Bioglan Laboratories (Aust.) Pty Ltd and Bioglan Inc. v Michael J. Crooks

[1989] APO 31

In the Matter of the Patents Act 1952

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In the Matter of Application NO. 566215 for a Patent by BIOGLAN LABORATORIES (AUST.) PTY. LTD. and BIOGLAN INC.

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In the Matter of Opposition thereto under Section 59 by MICHAEL J. CROOKS.

DECISION OF THE DELEGATE OF THE COMMISSIONER OF PATENTS:
Background
        Patent Application No. 566215 which is entitled "Clear Micellized Solutions of Fat Soluble Essential Nutrients", was lodged on 8 October 1984 in the Name of Bioglan Laboratories (Aust) Pty Ltd (BIOGLAN) and Bioglan Inc.  The application, which names Michael J Crooks, the present opponent, as the actual inventor, is based on a US patent application which was lodged on 1 May 1984.  The Office advertised acceptance of the application in the Official Journal dated 15 October 1987, and the opponent filed notice of opposition on 5 February 1988.
        Service of evidence‑in‑support was completed on 28 July 1988.  The applicants by letter dated 18 October 1988 informed the opponent that they did not intend to serve evidence‑in‑answer.  Consequently the matter was set down for hearing in Sydney on 6 March 1989.
        The notice of opposition specifies paragraphs (a), (e), (f), (g), (h) and (i) of sub‑section (1) of section 59 as grounds of opposition.  At the hearing argument was restricted to those grounds

concerned with prior publication, novelty, obviousness and section 40.  Mr Peter C Fisher, patent attorney of G R Cullen & Co represented Bioglan Laboratories (Aust) Pty Ltd and Bioglan Inc, and Mr Julian Blenkinship, solicitor, of Barker, Blenkinship & Associates represented Dr Michael Crooks, the opponent.
The Specification
        According to the specification the present invention is directed to a formulation for drugs, vitamins and essential nutrients.  More particularly, the present invention is directed to substantially clear aqueous formulations for fat soluble essential nutrients which remain clear when added to water or beverages for human consumption, and which permit enhanced absorption of the essential nutrients from the digestive system.
        The specification states the objects of the present invention to be attainable by dispersing one or more fat soluble vitamins, essential nutrients or drugs in an aqueous carrier in micelles of approximately 2 microns or smaller.  The formulations are obtained by admixing polyethoxylated castor oil with the fat soluble vitamin, essential nutrient or drug, together with a pharmaceutically acceptable water miscible polyol to obtain a non‑aqueous phase.  The non‑aqueous phase is heated to at least 60oC and an aqueous phase is slowly added whilst the admixture is agitated and kept at a temperature of at least 60oC.  The resulting mixture is cooled and thereafter optionally diluted with aqueous diluents and flavouring agents.
        Alternatively, heat sensitive fat soluble essential vitamins, nutrients and drugs are mixed with polyethoxylated castor oil and a pharmaceutically acceptable polyol or a flavouring agent or both, to provide a substantially clear micellized solution.  The specification describes the preferred proportions of ingredients in the formulations as well as the preferred temperatures used in the preparation of the formulations.  However upper concentration limits of the fat soluble vitamins, essential nutrients or drugs are imposed by the requirement that the final preparation must not be turbid.  The specification also describes results which demonstrate significantly enhanced uptake of vitamins A and E in normal human subjects from the formulations of the present invention in comparison to prior art formulations.
        The claims defining the invention read as follows:

"1.A substantially clear micellized aqueous solution of one or more fat soluble essential nutrients selected from a group consisting of fat soluble medicinal agents, essential fatty acids, alpha‑tocopherol, pharmaceutically acceptable esters of alpha‑tocopherol having vitamin E activity, retinol, pharmaceutically acceptable esters of retinol having vitamin A activity, calciferol and pharmaceutically acceptable derivatives of calciferol having vitamin D activity, said micellized aqueous solution having been prepared by a process comprising the steps of:

mixing one or more of the nutrients with an emulsifying agent comprising polyethoxylated castor oil, and with a water miscible pharmaceutically acceptable polyol to obtain a first non‑aqueous phase;

slowly adding a warm aqueous phase to said non‑aqueous phase while stirring the non‑aqueous phase, rate of addition of the warm aqueous phase to the non‑aqueous phase being such that the admixture of the two phases is at least at 55oC substantially during the entire step of addition; and

after adding the aqueous phase to the non‑aqueous phase, cooling the resulting clear admixture to a temperature of 35oC or less."

