BP International Limited v Neste Oil Oyj - [2013] APO 46

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
BP International Limited v Neste Oil Oyj [2013] APO 46

Patent Application: 2003258753

Title:Diesel fuel composition, comprising components based on biological raw material, obtained by hydrogenating and decomposition fatty acids

Patent Applicant:  Neste Oil Oyj
Opponent:  BP International Limited
Delegate:  Dr S.D.Barker
Decision Date:  14 August 2013
Hearing Date:  23 May 2013, in Melbourne
Catchwords:  PATENTS – opposition to the grant of a patent – opposition succeeds as the best method of performance does not identify the fat that is used – no award of costs – opportunity to propose amendments

Representation: Patent applicant: Callinans
Opponent:Griffith Hack

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2003258753

Title:Diesel fuel composition, comprising components based on biological raw material, obtained by hydrogenating and decomposition fatty acids

Patent Applicant: Neste Oil Oyj
Date of Decision: 14 August 2013
DECISION
Application for further evidence refused.
The opposition succeeds in relation to the provision of a best method of performance. I allow two months to propose amendments.
No award of costs.
REASONS FOR DECISION

Patent application 2003258753 in the name of Neste Oil Oyj (Neste) was advertised accepted on 4 December 2008. An opposition to the grant of a patent was filed by BP International Limited (BP) on 4 March 2009. A hearing was held on 23 May 2013 in Melbourne to decide the opposition. Neste was represented by Garry Fitzgerald of counsel. BP was represented by Helen Rofe of counsel.
The evidence in this matter consists of declarations by Professor Roy Jackson, Andrew Davey, Pekka Aalto, and Dr Wayne Davies. There is also an application for further evidence that is pending. For the reasons given later in this decision, that application is refused
The specification
The specification relates to fuel for diesel engines. Traditional fuels are produced from crude oil. However, in recent times there has been a move to include components of biological origin in fuels. The specification describes a fuel composition containing hydrogenated biological material.
The specification ends with five claims directed to fuel compositions.
What is the invention as described
Before commencing to construe the specification, I note what Middleton J said in Eli Lilly and Company Limited v Apotex Pty Ltd [2013] FCA 214, 100 IPR 451 at [139]:
"It is well settled that the Court should, from the outset, approach the task of patent construction with a generous measure of common sense. The Court must place itself in the position of a person skilled in the relevant art, being the subject matter of the patent. From this perspective, the patent is to be read as a whole, in the context of the specification and in light of the prevailing common general knowledge and state of the relevant art at the priority date."
The specification discusses diesel fuels containing components prepared from vegetable, animal or fish material. Such fuels are desirable due to a requirement to reduce emissions of carbon dioxide and an EU directive that diesel fuel contain such components. The specification notes that components derived from plant material are known (particularly the methyl esters of fatty acids, known as FAMEs). The specification also acknowledges that paraffins have been added to diesel fuels, but they lead to poor performance at low temperature.
One of the admitted prior art documents is FI 100248, which is discussed at page 3 as follows:
"FI 100248 describes a two-step process for producing middle distillate from vegetable oil by hydrogenating fatty acids of the vegetable oil, or triglycerides, to give n-paraffins, and then by isomerizing the n-paraffins to give branched-chain paraffins."
The specification frames the problem at page 4 as:
"As the above teachings indicate, there is a need for a high quality fuel composition for diesel engines containing components of biological origin and also meeting the quality requirements for diesel fuels under low temperature operation conditions. Moreover, the fuel should be more environmentally friendly than prior art solutions.
It would be advantageous to provide a more environmentally friendly fuel composition for diesel engines containing components of biological origin, and also meeting the quality requirements for diesel fuels under low temperature conditions."
The general description of the invention on page 4 is:
