CCOM Pty Ltd & Ors v Jiejing Pty Ltd

[1995] HCATrans 42

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B26 of 1994

B e t w e e n -

CCOM PTY LTD AND RONALD HOWARD THOMAS and ALLAN GARNHAM

Applicants

and

JIEJING PTY LTD, PARAVET INSTRUMENTS PTY LTD, JEFFREY JOHN YATES, and ERIC RUSSELL CHAPPELL

Respondents

Application for special leave to appeal

BRENNAN J
DEANE J
GAUDRON J

TRANSCRIPT OF PROCEEDINGS

FROM BRISBANE BY VIDEO LINK TO CANBERRA

ON FRIDAY, 10 MARCH 1995, AT 9.50 AM

Copyright in the High Court of Australia

MR J.J.J. GARNSEY, QC:   May it please the Court, I appear for the applicants.  (instructed by Paul Pattison)

MR D.K. CATTERNS, QC:   May it please the Court, I appear with my learned friend, MS D.A. MULLINS, for the respondent.  (instructed by Bennett & Philp)

BRENNAN J:   Yes, Mr Garnsey.

MR GARNSEY:   Your Honours, this is an application which, in the submissions of the applicants, raises matters of fundamental importance in relation to the administration of the Patents Act and the law relating to the fair basing of claims upon specifications and the significance of a provisional specification.   The decision, the subject of the application, is a decision of the Full Court of the Federal Court of Australia which upheld a decision ‑ ‑ ‑

BRENNAN J:   You can take it we have read the application book, Mr Garnsey.  Time is limited, you have a lot to cover.  Perhaps you might care to focus, however, on the problem of fair basing.

MR GARNSEY:   If your Honour pleases.  Your Honours, the decision of the Full Court on fair basing is wrong because the Full Court adopts an approach to the construction of the specifications and claims inconsistent with the proper purposive approach to the construction of the patent specifications which has been clearly enunciated in the House of Lords, in the decision of Catnic v Hill & Smith, and which has been explained in some manner in the Full Federal Court in a number of decisions and, indeed, at first instant in the Federal Court but, in particular, in Populin v HB Nominees  and Fisher v Paykel.

The Full Federal Court in this case fell into error because it placed excessive weight, apparently, on the reasoning of Sir Garfield Barwick in the old Incorporation Case in connection with fair basing.  His Honour’s remarks in that case do not sit well with the remarks of Mr Justice Stephen and Mr Justice Mason, as he then was, in that case and there is a confusion, in our respectful submission, regarding the proper approach.

GAUDRON J:   What interpretation would be placed on the applications in this case, or the specifications, on your approach?

MR GARNSEY:   On the proper approach, we submit, your Honour, the result would be that the invention as claimed in the claim of the petty patent in suit would have been disclosed in the provisional specification. 

GAUDRON J:   As what?

MR GARNSEY:   As an invention which enables the search and selection of Chinese or other idiographic characters by reference to the order of strokes in which they are written, not depending upon any particular categorisation of strokes; that is, you can say “I have eight categories or 10 categories or 12 categories”.  We say on the factual side of the case that it is transparent from the provisional specification that that is the invention, searching by stroke order to select from tens of thousands of characters the ones desired. 

The Full Court in this case followed Mr Justice Cooper’s reasoning in a judgment delivered a considerable time after submissions which picked particular words out of the specification and gave them a quite abnormal significance, in our respectful submission, and his Honour did that not as clearly as the Full Court but in the light of authority which in relation to fair basing has not been considered in this Court in any recent or deliberate or detailed way and which enables quite conflicting approaches.

BRENNAN J:   Can you identify, first, the principle for which you contend and, next, the passages in the  judgment which fail to give effect to that principle?

MR GARNSEY:   Yes, your Honour.  Can I do that in reverse order because it is convenient, the Full Court does go through the authorities.

BRENNAN J:   Yes.

MR GARNSEY:   Commencing at page 159 of the application book with that historical survey - I do not seek to take the Court to that - but at page 166 line 25, there is reference to the disconformity concerning:

the relationship between the claims and the body of the complete specification.