Claims 2‑10 are appended to claim 1 and define further features of the invention.
        Claim 11 defines an homogeneous micellized aqueous solution as follows:

"11.An optically substantially clear, substantially homogeneous micellized aqueous solution of a fat soluble medicinal agent or of one or more fat soluble essential nutrients, having micels of the size not substantially exceeding 2 microns, which solution remains substantially clear when added to an aqueous diluent such as a beverage for human consumption, the fat soluble essential nutrient being selected from a group consisting of essential fatty acids, alpha‑tocopherol, pharmaceutically acceptable derivatives of alpha tocopherol having vitamin E activity, retinol, pharmaceutically acceptable derivatives of retinol having vitamin A activity, calciferol, and pharmaceutically acceptable derivatives of calciferol having vitamin D activity, said composition having been prepared by a process comprising the steps of:

mixing the fat soluble medicinal agent or one or more of the fat soluble nutrients with polyethoxylated caster (sic) oil, and with a water soluble pharmaceutically acceptable polyol in ratios wherein at least 2.0 unit of weight of polyethoxylated castor oil and at least one (1) unit of weight of the polyol is added for each unit of weight of fat soluble essential nutrient;

heating the mixture of the one or more fat soluble essential nutrients, of the polyethoxylated castor oil and of the polyol to at least 60oC to obtain a substantially homogeneous non‑aqueous phase;

slowly adding to the non‑aqueous phase an aqueous phase comprising predominantly water, while agitating the non‑aqueous phase, and maintaining the same, including the aqueous phase slowly added thereto, at a temperature of at least 60oC, the quantity of the aqueous phase added to the non‑aqueous phase being at least 0.8 units of weight for each unit of weight of the non‑aqueous phase; and

cooling the admixture of the aqueous and non‑aqueous phases to a temperature of 35oC or less."

Claims 12 and 13 are appended to claim 11.  Claim 14 reads as follows:

"14.A substantially optically clear, substantially homogeneous aqueous micellized solution of one or more fat soluble essential nutrients, micel size of the nutrients being of approximately two (2) microns or smaller, the solution being capable of remaining substantially homogeneous and substantially optically clear when added to a substantially homogeneous, substantially clear aqueous phase such as water or a beverage for human consumption, the essential nutrient being selected from a group consisting of fat soluble medicinal agents, essential fatty acids, d‑alpha tocopherol, pharmaceutically acceptable derivatives of d‑alpha tocopherol having vitamin E activity, retinol, pharmaceutically acceptable derivatives of retinol having vitamin A activity, calciferol and pharmaceutically acceptable derivatives of calciferol having vitamin D activity, the solution further comprising:

water;

a pharmaceutically acceptable polyol; and

polyethoxylated castor oil, the amounts of said polyol and of said polyethoxylated castor oil being sufficient to maintain the fat soluble essential nutrient in said micellized solution."

Claims 15 to 18 are appended to claim 14.  Claim 19 reads as follows:

"19.A substantially clear, substantially homogeneous solution of beta carotene having been prepared by a process comprising the steps of:

mixing a suspension of particles of beta carotene in a suitable edible oil with polyethoxylated castor oil, said particles having an average particle size no larger than 10 microns;

agitating the resulting admixture for a prolonged period of time; and

thereafter adding to the admixture an alcoholic solution of a flavouring agent such as lemon oils."

Claims 20 to 22 are appended to claim 19.  Claims 23 and 24 read as follows:

"23.A substantially clear, substantially homogeneous solution of beta carotene which is capable of staying substantially clear and substantially homogeneous when added to an aqueous medium, such as water or beverages adapted for human consumption, the solution essentially consisting of:

beta carotene;

an edible oil, up to approximately four times the weight of the beta carotene;

polyethoxylated castor oil up to approximately seven times the combined weight of beta carotene and edible oil; and

an alcoholic solution of a flavouring agent such as lemon oil, being approximately 15 to 30 percent by weight of the substantially homogeneous solution, said homogeneous solution containing up to 20 mg of beta carotene per mililiter of the solution.

24.A substantially clear, substantially homogeneous solution of garlic oil, containing scordinin, which is capable of staying substantially clear when added to an aqueous medium, such as water or beverages adapted for human consumption, the solution comprising:

odourless garlic oil;

polyethoxylated castor oil;

and polyethylene glycol."

Claim 25 is appended to claim 24.  Claims 26 and 27 define processes for preparing the compositions in similar terms to the processes included in claims 1 and 11 respectively.  Claim 28 also defines a process as follows:

"28.A process for preparing a substantially optically clear, substantially homogeneous aqueous micellized solution of one or more fat soluble essential nutrients, micel size of the nutrients being of approximately two (2) microns or smaller, the solution being capable of remaining substantially homogeneous and substantially optically clear when added to a substantially homogeneous, substantially clear aqueous phase such as water or a beverage for human consumption, the essential nutrient being selected from a group consisting of essential fatty acids, d‑alpha tocopherol, pharmaceutically acceptable derivatives of d‑alpha tocopherol having vitamin E activity, retinol, pharmaceutically acceptable derivatives of retinol having vitamin A activity, calciferol and pharmaceutically acceptable derivatives of calciferol having vitamin D activity, the process comprising the steps of admixing water, a pharmaceutically acceptable polyol, and polyethoxylated castor oil, in sufficient quantities of said polyol and of said polyethoxylated castor oil to maintain the fat soluble essential nutrient in said micellized solution."

Claims 29 to 32 are omnibus claims to the compositions and processes described in the examples.
The Evidence
        The evidence‑in‑support of the opposition consists of declarations made by Michael John Crooks, Kenneth Frederick Brown, Richard Ho (2), Julian Robert Anthony Blenkinship and William John Sneddon.  I will not summarise this evidence; instead I will refer to the relevant parts thereof in this decision.
        Dr Crooks, who is a qualified pharmacist, states in his declaration as follows:

"Commencing at the beginning of March 1982 I oversaw the production of commercial quantities of "Vitamin E Emulsion" and "Vitamin A Emulsion" at Bioglan's said laboratory in Beaconsfield and I say that I continued to oversee such production at such laboratory until March 1983, after which period I continued to oversee such production but at different premises.