"The fuel composition for diesel engines of the invention, containing components of biological origin, comprises at least one component produced from a biological starting material obtained from plants, animals or fish, diesel components based on crude oil and/or fractions from Fisher-Tropsch process, and optionally components containing oxygen."
This statement is so broad as to be no more than a restatement of the problem. The broadest statement of the invention is given in the subsequent paragraph, which is incorrectly described as simply an embodiment:
"In an embodiment of the invention there is provided a fuel composition for diesel engines, wherein the fuel composition comprises: a) 0.1 – 99% by volume of a component or a mixture of components produced from biological raw material originating from animals by hydrogenating and decomposing fatty acids and/or fatty acid esters to give a hydrocarbon, which is isomerized; b) 0 – 20% by volume of components containing oxygen; both components a) and b) being mixed as an emulsion or dissolved in diesel components based on crude oil and/or fractions from Fischer-Tropsch process."
Does the specification describe the use of animal fats?
The specification as filed describes the invention in broad terms on page 4:
"The fuel composition for diesel engines of the invention, containing components of biological origin, comprises at least one component produced from a biological starting material obtained from plants, animals or fish, diesel components based on crude oil and/or fractions from Fischer‑Tropsch process, and optionally components containing oxygen."
The more detailed statement of the invention that follows at page 5 as filed is in slightly different terms:
"The composition of the diesel fuel of the invention comprises the following:
a) 0.1 to 99% by volume, preferably 0.1 to 80% by volume of a component or a mixture of components produced from biological raw material originating from plants and/or animals and/or fish;"
The specification as filed contained two examples. Both examples related to the use of hydrogenated and isomerized tall oil (which is abbreviated to TOFA). It is not in dispute that tall oil is derived from plant material.
The use of biological material from plant, animals or fish is clearly envisaged in the specification as filed, but is not exemplified or discussed in detail.
The specification as presently amended describes the invention in general terms at page 4 in the same was as at filing:
"The fuel composition for diesel engines of the invention, containing components of biological origin, comprises at least one component produced from a biological starting material obtained from plants, animals or fish, diesel components based on crude oil and/or fractions from Fischer‑Tropsch process, and optionally components containing oxygen."
However, the more detailed statement of the invention is now restricted to animal fats:
"In an embodiment of the invention there is provided a fuel composition for diesel engines, wherein the fuel composition comprises: a) 0.1 – 99% by volume of a component or a mixture of components produced from biological raw material originating from animals by hydrogenating and decomposing fatty acids and/or fatty acid esters to give a hydrocarbon, which is isomerised"
The restriction to animal fats arose after objection was taken during examination. The specification as presently amended contains a further three examples that were not present at filing. Examples 3, 4 and 5 discuss components derived from animal fats. The source of the animal fat is not specified in any example. It is clear that the specification as it presently stands describes components derived from animal fats.
Could a reader understand how to work the invention in relation to animal fats?
The specification as filed does not explain in detail how to hydrogenate and isomerise animal fats. However, it is similarly silent on the detail of how to hydrogenate and isomerise vegetable oils. However, this does not surprise me as it seems that these processes are known, and do not need to be explained to a reader. I am satisfied that the reader could hydrogenate and isomerise animal fats.
Construction of claim 1
The correct approach to the construction of claims was discussed by Bennett J in H Lundbeck A/S v Alphapharm Pty Ltd [2009] FCAFC 70, 81 IPR 228 at [118] – [120]:
"the words in a claim should be read through the eyes of the skilled addressee in the context in which they appear … while the claims define the monopoly claimed in the words of the patentee's choosing, the specification should be read as a whole … it is not permissible to read into a claim an additional integer or limitation to vary or qualify the claim by reference to the body of the specification … terms in the claim which are unclear may be defined or clarified by reference to the body of the specification"
