Federal Court of Australia

Australian Mud Company Pty Ltd v Globaltech Corporation Pty Ltd (No 3) [2022] FCA 1189

ORDERS

THE COURT ORDERS THAT:

1.    The parties confer and, within 14 days of these orders, submit to the Associate to Justice Rofe an agreed minute of orders giving effect to these reasons.

2.    Failing agreement, each party provide their proposed minute of orders within the same period as specified in order 1.

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

REASONS FOR JUDGMENT

ROFE J:

Introduction

1    The First Applicant, Australian Mud Company Pty Ltd (AMC) is the registered owner of Australian Standard Patent No 2010200162 for an invention entitled “Core Sample Orientation” (the Patent).

2    The Second Applicant, Reflex Instruments Asia Pacific Pty Ltd (Reflex) is the exclusive licensee of the Patent. The Applicants are subsidiaries of the publicly listed company Imdex Limited (Imdex). I will refer to the Applicants as AMC in these reasons.

3    The claims in the Patent assert a priority date from Provisional Patent Application No 2004905021 (the Provisional) filed on 3 September 2004 (the Priority Date), although there is an issue as to whether the claims of the Patent are fairly based on matter disclosed in the Provisional.

4    AMC claims that the Respondents have infringed claims 1–4, 7–10, 16, 17, 21–24, 27, 28, 33–40, 46–48, 54 and 65 of the Patent (the Contested Claims), of which claims 1 and 33 are independent claims. The Contested Claims are method claims (claims 1–4, 7–10, 16–17, 21–24, 27, 28 and 65) and what are described in the Patent as system claims (claims 33–40, 46–48, 54 and 65).

5    There are four Respondents. The First and Second Respondents are Globaltech Corporation Pty Ltd (Globaltech Corporation) and Globaltech Pty Ltd (GTCPL) (collectively, Globaltech). The Third and Fourth Respondents are Boart Longyear Limited (BLY) (now called Boart Longyear Pty Ltd) and Boart Longyear Australia Pty Ltd (BLYA) (collectively, Boart Longyear).

6    AMC contends that each of the four Respondents has infringed the Contested Claims of the Patent in respect of the exploitation of tools for orienting core samples, referred to in these reasons as the “V6 Tool”. The V6 Tool was also referred to in the evidence as the TruCore™ UPIX Tool or UPIX Orifinder Tool.

7    The infringement dispute is limited to one feature of independent claims 1 and 33, being the “predetermined time intervals” integer.

8    Before the trial Besanko J made orders on 12 December 2019 that the issues of liability be heard and determined before any issues of the quantum of pecuniary relief. AMC makes a claim for additional damages pursuant to s 122A of the Patents Act 1990 (Cth) (the Act). The entitlement to that relief, but not the quantum thereof, should an entitlement be established, was part of the hearing.

9    BLYA has filed a cross-claim for revocation of the Contested Claims, which turns upon a challenge to the Priority Date of the claims based on the Provisional. BLYA asserts that the claims lack fair basis on the Provisional.

10    The version of the Act and Patents Regulations 1991 (Cth) which is relevant is that in force prior to the “Raising the Bar” amendments passed in 2012.

11    In general terms, the Patent relates to a system and method for orienting core samples extracted from the ground, such as may be used in connection with geological surveys and other exploratory drilling operations.

12    For the reasons set out below I find that the V6 Tool takes each of the integers of the Contested Claims of the Patent. Further, I consider that AMC’s entitlement to an award of additional damages pursuant to s 122(1A) of the Act is enlivened. I have also found that the Patent is valid.

Prior Proceedings

13    The Patent was the subject of previous proceedings between AMC and Globaltech before Besanko J. In those proceedings, Globaltech was found to infringe the Patent by offering for sale and selling in Australia other core orientation devices known by the brand name “Orifinder”: versions 3A, 3B and 5 (Earlier Devices) (Australian Mud Company Pty Ltd v Globaltech Corporation Pty Ltd (2019) 138 IPR 33 (Globaltech FI)). Besanko J held the Patent to be valid and infringed. He rejected all invalidity challenges, including on the ground of external fair basis. A certificate of validity was issued by Besanko J in Globaltech FI in respect of each of claims 1–4, 7–10, 16–17, 21–24, 27–28, 33–40, 46–48, 54 and 65 of the Patent.

14    Globaltech’s appeal was unsuccessful. The Full Court held the Patent to be valid and infringed (Globaltech Corp Pty Ltd v Australian Mud Company Pty Ltd (2019) 145 IPR 39 (per Kenny, Robertson and Moshinsky JJ) (Globaltech FC)). An application for special leave to appeal to the High Court was refused.

15    Globaltech was recently unsuccessful in seeking a stay of the quantum aspect of the Globaltech FI proceeding: Australian Mud Company Pty Ltd v Globaltech Corporation Pty Ltd [2022] FCA 445 (Globaltech QS). Following that decision Globaltech sought an order that AMC make their election as between damages and an account of profits on or before 27 May 2022. This application was unsuccessful: Australian Mud Company Pty Ltd v Globaltech Corporation Pty Ltd (No 3) [2022] FCA 596.

16    Separate proceedings for infringement of the Patent were issued in respect of another core orientation device, the V4 Tool. These were resolved by consent, with orders made by Bennett J on 19 October 2015 including a restraint on both Globaltech Corporation and GTCPL from dealing with the V4 Tool.

17    The Patent was also the subject of proceedings between AMC and Coretell Pty Ltd: Australian Mud Company Pty Ltd v Coretell Pty Ltd (No 2) [2018] FCA 1109, in which Besanko J found the Patent to be valid and infringed. A certificate of validity of each of claims 1 to 69 of the Patent was issued by Besanko J.

18    There were also related infringement proceedings involving two innovation patents which claimed priority from the Provisional, before McKerracher J at first instance (Australian Mud Company Pty Ltd v Coretell Pty Ltd (No 4) [2015] FCA 1372 (Coretell 2015)) and then on appeal to the Full Court (Coretell Pty Ltd v Australia Mud Company Pty Ltd (2017) 250 FCR 155 (per Jagot, Nicholas and Burley JJ) (Coretell FC)). An application for special leave to the High Court was refused. Besanko J noted in Globaltech FI at [11] that the specifications and claims in the innovation patents were substantially the same as the specification and claims in the Patent.

19    The Respondents contend that the V6 Tool operates in a different way to the earlier core orientation devices (the V3A, V3B, V4 and V5 Tools) and therefore avoids infringement.

The Patent

20    The invention described and claimed in the Patent provides a method and system for identifying the in situ orientation of the core sample in the surrounding rock prior to extraction. This is important, because drilling typically takes place at an angle to the vertical, and it is necessary to understand the orientation of the sample so that once on the surface, information concerning the location and direction of particular rock formations can be derived from the sample.

21    The following description of the Patent is substantially based on the description of Besanko J in Globaltech FI, and the reasons of the Full Court in Globaltech FC. None of the parties took issue with those descriptions in this proceeding.

22    The Patent is entitled “Core Sample Orientation”. The abstract in the Patent describes a core orientation device by reference to Figure 1 and the way in which the device operates to provide a measure of the physical orientation of the device at a particular moment in time.

23    The field of the invention is said to relate to core sample orientation. More specifically, the invention relates to an orientation device for providing an indication of the orientation of a core sample relative to a body of material from which the core has been extracted. It also relates to a method of core sample orientation identification.

24    The field of the invention was discussed by Besanko J in Globaltech FI at [115]–[124], with his Honour concluding that the field of the invention is drilling for minerals in hard rock environments, as distinct from drilling for oil and gas.

25    The specification then sets out the “Background Art”, which explains what core sample orientation is and identifies conventional core orientation tools that were in use before the Priority Date. As at the Priority Date, various manual systems and methods for orientating core samples were known and used in mineral exploration. Importantly, these were all “mechanical” type tools, which worked by physically marking the core prior to its extraction from the ground. There were problems and difficulties associated with these prior art methods and tools which the invention claimed in the Patent addresses. These matters were discussed by Besanko J as part of his discussion of the common general knowledge in Globaltech FI at [125]–[159].

26    When a core sample has been acquired, it is fractured from the surrounding rock (referred to as “core break”), and then the inner tube assembly, and core sample therein, are retrieved back up to the ground surface for analysis. It is said to be desirable for analysis purposes to have an indication of the orientation of the core sample relative to the ground from which it was extracted.

27    The specification states that a common way of obtaining an indication of the orientation of a core sample is through the use of an orientation spear comprising a marker, such as a crayon, projecting from one end of a thin steel shank, the other end of which is attached to a wire line. The description of how the orientation spear is used to mark the core sample is as follows:

The orientation spear is lowered down the drill hole, prior to the inner tube assembly being introduced. The marker on the orientation spear strikes the facing surface of material from which the core is to be generated, leaving a mark thereon. Because of gravity, the mark is on the lower side of the drill hole. The inner tube assembly is then introduced into the outer tube assembly in the drill hole. As drilling proceeds, a core sample is generated within the inner tube assembly. The core sample so generated carries the mark which was previously applied. Upon completion of the core drilling run and retrieval of the core sample, the mark provides an indication of the orientation of the core sample at the time it was in the ground.

28    The specification states that there are also mechanical core orientation devices for marking a core sample prior to its extraction from the drill hole. Unlike the orientation spear, which is used before the inner tube assembly is introduced into the drill, the mechanical devices are typically adapted to be incorporated in the inner tube assembly for marking the core. An example of such a mechanical orientation device is said to be that disclosed in WO 03/038212 (which the Full Court in Globaltech FC noted should be WO 03/038232).

29    The specification notes that it is against this background and the problems and difficulties associated therewith that the invention was developed.

30    Before discussing the “Disclosure of the Invention” section, the Full Court in Globaltech FC considered it convenient to set out the two relevant independent claims in the Patent and the two claims that immediately follow them, namely, claims 1 and 2 (method claims) and claims 33 and 34 (system claims). Claim 1 comprises an introductory phrase followed by five descriptive phrases that are indented from the margin, which Besanko J described as “steps”, an approach adopted by the Full Court.

31    The broadest method claim, independent claim 1, provides as follows (with integer numbers added). I have also adopted the designation of “steps” as used by Besanko J and the Full Court:

1.    A method of providing an indication of the orientation of a core sample relative to a body of material from which the core sample has been extracted, the method comprising:

1.1    drilling a core sample from a body of material with a core drill having an inner tube [step 1];

1.2.    recording the orientation of the inner tube at predetermined time intervals during said drilling, the time intervals being referable to an initial reference time [step 2];

1.3.    inputting the specific time beyond the reference time representative of when the core sample was separated from the body of material [step 3];

1.4.     removing the inner tube, with the core sample held therein in fixed relation to it, from the body of material [step 4]; and

1.5.     relating the inputted specific time to the recorded time intervals to obtain an indication of the orientation of the inner tube and consequently the core contained therein at the specific time [step 5].

32    Claim 2 is as follows:

2.     A method as claimed in claim 1, comprising:

producing signals to indicate the orientation of the inner tube at any instant in time during said drilling;

processing the signals to determine data indicative of the orientation of the inner tube at various instants in time;

inputting a time measurement representative of the instant in time when the core sample is separated from the body of material and first held in fixed relation thereto; and comparing the inputted time measurement to the instants in time and identifying the data indicative of the orientation of the inner tube and consequently the core sample at the instant in time.

33    Claim 33 is as follows:

33.     A core orientation system for providing an indication of the orientation of a core sample relative to a body of material from which the core sample has been extracted using a core drill, the core drill having an inner tube, the system comprising:

means for recording the orientation of the inner tube at predetermined time intervals during drilling by the core drill, the time intervals being referable to an initial reference time, and for inputting the specific time beyond the reference time representative of when the core sample was separated from the body of material; and

means for relating the inputted specific time to the recorded time intervals to obtain an indication of the orientation of the inner tube and consequently the core contained therein at the specific time.

34    Claim 34 is as follows:

34.     A system as claimed in claim 33, comprising:

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

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

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

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

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

35    In the section headed “Disclosure of the Invention”, the Patent sets out a description of the invention. The first paragraph identifies what is said to be the first broad aspect of the invention and it is in the same terms as claim 1. There then follows a series of consistory clauses for the rest of the method claims. The same observations apply to the disclosure of the invention insofar as it relates to the system claims, which is described in the specification as the second broad aspect of the invention. The third broad aspect of the invention is a core drill having a core orientation system according to the second broad aspect of the invention, and the fourth and final broad aspect of the invention is a combination of the method and system aspects of the invention.

36    The specification includes six drawings, which are described as Figures 1–6. It contains a brief description of the drawings, which each depict one specific embodiment of the invention.

37    The function of this part of the specification is to provide a disclosure of the invention, or in other words, to say what the invention actually is. Four broad aspects of the invention are disclosed. These include a first broad aspect, a method of core sample orientation having particular features, referable to claim 1; and a second broad aspect, a core orientation system with particular features, which is referable to claim 33. There are also various narrowing preferments or limitations.

38    In the “first broad aspect”, the method disclosed works by using the orientation of the inner tube assembly of the core drill, which receives the core sample, as a proxy for the orientation of the core sample itself. The orientation of the inner tube can be measured by a device with components such as accelerometers, which are capable of sensing a device’s orientation. The device is typically attached to the inner tube and sent downhole to provide those measurements of orientation.

39    The “second broad aspect” of the invention, is directed to a core orientation system. It has generally similar features to the method of the “first broad aspect”. The difference is that it is directed to a system comprising means or components for carrying out the relevant steps, rather than a method comprising the steps. Those means are broadly defined by reference to their functions, which reflect the steps of the method. In context, it is apparent that the system is directed to a set of interacting components located downhole and on the surface which work together to achieve a specific purpose, being in this case to orient a core sample. The nature of such a system is dealt with further in the context of the corresponding claim of the Patent, claim 33.

40    The specification then provides a “Brief Description of the Drawings”. This commences with a passage which emphasises that the detailed description that is about to follow is exemplary but non-limiting, stating that “[t]he invention will be better understood by reference to the following description of one specific embodiment thereof as shown in the accompanying drawings…”. That “one specific embodiment” of the invention is then described in a section headed “Best Mode(s) for Carrying Out the Invention”.

41    The final part of the body of the specification sets out the “Best Mode(s) for Carrying Out the Invention” (Best Mode(s) section). Besanko J referred to this as the “best method section”, and the Full Court followed suit. This part of the specification extends over nine pages and refers to features that are shown in the drawings and are identified by numbers.

42    The purpose of the Best Mode(s) section is to provide a detailed description of a particular exemplary but non-limiting preferred embodiment. The embodiment described involves the use of two timers (downhole and above ground) that are started contemporaneously, using a “counting forwards” system from a common initial reference time. Consistent with it being merely a preferred embodiment, there are references throughout this part of the description to “this embodiment” or “the embodiment”. In context, the third last paragraph in this part of the description on page 21 relates to the particular preferred embodiment being described, not to the invention as a whole, or in its broad form. This was dealt with by both Besanko J and the Full Court: see Globaltech FC at [110].

43    The best method section contains a description of the process of using the core orientation device. The description begins with a reference to a “first step” which comprises moving the core drill, having the core orientation device forming part thereof, from a first location to a drilling location. The best method section refers to a “reference time” and contains a statement to the effect that the reference time corresponds to the time at which the core orientation device is started, and from which successive one minute intervals are timed.

44    The best method section states that in “this embodiment”, the core orientation device is started by pressing a particular key on the keypad. The best method section continues as follows:

It is also necessary to record the time duration between starting the core orientation device 10 and extracting the core sample. Typically this is achieved by starting an external stop watch at the time of starting of the orientation device 10. Other arrangements are of course possible.

The stop watch is started at the time that the orientation device 10 displays a signal on the display 31 indicating that operation of the orientation device 10 has started. This provides for added accuracy.

Once the orientation device 10 has been started and recording of the subsequent time duration commenced, the inner tube assembly 36 is inserted into a drill hole for reception in the outer tube assembly 13, and the core drilling operation commenced. During the drilling operation, a core is progressively generated within the inner tube assembly, as previous explained.

When the core is to be extracted, the core drill operator refers to the timer and notes the time duration involved. Specifically, the operator either notes the full minute that has previously elapsed or waits until the next full minute elapses, and then records that time (as it must be recalled later).

45    A little later in the best method section, there is a statement that in the particular embodiment described, the core orientation device is rotated to reflect the measure of the orientation. This is achieved by inputting the time duration, as measured by the external stop watch, into the orientation device using the keypad. The section provides that the time measurement measured by the operator and entered into the keypad represents the duration of time between starting the orientation device and the point at which the particular drilling process was terminated in order to fracture the core sample from the body of material to which it is attached so that the core sample can be retrieved from the drill hole and brought to the surface level.

46    The third and second to last paragraphs of the body of the specification are in the following terms:

From the forgoing, it is evident that the present invention provides an orientation device which does not require physical marking of a core sample prior to extraction thereof from the ground. Indeed, the orientation device according to the embodiment is particularly convenient for an operator to use. All that is required is for the operator to start the orientation device prior to the inner tube assembly 36 being inserted into the drill hole, and contemporaneously start a timer for recording the time duration before the drilling operation ceases to allow the generated core sample to be retrieved.

Modifications and improvements may be made without departing from the scope of the invention. For example in other embodiment the physical orientation does not comprise a rotational orientation but rather a measure of degrees above or below the horizontal plane.

47    The claimed method works in general terms by recording the orientation of the inner tube of the core drill during drilling (for example through the use of accelerometers) at predetermined time intervals. An inputted time (representative of core break) and recorded orientation measurements are subsequently related so as to provide an in situ indication of the orientation of the core sample.

48    There are then 69 claims, including the independent claims 1 and 33 set out above.

Witnesses

49    AMC called one expert at trial, Professor Jonathan Tapson. Professor Tapson gave evidence on both infringement and validity. Globaltech called three experts at trial, Professor Thomas Braunl, Mr Peter Berry and Mr Adrian Edmonds. Globaltech’s three experts gave overlapping evidence in relation to infringement. Boart Longyear called one expert, Professor Christian Dupuis who gave evidence solely in relation to the validity challenge. Each expert made affidavits before trial which contained their evidence-in-chief and evidence in answer. The parties formulated two lists of issues before trial and each expert addressed the issues in a joint expert report, one for infringement (JER-I) and another for (in)validity (JER-V). The experts gave evidence by way of two joint sessions which were conducted via Microsoft Teams. First on infringement with Professor Tapson, Professor Braunl, Mr Edmonds and Mr Berry and second on invalidity with Professor Tapson and Professor Dupuis.

50    As an aside, I note that the expert evidence in this proceeding was filed prior to the Full Court’s decision in Novartis AG v Pharmacor Pty Ltd [2022] FCAFC 58 per Yates, Beach and Moshinsky JJ (Novartis). Consistent with modern case management in patent litigation, the purpose expressed in Pt VB of the Federal Court of Australia Act 1976 (Cth) and the Intellectual Property Practice Note (IP-1), the Court would not expect to see a party relying on multiple expert witnesses from the same discipline. Rather, the Court would expect the parties to be guided by the comments of Beach J in Novartis at [24]–[30].

51    AMC also called evidence from Mr Kevin Laurence Brown, the Global Products Manager for Reflex. Mr Brown was not cross-examined.

52    Globaltech called evidence from two in-house witnesses, Mr Khaled Hejleh, the Managing Director of Globaltech Corporation and GTCPL, and Mr Brett Wilkinson, Chief Technical Officer at Globaltech Corporation, both of whom were cross examined.

53    Boart Longyear called evidence from Ms Shannon Emrick, General Counsel Asia Pacific of BLYA.

54    Globaltech was ordered to file a Product Description with respect to the V6 Tool before trial. The Product Description contains a description of, and flowcharts with respect to, the V6 Tool. The Product Description was verified by Mr Hejleh.

55    I turn now to summarise the qualifications and experience of the expert witnesses who gave evidence. In respect of Professor Tapson, Mr Brown and Mr Edmonds all of whom gave evidence in Globaltech FI, I also refer to the summary of Besanko J at [44]–[59] in the case of Mr Tapson, [60]–[79] for Mr Brown, and [98]–[103] in the case of Mr Edmonds.

Professor Tapson

56    Professor Tapson is an electronics and electrical engineer and Professor at the School of Computing, Engineering and Mathematics at Western Sydney University. He is currently on a leave of absence from the University during which he is employed as the Chief Scientific Officer for GrAI Matter Labs, an electronics company in San Jose, California.

57    Professor Tapson completed his PhD in engineering in 1994 at the University of Cape Town. He also holds a Bachelor of Science in electrical engineering and a Bachelor of Science in physics obtained from the same university.

58    Besanko J noted at Globaltech FI [52] that Professor Tapson has taught in the areas of Mechatronics Design, Microprocessor Systems, Process Control and Instrumentation, Electrical Engineering Design and Advanced Topics in Instrumentation. These subjects involve engineering concepts relevant to the design of instruments and techniques for orientation and position sensing in the mining industry.

59    In Globaltech FI at [53] and [54], along with details of Professor Tapson’s membership of professional associations and editorial boards and presentations at industry conferences, Besanko J noted that Professor Tapson had published over 100 academic papers covering a range of topics including sensor design, electronic circuits and networked systems. Of particular note to his Honour was that in 2003, and again in 2004, Professor Tapson was invited to present the keynote address at the Annual Conference of the South African Institute of Mining and Mineral Processing regarding the state of the art of instrumentation and networked systems in the mining industry.

60    At [55] Besanko J listed examples of projects that Professor Tapson had conducted in the areas of orientation instruments and systems for the mining industry up to late 2004.

61    It was suggested by the Respondents that Professor Tapson was an experienced or “seasoned” witness for AMC and its related entities, having appeared for them in eight other proceedings before this court and the Patent Office in Australia and the US, and that he had a close association with AMC. The Respondents pointed to the fact that as a result of Professor Tapson making suggestions during the course of a previous retainer as an expert for AMC, he was named as a co-inventor on two patents. Professor Tapson states in his affidavit dated 12 October 2020 that he has received no payment for his contributions to those patents nor was he involved in their preparation.

62    A similar suggestion was made by Globaltech to Besanko J in Globaltech FI, who rejected it, stating at [59]:

It is true, as Globaltech submitted, that Professor Tapson had acted for a number of years as an expert for AMC or its parent company, Imdex Pty Ltd (Imdex). I take into account the fact that Professor Tapson has given evidence in previous proceedings and that, in a sense, he has had a long association with this family of patents. However, I am not persuaded that his independence has been compromised.

63    Nothing that transpired in the hearing would cause me to depart from Besanko J’s conclusion. It is true that Professor Tapson has been an expert for AMC in a number of proceedings brought by AMC. However, this is in the context where each of the proceedings involved the construction of the claims of the Patent or the related innovation patents and their validity, and evolving iterations of the Globaltech core orientation device. In that context, it is unsurprising that AMC would continue to have Professor Tapson give expert evidence.

Mr Brown

64    Mr Brown is the Global Products Manager for Reflex. Mr Brown gave evidence in Globaltech FI. He was not required for cross examination in this proceeding.

65    Mr Brown has over 20 years’ experience in mineral exploration drilling. Over this time he has acquired knowledge and experience in all major forms of exploration drilling, including auger drilling, rotary-percussion drilling and diamond core drilling, including the technologies and instruments used in those drilling programmes. Details of Mr Brown’s employment history and experience was set out by Besanko J at [62]–[77].

66    For the most part, Mr Brown’s evidence was directed towards the conduct of the Respondents in support of AMC’s claim for relief against all the Respondents, and its claim for additional damages.

Mr Edmonds

67    Mr Edmonds was an expert witness for Globaltech in Globaltech FI.

68    Mr Edmonds is an electronics and software engineer who has worked with electronic drill hole surveying instruments for use in underground directional drilling since March 2004. Mr Edmonds has experience in working on projects developing instruments in the field of mining and mineral exploration and geotechnical drilling before the priority date. Justice Besanko summarised Mr Edmonds’ experience at [98]–[103].

Professor Braunl

69    Professor Braunl is a Professor of electrical, electronic and computer engineering in the Department of Electrical Engineering at the University of Western Australia. He is also the Director of the University’s Robotics & Automation Lab and Renewable Energy Vehicle Lab.

