Bradken Resources Pty Ltd v Lynx Engineering Consultants Pty Ltd
[2012] FCA 944
•31 August 2012
FEDERAL COURT OF AUSTRALIA
Bradken Resources Pty Ltd v Lynx Engineering Consultants Pty Ltd [2012]
FCA 944
Citation: Bradken Resources Pty Ltd v Lynx Engineering Consultants Pty Ltd [2012] FCA 944 Parties: BRADKEN RESOURCES PTY LIMITED (ACN 098 300 988) v LYNX ENGINEERING CONSULTANTS PTY LIMITED (ACN 059 949 469) File numbers: NSD 439 of 2007
WAD 212 of 2009Judge: MCKERRACHER J Date of judgment: 31 August 2012 Catchwords: PATENTS – two appeals from decisions of delegate of Commissioner of Patents – opposition to grant of patent for bulk material transport container on multiple grounds – consideration of nature of appeals as hearings de novo
PATENTS – combination patent – novelty – whether invention was disclosed in prior art – application of ‘reverse infringement’ test – whether invention involved an inventive step – whether the combination of integers would have been an obvious solution to a person skilled in the art in light of common general knowledge – consideration of how a person skilled in the art would have interpreted and understood the prior art – time at which prior art is to be construed
PATENTS – disputed priority date – whether there was a ‘real and reasonably clear disclosure’ in the provisional specification – whether secret use before the priority date – whether use by inventor for reasonable trial and experiment only
EVIDENCE – consideration of admissibility and weight to be given to expert evidence where the expert witnesses are not independent
Legislation: Evidence Act 1995 (Cth) ss 76(1), 79, 80, 135(c)
Patents Act 1990 (Cth) ss 7, 9, 18, 40, 43, 59, 60
Patents Regulations 1991 (Cth) r 3.12(1)(b), r 5.9A, r 5.4Cases cited: Airsense Technology Ltd v Vision Systems Ltd (2007) 73 IPR 65
Aktiebolaget Hassle v Alphapharm Pty Ltd (2002) 212 CLR 411
Andrew Master Hones Ltd v Cruikshank and Fairweather [1981] 98 RPC 389
Apotex Pty Ltd v Sanofi-Aventis (2009) 82 IPR 416
Arrow Pharmaceuticals Ltd v Merck & Co Inc (2004) 63 IPR 85
Aspirating IP Ltd v Vision Systems Ltd (2010) 88 IPR 52
Austoft Industries Ltd v Cameco Industries Inc (No 2) (1995) 33 IPR 251
Azuko Pty Ltd v Old Digger Pty Ltd (2001) 52 IPR 75
Bradken Resources Pty Ltd v Lynx Engineering Consultants Pty Ltd (2010) 187 FCR 476
Bramah v Hardcastle (1789) 1 Carp Pat Cas 168
Britain v Hirsch [1888] 5 RPC 226
British Celanese Ltd v Courtaulds Ltd (1935) 52 RPC 171
Catnic Components Ltd v Hill & Smith Ltd [1982] 99 RPC 183
CCOM Pty Ltd v Jiejing Pty Ltd (1994) 51 FCR 260
Cincinnati Grinders Inc v BSA Tools Ltd [1931] 48 RPC 33
Costa v GR & IE Daking Pty Ltd (1994) 29 IPR 241
Dunlop Holdings Ltd's Application, Re [1979] 96 RPC 523EI Dupont de Nemours & Co v Imperial Chemical Industries plc (2002) 54 IPR 304
F Hoffman-La Roche AG v New England Biolabs Inc (2000) 99 FCR 56
Flexible Steel Lacing Co v Beltreco Ltd (2000) 49 IPR 331
Fomento Industrial SA v Mentmore Manufacturing Co Ltd [1956] 73 RPC 87
Gambro Pty Ltd v Fresenius Medical Care South East Asia Pty Ltd (2004) 61 IPR 442
General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd [1972] 89 RPC 457
Grove Hill Pty Ltd v Great Western Corporation Pty Ltd (2002) 55 IPR 257
H Lundbeck A/S v Alphapharm Pty Ltd (2009) 177 FCR 151
Hudson, Scott & Sons Ltd v Barringer Wallis & Manners Ltd [1906] 23 RPC 79
Humpherson v Syer [1887] 4 RPC 407
ICI Chemicals & Polymers Ltd v Lubrizol Corporation Inc (1999) 45 IPR 577
ICI Chemicals & Polymers Ltd v The Lubrizol Corporation Inc (2000) 106 FCR 214
Iluka Midwest Ltd v Technological Resources Pty Ltd (2002) 116 FCR 218
Innovative Agriculture Products Pty Ltd v Cranshaw (1996) 35 IPR 643
International Paint Company Ltd's Application [1982] 99 RPC 247
JMVB Enterprises Pty Ltd v Camoflag Pty Ltd (2005) 67 IPR 68
Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd (2001) 207 CLR 1
Lektophone Corporation v SG Brown Ltd [1929] 46 RPC 203
Leonardis v Sartas No 1 Pty Ltd (1996) 67 FCR 126
Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (2004) 217 CLR 274
Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (No 2) (2007) 235 CLR 173
Longworth v Emerton (1951) 83 CLR 539
Martin v Scribal Pty Ltd (1954) 92 CLR 17Melbourne v Terry Fluid Controls Pty Ltd (1993) 26 IPR 292
Merck & Co Inc v Arrow Pharmaceuticals Ltd (2006) 154 FCR 31
Meyers Taylor Pty Ltd v Vicarr Industries Ltd (1977) 137 CLR 228
Minnesota Mining & Manufacturing Co v Tyco Electronics Pty Ltd (2002) 56 IPR 248
Minnesota Mining and Manufacturing Company v Beiersdorf (Australia) Ltd (1980) 144 CLR 253
New England Biolabs Inc v F Hoffman-La Roche AG (2004) 141 FCR 1
Newall & Elliot & Glass, In re (1858) 4 CBNS 269
Nicaro Holdings Pty Ltd v Martin Engineering Co (1990) 16 IPR 545
PAC Mining Pty Ltd Pty Ltd v Esco Corporation (2009) 80 IPR 1Perrard Engineering Ltd (Hubbard’s) Application [1976] 93 RPC 363
Populin v HB Nominees Pty Ltd (1982) 41 ALR 471
Prestige Group (Australia) Pty Ltd v Dart Industries Inc (1990) 26 FCR 197
R D Werner & Co Inc v Bailey Aluminium Products Pty Ltd (1989) 25 FCR 565
Ramset Fasteners (Aust) Pty Ltd v Advanced Building Systems Pty Ltd (1999) 44 IPR 481
Termite Tite (NZ) No 2 Ltd v Term-Seal (Aust) Pty Ltd (2007) 74 IPR 16
Vax Appliances Ltd v Hoover plc [1991] 18 FSR 307
Welch Perrin & Co Pty Ltd v Worrel (1961) 106 CLR 588
The Wellcome Foundation Ltd v VR Laboratories Pty Ltd (1981) 148 CLR 262
Wheatley's Patent Application, Re (1984) 2 IPR 450
Willmann v Petersen (1904) 2 CLR 1
WL Gore and Associates Inc v Kimal Scientific Products Ltd [1988] 105 RPC 137
Woolworths Ltd v WB Davis & Son Ltd Inc (1942) 16 ALJ 57Date of hearing: 27 February 2012-2 March 2012, 6-7 March 2012 Date of last submissions: 22 March 2012 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 369 Counsel for the Applicant/Cross-Respondent: SCG Burley SC with ADB Fox Solicitor for the Applicant/Cross-Respondent: Griffith Hack Lawyers Counsel for the Respondent/Cross-Appellant: JJ Garnsey QC with RJL McCormack Solicitor for the Respondent/Cross-Appellant: Karp Steedman Ross-Adjie
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
NSD 439 of 2007
ON APPEAL AND CROSS-APPEAL FROM A DELEGATE OF THE COMMISSIONER OF PATENTS
BETWEEN: BRADKEN RESOURCES PTY LIMITED (ACN 098 300 988)
Applicant/Cross-Respondent
AND: LYNX ENGINEERING CONSULTANTS PTY LIMITED (ACN 059 949 469)
Respondent/Cross-Appellant
JUDGE:
MCKERRACHER J
DATE OF ORDER:
31 AUGUST 2012
WHERE MADE:
PERTH
THE COURT ORDERS THAT:
1.The respondent/cross-appellant file any submissions as to the appropriate disposition of the appeal/cross-appeal and costs within 21 days.
2.The applicant/cross-respondent file any submissions in response within a further 21 days.
3.The respondent/cross-appellant file any submissions in reply within 7 days.
4.Any further orders in relation to the matters the subject of orders 1, 2 and 3 be dealt with on the papers unless otherwise ordered.
5.The time for the institution of any appeal will not run until final orders disposing of the appeal/cross-appeal and costs are made.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
WAD 212 of 2009
ON APPEAL AND CROSS-APPEAL FROM A DELEGATE OF THE COMMISSIONER OF PATENTS
BETWEEN: BRADKEN RESOURCES PTY LIMITED (ACN 098 300 988)
Applicant/Cross-Respondent
AND: LYNX ENGINEERING CONSULTANTS PTY LIMITED (ACN 059 949 469)
Respondent/Cross-Appellant
JUDGE:
MCKERRACHER J
DATE OF ORDER:
31 AUGUST 2012
WHERE MADE:
PERTH
THE COURT ORDERS THAT:
1.The respondent/cross-appellant file any submissions as to the appropriate disposition of the appeal/cross-appeal and costs within 21 days.
2.The applicant/cross-respondent file any submissions in response within a further 21 days.
3.The respondent/cross-appellant file any submissions in reply within 7 days.
4.Any further orders in relation to the matters the subject of orders 1, 2 and 3 be dealt with on the papers unless otherwise ordered.
5.The time for the institution of any appeal will not run until final orders disposing of the appeal/cross-appeal and costs are made.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
NSD 439 of 2007
ON APPEAL AND CROSS-APPEAL FROM A DELEGATE OF THE COMMISSIONER OF PATENTS
BETWEEN: BRADKEN RESOURCES PTY LIMITED (ACN 098 300 988)
Applicant/Cross-RespondentAND: LYNX ENGINEERING CONSULTANTS PTY LIMITED (ACN 059 949 469)
Respondent/Cross-AppellantIN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
WAD 212 of 2009
ON APPEAL AND CROSS-APPEAL FROM A DELEGATE OF THE COMMISSIONER OF PATENTS
BETWEEN: BRADKEN RESOURCES PTY LIMITED (ACN 098 300 988)
Applicant/Cross-Respondent
AND: LYNX ENGINEERING CONSULTANTS PTY LIMITED (ACN 059 949 469)
Respondent/Cross-Appellant
JUDGE:
MCKERRACHER J
DATE:
31 AUGUST 2012
PLACE:
PERTH
REASONS FOR JUDGMENT
TABLE OF CONTENTS
1........ . INTRODUCTION........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......
[1]
1.1...... The nature of the contest........ ........ ........ ........ ........ ........ ........ ........ .......
[1]
1.2...... The avenue to this judgment........ ........ ........ ........ ........ ........ ........ ........ .
[6]
2........ . DICTIONARY........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...
[16]
3........ . AN OVERVIEW OF THE ISSUES........ ........ ........ ........ ........ ........ ........ ........ .
[17]
3.1...... Substantive Issues........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..
[17]
3.2...... Some preliminary matters........ ........ ........ ........ ........ ........ ........ ........ .....
[22]
3.2.1... Competency of the Second Appeal........ ........ ........ ........ ........ ......
