British-American Tobacco Ltd v Philip Morris Ltd
[1996] FCA 990
•15 NOVEMBER 1996
CATCHWORDS
Practice and Procedure - motion seeking further and better particulars or that particulars be struck out - particulars going to prior publication, lack of novelty, obviousness and lack of inventive step under the Patent Act 1952 - should particulars be struck out for lack of evidentiary grounding - do inferences involve "guesswork" rather than logic - is this an appropriate case for an order of discovery before any order for the provision of further particulars - are there good grounds of objection on the grounds of want of novelty, obviousness or lack of newness or inventiveness
Patents - obviousness - whether inventors knowledge relevant - common general knowledge in Australia - whether common general knowledge in other jurisdictions is relevant - whether a patentable invention requires an element of "newness" or inventiveness
Patents Act 1952
Patents Act 1990
Statute of Monopolies, s 6
Gurnett v Macquarie Stevedoring Co Pty Ltd (1955) 72 WN (NSW) 261
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125
W A Pines Pty Ltd v Bannerman (1980) 41 FLR 175
Trade Practices Commission v CC (NSW) Pty Ltd (No 4) (1995) 131 ALR 581
Miller v Harper (1888) 38 ChD 110
Egg & Egg Pulp Marketing Board v K H Corp Tocumal Trading Co Pty Ltd [1963] VR 378
L Grollo & Co Pty Ltd v Nu‑Statt Decorating Pty Ltd (1978) 34 FLR 81
Wellcome Foundation Ltd v V R Laboratories (Aust) Pty Ltd (1981) 148 CLR 262
NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd (1995) 183 CLR 655
Windsurfing International Inc v Petit [1984] 2 NSWLR 196
Stanway Oyster Cylinders Pty Ltd v Marks (1996) 35 IPR 71
Alphapharm Pty Ltd v Eli Lilly Australia Pty Ltd, FCA 26 May 1996, unreported
BRITISH‑AMERICAN TOBACCO COMPANY LIMITED v PHILIP MORRIS LIMITED
No. NG 822 of 1994
CORAM:Lehane J
PLACE:Sydney
DATE:15 November 1996
IN THE FEDERAL COURT OF AUSTRALIA )
NEW SOUTH WALES DISTRICT REGISTRY )
GENERAL DIVISION ) No. NG 822 of 1994
ON APPEAL FROM A DELEGATE OF THE COMMISSIONER OF PATENTS
BETWEEN:BRITISH‑AMERICAN TOBACCO
COMPANY LIMITED
Applicant
AND:PHILIP MORRIS LIMITED
Respondent
PHILIP MORRIS LIMITED
Cross‑Appellant
BRITISH‑AMERICAN TOBACCO
COMPANY LIMITED
Cross-Respondent
CORAM:Lehane J
PLACE:Sydney
DATE:15 November 1996
MINUTE OF ORDERS
THE COURT ORDERS THAT:
The applicant's motion be dismissed.
Costs be reserved.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
NEW SOUTH WALES DISTRICT REGISTRY )
GENERAL DIVISION ) No. NG 822 of 1994
ON APPEAL FROM A DELEGATE OF THE COMMISSIONER OF PATENTS
BETWEEN:BRITISH‑AMERICAN TOBACCO
COMPANY LIMITED
Applicant
AND:PHILIP MORRIS LIMITED
Respondent
PHILIP MORRIS LIMITED
Cross‑Appellant
BRITISH‑AMERICAN TOBACCO
COMPANY LIMITED
Cross-Respondent
CORAM:Lehane J
PLACE:Sydney
DATE:15 November 1996
REASONS FOR JUDGMENT
LEHANE J: In a judgment delivered on 21 October 1996 I dealt with a motion of the respondent concerning the categories of documents of which the applicant should give discovery. I described in that judgment the nature of the proceedings and some of the background relating to the course which they have taken. I shall not repeat that material.
The applicant's motion
I now have before me a motion of the applicant, filed on 31 October 1995 and seeking orders that:
1.The Respondent/Cross‑Applicant file and serve further and better particulars to Paragraph 1(a)(xvii) of the Respondent/Cross‑Applicant's Grounds and Particulars of Invalidity, including but not limited to:
(a)when;
(b)where; and
(c)how,
the "TEN CENT" cigarette was published in Australia on or before the priority date.