I say that during the period March 1982‑February 1983 inclusive "Vitamin E" and "Vitamin A" Emulsion production was overseen by myself at Bioglan's said laboratory, predominantly in 200 litre batch sizes, which batches were subsequently directed to Bioglan Laboratories Pty Ltd premises at 25 Gerald Street, Marrickville, New South Wales whereat each 200 litre batch was packaged into four thousand individual packs and then on‑sold to distributors by Bioglan Laboratories (Aust) Pty Ltd from when the products found their way to end consumers in Australia under the trade name "Bioglan Emulsion E" and "Bioglan Emulsion A" respectively and later "Bioglan Micelle E" and "Bioglan Micelle A" respectively after a product name change.

Annexed hereto and marked "A" are fourteen "batch sheets" referrable to production of "Vitamin E Emulsion" at the laboratory of Bioglan Laboratories Pty Ltd at 488 Botany Road, Beaconsfield and in accordance with one or more of the claims of application No. 566215 over the period 5th March 1982‑8th December 1982.

...

Annexed hereto and marked 'B' are two batch sheets referrable to production of Vitamin A Emulsion initially sold in the Australian marketplace as "Bioglan Emulsion A" and subsequently "Bioglan Micelle A"; these batch sheets being referrable to production overseen by myself on 8th March 1982 and 17 August 1982 respectively.  The products referred to in Annexure B hereto were manufactured in accordance with the methods described in application No. 566215.

...

Myself and William Sneddon continued to oversee production of Micelle E, Micelle A, Micelle E and A, Primrose Micelle, Essential Fatty Acid Micelle, Antioxidant Micelle and Children's Micelle, (the products above mentioned all being manufactured in accordance with the "invention") and such supervision occurred through until the end of 1983."

Mr Fisher argued that the batch sheets which are annexed to Dr Crooks' declaration were of little evidentiary value because the sheets had not been completed to the required standard.  However, as pointed out by Mr Blenkinship, there is no evidence of what this required standard is.  Therefore it seems to me that I may rely on these batch sheets in my considerations.  Mr Sneddon, who is an analytical chemist, declares as follows:

"I say that in March 1982 production of products known as "Bioglan Emulsion E" and "Bioglan Emulsion A" (the same products being later sold as "Micelle E" and "Micelle A" respectively) commenced in commercial quantities (usually 200 litre batches) at 488 Botany Road.  I say that as at March 1982 Dr Crooks was primarily responsible for production and I was primarily responsible for quality control whereas Mr Fred Assaf, being an experienced pharmaceutical compounder, performed most of the "hands on" work in the laboratory.

...

I say that I continued to work in said laboratory at 488 Botany Road, Beaconsfield from March 1982 through to March 1983 when production of Micelle E and Micelle A by Bioglan Laboratories Pty Ltd was moved to Marrickville;  I then continued to oversee production of these and other products on behalf of a new company Bioglan Manufacturing Pty Ltd (in which I had an interest through Chromatographia Pty Ltd) up to 1986.

I say that over the period March 1982 ‑ March 1983 the products Micelle E, Micelle A and Micelle E and A were produced under my supervision by Bioglan Laboratories Pty Ltd and that these products were produced in accordance with the ingredients and methods disclosed in specification 566215.

I say that in March 1983 three further products were introduced, the introduction of which I oversaw, being "Essential Fatty Acid Micelle", "Primrose Micelle" and "Children's Micelle", and I further confirm that these products were additionally produced in accordance with the raw materials and methods described in patent application No. 566215."

Mr Fisher criticised some of the statements made in both the above declarations, for example, the statement that "Bioglan Emulsion E" and "Micelle E" are the same product, however I note the applicants have not served evidence to support these criticisms.
        Mr Ho is a pharmacist and he has practiced as a community pharmacist, owning and running pharmacy shops in Randwick since 1977.  He declares as follows:

"I am aware that from the beginning of 1983 Bioglan Laboratories Aust Pty Ltd offered for sale a product originally known as "Bioglan Emulsion E" but which during the course of 1983 was later sold as "Micelle E".

I am additionally aware that during the course of 1983 Bioglan Laboratories Aust Pty Ltd offered for sale a product known as "Micelle A"."

Annexed to Mr Ho's declaration is a price list from a wholesaler which traded as Cartrician Health Agency and this list indicates those BIOGLAN products which could be supplied at 24 July 1983.  Another annexure is a cash sales invoice from BIOGLAN indicating products which Mr Ho purchased for his pharmacy on 9 December 1983.  Annexed to Mr Ho's second declaration is a similar cash invoice from BIOGLAN dated 30 March 1984.  Mr Ho also states:

"During the course of 1983 I was a consumer of Micelle E (formerly known as "Bioglan Emulsion E") in the sense that I administered the product to myself in order to enhance my personal health."