[22]
3.2.2... Fresh grounds........ ........ ........ ........ ........ ........ ........ ........ ........ ......
[23]
3.2.3... Onus and standard of proof........ ........ ........ ........ ........ ........ ........
[25]
4........ . THE STATUTORY FRAMEWORK........ ........ ........ ........ ........ ........ ........ .......
[27]
5........ . THE APPROACH TO PATENT CONSTRUCTION........ ........ ........ ........ ....
[28]
6........ . THE CONTENT OF THIS PATENT........ ........ ........ ........ ........ ........ ........ ......
[30]
6.1...... The Abstract........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...
[30]
6.2...... The Lynx Complete Specification........ ........ ........ ........ ........ ........ ........ .
[31]
6.3...... Specific claims........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........
[36]
6.3.1... A combination of integers........ ........ ........ ........ ........ ........ ........ ...
[45]
6.3.2... ‘Integrally formed’........ ........ ........ ........ ........ ........ ........ ........ ......
[46]
6.3.3... Avoiding ‘hang up’ and the angle of repose........ ........ ........ ......
[49]
7........ . THE ORAL EVIDENCE........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...
[51]
7.1...... Objections to the evidence........ ........ ........ ........ ........ ........ ........ ........ .....
[51]
7.2...... The competing expert evidence........ ........ ........ ........ ........ ........ ........ ....
[54]
7.3...... The key witnesses in some detail........ ........ ........ ........ ........ ........ ........ ...
[64]
7.3.1... Mr Anic........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........
[65]
7.3.2... Dr Mazur........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......
[100]
7.3.3... Mr Kilian........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......
[200]
7.4...... Additional witnesses........ ........ ........ ........ ........ ........ ........ ........ ........ .......
[203]
7.4.1... Mr Ian Malouf........ ........ ........ ........ ........ ........ ........ ........ ........ .....
[203]
7.4.2... Mr Derek Owen........ ........ ........ ........ ........ ........ ........ ........ ........ ...
[204]
8........ . DOES THE LYNX COMPLETE SPECIFICATION LACK NOVELTY?.
[206]
8.1...... Bradken’s argument as to the key differences........ ........ ........ ........ ....
[215]
8.2...... Construction of Gilpin in 1936........ ........ ........ ........ ........ ........ ........ ......
[219]
8.3...... The F-type Coupler........ ........ ........ ........ ........ ........ ........ ........ ........ ........
[223]
8.4...... Conclusion on novelty – the Lynx Complete Specification was not anticipated........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......
[227]
9........ . WAS THERE LACK OF AN INVENTIVE STEP – WAS IT OBVIOUS?.
[253]
10....... WHAT IS THE CORRECT PRIORITY DATE?........ ........ ........ ........ ........ ...
[295]
11....... IF THE CORRECT PRIORITY DATE WAS NOT 30 MARCH 1998 BUT 30 MARCH 1999, WAS THERE A SECRET USE OF THE INVENTION BEFORE THE DEFERRED PRIORITY DATE?........ ........ ........ ........ ........ ..
[313]
12....... CONCLUSION........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...
[367]
ANNEXURE A – LYNX COMPLETE SPECIFICATION........ ........ ........ ........ .......
[370]
ANNEXURE B – GILPIN........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....
[371]
ANNEXURE C – RULINGS BY CATEGORIES OF OBJECTION........ ........ .......
[372]
1. INTRODUCTION
1.1 The nature of the contest
In the north-west of Australia there are valuable and plentiful mineral resources. The value of them depends in part on the efficiency with which they can be transported from the mine site to the port. One such mineral is iron ore which is railed from the interior to coastal ports.
Over ten years ago, the respondent (Lynx) designed bulk material containers capable of being used as rail wagons. They were intended to be a significant improvement on then available wagons for carrying iron ore in such locations. The Lynx containers were patented. The expectation was that they would be lighter, more aerodynamic, stronger, cheaper to manufacture and able to carry heavier loads while still operating within the same rail infrastructure.
The Lynx bulk material containers which I will refer to as wagons are by no means confined in their use to the mining industry. However that usage has been the main topic of focus in the course of this proceeding. The applicant (Bradken) has challenged the entitlement of Lynx to have its ‘invention’ patented. Bradken says in short that there is nothing new in the Lynx wagon such that there was a lack of novelty and no inventive step entitling a patent. In addition, Bradken contends that Lynx is not entitled to have the standard twenty year patent conferring upon it a statutory monopoly in respect of this invention because it made secret commercial use of the invention before the priority date. This contention depends on a further argument for Bradken that the true priority date was a year later than the date on which Lynx initially obtained its provisional patent.
As should be apparent from the analysis which follows, I have concluded that each party, as might be expected, has somewhat overstated aspects of its case. The conclusion I have reached is that Bradken’s attacks based on lack of novelty and lack of an inventive step cannot succeed but equally Lynx’s contention that all of the aspects of the final specification were apparent from the Lynx Provisional Specification, filed on 30 March 1998, suffers from the same defects of attempting to read too much into the documents upon which reliance is placed.
That gives rise to the challenging question which is whether or not the secret use argument advanced by Bradken can succeed. There is also a preliminary question as to whether it can be advanced. It is a defence to a secret use argument if the nature of the use is essentially experimental only. Although this aspect of the case is, in my view, more finely balanced, I consider that the defence to ‘secret use’ has been established.
1.2 The avenue to this judgment
There are two proceedings heard together. They are two appeals from decisions of the Delegate of the Commissioner of Patents (the Delegate) made on 13 March 2007 and 13 November 2009 in relation to an opposition proceeding conducted pursuant to s 59 of the Patents Act 1990 (Cth) (Patents Act). It is common ground the appeals are hearings de novo, being the first judicial determination of the proceedings: New England Biolabs Inc v F Hoffman-La Roche AG (2004) 141 FCR 1 (at [44]). However, as will be seen, there is a dispute between the parties as to what a hearing de novo means in this context.
As noted in Bradken Resources Pty Ltd v Lynx Engineering Consultants Pty Ltd (2010) 187 FCR 476 (Bradken No 1), the Lynx Patent Application No. 749848 is for the invention entitled ‘Side Reinforced Bulk Material Transport Container’ (Patent Application). The Patent Application was filed on 30 March 1999. It claims an earlier priority date of 30 March 1998. This was the filing date of the Provisional Application.
The Patent Application became open to public inspection on 16 December 1999, and was accepted by the Commissioner of Patents on 4 July 2002 (the Lynx Complete Specification).
The first appeal (Federal Court proceeding No. NSD 439 of 2007) (First Appeal) concerns the form of the Patent Application as at the date of filing (30 March 1999) (Original Application) and the decision of the Delegate made on 13 March 2007 to disallow some, but allow other, claims of the Original Application to proceed to grant (First Decision).
After the First Decision, Lynx made amendments to the Original Application. Those amendments were also opposed but subsequently allowed by a Delegate (Amendment Decision). The Patent Application reverted to the Delegate for determination of whether the application as amended (Amended Application) overcame relevant grounds of objection to the claims (Second Decision). The second appeal (Federal Court proceeding WAD 212 of 2009) (Second Appeal) concerns the Delegate’s decision dated 13 November 2009 to allow the Patent Application as amended to proceed to grant.
Bradken has at all times since the Amendment Decision contended that it is only the claims of the Amended Application (Amended Claims) which are relevant and properly before the Court. This is because the effect of the Delegate’s allowance of the amendment in the Amendment Decision is that ‘the amendment is taken to have been made’: s 104(6). The claims of the Original Application (Original Claims) no longer form part of the application. This point was raised before the Court by notice of motion, but not required to be determined in Bradken No 1.
At the commencement of this hearing, Lynx informed the Court that it did not pursue the grant of the Patent Application in the form of the Original Claims. The hearing was conducted on the basis that only the Amended Application (including the Amended Claims) was to be the subject of determination in this proceeding (subject, Bradken says, to its costs thrown away).
At the commencement of the hearing, Bradken was granted leave to file a Further Amended Consolidated Points of Claim (FACPC). The FACPC substantially reduced certain issues. On 28 February 2012, Bradken was also granted leave to file its Second Further Amended Consolidated Points of Claim (SFACPC), which further narrowed the issues in this Appeal. The question of costs in relation to the filing of Bradken’s FACPC and SFACPC has been reserved, although I indicated that I was favourably disposed to Lynx’s contention that it should have its costs thrown away by reason of the amendment.
Lynx has not formally pleaded in response to the SFACPC. However the final hearing was conducted on the basis that Lynx opposed the matters and contentions advanced in the SFACPC.
Further, I required the parties to commit to a list of agreed issues from the pleadings, to which oral and written argument on the evidence and the law was to be based. Their assistance in doing so has been valuable. Written submissions were extensive. I have adopted substantial parts of them at times. I have identified the party advancing any significant submission without repeating such attribution on every occasion when material is uncontentious.
2. DICTIONARY
For ease of reference, the following dictionary is provided for terms used throughout these reasons:
1946 Cyclopedia 1946 Car Builders’ Cyclopedia of American Practice (17th ed, Association of American Railroads – Mechanical Division, Simmons-Boardman Publishing Corporation, New York, USA) 1984 Cyclopedia The Car and Locomotive Cyclopedia of American Practices (5th ed, 1989) Amended Application Lynx’s Patent Application following the Delegate of the Commissioner of Patents’ decision on 18 August 2009 which permitted Lynx to make amendments to its Original Application Amended Claims The claims of the Lynx Patent Application following the decision of the Delegate of the Commissioner of Patents on 18 August 2009 Amendment Decision Decision of the Delegate of the Commissioner of Patents made on 18 August 2009 which permitted Lynx to make amendments to its Original Application BHP BHP Billiton Iron Ore Pty Ltd Bradken The applicant/cross-respondent in both appeals Bradken No 1 Bradken Resources Pty Ltd v Lynx Engineering Consultants Pty Ltd (2010) 187 FCR 476 Conformance Report A report prepared by Lynx for BHP in March 1999 entitled ‘Golynx Car Body Conformance Documentation for BHP Iron Ore’ Delegate Delegate of the Commissioner of Patents Dial-A-Dump Dial-A-Dump Pty Ltd Evidence Act Evidence Act 1995 (Cth) FACPC Bradken’s Further Amended Consolidated Points of Claim filed in Court on 27 February 2012 First Appeal Federal Court proceeding NSD 439 of 2007 First Decision The Delegate’s decision of 13 March 2007 to disallow some, but allow other, claims of the Original Application to proceed to grant Fyansford Quarry Railway article ‘The Fyansford Quarry Railway’ by WA Pearce in Industrial Railway Record (No 56, October 1974, Industrial Railway Society) Gilpin United States Patent Specification 2,054,784 and entitled ‘Railway car structure’ by Mr Garth G Gilpin, having a priority date of 8 June 1935 and published on 15 September 1936 Golynx Wagons The prototype wagons designed by Lynx and manufactured by Goninan for testing at BHP’s facilities in Port Hedland Goninan A. Goninan & Co Ltd Lynx The respondent/cross-appellant in both appeals Lynx Complete Specification Complete Specification AU199931293 (Patent No. 749848) filed on 27 August 2007 incorporating amendments made on 11 May 2007 and 27 August 2007 Original Application The form of Lynx’s Patent Application No. 749848 for the invention entitled ‘Side Reinforced Bulk Material Transport Container’ as at the date of filing of 30 March 1999 Original Claims The claims in the Original Application as at 30 March 1999 Original Specification The specification in the Original Application as at 30 March 1999 Patents Act Patents Act 1990 (Cth) Patent Application Lynx’s Patent’s Application No. 749848 for the invention entitled ‘Side Reinforced Bulk Material Transport Container’ field on 30 March 1999 Patents Regulations Patents Regulations 1991 (Cth) Provisional Application Application PP2677 for a patent for ‘Bulk Material Transport Containers’ by Lynx filed on 30 March 1998 Lynx Provisional Specification Provisional Specification PP2677 filed on 30 March 1998 by Lynx for ‘Bulk Material Transport Containers’ R and D research and development Second Appeal Federal Court proceeding WAD 212 of 2009 Second Decision Decision of the Delegate made on 13 November 2009 to allow the Patent Application as amended to proceed to grant SFACPC Bradken’s Second Further Amended Consolidated Points of Claim filed in Court on 28 February 2012 Trough Train An aluminium hopper carriage developed for transporting coal. It is discussed in an article entitled ‘The Trough Train’, Railnews (Issue 399, February 1997, Pasadena, California, USA) USFTA US Free Trade Agreement Implementation Act 2004 3. AN OVERVIEW OF THE ISSUES
3.1 Substantive Issues
As noted in the Introduction, Bradken now relies on the following grounds of opposition to the grant of the Amended Application:
(a)lack of novelty;
(b)lack of inventive step; and
(c)secret use.