70    Professor Braunl has substantial experience in the general areas of electronic circuits, assembly code, watch dog timers, and all manners of circuit boards, CPUs, chips, and their relationships to software. One of his particular research and teaching areas in his role at the University of Western Australia is in embedded systems. Professor Braunl explains that an embedded system is a computer hardware system (comprising processors, memory, input/output devices) with stored software as part of a complete device.

71    Professor Braunl teaches students in areas such as microcontrollers, sensors, actuators, hardware and software, assembly language, C language, watch dog timers, CPU design, interrupts and communication between processors, timers, design and analysis of circuits, and more. He also designs and uses all of these types of electronic components and software in his work on autonomous vehicles as part of his role as director of the Renewable Energy Vehicle Lab.

72    Professor Braunl had no experience with mining or drilling instrumentation or with software associated with drilling equipment and instrumentation.

Mr Berry

73    Mr Berry is a consultant electronics and software engineer based in Western Australia. He graduated in 1983 with a Bachelor of Science in Electronic Engineering from the University of Natal. As at the priority date he was working on a variety of projects concerning electronic technology including designing digital circuit boards, writing embedded firmware for processors, communications protocols and networking. He had also undertaken work to design circuitry and firmware to communicate with accelerometers to determine the data sensed from the accelerometer axes.

74    Mr Berry had undertaken some previous consulting work with Globaltech in or about 2017. Mr Berry states that that work involved two relatively small research projects in respect of testing out new product ideas. His role was to design some electronic componentry of the new product ideas. Neither of the projects was in relation to an electric downhole orientation tool. This constituted his only experience in relation to mining or drilling equipment. Mr Berry was unaware of any of the earlier proceedings.

Associate Professor Dupuis

75    Associate Professor Dupuis is an electrical engineer and an Associate Professor at the Université Laval, Québec, Canada. Professor Dupuis graduated with a Bachelor of Electrical Engineering in 2001 from the University of New Brunswick, Canada. He also holds a Masters in Electrical Engineering from the same University. His doctoral thesis was entitled “Field measurements and analysis of electrokinetic seismoelectric signals generated in sedimentary environments”. During 2013–14, he was an adjunct visiting fellow at Curtain University of Technology in Western Australia.

76    For approximately 13 years Professor Dupuis has carried out research in the areas of mining, mineral exploration and geotechnical drilling, including the development of borehole instruments and measurement systems to facilitate borehole geophysics and improve mineral exploration efficiency.

Mr Hejleh

77    Mr Hejleh is the Managing Director of both Globaltech Corporation and GTCPL. Mr Hejleh verified the Product Description for the V6 Tool. Mr Hejleh was cross examined predominantly in relation to the corporate relationships of the Respondents.

Mr Wilkinson

78    Mr Brett Wilkinson is the Chief Technical Officer of Globaltech Corporation, a company in which he is also a shareholder.

79    Mr Wilkinson graduated with a Bachelor of Engineering with honours in electronic systems in 1999 from Edith Cowan University. Since graduating, Mr Wilkinson has worked his whole professional life at Globaltech Corporation.

80    As Chief Technical Officer, Mr Wilkinson manages a team of about six firmware engineers and two technicians. Mr Wilkinson oversees the design and development of electronic tools at Globaltech, including both the electronic hardware and the firmware, from concept to production handover. He is listed as a co-inventor on a number of Globaltech’s patents. Mr Wilkinson was involved in the design and development of each version of the Orifinder Tools, including the V6 Tool.

81    Mr Wilkinson performed a series of repeat tests on a V6 Tool to provide output results of the time intervals between successive orientation recordings of the V6 Tool. These results were provided to the expert witnesses for consideration.

Ms Emrick

82    Ms Shannon Emrick is the General Counsel Asia Pacific of BLYA. Ms Emrick is also:

(a)    a director of BLYA (since February 2017);

(b)    Company Secretary of BLYA (since October 2017);

(c)    a director of the Third Respondent, BLY Limited (which became BLY Pty Ltd on 4 February 2022) (since December 2021);

(d)    a director of Votraint No 1609 Pty Ltd (which owns 58% of share capital in Globaltech Corporation) (since 2016); and

(e)    the Company Secretary of Votraint No 1609 Pty Ltd since 2017.

83    Ms Emrick was also interim Global Chief Legal Officer of Boart Longyear Company from 1 November 2021 until 28 February 2022.

84    As part of her role as General Counsel, Ms Emrick manages the regional BLY Adelaide Office and has legal oversight over Australian and Pacific operations, such as commercial and strategic decisions for the BLY Group within the Asia Pacific region, M&A and divestor work.

85    In her role as General Counsel Asia Pacific of BLYA, Ms Emrick reports to and supports the Global Chief Legal Officer and the Board of the ASX listed entity, which prior to 4 February 2022 was BLY.

The Skilled Person

86    The debate between the parties on infringement and validity centres on the construction of the Patent and of the Provisional. These are ultimately matters for the Court, although the evidence of properly qualified experts has the potential to assist in terms of the surrounding common general knowledge and any issues relating to the operation of the allegedly infringing device.

87    The notional person skilled in the art, or skilled addressee, is a person with a practical interest in the subject matter of the Patent. In general terms, in the present case, this includes those interested in the design, manufacture and operation of down hole drilling tools, including core orientation devices, their instrumentation, electronics and software, and the techniques for measuring orientation, particularly core sample orientation. It is likely that the person skilled in the art is a team.

88    In Globaltech FI, Besanko J identified the skilled addressee of the Patent as at the Priority Date as follows at [113]:

In my opinion, the person or persons skilled in the art would have experience or knowledge in electronics and software and drilling. There was a debate before me about whether one person was likely to have all of the requisite experience and knowledge. I am of the opinion, on the balance of probabilities, that that is unlikely, and it is more likely that the relevant “person” will be a team of two, possibly more persons.

89    Besanko J held in Globaltech FI at [114] that each of the experts called to give evidence, relevantly including Mr Edmonds and Professor Tapson, were in a position to give relevant expert evidence. Like the experts in Globaltech FI, the remaining experts in this case had varying levels of expertise relevant to areas and aspects of the task, but each were in a position to give relevant expert evidence.

Earlier Globaltech Proceedings

90    Before going further, it is useful to refer to the construction of claim 1 in the Globaltech FI proceedings. In that earlier proceeding, Besanko J construed claim 1 of the Patent, including the “predetermined time intervals integer” and then considered the question of whether the V3A, V3B and V5 Tools infringed the Patent. Justice Besanko found each of the V3A, V3B and V5 Tools infringed the claims in suit. Globaltech appealed the findings as to the V5 Tool. Justice Besanko’s construction of the claims and findings that the V5 tool infringed the claims in suit were upheld by the Full Court in Globaltech FC.

91    It is against the backdrop of Besanko J’s construction of the Patent claims in Globaltech FI, as upheld by the Full Court in Globaltech FC, that the Respondents advance their construction and external fair basis arguments in this proceeding.

Globaltech FI

92    Under the heading “The Main Construction Issues”, Besanko J discussed three issues, commencing at [185]. Only the first and third of these issues, described as “synchronisation” and “predetermined time intervals” are relevant for the purposes of this proceeding.

93    Besanko J began his consideration of the “synchronisation” issue at [185] by noting that there was no dispute that the method in claim 1 requires two timers, one in the downhole device and the other on the surface, and that they are involved in a way that ultimately leads to the identification of the orientation recording at or close to the time of the core break. Nor was it in dispute that the act of inputting the specific time referred to in step 3 is an act carried out by the operator on the surface. These matters were also not in dispute in the present proceeding.

94    The Full Court observed in Globaltech FC at [60], that Globaltech used the term “synchronisation” to refer to a timer on the surface being started contemporaneously with the timer of the orientation device. The Full Court gave as an example the method adopted when a stop watch is used, as per the best method for carrying out the invention, which may be described as “synchronisation”.

95    At [188] Besanko J referred to Professor Tapson’s explanation that the use of two timers where the two timers are not started at the same time and then counted forward at the same rate might be called “time correlation”, but was not synchronisation. For example, there might be time correlation between two timers (A and B) if the time on an already running timer is recorded. Justice Besanko noted Professor Tapson’s opinion that the claims included not only synchronisation, but also forms of time correlation.

96    The Full Court noted at [62] that a further expression used by Besanko J was “offset”. This was a term used by Globaltech. In order to identify what was meant by “offset”, Besanko J set out the following passage from Professor Tapson’s evidence at [192]:

Suppose that the preferred embodiment described on pages 18 to 20 of the Patent were implemented with a clock indicating Greenwich Mean Time (GMT) in place of the stopwatch referred to in page 19, 1st paragraph. The operator notes the GMT time when he/she starts the orientation device (10) and notes the GMT time when he/she initiates core break (cf. Patent, page 18, 6th paragraph to page 19, 2nd paragraph). The operator determines the difference between the former GMT time and the latter GMT time, in minutes (cf. Patent, page 19, 4th paragraph). The operator inputs the time difference into the orientation device (10) through keypad (72) (cf. Patent page 19, 6th paragraph to page 20, 1st paragraph). This inputted specific time is representative of core break.

The operator has used the difference between two points in time (i.e., the two GMT times) to determine the inputted specific time, instead of using a stopwatch that is started contemporaneously with the orientation device (10). For that reason, the embodiment I have just described is not a “Synchronised Surface Timer” as that term is defined by the Respondents.

97    At [193], Besanko J noted that Globaltech was prepared to accept the offset example at [192] fell within claim 1.

98    At [195]–[197] the primary judge summarised the rival construction contentions:

(a)    Globaltech’s primary contention was that the claims are restricted to synchronisation. The primary judge treated this contention as referring to “synchronisation” in the sense described above (although, as the primary judge recognised, there was a debate as to the meaning of synchronisation);

(f)    Globaltech’s secondary contention was that claim 1 is limited to synchronisation and time correlation where the two timers are counting forwards and the relevant calculation is made from the start to the relevant point, which is core break. While acknowledging that it was somewhat imprecise, the primary judge referred to this construction as “counting forwards” (an expression used in the evidence and submissions); and

(g)    AMC submitted that, although claim 1 is limited to synchronisation and time correlation, the latter phrase means where two timers are used and the relevant calculation is made either from the start to the relevant point or from the end back to the relevant point. Whilst again acknowledging that it is somewhat imprecise, the primary judge referred to this construction as “counting forwards or backwards”.

99    Besanko J summarised the competing contentions as to the first feature, the “synchronisation” issue, at [240]:

To sum up, Globaltech described its system as asynchronous. That followed, so it submitted, from the fact that there is no initial reference time and the handheld device at the surface only starts the core orientation device running. Sometime later, there is a point at which the drilling will stop. At that point, the operator starts a handheld timer, which may be different from the handheld device used at the beginning, to record the time. The core is broken and then retrieved to the surface. At that time, the handheld timer is stopped, as is the device timer. The operator is able to identify the orientation reading just prior to core break by reference to the time which has elapsed from the time when the handheld timer was started just prior to core break, and the time when it was stopped.

100    At [241] Besanko J opined that the construction issue concerning synchronisation and counting forwards or backwards turned primarily on the meaning of certain words and phrases in steps 2, 3 and 5 of claim 1 and, more particularly, “predetermined time intervals” and “initial reference time” in step 2, and “inputting the specific time beyond the reference time” and “representative” in step 3.

101    At [242] to [248], Besanko J set out the competing contentions in relation to the words “predetermined time intervals” and “initial reference time”:

Step 2 “predetermined time intervals” and “initial reference time”

242     AMC’s submission with respect to the phrase “predetermined time intervals” is that when applied to an occurrence, the phrase means no more than that something occurs or is done at pre-programmed intervals and it does not say anything about two timers or synchronisation.

243     Globaltech’s submission is that the predetermined time intervals are pre-known sequential time intervals that are referable to a known start time and that the start time must, therefore, happen at the beginning. In general terms, that proposition may be accepted. Globaltech goes on to submit that predetermined time intervals are synonymous with synchronised operations where two devices (i.e., one in the downhole tool and one at the surface) can keep track of the same intervals because they are predetermined. To be predetermined, such intervals must have pre-known start and end points. As I understood Globaltech’s submission, it was that accurate predetermined time intervals are an essential feature of a synchronised system. It put its submission in writing as follows:

The Patent is a synchronised method that requires highly accurate timers counting at accurate intervals, otherwise it would not be possible for the inputted specific time to be related to the initial reference time and the predetermined time intervals. And it would not be possible to subsequently identify a specific time interval using the inputted specific time if the intervals are at unpredictable duration.

It may be accepted, that predetermined time intervals are a feature of a synchronised system. However, the same may be said of the methods or systems which are a feature of the use of the Orifinder v3B and Orifinder v5.

244     With respect to the phrase “initial reference time”, dictionary definitions of the word “referable” when followed by “to” suggests that it means having a particular relationship with or be directed to.

245     There was debate between the experts concerning whether the start of the RTC which occurs when the Orifinder v5 is switched from Hibernation to Standby mode, was an initial reference time or simply a time. Professor Tapson said that it was the former because every measurement thereafter is timestamped against that time, whereas Mr Edmonds considered that it is just the time on the RTC. Professor Tapson’s initial reference time in the case of the Orifinder v5 is when the tool enters Standby mode from Hibernation mode which is when the RTC starts.

246     AMC submits that “initial reference time” means no more and no less than a reference time that may be referenced time. It means something that can serve as a reference for the “predetermined time intervals” that are referred to later in the claim, for example, by timestamping. AMC submits that the Court should accept Professor Tapson’s evidence that “initial reference time” means no more than a fixed start time with respect to which the predetermined time intervals are timestamped and includes the time at which a clock in the downhole tool is started. If it meant synchronised two timers, then that could easily have been said. If it meant the starting or synchronised time (Mr Ayris), or the starting point where the two timing devices are synchronised meaning that these times are matched and they count at the same rate (Mr Edmonds), then the claim could easily have said that. Mr Edmonds’ opinion as to the meaning of “initial reference time” was linked to his understanding of the specific time beyond the reference time which is examined below.

247     Globaltech submits that an initial reference time is an essential requirement of a synchronised system. In context, it means the synchronisation of a surface timer and a timer in the downhole tool. Globaltech relied on the evidence of its experts. The reasoning of those experts was based, in part at least, on the need for an initial reference time in the case of a synchronised system, but not otherwise, and the explanation as to the operation of the best mode or method. Globaltech also made the point that the only method described in the Patent involved a timer at the surface which is started contemporaneously with the timer in the downhole tool. Globaltech submits that Professor Tapson’s construction of initial reference time as related to the start time of the downhole timer, should be rejected because all the experts are agreed that there must be a surface timer in addition to a timer in the downhole tool, and that Professor Tapson’s construction involves reading words into the claim, that is, in the downhole timer, contrary to the principles established in the authorities (Welch Perrin v Worrell at 610).

248     The construction issues in this case are by no means easy. At first blush, there is a good deal of attraction in Globaltech’s submission that in a context in which it is agreed on all sides that the method involves two timers, one on the surface and one in the hole, the reference to “initial reference time” would suggest a time to which both timers referred, and in its submission that in practical terms the only context provided by the Specification in the best method section and its reference to a synchronised or at least counting forwards method.

102    Ultimately Besanko J concluded as to “synchronisation” as follows at [265]:

In conclusion, the claims are not limited to the use of a Synchronised Surface Timer and the major issue is whether the claims are limited to a method which counts forwards or includes a method that counts forwards or backwards. I accept Professor Tapson’s evidence that “initial reference time” in step 2 includes the start of the timer in the downhole device. I do not see any reason to limit the phrase to the start of two timers or the start of one timer and the recording of the time shown on another timer. I accept the evidence, particularly in light of the acknowledgments or concessions made by Mr Edmonds, that the Orifinder v5 involves an inputting of a specific time within step 3 and falls within step 5 when that step is considered alone. That really leaves for consideration the word “beyond” in the phrase “beyond the reference time” in step 3. I do not think it means anything more than after or later than.

103    At [277], in considering the “predetermined time intervals” integer in the context of his infringement analysis, Besanko J noted:

The Orifinder v5 uses a WDT. WDTs are not precisely accurate as they can be affected by temperature and pressure. The margin of error is in the region of up to 10%.

104    In short, the V5 Tool operated using a device called a “Watch Dog Timer” which counted 12 mini cycles of approximately 2 seconds each so as to produce time intervals which due to the inaccuracy of the WDT, varied randomly within a range of about 25 seconds plus or minus up to about 10%. In other words, although intended to be 25 seconds, the time intervals varied randomly within the range of about 22.5 to about 27.5 seconds (the V5 range). The Respondents’ argued that these were not “predetermined time intervals” because of this variability and the fact that the precise duration of each time interval could not be known in advance.

105    Justice Besanko noted at [278] that:

AMC submitted that there is no requirement in the claims that the predetermined time intervals be exact or precise time intervals, and no requirement that the progression of time intervals be known or confidently predicted to within “a given second”. The best method section in the Specification does not suggest a need for such a degree of accuracy. First, the body of the Specification refers to a timer in the device, but not one exhibiting any particular degree of accuracy. Secondly, there will inevitably be a short delay between starting the orientation device and starting the external stop watch. Thirdly, the relevant time duration inputted into the orientation device is referred to as “in minutes” and not the more precise “in minutes and seconds”.

106    At [279] Besanko J recorded the evidence of the Respondents’ experts on the issue of “predetermined time intervals”; Mr Ayris, who did not give evidence in this proceeding, and Mr Edmonds, who gave evidence in this proceeding:

Mr Ayris agreed that “predetermined time intervals” in step 2 means a pre-programmed or pre-set time interval and that there is no requirement in the claim that some intervals must be expressed with any particular degree of accuracy. Time intervals of, for example, 25 seconds plus or minus 10% (resulting from the use of a WDT) are predetermined time intervals. Mr Edmonds did not agree with this for two reasons. The first reason related to the particular wording of claim 2 which I do not need to consider at this time. The second reason is that he interpreted the claim to mean that the inputted specific time on the surface timer must precisely align with the end of one of the predetermined time intervals when a predetermined time interval is taken.

107    At [280] Besanko J noted two points:

First, the WDT in the Orifinder v5 will be accurate to plus or minus 10%. It determines when the orientation readings are taken, and while it must fulfil the requirement of readings at predetermined time intervals, there is no further accuracy issue because the timestamping is done by reference to the RTC. Secondly, core break is not instantaneous, or not necessarily instantaneous. The timestamping of each measurement is done by reference to the RTC which, in turn, refers back to the starting of the RTC (i.e., when entering Standby mode).

108    At [281] Besanko J concluded that the WDT used in the V5 Tool (with its plus or minus 10% accuracy) did not mean that the recording of the orientation of the inner tube does not take place at predetermined time intervals within step 2. The V5 was held to infringe the claims of the Patent.

109    Globaltech appealed Besanko J’s construction of the claims and finding that the V5 Tool infringed the claims of the Patent. Relevantly for this case, it alleged that Besanko J had erred by finding that the invention was not limited to a “synchronous” method/system involving two timers that each noted the same initial reference time at the beginning of drilling operations, with both timers counting from that time.

Globaltech FC

110    The Full Court observed at [120] that:

It was common ground at the trial that two timers would need to be used, one downhole (where orientation measurements would be recorded) and one on the surface (where the person using the method would be). However, the claim does not refer to these timers or how they are to be operated. In particular, it does not refer to the two timers being ‘synchronised’, or to the two timers being started at the same time.

111    The Full Court continued at [121] to [124] in relation to the steps of claim 1:

121     The steps of claim 1 that deal with the recording, inputting and relating of time measurements are steps 2, 3 and 5. As the primary judge recognised, these steps cannot be considered in isolation from each other.

122     Step 2 refers to recording the orientation of the inner tube at predetermined “time intervals” during the drilling, the time intervals being “referable to an initial reference time”. This occurs downhole, where the orientation measurements are recorded, and thus involves the use of the downhole timer. The time intervals at which the orientation measurements are recorded are “referable to” an initial reference time on that timer.

123     Step 3 refers to inputting “the specific reference time beyond the reference time”, which is representative of the time at which the core is broken. It was common ground below that this step occurs on the surface. In contrast to step 2, the “specific time” inputted in this step is not said to be “referable to” the initial reference time. It need only be “beyond” the initial reference time. As a matter of ordinary language, this may simply mean that the “specific time” occurs after or later than the initial reference time. This issue is discussed further below.

124     Step 5 refers to “relating the inputted specific time to the recorded time intervals” to obtain an indication of the core orientation at the specific time. This is the step of the method at which the two sets of time measurements (downhole and surface) are related to each other, so as to enable the orientation of the core sample at the time of core break to be determined. The word “relating” is a broad term. In this context, it encompasses any means of relating the inputted specific time to the recorded time intervals so as to obtain an indication of the orientation of the core sample at the specific time.

112    At [125] and [126]:

125     In our view, in light of the above matters, and having regard also to the further matters discussed below, the correct construction of claim 1 is that: step 2 involves the recording of time measurements downhole, while step 3 involves the inputting of a time measurement at the surface; the step in which these time measurements are related to each other is step 5, which occurs later, after the inner tube with the core sample contained in it has been removed from the ground and brought to the surface (see step 4); there is no requirement that the time measurements be related to each other prior to step 5 (by the use of a common initial reference time); that work is done by step 5, which involves “relating” the time measurements to each other.

126     This construction is supported by other aspects of the Patent. First, the specification, after referring to a preferred method comprising (inter alia) inputting a time measurement representative of the instant in time when the core sample is separated from the body of material (Patent, p 4, lines 16-17), states that “[p]referably, the instant in time is representative of a duration of time relative to the initial reference time” (Patent, p 5, lines 4-5). Secondly, the Patent contains a number of narrower claims that use the same or similar language (claims 6, 26 and 52). For example, claim 6, which is dependent on claim 2, requires the instant in time (referred to in claim 2) to be “representative of a duration of time relative to the initial reference time”. These parts of the specification and these claims suggest that when the patentee intends to indicate that the time of a core break is to be measured in a way that is referable to the initial reference time, it says so expressly.

113    At [127] the Full Court observed that the claims were not limited to the preferred embodiment as described in the best modes section:

While it may be accepted that the best method section (which describes one embodiment) contemplates a system of synchronisation, or at least counting forwards, as discussed above it is not usually legitimate, in the absence of an express reference in the claim itself, to import into a claim features of the preferred embodiment. In the present case, the claim itself does not contain an express reference to a system of synchronisation or counting forwards, and we do not consider there to be a proper basis to import this aspect of the preferred embodiment into the claim.

114    The Full Court then turned to consider the construction specific issues raised by Globaltech on appeal.

115    First, at [130], the Full Court rejected Globaltech’s submission that Besanko J erred by finding that the invention claimed was not limited to a method/system involving two timers that each noted the same initial reference time at the beginning of drilling operations (ie that a “synchronised” approach was required). In doing so, the Full Court noted that claim 1 does not require the use of two timers that “record time by reference to the same initial reference time”. The Full Court further noted that only step 2 (involving the downhole timer) requires that the time intervals be “referable to” the initial reference time and step 3 (at the surface) merely requires that the input specific time be “beyond” the reference time. The Full Court continued at [130]:

Further, the claim does not, as Globaltech submitted, provide that “the times on the two timers are matched when the specific time is inputted into the surface timer to determine the orientation of the core sample”. As noted above, step 3 deals with the “inputting” of the specific time at the time of core break (at the surface); step 5, which occurs later, is the step in which the measurements are related to each other so as to obtain an indication of the orientation of the core sample.

116    Secondly (at [133]), Globaltech submitted that the primary judge erred by finding that the “initial reference time” in step 2 of claim 1 includes the start of the timer in the downhole device but does not necessarily also refer to the start of the surface timer. Globaltech submitted that, given that claim 1 requires the use of two timers, the only reasonably open construction of step 2 is that the initial reference time refers to the same start time on both timers. It submitted that, if “initial reference time” does not refer to the starting time on both timers, it cannot be known whether the initial reference time refers to a time on the surface timer or the downhole timer. Globaltech submits that AMC’s construction involves reading “initial reference time” so as to exclude the surface timer and, in effect, impermissibly reading into the claim the words “on the downhole device”.