Claim 1 reads:
Biodiesel fuel composition for diesel engines wherein the fuel composition consists of:
a) 0.1 – 99% by volume of a hydrocarbon component free of aromates or a mixture of hydrocarbon components free of aromates, produced from biological raw material originating from animal fats by hydrogenating fatty acids and/or fatty acid esters to give a hydrocarbon which is isomerized, said isomerized hydrocarbon having a turbidity point lower than -30°C and a cetane number higher than 60;
b) 0 – 20% by volume of components containing oxygen, selected from the group consisting of aliphatic alcohols, ethers, fatty acid esters, water, and mixtures containing the same;
both components a) and b) being mixed as an emulsion or dissolved in diesel components based on crude oil and/or fractions from Fischer-Tropsch process.
It is readily apparent that the composition is characterised by component a), since component b) can be absent, and the crude oil or Fischer-Tropsch fractions are not defined. Component a) is derived from animal fats by hydrogenation and isomerisation. The product produced by this process must have a turbity point lower than -30° and a cetane number higher than 60.
What are aromates?
The claim says that component a) is free of “aromates”. This is a word that does not exist. The description does not use this term (so far I have been able to discern). Dr Davies (at para 16) declared that he thought the word should be “aromatics”:
"I can only conclude that reference to being free of aromates in the claim is a typographical or translation error. It is nonsense to refer to aromates in respect of biodiesel. The obvious correction is aromatics, for aromates is French for aromatics and aromatics are present in petroleum diesel and are undesirable from a pollution perspective."
This view is extremely sensible, and is consistent with my initial thoughts when I read the claim. I consider that the term “aromates” should be construed as “aromatics”.
What is the priority date of the claims
The claim was amended during examination in line with the amendment of the specification. At filing the biological material used as the starting material was “originating from plants and/or animals and/or fish”, whereas in the present claim it is “originating from animal fats”. The parties characterised this amendment variously as a legitimate narrowing of the scope of the claim, or as a change to the invention. It is readily apparent how this can be viewed as a narrowing of the claim, but not so easy to see why it is a change in the invention. The reason why the opponent characterised it as a change is understood by considering the way that the amendment came about.
During examination, the examiner objected that claim 1 (and other claims) was not novel. The applicant stated in their response to the examiner that animal fats have shorter carbon chain lengths than vegetable fats, and this leads to a shorter chain in the final iso-paraffin. The shorter chain length was said to lead to improved properties at low temperature:
"As a result of the above it can be seen that components originating from animal fats provide improved cold flow properties. The invention as defined by claim 1 is a solution to the technical problem of achieving the given technical result."
The applicant provided a copy of a declaration by Dr Ari Juva. The Juva declaration states:
"It was generally thought that products based on animal and fish origin, as well as products based on recycled fats, could not be used in diesel fuels … This, however, turns out not to be true … The animal- and fish-based fuel compositions of the current invention also have significantly improved performance ability under cold conditions … This differs markedly from the turbidity points presented in SE 9700149, which are considerably higher."
It is clear that the applicant amended the claims to claim a subset of the biological materials (i.e. animal fats only). Further, the applicant asserted, and it seems likely that the examiner accepted, that animal fats are superior to vegetable fats.
Where an amendment results in narrowing of a claim, the priority date of the claim is not altered unless the amendment causes the claim to become a selection where the basis of the selection was not disclosed in the specification. The decision of the Federal Court in Coopers Animal Health Australia Limited v Western Stock Distributors Pty Limited [1987] FCA 355, 11 IPR 20 is pertinent in this regard.
The Juva declaration contains a table that shows the advantage of animal fats over vegetable oils. That table is as follows:

Feed Vegetable fat Animal fat

Reaction Example 4 from SE 9700149 Hydrotreated and Isomerized

Density 15 C ENISCO 12185 kg/m3 770 776

Cloud Point ASTM D5771 ° C -12 -35

CFPP EN 116 Ann ° C -11 -34

S content ASTM D5453 mg/kg 0 <1

Cetane number NM 353 >74 78

It is clear that one animal fat produces a paraffin with a lower cloud point than one vegetable fat. It is not at all clear whether this is a property that would be possessed by other animal fats compared to all other vegetable oils. Dr Juva says the difference is significant. However, it is not apparent whether this difference falls outside the range of normal variation that would be expected within the class of fats and oils. In the absence of more precise evidence, I cannot be satisfied that this is an unexpected variation.
I am satisfied that the claim as amended is fairly based on the specification as filed. Consequently the claims are entitled to a priority date of the date of filing the specification.
Novelty

32. Subsection 7(1) of the Patents Act (the Act) states that an invention is taken to be novel unless it is not novel in the light of the prior art. A citation is part of the prior art base for the purposes of novelty if it was published before the priority date of the claim.
33. It is well established that the general test for lack of novelty is the reverse infringement test. The classic formulation of this test is that given by Aickin J in Meyers Taylor Pty Ltd v Vicarr Industries Ltd [1977] HCA 19, 137 CLR 228 at 235:
"The basic test for anticipation or want of novelty is the same as that for infringement and generally one can properly ask oneself whether the alleged anticipation would, if the patent were valid, constitute an infringement"

34. This test is satisfied if the alleged anticipation discloses all the essential features of the invention as claimed (see Nicaro Holdings Pty Ltd v Martin Engineering Co [1990] FCA 40, 91 ALR 513 at 517). In order to meet this requirement, the prior art must "contain clear and unmistakeable directions to do what the patentee claims to have invented" (The General Tire & Rubber Company v The Firestone Tyre and Rubber Company Limited [1972] RPC 457 at 486).

The argument for lack of novelty relies upon the priority date being deferred. Given my conclusion that the priority date of the claims has not been deferred, it is not necessary to consider the question of novelty.
Inventive step
Subsection 7(2) of the Act states that an invention is taken to involve an inventive step unless it would have been obvious to a person skilled in the art in the light of the common general knowledge, considered alone or together with the prior art. A document is prior art for this purpose if "a skilled person mentioned in subsection (2) could, before the priority date of the relevant claim, be reasonably expected to have ascertained, understood, regarded [the document] as relevant".
The test for whether an invention is obvious is to ask whether it would have been a matter of routine to proceed to the claimed invention.
"The test is whether the hypothetical addressee faced with the same problem would have taken as a matter of routine whatever steps might have led from the prior art to the invention, whether they be the steps of the inventor or not."
Wellcome Foundation Ltd v V.R. Laboratories (Aust.) Pty Ltd [1981] HCA 262, 148 CLR 262 at 286
The High Court in Aktiebolaget Hassle v Alphapharm Pty Ltd [2002] HCA 59, 212 CLR 411 approved this approach.
The opponent relies on two documents to argue that there is a lack of inventive step. The first document is FI 100248 (referred to as D1). The second document is “Conversion of Vegetable Oils and animal fats into paraffinic cetane enhancers for diesel fuels” by Wang (referred to as D25).
What is the problem
I previously found that the problem addressed by the specification is a biodiesel with improved low temperature performance.
Would D1 have been ascertained
D1 is a Finnish patent application, and is not written in English. There was a fundamental disagreement between the parties as to whether patent documents would have been consulted by a person skilled in the art. Professor Jackson stated that "I would have used these search terms in the online database ‘Chemical Abstracts’ to identify papers and relevant patent documents" (page 14). On the other hand Dr Davies said
"I would not have searched for or reviewed patents in the English language or otherwise. In the field of biodiesel there was significantly more useful information in the Engineering journals and in reference books, trade journals and also on the world wide web … There is no need to locate resources searching patents when there is a wealth of information regarding biodiesel in journals." (page 9)
In the present case I do not have to decide between the positions adopted by the declarants, for the reasons presented below in para [44]. However, if I had had to decide, the evidence of Dr Davies would have been of little assistance. A statement that a person would not search patents is surprising because searching of technical information is normally carried out electronically, and patents can be found in widely used databases such as Chemical Abstracts and in searches of the world wide web. It is difficult to believe that declarants do not make use of these common information sources, or that they deliberately ignore patent documents obtained from these sources regardless of their relevance. It is more helpful for declarants to make positive statements along the lines of "I would search databases A, B and C. These databases do/do not contain patent documents. Where my searches identify patent documents I would/would not consider these documents to assess their relevance."
Assuming that a person would have consulted patent documents, it is necessary to decide whether D1 could have been ascertained and regarded as relevant I must look at the abstract of D1, and consider whether it provides enough information to induce a reader to obtain the document and an English language translation. The abstract reads:
"In the manufacture of a middle distillate from vegetable oil, the vegetable oil fatty acids and triglycerides are hydrogenated to n-paraffins in a first stage and these are isomerised to branched paraffins in a second stage. The resulting middle distillate is suitable for use in diesel fuels without particular specifications. Suitable starting materials are rape, sunflower, mustard, tall, palm, and soy oils and these are treated in the first stage with a NiMo or CoMo catalyst. The catalyst for the second stage is an isomerising mol. Sieve or preferably Pt, and Al2O3 or SiO2."