And the problem in this case is the same; it was a disconformity within the claims of the complete specification and the provisional specification that was in question.  And there is a reference to Mullard Radio Valve Co Limited v Philco Radio and Television Corporation of Great Britain Limited and then to Mr Justice Dixon, as he then was, in Palmer v Dunlop Perdriau Rubber Co Limited, and then an extract from the speech of Lord Macmillan in Mullard, and we say the principle is the principle enunciated there and developed in the case referred to at the bottom of page 168, with the passage set out on page 169 in Mond Nickel Company Ltd’s Application for a Patent from the judgment of Mr Justice Lloyd-Jacob.

Now that is to be contrasted with the statement from the judgment of Sir Garfield Barwick in the Olin Corporation Case, which is in the application book at page 168 lines 20 to 25, and his Honour puts it:

the question is a narrow one, namely whether the claim to the product being new, useful, and inventive, that is to say, the claim as expressed, travels beyond the matter disclosed in the specification.

Now, the judgment of the Full Court then proceeds to refer to:

Another tendency has been to analyse “fair basing” in terms of particular “tests”, a process to which lawyers often are attracted when presented with a broadly expressed statutory norm.

In the matter of the Mond Nickel Company Ltd’s Application for a Patent there is then the reference to the analysis of Mr Justice Lloyd-Jacob.

Then the court at 169, line 28, proceeds:

The use of the term “inconsistent” is somewhat unfortunate.  First, whilst it may have a clear meaning to an English lawyer, in Australian law, particularly constitutional law, it is a term used in a variety of senses.

At 170, line 3, the court says:

In addition, it is well established that a claim may be fairly based on matter in the specification which is not verbal description but accompanying drawings; these of course, are to be read by the skilled addressee.

The comparison is not analogous to that between a claim and an alleged anticipation or infringement.  The statutory treatment of fair basing represents a particular development of a special branch of patent law ‑

The court’s consideration proceeds over the next two pages, saying at 171, line 15:

Buckley LJ eschewed an over meticulous verbal analysis.

A passage is cited and then the court said:

This judgment was approved by Fox J and Spender J in Coopers Animal Health Australia Ltd v Western Stock Distributors Pty Limited ‑ ‑ ‑

BRENNAN J:   Do you join issue with that proposition?

MR GARNSEY:   Your Honour, we do not join issue with that proposition, no.

BRENNAN J:   Was that not the proposition applied by the Full Court?

MR GARNSEY:   Not here, no, your Honour.  This is our difficulty.  The Full Court goes through a number of decisions which do tend, we say, towards a non‑textual purposive approach in relation to fair basing, but then comes down in its examination at pages 173 to 181 of the application book on the side of a narrow textual approach.

GAUDRON J:   It decided that there was in fact a difference between the two specifications:  the final specification and the preliminary.

MR GARNSEY:   That is the precise point of decision.

GAUDRON J:   Yes, and one point in difference is that the early specifications do not speak of the order of stroke.

MR GARNSEY:   They refer to search according to order, if your Honour pleases.

GAUDRON J:   Yes, they refer to a search and they refer to eight basic character strokes.

MR GARNSEY:   Yes, your Honour, and they also refer to an invention which works according to the order in which those eight basic character strokes are written.

BRENNAN J:   Mr Garnsey, it is patently clear that you will not get special leave to agitate a mere question of construction of documents.

MR GARNSEY:   No, your Honour, and I do not seek that.

BRENNAN J:   No.  You must be able to identify an error of principle.

MR GARNSEY:   Yes, your Honour.

BRENNAN J:   Now, it may be that in the application of the principle you would have some quarrel with the result arrived at by the Full Court, but do you take it beyond that?

MR GARNSEY:   Your Honour, we do say that there must have been an error of principle because the Full Court held there being no fair basing the petty patent was then anticipated by two things:  first, the sale of the respondents’ Jiejing products since 1989; and, secondly, by the Patent Co‑operation Treaty, the PCT, specification which was in the same form as the provisional specification at the date at which it was lodged.  Now, the traditional test for anticipation is that the earlier product or disclosure is an infringement of the anticipated patent, but by definition or at least by the prior reasoning of the Full Federal Court the earlier sales of the Jiejing product and the Patent Co‑operation Treaty, which refers to the eight strokes as the same as the provisional, does not disclose the invention, cannot anticipate ‑ ‑ ‑

BRENNAN J:   But where does that take us?  Was it not common ground that in order for you to succeed you had to establish that the claiming of the petty patent was fairly based on the provisional application?