117    The Full Court rejected Globaltech’s second submission at [134]:

Step 2 refers to recording the orientation of the inner tube at predetermined time intervals during the drilling, “the time intervals being referable to an initial reference time”. This recording takes place on the downhole timer. It is therefore apparent that step 2 refers to, at least, the downhole timer. The real issue is whether the time recorded on the surface timer must also be referable to the initial reference time. While there are arguments in favour of that construction, we consider the preferable construction to be that this is not required. In resolving this issue, step 2 cannot be considered in isolation. It is necessary to consider the other integers of the claim, in particular, steps 3 and 5. Step 3 does not in terms require the time on the surface timer to be referable to the initial reference time. Rather, it refers to inputting the specific time “beyond” the reference time. Step 5 is the stage at which the inputted specific time is related to the recorded time intervals. Having regard to these steps, in addition to step 2, the preferable construction is that the claim does not require the time recorded on the surface timer to be referable to the initial reference time. Contrary to Globaltech’s submissions, this construction does not involve reading words into the claim; rather, it involves construing the words of the claim.

118    Thirdly, the Full Court noted at [137] that Globaltech submitted that the primary judge erred by failing to find that the words “inputting the specific time beyond the reference time” in step 3 refer to a time that is referable to the initial reference time. Globaltech submitted that AMC’s construction gives the word “beyond” a meaning in isolation from its context; it ignores that the steps of claim 1 are in chronological sequence — in particular, when step 2 is read with step 3, there is a clear link between the initial reference time and the inputting of the specific time; it ignores the word “reference” in the phrase “the reference time”, which indicates that the initial reference time is used as a reference point in time.

119    The Full Court rejected Globaltech’s third submission at [138]:

First, contrary to Globaltech’s submissions, the primary judge did construe the words “specific time”. His Honour considered what the “specific time” represented at [250]. His Honour also considered how the “specific time” was required to be measured or expressed at [258]-[259]. Secondly, while there are arguments in favour of Globaltech’s construction of the words “inputting the specific time beyond the reference time” in step 3, we consider the preferable construction to be that “beyond” does not mean anything more than “after” or “later than” and that the words do not require the inputted specific time to be referable to the initial reference time. The word “beyond”, on a natural reading, does not mean “referable to”. The wording of step 3 may be contrasted with that of step 2, which requires in terms that the time intervals be “referable to” the initial reference time. AMC’s construction is supported by other aspects of the claims, in particular claim 6 [which the Full Court discussed further below].

120    At [141] the Full Court noted the evidence of Globaltech’s experts, Mr Ayris and Mr Edmonds, to the effect that the inputted time in step 3 is referable to the initial reference time, later stating “it is apparent that the primary judge considered Globaltech’s experts’ opinions to involve reading in words to the effect that the inputted time in step 3 must be referable to the initial reference time”.

121    In relation to claim 6, the Full Court observed at [143]:

In our view, contrary to [Globaltech’s] submissions, claim 6 provides some assistance in resolving the construction issue concerning claim 1. Globaltech submits that claim 2 requires the inputted time to be measured by reference to the initial reference time. However, claim 2 does not state this. Rather, as with claim 1, there is an issue as to whether the inputted time needs to be referable to the initial reference time. Claim 6 does in terms require a relationship between the inputted time and the initial reference time, by stating that the instant in time (referred to in claim 2) is “representative of a duration of time relative to the initial reference time”. As stated above, this suggests that when the patentee intends to indicate that the time of a core break is to be measured in a way that is referable to the initial reference time, it says so expressly. Globaltech’s reference to Nichia v Arrow does not assist. Here, the two claims under consideration (claims 1 and 6) do not raise the “same issue of construction”, but rather use materially different wording.

122    The Full Court did not comment specifically on Besanko J’s construction of “predetermined time intervals” as there was no challenge to that construction. At [144] the Full Court upheld Besanko J’s construction of claim 1 of the Patent as correct.

Construction

Relevant Principles

123    The principles which govern claim construction are well established and are not in dispute. The Full Court in Globaltech FC adopted at [92] the summary of principles set out by the Full Court (per Hill, Finn and Gyles JJ) in Jupiters Ltd v Neurizon Pty Ltd (2005) 65 IPR 86 at [67]:

There is no real dispute between the parties as to the principles of construction to be applied in this matter although there is some difference in emphasis. It suffices for present purposes to refer to the following:

(i)     the proper construction of a specification is a matter of law: Décor Corporation 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] (Flexible Steel Lacing); 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; 177 ALR 460; 50 IPR 513; [2001] HCA 8 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 Corporation 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] 4 All ER 221 at 224–5; (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 (Sartas No 1 Pty Ltd); 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.

124    At [94] the Full Court observed that it is usually not legitimate, in the absence of an express reference in the claim itself, to import into a claim features of the preferred embodiment: Rehm Pty Ltd v Websters Security Systems (International) Pty Ltd (1988) 81 ALR 79 per Gummow J at 89.

Predetermined time intervals

125    The sole issue for construction is the “predetermined time intervals” integer.

126    The Respondents submit that predetermined time intervals are sequential time intervals that have a pre-known start and finish time relative to a known start time. That is, they are predictable at the commencement of operation of the device.

127    In support of their construction the Respondents point to the only example given in the Patent of a predetermined time interval as “an interval of one minute” (ie recordings taken at 1 minute intervals). They also refer to the common view of their experts that the predetermined time intervals integer requires that the orientation recordings which are taken are to be known in advance and be predictable.

128    The Respondents referred to the Macquarie Dictionary definitions of “determined” as “decided; settled; resolved” and “predetermined” as “to determine or decide beforehand”. The complete definition of “predetermined” is:

1.  To determine or decide beforehand.

2.  To ordain beforehand; predestine.

3.  To direct or impel beforehand to something.

129    AMC submits that the language and context of the phrase “predetermined time intervals” in claim 1 reveals the nature and purpose of those intervals, and their relevance to how the claimed method works. In particular, there is nothing in the language of “predetermined time intervals” which requires, as a matter of ordinary English, that they must all be same, or known in advance with any particular degree of precision. In their closing submissions AMC states:

Further, once it is recognised that the method in claim 1 as a whole is not limited to a “synchronised” approach, in which the above ground timer is started at the same time as (or synchronised with) the downhole timer before the beginning of the operation, so as to relate the measurements of one to the other, it is apparent that there is no need for the downhole time intervals to be of known duration or predictable in advance by the operator of the method. The method works perfectly well by the two sets of measurements — the record of the time of core break made above ground, and the downhole time intervals at which orientation measurements are taken — being related to each other in the subsequent relating step, being step 5 of the method claimed in claim 1. AMC notes that this was recognised by both Besanko J and (in the context of the “synchronisation” issue) the Full Court.

130    Against that background, AMC submits that the phrase “predetermined time intervals” in claim 1 (and in claim 33) refers simply to time intervals which are predetermined by the operation of the method or system, such as by being programmed or set in hardware or software. There is no requirement that the precise progression of time intervals be known in advance or be predictable with any given level of accuracy (such as within “a given second”). Further, there is no requirement that the same outcome be generated each time, so that the intervals at which core orientation measurements are taken are identical. AMC contends that Besanko J’s findings show that the intervals may, for example, be predetermined so as to fall within an acceptable range which is sufficient to enable the invention to work.

131    AMC submits that its construction accords with the ordinary meaning of the word “predetermined”, and the use of the word in context in the method and system of the claims and Besanko J’s correct construction of “predetermined time intervals” in Globaltech FI (and affirmed by the Full Court).

Consideration

132    It was not in dispute that the phrase “predetermined time intervals” is not a term of art and it does not have a defined meaning in the specification which is inconsistent with, or other than, the ordinary English meaning of the words.

133    The Full Court noted at [120] that it was common ground in the earlier proceeding that two timers would need to be used to carry out the method of claim 1, one downhole (where the orientation measurements would be recorded) and one on the surface (where the person using the method would be). The need for two timers was also common ground in this proceeding. The Full Court went on to note that the claim does not refer to these timers or how they are to be operated. In particular, the claim does not refer to the two timers being “synchronised”, or to the two timers being started at the same time (see also [130]). There is no requirement that the time measurements be related to each other prior to step 5, the relating step.

134    Justice Besanko held that the phrase “predetermined time intervals” in claim 1 does not require a method in which the precise duration of each time interval is the same or can be known in advance by the operator (at [278]).

135    The effect of the dictionary definitions of “determined” and “predetermined” relied on by the Respondents is that “predetermined” means to determine or decide beforehand, or to preordain. The construction adopted by Besanko J and advanced by AMC is consistent with these definitions. A series of time intervals which are designed, programmed or set so as to fall within a defined acceptable range, as opposed to being unconstrained, can fairly be described as “predetermined”. The word predetermined, in and of itself, does not designate any degree of precise predictability.

136    There is nothing in the phrase “predetermined time intervals” which requires, as a matter of ordinary English, that they must all be same, or known in advance with any particular degree of precision. There is nothing in the claims or the specification which requires or suggests that the time intervals must be known in advance or be predictable with any given level of accuracy (such as within “a given second”). Rather, the Respondents seek to impermissibly read this in as a requirement of the claim.

137    It is important to recall that, as construed by Besanko J and the Full Court, the method of claim 1 is not limited to, and does not require, a “synchronised” approach, in which the above ground timer is started at the same time as (or synchronised with) the downhole timer before the beginning of the operation. At [127] the Full Court observed that claim 1 did not contain an express reference to a system of synchronisation, or counting forwards, and they did not consider there to be a proper basis to import that aspect of the preferred embodiment into the claim. There is thus no need for the downhole time intervals to be of known duration or predictable in advance by the operator of the method, so that the above ground time of core break can be made referable to those time intervals in step 3. Rather, according to the claimed method, the two sets of measurements — the record of the time of core break made above ground, and the downhole time intervals at which orientation measurements are taken — are related to each other in the subsequent relating step, being step 5 in claim 1 (at [130]).

138    The Respondents’ experts set out their understanding of “predetermined time intervals” in the JER-I as follows:

Mr Edmonds expressed that his understanding of this integer meant that the sampling intervals should be known in advance, such that at a given point in time, the operator should be able to say with confidence that an orientation sample is or is not being recorded.

…

Mr Berry directed the other experts to paragraph 17 of his affidavit, repeated here:

My understanding of the meaning of the term “predetermined time intervals” in the AMC Patent is that it requires specific time intervals that, before measurements commence being taken (at those time intervals), I could say (and know) that measurements would be recorded at those specific time intervals. If I cannot predict or know in advance the time intervals when the orientation measurements were going to be recorded, then I do not consider that those time intervals can be regarded as “predetermined”.

139    Professor Braunl referred to paragraph 18 of his affidavit in which he said:

My understanding of the meaning of the term “predetermined time intervals” as used in the AMC Patent is it is referring to time intervals having an interval length, or intervals lengths, that is/are determined or known in advance. In other words, a time interval would be predetermined if I could tell or know what the interval length (or pattern of interval lengths) would be in advance of the interval occurring. This is based on the everyday English meaning of the word “predetermined” and what I have always considered the term to mean in my teaching, research and designing roles.

140    It is clear from these extracts of their evidence in the JER-I, and their oral evidence in the joint session, that each of the Respondents’ experts considered that the method of the invention as asserted in claim 1 required “synchronisation” so that the timer in the downhole device counting out the time intervals and the above ground timer are started at the same time, such that the time intervals could be accurately predicted or known by the surface operator. Mr Edmonds and Mr Berry expressly agreed in the joint session that their understanding of how the method in claim 1 of the Patent works is that it requires there to be a synchronisation between an above ground timer and a below ground timer. A construction of claim 1 that was limited to a “synchronisation” approach was expressly rejected by Besanko J and the Full Court (at Globaltech FC [118]–[127] and [130]).

141    Professor Tapson’s evidence as to his understanding of the phrase “predetermined time intervals” was consistent with the evidence he gave in the earlier proceedings. As he explained, the phrase simply refers to time intervals which are predetermined by the operation of the method or system, such as by being pre-programmed or deliberately constructed in hardware or software (or “hard-wired”). There is no requirement, either in the claims or the description, that the precise progression of time intervals be known in advance or be predictable within any given level of accuracy (such as within “a given second”). Further, there is no requirement that the same outcome be generated each time, so that the intervals at which core orientation measurements are taken are identical, exact or precise.

142    Professor Tapson explained that it is clear from the invention described and claimed in the Patent that the time intervals in the downhole tool only need to be timed to a sufficiently precise degree such that the invention works. Further, if orientation measurements were not predetermined and were rather taken at completely random times the downhole tool would not be able to function properly because it would not be possible to associate the orientation datasets with the relevant period of drill silence and it would not be possible to guarantee that an orientation measurement would be taken during the period of drill silence. Core break is not instantaneous, so any time measurement is representative rather than exact. So long as the time intervals are pre-set within an acceptable range that is not greater than the period of drill silence at core break, the method will ensure that at least one orientation measurement is captured during the period of drill silence.

143    The Respondents submitted that Professor Tapson adopted an unusual and strained construction, which they said changed in the course of his evidence, some of which was given by him after he had been given information about the operation of the V6 Tool and which led him to construe the claims in a manner that applied to the V6 Tool.

144    An examination of Professor Tapson’s second affidavit shows that he gave his views on the construction of the phrase “predetermined time intervals” in the first part of his affidavit before he was given information about the V6 Tool. He later discussed infringement and referred back to his earlier construction. I found his explanation of predetermined time intervals to be consistent with his evidence in the earlier proceeding.

145    A similar assertion was made by Globaltech in the earlier Globaltech FI proceedings in relation to Professor Tapson’s evidence as to whether synchronisation was required for the method of claim 1 being made with knowledge of the V5 Tool. Besanko J responded as follows at [238]:

It seems to me that in the [Coretell] proceedings, Professor Tapson was focused on the alleged infringing product in those proceedings or the preferred embodiment of the claims in suit. A method involving synchronisation clearly falls within the terms of the claims and that was the focus of Professor Tapson’s consideration in the previous proceedings. I do not think that it can be said from the passages I have identified that Professor Tapson identified the metes and bounds of the claims and has now changed his mind with a view to giving evidence that the Orifinder v3B and Orifinder v5 fall within the terms of the claims. That is not to say that the boundaries of claim 1, for example, as now stated by Professor Tapson were in his mind at the time of the previous proceedings.

146    Once it is recognised, consistent with the construction of Besanko J (upheld by the Full Court), that the method in claim 1 as a whole is not limited to a synchronised approach, it is apparent that there is no need for the downhole time intervals to be of pre-known duration or be predictable in advance by the operator of the method. The method works perfectly well by the two sets of measurements — the record of the time of core break made above ground, and the downhole time intervals at which orientation measurements are taken — being related to each other in the subsequent “relating step”, being step 5 of the method asserted in claim 1. This was recognised by both Besanko J and (in the context of the “synchronisation” issue) the Full Court.

147    The relating step (in step 5 of claim 1) occurs after the predetermined time intervals (in step 2) and the time of core break (in step 3) have already been separately recorded or inputted. Those two data sets can be related to each other (in step 5) without the precise duration of the predetermined time intervals having been known or predictable in advance by the operator: Globaltech FC at [124].

148    While it may be accepted that the best method section (which describes one embodiment) contemplates predetermined time intervals of one minute, the Full Court expressly stated with respect to claim 1 and the preferred embodiment that it is not usually legitimate, in the absence of an express reference in the claim itself, to import into a claim features of the preferred embodiment: Globaltech FC [94]. In the present case, the claim itself does not contain an express reference to the time intervals being of a fixed duration or being known in advance with precision. I do not consider there to be a proper basis to import this aspect of the preferred embodiment into the claim.

149    The context requires only that the time intervals be predetermined in the sense that the device is programmed to record the core orientation at time intervals which fall within an acceptable range, being a range that is sufficient to enable the method of the invention to work. In particular, it is necessary that the duration of the time intervals be within an acceptable range that is not greater than the period of drill silence allowed by the operator at the time of core break, so as to ensure that at least one orientation measurement is captured at that time. It is relevant in this respect, as recognised by Besanko J, that the event of core break itself is not instantaneous, so that it is impossible to be precise as to exactly when a core sample fractures. The example given in the “Best Mode(s)” section is for the operator to wait one minute.

The V6 Tool

150    It was not in dispute between the experts as to how the V6 Tool works.

151    Mr Hejleh verified a V6 Tool product description and operational flowchart, further product description, circuit diagrams and extracts of UPIX source code.

152    The V6 Tool has two components. The “Oritool” which is sent down hole with the core drill, and the “Oripad” which remains with the operator at the surface.

153    Globaltech described the critical aspects of the operation of the V6 Tool in its written submissions as follows:

The device is programmed to take orientation recordings at unknown time intervals. Those time intervals are determined by a random number generator. The way the random number generator works is complex. In a shortened form, an 8 bit timer is repeatedly counting from 0 to 255. A number between 0 and 255 is selected for the next time interval. That number is then divided by 10 and applied to a lookup table which generates an integer number between 1 and 14 for the next interval “analogous to throwing a die”. However, the numbers do not occur with an equal likelihood – i.e. this is not a “fair die”. The numbers are multiplied by a watch dog timer period of approximately 2.1 secs, to produce the intervals of anywhere between approximately 2.1 to 30 secs. The selection of which time interval will be generated, from recording to recording, is unknowable – i.e. “during any interval, you cannot predict what the next interval will be”. It is not possible to know in advance, whether by the software, the programmer or a user, which of the different time ranges will be deployed from recording to recording. Furthermore, the base time intervals are themselves subject to slight variations due to the side-effects of a number of independent processes and events.

154    In the JER-I, the experts agreed that the following statements about the V6 Tool algorithm are correct:

1.    The software algorithm is a random number generator.

2.    It generates integer numbers between 1 and 14, analogous to the throwing of a die. In addition, we individually state the following:

a)    Tapson – The numbers do not occur with an equal likelihood, ie. this is not a “fair die”. I say this based on my analysis of the flowchart, and confirmed it by observing the distribution of numbers in the test chart I was supplied with, as shown in my second affidavit at paragraph 81.

3.    The numbers are multiplied by a watchdog timer period of approximately 2.1 seconds to produce intervals of approximately 2.1 to 30 seconds. In addition, we individually state the following:

a)    Edmonds – These base time intervals can be randomly varied due to the side effects of a number of independent processes and events. As I was not provided the raw test data with the timing information in Excel format the other experts were, I am unable to state an opinion on the specific characteristics of the base time variation.

b)    Berry – These base time intervals can be randomly extended due to the side effects of a number of independent processes and events.

c)    Braunl – The generated time intervals are not predetermined and unpredictable as can be seen from the attached charts. It is usual practice to have a bounded value range.

d)    Tapson – There are some small (perhaps 100ms) variations from this fundamental timing observable in the times in the test charts. These may be artefacts resulting from the use of an oscilloscope to measure the times, or they could be produced by noise in the WDT periods, or perhaps by some inconsistencies in the software process timing.

4.    Therefore during any interval, you cannot predict what the next interval will be.

155    Mr Wilkinson’s oral evidence was that the team of software engineers deliberately programmed the software of the V6 Tool so that the range of time intervals between orientation measurements was between 2 to 32 seconds, a range that would be acceptable to the user:

… [W]e want the user to not have to sit there and wait up the top for a period of time – that the user would go, “I can’t use this tool. This is ridiculous. It takes too long.” So we had to make it a period that the user would accept as not being too long to wait.

V5 Tool

156    The V5 Tool was found to infringe the claims of the Patent in Globaltech FI. In that case, Globaltech denied that the V5 Tool infringed on the basis (amongst others) that it did not have the “predetermined time intervals” integer: Globaltech FI at [176].

157    The Respondents contend that the V6 Tool operates differently to the V5 Tool and as a result does not infringe the Contested Claims. Comparisons to the operation of the V5 were drawn in the cross-examination of the experts and in submissions, so it is useful to briefly outline the operation of the V5 Tool as relevant to this case.

158    Besanko J set out the experts’ agreement as to the operation of the V5 Tool in Globaltech FI, including how it determined core orientation, at [172]:

The V5 Orifinder has four modes according to the Amended Product Description, and five according to its User Guide. The four modes are Hibernation, Standby, Running, and Orientating; the User Guide refers also to a Sleep mode. Hibernation mode extends the battery life when on the shelf. It switches from Hibernation to Standby when subject to movement, and goes back to Hibernation when in Standby and not subject to movement for four hours. On the surface, the Oritool is typically in Standby mode. When switched from Hibernation to Standby mode, the Oritool’s RTC (Real Time Clock) starts up from the factory reset value. The Oripad RTC is always running and hence reflects the time since it was powered up with batteries. This means that the RTCs in Oripad and Oritool do not reflect the same starting time.

The Oripad is switched on and then used to switch on the Oritool, which goes from Standby to Running mode. This Oritool uses a watchdog timer (WDT), which starts up in Running mode. The WDT counts 12 mini-cycles of approximately 2 seconds each and performs an orientation measurement at the end of each approximately 24 second cycle. Each of these measurements is time-stamped with the time of the Oritool RTC and stored in memory.

…

When the driller wants to break the core, he stops the drill. The time of core break is recorded by pressing the “Mark” button on the Oripad – this triggers a Wait period of 33s, and then the time is recorded from the Oripad RTC (the Wait expiry timestamp). When the Oritool is returned to the surface, the Oripad communicates with the Oritool and sets it into Orienting mode (this is started by pressing “Find” on the Oripad). At this time the Oritool stops recording data. The Oripad sends the elapsed time since core break to the Oritool (the time since the Wait expiry timestamp), and the Oritool subtracts that elapsed time from its current RTC time to establish at what time on its RTC the core break happened. It then recovers the most recent orientation data prior to core break and uses that as the core orientation data.

(Emphasis in original.)

159    The highlighted passages were the features of the V5 which were said by Globaltech to mean it fell outside the terms of claim 1. Besanko J then discussed three features of the V5 Tool which Globaltech submitted had the consequence that it fell outside the terms of claim 1. The following two features discussed at [174] and [176] are relevant to this proceeding:

174     First, claim 1 in the Patent is limited to a synchronised system and the Orifinder V5 does not employ such a system. As the experts have said in the case of the Orifinder V5, the Oripad sends the elapsed time since core break to the Oritool (the time since the Wait expiry timestamp), and the Oritool subtracts that elapsed time from its current RTC (Real Time Clock) time to establish at what time on its RTC the core break happened. As I will explain, unlike the Orifinder V3A, the respective RTCs in the Oripad and Oritool are not synchronised at the beginning of the process.

…

176     Thirdly, step 2 in claim 1 in the Patent is limited to readings taken at predetermined time intervals and such intervals are precise time intervals. The time intervals at which readings are taken by the Oritool in the case of the Orifinder V5 are determined by a WDT, the accuracy of which can be affected by matters such as temperature and pressure. The WDT means that it cannot be said that readings are taken at predetermined time intervals.

(Emphasis in original.)

160    The time intervals at which the orientation measurements were taken by the V5 Tool were 25 seconds plus or minus 10% (resulting from the use of a WDT), or, in other words, the time intervals of the V5 Tool were within a range from 22.5 – 27.5 seconds (the V5 range).

Infringement by the V6 tool

161    The only dispute on infringement is whether the V6 Tool has the “predetermined time intervals” integer of claims 1 and 33.

162    The Respondents submit that the V6 Tool operates in a different way to the earlier devices, including the V5 Tool. The Respondents submit that the V6 Tool does not infringe the Contested Claims because the time intervals at which the orientation measurements are taken occur at “random” or unpredictable times somewhere within the range of about 2.1 to 32.2 seconds. The precise time interval is not capable of being known by the surface operator or determined beforehand. Each time interval is not predictable before generation. The V6 Tool orientation recordings are not made at predetermined intervals (in the sense of pre-known sequential time intervals), but rather at “unpredictable” time intervals.

163    The Respondents submit that the recording method of the V6 Tool which involves recordings being made at unpredictable points in the range 2.1 to 32.2 seconds utilises a different methodology (from the V5 Tool, the subject of Globaltech FI) as the time intervals vary by significantly greater than 10%. For example, an interval of 2.1 seconds might be followed by an interval of 30 seconds. That would be a variation of over 1000%, far exceeding the plus or minus 10% of the variability of the V5 Tool.

164    The Respondents submit that the fact that it is known that the “random” time intervals fall within a bounded range, and that the range is an acceptable range for the device to work, does not make them predetermined. I note that the word “random” was not used by the experts or parties in its strict mathematical sense, but in the sense of “unpredictable”.