The abstract contains no hint that D1 relates in any way to the problem of low temperature performance of a diesel fuel. I do not believe that the abstract provides a reasonable basis for proceeding to obtain D1, and as a consequence it is not reasonable to consider that it would have been ascertained.
Would D25 have been ascertained, understood and regarded as relevant
D25 is not a patent document, and I take it from the evidence of Dr Davies that it is the type of document that would have been ascertained. While D25 discloses conversion of fats and oils to paraffinic compositions useful as diesel additives, it makes no mention of low temperature properties. As such, it is difficult to see why it would have been regarded as relevant to the problem.
I think it is only with hindsight that it can be seen that D25 is relevant. Consequently it is not necessary to further consider D25.
Conclusion
It has not been established that the claimed invention lacks inventive step in the light of either D1 or D25.
Section 40 matters
Clarity
BP raised questions of clarity in relation to the following terms: "animals", "aromates", "biological material originating from animals", "recycled fat of the food industry".
(i) "animals"
BP asked whether "animals" includes fish. On the face of it, there is an ambiguity in claim 1. In the claims as filed, animals and fish were separately specified. Amendments during examination resulted in the claims being restricted to animals. However, the body of the specification still contains original text that draws a clear distinction between animals and fish. For instance, on page 5:
"biological raw material originating from plants and/or animals and/or fish"
The specification contains sufficient basis to treat animals as different to fish. The ambiguity in claim 1 should be resolved by reference to the body of the specification, and animals do not include fish.
(ii) "aromates"
I previously stated that this term would be construed as "aromatics", and there is no ambiguity. It would be preferable if this spelling error were corrected.
(iii) "biological material originating from animals"
Claim 2 is appended to claim 1. It states:
The fuel composition according to claim 1, wherein the fuel composition comprises 0.1 – 80% by volume of a component or a mixture of components produced from biological raw material originating from animals.
BP stated that the term “biological material originating from animals” is broader than animal fats. Neste said that this is merely a reference to the animal fats. The language used is not consistent with that in claim 1, which creates an initial presumption that it is not the same as the animal fat. However, I believe that it is a strained construction to view the material originating from animals in claim 2 as referring to something other than the animal fats of claim 1.
(iv) "recycled fat of the food industry"
Claim 3 is appended to claim 1 or 2. It states:
The fuel composition according to claim 1 or 2, wherein the biological raw material is an animal-based fat, a fat contained in milk, a recycled fat of the food industry or a mixture of the above.
BP stated that the term "fat of the food industry" is not limited to animal fats. As stated in point (iii) above, this is a reasonable initial presumption. However, I believe it is a strained construction to view claim 3 as referring to something other than the animal fats of claim 1 (and claim 2).
I conclude that the claims are clear.
Sufficiency
Section 40(2) states that the specification must describe the invention fully. The High Court in Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd [2001] HCA 8, 207 CLR 1 explained that the key question is "will the disclosure enable the addressee of the specification to produce something within each claim without new inventions or additions or prolonged study of matters presenting initial difficulty". In essence BPs argument is that the specification does not explain how to process animal fats, so there is a lack of sufficiency.
Dr Davies declared (at page 11) that:
"different types of feedstock have markedly different properties and require different processing techniques"
While it is reasonable to expect that different processing would be required, it seems that Dr Davies understands this and discusses at length those differences. It seems reasonable that a person would understand how to hydrogenate and isomerise animal fats without the need for detailed instructions.