I conclude from the declarations in support of the opposition that the subject matter defined in the present claims may have been anticipated by a prior disclosure to a person who was not under an obligation of confidence or by prior commercial dealing.
Prior Disclosure
        Dr Crooks states that the alleged invention, which is the subject of application No. 566215, was made by him in 1981 though he did not consider it appropriate to apply for patent protection because he thought it was a specific example of established technology.  In late 1981 and early 1982 a company called Chromatographia Pty Ltd (CHROMATOGRAPHIA), which was jointly owned by Dr Crooks and Mr Sneddon was engaged in a consulting capacity by BIOGLAN in order to commercially formulate and supervise production of products in accordance with the invention.  There was no written agreement between CHROMATOGRAPHIA, Dr Crooks and Mr Sneddon concerning services performed for BIOGLAN although consultancy fees were paid during the course of 1982.  In early 1982 it was resolved that products in accordance with the invention would be produced by BIOGLAN for sale in Australia; and Dr Crooks was to supervise production, and Mr Sneddon was to be primarily responsible for quality control of the products.  Dr Crooks declares as follows:

"20.As I attended the said Laboratories of Bioglan Laboratories Pty Ltd at 488 Botany Road, Beaconsfield more than any other senior personnel I am well aware of the terms of employment of Terry Macarthy and Fred Assaf, as well as other assistant compounders who were employed in the laboratory from time to time.

21.I say that at no time prior to my disclosing the "invention" to Terry Macarthy and/or Fred Assaf in 1982 were those personnel told that the "invention" or information connected therewith was "confidential" and that they were not to discuss the matter with anyone else.  I am further aware that there were no written employment contracts between Bioglan Laboratories Pty Ltd and Mr Terry Macarthy or Mr Fred Assaf stating that any knowledge that they received in the course of their duties was to be confidential and furthermore there were no notices in or about the laboratory indicating that any matters associated therewith were confidential.

22.By the end of 1982 there were two other employees in said laboratory at 488 Botany Road, Beaconsfield apart from Mr Macarthy and Mr Fred Assaf although as these were junior personnel I cannot now remember the full names of these persons; I can however state that these persons were made aware of the methods and products disclosed in patent application No. 566215 without any indication to said personnel that such information was confidential.

...

66.I furthermore confirm that having regard to the extensive exposure of the subject matter disclosed in Application No. 566215 prior to May 1984 to various senior personnel at Bioglan Laboratories Pty Ltd and laboratory personnel of Bioglan Manufacturing Pty Ltd the subject matter of the patent application and the aforementioned thirty two claims were certainly not confidential or new as at 1st May, 1984."

Both Mr Fisher and Mr Blenkinship expressed opinions on the common law regarding the obligation of BIOGLAN employees to keep information confidential.  This aspect of the law was recently summarised in the judgements of the Court of Appeal of the Supreme Court of New South Wales in the recent "Spycatcher" case (Attorney General (UK) v Heinemann Publishers Australia Pty Ltd 75 ALR 353). However whatever obligations BIOGLAN's employees were under the onus is on Dr Crooks to show that any patent granted on the present application would be clearly bad because the claimed subject matter had been disclosed under conditions which did not require confidentiality (Stamp v W J Powell Pty Ltd 24 CLR 339 at page 343).
        Mr Sneddon confirms that there were no signs at either laboratory stating that the work performed at the laboratory was to be kept confidential.  He also states that at no time did he observe any employees of BIOGLAN, including Mr Assaf and Mr Macarthy, being informed that anything to do with the manufacture of the products was confidential.  However I note that all employees employed in the manufacture of products were employed by BIOGLAN and not CHROMATOGRAPHIA and therefore neither Dr Crooks nor Mr Snedden would necessarily be aware of all of their terms of employment, including whether these employees had signed a confidentiality agreement specifically directed to the manufacture of these products.  According to Mr Snedden's declaration Mr Macarthy was assigned to the laboratory to oversee the day to day running of the laboratory.  It is also not clear from Mr Sneddon's or Dr Crooks' declarations whether at least one of them was present at the laboratory at all times the employees were present because they attended the laboratory "for at least two days per week" (Sneddon) or attended "for two to three days per week" (Crooks).  Thus in my view it may have been possible for Mr Macarthy, or senior personnel employed by BIOGLAN, to give oral instructions regarding the confidentiality of the manufacture of the products when Dr Crooks and Mr Sneddon were not present.  Consequently I think there is insufficient evidence for me to conclude that the employees involved in the manufacture of the products did not have to keep this information confidential.  I also think that Dr Crooks in his role as a consultant to BIOGLAN through the company CHROMATOGRAPHIA would probably not be in a position to know which matters senior personnel at BIOGLAN were required to keep confidential.
        Mr Sneddon declares as follows in respect of what Dr Crooks told him about the invention:

"Indeed when Dr Crooks first explained the method of production of the proposed Micelle E and Micelle A products to me in late 1981 there was no question of confidentiality arising as at that time we did not consider that the method of production of the products concerned could possibly comprise an "Invention"."