The lack of novelty arises because what the inventors assert was new was said to be disclosed to the public before the earliest priority date of the Patent Application (30 March 1998). Prior publication of a claim may be in a document anywhere in the world. If the information, whether in documentary form or in the form of the invention being used, has been communicated to a single member of the public ‘who [is] free in law or equity to use it as he or she pleases’, that sufficies to making it available to the public: Humpherson v Syer [1887] 4 RPC 407 per Bowen LJ (at 413); see also Merck & Co Inc v Arrow Pharmaceuticals Ltd (2006) 154 FCR 31 per Heerey, Kiefel and Dowsett JJ (at [98]) affirming Arrow Pharmaceuticals Ltd v Merck & Co Inc (2004) 63 IPR 85.
Bradken now relies on one prior publication only: United States Patent Specification 2,054,784. It is entitled ‘Railway car structure’, written by Mr Garth G Gilpin and has a priority date of 8 June 1935 (Gilpin). Gilpin was published on 15 September 1936.
A complete copy of Gilpin (taken from Court Book, i.e., CB vol 3 Part D, pp 613-618) appears at Annexure B to these reasons.
Consideration of each of the grounds of invalidity necessarily requires an understanding of the invention as described and claimed in the Patent Application.
3.2 Some preliminary matters
3.2.1Competency of the Second Appeal
Lynx originally objected to the competency of the second appeal but did not, as I apprehend it, by the position it adopted at the hearing, appear to maintain that objection. Nevertheless, for completeness, I accept Bradken’s submission that the appeal from the Second Decision is competent for the reasons it advances, namely:
(a)Lynx contends in its Notice of Objection to Competency that the Second Appeal is not an appeal from a decision of the Commissioner within s 60(4) of the Patents Act. Nonetheless the Delegate wrote to the parties on 29 September 2009 confirming that the Second Decision was one to which ss 59 and 60 applied.
(b)I consider that a decision such as the First Decision is an ‘interim decision’ which does not finally dispose of an opposition proceeding. If amendments under s 104 are sought and subsequently allowed to a patent specification following a decision, then the opposition to the grant of the patent application resumes and is ‘finally determined’: Airsense Technology Ltd v Vision Systems Ltd (2007) 73 IPR 65 (at [5]).
(c)At the resumed hearing, the Delegate is required to address those issues arising out of specific deficiencies found in the earlier decision as well as anything consequential upon the amendments to correct those deficiencies. It is the decision following such a resumed hearing which is the ‘final hearing’ in relation to the opposition proceeding. A ‘final decision’ (such as the Second Decision) is one which is separately and properly appellable under s 60(4) of the Patents Act: eg. Iluka Midwest Ltd v Technological Resources Pty Ltd (2002) 116 FCR 218 (at [30]-[32]). It is a decision which is equally appellable under that section as the First Decision (the ‘interim decision’) because it has not sought to re-decide a matter previously determined by the Delegate.
(d)The Second Decision is therefore appellable under s 60(4) of the Patents Act and properly instituted under s 60(4) of the Patents Act.
3.2.2Fresh grounds
Lynx also contends that certain particulars of grounds of appeal (notably, Gilpin as relevant prior art for novelty purposes and the ground of secret use) should not be considered by the Court because they were not argued before the Delegate. Bradken submits that this contention fails properly to identify the subject matter of the appeal, which is the opposition to the grant of the Patent Application pursuant to the available grounds under s 59 of the Patents Act. The Appeal is the first judicial determination of that subject matter and the Court, hearing the matter de novo, is confined to in the grounds within s 59 upon which the matter is argued, or on the evidence which is adduced.
I prefer Bradken’s submissions on Gilpin for the following reasons. (I will deal with secret use separately.) An ‘appeal’ under s 60(4) of the Patents Act, is a hearing de novo. The ‘subject matter’ of the appeal is whether the Patent Application should proceed to grant within the requirements of the Patents Act (s 59) and the Patents Regulations 1991 (Cth) (Patents Regulations). In New England Biolabs the Full Court (Kiefel, Allsop and Crennan JJ) said (at [49]-[50]):
49 The subject matter of any appeal against a decision of the Commissioner is limited by the Act and Regulations as is also the decision or function that was previously before the Commissioner (the “decision” against which the appeal is sought). This is not to give any restricted or restrictive interpretation to otherwise ample powers in s 106 of the Act or ss 19, 22 and 23 of the Federal Court of Australia Act: … Rather, it is to recognise that the provision for an appeal to the Court against a decision of an administrator in this statutory context is to confer judicial power on the Court to hear and decide the same subject matter as was before the administrator, such subject matter having the same boundaries and limits as existed under the statute before the administrator. One boundary of the subject matter for decision was that the opponent (the appellant) was restricted to opposing amendments sought under s 104(1) to grounds found in s 102 …
50 … That the Court relies on evidence different from the material before the Commissioner is only to be expected as a consequence of the judicial power being exercised. ... The raising of fresh grounds (within the statutory limits of the subject matter of the decision) merely reflects the original nature of the jurisdiction in the Court and the fact that the subject matter is being litigated for the first time in the exercise of judicial power. … (emphasis added and citations omitted)
3.2.3Onus and standard of proof
The onus of proof borne by Bradken is the same as that in the Opposition before the Delegate, namely, to establish that it is clear that the patent, if granted, would not be valid: F Hoffman-La Roche AG v New England Biolabs Inc (2000) 99 FCR 56 (at [67]) per Emmett J:
The language employed in the cases to which I have referred suggests that it should appear clear to the Court that no patent granted in respect of the specification would be valid. I consider that, before the Court would uphold an opposition to the grant of a patent, the Court should be clearly satisfied that the patent, if granted, would not be valid. … (emphasis added)
The Court must be satisfied to the civil standard, on the balance of probabilities: Re Dunlop Holdings Ltd's Application [1979] 96 RPC 523 (at 543). Accordingly, the primary facts are to be established on the balance of probabilities: Aspirating IP Ltd v Vision Systems Ltd (2010) 88 IPR 52 (at [35]). Lynx makes reference in its submissions to the ‘practically certain’ test but this test is directed to acceptance of a Patent Application in contrast to the present case which concerns a patent opposition. That distinction was also emphasised in New England Biolabs.
4. THE STATUTORY FRAMEWORK
The Patents Act has been amended several times since 1990, particularly at 1 April 2002. However, the amendments as set out in the Patents Amendment Act 2001 (Cth) do not apply to complete applications for patents filed before 1 April 2002 (being the date of proclamation): see Sch 1, Pt 1, item 13 of the Patents Amendment Act 2001 (Cth). The version applicable to this appeal is that which stood as at the date of filing of the Complete Specification for the Original Application (i.e. 30 March 1999). The key sections of the Patents Act relevant to consideration of the arguments on the appeals are ss 7, 9, 18, 40, 43, 59, and 60. The sections were in the same form as at the date of filing the Lynx Provisional Specification (30 March 1998) and were and are, relevantly, as follows:
7 Novelty and inventive step
(1)For the purposes of this Act, an invention is to be taken to be novel when compared with the prior art base unless it is not novel in the light of any one of the following kinds of information, each of which must be considered separately:
(a)prior art information (other than that mentioned in paragraph (c)) made publicly available in a single document or through doing a single act;
(b)prior art information (other than that mentioned in paragraph (c)) made publicly available in 2 or more related documents, or through doing 2 or more related acts, if the relationship between the documents or acts is such that a person skilled in the relevant art in the patent area would treat them as a single source of that information;
(c)prior art information contained in a single specification of the kind mentioned in subparagraph (b)(ii) of the definition of prior art base in Schedule 1.
(2)For the purposes of this Act, an invention is to be taken to involve an inventive step when compared with the prior art base unless the invention would have been obvious to a person skilled in the relevant art in the light of the common general knowledge as it existed in the patent area before the priority date of the relevant claim, whether that knowledge is considered separately or together with either of the kinds of information mentioned in subsection (3), each of which must be considered separately.
(3)For the purposes of subsection (2), the kinds of information are:
(a)prior art information made publicly available in a single document or through doing a single act; and
(b)prior art information made publicly available in 2 or more related documents, or through doing 2 or more related acts, if the relationship between the documents or acts is such that a person skilled in the relevant art in the patent area would treat them as a single source of that information;
being information that the skilled person mentioned in subsection (2) could, before the priority date of the relevant claim, be reasonably expected to have ascertained, understood and regarded as relevant to work in the relevant art in the patent area. (emphasis added)
9 Secret use
For the purposes of this Act, the following acts are not to be taken to be secret use of an invention in the patent area:
(a)any use of the invention by or on behalf of, or with the authority of, the patentee or nominated person, or his or her predecessor in title to the invention, for the purpose of reasonable trial or experiment only;
…
(emphasis added)
18 Patentable inventions
(1)Subject to subsection (2), a patentable invention is an invention that, so far as claimed in any claim:
(a)is a manner of manufacture within the meaning of section 6 of the Statute of Monopolies; and
(b)when compared with the prior art base as it existed before the priority date of that claim:
(i)is novel; and
(ii)involves an inventive step; and
(c)is useful; and
(d)was not secretly used in the patent area before the priority date of that claim by, or on behalf of, or with the authority of, the patentee or nominated person or the patentee’s or nominated person’s predecessor in title to the invention.
...
(emphasis added)
40 Specifications
(1)A provisional specification must describe the invention.
(2)A complete specification must:
(a)describe the invention fully, including the best method known to the applicant of performing the invention; and
(b)where it relates to an application for a standard patent—end with a claim or claims defining the invention; and
…
(3)The claim or claims must be clear and succinct and fairly based on the matter described in the specification.
(4)The claim or claims must relate to one invention only.
59Opposition to grant of standard patent
The Minister or any other person may, in accordance with the regulations, oppose the grant of a standard patent on one or more of the following grounds, but on no other ground:
…
(b)that the invention is not a patentable invention because it does not comply with paragraph 18(1)(a) or (b);
…
60Hearing and decision by Commissioner
(1)Where the grant of a standard patent is opposed, the Commissioner must decide the case in accordance with the regulations.
(2)The Commissioner must give the applicant and the opponent a reasonable opportunity to be heard before deciding a case.
(3)The Commissioner may, in deciding a case, take into account any ground on which the grant of a standard patent may be opposed, whether relied upon by the opponent or not.
(4)The applicant, and any opponent, may appeal to the Federal Court against a decision of the Commissioner under this section.