Best method
Section 40(2) states that the specification must describe the best method known to the applicant. BP stated that the specification does not explain the composition of the animal fats that are hydrogenated in the examples. Clearly the composition of the fats will control the nature of the ultimate product. Neste stated that there is no evidence that the specification does not disclose the best information known to the applicant as to how to carry out the invention. However, the specification omits to identify the fat that is used as the starting material, so the specification does not contain a complete best method.
Fair basis
Section 40(3) states that the claims must be fairly based on the body of the specification. The High Court in Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [2004] HCA 58, 217 CLR 274 stated that this is satisfied if there is a real and reasonably clear disclosure in the body of the specification of what is claimed.
BP argued that claim 1 lacks fair basis as there is no basis for claiming the range of 0.1 to 99% of the component from biological origin. The written submissions state that "no description is provided which would indicate that a useable fuel composition is produced at the minimum and maximum of this range".
The specification clearly asserts that the invention is this broad range. I believe that there is a real and reasonable disclosure of this broad range. BP’s point may be more that there is no demonstrated utility, but this has not been demonstrated.
It was also suggested that claim 1 lacks fair basis as there is no basis for claiming the range 0 to 20% of the component containing oxygen. Again, the specification clearly asserts that the invention is this range. I believe that there is a real and reasonable disclosure of this range.
Conclusion
There is a failure to provide a best method in that the nature of the fat used as the starting material is not specified.
Manner of manufacture
It was argued that the application is not a manner of manufacture because there is no invention on the face of the specification. BP argued that the face of the specification incorporates D1, and that there is a lack of invention in the light of D1.
It is true that the specification refers to D1, and states that it describes a process of hydrogenating vegetable oil, and then isomerising. BP said that it was known that the chain length of the fatty acids in animal fats overlap with that of vegetable oils. I accept that this is also true. The key point is stated in the written submissions as:
"Following D1 using animal fats would produce a middle distillate with a high cetane number and lowered turbidity point"
While this is true, my difficulty is that on the face of the specification I can find no reason why a person would have used animal fats in the process of D1. In this situation I am not satisfied that the specification does not relate to a manner of manufacture.
Further evidence
It is necessary to consider the nature and significance of any potential further evidence. In this case the further evidence relates to the ground of inventive step. I have already found that the citations would not have been ascertained, understood and regarded as relevant. Consequently, the further evidence would not be significant in the opposition. I can see no justification for allowing further evidence that would be of no significance.
Conclusion
The opposition succeeds on the ground of non-compliance with section 40. I will allow two months from the date of this decision to propose amendments.
Costs
It is normal for costs to follow the event. However, in the present case the opposition has succeeded only the ground of section 40, and failed on the grounds of novelty and inventive step. In this situation I consider that BP has been successful in only a very small part of their case. I consider that it is more appropriate to make no award of costs.
Dr S.D.Barker
Delegate of the Commissioner of Patents

Feed	Vegetable fat	Animal fat
Reaction	Example 4 from SE 9700149	Hydrotreated and Isomerized
Density 15 C	ENISCO 12185	kg/m3	770	776
Cloud Point	ASTM D5771	° C	-12	-35
CFPP	EN 116 Ann	° C	-11	-34
S content	ASTM D5453	mg/kg	0	<1
Cetane number	NM 353	>74	78