However in my view this disclosure to Mr Sneddon may have been as a result of Mr Sneddon's co‑ownership of CHROMATOGRAPHIA.  Mr Sneddon is also silent as to what matters he was free to discuss with parties other than employees of BIOGLAN.  However Dr Crooks declares as follows:

"I freely disclosed the method and products claimed in the present application No. 566215 to Bioglan Laboratories Aust Pty Ltd as well as the employees of that company and related companies as aforementioned as well as to consumers such as Mr Richard Ho and other friends of mine as I believed that there was no question of patent protection for the invention."

Unfortunately in his declaration Mr Ho does not confirm that Dr Crooks disclosed the products and the method of producing the products to him.  Consequently I consider there is insufficient evidence for me to conclude that Dr Crooks disclosed the method of producing the products to Mr Sneddon and Mr Ho in a manner which did not require an obligation of confidence.  The onus is on the opponent, Dr Crook, to show that the subject matter which is claimed in the present claims was disclosed to a person who did not have to keep the matter confidential.  I consider the opponent has failed to show that such a disclosure clearly took place (Montecatini Edison S.p.A. v Eastman Kodak Co. 45 ALJR 593 at page 595). Therefore I am not satisfied that the subject matter claimed in the claims of application No. 566215 was disclosed to a person who was not under an obligation to keep the matter confidential.
Commercial Dealing
        The UK Court of Appeal considered that commercial dealing with the subject matter of a claim before the priority date of the claim constitutes prior use of the claimed subject matter (Wheatley's Application 1985 RPC 91). Mr Fisher submitted that there was no evidence that the products offered for sale or purchased by Mr Ho had been prepared by the process which is included in claim 1 or contained micelles of approximately 2 microns or smaller as claimed in claims 11 and 14 for example. Mr Blenkinship argued that there was no evidence to contradict the evidence‑in‑support of the opposition which demonstrates that products had been sold before the priority date. Concerning the process of making the products, he said great weight should be given to the declaration of Dr Crooks who is the inventor of record of application No. 566215.
        I think it is apparent from the annexures to Mr Ho's declaration that the products "Bioglan Emulsion A", "Micelle A", "Bioglan Emulsion A Plus E", "Micelle E", "Children's Micelle" and "Primrose Micelle" were dealt with commercially before the priority date of the claim of application No. 566215.  What is not clear from Mr Ho's declaration in my view, is whether any of these products are defined by the present claims.
        The batch sheets which are annexed to Dr Crooks' declaration do not describe the process which was used to make the emulsions and I note that the date of the latest batch sheet referring to the vitamin E emulsion is 7 December 1982.  Example 1 of the present specification describes a composition which contains the same ingredients in the same proportions as those in the latest batch sheet which refers to the vitamin E emulsion.  The process described in example 1 falls within the scope of the defined included in claim 1.  Dr Crooks declares that example 1 essentially describes the "Micelle E" product and process utilised by BIOGLAN whilst producing "Micelle E" under his supervision in 1982.  He also states that "Micelle E" products manufactured under his supervision and sold in Australia in 1982 were prepared precisely in accordance with the statement appearing in claim 1.  Unfortunately there is no evidence of sales in 1982 annexed to Dr Crooks' declaration and the earliest commercial dealing with "Micelle E" according to Mr Ho's declaration is the Cartrician Health Agency price list which is dated 24 July 1983.  With reference to claim 26 Dr Crooks notes the wording to be substantially identical to the wording of claim 1, except that it refers to a process rather than a product he then  continues:

"I state that the Micelle E and Micelle A products produced by Bioglan Laboratories Pty Ltd under my supervision in 1983 were produced in accordance with this precise process."

Claim 28 defines a different process to that defined in 26 and Dr Crooks states:

"With respect to Claim 28 I once again confirm that the Micelle E and Micelle A products produced by Bioglan Laboratories Pty Ltd under my supervision were produced in accordance with the process stated herein."

I conclude from the above analysis of Dr Crooks' declaration that the "Micelle E" produced under his supervision contained the same ingredients as the compositions claimed in the present specification, however the situation with respect to the manufacturing process is less clear.  For example, one interpretation of the declaration is that the vitamin E emulsion produced before the change of premises in March 1983 was produced by the process defined in claim 26 but the emulsion produced after this date was produced by either the process defined in claim 26 or the process defined in claim 28.  Mr Ho is aware that BIOGLAN offered "Bioglan Emulsion E" for sale from the beginning of 1983; but during the course of 1983, this product was sold as "Micelle E".  Mr Sneddon states that "Bioglan Emulsion E" and "Micelle E" are the same product and there is no evidence to the contrary before me.  However, it seems to me that a statement that two products are the same does not imply that the products have been prepared by the same process.  Thus the change of "Bioglan Emulsion E" to "Micelle E" may have reflected a change in the manufacturing process.
        Mr Ho states that the "Micelle E" which was sold to him in 1983 comprised a substantially clear micellised aqueous solution of fat soluble essential nutrients including alpha‑tocopherol or a pharmaceutically acceptable ester of alpha‑tocopherol having vitamin E activity.  He further states as follows:

"Having regard to my personal interest in the "Micelle E" (formerly Bioglan Emulsion E) product and my knowledge of pharmacy, as well as simple observations I have made of the said product, I can say that said product sold by Bioglan Laboratories Aust Pty Ltd entitled "Micelle E" (formerly Bioglan Emulsion E) is entirely consistent with the method of production stated at lines 12 to 27 of Annexure 'D' hereto which annexure I have carefully read."