Schedule 1 – Dictionary
Section 3 In this Act, unless the contrary ‘intention appears’:
Prior art base means:
(a)in relation to deciding whether an invention does or does not involve an inventive step:
(i)information in a document, being a document publicly available anywhere in the patent area; and
(ii)information made publicly available through doing an act anywhere in the patent area; and
(iii)where the invention is the subject of a standard patent or an application for a standard patent—information in a document publicly available outside the patent area; and
(b)in relation to deciding whether an invention is or is not novel:
(i)information of a kind mentioned in paragraph (a); and
(ii)information contained in a published specification filed in respect of a complete application where:
(A)if the information is, or were to be, the subject of a claim of the specification, the claim has, or would have, a priority date earlier than that of the claim under consideration; and
(B)the specification was published after the priority date of the claim under consideration; and
(C)the information was contained in the specification on its filing date and when it was published. (emphasis added)
5. THE APPROACH TO PATENT CONSTRUCTION
Both Bradken and Lynx rely on the High Court’s decision in Welch Perrin & Co Pty Ltd v Worrel (1961) 106 CLR 588 (at 609-610) from which it is established that:
(a)the main requirements for the specification are that it fully describes the invention and the manner in which it is to be performed;
(b)the specification shall end with a claim or claims, the function of which is to define the invention;
(c)the specification is to be construed in the light of the common knowledge in the art before the priority date;
(d)the specification is not a written instrument operating inter partes but a public instrument which must, if it is to be valid, define a monopoly in such a way that it is not reasonably capable of being misunderstood;
(e)the specification must be read as a whole, but is has several parts, which have different functions. It is not legitimate to narrow or expand the boundaries of a monopoly as fixed by the words of a claim by adding to those words glosses drawn from the other parts of the specification.
(f)similarly, if a claim is clear, it is not to be made obscure simply because obscurities can be found in particular sentences in other parts of the specification.
The parties are agreed that the test for construing the patent and the claims requires observance of the following principles:
(a)‘Provision for [a patent] is made in legislation permitting a special monopoly, and the English predecessor to the present standard patent, the issue of which is provided for in Pt VI of the Patent Act, was Letters Patent issued by the Crown. The granting of the modern standard patent is an activity not contractual but quasi-legislative in character’: Prestige Group (Australia) Pty Ltd v Dart Industries Inc (1990) 26 FCR 197 (at 211) per Gummow J.
(b)‘The complete specification must not be read in the abstract but in the light of common knowledge in the art before the priority date, bearing in mind that what is being construed is a public instrument which must, if it is to be valid, define a monopoly in such a way that it is not reasonably capable of being misunderstood … The essential features of the product or process for which it claims a monopoly are to be determined not as a matter of abstract uninformed construction but by a common sense assessment of what the words used convey in the context of the then-existing published knowledge’: Populin v HB Nominees Pty Ltd (1982) 41 ALR 471 per Bowen CJ, Deane and Ellicott JJ (citations omitted) (at 476).
(c)‘A patent is a public instrument which grants the right to protection of a defined monopoly, for the consideration of the disclosure of the invention to the general knowledge base of society. It is the need for balance between these symbiotic, yet competing interests which underscores the rules of patent construction’: Flexible Steel Lacing Co v Beltreco Ltd (2000) 49 IPR 331 per Hely J (at [70]).
(d)‘Plain language must be given its plain meaning, and clear words in a claim must not be tortured into an unnatural meaning by importing passages from the body of the specification’: Martin v Scribal Pty Ltd (1954) 92 CLR 17 per Taylor J (at 97).
6. THE CONTENT OF THIS PATENT
6.1 The Abstract
The Abstract to the patent reads:
A container for transporting bulk material including two side walls, two end walls, and a base; the side walls including a plurality of vertical reinforcing members spaced along the length of the side wall, wherein the side wall between at least one adjacent pair of the reinforcing members includes at least one internal ridge running therebetween.
6.2 The Lynx Complete Specification
To facilitate a convenient point of access, the Lynx Complete Specification in its entirety is annexed to these reasons at Annexure A (taken from CB vol 3, Part D, pp 528-553).
Breaking down its integers, the Lynx Complete Specification is entitled ‘Side reinforced bulk material transport container’. The abstract and the first line of the Lynx Complete Specification emphasise that the invention relates to ‘bulk transport containers’. Particular reference is made to containers used in road and rail transportation. It is clear, however, as Bradken correctly contends, that the invention is not limited to containers for any particular form of transportation.
There is also a ‘consistory clause’, which is a general description of what the invention is said to consist of: Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (2004) 217 CLR 274 (at [10]). The consistory clause (p 1 lines 20-25) reveals:
…the present invention provides a container for transporting bulk material including two side walls, two end walls and a base, wherein at least one said side wall includes at least one ridge running along said at least one side wall between said end walls, and wherein said ridge is integrally formed within said at least one side wall and the distance from which said ridge projects from said side wall is greater than the thickness of said side wall. (emphasis added)
The Lynx Complete Specification contains references to an embodiment (i.e. a non-limiting example) by reference to figures 2–8. Several aspects of the invention claimed in the claims are explained in more detail in the Lynx Complete Specification. The purpose of such a description is generally to comply with s 40(2) and (3) of the Patents Act by describing sufficiently what it is that the patentee says is the invention to enable a person skilled in the art to read it and ‘carry out’ the invention at the end of the term of the monopoly: Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd (2001) 207 CLR 1 (at [25]).
The following points are particularly identified in this description:
(a)detail is given about the integrally formed ridge to take into account the ‘angle of repose’ (emphasis added) of the bulk material to be transported during unloading (p 4 line 26 – p 5 line 30).
(b)detail is given of the extra reinforcing to the internal ridge that may be added (p 4 lines 19–25; figures 2a, 3a.
(c)the internal ridge is described to act as a ‘built-in longitudinal structural stiffener’ (p 6 lines 29 – p 7 line 2); the effect of this ridge is to add structural strength so that fewer ribs and welds are required with less stress concentration (p 9 lines 1-6).
6.3 Specific claims
The specific claims defining the invention, the subject of the Lynx Complete Specification, are set out in Annexure A to these reasons.
The Lynx Complete Specification consists of 26 claims. Claim 1 (reproduced and annotated below) is an independent claim. Claims 2–25 are dependent claims (excluding claim 23). The dependent claims all depend for some of their content on claim 1. In order to anticipate a dependent claim, a container must have present all of the features of claim 1 plus the additional feature of the particular dependent claim.
Claim 1 of the Amended Claims (broken into integers, for convenience) is:
(a)A container for transporting bulk material;
(b)for rotary or tipping unloading;
(c)the container including two side walls, two end walls, and a base;
(d)said side walls including a plurality of vertical reinforcing members spaced along the length of each said side wall;
(e)wherein a section of said side wall between at least one adjacent pair of said reinforcing members includes at least one internal ridge running therebetween;
(f)the said at least one internal ridge including a first wall portion angled towards an interior of said container;
(g)wherein the angle is in the direction of flow of the material during said rotary or tipping unloading;
(h)wherein said at least one internal ridge is integrally formed within said side wall; and
(i)said at least one internal ridge has a depth greater than the thickness of said side wall.
Bradken observes the following points:
(a)as noted previously, the claim is not limited to rail, air, sea or road containers;
(b)the claimed invention is for a container of no particular construction (for instance, the height, depth or length of the walls are not specified, nor are aspects of the shape determined, or the number of any vertical reinforcing ribs and so on);
(c)the claim contains no requirement that the resulting container be ‘aerodynamic’ or ‘light’ or ‘utilise fewer vertical ribs’ or carry more load than a conventional wagon. None of these are a necessary consequence of the invention as claimed;
(d)the only features identified in claim 1 that may be said to distinguish the container of the invention from that of the conventional container depicted in figure 1 (which is accepted as part of the common general knowledge) is the ‘internal ridge’ that is angled in the direction of flow of the unloading and which must be ‘integrally formed within the said side wall’ and have a ‘depth greater than the thickness of the side wall’.
Bradken argues that the claims of the Patent Application do little to confine the nature of the ‘internal ridge’ save to say that it should be ‘integrally formed’ within the side wall. Its purpose is not defined. There is no requirement that it have a structural effect on the wall. It can be of any length, so long as it is between an adjacent pair of reinforcing members (claim 1), and there is no upper or lower limitation on the number of ridges, except that there must be at least one.
Lynx says the features of the invention claimed in Claim 1 (upon which each of claims 2 to 22, 24 and 25 and the additional feature in each are cumulative and directly or indirectly dependent) are more appropriately set out as follows with three fewer integers:
Claim 1:
(a)A container for transporting bulk material and for rotary or tipping unloading
(b) The container including two side walls, two end walls, and a base
(c)Said side walls (a) including a plurality of vertical reinforcing members spaced along the length of each said side wall, (b) wherein a section of said side wall between at least one adjacent pair of said reinforcing members includes at least one internal ridge running there between
(d)The said at least one internal ridge including a first wall portion angled towards an interior of said container
(e)Wherein the angle is in the direction of flow of the material during said rotary tipping or unloading, and
(f)Wherein said at least one internal ridge is integrally formed within said side wall and said at least one internal ridge has a depth greater than the thickness of said side wall. (emphasis added)
It does not appear that a great deal turns simply on whether claim 1 is broken into 9 integers as Bradken does or 6 as Lynx does. However, Lynx does repeatedly stress that each integer must be seen in context of the others so that the combination of them is considered rather than viewing the various components on an isolated basis. It seems to me this submission is correct on the authorities but what impact, if any, that approach will have is another question. The claims for a combination patent are to be read and understood as forming part of the specification, which should be read as a whole: Welch Perrin (at 610) per Dixon CJ, Kitto and Windeyer JJ. In a combination patent, the most important function of the body of the specification is to show what are the mechanical means which, operating together, produce the result claimed and how they so operate: Welch Perrin (at 612).
In British Celanese Ltd v Courtaulds Ltd [1935] 52 RPC 171 Lord Tomlin said (at 193):
It is accepted as sound law that a mere placing side by side of old integers so that each performs its own proper function independently of any of the others is not a patentable combination, but that where the old integers when placed together have some working inter-relation producing a new or improved result then there is a patentable subject-matter in the idea of the working inter-relation brought about by the collocation of the integers.
In Willmann v Petersen (1904) 2 CLR 1 Griffith CJ said (at 21):
These cases in our opinion establish the following proposition … A combination of two or more known mechanical appliances the result of which is to effect a new purpose, or to effect an old purpose with greater efficiency or economy, may be the subject-matter of a patent, if it involves some substantial exercise of the inventive faculty …
6.3.1A combination of integers
On this topic, Lynx stresses that its patent discloses, teaches and claims an inventive combination. Bradken disagrees. Lynx submits that the individual integers have been caused to act on, or with, each other in such a way as to produce a new product. The Lynx Complete Specification draws together some known features, with new features (in particular in claim 1 the ‘internal ridge including a first wall portion angled towards an interior of said container wherein the angle is in the direction of flow of the material during said rotary tipping or unloading’), combining and co-operating together to produce an improved wagon. This is examined in greater detail below.
6.3.2‘Integrally formed’
To foreshadow one of the areas of debate, Lynx contends that ‘integrally formed’ in relation to the internal ridge of the Lynx Complete Specification means that the ridge is formed to be an integral part of the side wall and therefore part of the structure of the side wall and of the container, not just an optional or add-on strengthening member. The integrally formed ridge can be achieved by bending or pressing the plate into the required side wall silhouette, or by fabricating the ridge, for example, by welding individual plates to construct the side wall to achieve this silhouette.