2.Alternatively, Paragraph 1(a)(xvii) of the Respondent/Cross-Applicant's Grounds and Particulars of Invalidity be struck out.
The Grounds and Particulars of Invalidity
At the first directions hearing, Gummow J ordered by consent that the respondent file and serve a statement setting out the grounds upon which it wished to rely in its opposition to the grant of the patent, for which the applicant has applied, together with particulars. The respondent filed and served such a document, which specified, and gave particulars of, the grounds on which the respondent relied. They included, relevantly for present purposes, that the invention, so far as claimed in any claim: was published in Australia before the priority date of that claim; is obvious and does not involve an inventive step, having regard to what was known or used in Australia on or before the priority date of that claim; is not a manner of manufacture within the meaning of Section 6 of the Statute of Monopolies; and was, before the priority date of that claim, otherwise not novel in Australia. In the particulars in paragraph 1, relating to prior publication, the respondent, in subpara (a)(xvii), relies on a "publication" described as follows:
The manufacture and sale, by East African Tobacco Company Limited in Africa, of large quantities of cigarettes, under the brand name "Ten Cent Cigarettes", between approximately 1955 and approximately 1974, by reason of which the cigarettes were known in Australia on or before the priority date.
Further Particulars
That is the particular to which the applicant's motion relates. It is, in a sense, somewhat curious that the motion is now before me, as Burchett J has already dealt with it. On 18 March 1996 his Honour ordered that within 28 days the respondent provide particulars showing how it relates the matter alleged in para (1)(a)(xvii) of the Grounds and Particulars of Invalidity to a ground arising under the relevant Australian law. In a document filed on 18 April 1996 the respondent gave the following further particulars:
1.Paragraph 1(a)(xvii):
(The invention, so far as claimed in any claim, was published in Australia before the priority date of the Applicant's Patent Application No 573088.);
and Paragraph 6:
(The invention, so far as claimed in any claim was, before the priority date of that claim, otherwise not novel in Australia.)
1.1Between approximately 1955 and 1974 inclusive, the East African Tobacco Company Limited, a subsidiary of the Applicant based in Nairobi, Kenya, manufactured large numbers of cigarettes under the brand name "Ten Cent Cigarettes" ("Ten Cent Cigarettes") at its Nairobi and Dar es Salaam factories, located in Kenya and Tanzania respectively. Further, until at least 1963, East African Tobacco Company Limited's Jinja Factory, located in Uganda, was also involved in the production of Ten Cent Cigarettes.
1.2Ten Cent Cigarettes manufactured during the period were sold widely in both urban and rural parts of Kenya, Tanzania, Zanzibar, Somalia and until approximately 1969, Uganda, and was one of the highest selling cigarettes in these countries.
1.3The Ten Cent Cigarette comprised a tobacco rod comprising a tobacco filler and a paper wrapper. It had a length of or about 63mm, a circumference of or about 18mm and provided approximately 5.2 puffs per cigarette, which correlates to a free burn rate of approximately 34 mg min-1 and which requires a packing density of approximately 250 mg cm-3.
1.4By reason of the matters aforesaid, the Ten Cent Cigarette was:
1.4.1well known to; and/or
1.4.2was likely to be purchased by
a substantial proportion of those persons living in or visiting Kenya, Tanzania, Zanzibar and Somalia during the period 1955 to 1964, and Uganda during the period 1955 to approximately 1969.
1.5On or before the priority date or dates of the Applicant's claims, there were present in Australia many persons who had either lived in or visited East Africa as described in paragraph 1.4.
1.6From the facts alleged in paragraph 1.1 to 1.5 inclusive, it is reasonable to infer that on or before the priority date or dates of the Applicant's Claims:
1.6.1one or more of the persons mentioned in paragraph 1.5 had either purchased the Ten Cent Cigarette or well knew of its existence in the market in East Africa;
1.6.2one or more of the persons mentioned in paragraph 1.5 had brought to Australia one or more of the said Ten Cent Cigarettes; and/or
1.6.3one or more of the persons mentioned in paragraph 1.5 had disclosed to another person in Australia before the priority or dates:
(a)the Ten Cent Cigarette itself;
(b)the existence of the Ten Cent Cigarette in East Africa;
(c)the fact that the Ten Cent Cigarette provided approximately 5 puffs per cigarette; and/or
(d)that the Ten Cent Cigarette had a length of or about 63mm, and a circumference of or about 18mm.