Annexure D is the first claims page of the present specification and the particular lines referenced relate to the process for preparing the composition which is defined in claim 1.  Dr Brown makes many statements concerning the compositions which are disclosed in the present specification but he does not say that the relevantly skilled person would be able to deduce the process used to make a composition from an analysis of the composition itself.  Thus I consider that any commercial dealing with "Micelle E" before the present priority date would not disclose the process used to make that composition because the present compositions are not of such nature that this would be possible (Cullen v Wellsbach Light Company of Australasia 4 CLR 990 at page 1003).
        The 200 litre batches of vitamin E emulsion prepared under Dr Crook's supervision during the period March 1982 to February 1983 inclusive were, according to Dr Crooks, packaged into four thousand individual packs and then on‑sold to distributors by BIOGLAN where the product found its way to end consumers in Australia.  Once again there is no evidence of commercial dealing before the Cartrician Health Agency's price list dated 24 July 1983.  I note, however, that on this price list as well as on the BIOGLAN Cash Sales Invoices, "Micelle E" is packaged in 50ml packs.  Nevertheless, there is no evidence before me which shows that these packs contained vitamin E emulsion prepared before March 1983, for example by reference to a batch number.  In other words the product in these packs may have been prepared by the process included within the scope of claim 1, or by the process which is defined in claim 28.  Thus with respect to "Micelle E" the most I can conclude from the opponent's evidence is that before the priority date BIOGLAN commercially dealt with a composition in Australia whose ingredients fall within the scope of the ingredients defined in Claim 1.  However I cannot conclude that this composition was definitely prepared by the process which is included in claim 1.  Consequently I consider that the opponent has not clearly established (Montecatini Edison S.p.a. v. Eastman Kodak Co loc. cit) that the commercial dealing with "Micelle E" constitutes prior use of the invention which is defined in claim 1.  In my view, a similar analysis of the opponent's evidence with respect to the commercial dealing with "Bioglan Emulsion A", "Micelle A" and "Bioglan Emulsion A plus E" leads to a similar conclusion.
        Mr Sneddon, who was primarily responsible for quality control, does not specifically comment on the size of any micelles in the vitamin E emulsion, or on whether the measurement of the size of the micelle was an aspect of the quality control procedures.  Dr Crooks states that certain contamination problems were encountered with the initial batch of vitamin E emulsion.  With respect to the size of the micelles he comments that all micelles are less than 2 microns in diameter and this was a well known feature of micelles prior to 1980.  Thus it seems to me that neither Mr Sneddon nor Dr Crooks regarded the size of the micelles as a feature of their vitamin E emulsion.  Dr Crooks does not adduce any evidence to support his comment that all micelles are less than 2 microns in diameter.  Dr Brown, on the other hand, comments as follows:

"the statement that the micelle size of the nutrients is less than 2 microns or smaller is not a significant qualification as micelles would generally be less than 2 microns in diameter."

Thus the opponent's expert witness Dr Brown and the opponent himself disagree that the size of a micelle is always less than 2 microns.  Therefore I cannot proceed on the basis that the limitation of the size of the micelles to approximately 2 microns or smaller is no limitation at all on the scopes of claims 11 and 14.  Therefore I do not think the opponent has clearly shown that "Micelle E", which was commercially dealt with before the present priority date, was a composition containing micelles of approximately 2 microns or smaller.  Consequently I consider that this commercial dealing with "Micelle E" does not constitute prior use of the composition which is defined in the present claims 11 and 14.  It is also my view that a similar argument applies to the commercial dealing with "Bioglan Emulson A", "Micelle A" and "Bioglan Emulsion A Plus E".
        Mr Sneddon states that in March 1983 three further products were introduced including "Primrose Micelle" and "Children's Micelle".  He confirms that these products were additionally produced in accordance with the raw materials and methods described in patent application No. 566215.  Dr Crooks deposes that Example 4 in the present specification essentially describes the method and product produced by BIOGLAN under his supervision and sold as "Children's Micelle".  He also says that example 5 describes the procedure applied during the production of "Primrose Micelle", being a product manufactured by BIOGLAN under his supervision in March 1983 and thereafter.  I note that examples 4 and 5 describe processes which fall within the scope of the process included in present claim 1.  I also note that neither Mr Sneddon nor Dr Crooks have presented any evidence in support of their statements such as batch sheets.  Mr Ho purchased 50ml packs of "Primrose Micelle" directly from BIOGLAN in December 1983 and also purchased further packs from this source along with 50ml packs of "Children's Micelle" on 30 March 1984.  Dr Crooks declares in this regard:

"I say that I have examined the declaration of Mr Richard Ho dated 19/7/88 and that Invoice No. 0802 dated 30/3/1984 included in such declaration and mentioning the products "Micelle E", "Micelle A", "Children's Micelle" and "Primrose Micelle" refers to the products manufactured for Bioglan Laboratories Aust Pty Ltd in accordance with the products and methods disclosed in application No. 566215."