165    AMC submitted that the V5 range which was considered by Besanko J — the plus or minus up to 10% variation for each successive time interval in the V5 Tool — was significant having regard to the typical duration of a core sampling operation. AMC submitted that the expert evidence in the this proceeding made clear that such an operation could take over an hour in total, meaning that the time intervals cumulatively could vary by a period of several minutes from what might be expected by the operator had they been uniform and precise. As such, the precise duration of each time interval in the V5 Tool was simply unknowable by the operator, and advance knowledge of the duration of each time interval could not be used as the basis for practising the method.

Consideration

166    The variation of the time intervals in the V6 is due in large part to the WDT which was also the source of variability in the V5 Tool. Each of the Respondents’ experts were of the view that time intervals with the variation of the kind seen in the V5 Tool would not be predetermined. Of the Respondents’ experts, only Mr Edmonds had prior knowledge of the V5 Tool (from giving evidence in the earlier proceeding). The other experts were asked questions about time intervals of the kind in the V5 Tool on a hypothetical basis in the joint session.

167    The experts agreed that due to the variation present in the V5 Tool time intervals, the surface operator could not predict in advance what any particular time interval would be within the V5 range of 22.5 to 27.5 seconds, but that the operator knew that the interval would be within that bounded range.

168    In cross examination, Mr Edmonds agreed that in the case of the V5 Tool (and its plus or minus 10% variability) the operator on the surface would not be able to say with confidence when a given time interval would end within that range. He reiterated his view (contrary to Besanko J’s finding) given in the earlier proceedings that the V5 time intervals were not predetermined, and agreed that his reasons for his conclusion were also his reasons for considering that the time intervals of the V6 Tool were not predetermined, adding that the variation is now greater than for the V5 Tool.

169    Mr Edmonds confirmed that despite the unpredictable variation in the length of time intervals in the V5 Tool, the orientation method employed by the V5 Tool worked. Mr Edmonds explained that the V5 Tool worked because there was a real time clock on the downhole tool that was keeping a synchronised time with the timer on the surface, and the orientation measurement (taken at the time interval within a known range) was time stamped against the real time clock so that the operator could look up the particular measurement at core break after the tool was back on the surface. As a result of the time intervals being within a known range, the surface operator would know with confidence that if they waited for a period of 27.5 seconds or more (the maximum value in the V5 range), that at least one orientation measurement would have been taken.

170    Mr Edmonds’ evidence as to why the V5 Tool worked was:

[Counsel]: And adopting a practical approach to this, you need to have an upper bound which makes sense in terms of the system being usable so the operator doesn’t have to wait an hour, for example; correct?

Edmonds: Well, I guess – I guess in the context of the drilling, I don’t – I don’t know if an hour – it – it would depend on the circumstances, but, yes, there would be an upper limit to – to it, whatever it was set to be.

[Counsel]: And the second reason which is interrelated why the v5 tool worked was the one you referred to, which was that each orientation measurement was timestamped by reference to a real-time clock in the v5 tool; correct?

Edmonds: Yes, that’s correct

171    The only essential difference between the V5 Tool and the V6 Tool is the incorporation into the latter of the algorithm which means that each time interval was in the range of 1 to 14 WDT cycles.

172    The V6 Tool operates similarly to the way Mr Edmonds explained the V5 operated, in that the random and unpredictable time intervals fall within a bounded range, albeit a wider range than the V5 range.

173    The experts agreed that the time intervals counted out by the V6 Tool are not unconstrained, but rather, are within a range of approximately 2.1 to 30 seconds (or a little more, taking into account possible sources of variation additional to the algorithm and the random number generator). To use Mr Berry’s language, the time intervals are within an “upper bound” that is known in advance by reason of the design of the system.

174    Professor Tapson’s evidence was that a 2 second time interval would work acceptably, but a longer interval, such as 10 minutes, would be impractical.

175    Professor Braunl stated in relation to predetermination during the expert session:

[I]n order to be predetermined it could all just be the same interval or there could be different intervals, as long as they have a method to establish what that interval will be. So there could be pattern, could all just be, I don’t know, double of that up to a certain value, or it could be any other method that I can calculate in advance.

176    Professor Braunl also considered that the time intervals with variation of the kind found in the V5 were not predetermined time intervals:

I think it also depends because I think what you referred to earlier was because the drilling operation takes up to an hour, the – the time difference could be several minutes. If there’s a time difference of several minutes I would say that it’s – it’s not – it’s not predetermined. Of course, if you shrink that interval to – you had, what’s that, five seconds. If you shrink that to a fraction of a 5 second, you might argue, well, maybe that is still predetermined. That’s just a margin of error. But, you know, plus one is 10 per cent. That’s 20 per cent variation times a certain factor. So if there’s a difference in outcome of several minutes, I would probably say it’s not predetermined.

177    Professor Braunl agreed with the proposition put to him that whether or not time intervals are predetermined doesn’t depend on the particular source of the randomness, whether it’s an algorithm or some other source; it’s the fact of the randomness and perhaps a consideration of the extent of it which led him to conclude that the time intervals of the V6 Tool are not predetermined.

178    Mr Berry read into the Patent a requirement that the time intervals were equal. Neither the specification nor the claims impose such a requirement:

It’s not an explicit requirement in the patent, but if – reading it as a – an engineer tasked – if I was tasked to go and build this thing, given the patent, I would naturally assume we’re going to – we would start using a regular set of time intervals. In other words I would say, “Right. I’m going to sample this thing at once a minute”, or once every second, or whatever it is. There is nothing in the patent that would direct me to use variable time intervals. So I – I think it’s implicit that the – that – in the patent that the time intervals are all the same. … it’s certainly not explicit.

179    The V6 Tool time intervals are not truly random. The V6 Tool is programmed to generate time intervals that fall within the range of 2 to about 32.5 seconds, ie a known range, a range over which the V6 Tool will work. The algorithm may be represented by a formula such as T = N x 2.1 seconds, where T is the time interval and N is a number from 1 to 14. If the time intervals were not within a bounded range, and were able to be generated anywhere between 2 seconds and 24 hours (as an example), the V6 Tool would be at the very least uncommercial as the surface operator would need to wait the maximum time that a time interval could be from the core break to be sure that an orientation measurement had been made. Hence, although the surface operator does not know and cannot predict the length of the next time interval, they do know that it will fall within the range and that the wait period will therefore be 32.5 seconds (or slightly longer to be safe). The surface operator also knows that the orientation measurement will be time stamped along the real time clock so that it can be identified.

180    The Respondents’ experts raised the prospect of additional sources of randomness (over and above the algorithm with its random number generator) that would also contribute to the variation between successive time intervals in the V6 Tool. These include “side effects” such as inaccuracies caused by the equipment used, including variation in the WDT or temperature changes. As Mr Berry pointed out the time interval algorithm might be better represented as T = (N x 2.1) + X, where X is the additional source of randomness. These additional sources of randomness make no difference to whether the time intervals are pre-determined or not, as they are the same sources of randomness that were present in the V5 Tool, and which did not prevent the time intervals from being “predetermined” within an acceptable range.

181    The orientation measurement recorded at each sampling interval is associated with a precise time stamp generated by the Real Time Clock (RTC) in the V6 Tool. Thus, the time of each time interval is in fact precisely recorded, and can be related, in step 5, to the above ground time measurement for the time of core break to obtain an indication of the orientation of the inner tube assembly, and thus the core, at that time. This aspect was also present in the V5 Tool as Besanko J observed: Globaltech FI at [280]. To adopt his Honour’s words, the V6 Tool determines when the orientation readings are taken, and while it must fulfil the requirement of readings being taken at predetermined time intervals, there is no further accuracy issue because the timestamping is done by reference to the RTC.

182    For these reasons I consider that the V6 Tool has the feature of “predetermined time intervals” and infringes claims 1 and 33 and the remainder of the Contested Claims. As the predetermined time interval integer was the only integer in dispute, the V6 tool infringes the Contested Claims.

Infringement and accessorial liability of respondents

183    I have found that the V6 Tool infringes the Contested Claims.

184    The Respondents admit that since 25 February 2019, Globaltech Corporation has manufactured and supplied to BLYA in Australia the TruCore™ UPIX core orientation device (the V6 Tool). The Respondents also admit that BLYA has acquired V6 Tools from Globaltech Corporation and sold or supplied, or offered for hire and hired out to customers in Australia, the V6 Tools.

185    AMC submits that all four Respondents (not just Globaltech Corporation and BLYA) are directly liable for infringement of those of the Contested Claims which are directed to the core orientation system by the sale and supply of the V6 Tool because when used each tool takes all of the integers of the Contested Claim.

186    AMC also contends that the Respondents are indirectly liable for infringement of the Contested Claims on the following grounds.

187    First, AMC contends that the Respondents have directly infringed those of the Contested Claims which are method claims by supplying the V6 Tools, pursuant to s 117 of the Act. Related to this is AMC’s contention that each of the Respondents has authorised, or procured, induced or joined in a common design with customers or end users to whom the V6 Tool has been supplied to use as a core orientation tool, and have thereby indirectly infringed the Contested Claims.

188    Second, AMC contends that each of the Respondents has authorised the infringing acts.

189    Third, AMC contends that each of the Respondents has engaged in a common design with the others, and/or is a joint tortfeasor in the other’s acts of infringement.

190    The Respondents deny that GTCPL and BLY have infringed the Patent, or that they are liable as joint tortfeasors or otherwise for infringement. They submit that GTCPL does not trade, its sole purpose being to provide management services to Globaltech. GTCPL has not supplied the V6 Tool in Australia. They submit that BLY is a holding company which has never supplied any of the V6 Tools.

Relevant Principles

Ground 1 - s 117

191    Section 117 of the Act states:

117 Infringement by supply of products

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

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

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

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

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

192    Schedule 1 to the Act includes the following definition of “supply”:

supply includes:

(a)     supply by way of sale, exchange, lease, hire or hire-purchase; and

(b)    offer to supply (including supply by way of sale, exchange, lease, hire or hire- purchase).

193    The question whether “the use of a product would infringe a patent” raised in s 117(1) turns on whether such use would infringe the exclusive rights given to the patentee. These rights are defined in s 13. Section 13(1) provides that “[s]ubject to this Act, a patent gives the patentee the exclusive rights, during the term of the patent, to exploit the invention and to authorise another person to exploit the invention”. Section 13(3) provides that a patent has effect throughout the patent area.

194    Schedule 1 to the Act includes the following definition of the word “exploit”:

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.

195    Section 117, has been considered by the High Court in Northern Territory v Collins (2008) 235 CLR 619 (Northern Territory) and Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd (2013) 304 ALR 1 at [300]–[302] and by the Full Court in Generic Health v Otsuka Pharmaceutical Co Ltd (2013) 100 IPR 240 at [60]–[64] and recently in Hood v Down Under Enterprises International Pty Ltd [2022] FCAFC 69 at [33]–[36] and [104]–[110].

196    Section 117(2)(a) addresses “only use” in contrast to “known use” in s 117(2)(b) and “instructed use” in s 117(2)(c): Northern Territory per Hayne J at [35].

197    Section 117 imposes liability on the supplier where the supply would otherwise not infringe but where use of the product supplied by the person to whom it is supplied would infringe: Northern Territory at [42] per Hayne J.

Ground 2 - Authorisation

198    Section 13(1) provides that a patent gives the patentee the “exclusive rights” during the relevant period “to exploit the invention and to authorise another person” to exploit the invention. As Gummow J observed in Rescare Ltd v Anaesthetic Supplies Pty Ltd (1992) 25 IPR 119 at 153, exploitation and authorisation are distinct concepts.

199    The word “authorise” as used in s 13(1) is to be taken by analogy to have the meaning it has in the comparable context of the Copyright Act 1968 (Cth): Bristol-Myers Squibb Co v FH Faulding & Co Ltd (2000) 97 FCR 524 at [97]. In the copyright context, Gibbs J (as his Honour then was) said in University of New South Wales v Moorhouse (1975) 133 CLR 1 at 12, that a person could not be said to authorise an infringement unless they had some power to prevent it, although express or formal permission or sanction, or active conduct indicating approval was not essential to constitute an authorisation. Inactivity or indifference exhibited by acts of commission or omission may reach a degree from which an authorisation or permission may be inferred.

200    This approach has been applied in the context of patent infringement in a number of cases including Inverness Medical Switzerland GmbH v MDS Diagnostics Pty Ltd (2010) 85 IPR 525 (Inverness) at [194] and Streetworx Pty Ltd v Artcraft Urban Group Pty Ltd (2014) 110 IPR 82 (Streetworx) per Beach J at [390]–[396]. In Inverness, Bennett J said at [194]:

It is an infringement of the patentee’s exclusive rights not only to exploit an invention but also to authorise another person to exploit it: s 13 of the 1990 Act. The word “authorise” in s 13 has the meaning in the comparable context of the Copyright Act. … A person authorises an infringement if he or she “sanctions, approves or countenances” the infringement. … s 13 at least embraces the case where a person “made himself a party to the act of infringement”.

(Citations omitted.)

201    In the Roadshow Films Pty Ltd v iiNet Ltd (2012) 95 IPR 29 (iiNet), a copyright case involving an internet service provider, the High Court expressed the view that “while ‘countenancing’ may encompass inactivity, support and encouragement, it is not enough to make the party a secondary infringer for authorisation of the conduct”. An alleged infringer must, their Honours said, have a power to prevent the primary infringements. This was said in the context of the express requirement in s 101(1A) of the Copyright Act 1968 (Cth) that certain matters must be taken into account in determining authorisation, including the extent of the power to prevent the doing of the act, the relationship between the parties and any reasonable steps taken to prevent or avoid the doing of the act.

202    In Apotex Pty Ltd v Les Laboratoires Servier (No 2) (2012) 293 ALR 272 (Apotex), Bennett J summarised the principles of authorisation and observed at [27] to [29]:

27    There cannot be an act of authorisation without an act of primary infringement (RCA Corporation v John Fairfax Sons [1981] 1 NSWLR 251 at 257). A secondary infringement is completed only when the primary infringement has taken place (Roadshow Films Pty Ltd v iiNet Pty Ltd (2012) 286 ALR 466 at [94] per French CJ, Crennan and Kiefel JJ). In iiNet at [68]–[70], French CJ, Crennan and Kiefel JJ discussed aspects of “authorisation” of breach of copyright. iiNet, an internet service provider, had no direct power to prevent the primary infringements and could only ensure that result indirectly by terminating the contractual relationship it had with its customers. Their Honours expressed the view that while “countenancing” may encompass inactivity, support and encouragement, it is not enough to make the party a secondary infringer for authorisation of the conduct. An alleged infringer must, their Honours said, have a power to prevent the primary infringements. This was said in the context of the express requirement in s 101(1A) of the Copyright Act 1968 (Cth) that certain matters must be taken into account in determining authorisation, including the extent of the power to prevent the doing of the act, the relationship between the parties and any reasonable steps taken to prevent or avoid the doing of the act.

28     Apotex P/L emphasises that “control is a significant element in a finding of authorisation” and refers to Gummow and Hayne JJ’s comments that iiNet only had an indirect and “attenuated” power to control the primary infringements (at [146]). On the other hand, as Servier says, control is not a necessary element of authorisation. Servier points out that Gummow and Hayne JJ, in their Honours’ discussion of authorisation in iiNet at [122], do so in terms of “clothe with authority, particularly legal authority, thereby giving a right to act” and not in terms of “control”. This definition of “authorise” was a “matter of ordinary usage” and was “without the subsequent accumulation of case law” (at [122]). However, their Honours declined to accept that indifference or countenancing amounted to authorisation.

29    Inactivity is not enough to constitute authorisation without a clear power, more than an indirect or attenuated power, to prevent the primary infringements: iiNet at [69] and [143]. Neither mere facilitation nor mere indifference may be sufficient to constitute authorisation: Australasian Performing Right Association Ltd v Metro on George (2004) 210 ALR 244; [2004] FCA 1123 at [18]–[19]; Nationwide News Pty Ltd v Copyright Agency Ltd (1996) 65 FCR 399 at 422; 136 ALR 273 at 295; 34 IPR 53 at 76 (Nationwide News). Knowledge that infringement is likely to occur does not necessarily amount to authorisation (compare copyright: Nationwide News at FCR 424A; ALR 296; IPR 77).

203    For “authorise”, no intention to infringe or knowledge that the relevant acts would be likely to infringe is necessary. More particularly, knowledge of the patentee’s intellectual property rights does not need to be shown. All that may be required is knowledge of the acts that constitute infringement rather than their legal characterisation as infringing acts: Streetworx per Beach J at [394].

Ground 3 – Joint tortfeasorship

204    Liability on the basis of joint tortfeasorship may arise in patent infringement proceedings as patent infringement is a statutory tort: Collins v Northern Territory (2007) 161 FCR 549 at [24]–[30] per French J (Collins). French J observed at [25]:

What was, and still is, required was conduct of the kind that would characterise a person as a joint tortfeasor at common law. As was said in the 16th ed of T[e]rell on The Law of Patents, Sweet & Maxwell, London, 2006 at p 8–40:

Persons may be liable for infringement if their acts are such as would make them joint tortfeasors under the general law.

Liability as a joint tortfeasor has been said to require concerted action with another in the commission of the infringement or a “concerted design”: Morton-Norwich Products Inc v Intercen Ltd [1978] RPC 501 at 513 (per Graham J). … mere facilitation of an infringement does not amount to procuration of or involvement in it: Molnlycke AB v Procter & Gamble (No 4) [1992] RPC 21 at 29; [1992] 4 All ER 47 at 55 (per Dillon LJ).

205    The relevant principles were usefully extracted by Moshinsky J in Playgro Pty Ltd v Playgro Art & Craft Manufactory Limited (2016) 117 IPR 489 at [150]–[153]:

150     The liability of a joint tortfeasor was considered in Thompson v Australian Capital Television Pty Ltd (1996) 186 CLR 574; 141 ALR 1. Brennan, Dawson and Toohey JJ said (at CLR 580; ALR 4):

As was said in The Koursk [[1924] P 140 at 159–160], for there to be joint tortfeasors “there must be a concurrence in the act or acts causing damage, not merely a coincidence of separate acts which by their conjoined effect cause damage”. Principal and agent may be joint tortfeasors where the agent commits a tort on behalf of the principal, as master and servant may be where the servant commits a tort in the course of employment. Persons who breach a joint duty may also be joint tortfeasors. Otherwise, to constitute joint tortfeasors two or more persons must act in concert in committing the tort.

151     In the same case, Gummow J said (at CLR 600; ALR 19):

In England, Australia and New Zealand, criteria for the identification of joint tortfeasors are to be found in expressions used in The Koursk. Scrutton LJ there spoke of “two persons who agree on common action, in the course of, and to further which, one of them commits a tort”, saying that in such a case there is one tort committed by one of them “in concert with another”. Sargant LJ accepted the proposition that persons are joint tortfeasors when their “respective shares in the commission of the tort are done in furtherance of a common design” so that those who “aid or counsel, direct, or join” in commission of the tort are joint tortfeasors. (Footnotes omitted.)

152     In Universal Music Australia Pty Ltd v Cooper (2005) 150 FCR 1; 65 IPR 409; [2005] FCA 972, which involved allegations of copyright infringement, Tamberlin J said (at [135]–[136]):

135    The authorities indicate that in order to make out a case of joint tortfeasor liability on the basis that copyright infringement is a statutory tort, it is necessary to establish that there has been a common design by the respondents to participate in or induce or procure another person to commit an act of infringement. In WEA International Inc v Hanimex Corporation Ltd (1987) 17 FCR 274 at 283; 77 ALR 456 at 465; 10 IPR 349 at 359, Gummow J points out that in circumstance where two or more persons assisted or concurred in or contributed to an act causing damage this is not of itself sufficient to found joint liability and there must also be some common design. In other words, there must be something in the nature of concerted action or agreed common action. It is not necessary that there must be an explicitly mapped out plan with the primary offenders. Tacit agreement between the parties is sufficient: see Unilever Plc v Gillette (UK) Ltd [1989] RPC 583 at 609 per Mustill LJ; Molnlycke AB v Procter & Gamble Ltd (No 4) [1992] 1 WLR 1112; [1992] 4 All ER 47 at 52; [1992] RPC 21 at 29 per Dillon LJ (with whom Leggatt LJ agreed). In Intel Corporation v General Instrument Corporation (No 2) [1991] RPC 235 at 241, Aldous J stated that:

that capacity to control will not establish a common design. It is the extent of the control actually exercised or the involvement which is relevant and, in particular, whether it amounts to a common design to do the acts complained of.

136     The relevant authorities were considered by the High Court in Thompson v Australian Capital Television Pty Ltd (1996) 186 CLR 574 at 580–581; 141 ALR 1 at 3, where the joint judgment referred to the necessity for two or more persons to act in concert in committing the tort. At 600, Gummow J cited with approval the comment of Sargent LJ in The Koursk [1924] P 140 at 159–60 that persons are joint tortfeasors when their respective shares in the commission of the tort are done in furtherance of a “common design” so that those who aid or counsel, direct or join in the commission of the tort are joint tortfeasors.

153     See, on appeal, Cooper v Universal Music Australia Pty Ltd (NSD) (2006) 156 FCR 380; 237 ALR 714; 71 IPR 1; [2006] FCAFC 187 at [87] per Branson J (Universal Music v Cooper), [173] per Kenny J. In Aristocrat Technologies Australia Pty Ltd v Global Gaming Supplies Pty Ltd (2016) 329 ALR 522; [2016] FCAFC 22, Nicholas, Yates and Wigney JJ set out the above passage from Universal Music v Cooper and said (at [142]):

We respectfully agree with Tamberlin J’s summary of the authorities. We would add that it is not necessary that the parties to the common design intend to infringe. As Mustill LJ (with whom Ralph Gibson and Slade LLJ agreed) observed in Unilever Plc v Gillette (UK) Ltd [1989] RPC 583 at 602, it is not necessary to show “a common design to infringe … it is enough if the parties combine to secure the doing of acts which in the event prove to be infringements”: see also Unilever v Chefara Properties Ltd [1994] FSR 135 at 138.

See also Caterpillar Inc v John Deere Ltd (1999) 48 IPR 1; [1999] FCA 1503 at [21]–[25] per Carr, Sundberg and Kenny JJ.

See also: Seiko Epson Corporation v Calidad Pty Ltd (2017) 133 IPR 1 per Burley J at [440]–[441] (Calidad).

206    Merely because companies are closely associated, even if there was overall control (both financial and voting) and the companies regarded themselves as a single economic unit, does not establish that they are acting in concert or pursuant to a common design: Apotex at [26] citing Laddie J at 490 in Mead Corporation v Riverwood Multiple Packaging Division of Riverwood International Corporation [1997] FSR 484.

207    In Apotex Bennett J observed at [26] the fact that companies regard themselves as vertically integrated is not sufficient, of itself, to establish joint tortfeasorship by common design. The fact that two parties form part of the same global group of companies and that a manufacturer and distributor relationship exists between them is not, alone, sufficient to support an arguable case. However, her Honour noted that these may be factors that, together with other factors, are relevant to establishing joint tortfeasorship.

208    The High Court (per Brennan CJ, Dawson and Toohey JJ) had “no doubt” that Channel 7 and Channel 9, the respondents to a defamation action, were joint tortfeasors in Thompson v Australian Capital Television Pty Ltd (1996) 186 CLR 574 (Thompson). In that case, Channel 9 produced a live program from its studios in Sydney. Pursuant to a licence agreement between Channel 7 and a related corporation of Channel 9, the program was received by a Channel 7 transmitting site on Black Mountain in the ACT. From there the program was relayed to the studios of Channel 7 in the ACT from where it was broadcast throughout the ACT and adjoining areas of NSW.

209    Chief Justice Brennan, Dawson and Toohey JJ observed that the difference between joint tortfeasors and several tortfeasors is that the former are responsible for the same tort whereas the latter are responsible only for the same damage (at 580). They continued at 581:

The transmission of the television program in question was the result of concerted action on the part of Channel 9 and Channel 7 and that made them joint tortfeasors. In the same way, the journalist, printer, publisher and distributor are joint tortfeasors in respect of the ultimate publication of a libellous periodical or book. In the present case, PBL had licensed Channel 7 to transmit the program in question. The relevant licence agreement established the common design, namely, the transmission of the program by Channel 7 to the Australian Capital Territory and adjoining areas in pursuit of commercial gain. Whilst Channel 7 had the right not to broadcast any particular program or part of a program, where a program was in fact broadcast it was because Channel 9 and Channel 7 acted together — in concert — to achieve a common end.