1.7The Respondent is unable at present to give particulars of any particular instance of the facts alleged in paragraph 1.6, but will do so as soon as any such instance comes to its knowledge.
To that extent, the further particulars relate to prior publication and want of novelty. The document continues, however, by stating that those same particulars will be relied upon in relation to the ground of obviousness or lack of an inventive step. Then, in relation to Section 6 of the Statute of Monopolies, the following further particulars are given:
3.1Paragraph 3 incorporates by reference the particulars given in paragraph 1(a)(xvii).
3.2By reason of the matters set out in paragraph 1 hereof, and reports and information provided by East African Tobacco Company Limited to the Applicant in relation to those matters, the Ten Cent Cigarette was known to:
(a)the Applicant; and/or
(b)the alleged inventor, who was at all material times an employee of the Applicant.
3.3The matter claimed has no element of invention or inventive merit having regard to:
3.3.1the manufacture and sale of the Ten Cent Cigarette as referred to in paragraph 1 hereof; and/or
3.3.2the knowledge of the Ten Cent Cigarette by the Applicant and/or the alleged inventor referred to in paragraph 3.2.
3.4Copies of examples of the reports and information referred to in paragraph 3.2 may be inspected at the offices of the Respondent's
solicitors by reasonable appointment. The Respondent will provide further particulars after discovery.
3.5Further or alternatively, by reason of the known properties of tobacco and paper wrappers, it was known on or before the priority date or dates that tobacco and paper wrappers were suitable for use in the manufacture of cigarettes of a range of circumferences. The Applicant's Claims do not more than specify a range of circumferences together with the relevant range of known tobacco and paper wrapper properties appropriate of those circumferences.
Evidence on the motion
On the motion, the applicant relied on an affidavit of Andrew James Wiseman to which was annexed a copy of a declaration made by an officer of a related corporation of the respondent. The declaration is dated 3 August 1990 and deals with the Ten Cent Cigarette. The material was relied on by the applicant only as evidence that the respondent had known of the Ten Cent Cigarette, and issues to which it might give rise, since the date of the declaration.
Counsel for the respondent tendered a copy of portion of the records of the United Patent & Trade Mark office relating to the corresponding US patent: the particular material relied on is an exhibit to a declaration of Mr John Luke, said to be the inventor of the subject matter of the present application. The material is not clearly legible, but it relates to the Ten Cent Cigarette, comprises apparently internal documents of BAT Kenya Limited and BAT Tanzania Limited and has what appears to be a covering sheet the heading of which includes the words "London Advisory Services", said to indicate that matters relating to the Ten Cent Cigarette came to the attention of the applicant in London
at the time that the material is dated (apparently 1996). Senior Counsel for the respondent also read two affidavits: they were read not as evidence of the truth of their contents but "documents showing the sort of evidence we would be continuing to produce at the trial". Each deponent is a retired person living in Australia who previously lived in Africa, had smoked Ten Cent Cigarettes and observed that they were widely known and used in certain countries in Africa. It might be added in passing that the affidavits go no further than that: they say nothing of any publication or use in Australia.
Submissions on the motion
Mr Kerr, who appeared for the applicant, argued that the matters which para 1.6 of the further particulars suggests to be reasonable inferences from the facts stated in the earlier paragraphs cannot be inferred from those facts as a matter of logic: to reach the suggested conclusions involves guesswork not logic (Gurnett v Macquarie Stevedoring Co Pty Ltd (1955) 72 WN (NSW) 261 at 264 per Street CJ). As the differing opinions in the judgments in that case show, the distinction between logic and guesswork, in relation to particular facts, is not always easy to draw. I agree with Mr Kerr, however, that the inferences proposed, particularly in subpara 1.6.3, involve a substantial leap. Mr Kerr said also, and with justice, that the evidence relied on by the respondent does not support those inferences at all. He then submitted that, in any event, the suggested inferences (b), (c) and (d) could not, by themselves, amount to prior publication of the invention; and I think that is very likely right.