However, Dr Crooks has not presented any evidence which demonstrates that the products purchased by Mr Ho were produced under his supervision, for example evidence in relation to batch numbers.  Dr Crooks states that example 4 essentially describes the method and product which was used to prepare the "Children's Micelle" produced under his supervision.  It seems to me that Dr Crooks' statement could mean that the methods and products were in accordance with example 4 except that unnecessary features were omitted.  For example if an injectable composition was being produced the lemon spirit described in example 4 may not be necessary.  Thus I consider there is insufficient evidence for me to conclude that Dr Crooks supervised the production of the "Children's Micelle" in the form in which it was purchased by Mr Ho.  Therefore I cannot conclude that the "Children's Micelle" purchased by Mr Ho was definitely prepared by the process which is defined in claim 1.  With reference to the "Primrose Micelle" Dr Crooks states that example 5 in the present specification describes the procedure applied during the production of this product under his supervision but he does not say in what form this product was packaged, for example 50ml packs or liquid filled capsules.  Therefore, there is no evidence which shows that the "Primrose Micelle" purchased by Mr Ho in March 1984 was prepared under the supervision of Dr Crooks in 1983.  Consequently, the opponent has not clearly established, as the law requires, (Montecatini Edison S.p.a. v Eastman Kocak Co loc. cit.), that the "Children's Micelle" and the "Primrose Micelle" which were purchased before the present priority date were prepared by the process defined in claim 1.  Therefore I do not consider that the commercial dealing with these products constitutes prior use of the composition defined in claim 1.  I consider that the same findings I made previously with respect to the commercial dealing with "Micelle E" and claims 11 and 14 also applies to the commercial dealing with "Children's Micelle" and "Primrose Micelle".  I note also that there is no evidence of any commercial dealing with the compositions which are defined in claims 19, 23 and 24, before the present priority date.  Consequently I am satisfied that the commercial dealing with the products before the present priority date did not anticipate the subject matter which is claimed in the claims of the specification of application No. 566215.
Prior Documents
        Annexed to Dr Brown's declaration are exhibits B to D which are documents relating to micelles and pharmaceutical compositions.  However the opponent did not lodge any evidence which shows that exhibits B to D were published in Australia before the present priority date.  Therefore I am unable to conclude that the disclosures in exhibits B to D anticipate the subject matter claimed in the present claims.
Section 40
        Mr Blenkinship submitted that the specification of application No. 566215 did not comply with section 40.  In particular he pointed to Dr Crooks' statement that the reference to 1,2‑diethylene glycol, which is claimed as a water miscible polyol in claim 3 and described at page 5, line 17, is a mistake, because this compound is poisonous.  Mr Fisher conceded that Mr Blenkinship was correct and that the reference to 1,2‑diethylene glycol should be replaced with a reference to polyethylene glycol. 
        The first paragraph of the specification states that the present invention is directed to substantially clear aqueous formulations for fat soluble essential nutrients which remain clear when added to water or beverages for human consumption, and which permit enhanced absorption of the essential nutrients from the digestive system.  The specification goes on to state that the simplest formulations of fat soluble essential nutrients in an edible oil carrier medium suffer from the disadvantages of low palatability and relatively poor absorption of the nutrient in the human digestive system.  Prior art formulations of fat soluble vitamins and fat soluble essential nutrients in an aqueous carrier medium have been turbid.  Thus the relevant industry has been striving for a long time to create substantially clear, substantially homogeneous aqueous formulations for fat soluble vitamins and other essential nutrients.  In addition the industry has been striving for a long time to provide formulations which have improved absorption characteristics in the human digestive system.  According to the specification, the present invention satisfies both of these long sought after goals of the prior art.  The specification then states as follows:

"It is an object of the present invention to provide aqueous formulations for fat soluble vitamins, essential nutrients, non‑water soluble drugs, medicinal and pharmaceutical agents, and the like, which are substantially clear, homogeneous, and cause no turbidity when added to an aqueous beverage prior to ingestion.

It is another object of the present invention to provide formulations for fat soluble vitamins, essential nutrients, non‑water soluble drugs, medicinal and pharmaceutical agents and the like, which permit enhanced absorption of the vitamin, nutrient, drug or agent from the digestive tract.

The foregoing and other objects and advantages are attained by formulations of one or more fat soluble vitamins, essential nutrients or drugs, wherein the vitamin, nutrient or drug is dispersed in an aqueous carrier in micelles of approximately 2 microns or smaller."

It seems to me that the skilled reader of this introductory part of the specification would conclude that the problem in the prior art is in the field of aqueous compositions of fat soluble ingredients and that the problem can be overcome by dispersing the fat soluble ingredient in an aqueous carrier in micelles of approximately 2 microns or smaller.  However the paragraphs following read:

"The formulations or compositions of the invention are obtained by admixing polyethoxylated castor oil with the fat soluble vitamin, essential nutrient or drug, together with a pharmaceutically acceptable water miscible polyol, to obtain a non‑aqueous phase.

The non‑aqueous phase is heated to at least 60oC, and an aqueous phase comprising predominantly water and optionally a preservative is slowly added while the admixture is agitated and kept at a temperature of at least 60oC.  The resulting mixture is cooled, and thereafter optionally diluted with aqueous diluents and flavouring agents."