Bradken, however, says that ‘integrally formed’ in a general engineering context means formed from a single piece of material.
Lynx contends there is no requirement in the Lynx Complete Specification that the ridge be formed from a single piece of material together with the wall. The Lynx Complete Specification is not limited to only one specific way of manufacture (various manufacturing technologies are available to achieve the same final result) and allows for structural and geometrical interpretation. Lynx says the term ‘integrally formed’ simply means that the ridge formed within the side wall becomes an integral part of it by providing not only a strengthening effect but also by providing a means of retaining bulk material inside the container. From this it follows that in some instances the side wall could be manufactured from a single piece of material, in which case the internal ridge will be formed from the same piece of material. In most cases this is not possible, because of various technological restraints or design requirements. For example, if the required width or length of the material for the wall sheet is not available, or if the equipment and technologies used in manufacturing cannot process the entire width of side wall sheet, then the wall sheet will need to be manufactured in sections and joined together during assembly. It may be that in other cases, design restrictions may require stronger material for the bottom portion of the side wall where the pressure exerted by the bulk material is higher. In this case, material of different thicknesses and/or material with different mechanical properties would need to be used for different parts of the side wall.
6.3.3Avoiding ‘hang up’ and the angle of repose
Bradken contends that the question of ‘hang up’ is relevant to all of the claims of the Patent Application. ‘Hang up’ refers to the proportion of bulk material remaining in a container after unloading when the material is caught on internal construction and/or strengthening members. This was explained in the first affidavit of Dr Vladimir Mazur for Lynx.
Bradken explains that although Lynx’s case appears to be that the claims require that hang up be avoided, that is not the case. Claim 1 only requires that the internal ridge have a first wall portion ‘angled towards an interior of said container…in the direction of flow of the material’; claim 6 requires that the angle progressively increase relative to the intersection of the side wall and the base; claims 7 and 8 require that the first wall portion be calculated in accordance with the formula set out in each.
7. THE ORAL EVIDENCE
7.1 Objections to the evidence
Both parties produced schedules of objections to the affidavit evidence led by the other. The affidavit evidence stood as the evidence in chief subject to these objections. It was agreed that the evidence be taken subject to the objections on the basis that, to the extent necessary, I would rule on the objections in these reasons. As is frequently the case, while on the one hand the parties have been cautious not to allow in possibly inadmissible evidence from the other which might be damaging to their case in an unanticipated manner, it was quite clear from the closing submissions that the parties argued the case on the premise that, notwithstanding objections, most of the evidence would be taken in subject to the question of weight.
Again, which is not unusual, determination of very few of the objections has had any significant effect on the outcome of the case. Particularly in a case such as the present, the evidence of the witnesses, most of whom were experts to some degree or another and with different degrees of independence from the issues, was very thoroughly tested on cross-examination regardless of the fact that objections had been taken. Accordingly, to the extent that witnesses (or those who drew their statements) may have overstepped the mark at a technical level, it was very much a question of weight.
I have ruled on objections by means of category. Those rulings appear in Annexure C to these reasons.
7.2 The competing expert evidence
Bradken submits that Dr Mazur’s evidence going to the issue of inventive step must be totally or considerably discounted because of his intimate involvement in the Patent Application, his role as a director of Lynx, his involvement as an inventor and his ‘plain inability’ to dissociate himself as a senior executive of Lynx for the purpose of giving expert opinion evidence. Bradken argues that his evidence should be given little weight where it purports to contradict that of Mr Ivo Anic. In this regard Bradken relies on the following matters.
First, both Dr Mazur and Mr Kris Kilian are the named inventors in respect of the Patent Application. They are both directors and shareholders of Lynx. They each have a clear interest in the outcome of the proceedings. Bradken contends that they both clearly lack the independence brought by Mr Anic to the task of assessing obviousness, as well as the other grounds of invalidity. They are also led as witnesses of fact – for example, in relation to Lynx’s defence of Bradken’s contentions in respect of ‘secret use’ relating to the prototype Golynx Wagons in 1998/1999.
Secondly, Dr Mazur concedes that the starting point for his consideration of matters relating to validity, and the expression of his ‘expert’ opinions in relation to them, is that he has already formed the view that the Patent Application is valid. He acknowledges that he has held this view for some years, having previously expressed his views in evidence given by statutory declaration in the opposition proceedings.
Thirdly, Bradken submits, many of Dr Mazur’s opinions are ‘infected’ by their failure to distinguish between the design for the Golynx Wagon (the embodiment of which is in fig 2a of the Patent Application) and the invention the subject of the claims.
Fourthly, Dr Mazur’s written evidence in many respects differs ‘significantly’ from the oral evidence given during the course of cross-examination. This, it is said, is particularly apparent when one considers his strident written arguments put forward to defend the novelty attack on the basis of Gilpin, many of which ‘evaporated’ when his attention was drawn in detail to the wording of the claims of the Patent Application or Gilpin: see Dr Mazur’s first affidavit sworn on 23 December 2010 (at [173]-[174]) where he denies that geometric stiffening in the form of an internal ridge was well known at the priority date but resiled from this position in cross-examination.
Bradken contends that Dr Mazur and Mr Kilian’s clear lack of independence is a significant matter which bears on the weight to be attributed to their opinions on inventive step, as well as the other grounds of invalidity: see The Wellcome Foundation Ltd v VR Laboratories Pty Ltd (1981) 148 CLR 262 (at 287); see also Termite Tite (NZ) No 2 Ltd v Term-Seal (Aust) Pty Ltd (2007) 74 IPR 16 per Besanko J (at [116]):
As to the other point raised by the applicants, unless it is a particularly serious case of bias which might enliven the discretion to exclude, the fact that Dr Franklin is a party goes to the weight to be accorded to his evidence, not the admissibility of the evidence: J D Heydon, Cross on Evidence (7th Australian ed, 2004) (at [29080]) and cases cited therein; Ian Freckelton and Hugh Selby, Expert Evidence (3rd ed, 2005) (at 26 and 315-16) and cases cited therein.
However, this very passage (with which I respectfully concur) underscores the fact that the presumed bias should be taken into account but accorded such weight as all the circumstances suggest. One such circumstance is that in an appropriate case, commonsense might displace expert evidence. This is not a totally foreign forensic concept.
Bradken submits that where there is a difference of opinion between the views expressed by Mr Anic on the one hand and Dr Mazur and Mr Kilian on the other in relation to matters relevant to validity, Mr Anic’s opinion is to be preferred. As I have indicated elsewhere in these reasons, it appears to me, with respect, that the complaints made by senior counsel for both parties about the witnesses for the opposing party were not particularly compelling. I fully accept that it would be unwise not to take into account the fact that Dr Mazur and Mr Kilian are not independent experts and that Mr Anic is an independent expert. I have taken that factor into account. I consider that it may have influenced the content of the written evidence and the willingness with which Dr Mazur was prepared to accede to propositions put to him in cross-examination. That said, I find no reason to conclude that Dr Mazur gave other than truthful evidence. Experts in a field, whether independent or not, may arrive at a point of view after a great deal of consideration and struggle to depart from that point of view. I observe that Mr Anic suffered from the same hesitation in assisting the cross-examiner as that described above, although that feature of his evidence would not be attributed to lack of independence.
I consider that Mr Anic was an entirely truthful witness but equally there were occasions in cross-examination, at least to the extent, if not more than Dr Mazur, in which he was reluctant to accede to propositions which appeared to me to be fairly straightforward. I observe elsewhere in these reasons that there are occasions on which the language used by lawyers and judges alike while entirely appropriate for the courtroom is simply not the language or the way of thinking of scientific experts. My view is that some of the hesitation of the expert witnesses was attributable to this factor.
Finally, and perhaps most importantly, having indicated that I form no adverse view on the credibility of any witness, I nevertheless prefer at an intellectual level the explanations and views given by Dr Mazur to those expressed by Mr Anic on most topics, particularly in relation to novelty and inventiveness. The detail of that appears in the analysis which follows.
7.3 The key witnesses in some detail
In discussing the evidence of the key witnesses, I will summarise the evidence in chief of each and then make reference to key aspects of the evidence in chief and the cross-examination by reference to the agreed issues.
7.3.1Mr Anic
Bradken’s expert, Mr Anic, is a mechanical engineer with over 20 years experience in rail engineering projects in Australia. No issue arises as to whether he is an appropriate person skilled in the relevant art as at the priority date, whether that be 30 March 1998 or 30 March 1999. Indeed, Dr Mazur accepted in cross-examination that Mr Anic is a person possessing appropriate expertise to express opinions relevant to the matters in issue.
Mr Anic’s first affidavit makes the point that geometric stiffening to strengthen the side walls of rail wagons was well known in the industry prior to 1998. He draws attention to the difference between an internal ridge and a partial internal ridge. The formulae in the Lynx Complete Specification, he says, are no more than a simple statement of the well known facts that the angle of repose in the material and the cohesion of the material are to be taken into account when designing any container suitable for either rotary discharge or bottom discharge. It is, he says, no more than the application of simple geometry for the former. He discusses his understanding of the expression ‘internal ridge’ in the claim. He says claim 6 adds nothing to the features disclosed in the earlier claims. Claims 7 and 8 simply replicate a well known formula.
Mr Anic was initially provided with a selection of prior art documents including various US patent specifications and one Canadian patent specification. He initially considered that the disclosures made in each of the prior art documents disclosed the same matters as disclosed in the Lynx Complete Specification.
He now considers that Gilpin clearly discloses all the features of claims 1, 2, 4, 5, 6, 7, 8, 9, 17, 19, 21, 23, 25 and 26 of the Lynx Complete Specification. He focuses predominantly on the reinforcing aspects. He refers to the statement in the Lynx Complete Specification that at least one internal ridge must have a depth greater than the thickness of the side wall and says that it is clear from figures 1 and 2 of Gilpin that the depth of the corrugation at reference point 13 is greater than the thickness of the side wall at 8. He does not accept an interpretation which would have the internal ridge consisting of a first wall portion alone not connected to a second wall portion. He says this would be artificial.
As to concessions on Gilpin, Mr Anic appears to acknowledge.
(a)In relation to claim 10, namely, a container as claimed in any one of claims 5, 6 or 9 wherein said second wall portion is convex or concave, that this is not shown in Gilpin as the sloping upper walls are shown as straight sections. It does not, therefore, explicitly expose a second wall portion which is convex or concave.
(b)Nor does Gilpin explicitly disclose the equivalent of a ‘third wall portion’ (claim 13/claim 11).
(c)Nor does Gilpin explicitly disclose the equivalent of a ‘third wall portion’ for claim 14/claim 13 or claim 15/claim 13 or claim 16/claims 11-15.
(d)Gilpin does not disclose a strengthening member which is integrally formed within the side wall (claim 20).
(e)As to claim 22, although Gilpin discloses corrugations in the floors of railway cars, it does not explicitly disclose the position of corrugations with respect to the wheel or track positions (claim 22).
Mr Anic also discusses an article entitled ‘The Trough Train’ in Railnews (Issue 399, February 1997, Pasadena, California, USA). This is an aluminium hopper carriage developed for transporting coal (Trough Train). The Trough Train is intended for bottom discharge and not for rotary or tipping unloading. It is relied on by Bradken and Mr Anic only in relation to the structural integrity issue.
As to common general knowledge, he describes the qualifications of the relevantly skilled person as having a good understanding and proven ability to use computer design techniques such as computer aided design packages and finite element structural analysis software. The person would have had a detailed understanding of manufacturing processes and methods available in the rail industry and well developed knowledge of existing rolling stock designs in use in Australia and elsewhere.