In other words, I accept (and I do not think that Mr Garnsey QC for the respondents seriously contested) that the respondent is likely to fail on the issue of prior publication or prior use if nothing more is relied upon than the inference particularised in subpara 1.6 of the further and better particulars. The next step taken by Mr Kerr was to submit that, because that is so, the respondent's case in relation to the Ten Cent Cigarettes is manifestly hopeless and that, applying the test in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, I should strike out subpara 1(a)(xvii) of the Grounds and Particulars of Invalidity. That was so, he submitted, as much in relation to obviousness as in relation to want of novelty: just as the particulars were inadequate in relation to prior use or prior publication, so too were they inadequate for a case that the way in which Ten Cent Cigarettes had been made formed part of any relevant common general knowledge in Australia.
Mr Garnsey argued on the other hand that, even if one accepted (at least in relation to novelty) that the particulars so far given are inadequate, this is a case where the party seeking particulars (and which resisted the discovery previously sought), the applicant, is alone in possession of the relevant documents; that this is a case where the material is sufficient to enable me properly to conclude that "sufficient is shown to ground a suspicion" that the respondent "has a good case" (see W A Pines Pty Ltd v Bannerman (1980) 41 FLR 175 at 181) so that it is appropriate to allow discovery - including discovery as already ordered in relation to the Ten Cent Cigarettes - to take place before requiring the respondent to provide further particulars. I was referred particularly to the decision of Lindgren J in Trade Practices Commission v CC (NSW) Pty Ltd (No 4)
(1995) 131 ALR 581 at 592, 593 and was taken to some authorities referred to by his Honour: Miller v Harper (1888) 38 ChD 110: Egg & Egg Pulp Marketing Board v K H Corp Tocumal Trading Co Pty Ltd [1963] VR 378; and L Grollo & Co Pty Ltd v Nu‑Statt Decorating Pty Ltd (1978) 34 FLR 81.
Mr Garnsey submitted also that evidence of what the inventor knew and of what the inventor did is relevant to the issue of obviousness: Wellcome Foundation Ltd v V R Laboratories (Aust) Pty Ltd (1981) 148 CLR 262 at 287; it is relevant therefore to know what, if anything, the inventor knew about the Ten Cent Cigarettes. His statement, in a declaration a copy of which formed part of an annexure to an affidavit relied on by the respondent, that he had no knowledge of the Ten Cent Cigarettes should not be treated as conclusive evidence of that fact. It is relevant, Mr Garnsey contended, to ascertain the extent of the applicant's own knowledge of the Ten Cent Cigarettes: that would be relevant to the issue of obviousness, though other matters would need to be established in relation to common general knowledge: particularly as to the characteristics of the cigarette manufacturing and distributing industry and as to the correspondence between common general knowledge in one jurisdiction and such knowledge in another. Aickin J said in Wellcome Foundation at 284:
It is important, particularly in relation to convention patents, to bear in mind that the common general knowledge which is material to the question of obviousness is common general knowledge in Australia and not the common general knowledge in the country of origin. No doubt occasions may occur where there may be no difference or no significant difference in the common general knowledge of the ordinary skilled worker in one country from that of his counterpart in another. However, that cannot be assumed and there is certainly no presumption that it is so. What must be
proved is common general knowledge in Australia and the inventiveness or otherwise of the alleged invention must be judged against that background. Care must be taken to judge the foreign experiments and developments not against their own background but against the proved background of common general knowledge in Australia.
Finally, it was put to me (as I understood the submission) that the majority decision in NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd (1995) 183 CLR 655 at least arguably establishes, both for the purposes of the 1990 Act and under the previous law, that the requirement that a patentable invention be a manner of manufacture within s 6 of the Statute of Monopolies imports a requirement of "newness" or inventiveness distinct from what might be described as the obverse of the objections of prior use or publication (or want of novelty) and obviousness. On that basis, knowledge by the inventor or, it was said, of the applicant would similarly be relevant to the ground of objection that the invention is not a manner of manufacture within the meaning of s 6 of the Statute of Monopolies.