In my view the skilled reader could conclude that the compositions produced by the process described in these paragraphs have the fat soluble ingredient dispersed in an aqueous carrier in micelles of approximately 2 microns or smaller.  This conclusion is supported upon reference to the process defined in claim 27, which includes similar process steps and is described as a process for preparing a micellized aqueous solution of fat soluble ingredients having micelles of the size not significantly exceeding 2 microns.  A reading of claim 11 also provides support for this conclusion.  On the other hand, I think that the skilled person could equally conclude that only some of the compositions produced by the process described in these paragraphs contain micelles of approximately 2 microns or smaller and that the process itself is the essence of the invention.  For example, the scopes of claims 1 and 26 include a similar process but do not specify the size of the micelles.  Moreover, the compositions described by examples 1 to 5 which are also prepared by a similar process, do not describe the size of the micelles.  I should point out that the paragraphs quoted above describe the temperature of the admixture of the aqueous and non‑aqueous phases as 60oC whereas claims 1 and 26 state this temperature as 55oC.
        The next paragraph in the description reads as follows:

"Alternatively, heat sensitive fat soluble essential vitamins, nutrients, drugs or related pharmaceutical agents such as beta‑carotene, or herb oils (such as odorless garlic oil containing scordinin) are mixed with polyethoxylated castor oil and a pharmaceutically acceptable polyol or a flavoring agent such as lemon spirit, or both, to provide a substantially micellized solution."

It seems to me that the skilled  person reading both the original process and the alternative process could conclude that both processes lead to dispersions of fat soluble ingredients in an aqueous carrier in micelles of approximately 2 microns or smaller, because claim 28 defines a similar process to this alternative which is described as a process for preparing micellized solutions in which the micelles are approximately 2 microns or smaller.  However claim 19 which defines similar process steps to this alternative process is merely stated to produce a solution of beta‑carotene.  Example 6 which also includes similar process steps is silent with respect to the size of the micelles.  Therefore the skilled person could equally conclude that only some of the compositions produced by the alternative process contain micelles of approximately 2 microns or smaller.
        The skilled person reading the description of this alternative process might also conclude that the invention includes non‑aqueous compositions because the product of the process will only be an aqueous composition if the flavouring agent includes water.  I note the term "micellized solution" in the last line of the paragraph can also be used to refer to non‑aqeous solutions.  This conclusion is supported by the paragraph which bridges pages 7 and 8 of the specification, by example 7 and by claim 24, which claim defines a composition comprising odourless garlic oil, polyethoxylated castor oil, and polyethylene glycol.  The scopes of claims 19 and 23 also include non‑aqueous compositions because the ingredient "an alcoholic solution of a flavouring agent" is not necessarily an aqueous alcoholic solution (cf. page 8, lines 2 and 3).
        Thus it seems to me that the skilled person reading the present specification would be unable to make a conclusion as to the nature of the invention.  An applicant for a patent has to make the nature of his invention clear to persons having a reasonably competent knowledge of what was known before on the subject (Samuel Taylor Pty Ltd v S.A. Brush Co Ltd 83 CLR 617 at page 625). I am satisfied that the present specification does not do so.
        Returning to the introductory part of the specification, I think it is apparent that one of the primary objects of the present invention is to provide substantially clear aqueous formulations for fat soluble essential ingredients which are substantially homogeneous and remain clear when added to an aqueous beverage prior to ingestion.  According to the specification (page 11, lines 15 to 18), this imposes upper concentration limits on the fat soluble vitamins and essential nutrients in the compositions used for the formulations.  I think that claims 1, 19 and 26 do not meet this object as they do not state that the compositions cause no turbidity when added to an aqueous beverage.  The primary objects and advantages of the invention including the enhanced absorption of the vitamin, nutrient, drug or agent from the digestive tract, are attained by formulations wherein the vitamin, nutrient or drug is dispersed in an aqueous carrier in micelles of approximately 2 microns or smaller.  It is apparent that the aqueous compositions which are defined in claims 1, 19, 23, 24 and 26 do not meet these objects as the claims do not define the size of the micelles which the compositions contain.  I also think that the non‑aqueous compositions which are included within the scopes of claims 19, 23 and 24 would not necessarily produce, after dilution with water, an aqueous composition in which the fat soluble ingredient is dispersed in micelles of approximately 2 microns.  Thus these claims also do not meet the primary objects in this respect.  According to the High Court, if a patentee chooses to state advantages of his invention, failure of a claim to embody the primary objects of the invention results in failure of the claim under sub‑section 40(2) (AMP Inc v Utilux Pty Ltd 45 ALJR 123 at page 131). It is apparent from the discussion above that claims 1, 19, 23, 24 and 26 do not attain such objects and advantages as described in the specification. Therefore in my view these claims are not fairly based. Consequently I am satisfied that the specification of application No. 566215 does not comply with section 40.
Summary
        I have found that the subject matter defined in the claims of application No. 566215 has not been anticipated but that the specification has serious section 40 defects.  I give BIOGLAN 60 days from the date of this decision to propose amendments to overcome these defects.  Dr Crooks' opposition to application No. 566215 drew the Commissioner's attention to the defective specification, consequently I award costs in his favour.

(J.L. ROVETA)

Attorneys for the Applicants: G.R. Cullen & Co