210    At 602, Gummow J (Gaudron J agreeing) rejected the submissions that Channel 7 and Channel 9 were not joint torfeasors, stating:

In the present case the licence agreement existed for the common commercial benefit of Channel 7 and Channel 9. The material supplied pursuant to that licence agreement was, given its nature, for transmission forthwith in the Territory. The television programme sued upon was not capable of use for a purpose which, in respect of the rights of the appellant, was a lawful one.

211    The High Court in Thompson referred to the English Court of Appeal case of The Koursk [1924] P 140. That case, Bankes LJ observed, was the first reported case to consider the question of what constituted a “joint tort”. The Koursk was one of five ships travelling at night, without lights, in a line abreast with set spacing between them and following a prescribed zig zag course. Just prior to 3:00 am, the Koursk got out of position and was observed heading for another ship, the Clan Chisholm. The Clan Chisholm turned but did not reverse engines. The Koursk collided with the Clan Chisholm which in turned collided with another ship, the Itria, which sank. Ultimately, the question before the Court of Appeal was whether the Koursk and the Clan Chisholm were joint tortfeasors. If so, the Itria could not recover from the Koursk as it had already recovered judgment against one of the joint tortfeasors, the Clan Chisholm, in an earlier proceeding.

212    At 152 Bankes L.J. found the acts of negligence to be separate, stating “there is no possible connection between them. They began, they continued, and they ended as separate acts, and they never became a joint act”.

213    Lord Justice Scrutton found at 157 that there were two separate and independent acts of negligence which resulted in the collision. The Koursk and the Clan Chisholm were not joint tortfeasors of the same tort, but separate tortfeasors of two different torts.

214    At 159, Sargant L.J. quoted from Clerk and Lindsell on Torts, (7th ed, Sweet & Maxwell, 1921) pp 59–60, observing that in order to constitute joint tortfeasance there must be concurrence in the act or acts causing damage, not merely a coincidence of separate acts which by their conjoined effect cause damage.

The Respondents’ Conduct

Boart Longyear corporate arrangements

215    In September 2018 BLY announced that it had acquired a majority shareholding in Globaltech Corporation. The announcement stated that:

Boart Longyear’s continued investment in GlobalTech builds our in-house knowledge tied to electronic instrumentation and data collection in the mineral exploration and mining industry. This is an intentional decision to further support our Geological Data Services strategy that is fully focused on developing digital technologies and services and delivering resource-defining information for mining clients.

BLY holds its 58.32% of Globaltech Corporation in its subsidiary, Votraint No 1609 Pty Ltd (Votraint), of which it presently owns 100% of the share capital. A February 2022 company search showed Votraint as a minority shareholder in BLYA, with BLY holding the majority of shares. The decision to acquire the majority shareholding in Globaltech Corporation was made by the BLY board.

216    According to Ms Emrick, at the time of the acquisition of Globaltech Corporation, BLY did not have its own R&D capacity so it invested in an entity that did. At that time BLYA had been renting out Globaltech’s V5 Tool.

217    On 4 February 2022, BLY converted to a proprietary company and became Boart Longyear Pty Ltd. Prior to 4 February 2022, BLY was listed on the Australian stock exchange (as BLY). Since that date the ASX listed entity is Boart Longyear Group Ltd, a Canadian entity (BLG), which is now the ultimate holding company of BLYA and BLY.

218    Ms Emrick confirmed that Boart Longyear only has the one board, which prior to the February 2022 restructure, was the board of the holding company, BLY (now BLG). Ms Emrick agreed that the board was responsible for guiding and directing its controlled entities. The CEO of BLY, Jeff Olsen, is also a director of BLYA. Ms Emrick has been a director of BLYA since February 2017.

219    Longyear TM Inc (LTM) is the registered owner of the TRUCORE and TRUCORE UPIX trade marks. BLYA has an exclusive licence from LTM to use LTM’s trade marks in Australia. LTM is also the registered owner of the Boart Longyear 5 blade impeller device mark, pictured below:

(BLY logo)

220    LTM is also the registered owner of the TRUCORE and TRUCORE UPIX marks in Australia.

221    Prior to its conversion to a proprietary company, BLY was the ultimate holding company for BLYA, LTM and the rest of the Boart Longyear entities around the world.

222    In their submissions the Respondents seek to rely on the corporate structure after the restructure wherein since 4 February 2022, BLG has been the ultimate holding company. Given that the Respondents admit that Globaltech Corporation has manufactured and BLYA has supplied the V6 Tool since 25 February 2019, the corporate arrangements of BLY prior to 4 February 2022 are relevant to the consideration of liability.

2019 Boart Longyear Annual Report

223    The Boart Longyear 2019 Annual Report describes “Boart Longyear” as the global leading integrated provider of drilling services, drilling equipment and performance tooling for mining and mineral drilling companies. Boart Longyear is said to offer a comprehensive portfolio of technologically advanced and innovative drilling services and products. Boart Longyear operates through two divisions: “Global Drilling Services” and “Global Products”.

224    The 2019 Annual Report bears the BLY logo on the cover and begins with “WHO WE ARE. Established in 1890, Boart Longyear is celebrating its 130th year as the world’s leading provider of drilling services…”. The President and CEO, Jeff Olsen, commences his report to shareholders: “At Boart Longyear, we continue our commitment to improving our financial, operating, and safety performance. … [O]ur team has worked diligently to deliver on these commitments during 2019…”. The first page of the 2019 Annual Report states that “[o]ur Corporate Governance Statement may be found at www.boartlongyear.com/corporate-governance”. I will refer to the website: www.boartlongyear.com as the BLY website.

225    Under the heading “Directors’ Report” on page 3 of the 2019 Annual Report, BLY is described as “the Parent”, and together with its “controlled entities” it is referred to as “the Company” throughout the Annual Report. As at the date of the 2019 Annual Report, BLY was the holding company of all the Boart Longyear entities. Amongst their responsibilities, the Board of BLY guided and directed the controlled entities.

226    Note 28 to the Consolidated Financial Statements in the Annual Report lists the many principal subsidiary companies of BLY. With the exception of Globaltech Corporation, BLY owns 100% of each of the principal subsidiary companies listed, including LTM, BLYA and BLY Company, which is discussed below in relation to the BLY website.

227    In the Corporate Information section at the rear of the 2019 Annual Report, the Global Headquarters and Boart Longyear Investor Relations is listed at an address in West Valley City, Utah in the United States, and the registered office is located in Adelaide, South Australia.

BLY website and social media

228    According to Ms Emrick, as at January 2019, and continuing as at the date of her affidavit, the BLY website was managed by CSC Global, which is paid for its services by BLY Company. BLY Company is responsible for managing, monitoring, creating and/or posting content on the BLY website and social media.

229    According to Mr Brown, on 1 October 2020, he accessed the BLY website. The “corporate profile” page of the BLY website identifies “Boart Longyear” as being headquartered in Salt Lake City, Utah, USA and listed on the Australian Securities Exchange in Sydney, Australia (ASX:BLY). The BLY website displays the BLY logo on each page.

230    The “legal” page of the BLY website states that the “website is operated by Boart Longyear and its affiliates and subsidiaries (collectively referred to as ‘us’, ‘we’ or ‘Boart Longyear’)”. Under the heading “Intellectual Property Considerations”, the website states “All trademarks, service marks and trade names used on the Website are trademarks or registered trademarks of Boart Longyear”. The domain registration information lists the registrant contact as Boart Longyear.

231    In correspondence dated 11 February 2019, and repeated in their letter of 20 February 2019, BLYA’s lawyers noted that the Boart Longyear website is not managed or controlled by BLYA, such that BLYA was unable to comply with a demand that certain materials be taken off the website.

232    According to Mr Brown, on 1 October 2020, he accessed the icons with hyperlinks to Boart Longyear social media platforms on the BLY website. One of those platforms was the Boart Longyear YouTube channel at the URL https://www.youtube.com/user/BoartLongyear1. Mr Brown viewed a training video for the TruCore UPIX device on BLY’s YouTube channel. The video is discussed later.

February 2019 letter

233    In February 2019, Boart Longyear sent a letter to “Dear Valued TruCore Customer” (February 2019 letter). The BLY logo was at the top left of the letter and the letter was signed by Ms Emrick as “Regional General Counsel Asia Pacific” without reference to a company. There was no reference to BLYA in the letter. The letter stated:

As you are aware, a decision was recently made by the Federal Court in proceedings issued by Reflex/AMC against GlobalTech in relation to certain intellectual property used in the TruCore Tools manufactured by GlobalTech.

Boart Longyear understands that Reflex/AMC has recently written to various customers regarding the asserted effect of the Court’s decision in those proceedings upon those customers’ continued use of any TruCore Tools supplied by Boart Longyear.

It is important to note that the Court’s orders are only enforceable by Reflex/AMC against GlobalTech directly, being the only defendant to that action, and only in relation to any TruCore Tools that are owned by GlobalTech, which excludes any tools currently supplied by Boart Longyear.

On 23 January 2019, GlobalTech filed its appeal in the Proceedings which seeks to overturn the Court’s original decision. The appeal is anticipated to be heard in May this year. We understand that GlobalTech is confident that the Court’s original decision will be overturned.

Whilst Boart Longyear is unable to make any comment regarding the merits of the Court’s original decision or as to the prospects of the appeal, we note that GlobalTech has developed an alternative solution for its TruCore Tools which addresses the issues raised in the proceedings. As a precautionary measure, pending the outcome and determination of GlobalTech’s appeal, Boart Longyear is currently in the process of replacing all of its existing and new TruCore Tools to incorporate that alternative solution (New Version TruCore Tools).

Our team will be in touch with you shortly to arrange for the New Version TruCore Tools for you.

(Emphasis added.)

Globaltech Corporation and GTCPL corporate arrangements

234    As noted above, at the relevant times since around September 2018, the majority of the shares in Globaltech Corporation were held by Votraint, a subsidiary of BLY.

235    Mr Hejleh is the Managing Director of both Globaltech respondents. Globaltech Corporation shares two of its seven directors (Mr Hejleh and Mr Stewart) with GTCPL, which has four directors. Mr Klass and Mr Anwar are the other two directors of GTCPL. Until 1 October 2018, Mr Klass and Mr Anwar were also directors of Globaltech Corporation. GTCPL does not hold shares in Globaltech Corporation and vice versa.

236    Mr Hejleh and Mr Stewart are the executive directors of Globaltech Corporation. Four of the five non-executive directors of Globaltech Corporation are also “Boart Longyear” employees: Mark Dogan, Brian Durrant, Robert Buto and Mike Ravella. These non-executive directors are not involved in the day to day operations of Globaltech Corporation.

237    Globaltech Corporation and GTCPL have the same recorded registered business address and principal place of business.

Globaltech Corporation and GTCPL business operations

238    Mr Hejleh gave evidence on behalf of the Globaltech respondents. In his affidavit, which was directed primarily to the issue of GTCPL’s role, Mr Hejleh deposed that he had full access to the business records of both Globaltech respondents and that he was familiar with their business and technology.

239    Mr Hejleh gave written evidence that since 2008, the sole business activity with which GTCPL was engaged was the provision of management consulting services to Globaltech. The management consulting services are provided to Globaltech Corporation by the four directors of GTCPL. A copy of the confidential Management Consultancy Agreement between Globaltech Corporation and GTCPL dated 22 August 2008 was annexed to his affidavit dated 24 December 2020 (Management Agreement).

240    Mr Hejleh’s oral evidence was that GTCPL was “more or less a … holding company” and had been since 2006, when for accounting and taxation reasons all money and assets (including intellectual property) were transferred to Globaltech Corporation, and it became the operating company. GTCPL has no employees; the four directors are the only people in GTCPL. There was no mention of any transfer of assets in Mr Hejleh’s affidavit.

241    During cross-examination, Mr Hejleh recalled that there was a written transfer agreement documenting the transfer of assets to Globaltech Corporation in 2008. He agreed that he had not mentioned the transfer agreement in his affidavit because he thought it was “irrelevant”. According to Mr Hejleh the transfer agreement would be somewhere in the archives.

242    Prior to 2008, the four directors of GTCPL were paid salaries as employees of Globaltech. Pursuant to the Management Agreement, each of the four directors of Globaltech Corporation directed that part of their salary from Globaltech Corporation be paid as a combined management fee to GTCPL. Mr Hejleh’s evidence was that after Mr Klass and Mr Anwar left the Globaltech Corporation board, they were still “as senior as they’ve ever been in directing people within the company”. They remained as employees of Globaltech Corporation and continued to be paid their salary, a portion of which was paid to GTCPL as per the Management Agreement.

243    The portion of the Globaltech Corporation employee salaries of the GTCPL directors paid to GTCPL is the sole income source of GTCPL from which it paid directors’ fees and issued dividends.

244    The Management Agreement is silent as to the nature of the services for which the management fees were to be paid. There is nothing in the Management Agreement that says that the sole business activity of GTCPL is to provide management or management consultancy services to Globaltech Corporation. Mr Hejleh was unable to provide any examples of management consulting or services provided to Globaltech Corporation by GTCPL. The primary purpose of the Management Agreement was for accounting reasons to reduce the tax payable on the salaries of the four directors of Globaltech Corporation. Mr Hejleh stated in cross-examination:

You could characterise it, I guess, any way you like, but the bottom line is our accountants know us well and they know how we contribute to the business and they proposed to us, said, [sic] “That would be a good structure to have going forward,” so we went along with it.

245    Mr Hejleh agreed that he gave instructions on behalf of both Globaltech Corporation and GTCPL in legal proceedings, and that he gave high level strategic and business directions in relation to the Globaltech website if asked.

246    Mr Hejleh was taken in cross examination to screenshots of webpages printed from the Globaltech website (www.globaltech.com.au). The Globaltech website displayed the Globaltech logo at the top left of each webpage, and also prominently on a page displaying “Globaltech News” and “Globaltech Proud Partners”. The Globaltech logo was displayed at the top left of the webpage displaying the “TRUCORE UPIX CORE ORIENTATION TOOL” which Mr Hejleh agreed was the V6 Tool. Below a short description of the V6 Tool, the website stated “Click here for more info”. When the reader clicked for more information they were taken to the BLY website (www.boartlongyear.com).

247    Mr Hejleh was unaware of whether there was any formal agreement with Boart Longyear giving Globaltech Corporation or GTCPL permission to use the TRUCORE UPIX trade mark on the Globaltech website.

248    Mr Hejleh was also unaware of whether there was any formal agreement between Globaltech Corporation and Boart Longyear which allowed the Globaltech website to link to the BLY website. He had not seen any written documentation concerning the link and said that “Gordon was in charge of putting this together”. “Gordon” was Mr Stewart, who was the other director of both Globaltech respondents.

249    Until December 2019, GTCPL was the registrant of the www.globaltech.com.au domain. Mr Hejleh’s evidence was that the website should have been transferred to Globaltech Corporation at the date of the asset transfer in 2008, but it had been overlooked. He asked the “Company Secretary” to change the registration to Globaltech Corporation in late 2018, but it was not effected until about a year later in December 2019. When pressed by AMC’s junior counsel, Ms Arcus, to identify the company secretary, the following exchange took place:

[Counsel]: Now, you refer to the company secretary. Can you identify the name of the individual you’re referring to, please?

Hejleh: I believe that would have been Gordon and/or Mike, I can’t remember to be quite honest.

[Counsel]: And – well, Gordon Stewart was the company secretary of Globaltech Corporation at that time, whereas Michael Klass was the company secretary of Globaltech - - -?

Hejleh: Yes.

[Counsel]: Proprietary Limited at that time?

Hejleh: I would have probably called Gordon.

[Counsel]: You would have called Gordon?

Hejleh: I would have probably asked Gordon, yes.

[Counsel]: So you would have asked the company secretary of the Globaltech Corporation entity - - -?

Hejleh: I wasn’t thinking about - - -

[Counsel]: - - - to change - - -?

Hejleh: I wasn’t thinking, the titles were there all the time. We all [sic] got different hats. I just would have asked Gordon naturally.

[Counsel]: So is it the case that you weren’t thinking of the fact that the company secretary necessarily acting on behalf of Globaltech Proprietary Limited or Globaltech Corporation; is that right?

Hejleh: My objective was to change the domain holder. I didn’t really mind who did it.

250    GTCPL was also the registered owner of the Globaltech logo from 2000 until June 2020, when the renewal fees were not paid. No formal licence was given by GTCPL to Globaltech Corporation to use the logo:

[Counsel]: Did Globaltech Proprietary Limited ever give Globaltech Corporation permission to use the logo?

Hejleh: Yes.

[Counsel]: And was that permission in the form of a trademark licence agreement?

Hejleh: Don’t think so. I think we just – we wanted to register the logo with Corp, and then the trade people, I think, from memory, came back to us and said, “You need to get permission from the other company.” So we gave the permission back to the people that register the trademarks, and it was allowed.

[Counsel]: And I take it this was, again, a conversation in your own head, as managing director of both entities; is that right?

Hejleh: No. No.

[Counsel] So what – so there was no - - -?

Hejleh: No.

[Counsel]: - - - formal trademark licence agreement. Was there a verbal agreement?

Hejleh: It was probably a conversation between the four of us that that’s what we’re going to do; we’re going to – because, at that time we’re talking – I think – I think Corp would have had access to this logo since 2006, at least, if not before, and we would ..... conversations – as we are moving everything, then the trademarks move; everything moves.

[Counsel]: And so what was the date of this verbal agreement between the four of the directors?

Hejleh: I don’t know.

251    During Mr Hejleh’s cross-examination, it became apparent that there were no strict boundaries or roles for the directors of the two Globaltech companies. Rather, the approach was “it’s the four of us”, being the four original directors of both Globaltech entities, who were also the four employees of Globaltech Corporation. The four men would take on interchangeable roles between the two entities at any given time to get things done. The result being that, at times in his cross-examination, Mr Hejleh himself was confused as to which entity the directors were working for.

[Counsel]: Now, you refer to the company secretary. Can you identify the name of the individual you’re referring to, please?

Hejleh: I believe that would have been Gordon and/or Mike, I can’t remember to be quite honest.

…

[Counsel]: So is it the case that you weren’t thinking of the fact that the company secretary necessarily acting on behalf of Globaltech Proprietary Limited or Globaltech Corporation; is that right?

Hejleh: My objective was to change the domain holder. I didn’t really mind who did it.

[Counsel]: Okay. And when you made the request of the company secretary, who we know to be Mr Stewart, I take it you were acting in your capacity as managing director of Globaltech Proprietary Limited, as well as Globaltech Corporation, correct - - -? - - - both entities?

Hejleh: I guess so, yes.

252    According to Mr Hejleh, he had regular contact with the four Boart Longyear employees who were non-executive directors of Globaltech Corporation.

253    According to Mr Hejleh, Globaltech Corporation is not able to sell or supply the V6 Tool to anyone other than BLYA. If Globaltech Corporation received a request from a customer to buy a TruCore™ Upix device (V6 Tool) they would direct the customer to “Boart Longyear”.

254    Mr Hejleh spoke of an “overall distribution agreement” between “us and Boart Longyear” that had been in place in an earlier form since 2012. The distribution agreement covered matters such as the terms on which Boart Longyear bought products, the applicable warranty and the royalty to be paid to Globaltech when Boart Longyear rented out products. There was no copy of the distribution agreement in evidence.

Globaltech logo and trade marks

255    Until June 2020, GTCPL was the registered owner of the Globaltech logo trade mark, registration number 837672 (the Globaltech logo), depicted below:

The renewal fees were not paid in respect of the Globaltech logo when they were due in June 2020, so the current status of the Globaltech logo given on the IP Australia database at the date of the hearing is: Registered – Expired: Renewal Possible.

256    There was no licence agreement between GTCPL and Globaltech in relation to the Globaltech logo.

257    Globaltech Corporation is the registered owner of the UPIX trade mark. The UPIX trade mark was created by Mr Hejleh, who agreed that at the time it was registered, Globaltech had the intention to use it on advertising and customer facing material. According to Mr Hejleh, Globaltech licensed Boart Longyear to use the UPIX trade mark:

Hejleh: “UPIX”. They applied for “UPIX”, as well, and, again, the trademark people said that they have to get our permission, and we allowed it.

[Counsel]: And was there a formal – sorry. Was there written documentation recording this arrangement or understanding - - -?

Hejleh: I just got - - -

[Counsel]: - - - between Boart Longyear and Globaltech?

Hejleh: We just got an email from the – from the product manager saying, “We would like to use ‘UPIX’, and we can’t do it without your permission. Would you allow it?” And we just signed the piece of paper and sent it back.

Globaltech website and LinkedIn page

258    Mr Brown visited the Globaltech website (www.globaltech.com.au) in September 2020. The Globaltech logo is displayed on the home page of the Globaltech website and each page of the website that Mr Brown annexed to his affidavit. Globaltech Corporation admits that it is the controller and registrant of the Globaltech website at domain name www.globaltech.com.au. The public records indicate that Globaltech Corporation has owned the website since December 2019. Before that time the website was owned by GTCPL.

259    The following discussion of the display of the V6 Tool on the Globaltech webpages is based on the pages from the Globaltech website visited by Mr Brown in September and October 2020, and annexed to his affidavit.

260    The “about” section of the Globaltech website notes that in 2018, Boart Longyear became a majority stakeholder in Globaltech. Boart Longyear is described as “the world’s leading provider of drilling services, drilling equipment and performance tooling for mining and drilling companies globally”. The relationship between the two companies is described as a “strategic alliance” with Boart Longyear “helping Globaltech to build leading products and services that will improve performance in the mining and exploration industry”.

261    Under the heading “our vision & core values”, the Globaltech website states “[i]n collaboration with our major business partner, Boart Longyear, we keep health and safety foremost…”.

262    The Globaltech website page headed “Exploration & Instrumentation” links to a “products” page which refers to the TruCore™ UPIX core orientation tool product which is described as “an easy-to-use, highly accurate core orientation system”. Underneath the heading there is a short description, under which is a link “click here for more info”. When the reader clicks on the link they are taken to the BLY website, to a page displaying the BLY logo, a picture and a heading “TRUCORE™ UPIX CORE ORIENTATION”. Under the heading is written “TruCore™ UPIX is an easy-to-use highly accurate core-orientation system featuring step-by-step workflow guidance, wireless communication, and a field replaceable battery”. This webpage is reproduced below:

263    Further down the page there is a heading “TAKE CORE. TAKE CONTROL”. Under that heading is written “Boart Longyear has a living legacy of delivering innovation in drilling technology. As a tool in Boart Longyear’s new line of instrumentation, TruCore UPIX is supported by a hands-on team of experts with professional backgrounds in drilling, geology and engineering”. Next to this there is a drawing of the TruCore™ UPIX hand-held unit on which the Boart Longyear logo is prominently displayed at the top.

264    Continuing down the page there is a heading “Downloads” and underneath that the “TruCore™ UPIX Core Orientation Technical Data Sheet” pdf is available to download. There is then an invitation to “RENT TRUCORE UPIX TODAY”.

265    Mr Brown also visited the GTCPL LinkedIn page in October 2020. The page described GTCPL as a Western Australian company that develops and manufactures tools and technologies for efficient exploration drilling and mining applications. The ORIFINDER bore core orientation system is described as a “Core product”.

TruCore™ UPIX instruction manual and training video

266    In July 2020, BLY’s lawyers forwarded to AMC’s lawyers a copy of the instruction manual for the TruCore™ UPIX Tool. Ms Emrick believed that the instruction manual was supplied with the TruCore™ UPIX devices hired to customers. The instruction manual provides detailed instructions to the user on how to use the TruCore™ UPIX or V6 Tool.

267    The instruction manual is entitled “TRUCORE™ UPIX CORE ORIENTATION KIT User Guide”. The front page bears the Boart Longyear logo and the TRUCORE trade mark. The manual suggests that if additional training and support is required, the customer should contact “your local Boart Longyear representative”, or further information can be found on the BLY website. The worker pictured in the instruction manual wears a shirt and a hard hat bearing the Boart Longyear logo. The handheld part of the TruCore™ UPIX device shown in the instruction manual bears the name “TRUECORE UPIX”. The underground part of the device has the name Boart Longyear and the Boart Longyear logo pictured as being along the side of the barrel.

268    The device is described throughout the instruction manual as the “TruCore™ UPIX tool”.

269    The only references in the instruction manual are to “Boart Longyear”. There are no references to BLYA or Globaltech.