In relation to inventive step and common general knowledge alone, by reference to certain prior art, Mr Anic notes features including side walls including a plurality of vertical reinforcing members spaced along the length of each side wall and the need for the side walls to be at minimal thickness for efficient rail transport thus to be reinforced by vertical reinforcing members. He deposes that this was common feature at the time. As to the aspect that a section of the side wall between at least one adjacent pair of reinforcing members included at least one internal ridge running there between, this was evident from the article ‘The Fyansford Quarry Railway’ by WA Pearce in Industrial Railway Record (No 56, October 1974, Industrial Railway Society) (the Fyansford Quarry Railway article). As to being set at least one internal ridge including a first wall portion angle towards an anterior of said container, he says that this would have been obvious to the skilled person. He concludes that all the claims have been obvious.
In relation to the Golynx Wagon (which, as mentioned, is embodied in figure 2a of the Patent Application), Mr Anic examines a confidential engineering diagram of the Golynx Wagon bearing an issued for construction date of 19 October 1998 and observes there would be no discernable differences in the matters considered between 30 March 1998 and 30 March 1999. In general terms, the Golynx Wagon is an open top rail container wagon suitable for transporting bulk materials. It is described as being an ‘ore car’. It discloses all the features of the claims and the Lynx Complete Specification. On the priority date argument, he notes there were two key differences between the two specifications. The first was that the Lynx Complete Specification contained an extra paragraph at p 1, line 26 referring to ‘rotary or side tip unloading’ and, second, it also contained an extra paragraph at p 2a, line 1 to line 11 including reference to ‘rotary or tipping unloading’ not present in the original specification the subject of the Original Application (the Original Specification).
In relation to the remainder of the prior art documents considered in the first affidavit, Mr Anic’s views are the same, that is to say, the features were available in the earlier material but he indicates that each of those documents did not disclose each of the features in any of the claims 1-31 of the Original Specification.
On inventive step and common general knowledge, Mr Anic was asked to consider what would constitute improvements in the prevailing designs as at March 1998 and whether his response would have been any different in March 1999. He says that his comments and observations apply equally at March 1999. Mr Anic draws attention to the first Australian National rail car which he refers to as the ‘open type rail car coal transport’ design showing a large arrow on it ensuring that the wagon is orientated in the right direction for the ‘tippler’ unloading system. The design also shows side sheet stiffeners located on the outside and ‘hungry boards’ added for increased capacity. Mr Anic also draws attention to another typical conventional wagon used in Australia at March 1998 which he refers to as the ‘open type rail car general traffic’ design. He says the major difference between the latter design on the one hand and the design in figure 1 of the Original Specification was that the design had heavy double doors, two per side designed into the side walls. That reflected its application to the general transportation of goods wrapped, bundled and stacked together and the need to manually off-load general goods through the doors, for example, by means of a forklift truck.
Mr Anic identifies four main design criteria for the making of an improved wagon as at 1998. There would need to be advances in:
(a)capacity;
(b)tare weight reduction, that is, the capacity to carry more with less dead weight;
(c)unloading efficiency, that is, to ensure that all bulk product was unloaded with no residue; and
(d)cost-effectiveness whilst bearing in mind aerodynamic requirements.
He describes steps he would have taken at 1998/1999 to achieve those objectives and then basically examines the Original Specification to see what it had achieved in that regard. He considers that its major focus was the design of the side walls so as to maximise the width internally between the side walls while still adhering to the restrictions on the external dimensions of the wagons. That, he says, is the only way of providing any substantial wagon capacity increase as the length and the height of the wagon is set and any variation in the wagon shape is limited to the variation in the shape of the side walls.
Mr Anic deposes that because wagons are usually designed for an operational life of 20 or 30 years, it can be many years before the next cycle of investment actually results in a new wagon being designed. The long life cycle of the rail wagon in the iron ore transportation industry is, in Mr Anic’s view, the main reason why the shape of the side walls in the prevailing wagon design has not been redesigned in the 20 years or so prior to March 1998. In that period, the industry used wagons which had been made at least one or two decades earlier and which continued to operate with efficiencies acceptable to the industry up to that point in time. It was very clear that the only commercially feasible way of providing the required capacity increase and improvement to structural strength of the side walls was to redesign the shape of the side walls in such a way that utilised the maximum allowable width as restricted by the outer surfaces of the vertical ribs. That is all that is done by the invention. In Mr Anic’s opinion, that would have been obvious in March 1998.
In his third affidavit, Mr Anic points to the fact that no claim in the Lynx Complete Specification (or in the Original Specification) contains any feature that directs how to construct the wagon or any features of it other than the feature that the ridge must be integrally formed.
He refers to statements by Dr Mazur that the unloading procedure in an ‘unloading machine’ at the time of filing of Gilpin was very different to that of a modern rotary dumper, especially in relation to the angle of rotation. As to this, the point Dr Mazur was making was that if the wagon described in Gilpin were put into practice in a modern dumper, it would fail to unload fully because the modern dumpers in the absence of decoupling do not permit the wagon to be turned upside down. However, Mr Anic says that due to the differences in technology in rotary unloading in the rail industry today, from rotary unloading in the rail industry at the time of Gilpin, the term ‘rotary unloading’ in the context of each of the Lynx Complete Specification and the Original Specification would be understood by the person skilled in the field of railway wagon design as at the priority date as being limited to meaning that rotary unloading requires the F-type rotary coupler, not rotary unloading using other means of technology that existed in 1935.
Mr Anic notes that F-type rotary couplers are not and never have been used for unloading in any industry other than rail transportation. In those other industries, rotary unloading is achieved using other technology. In dump trucks, for example, rotary unloading is and was at the priority date typically achieved using hydraulic hoist systems whereby the hydraulic hoist system lifts the bulk material container and rotates it. There is no reason to limit the meaning of ‘rotary unloading’ in the Lynx Complete Specification to rotary unloading using a piece of technology used only in rail but not road transportation. There is no reason to limit the expression ‘rotary or tipping unloading’ where used in the Lynx Complete Specification to be understood to mean anything other than any form of rotary or tipping unloading in respect of transport by road or by rail.
On the topic of inventive concept, Mr Anic notes that Mr Kilian said that the distinctive feature of the design was, amongst other things, the fact that it had original ridges projecting towards the interior of the wagon which were intended to allow unobstructed flow of material during unloading while increasing the strength of the side wagon walls and also allowing increase in volume without increasing the dimensions of the wagon body. He also notes that Dr Mazur said that the new design could transport more ore and would cost less to operate (with reduced maintenance costs and more fuel efficient design). It would be cheaper to manufacture than conventional containers and the Lynx wagon design had side walls that were shaped in such a way that there were horizontal ridges (protrusions) extending towards the interior of the containers (when seen in cross section). The shape provided for strengthening, allowed the materials to discharge cleanly and maximised the interior volume of the container without having to exceed the dimensional restrictions imposed by a rail road operator. Mr Anic considers that Mr Kilian and Dr Mazur approached the matter on the basis the inventive concept was in the shape of the side walls of the container rather than the container or wagon as a whole but that a wagon consists of many sub-assemblies including bogies, couplers, draft gear, braking system and underframe with the side wall being only a small part of a complete wagon.
As to inventive step, Mr Anic rejects Lynx’s contention that he had not considered a combination of various ideas. He accepts that an internal ridge as disclosed in the specifications had not been used to a great extent in the bulk material container transportation industry as at the priority date due to the fact that generally wagon designs are dictated by the specific operational requirements of the end user. The end user almost always provides technical specifications setting out future operational requirements. Essentially, operational efficiency requirements dictate the evolution of wagon design. For example, although both Hamersley Iron and BHP Billiton Iron Ore Pty Ltd (BHP) are iron ore operators, the factors driving their operational requirements differ. Whereas BHP had a need to lift its axle load to 40 tonnes, Hamersley Iron was predominantly focused on maximising capacity with a new lower density ores without increasing axle load. An increase in maximum load is not always the driving factor in operational efficiency. For example, introduction of the F-type coupler in the 1950s resulted in operational efficiency gains in unloading rather than increased capacity.
As a general comment, Mr Anic observes that the designs of railway wagons used in Australia before the priority date were from time to time modified in order to overcome problems related to wear or corrosion due to their extensive use or were modified so they could be used to transport product or material for which they had not been previously designed. The key to any efficient rail operation transporting freight is to optimise wagon fleet utilisation. One way of facilitating that is to modify the wagon design to ensure that the wagons are always available for rail operation. For example, if a railway wagon is to be used for transporting material which is heavier than the material it had been transporting up to that point in time, the design might need to be modified by strengthening the undercarriage in order to carry the heavier material.
Mr Anic deposes that he was regularly involved in that kind of design required to maintain familiarity with the resources. In his expert opinion, the design process steps undertaken by Mr Kilian and Dr Mazur were simply routine steps that any skilled wagon designer would have taken at the priority date. When redesigning an existing wagon, Mr Anic understands that Mr Kilian and Dr Mazur undertook the following steps:
(a)being familiar with the existing technology and noting where there was room for improvement over existing technology in the industry;
(b)recognising the limitations or the parameters that could be changed in any design that would address these errors and for potential improvement, that is any wagon designed would have to have been compatible with certain BHP technology;
(c)attempting to design a wagon in the areas in which it was identified that potential improvement could be attained;
(d)setting objectives for the design of the wagon;
(e)brainstorming and producing preliminary sketches and design concepts.
I consider that the position is not as clear as Bradken suggests. In the present situation, there was a trial period after the Lynx Provisional Specification was lodged but just before March 1999.
There was no guaranteed income from the trial. As stated above, if the three Golynx Wagons which were supplied (amongst the five being tested in all) did not meet BHP’s conformance criteria, then there would be no receipts whatsoever. In addition, one wagon had to be replaced at the beginning of the trial period due to a problem.
Lynx or more accurately the manufacturer, Goninan, would receive payment for the two wagons if they satisfied BHP’s conformance criteria but BHP may not have wished for whatever reason, to proceed with the acquisition of the wagons even if they did satisfy BHP’s specifications. It was not obliged to do so. The third possibility was that BHP would order more Golynx Wagons. This is what occurred and the result was significant commercial success.
The defence in s 9(a) depends upon the testing being for experimental purposes only. ‘Only’ is to be given meaning. All words in legislation must prima facie be given some meaning and effect as discussed by DC Pearce and RS Geddes in Statutory Interpretation in Australia (2011, 7th ed) (at [226]). The test is usually whether the patentee has reaped a commercial benefit according to Gyles J, with Beaumont J concurring, in Azuko (at [181]); see also International Paint Company Ltd's Application [1982] 99 RPC 247 (at 274). In Azuko, Gyles J concluded that the manufacture of some drill bit assemblies before the date of the patent but sold after the date did not lead to a de facto extension of the patent term. It was not a ‘use’ within the meaning of s 18(1)(d) even though the making of an article for ultimate sale had a commercial aspect. Gyles J declined to follow the dicta of Jenkins LJ in Fomento Industrial SA v Mentmore Manufacturing Co Ltd [1956] 73 RPC 87 (at 115) which was applied by Heerey J in his dissenting judgment. The effect of that dicta was that mere manufacture of a patent article constituted a use of an invention. Gyles J also concurred with von Doussa J at first instance that the receipt before the date of the patent of an unsolicited order for the goods did not constitute a ‘use’ of the invention (see [177]).