Reasoning and conclusions
I have already indicated, by accepting in this respect Mr Kerr's submissions, that in my view the further particulars given by the respondent are inadequate. Mr Kerr referred to authorities, particularly Windsurfing International Inc v Petit [1984] 2 NSWLR 196 and Stanway Oyster Cylinders Pty Ltd v Marks (1996) 35 IPR 71, but reference to authority on this aspect of the matter was, I think, a work of supererogation. It does not necessarily follow, however, that subpara 1(a)(xvii) of the Grounds and Particulars of
Invalidity should now be struck out; it will not necessarily be struck out if this is a case where it is proper to allow the particulars to be supplemented following discovery. In retrospect, it would no doubt have been better if this motion and the respondent's motion for discovery (on which I have already given judgment) had been heard together. It may be recalled, however, that the applicant did not object to discovering documents relating to its development before 22 July 1985 of cigarettes with a circumference of less than 21 mm or documents relating to the manufacture and sale before 24 May 1985 of cigarettes with a circumference of less than 21 mm, including such cigarettes manufactured in Africa, for example the Ten Cent Brand: the only substantial difference between the documents in those categories sought by the respondent and those offered by the applicant was that each of the applicant's offered categories was qualified by the word "unprivileged", in context apparently importing privileges available under either the law of England or that of the United States.
Subparagraphs 1.1 to 1.4 of the respondent's further and better particulars describe what is apparently not significantly disputed: that is that for a substantial period of time a subsidiary of the applicant manufactured and sold in a number of African countries a cigarette whose characteristics to a substantial extent match the claims. It appears likely that it will not be difficult to establish that that cigarette was widely used and well known in the countries concerned. The respondent has pointed to some material which suggests that the applicant, in London, knew of the cigarette. Indeed, it would be somewhat surprising if it did not. Facts relating to the manufacture, distribution and sale of the cigarette are, as between the parties, a matter peculiarly within the knowledge of the applicant. The question is, I think, not whether the respondent is capable now of providing particulars of a case which, if proved, will make good the grounds of objection. It is rather whether there is a sufficient foundation to permit the respondent to await the results of discovery (and, if leave is given to administer them, interrogatories) before fully particularising its claim.
This is by no means an easy question, given that at least both on the issues of want of novelty and obviousness there are substantial gaps to be filled: the case is close to the borderline. In the end, however, my view is that the particulars which the respondent is able now to give concerning the substantial period during which the Ten Cent Cigarettes were manufactured and sold, the large (if contained) geographical area within which that happened and the widespread promotion and use within that area provide a sufficient foundation for a conclusion that discovery as to matters relevant to other elements of the grounds of objection is not to be regarded as mere fishing (see particularly Grollo at 90, 91) so that the present motion should not succeed and the respondent should have the later opportunity, which it seeks, to supplement its particulars.
Questions similar to that which arises on this motion can arise under O 15A r 6 of the Federal Court Rules. That is the rule which empowers the Court to make an order for discovery before action. One of the conditions of the power is that there is 'reasonable cause to believe that the applicant ... may have the right to obtain relief in the Court ...' The analogous question here - which, for the reasons I have given I would answer affirmatively - is whether there is reasonable cause to believe that the respondent may
have good grounds of objections on the grounds of want of novelty, obviousness or lack of 'newness' or inventiveness, (See the decision of O 15A r 6 by Lindgren J in Alphapharm Pty Ltd v Eli Lilly Australia Pty Ltd, FCA 26 May 1996, unreported).
There was a suggestion that the respondent should be directed now to provide further particulars in relation to the grounds that the invention is obvious and does not involve an inventive step and that it is not a manner of manufacture. I do not think that anything is to be gained by directing the provision of further particulars at this stage. Accordingly, I dismiss the motion. In the circumstances I think the appropriate order to make as to costs is that they be reserved, but the question of costs has not been argued and I am willing to hear counsel on it.
I certify that this and the preceding 12 pages are a true copy of the Reasons for Judgment of the Honourable Justice Lehane.
Associate:
Dated: 15 November 1996
Heard: 21 October 1996
Place: Sydney
Decision: 15 November 1996
Appearances: Mr P Kerr of Allen Allen & Hemsley appeared for the applicant.
Mr J J Garnsey QC and Mr T J Hancock of counsel instructed by Arthur Robinson & Hedderwicks, Solicitors appeared for the respondent.
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