270    Mr Brown compared the instruction manual (user guide) for the V6 Tool with the 2016 TruCore User Guide, which he in turn compared with the Orifinder V5 User Guide. According to Mr Brown the text of the Orifinder V5 User Guide step-by-step operating procedure is almost identical to the 2016 TruCore User Guide, and that the operating procedure for the V6 and TruCore 2016 User Guides is essentially the same. Mr Brown considered that the V6 User Guide, the Orifinder V5 User Guide, and the 2016 TruCore User Guide could be used interchangeably to operate any of the Orifinder V5, V6 Tools, or TruCore Tools.

271    In the training video downloaded by Mr Brown from the BLY YouTube page, the only corporate name that can be seen is “Boart Longyear” and the only logo is the BLY logo. That is also what is displayed on the screen at the start and end of the video. The people in the video wear work clothes and safety hats with the BLY logo. The hand held device in the video bears the BLY logo.

Adjacent premises

272    Globaltech and Boart Longyear both have warehouses at the same address in Forrestfield, Western Australia. The warehouses of the companies are in the same building but they are separated by a fence and each has separate access and key card entry systems.

273    The land where the warehouses are located is owned by Boart Longyear, and Globaltech pays rent to Boart Longyear. It was not suggested that the rent was other than market value. The Globaltech logo is attached to the exterior fence of the Forrestfield premises. It is also the registered address for GTCPL.

Boart Longyear’s knowledge of the Patent and December 2018 Orders

274    Boart Longyear has been on notice of the existence of the Patent since at least February 2016, when AMC’s lawyers sent a copy to BLY’s South Australian registered office. Boart Longyear’s US lawyers responded in March 2016 stating:

[W]e have investigated the issue of clearance in view of the above identified ‘162 patent and have concluded that the ‘162 patent is not a hindrance for Boart Longyear to make, use, offer to sell or sell in Australia, or import into Australia any of the products currently being marketed by Boart Longyear, to include the TrueCore™.

275    Copies of the 14 December 2018 orders made by Besanko J were forwarded by AMC to Boart Longyear’s US lawyers in December 2018.

276    According to Mr Hejleh, Globaltech Corporation has kept Boart Longyear informed as to its legal disputes with AMC concerning the Patent, including that it was working on a workaround for the V5 Tool found to infringe the Patent. According to the February 2019 letter to customers, Boart Longyear was aware that Globaltech was working on an alternative solution to the V5 Tool which was found to infringe in Globaltech FI.

Consideration

277    AMC contends that the Contested Claims which are directed to a core orientation system (claims 33 to 40, 46 to 48, 54 and 65 of the Patent) (the Contested System Claims) have been directly infringed since January 2019, by each of the Respondents’ making, selling and otherwise exploiting the V6 Tool because each V6 Tool takes all the integers of each of the Contested System Claims sued upon. AMC contends that the Respondents have directly infringed the Contested System Claims by their supply (including offers to supply) of the V6 Tool because when used each tool takes all the integers of each contested claim sued upon.

278    AMC contends that the Respondents have also infringed those of the Contested Claims which are method claims (the Contested Method Claims) by supplying the V6 Tools, pursuant to s 117 of the Act.

Ground 1 - s 117

279    As I have found the V6 Tool infringes the Contested Claims, the enlivening requirement of s 117(1), that use of a product by a person would infringe the Patent, is met.

Section 117(2)(a)

280    Under s 117(2)(a), the supply of a product will infringe a patent if the infringing use is the only reasonable use of the product. This applies to the V6 Tools. Globaltech admits that the V6 Tool is capable of only one reasonable use having regard to its nature and design. Boart Longyear denied this, but did not appear to seriously contest that fact on the evidence and did not identify any other use for the V6 Tool other than to orient core samples. Professor Tapson’s evidence was to the effect that the only reasonable use for the V6 Tool in practice is to orient core samples in the manner claimed in the Contested Claims. I accept that having regard to the nature and design of the V6 Tool, it is a piece of purpose built equipment which is designed to be put to a particular, specific use: orienting core samples.

281    I consider that Globaltech Corporation and BLYA have infringed the Contested Method Claims under s 117(2)(a) by supplying (and offering to supply) the V6 Tools in Australia.

Section 117(2)(b)

282    Under s 117(2)(b), the supply of a product will infringe if the supplier had reason to believe it would be put to the infringing use, if the product is not a “staple commercial product”.

283    Globaltech admits that the V6 Tool is not a staple commercial product. Boart Longyear denied that the V6 Tool is not a staple commercial product, but did not appear to contest that proposition on the evidence, or make submissions on the issue.

284    The V6 Tool cannot be put to a variety of uses, and is not in fact put to a variety of uses: Northern Territory per Hayne J at [48]. The V6 Tool is a piece of purpose built equipment which is put to a specific purpose: core orientation. It is not a staple commercial product.

285    Globaltech and BLYA had reason to believe that the V6 Tools would be used in a manner that would infringe the Contested Method Claims, this being the use for which the V6 Tool is intended and for which it is instructed in the instruction manual provided to customers with the V6 Tool.

286    I consider that infringement of the Contested Method Claims by Globaltech and BLYA under s 117(2)(b) is also established.

Section 117(2)(c)

287    Under s 117(2)(c), the supply of a product will infringe a patent if the supplier gave instructions or inducements for the infringing use.

288    The V6 Tool instruction manual or user guide supplied with the V6 Tools, which was considered by Professor Tapson, instructs on the use of the V6 Tools. Use of the V6 Tool in accordance with the instructions in the user guide will take all the integers of the Contested Method Claims.

289    The Globaltech website advertised the V6 Tool on the “products” page as the “TruCore UPIX Core Orientation Tool” which it describes as “an easy-to-use, highly accurate core orientation system”. Underneath the heading there is a short description, under which is a link “click here for more info” which directs to the BLY website.

290    There are no references to BLYA or Globaltech in the V6 Tool user guide. The only corporate reference in the user guide is to “Boart Longyear” and the BLY logo. The hand held device pictured in the user guide bears the BLY logo. The user guide suggests that if additional training and support is required, the customer should contact “your local Boart Longyear representative”, or further information can be found on the BLY website.

291    I consider that infringement of the Contested Method Claims by Globaltech Corporation and BLYA pursuant to s 117(2)(c) is established.

292    I also conclude that Globaltech Corporation and BLYA authorised customers of the V6 Tool to exploit the invention within s 13(1) of the Act, in that without AMC’s licence they sanctioned, approved and countenanced the use of the V6 Tool in accordance with the instruction manual.

Grounds 2 and 3 – authorisation and joint tortfeasorship with other respondents

293    The Respondents submit that the position of BLYA and Globaltech Corporation is dramatically different from the factual circumstances in Calidad. In that case there were separate family-owned companies found to be operating as “a single corporate organism to one end” (Calidad at [446]). The fact that BLYA and Globaltech Corporation may form part of the same global group of companies is not to be misconstrued — their day-to-day relationship is of manufacturer and distributor. Properly regarded in light of the facts and circumstances set out above, the Respondents say that BLYA and Globaltech Corporation have not acted as joint tortfeasors by common design in the sale and supply of V6 Tools in Australia: Apotex at [26].

GTCPL and Globaltech Corporation

294    GTCPL was the second respondent in Globaltech FI. In that case Globaltech submitted that there was no or insufficient evidence of infringement by GTCPL. At [327] Besanko J found that the evidence supported the conclusion that GTCPL was a participant in the infringing acts and an infringer. That finding was not challenged on appeal. The evidence relied upon by Besanko J in reaching his finding included the fact that GTCPL’s logo mark appeared on the V5 Tools and the 2011 User Guide, and also that GTCPL’s logo mark and website address appeared in a 2010 brochure, a quotation and historical website material. GTCPL also agreed to consent orders imposing an injunction against it in relation to the V4 tool.

295    The Respondents submit that GTCPL is effectively a holding company which transferred all of its assets (including technology, domain names and trade marks) to Globaltech Corporation in 2006, many years prior to Globaltech FI and the V4 tool, via a written agreement. According to the Respondents GTCPL does not manufacture, offer to sell, distribute or supply V6 Tools in Australia, online or otherwise, and it has never advertised or promoted the V6 Tools in Australia.

296    When GTCPL’s managing director, Mr Hejleh, prepared his evidence in this proceeding it was against the backdrop of the finding in Globaltech FI that GTCPL was a participant in the infringing conduct. It would be fair to conclude that in those circumstances Mr Hejleh put the best case he could before the Court in his affidavit in relation to the separate nature of the Globaltech respondents.

297    According to Mr Hejleh, he had access to all the business records of Globaltech Corporation and GTCPL. Yet he failed to mention in his affidavit or annexe to it any documents, contemporaneous or otherwise, to corroborate the matters that he gave evidence about for the first time only when they arose in the course of cross examination, such as the 2006 asset transfer to Globaltech, or the 2012 distribution agreement with Boart Longyear. Mr Hejleh regarded the asset transfer agreement as “irrelevant”.

298    Both the asset transfer and distribution agreements were important documents on which the Respondents sought to rely in support of their case that GTCPL had no role in the manufacture, sale or supply of the V6 Tools. Whilst it is possible that the documents may have been destroyed as being over 10 years old, it is noteworthy and surprising that their existence and effect was not canvassed in Mr Hejleh’s affidavit. Their existence was raised by Mr Hejleh for the first time during cross-examination.

299    I consider that the Management Services Agreement entered into by the four directors of Globaltech Corporation and GTCPL in 2008 was entered into solely for accounting and tax purposes, not business operational purposes. Mr Hejleh was questioned extensively about the agreement and was unable to provide an example of any of the management services provided by GTCPL.

300    The finding that GCTPL was jointly liable for infringement in Globaltech FI did not result in a noticeable change in corporate behaviour at Globaltech Corporation. GTCPL remained as the proprietor of the Globaltech website until December 2019 (a year after the final orders in Globaltech FI). Mr Hejleh’s evidence was that he asked the “company secretary” to change the registrant of the website in late 2018, yet it remained in GTCPL’s name until December 2019. GTCPL remained as the registered owner of the Globaltech logo until the registration lapsed for non-payment of fees in June 2020. The Globaltech logo continued to be used on the Globaltech website.

301    GTCPL’s proprietorship of the website and logo were two factors relied upon by Besanko J in reaching his findings that GTCPL was liable for infringement in Globaltech FI. If the Globaltech companies were the separate entities contended by the Respondents, and the ownership of the website and trade marks were meant to have been transferred under the 2006 asset transfer agreement, it is surprising that they were still not transferred to Globaltech for over a year after the Globaltech FI decision.

302    Mr Hejleh is the Managing Director and guiding mind of both entities. Together with the assistance of Mr Stewart, Mr Anwar and Mr Klass, Mr Hejleh directed and controlled the collective Globaltech business.

303    It is apparent from Mr Hejleh’s evidence that there were no strict boundaries or roles for the four original directors of the two Globaltech companies, who were also employees of Globaltech Corporation. Rather, the approach was “it’s the four of us”. The four men would take on interchangeable roles between the two entities as required at any given time to get things done. The lax approach to the holding and eventual transfer of the website and the ownership of the Globaltech logo is consistent with the blurred operational lines between the two Globaltech entities.

304    There is no real difference between the two Globaltech entities for the purposes of its core orientation tools and Globaltech’s core orientation business runs through both Globaltech entities.

305    These factors take the relationship between Globaltech Corporation and GTCPL beyond that of merely related companies which share a registered address and principal place of business and have some directors and shareholders in common.

306    As such, I find that Globaltech Corporation and GTCPL were acting in a common design and are jointly liable for the infringing conduct.

BLY and BLYA

307    Following the recapitalisation initiative in late 2021, BLY is no longer an ASX listed entity. The ASX listed entity is now BLG. Ms Emrick’s evidence was that BLG is now the ultimate parent company of more than 65 entities, including BLY and BLYA.

308    The Respondents submit that BLY has not, and does not supply the V6 Tools in Australia, or at all. They contend that BLY is a holding company; it has no operational function, and no employees. BLY is not the entity responsible for the BLY website, the videos published on social media or the instruction manual relied on by AMC.

309    The Respondents argument is largely based on the current post-restructure corporate arrangements. However, a substantial proportion of the time during which the V6 Tool was offered for sale and supplied in Australia was prior to the restructure. The conduct of BLY during this period cannot simply be ignored because it is no longer the ultimate holding company.

310    It is apparent from the discussion of the evidence above that there is a strong tendency for Boart Longyear entities, and those acting for them, to refer to the entities globally as “Boart Longyear” rather than identifying a particular Boart Longyear company. An example of this is the Boart Longyear 2019 Annual Report discussed above. Another example is the February 2019 letter to customers also set out above. A further example is the V6 Tool Instruction Manual which has the BLY logo on the front page and which invites customers to “contact their local Boart Longyear representative”. BLY presents itself to the world as one entity: Boart Longyear.

311    Mr Hejleh referred to the global “Boart Longyear” in his cross examination and did not differentiate between BLY and BLYA in his oral evidence.

312    In a letter dated 9 March 2016, BLY’s US lawyers wrote to AMC’s lawyers, noting:

…the ‘162 patent is not a hindrance for Boart Longyear to make, use, offer to sell or sell in Australia, or import into Australia any of the products currently being marketed by Boart Longyear, to include TruCore™.

(Emphasis added.)

And in a letter dated 5 March 2019, the US lawyers wrote:

My firm represents Boart Longyear Co. and its affiliates. In that capacity, I respond to your February 27, 2019 letter to the company’s directors.

…

If your letter portends US-based litigation, please be aware that Boart Longyear will defend itself vigorously, including by initiating post-grant proceedings against Imdex-related US patents at the US Patent & Trademark Office. For example, Boart Longyear may initiate inter partes review to invalidate the ‘055 patent for anticipation and obviousness under 35 U.S.C. §§102 and 103. Boart Longyear also reserves the right to initiate a declaratory judgment action in the US to invalidate the ‘055 patent under 35 U.S.C. §§ 101, 102, 103, and 112.

(Emphasis added.)

313    It is clear that up until the restructure in February 2022, BLY presented itself and its entities to the world globally as “Boart Longyear”. The companies within Boart Longyear, in particular BLY and BLYA, worked collectively together to operate the Boart Longyear core orientation tool business in Australia.

314    The BLY website, the instruction manual, the letters to customers, all refer to Boart Longyear. To the public and potential consumers, the offer to supply was being issued by Boart Longyear, rather than BLYA. The Respondents admitted that BLYA sold or supplied or offered for hire and hired the V6 Tools to customers in Australia. Absent that admission, there was no evidence that BLYA had any role in the sale, hire or supply of the V6 Tools in Australia.

315    As such, I find that BLY could have prevented BLYA from supplying the V6 Tools. BLY authorised the infringing conduct and BLY and BLYA participated together in a common design to sell, supply and hire the V6 Tools.

Globaltech Corporation and BLY

316    Globaltech Corporation granted Boart Longyear an exclusive distribution and supply arrangement in respect of the V6 Tool. According to Mr Hejleh the V6 Tool is “built specifically” for Boart Longyear, and any V6 Tool customer enquiry received by Globaltech Corporation is referred to Boart Longyear. The exclusive supply agreement existed for the commercial benefit of Globaltech Corporation and BLY.

317    Globaltech Corporation kept Boart Longyear appraised of the legal disputes with AMC about the Patent, and the workaround solution to the infringing V5 Tool that it was developing. As early as January 2019, Boart Longyear was informing its V5 customers that Globaltech had developed an alternative solution.

318    Globaltech Corporation and BLY use the trademark “TRUCORE UPIX” on or in relation to their exploitation of the V6 Tools, even though Globaltech Corporation is the registrant of the UPIX trade mark and LTM is the registrant of the TRUCORE UPIX trade mark.

319    Globaltech Corporation only ever used the mark TRUCORE UPIX in relation to V6 Tools, which it manufactured and supplied to Boart Longyear. Globaltech Corporation did not object to Boart Longyear filing the TRUCORE UPIX mark in late 2019 even though the UPIX mark was registered by Globaltech Corporation earlier in time (in March 2019) and Mr Hejleh came up with the UPIX mark. Mr Hejleh said he gave permission to Boart Longyear to use the UPIX mark.

320    In September 2020 the “TRUCORE UPIX CORE ORIENTATION TOOL” was advertised on the Globaltech website (www.globaltech.com.au) (then owned by Globaltech Corporation), with links to the BLY website. The Globaltech website described Globaltech being in collaboration with its major partner Boart Longyear. Globaltech Corporation does not receive any fees for each customer that is redirected to the Boart Longyear website from the Globaltech website.

321    Globaltech and BLY are also related companies. BLY is a majority shareholder in Globaltech, via its ownership of Votraint.

322    Taken together, the above factors establish that the relationship between Globaltech Corporation and BLY is more than a mere supplier/distributor relationship with regard to the supply of the V6 Tools.

323    I consider that Globaltech and BLY have engaged in a concerted action to a common end. There is a concurrence to the actions of BLY and Globaltech. The allegations of authorisation and joint tortfeasorship are made out.

All respondents

324    AMC contends that the present corporate structure of the Respondents shows a close connection between all four Respondents. In addition to the matters in the preceding section, AMC points to:

(a)    BLY, through its subsidiary Votraint acquiring over time a majority shareholding in Globaltech Corporation (58.32% as at February 2022);

(b)    The replacement of two of the original Globaltech directors with four directors who are employees of Boart Longyear;

(c)    BLYA, BLY and Globaltech Corporation admitting that they are associated entities within the meaning of s 50AAA of the Corporations Act 2001 (Cth);

(d)    The four Respondents share the same principal place of business and operate from shared premises at which the V6 Tools are manufactured;

(e)    Mr Hejleh, the Globaltech entities’ Managing Director kept in regular contact with the directors of Globaltech Corporation who were employees of BLY;

(f)    The interchangeability of the User Guides for the V5 and V6 Tools.

325    Other than the findings that I have made above, I do not consider that all the respondents were engaged in some common design or that they were all acting in concert as a group in relation to the manufacture, sale, supply or offers to supply of the V6 Tool. A principle reason for this is that aside from the Respondents’ admission as to liability of BLYA, there was no evidence as to BLYA’s role in the infringing conduct. As discussed above, BLY as Boart Longyear was the entity from the consumer’s perspective offering the V6 tool for supply in Australia.

Additional damages s 122A

326    AMC seeks orders for additional damages from each of the Respondents, in the event that they make an election for damages. The Respondents deny that claim. The only point to be determined at this stage is entitlement, not quantum.

327    Section 122(1A) of the Act was introduced with effect from 28 September 2006 and it applies to infringements occurring on and after that date. It provides as follows:

(1A)     A court may include an additional amount in an assessment of damages for an infringement of a patent, if the court considers it appropriate to do so having regard to:

(a)     the flagrancy of the infringement; and

(b)     the need to deter similar infringements of patents; and

(c)     the conduct of the party that infringed the patent that occurred:

(i)     after the act constituting the infringement; or

(ii)     after that party was informed that it had allegedly infringed the patent; and

(d)     any benefit shown to have accrued to that party because of the infringement; and

(e)     all other relevant matters.

328    It was common ground that the factors identified in subsection (1A) are the same as those in the additional damages section (s 115(4)) in the Copyright Act 1968 (Cth) and the case law relevant to that section may be deployed by analogy to patent cases.

329    The Court has a broad discretion to award additional damages.

330    More than copying is required to enliven the application of s 122(1A). The Full Court in Oxworks Trading Pty Ltd v Gram Engineering Pty Ltd (2019) 154 IPR 215 (Oxworks) observed at [72] that “it is not illegitimate, or flagrant, for a competitor to examine the disclosure of a patent and to attempt to work around the monopoly claimed in the claims”. Nor is flagrancy a prerequisite for an award of additional damages: MJA Scientifics International Pty Ltd v SC Johnson & Sons Pty Ltd (1998) 43 IPR 275 per Sundberg J at 282.

331    Section 122(1A) provides a non-exhaustive guide as to the matters that are relevant in considering whether additional damages should be awarded the Court. In addition to flagrancy, these factors include the conduct of the infringer after the acts of infringement (including after the infringer has been informed that it has infringed the rights in question), the benefits accruing to the infringer by reason of the infringements that are found, and all other relevant matters: Hytera Communications Corp Ltd v Motorola Solutions, Inc [2019] FCAFC 210 (per Jagot, Yates and Stewart JJ) at [25] (Hytera). The Full Court in Hytera at [25] observed that “all other relevant matters” meant “all other matters that can be seen, rationally, to bear on an assessment of the conduct that is found to be infringing and the context in which that conduct takes place”.

332    Speaking in the copyright context, Lander and Gordon JJ observed in Facton Ltd v Rifai Fashions Pty Ltd (2012) 95 IPR 95 at [32] that in order to enliven an entitlement to additional damages, the court must first order that compensatory damages are payable, as opposed to an account of profits. At [33], they noted that the damages contemplated under s 115(4) were of a punitive kind. At [36] they observed that additional damages will be awarded under s 115(4) when the conduct of the defendant is such that an award of punitive damages should be made to mark the court’s recognition of the opprobrium attached to the defendant’s conduct.

333    AMC was unsuccessful in its claim for additional damages in Globaltech FI. Besanko J dealt with the matter briefly, giving his reasons for rejecting the claim at [332]:

The principal argument put by AMC in favour of an award of additional damages was that since late 2011, albeit in relation then to the Method and System Patents, Globaltech has known of AMC’s patent rights and has pressed on with their core orientation tools “working around”, or trying to work around those rights. It is in this respect that AMC relies on Mr Hejleh’s evidence that the only difference between the Orifinder v3A and the Orifinder v5 related to the software programming and there were no differences in the hardware. There are two answers to this argument. First, the construction issues in this case were not straightforward and, for the purposes of infringement, centred on the issue of a Synchronised Surface Timer, counting forwards and counting forwards or backwards. Secondly, the evidence of Dr Blake concerning the High Side Seeker tool and promotional website material (discussed below) raised a serious issue about the novelty of the invention.

334    AMC submits that the following matters are relevant factors which support the award of additional damages against Globaltech in this case:

(a)    the V6 Tool is the sixth iteration of Globaltech’s Orifinder device;

(b)    these proceedings are the third proceedings brought against Globaltech for the infringement of the Patent;

(c)    the V6 Tool was developed as a workaround of the Patent claims; and

(d)    the V6 Tool was launched whilst Globaltech was subject to a general form of permanent injunction which restrained infringement of the Patent claims.

335    AMC submits that the following matters are relevant factors which support the award of additional damages against Boart Longyear in this case:

(a)    AMC notified BLY of the existence of the Patent in February 2016;

(b)    BLY was aware of the earlier proceedings and the final orders including the permanent injunction; and

(c)    Given (a) and (b), BLY took a calculated risk launching the V6 Tool in February 2019.

336    AMC contends that the change from the V5 to the V6 Tool involved “only a few software tweaks” to deliberately create the appearance of more random and unpredictable time intervals. Globaltech rejects that proposition and says that the evidence of Mr Wilkinson showed that the programming of the V6 Tool was a massive task, and the technology is the subject of a US patent.

337    AMC also made reference to the following matters which I do not consider to be relevant matters for the purposes of s 122(1A):

(a)    The attempt to stay the Globaltech FI quantum enquiry on the basis that the validity of the Patent was being challenged in this proceeding;

(b)    The necessity for AMC to issue yet another proceeding concerning the V5 Tool, this time against BLY as they have disclaimed responsibility for what was found to have been done by Globaltech in the Globaltech FI proceeding, even though Globaltech supplied the V5 tools to BLY to be rented out under the TruCore brand.

I consider that these are more properly matters which, if appropriate, can be dealt with via a costs order or case management in those other proceedings but which have no bearing on the enlivenment of additional damages in this case.

338    The Respondents submit that there is no basis for an award of additional damages. First, they say there is no basis to award such damages against Boart Longyear Australia, as it was not a party to the earlier proceedings, nor subject to any injunction restraining its conduct. Boart Longyear had conducted its due diligence and formed a view that the V6 Tool did not infringe the Patent. Second, BLY has not engaged in any infringing conduct as it has not and does not supply the V6 Tools in Australia. Nor has it authorised anyone else to do so. Similarly GTCPL does not trade so there is no basis for an award of additional damages against it.

