherein the sign system fulfils the criteria of being a speed display sign by always showing a number in a circle on a display panel while being able to indicate a selected one of at least two possible speed limits and while simultaneously indicating a change of speed limits, and therefore a change in conditions, by the varying of part of one or more of the display panel, the central numeric displaying area or the annulus.

272    For the reasons I am about to set out, I would construe claim 1 as a product claim limited by result. It must be accepted, it seems to me, that claim 1 commences with language indicative of a product claim, and continues to use language that is apposite to a product claim until it reaches the final integer set out above, namely:

wherein the sign system fulfils the criteria of being a speed display sign by always showing a number in a circle on a display panel, when the system is in use, with the circle being illuminated by the light emitting structures of the annulus, while being able to indicate a selected one of the at least two possible speed limits and while simultaneously indicating a change of speed limits when a speed limit different to the normal speed limit is displayed on the a [sic] central numeric displaying area, and therefore a change in conditions, by the varying of part of one or more of the display panel, the central numeric displaying area or the annulus.

273    Reading this passage in the context of the entire claim, it seems to me that this passage is intended to be read as a whole and that it sets forth a number of functional limitations or limitations by result. These limitations are that, when the sign system is in use, the properties of the sign are such that the sign: (1) can be observed always to show a number in an illuminated circle on the display panel; (2) while also being able to show one of at least two possible speeds; and (3) while (also) at the same time being able to indicate a reduced speed limit (and therefore a change in roadway conditions) by varying part of the display panel, the numeric displaying area or the annulus.

274    In other words, I would not separate the integers in the final passage, as the respondents would do: see [260] above. I do not understand that “and” effects a separation of the kind for which the respondents contend. That construction leads, as the respondents observed, to difficulties of construction. Rather, I would understand the word “and” to be connecting a coordinate limitation. The first and second functional limitations (as identified in at [273] above) are to be read with the third functional limitation (as also identified at [273] above). This understanding is, so it seems to me, further indicated by the consecutive use of the words “while” and “and while”, indicating that all three functional limitations apply at the same time, namely, while the sign system is in use. Although the expression “normal speed limit” could, for the reasons the respondents advanced, be regarded in some contexts as indicative of a method claim since the concept of “normal speed limit” might be read as specific to a particular location and time of use, this is not how that concept is to be understood in claim 1 of the specification of the Patent in suit. In this context, it seems to me that the expression “normal speed limit” is used in a normative sense so as to mean “conforming to the usual standard on the roadway” wherever located.

275    These limitations by result draw a line between things (electronic variable speed limit signs) that would otherwise fall within the claim and those that do not, with the implication that conditions of their manufacture can be adjusted by the reader of the specification, to secure the specified result. This is in substance a “description of the physical characteristics” of the claimed product.

276    It would also follow from this that I reject Axent’s submission that claim 1 looks to capabilities. Axent’s construction appears to me to be overly broad, and not supported by the specification including the language of the claims of the specification. My preferred approach, it seems to me, aligns with a purposive common-sense approach to construction. If Axent’s construction were correct, then claim 1 could be infringed by a product that was not, and was never intended to be, used as a speed limit sign. Further, as the respondents submitted, the claim could be infringed by a product intended to be used as an electronic speed limit sign, but not intended to have a partly flashing annulus for lower speeds. This might be a wide class, bearing in mind that Mr Fontaine’s evidence was that Axent’s prototype sign was capable of speedy modification in order to demonstrate the partly flashing annulus: see [48] above. I accept that, as the respondents submitted, Axent’s construction would mean that claim 1 could encompass an electronic traffic sign, the operation of which was unrelated to the invention of the Patent in suit, providing it had a fully controllable matrix display.

277    In closing written submissions, Axent relied on Bitech Engineering v Garth Living Pty Ltd [2010] FCAFC 75; 86 IPR 468 at [26] and Seafood Innovations Pty Ltd v Richard Bass Pty Ltd [2011] FCAFC 83; 92 IPR 1 in support of the proposition that, in determining a question of infringement, the question is whether the alleged infringing products contain all the essential integers of the claims, not whether the claims contain all of the integers of the alleged infringement. There is no dispute about this proposition. In closing oral submissions, however, counsel for Axent submitted that the respondents’ argument was in substance that infringement could be avoided if an extra feature were grafted on to the sign or the system so that it reproduced the invention but also operated in some other way, such as, for example, as a lane use sign. Counsel submitted that this was the very approach that the Full Court of this Court in Bitech held was erroneous. I reject this submission. The issue in this case is whether the allegedly infringing products have the functional limitations (or limitations by result) that are essential integers of the claims of the Patent in suit. As counsel for the respondent said, referring to claim 1, the integer, “wherein the sign system fulfils the criteria of being a speed display system by always showing a number in a circle on the display panel, when the system is in use” is “not framed in terms of capability” but “in terms of how the sign will operate”. As he said, claims 1 and 17 can, in this regard, be contrasted with claim 20, which does not contain this functional limitation and instead requires that “the sign system fulfils the criteria of being a speed display system by always showing a number in a circle on the display panel” all the time.

278    I would reject Axent’s submission, so far as it was made, that the alternative constructions were not “put to” Mr Prasad. As noted earlier, issues of construction are ultimately for the Court to determine.

279    So far as determining whether the independent claims are product or method claims, I accept that, as the respondent submitted, there was no good reason to distinguish between claims 1, 17 and 20. Further, save for claims 12, 14 and 16 it seems to me that the other claims, including claims 4, 6 and 8 to 10, should also be regarded as product claims, containing functional limitations or limitations by result. Claims 12, 14 and 16 use “a method of definition appropriate only to a [method or] process claim”: see Rescare at 126. That is, they describe the actual variation of the annulus in response to an external sensor (claim 12), in response to an external signal (claim 14); and according to pre-programmed times (claim 16). These claims are not, as Axent submitted, framed in terms of capabilities. Rather, these claims in substance describe the operation of the claimed sign system and are, therefore, method or process claims.

280    If am wrong and the respondents’ submission that all the claims are method claims is correct, then the following lengthy discussion on infringement is unnecessary since none of the respondents have been shown to have performed the method.

Regarding clarity of claims

281    Section 40(3) of the Patents Act requires that the claims of a patent be clear and succinct. It is an objection to the validity of a patent that “the scope of any claim of the complete specification is not sufficiently and clearly defined”: see Blanco White at 4-701, p. 143. The need for clarity arises because, as Dixon CJ said in Martin v Scribal Pty Ltd [1954] HCA 48; 92 CLR 17 at 59, “the principles governing the definition of a monopoly operating over the public at large require a description which is not reasonably capable of misunderstanding”.

282    A court may refer to the body of the specification not only to identify the background of the claims and the meaning of technical terms, but also to resolve ambiguities in or other doubts about the claims’ construction: Austal Ships Sales Pty Ltd v Stena Rederi Aktiebolag [2008] FCAFC 121; 77 IPR 229 at [13], citing Flexible Steel Lacing Co v Beltreco Ltd [2000] FCA 890; 49 IPR 331 at [71]-[78]; Nesbit Evans Group Australia Pty Ltd v Impro Ltd (1997) 39 IPR 56 at 94-95. A claim is not invalid merely because it might have been better drafted nor because it is difficult to construe, “provided it can be properly and fairly construed”: Britax Childcare Pty Ltd v Infa-Secure Pty Ltd (No 4) [2015] FCA 651; 113 IPR 280 at [583] (emphasis in original); see also Flexible Steel at [80]-[81], quoting Blanco White at 4-701, and cited with approval by the Full Court in Austal Ships at [14].