By comparison, in Re Wheatley's Patent Application (1984) 2 IPR 450, there was a patent application under which certain ‘pull keys’ were claimed for conveyor belts. The patent applicant had demonstrated the keys under an agreement of confidentiality to an employee of the National Coal Board who then placed an order for ten of them. The order was accepted and manufacture was commenced but delivery had not taken place until the day on which the patent application was filed. In the Court of Appeal, Lawton LJ, with whom Oliver and Dillon LJJ concurred, held that by agreeing to sell, the patent applicant had used his invention before the relevant date. Lawton LJ also appeared to be of the view (at 252) that simply demonstrating an invention for the purpose of soliciting a sale would have been a use. It does not seem to me that mere demonstration would satisfy the test as applied in Australia.
On the other hand, it was held in Innovative Agriculture Products Pty Ltd v Cranshaw (1996) 35 IPR 643 (at 657, 658) (see also Vax Appliances Ltd v Hoover plc [1991] 18 FSR 307 (at 317) that an agreement by a patent applicant to obtain an input of capital from a co‑venturer and to share the profits from the commercial exploitation of the invention was not a ‘use’ of the invention. Also, an advertisement in a magazine published in America was not an offer for sale in England: Cincinnati Grinders Inc v BSA Tools Ltd [1931] 48 RPC 33 (at 51). Distribution of samples to potential customers has been held to be a use: WL Gore and Associates Inc v Kimal Scientific Products Ltd [1988] 105 RPC 137 (at 147) per Whitford J.
In Vax it was held that it will not be a use of the invention to demonstrate a prototype article which embodies the invention to a prospective licensee before the relevant priority date for the purpose of encouraging the prospective licensee to enter a licence agreement: Vax (at 316-317). Bodkin expresses the view (at [3900]) that it appears that ‘the position may have been different if a licence agreement had actually been signed before the relevant priority date’. This case appears to be most closely aligned to the present, subject to the question of whether the agreement in terms I’ve described and depending on the actual date of payment have a bearing on the situation.
For the use to be ‘secret’, there must be deliberate concealment as a necessary element of the process. In Wheatley’s case, the use by the patent applicant was held not to have been secret notwithstanding that the demonstration of the invention (pull keys) had been secret. In Melbourne v Terry Fluid Controls Pty Ltd (1993) 26 IPR 292 (at 302) Jenkinson J held that goods supplied by a party to a potential buyer may be under a secret use if, first, the supplier intends that knowledge of the design of the goods be restricted to those of the potential buyer’s employees who need to trial the goods and, second, if the supplier has reasonable grounds to believe that this intention is known to or assumed by the participants in the trial. The High Court in Longworth v Emerton (1951) 83 CLR 539 provides examples of inventions whose nature may require working in public for trial purposes. That is no longer directly relevant because Bradken no longer presses a public use argument. However it does shed light on the phrase ‘reasonable trial or experiment’. In Longworth (at 550-551) it was held that ‘reasonable trial or experiment’ for the purpose of developing a suitable invention for a patent application requires some deliberate intention to use the invention with a view to making definite improvements, experiments of a specific character or developing the actual invention. It is insufficient to have some vague sense of dissatisfaction that the machine’s qualities have not been fully tested or uncertainty as to whether some further improvements might increase efficiency. Wide and unguarded use of the invention with no specific purpose for testing or experiment will fail the test: Longworth (at 50-51). In contrast, the delivery and use of a prototype of a machine that does not initially function before a period during which numerous changes are made may be trial or experimental use: Costa v GR & IE Daking Pty Ltd (1994) 29 IPR 241 (at 250).
In Andrew Master Hones Ltd v Cruikshank and Fairweather [1981] 98 RPC 389, Buckley LJ commented (at [251]) that the following peripheral factors are of some relevance:
•the deposit was received on 5 July — a date sufficiently far removed from 25 June to preclude me drawing an inference that commercial use necessarily commenced before 25 June.
•the provisional application was made some 6 weeks after the machine was delivered to Gerardis, a period which is not manifestly inconsistent with that required for a reasonable trial of the machine.
In Grove Hill Pty Ltd the Full Court (French, Dowsett and Gyles JJ) noted (see Dowsett J at [231]-[233]):
231 It is also relevant for present purposes that in Longworth the Court was considering only the question of experiment whereas par 9(a) speaks of both trial and experiment. The structured and specific research processes often adopted in experimentation will not necessarily be relevant in trials. The latter process may simply involve "seeing how it goes", when the invention is employed in the field. In such a situation adjustment and fine tuning may not be recorded as would be the results of laboratory experiments.
232 In assessing what might be reasonable for present purposes, it is necessary to keep in mind the nature of the equipment in question, the tasks for which it was designed, and the conditions under which it is to be used. Clearly, a row cultivator or a tool for a row cultivator will have to be very robust to enable it to resist the rough nature of its likely employment. It will be expected to perform in a wide variety of conditions, both of weather and terrain. It is easy to accept that such a piece of equipment could not be subjected to in anything less than a year, particularly given the seasonal nature of its employment.
233 If, as I have concluded, the onus of excluding and experiment was upon the appellant, then there can be no basis for challenging the inference drawn by her Honour that such burden was not discharged. However, even if the burden lay upon the respondent to prove the reasonableness of the trials and that the use was only for the purpose of such trials, I see no reason to reject Mr Mansur's evidence. Clearly, her Honour did not do so. That being the only evidence directly bearing upon the matter, and there being nothing improbable about it, any such onus was discharged. The appellant must fail on this ground.
Against the preceding analysis in the cases, and as discussed at [332], I have found that between 17 December 1998 and 17 January 1999 three fully operational prototypes were delivered to BHP at Port Hedland. Following delivery of the prototypes, I accept Dr Mazur’s evidence (as outlined above at [119] – [123]) that extensive data was collected and analysed by Lynx. Various tests were also carried out.
Lynx stresses, and I accept, that:
(a)The Golynx Wagon design was unconventional (i.e. it was much lighter than other wagons on the market and included an internal ridge, a novel concept). These elements needed to be tested in the environment in which it was expected that they would be used to confer the alleged benefits of the conventional design.
(b)Lynx and Goninan incurred all costs (and would have had to) for the fabrication and testing of the prototypes, regardless of whether BHP or any other operator would in due course order these wagons.
(c)The testing was necessary to confirm Lynx’s mathematical and economic models.
(d)Lynx tested the prototypes at BHP because Lynx knew BHP was looking for new wagons and because BHP allowed Lynx to use its facilities to do so. Neither Lynx nor Goninan had the necessary facilities to test the prototypes in real life operation.
(e)Without testing and consequently modifying the prototypes, Lynx could not have used the unmodified prototypes in operation for any client i.e. BHP or any other iron ore operator.
(f)BHP subsequently purchased the modified prototypes in July 1999 for use in its operation for a fraction of the cost incurred to build and test the prototypes.
(g)Lynx was not directly involved in the discussions with BHP concerning BHP’s acquisition of the prototypes. Any discussions were between Goninan and BHP.
As discussed, I have found that Lynx considered the design of the prototype Golynx Wagons to be confidential and required Goninan and BHP to maintain the confidentiality of the design. Further, the prototype wagons were shrouded for delivery to BHP for testing. I also accept that Lynx, through Mr Kilian in particular, was directly involved in the testing of the prototypes as test coordinator and provided Performance Criteria Compliance Certificates.
The main point of departure between Bradken and Lynx is Lynx’s submission that a use for a commercial purpose does not necessarily prevent that use being for the purposes of reasonable trial or, to put it another way, the mere fact that the use amounts to ‘commercial working’ of the invention does not necessarily make such use other than by way of ‘reasonable trial’: see Re Newall & Elliot & Glass (1858) 4 CBNS 269 (at 295); Perrard Engineering Ltd. One key distinction appears to be whether the working is in fact a trial or test of the invention and not merely a demonstration of the invention to secure orders: Austoft Industries Ltd v Cameco Industries Inc (No 2) (1995) 33 IPR 251 (at 259‑260); Innovative Agriculture Products Pty Limited (at 659‑660).
Dr Mazur explains in his evidence that the idea for the Lynx wagon design, involved several hundred hours of sketching, calculating and brainstorming, and, eventually, proof concept testing. When regard is had to the Conformance Report prepared by Lynx for BHP in March 1999, it is clear the results of the testing conducted on the prototype Golynx Wagons, together with documentation verifying the performance, were matters which related to and were controlled through the criteria set by BHP. Those relevant facts included:
(a)the offer from BHP to trial the Golynx Wagons from Goninan and Lynx expressly required three wagons to be provided with the trial being conducted over a period of two months;
(b)the terms and conditions for the trial were expressly predicated on the basis that unless and until a successful trial occurred, Lynx had no contractual certainty as to whether BHP would make a decision to purchase additional Golynx Wagons;
(c)in the event that the Golynx Wagons did not meet the agreed performance criteria (unsuccessful trial) the terms and conditions require the wagons to be returned to Goninan and no payment would be made;
(d)during the first round of dumping cycles (unloading testing) the side wall of a prototype wagon buckled due to excessive dynamic loading;
(e)design modifications were then required to be made to the prototype Golynx Wagon, with the problem being overcome by including an extra external stiffener in the middle of the side walls (on the longest sidewall section);
(f)the process of evaluation and testing resulted in Lynx modifying various aspects of the Golynx Wagon design, additional to reinforcement of sidewall panel which buckled during unloading; and
(g)the prototype testing was conducted at no cost to BHP.
Mr Owen’s evidence corroborates the background facts to the prototype testing arrangements.
At the time of the prototype testing arrangements being made, Lynx had taken advice from Watermark, Patent and Trade Mark Attorneys and had been cautioned as to the need to ensure confidentiality arrangements were in place.
The Golynx Wagon was experimental. Importantly both for the issue of experimental use as well as secret use, the prototype wagon was just that, a prototype, in the sense that its features were still in the process of design and development. This is reflected by the fact that modifications were necessary, following a buckling of a side wall of the first prototype that was tested in BHP’s rotary unloading facility at Port Hedland. Lynx had designed the side walls of the container to accommodate the force vectors consistent with a 47 second turning cycle, not a faster 27 second cycle. As referred to above by Dr Mazur, various other changes were made during the course of the trial and testing period. Accordingly, it was not until the trial period had been concluded that the design features for the prototype were resolved.
In Hudson, Scott & Sons Ltd v Barringer Wallis & Manners Ltd [1906] 23 RPC 79, Kekewich J said (at 87):
No man can draw up a Specification, which will have the slightest chance of holding water, without testing the results which he is going to state in that Specification, and he is entitled to make experiments; and so far as Mr Thomson’s experiments are concerned I see no reason for doubting that secrecy was observed, and that he and his employees kept the results of those experiments… to themselves.
Relevant to the High Court’s consideration in Longworth (at 550) as to when the exception of reasonable trial and experiment will not constitute a public use was based on:
(a)where an experiment that was required to be conducted in specific physical location and conditions, which were necessary to determine the sufficiency or utility of the invention;
(b) that to perform it, the disclosure was unavoidable;
(c)that any profit or advantage was an accidental though necessary concomitant; and
(d) the use was in fact experimental.
(emphasis added)In Innovative Agriculture Products Pty Ltd v Cranshaw, Lee J was satisfied that the use of the subject of the patent in suit, being for a computerised animal feeder, was not a prior use of the invention when the system embodying the invention, was installed in a privately owned and operated dairy. The prototype system was installed as part of a commercial operation and formed part of the equipment operated by the business. The system was installed at no cost to the owners of the dairy and was in use for a period of 14 months. During this period the system was open for inspection by any visitor to the dairy. The issue in the case was whether the use of the feeder system was a reasonable trial and whether it was reasonably necessary to conduct the trial in public. The Court, in determining that use of the system on terms of confidentiality and with limited public access was a reasonable compromise by the patentee between the need to protect against disclosure of the invention and to trial the embodiment of invention, reflected on the nature of the invention. Lee J held (at 659) that the trial was required in order to determine the usefulness of the invention and its suitability for a patent.