339    As to Globaltech Corporation, the Respondents say that Globaltech Corporation ceased manufacture and supply of the V5 Tools immediately upon the final orders coming into effect. Further the V6 Tool was designed to avoid the claims of the Patent. Globaltech submits that the evidence shows an earnest attempt on Globaltech Corporation’s part to design a device which avoided the infringement findings in the Globaltech FI proceedings. Globaltech was so confident that its V6 Tool did not infringe the claims of the Patent that it did not consider it necessary to seek a declaration of non-infringement.

Consideration

340    In Globaltech FI Besanko J made the following order, amongst others, on 14 December 2018 for a permanent injunction (December Orders):

4.     The respondents [Globaltech Ltd and Globaltech Pty Ltd] and each of them be permanently restrained, whether by themselves, their directors, officers, servants, agents or however otherwise from infringing the Patent in Australia during the term of the Patent, including without limitation by, without licence of the applicants:

(a)     making, hiring, selling or otherwise disposing of, offering to make, hire, sell or otherwise dispose of, using, importing, exporting, or keeping for the purpose of doing any of those things, any core sample orientation tool or system according to any of claims 33-40, 46-48, 54 or 65 of the Patent, including without limitation the core sample orientation tools developed and sold under the names “Orifinder v3A”, “Orifinder v3B”, “Orifinder v5” or “TRUCORE” (the Orifinder Tools);

(b)    using any method of providing an indication of the orientation of a core sample according to any of claims 1-4, 7-10, 16-17, 21-24, 27-28 or 65 of the Patent;

(c)    supplying or offering to supply any core sample orientation tool or system capable of being used in a method of providing an indication of the orientation of a core sample according to any of claims1-4, 7-10, 16-17, 21-24, 27-28 or 65 of the Patent;

(d)    doing the acts referred to in sub-paragraph (c) above together with the giving of, or the publication of advertisements containing, instructions or inducements for the use of such a core sample orientation tool or system in a method of providing an indication of the orientation of a core sample according to any of claims 1-4, 7-10, 16-17, 21-24, 27-28 or 65 of the Patent;

(e)    authorising, procuring, inducing or joining in a common design with any person to do any act referred to in sub-paragraphs (a) to (d) above.

341    The December Orders included orders for destruction of any Orifinder Tools and all advertising, instructional and promotional material relating thereto in the possession, custody, power or control of the respondents. The orders also had a penalty notice in the following form attached:

If you, GLOBALTECH CORPORATION PTY LTD (ACN 087 281 418) AND

GLOBALTECH CORPORATION PTY LTD (ACN 087 281 418):

(a)    refuse or neglect to do any act within the time specified in this order; or

(b)     disobey the order by doing an act which the order requires you to abstain from doing;

you will be liable to imprisonment, sequestration of property, or any other action the Court may determine.

If any person who knows of this order does anything to assist you in disobeying the order as specified above, they will also be liable to imprisonment, sequestration of property, or any other action the Court may determine.

342    The permanent restraint imposed by the December Orders is an injunction in a “general” form; which restrains Globaltech from infringing specific claims of the Patent, and lists as non-limiting examples of core sample orientation tools the three specified Orifinder versions found to infringe: V3A, V3B and V5. The general injunction is framed in terms of AMC’s statutory rights as the patentee, rather than on the infringer’s acts or products which have been found to infringe those statutory rights.

343    In Calidad Pty Ltd v Seiko Epson Corp (No 2) (2019) 147 IPR 386 (Calidad FC), the Full Court (Greenwood, Jagot and Yates JJ) in the context of discussing why a general injunction was appropriate in the circumstances of the case, over a narrower form of injunction observed at [49]:

This approach effectively, but in our respectful view unjustifiably, elevates the position of the infringer over that of the holder of the rights in question. Where the infringer has already been found to have engaged in wrongful conduct, and is undoubtedly cognisant of the intellectual property rights in question, it is not unjust to expect that the infringer be the party at risk in respect of that person’s future conduct and acts, not the party whose known rights have already been infringed and vindicated by the court’s judgment. Thus, the imposition of an injunction in general form is not, in and of itself, an undue burden on the infringer. By the same token, the person whose intellectual property rights have been infringed should not be exposed to the risk of having to engage in continuing legal proceedings in order to vindicate, again, that person’s established rights against an established infringer. It is not, with respect, a sufficient answer to say that the rights holder might have a claim for additional damages if further infringement be found. Further, if the established infringer is in any doubt about whether that person’s future acts might infringe the intellectual property rights that have been established, or is concerned that those acts will be a matter of contention so far as the rights holder is concerned, then it is within the power of that person to seek appropriate declaratory relief. Relevant to the present case, for example, is s 125 of the Patents Act 1990 (Cth) which specifically provides for the granting of non-infringement declarations. In other cases, recourse can be had to the Court’s general power to grant declaratory relief under s 21 of the Federal Court of Australia Act 1976 (Cth).

344    The V6 Tool is the sixth version of the Orifinder Tool that Globaltech has developed as a work-around of AMC’s Patent that have embodied the Patent’s time-stamping core orientation method. Those different embodiments span more than a decade. Three versions (the V3A, V3B and V5) were considered by Besanko J in Globaltech FI and found to infringe the Patent. Globaltech then unsuccessfully appealed and its special leave application before the High Court was refused.

345    Another version, the Orifinder V4 was the subject of separate proceedings: NSD142/2015, which was resolved by consent with orders made on 19 October 2015 including a restraint on both Globaltech respondents from dealing in the Orifinder V4.

346    The present proceedings are the third Federal Court proceedings brought by AMC against Globaltech for infringement of the Patent.

347    Whilst ordinarily Globaltech may be able to say that it is confident that the work around for the Patent it has designed does not infringe and that it is not obliged to take any steps such as seeking a non-infringement declaration, this case is not the ordinary case. That was the position in Globaltech FI in which Besanko J did not award additional damages. The position is different this time. The V6 Tool is another iteration, following four previous iterations, each found to infringe the Patent. Unlike the earlier proceedings, at the time Globaltech launched the V6 Tool, it had been found to engage in wrongful conduct and was subject to a general form injunction restraining it from infringing the claims of the Patent.

348    Globaltech had been found by Besanko J in Globaltech FI to engage in wrongful conduct in relation to the Patent.

349    Globaltech was aware of the permanent injunction ordered by Besanko J in Globaltech FI. Mr Hejleh’s evidence was that he had read the December Orders carefully in December 2018, and he understood when he read the orders the restraints on GTCPL and Globaltech Corporation.

350    Globaltech launched the V6 Tool when it was bound by orders as to a permanent injunction in general terms as set out above. The December Orders identified as non-limiting examples of core sample orientation tools, the V3A, 3B and V5 Tools; the subject of the proceeding. The orders permanently restrained Globaltech from infringing specified claims of the Patent during the term of the Patent, including supplying or offering to supply any core orientation tool or system according to any of the contested system claims of Patent, using any method of providing an indication of the orientation of a core sample, or providing any core orientation tool or system capable of being used, according to any of the contested method claims of the Patent.

351    Flagrancy is one of the relevant considerations as to whether additional damages should be awarded, but is not a prerequisite to enliven additional damages.

352    As the Full Court said at [49] in Calidad FC, where the infringer has already been found to have engaged in wrongful conduct, and is undoubtedly cognisant of the Patent, it is not unjust to expect that the established infringer be the party at risk in respect of that person’s future acts, not the party whose known statutory rights have already been infringed and vindicated. In the circumstances of this case, it is not unjust to expect that Globaltech, if it was confident that the V6 Tool did not infringe the claims of the Patent, take some action, such as seeking a non-infringement declaration pursuant to s 125 of the Act, or providing a sample V6 Tool to AMC to demonstrate that it did not infringe. Globaltech did neither.

353    Instead, on 10 January 2019, Mark Dogan, BLYA’s Sales Director – Asia Pacific and Africa, sent an email to customers which stated:

As you may be aware there was a court ruling on 26 November 2018 in the matter of AMC/Reflex v. Globaltech. The ruling in that matter relates to an Australia [sic] patent held by AMC/Reflex and the software used in their core orientation tools. Globaltech and Boart Longyear are of the view that the court erred in its decision and Globaltech has already notified the court of its intention to file an appeal. …

In the interim, we have been advised that Globaltech has developed an alternative solution that can be applied to existing and new TruCore units that does not include the specific subject of the legal dispute noted above. The new solution will allow the tools to operate without impacting workflow or data accuracy. At your request, we are prepared starting January 23, 2019 to begin exchanging any units currently in the field with the alternative solution. As previously noted, while our view is that the court decision will be overturned on appeal, we understand that this may provide some added level of comfort.

Boart Longyear owns its TruCore tools and is not an agent of Globaltech. Boart Longyear remains committed to providing our clients with the best geological data services tools the market has to offer.

354    On 8 February 2019, Globaltech’s lawyers informed AMC’s lawyers that Globaltech intended to release a new Orifinder tool, but provided no details of the new tool. On the same day Boart Longyear made the statement “Globaltech has developed an alternative solution for its TruCore Tools which addresses the issues raised in the proceedings”.

355    On or around 8 February 2019, Ms Emrick signed off on a letter to “Valued TruCore Customers”. The letterhead bore the Boart Longyear logo and Ms Emrick signed herself as “Regional General Counsel Asia Pacific”. The letter, which on Ms Emrick’s evidence was distributed by Mr Dogan, stated:

As you are aware, a decision was recently made by the Federal Court in proceedings issued by Reflex/AMC against GlobalTech in relation to certain intellectual property used in the TruCore Tools manufactured by GlobalTech.

Boart Longyear understands that Reflex/AMC has recently written to various customers regarding the asserted effect of the Court’s decision in those proceedings upon those customers’ continued use of any TruCore Tools supplied by Boart Longyear.

It is important to note that the Court’s orders are only enforceable by Reflex/AMC against GlobalTech directly, being the only defendant to that action, and only in relation to any TruCore Tools that are owned by GlobalTech, which excludes any tools currently supplied by Boart Longyear.

On 23 January 2019, GlobalTech filed its appeal in the Proceedings which seeks to overturn the Court’s original decision. The appeal is anticipated to be heard in May this year. We understand that GlobalTech is confident that the Court’s original decision will be overturned.

Whilst Boart Longyear is unable to make any comment regarding the merits of the Court’s original decision or as to the prospects of the appeal, we note that GlobalTech has developed an alternative solution for its TruCore Tools which addresses the issues raised in the proceedings. As a precautionary measure, pending the outcome and determination of GlobalTech’s appeal, Boart Longyear is currently in the process of replacing all of its existing and new TruCore Tools to incorporate that alternative solution (New Version TruCore Tools).

Our team will be in touch with you shortly to arrange for the New Version TruCore Tools for you.

356    Although at the time she signed the letter Ms Emrick was aware that the V5 Tool had been found to infringe the Patent in the earlier proceedings, she had not read the December Orders. She thought at the time she signed that letter she may have read a summary of the Globaltech FI reasons from the Chief Legal Officer of BLY.

357    Ms Emrick agreed in her oral evidence that the injunctive relief in the December Orders was not limited to versions of software used on core orientation tools and it included core orientation tools sold under the brand name TruCoreTM.

358    In a letter dated 20 February 2019, BLYA’s lawyers were at pains to point out to AMC’s lawyers that the December orders only applied to, and were enforceable against Globaltech, and not BLYA as they were not a party to the earlier proceedings. They stated that, nevertheless, BLYA was “acutely aware of the effect of the Orders, including the Penal Notice”. The letter also noted that Boart Longyear’s website was not managed or controlled by BLYA.

359    Globaltech did not proffer details of the workings of the V6 Tool, and why it did not infringe. On 24 June 2019, AMC commenced an application for preliminary discovery seeking inspection of the V6 Tool, the source code, circuit diagrams and any user guides or instruction manuals. Orders for inspection were made by consent on 5 September 2019, and Professor Tapson inspected a V6 Tool on 21 and 22 October 2019.

360    Globaltech submits steps such as seeking a non-infringement declaration are not necessary when a party is confident that its conduct does not infringe. Globaltech relied on the statements of the Full Courts in Fuchs Lubricants (Australasia) Pty Ltd v Quaker Chemical (Australasia) Pty Ltd [2021] FCAFC 65, and Oxworks (at [73]) to the effect that the failure of an alleged infringer to defend their “reasonably arguable” case is not of itself a trigger for an entitlement to additional damages. These statements were made by the Full Courts in the context of first time infringement cases. The Full Courts were not dealing with an infringer already found to have engaged in infringing conduct in respect of the same patent, being found to infringe again with a modified version of the product previously found to infringe.

361    Globaltech submits that if “AMC felt so strongly that the UPIX [V6] Device infringed then they could have brought an application for contempt”.

362    Globaltech submits that it may be regarded as having cooperated with AMC to provide information and documents about the operation of the V6 Tool. Such “cooperation” came after AMC had filed an application for preliminary discovery, some five months after the Respondents publicly announced the launch of the “alternative solution”.

363    In the circumstances of this case, I find that the conduct of Globaltech as discussed above is such as to enliven the award of additional damages.

364    BLY and BLYA were aware of the Globaltech FI proceeding and the December Orders. A copy of the December Orders was sent to BLY in December 2018 by the solicitors for AMC. Mr Hejleh’s evidence was that he discussed the December Orders with Boart Longyear soon after they were published. The December Orders had a penalty notice attached, the last paragraph of which was addressed more broadly than the parties to Globaltech FI.

365    Despite the general form of the injunctive relief granted against Globaltech in those orders, and even though Globaltech was the manufacturer and supplier of BLYA’s TruCore V5 Tools, BLY and BLYA continued to sell the V5 Tools after the injunctive relief came into effect on 24 January 2019.

366    Boart Longyear immediately commenced supplying the V6 “UPIX” tool to the Australian market when it first became available in February 2019.

367    There was no material before the Court to suggest that BLY had conducted its own due diligence as to whether there was any arguable case as to non-infringement before it commenced supply. BLYA’s General Counsel Asia Pacific, Ms Emrick, had not read the Globaltech FI reasons or the December Orders, and may have read a summary of the December Orders prior to BLY launching the alternative solution. The evidence suggests that Boart Longyear may have been given some kind of assurance by Globaltech that the V6 Tool was an “alternative solution” that addressed the issues raised in the V5 Proceedings.

368    Boart Longyear took a calculated risk by supplying the infringing V6 Tool in light of the terms of the general injunctive relief of the December Orders and the penalty notice. The 20 February 2019 letter shows that BLY was “acutely aware of the effect of the Orders, including the Penal Notice”. BLY was clearly alive to the risk that the tool it was renting out and supplying to the Australian market as the new version of the “TruCore UPIX” tool may infringe the Patent.

369    Like Globaltech, BLY took no steps to seek a declaration of non-infringement, or to provide an example tool to AMC for inspection prior to launching the alternative solution. In the circumstances of this case, I consider that the potential to award additional damages is also enlivened against BLY and BLYA.

370    I find that the potential to award additional damages is enlivened in respect of all the Respondents. The amount of any additional damages to be awarded is a matter for the quantum part of this proceeding.

Validity – external fair basis

371    BLYA contends the Patent is not entitled to a priority date earlier than 17 June 2011 (the filing date of the amendment to the specification of the Patent to include the term “recording the specific time”), as the claims are not fairly based on the matter disclosed in the Provisional. BLYA submits that an essential feature of the invention disclosed in the Provisional concerns time referencing limited to time intervals from an initial reference time. To the extent that the Patent’s claims are not confined to such an arrangement, then they are not fairly based on the matter disclosed in the Provisional.

372    It is common ground that if the Priority Date is shifted to 17 June 2011, AMC will have prior published itself with its own device. AMC’s Ace Core Tool was released to the Australian market in late September 2004 and is an embodiment of the invention described and claimed in the Patent (Globaltech FI at [334])

373    BLYA points to the difference between recording or inputting a specific time beyond the reference time (in claim 1 of the Patent) and recording or inputting a specific time interval beyond the reference time (in the fifth aspect of the Provisional) to argue that claim 1 of the Patent is wider than the fifth aspect of the invention disclosed in the Provisional, and therefore not entitled to the Priority Date.

374    AMC submits that the same or similar external fair basis issues have previously been considered by the Court. AMC points to the grounds of challenge by Globaltech to the Priority Date which were considered and rejected by Besanko J in Globaltech FI at [334]–[349] and [524]. Another challenge to the Priority Date was made in relation to similarly worded claims in the divisional innovation patents based on the Provisional and rejected at first instance in Coretell 2015 at [437]–[459] and on appeal in Coretell FC at [127]–[171].

375    AMC submits that each of these Priority Date challenges focused on a particular aspect of the disclosure in the Provisional, being the “fifth aspect” of invention, which relates to a method of core sample orientation. According to AMC, each of the judges who considered the matter held, that passage, read in context, provides a broad disclosure of the invention claimed in claim 1 (and claim 33) of the Patent and the similarly worded claims of the two divisional innovation patents. This is so, notwithstanding some minor differences in the wording of the “fifth aspect” of the invention in the Provisional as compared with the relevant claims. AMC submits that those differences are not material, having regard to the principles of external fair basis. Considered in context and as a matter of substance, AMC contends that the “fifth aspect” in the Provisional discloses the same combination of steps as is seen in claims 1 and 33 of the Patent.

376    AMC highlighted that the argument now made by BLYA, focused on the phrase “recording the specific time interval” (in the third integer of the “fifth aspect” of the invention in the Provisional) and the phrase “inputting the specific time” (in the Contested Claims), was raised by Globaltech before Besanko J. The argument did not need to be addressed by his Honour as it was abandoned by Globaltech in closing: Globaltech FI at [339]. AMC contends that his Honour’s findings entailed a rejection of the present external fair basis argument; a contention not rejected by Besanko J in Globaltech QS at [22]. Specifically, his Honour noted in Globaltech FI at [345] that “… the invention [in the Provisional] encompasses a recorded specific time that is inputted so that the relating step (ie, the recorded specific time is related to recorded time intervals) can be carried out”. This was a finding that the disclosure of the “fifth aspect” of the invention in the Provisional provided external fair basis for step 3 [integer 1.3] of the Contested Claims, the integer that BLYA alleges lacks fair basis.

377    BLYA submits that the external fair basis argument it puts forward in this case is different to that ultimately abandoned by Globaltech in the earlier proceeding. BLYA says that claims of the Patent involve inputting a “specific time” as part of undertaking the method of core orientation claims, which term was construed by Besanko J as not being limited to a time interval or a duration of time, and so included a time on a clock (e.g. 3.05 pm) or the time at which a timer is started.

378    The term “specific time” appears only once in the Provisional, whereas there are a number of references to “specific time interval”. BLYA submits that, properly construed, in the context of the Provisional as a whole, “specific time” is concerned with using time intervals, calculated from an initial reference time. This is a narrower time measurement concept than that which is used in the Patent. On that basis BLYA contends that the claims of the Patent claim a time measurement methodology which travels beyond the disclosure in the Provisional.

379    BLYA notes that the phrase “recording the specific time” was amended on 16 August 2011 to “inputting the specific time”, the phrase which appears in the Contested Claims.

380    BLYA submits that there is a disconformity between the language of the Provisional and the Patent which, following the broad construction of the fifth aspect adopted by Besanko J in the earlier proceeding, provides the basis for its external fair basis argument. BLYA says that its external fair basis argument only crystallised upon the construction of step 3 adopted in the earlier proceeding (and affirmed by the Full Court in Globaltech FC), and for that reason it could not have been run earlier. In any event, BLYA was not a party to the earlier proceeding.

381    In Globaltech FI, Globaltech propounded a construction which limited claim 1 to a synchronised method. This construction was rejected by Besanko J and the Full Court. The present external fair basis argument could have been run in Globaltech FI on the basis of Globaltech’s preferred construction. It was not necessary to wait until Besanko J and the Full Court had construed claim 1 in order to raise the external fair basis argument. Globaltech chose not to run the external fair basis argument and to pursue other external fair basis arguments. As Besanko J noted in Globaltech QS, it is not irrelevant that the external fair basis argument now pressed was not pursued in Globaltech FI.

382    Step 3 of claim 1 of the Patent was construed by Besanko J in Globaltech FI at [250] as follows:

With respect to the phrase “inputting the specific time beyond the reference time” there needs to be an inputting or recording of a specific time that must be beyond the reference time, and the specific time must be representative of when the core sample was separated from the body of material. …

383    At [258] Besanko J said “In my opinion, ‘beyond’ means no more than after and the operator would know that step 3 was carried out after the initial reference time”.

384    BLYA contends that the construction given by Besanko J to “specific time” (in claim 1) was therefore not limited to a time interval or duration of time calculated from an initial reference time. BLYA submits that the Court’s finding that claim 6, which referred to a duration of time, was a narrower claim than claim 1, highlights the breadth of the construction of step 3 in claim 1. The Court construed “specific time” very broadly, BLYA submits, so as to encompass a wide variety of time referencing techniques, such as a specific time on a clock (e.g. 3.05 pm) and the starting of a timer.

385    In contrast, BLYA submits that the invention described in the Provisional concerns a method of core orientation involving time referencing limited to time intervals from an initial reference time. Properly construed, the Provisional as a whole uses the term “specific time interval”, which BLYA contends means a time interval or a duration of time calculated from something. Whilst the term “specific time” is used numerous times in the Patent (including in the claims), it is only used once in the Provisional, in the fifth aspect.

386    The fifth aspect which is of particular relevance to the external fair basis argument is described in the Provisional as follows:

According to a fifth aspect of the invention there is provided a method of providing an indication of the orientation of a core sample relative to a body of material from which the core sample has been extracted, the method comprising: (1) drilling a core sample from a body of material with a core drill having an inner tube assembly; (2) recording the orientation of the inner tube at predetermined time intervals with reference to an initial reference time during said drilling; (3) recording the specific time interval beyond the reference time at which the core sample was separated from the body of material; (4) removing the inner tube assembly and core sample contained therein from the body of material; and (5) relating the recorded specific time to the recorded time intervals to obtain an indication of the orientation of the inner tube and consequently the core contained therein at the specific time interval.

Preferably, the method according to the invention is performed using an orientation device attached to the inner tube assembly, the orientation device being in accordance with either the first or second aspect of the invention

(Emphasis added.)

387    BLYA contends that the singular reference to “specific time” in the Provisional is to be understood as a reference to “specific time interval”, because it is plainly referring to the earlier words “recording the specific time interval”. BLYA submits that if its meaning is otherwise, then it is a loose or stray remark of the kind referred to in Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (2004) 217 CLR 274 at [69] (Lockwood No 1).

388    BLYA submits that other passages in the Provisional support its construction. For example in the Best Mode section:

It is also necessary to record time duration subsequent to starting of the orientation device, the purpose of which will be explained later. This time duration is typically recorded by way of a timer such as a stop watch”

And:

Once the orientation device 10 has been started and recording of the subsequent time duration commenced, the inner tube assembly 15 is inserted into the drill hole for reception in the outer tube assembly 13, and the core drilling operation then commenced.

And finally:    

From the forgoing, it is evident that the present invention provides an orientation device which does not require physical marking of a core sample prior to extraction thereof from the ground. Indeed, the orientation device according to the embodiment is particularly convenient for an operator to use. All that is required is for the operator to start the orientation device prior to the inner tube assembly 15 being inserted into the drill hole, and contemporaneously start a timer for recording the time duration before the drilling operation ceases to allow the generated core sample to be retrieved.

(Emphasis by BLYA.)

Relevant principles

389    BLYA challenges the Priority Date of the claims of the Patent on the basis that they are not fairly based on the matter disclosed in the Provisional.

390    Subsection 43(2) of the Act provides that the priority date of a claim is either the date of filing of the specification or, where the Patents Regulations 1991 (Cth) provide for the determination of a different date as the priority date, the date determined under the Regulations.

391    The Patent was filed on 15 January 2010 as a divisional application of Australian Standard Patent no. 2005256104, which claimed priority from the Provisional. In these circumstances the priority date of the claims of the Patent is determined under s 40(3) and s 79B of the Act, together with reg 3.12.

392    Regulation 3.12 in the applicable form relevantly provides:

3.12 Priority dates generally

(1)     Subject to regulations 3.13 and 3.14 and sub regulation (2), the priority date of a claim of a specification is the earliest of the following dates:

(a)     the date of filing of the specification;

(b)     if the claim is fairly based on matter disclosed in 1 or more priority documents, the date of filing the priority document in which the matter was first disclosed;

(c)     if the specification is a complete specification filed in respect of a divisional application under section 79B of the Act and the claim is fairly based on matter disclosed in the specification referred to in paragraph 79B (1) (a) of the Act — the date mentioned in sub regulation (2C);

…

(2C)     The date for a specification to which paragraph 3.12 (1) (c) applies is the date that would have been the priority date of the claim if it had been included in the specification referred to in paragraph 79B (1) (a) of the Act.

393    As Besanko J observed at [341] in Globaltech FI, the principles of fair basis are well established. The question is whether there is a real and reasonably clear disclosure in the body of the specification of that which is then claimed, so that the alleged invention as claimed is broadly, that is to say in a general sense, described in the body of the specification: Lockwood No 1 at [69] citing Fullagar J in Société des Usines Chimiques Rhône-Poulenc v Commissioner of Patents (1958) 100 CLR 5. Also at [69], the High Court noted that “a real and reasonably clear disclosure” in connection with s 40(3) did not limit disclosures to preferred embodiments.

394    In Coretell FC, Burley J (with whom Jagot and Nicholas JJ agreed) observed at [134] that there was a nuanced difference between the test for fair basis arising under s 40(3) of the Act and the test for determining priority dates pursuant to reg 3.12(1) above. The latter requires that the claim be “fairly based on matter disclosed in the specification” and the former requires that the claim described be “fairly based on the matter described in the specification” (emphasis added by his Honour). Burley J continued at [134]–[136]:

134     …

A Full Court of this Court succinctly stated the practical effect of the difference in Multigate Medical Devices Pty Ltd v B Braun Melsungen AG (2016) 117 IPR 1 at [189]:

… There are two linguistic differences in the phrase used for external fair basis. First, the definite article is omitted. Second, the reference is to what is disclosed rather than what is described. So, the absence of the definite article makes it plain that external fair basis can arise if some part of the overall disclosure made in the prior specification discloses the relevant matter. … Further, the use of “disclosed” rather than “described” connotes greater flexibility in the test for external fair basis in terms of ascertaining from the prior specification the requisite disclosure.

(Citations omitted; italics in original.)

135     Whilst one must bear in mind this nuance, otherwise, the test for external fair basis is essentially the same as that set out definitively in Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (2004) 217 CLR 274 (Doric No 1), where the High Court held that the requirement that a claim or claims be fairly based on matter described in the specification within s 40(3) of the Act requires a “real and reasonably clear disclosure” of what is claimed. At [69] the High Court referred with approval to the following passage in the judgment of Gummow J in Rehm at 95:

The circumstance that something is a requirement for the best method of performing an invention does not make it necessarily a requirement for all claims; likewise, the circumstance that material is part of the description of the invention does not mean that it must be included as an integer of each claim. Rather, the question is whether there is a real and reasonably clear disclosure in the body of the specification of what is then claimed, so that the alleged invention as claimed is broadly, that is to say in a general sense, described in the body of the specification.

136     The relevant inquiry is to ascertain what that patentee discloses to be the invention, which involves consideration of the whole document. The fact that some words in the specification match the claims in what is referred to as a “consistory clause” will not be determinative. As the High Court said in Doric No 1 at [99]:

… the correct position is that a claim based on what has been cast in the form of a consistory clause is not fairly based if other parts of the matter in the specification show that the invention is narrower than that consistory clause. The inquiry is into what the body of the specification read as a whole discloses as the invention [Welch Perrin & Co Pty Ltd v Worrel (1961) 106 CLR 588 at 612-613]. An assertion by the inventor in a consistory clause of that of which the invention consists does not compel the conclusion by the court that the claims are fairly based nor is the assertion determinative of the identity of the invention. The consistory clause is to be considered by the court with the rest of the specification.

395    The disclosure in the Provisional has been now considered in two earlier proceedings, Globaltech FI and FC and Coretell FC.

Coretell FC

396    Burley J (with whom Jagot J and Nicholas J concurred) considered the disclosure of the Provisional in detail in Coretell FC at [137]–[154], in the context of an external fair basis challenge to the claims of the Method and System innovation patents. His Honour did so against the background of three arguments that were raised by the Coretell parties in that proceeding (the “unitary device argument”, the “functional disclosure argument” and the “held in fixed relation” argument). His Honour’s reasons demonstrate the breadth of the disclosure in the Provisional. In particular, in Coretell FC at [142], his Honour considered the section of the Provisional entitled “Disclosure of the Invention”, which is the section that broadly describes the invention. This provides a description of the invention in several aspects. The fifth aspect (set out above) is of particular relevance to BLYA’s present external fair basis argument.

397    The breadth of the fifth aspect was remarked upon by Burley J, who observed at [145]:

It is notable that this aspect is expressed in broad, functional terms. The description is not limited to the manner in which the method may be carried out, although the use of a core drill having an inner tube assembly is required. Unlike the first four aspects described, the use of particular “means” is not identified.

And at [147]:

It is clear from these paragraphs that the method so described is not constrained to be performed by any particular orientation device, as described in aspects one, two, three or four. No language in the fifth aspect mandates such an approach. The language in the final paragraph beginning with “[p]referably” tells against such a construction.

398    Burley J also considered the detailed description of what the inventor considered to be the best method for carrying out the invention. The non-limiting nature of that description was highlighted in his Honour’s reasons in Coretell FC by his emphasis on “embodiment” in the passage at [148] (below) to indicate that this is only an embodiment of the invention, and the invention is not limited to that the preferred embodiment:

The specification then includes a section which refers to Figures 1 – 6 which are included in the Application, and describes, at length, what the inventor considered to be the best method for carrying out the invention. The section commences by observing that the embodiment shown in the drawings is directed to an orientation device for use with a core drill in order to provide an indication of the orientation of a core sample obtained in a core drilling operation.

(Emphasis in original.)

399    At [154], Burley J addressed the final paragraph of the Provisional. His Honour rejected an argument that this confined the scope of the invention, stating at [158]–[159]:

158     …When the invention is read as a whole, in order to understand the sense of its disclosure, it is my view that the invention is described to extend beyond the particular device described. It includes a method disclosed by reference to function. In particular, the disclosure of the fifth aspect of the invention is not confined in the manner for which the appellants contend. As a matter of language, the fifth aspect describes a method that employs a core drill having an inner tube assembly, but otherwise provides no constraint on the five functional steps to which the method refers. Nothing in the paragraph setting out the fifth aspect suggests that the method is confined to the use of a device as set out in the earlier aspects. The paragraph that immediately follows the description of the fifth aspect indicates, as I have observed above, that the inventor considered it to be preferable, but not essential, that the method be performed using an orientation device of the type described in the first two embodiments. Nor, in my view, does the detailed description of the best method provide any language to suggest that the invention is to be understood as confined to a device embodiment. Indeed, that section is particular in emphasising that it describes only an “embodiment”.

159     I have observed above that, as the High Court noted in Doric No 1, a broad statement of the invention made by the inventor may be sufficient to provide fair basis for the claims, although it is open to the Court to find that a claim which is based on what has been cast in the form of a consistory clause will not be fairly based if other parts of the matter in the specification show that the invention is narrower than that clause: Doric No 1 at [99]. I have been unable to detect in the content of the specification a suggestion that the invention is narrower than that described in the fifth aspect. Whilst the appellant draws attention to the paragraph (quoted above) on the final page of the specification, I do not consider that, properly construed, that paragraph is to be understood as confining the disclosure of the invention to “an orientation device only”, and not the broader method set out in the fifth aspect. The statement in the first sentence of the paragraph that the invention “provides an orientation device” is plainly correct, but it does not limit the disclosure to that orientation device (singular) alone.

400    BLYA referred to Burley J’s observations in relation to the fifth aspect at [158] and [159], drawing attention to three elements which it says are relevant to construction in this proceeding. First, at [158] his Honour noted that the invention described extends beyond the particular device described to include a method disclosed by reference to function. The fifth aspect concerns disclosure of five functional steps. Thus, BLYA submits, the disclosure is limited to, and concerns, such expressions of functionality. If later amendments introduce new functionality then they will introduce matter that travels beyond the disclosure of the fifth aspect.

401    The second, relates to the second last sentence of [158]: “Nor in my view, does the detailed description of the best method provide any language to suggest that the invention is to be understood as confined to a device embodiment”. BLYA submits that this raises the point as to whether the description of the best method might aid construction of the fifth aspect. BLYA says that the “Best Mode” section of the Provisional simply affirms the disclosure in the fifth aspect, confirming Professor Dupuis’ view as to the confined nature of the disclosure in the fifth aspect.

402    Third, BLYA refers to Burley J’s observation at [159] that he had “been unable to detect in the content of the specification a suggestion that the invention is narrower than that described in the fifth aspect”, and submits that passage supports the proposition that the other parts of the Provisional do not suggest a construction of the broad statement of the fifth aspect other than as a method limited to the description of the best mode, in accordance with Professor Dupuis’ reading of the specification.

403    AMC drew attention to Burley J’s comments at [162] in the context of considering the Coretell parties’ argument in that case on the external fair basis issue (the “functional disclosure” argument), his Honour again noted the breadth of the disclosure in Coretell FC at [162]:

As I have noted, in the fifth aspect, the inventor says his invention is a method whereby the functional effects described are achieved. That function may be achieved using any means that meets the function. The position is, as the respondents submitted, analogous to the facts in Doric No 1 at [4]-[12], where the consistory clause in the specification included a broad statement directed to a latch assembly which had a lock release means described in terms of its function, but did not indicate anything in terms of the form which the lock release means may take. The High Court considered that to be sufficient description, and within s 40(3) of the Act, to satisfy the test for fair basis. In that case, the Court found at [38] that no words of limitation of the breadth of the functional disclosure were to be found in the body of the specification. The same applies in the present case.

(Emphasis added.)

404    AMC submits that Justice Burley’s findings and analysis as to the disclosure of the Provisional in Coretell FC are correct, and significant for the present case. In particular, his Honour’s emphasis on the fact that the “fifth aspect” discloses a broad method whereby the functional effects described are achieved, using any means that meets the function, is significant.

Globaltech FI

405    Besanko J also addressed an external fair basis challenge, this time in relation claims of the Patent: Globaltech FI at [334]–[349]. His Honour found that claims 1 to 4, 7 to 10, 1–17, 21 to 24, 27 to 28, 33–40, 46–48, 54 and 65 of the Patent were fairly based on matter disclosed in the Provisional. In doing so, his Honour construed the Patent and the Provisional and made detailed findings as to their disclosure, and found that the Provisional provided a real and reasonably clear disclosure of the methods and systems that were claimed in the Patent.

406    AMC submits that the allegation of lack of fair basis that was considered and rejected by Besanko J concerned the very same feature in the “fifth aspect” of the invention in the Provisional, and the very same integer of the claims of the Patent, as are put in issue by BLYA’s argument in this case. In dealing with this, his Honour held that the relevant part of claim 1 (integer 1.3, referring to the inputting of a “specific time”) was fairly based on the corresponding part of the Provisional (step 3 of the “fifth aspect”, referring to the recording of a “specific time interval”); see Globaltech FI at [345]:

In my opinion, the word “recording” includes inputting and, indeed, the word “inputting” may have a narrower scope. I have reached this conclusion for three reasons. First, the fifth aspect of the invention in the Provisional Application is describing a method and, as Burley J said in Coretell Full Court, it is a method described in broad functional terms. Secondly, having regard to step 5, the invention encompasses a recorded specific time that is inputted so that the relating step (i.e., the recorded specific time is related to recorded time intervals) can be carried out. I agree with AMC’s submission that if one has recording of the specific time according to the fifth aspect of the Provisional Application, then considering the method as a matter of substance, one will also have inputting of that time. …

407    At [347] Besanko J rejected an argument that the specific time interval “at which” the core sample was separated (in the “fifth aspect” of the invention in the Provisional) was materially different from the specific time “representative of when” the core sample was separated (in the Contested Claims of the Patent). Reading the disclosure in the Provisional purposively and in a common sense way, Besanko J held that the skilled person would not understand the language used to require exact precision with the core break, particularly noting that core break is not instantaneous: Globaltech FI at [347], citing Professor Tapson’s evidence.

The expert evidence

408    Professors Tapson and Dupuis agreed in the JER-V, that a “time interval” is defined as a “period of time that separates two given instants in time”, and that time intervals can exist without the need that they be calculated. They also agreed that the Provisional disclosed the use of time as a means of indexing data that is collected by the invention.

409    The experts noted that the concept of time is intrinsically defined by intervals that are referenced to an agreed upon temporal reference. For example, the time “12.35 am” represents an instant in time that is referenced to a 35 minute interval since midnight, ie counting forward from midnight. Or, as Professor Dupuis agreed in the joint session, the same time can also be identified as 25 minutes until 1 am, ie counting backward from 1 am. These examples are two different, but equally valid, ways of identifying the same instant in time. It is inherent in the nature of time that either method can be adopted, because time is a continuum that is counted in standard units of minutes and hours.

410    The two experts also agreed that the sole reference to “specific time” within the context of the fifth aspect of the invention disclosed in the Provisional is to the time when the core sample is separated from the body of material (ie core break). The experts differed as to whether that sole reference to “specific time” allowed for the recording of the event without consideration of a duration of time relative to an initial temporal reference (ie initial reference time).

411    Professor Tapson considered that the Provisional describes relating a “specific time to the recorded intervals” and that “specific time” in that context is not necessarily calculated, measured or expressed as a duration of time relative to the initial reference time. Professor Tapson considered that there was nothing in the Provisional that limited “specific time” to a duration of time relative to the initial reference time. Professor Dupuis disagreed.

412    Professor Dupuis agreed that the “specific time interval” in step 3 is one of the time intervals referred to in step 2, being the specific one that occurs at the time of core break. Professor Dupuis agreed that “specific time interval” is used because it identifies which of the downhole time intervals is the time interval of interest. That is, the time interval at which the core breaks. He also agreed that the recording of the specific time interval is done by the operator, above ground, and that the operator would be aware that the orientation tool down the hole has been recording orientation measurements at successive time intervals, and the record of those would be stored by the downhole device. Professor Dupuis agreed that step 3 required making a record to identify which of the downhole time intervals is the one of interest, the one recording the core break.

413    Professor Dupuis agreed that step 5 of the fifth aspect involved the relating of the above ground record relating to the time of the core break, and the downhole time record of the time interval at which the core break orientation measurement was taken.

414    Professor Dupuis regarded the sole reference to “specific time” as “essentially synonymous” with “specific time interval” in the context of the Provisional. He considered them as intimately related to the same temporal reference (the starting of the stopwatch disclosed in the described embodiment), and the specific instant when the core was separated from the body of material — namely, “specific time”.

415    Professors Dupuis and Tapson agreed that “recording the specific time interval” in step 3 could be implemented simply by making a record of the time at which core break occurs on the above ground timer.

[Counsel]: Just to clarify … simply recording the time on the aboveground timer at which the core break occurs, you accept that that, subject to the issues you raised, would be one way in which you could make … a record of the specific time interval downhole at which core break occurred; correct?

Dupuis: That’s correct.

[Counsel]: And you could do that, because you would know, for example, if the time on the aboveground timer was one hour and 55 minutes – just to take an arbitrary number – you would know that the specific time interval counted out down hole at which core break occurs is the one that occurred at the time of one hour and 50 minutes or whatever I put to you that was the time …

Dupuis: 55 minutes, yes.

[Counsel]: … on the aboveground timer. Yes. Do you agree with that?

Dupuis: Yes.

[Counsel]: Professor Tapson, can I ask you whether you agree that that is one way in which step 3 of this method could be practiced.

Tapson: Yes, I agree.

416    Professor Dupuis agreed that, subject to the accuracy of the timers, the fifth aspect of the invention in the Provisional could be implemented without having an initial temporal reference and instead using a later temporal reference.

417    BLYA sought to diminish the effect of Professor Dupuis’ agreement that there were other means by which the method of the fifth aspect could be implemented, noting that the cross examination was directed towards potential ways to implement the method of the fifth aspect, not what the experts considered was taught by the disclosure in the Provisional. AMC rejected the criticism, submitting that the role of the expert is not to construe the words of the specification, but to assist with technical matters, such as how the invention disclosed might be implemented.

418    Whilst Professor Dupuis agreed that there was more than one way that the method of the fifth aspect could be implemented, he was not completely convinced that the Provisional specification intended any method other than a synchronised (counting forward) method. The cornerstone of his reasoning was his observation that the invention described in the Provisional involves the concept of a time interval referenced to a synchronisation event, which he regarded as fundamental to the one embodiment of the invention disclosed in the Provisional. It was clear that he considered that the invention disclosed in the Provisional was limited to the preferred embodiment described in the best method section. He considered that implicit in that embodiment was the feature of the inputting of a specific time interval beyond the reference time. In his affidavit dated 28 January 2021, Professor Dupuis stated:

Implicit in the provisional specifications is the synchronicity of the measurement system based on an external reference clock that is disclosed as a stopwatch. The description of the invention makes it clear that, the key to indexing the measurements in space and time is the ability to recall the time interval that elapsed from the initialization of the system and when the rock core was broken.

419    BLYA criticised Professor Tapson for his clarification made at the start of the joint session wherein he changed his reference in the JER-V to the notions of counting forward and counting backwards as being “valid within the claims of the patent” to “valid within the description of the provisional specification”. BLYA submitted that this showed that Professor Tapson’s reasoning was based on the way AMC advanced its claim construction arguments for the Patent in the earlier proceeding, rather than him considering the disclosure in the Provisional in isolation. When this proposition was put to Professor Tapson, he rejected it:

I think that’s much too direct. I – I do – I think it’s not unreasonable to say that I’m a human being, and – and having read the patent and the claims, it would be impossible to, in a sense, not be informed by that. But – but the idea that there was some effort to merge or – or – or resolve any differentiation between those two is – is simply not accurate.

420    I do not consider that Professor Tapson’s “acknowledgement” diminished his evidence as to what he considered to be disclosed in the Provisional.

Consideration

421    In Globaltech FI and FC, Globaltech’s preferred construction which limited claim 1 of the Patent to the synchronised method of the preferred embodiment, was rejected. Besanko J and the Full Court adopted a broad construction of step 3 of the method of claim 1 as encompassing synchronous and asynchronous methods. (Globaltech FI at [265] and Globaltech FC at [134]).

422    For the reasons which follow, I do not consider that the disclosure in the Provisional is limited to a synchronised method. The claims of the Patent are fairly based on the matter disclosed in the Provisional.

423    Despite propounding a construction of claim 1 of the Patent limited to a synchronised method at trial, Globaltech chose not to pursue the present external fair basis argument in Globaltech FI. BLYA, not a party to the earlier proceedings, seeks to explain Globaltech’s abandonment on the basis that the external fair basis argument only “crystallised” with the adoption of the broader construction of claim 1 encompassing synchronous and asynchronous methods by Besanko J, which was upheld by the Full Court in Globaltech FC. The current external fair basis argument could have been run at the Globaltech FI trial. That Globaltech abandoned the argument suggests that Globaltech did not count it amongst its strongest. In any event the argument is now raised by BLYA, which was not a party to Globaltech FI.

424    By directing attention to the contrast between the third integer of the fifth aspect disclosed in the Provisional — “recording the specific time interval beyond the reference time at which the core sample was separated from the body of material” — and the third integer of claim 1 of the Patent — “inputting the specific time beyond the reference time representative of when the core sample was separated from the body of material”, BLYA seeks to argue that the disclosure in the Provisional is limited to a synchronised method and that there is no basis in the Provisional for the broad construction of claim 1 adopted by Besanko J and the Full Court in Globaltech FI and FC.

425    BLYA submits that the disclosure in the Provisional is limited to the manner of carrying out step 3 in the embodiment described in the best method section. Professor Dupuis, despite his agreement in oral evidence that there are other ways to carry out the method of the fifth aspect, continued to maintain his position that the disclosure in the Provisional is confined to the synchronised method using a stop watch as described in the embodiment. The other ways of carrying out step 3, which Besanko J found to fall within the claims, are said by BLYA to “introduce new functionality”, and travel beyond the disclosure of the Provisional. I reject that submission.

426    Justice Burley described the fifth aspect of the Provisional as being “expressed in broad functional terms”. The description of the fifth aspect in the Provisional is not limited to the manner in which the method may be carried out: Coretell FC at [145]. That function may be achieved using any means that meets the function: Coretell FC at [162]. His Honour described the position being analogous to the facts in Lockwood No 1 (at [4]–[12]) at [162]:

[W]here the consistory clause in the specification included a broad statement directed to a latch assembly which had a lock release means described in terms of its function, but did not indicate anything in terms of the form which the lock release means may take. The High Court considered that to be sufficient description, and within s 40(3) of the Act, to satisfy the test for fair basis. In that case, the Court found at [38] that no words of limitation of the breadth of the functional disclosure were to be found in the body of the specification. The same applies in the present case.

427    The functional effects of particular relevance to the external fair basis case are the recording and relating functions described in steps 3 and 5 of the fifth aspect of the Provisional:

•    Recording the specific time interval, beyond the reference time…; and

•    Relating the recorded specific time to the recorded time intervals…

428    As discussed above, the experts agreed that a “time interval” is defined as a “period of time that separates two given instants in time”, and that the Provisional disclosed the use of time as a means of indexing data that is collected by the invention.

429    Professor Dupuis accepted as a general proposition, that the nature of time is such that there are different ways of identifying an instant in time which are equally valid.

430    Professors Dupuis and Tapson understood the phrase “specific time interval” as used in step 3 to designate one of the time intervals referred to in step 2 which are counted out downhole, being the specific one that occurs at the time of core break as referred to in step 3.

431    Professor Dupuis agreed with Professor Tapson that it is possible to use a temporal reference that occurs after an event of interest in order to relate measurements of two timers that occurred before that reference, even if the two timers were not synchronised with each other to begin with, due to the inherent properties of time.

432    Professor Dupuis agreed that “recording the specific time interval” in step 3 could be implemented simply by making a record of the time at which core break occurs on the above ground timer.

433    Professor Dupuis agreed that other there were other possible ways to carry out step 3 than the synchronous method involving a stopwatch described in the embodiment, including an asynchronous method. His evidence was that the difference between a synchronous method and an asynchronous method was not “trivial”, and that design of an asynchronous method might “require a little bit more thought” in order to make “all of the timing events line up”. However, he did not suggest that utilising an asynchronous method would introduce new functionality to the steps set out in the fifth aspect.

434    Professor Dupuis maintained his opinion that the invention described in the Provisional involved a concept of a time interval referenced to a synchronisation event, which he regarded as fundamental to the invention disclosed in the Provisional. He considered the synchronicity of the measurement system based on an external reference clock (the stopwatch disclosed) was implicit in that embodiment. Professor Dupuis accepted that his view was based on the features of the preferred embodiment in the Best Modes section of the Provisional. Professor Dupuis considered the preferred embodiment was the only method disclosed in the Provisional.

435    Professor Dupuis’ opinion that the disclosure of the Provisional was limited to the one embodiment disclosed in the Provisional was not founded on the absence of “interval” in the fifth step of the fifth aspect. In his view the phrases “specific time” and “specific time interval” were “essentially synonymous in the context of the Provisional”.

436    Justice Burley in Coretell FC held that the disclosure of the fifth aspect of the invention was not confined to the preferred embodiment. His Honour observed at [158] that the inventor considered that embodiment to be “preferable” but not essential. There is no language in the detailed description of the best method of the Provisional to suggest that the invention is to be understood as confined to the preferred embodiment. No words of limitation of the breadth of the functional disclosure are to be found in the body of the Provisional.

437    As the experts agreed, there were other manners in which to record the time at which core break occurred for the purposes of carrying out step 3 than the stopwatch method of the preferred embodiment. These other manners do not add additional functionality to the steps of the fifth aspect disclosed in the Provisional.

438    The absence of “interval” in step 5 of the fifth aspect does not cause the disclosure in the Provisional to be confined to the synchronised method of the preferred embodiment. BLYA’s external fair basis argument which relies of the absence of “interval” in the fifth step epitomises the over meticulous verbal analysis approach of the kind rejected by the High Court in Lockwood No 1 at [68].

439    As such, I do not consider the claims to be without fair basis and BLYA’s cross-claim is unsuccessful.

Conclusion

440    Each of the respondents has infringed the Contested Claims of the Patent which I find to be valid. Further, the applicants are entitled to additional damages pursuant to s 122(1A) of the Act.

Associate:

Dated:    6 October 2022

SCHEDULE OF PARTIES