‘Only’ where it appears in s 9(a) of the Patents Act cannot exclude as a defence a circumstance in which some commercial benefit inures. That must be so because any experimentation in advance of the priority date whether it be to refine with precision the language of the specification and claims in the patent or whether it be to ensure that the invention actually works may well have a commercial benefit, but, like this situation, the commercial benefit may not be guaranteed.
Given that ‘only’ where it is used in s 9(a) of the Patents Act on any logical analysis does not mean with no ultimate or potential commercial benefit whatsoever, is a question of evaluating all of the circumstances as established by the evidence in order to determine whether the testing carried out falls within the defence in s 9(a). Lynx would emphasise that it had incurred all of the expense and time in creating the invention including most of the expenses involved in the testing period. Mr Kilian stated that the testing of the prototype Golynx Wagons was conducted at no cost to BHP. Goninan paid for the fabrication of prototypes and the cost of implementing the required modifications. Lynx incurred the expenses of designing and testing the prototypes. The effect of the agreements was that if the Golynx Wagons did not meet BHP’s conformance criteria, then Lynx would be paid nothing. Secondly, if the Golynx Wagons met the conformance criteria but BHP still did not wish to acquire any further wagons, then the only obligation on BHP was to pay Goninan and, therefore, Lynx indirectly via the licence agreement, a sum of money in respect of the three Golynx Wagons provided which met the conformance criteria but not so as to attract BHP to contract further. Thirdly, the agreement provided a price schedule which would apply if BHP did wish to proceed. This third scenario, in fact, was the ultimate reality.
Although what was done by way of trial and experiment certainly had an eye to a commercial prospect, there was no guarantee at any time of a commercial return although there was a guarantee of some reimbursement towards manufacturing costs if the conformance criteria were met but BHP did not place orders. The observations made by Gyles J in Azuko are, with respect, helpful in my view. In looking at the practical question of whether what has occurred amounts to a de facto extension of the patent term, the answer, as his Honour said, will usually depend upon whether the patentee reaped a commercial benefit from what was done before the priority date. The cases seem to focus more upon deriving concrete commercial benefit prior to the priority date rather than confidentially testing and experimenting with a view to possible sales. In Azuko Gyles J held (at [183]) that to secretly use the process or method to make goods for sale can readily be seen as a secret commercial use of the invention which would extend the patent if done prior to the priority date. His Honour said:
To make an article for ultimate sale has, no doubt, a commercial aspect, but it does not amount to use of the product made and does not involve any de facto extension of the term of a patent claiming the product. The manufacturing of goods is not, in my opinion, commercial use of those goods.
There is no evidence of the manufacture of any wagons prior to the priority date other than the modified prototypes.
Indeed (at [184]) Gyles J referred to Bramah v Hardcastle (1789) 1 Carp Pat Cas 168 in which there was evidence that the patentee had made two or three of the machines claimed before he obtained his patent. In that case the patentee’s counsel accepted that mere manufacture prior to claiming the patent does not disqualify it. No authority since has shown that concession to be wrong.
This was not a circumstance in which Lynx understood that it was deliberately and secretly deriving commercial benefit from secret use prior to the priority date as discussed in some of the cases. As far as it was concerned, the priority date was the date of filing the Lynx Provisional Specification, the position which it has always maintained. It was always possible, of course, that the provisional patent may require amendment or refinement (which did indeed occur) which was just one reason for maintaining confidentiality in the experimentation. But this is not a case in which a patentee deliberately and secretly sold an invention or products based on the invention in advance of the priority date in order to extend the period of monopoly conferred by the legislation. If the testing did not succeed, Lynx received nothing and would be out of pocket. I do not consider this to be commercial ‘exploitation’ of the invention. Rather, it has all the hallmarks of testing and experimentation, albeit with some assurance of financial contribution only if the tests were successful. But no ongoing sales were guaranteed at any time. No sales or income were secured prior to the actual priority date. No manufacture occurred prior to that date. There was no other use of the invention prior to that date. All of this was done in extreme confidence and at a point in time, deliberately, when it was thought that the priority date for the Lynx Complete Specification had passed on lodgement of the Lynx Provisional Specification. For rather technical reasons that was not so.
These circumstances may be close to the boundaries of the exception or defence to ‘secret use’ but in my view, there has not been a ‘secret use’.
In summary, in my view, Bradken had the onus of proving its secret use claim. While it refers to an affirmative defence raised by Lynx, Lynx does no more than rely upon the definition of secret use contained in the Patents Act which, as noted in Azuko (at [175]), excepts certain uses including those uses as described in s 9(a) of the Patents Act. Regardless of onus and, in any event, while this case may be more finely balanced than some, in my view, the evidence shows that the secret use is properly described as one for the purpose of reasonable trial or experiment only. ‘Only’ cannot be given an absolute meaning and must permit of some commercial content otherwise there would almost never be an exception available under the Patents Act making the defence pointless.
12. CONCLUSION
From what I have said it follows that despite presenting its case most helpfully, Bradken has not succeeded on any ground other than the priority date and its entitlement to rely on Gilpin although raised for the first time on appeal.
The parties are agreed that my reasons should be delivered before they have the opportunity to make further submissions on the question of what relief should flow from the reasons. That course is entirely conventional and acceptable and has been followed.
The following orders are made in both proceedings:
1.The respondent/cross-appellant file any submissions as to the appropriate disposition of the appeal/cross-appeal and costs within 21 days.
2.The applicant/cross-respondent file any submissions in response within a further 21 days.
3.The respondent/cross-appellant file any submissions in reply within 7 days.
4.Any further orders in relation to the matters the subject of orders 1, 2 and 3 be dealt with on the papers unless otherwise ordered.
5.The time for the institution of any appeal will not run until final orders disposing of the appeal/cross-appeal and costs are made.
I certify that the preceding three hundred-sixty nine (369) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher. Associate:
Dated: 31 August 2012
ANNEXURE A – LYNX COMPLETE SPECIFICATION
The Lynx Complete Specification:
ANNEXURE B – GILPIN
Gilpin:
ANNEXURE C – RULINGS BY CATEGORIES OF OBJECTION
The rulings are as follows:
1.The first broad category has been touched upon in the substantive reasons. Bradken objects generally to the evidence of Dr Mazur and Mr Kilian. Bradken argues pursuant to s 135(c) of the Evidence Act that to the extent that the witness purports to give expert opinions on matters in issue, including but not limited to novelty and inventive step, it ought to be refused admission into evidence on the basis that the witness is not independent. Dr Mazur is a director of Lynx and a person directly interested in the proceedings. As I indicated both before and during the hearing, in my view, this objection goes only to weight. It is an objection which is repeated on a number of occasions. I do take into account that Dr Mazur and Mr Kilian are not entirely independent. Clearly they would hold subjective views on the topic but there has been wide ranging and probing cross-examination on all of their evidence including their opinions that cross-examination has thrown up any internal inconsistencies and inconsistencies with other evidence. There is no reason given that the expertise of each of the witnesses having otherwise very clearly been demonstrated to preclude admission of the evidence altogether.
2.On a number of occasions, objection was taken to the evidence of Dr Mazur and Mr Kilian on the basis that views expressed were unsubstantiated opinion, with no foundation being given for assertions raised. I consider that taking the affidavits as a whole of each of the respective witnesses, it is quite possible to understand the foundation for the opinion expressed in each instance.
3.In other instances, objections were taken on expression of opinion as it was unclear whether the content constituted expressions of the witnesses’ belief or a fact. In most instances, I have taken it as expressions of the witnesses’ belief on the basis of the surrounding foundational material.
4.Objection was taken to relevance of evidence concerning what persons skilled in the art did not know as distinct from what they did know. While it may be accepted that publication anywhere in the world of prior art may satisfy the requirements of, in relation to novelty, the ignorance of persons skilled in the art may be capable of being relevant in relation to what was common general knowledge for the purpose of the inventiveness issue.
5.Objection was also taken to Dr Mazur expressing his views as to how the Lynx Complete Specification should be construed. It may be accepted that this is ultimately a matter for the Court but there is no principle which would preclude the admission of the expression of opinion by an expert in the field on this topic.
6.Similar objections were taken in relation to expressions of opinion which were said to constitute submissions. Again, I would receive submissions only as evidence from an expert as to his opinion.
7.There was objection taken to the authenticity of a drawing which I did not take to be pursued in the course of the trial.
8.In relation to Bradken’s witnesses, objection was taken to the state of knowledge based on a document published in parts of the world other than Australia. As with the Bradken objections to the Lynx evidence, the evidence of Bradken in relation to Gilpin, for example, and a variety of documents which were either foreign or not shown to be readily available in Australia, is capable of being relevant to prior art (only to the extent of Gilpin) and, to the extent established at trial of availability of the document in Australia, common knowledge. Evidence was adduced at trial in relation to the availability in Australia of certain publications and they, accordingly, are admissible as to common general knowledge.
9.There were general objections taken by Lynx as to the expressions of opinion by Mr Anic in circumstances where the absence of reasoning was not disclosed and the foundation for the opinion was not indicated. I take the same approach in relation to the evidence of Mr Anic as I took in relation to the objection on this ground in relation to the evidence of Dr Mazur. I am satisfied that there is in each instance adequacy of reasoning and foundation material.
10.The ‘publication in Australia’ objection was widely repeated and also applied in entirety to the affidavits of the librarian and the solicitor, Ms Pettit-Young and Dr Baigent respectively, in relation to availability of published material. The material in these affidavits was ultimately not relied upon other than to the extent of establishing that Gilpin was published in the United States on 15 September 1936. Other than that, the material was not relied upon in Bradken’s case and in light of the admissions made together with the tendering of these two affidavits, the objections fall away. The admissions as outlined in Exhibit A7 (exhibited on 1 March 2012) were these:
[Bradken] admits that Dr Baigent does not know of any inspections of the Canadian specifications referred to in his affidavit by any person, corporation, entity or institution, whether in Australia or otherwise.
Bradken also admits that the librarian Ms Pettit Young does not know of any inter-library loan made to any person, corporation, entity or institution in Australia of the following publications:
-The Trough Train article
-‘Tiazheloe Masinostroenie’ no 1 of 1998 – article ‘New freight cars issued by Russian plants’ by NI Mironov et el
-The Car and Locomotive Cyclopedia of American Practices (6th ed, 1997 by Simmons-Boardman Books Inc, Omaha, USA)
-The Fyansford quarry railway article.
11.Finally, in relation to the evidence of Mr Owen, formerly of BHP, Lynx took objection as to the form of the affidavit at two levels. First, objection was taken to this particular witness expressing the opinion of BHP. As I understand it, the evidence was ultimately pressed only on the basis that Mr Owen was expressing his personal understanding as the company officer directly involved in negotiations concerning Golynx Wagons, as to the company’s intentions and opinion. On that basis and with very limited weight being attached to that part of the evidence, the objection falls away. The second objection was as to the form of evidence where the witness spoke to the contents and effect of documents which should speak for themselves. I am content, once again, to treat any remark about a document in Mr Owen’s evidence as simply being his understanding of its terms and effect. He was cross-examined and evidence was also adduced in considerable detail on the topic of the relationship between BHP and Goninan and Lynx. Nothing Mr Owen said about the terms or effect of a document would outweigh the legal force and effect of such a document on its face, whether it be a letter or similar communication or an agreement.
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