MR GARNSEY:   Yes, your Honour, but it takes, we respectfully submit, us to this conclusion, that the Full Federal Court adopted a very narrow and wrong construction of the provisional specification, the disclosure, relying on the first principal passage cited from the decisions of this Court in the judgment of Sir Garfield Barwick in the Olin Corporation Case because the court’s treatment of those authorities is not in any conclusive way to say this is right or this is the right approach or this is the right approach.  The court refers to them all but then comes down very strongly in relation to Sir Garfield Barwick’s statement and a very narrow textual approach and this is shown, we submit, in the length that the Full Court went to to avoid referring to the Catnic principle which had been referred to expressly and at some length by Mr Justice Cooper in relation to infringement and to narrowly confine a vital word in the claim, that is, “search”, contrary to the Oxford Dictionary of Computers so as to exclude an algorithm of the type which the respondents say existed here and made a difference.

GAUDRON J:   But, was that done on the issue of fair basing or on the issue of infringement?

MR GARNSEY:   Your Honour, it was done principally on the issue of infringement.

GAUDRON J:   Well, that does not take us anywhere in terms of error, does it, in fair basing?

MR GARNSEY:   Your Honour, it shows, we respectfully submit, an approach and a reading down of authority which has been long applied in relation to fair basing and contrary to authority which has not been considered by this Court in relation to the construction of patent specifications generally, but which has been applied in the area of infringement.  And this is, we respectfully submit, a very good example of where clarification of the law is required from this Court.

Can I just refer very briefly to the Olin Corporation Case 51 ALJR 525. The passage from the judgment of Sir Garfield Barwick which the Full Court referred to is found at page 527, column 2, letters D to G. Now, his Honour refers to the reasons of Mr Justice Stephen and Mr Justice Mason; however, their Honours at page 537, column 1, letters A to F refer to Mond Nickel and Mullard Radio Valve Cases, which is contrasted in the Full Court in this case with Sir Garfield Barwick.  Sir Harry Gibb’s judgment really does not discuss those questions.

The result here, we say ‑ and submit with greatest respect ‑ has been to confine the construction, not only of this specification but of all specifications involving computer programs and searches, to a very narrow area.  We submit that, if one looks at the discussion of authority in the judgment of the Full Court on fair basing, it is confused and inconclusive.  We submit, with respect, that this is a developing area of patent law of increasing importance to a great number of persons. 

It is also of importance to Australian industry and the economy.  It is also a case in which, had a purposive approach as in Catnic Components Ltd v Hill & Smith been adopted, we submit quite clearly, the result would have been that the claim would have been found to have been based on the provisional specification and that, quite clearly, there would have been infringement.  On an appeal, we shall seek to present analysis to show that 98 per cent of the 10 category characters are accessible by the eight categories of the applicants.

Your Honours, we submit, with respect, that if Mr Justice Cooper’s judgment, and if the Full Court judgment stands, and Mr Justice Cooper’s judgment has been found in one respect to have contained serious error of

fundamental principle, then they are a recipe for confusion and injustice, especially in the developing area of patent law, of great importance to the Australian economy, both nationally and internationally.  We respectfully submit that notwithstanding the factual substratum which is not in dispute as to the primary facts, though it would take a little explaining, but not too much, that this is an appropriate case for a grant of special leave.  May it please the Court.

BRENNAN J:   Thank you, Mr Garnsey.  We need not trouble you, Mr Catterns.

The proposed appeal cannot succeed unless the applicant succeeds in establishing that the claim for the petty patent was fairly based on the specification in the provisional application lodged with the Patents Office on 5 September 1988.  The question whether the petty patent was fairly based on the provisional application was answered against the applicant, both by the trial judge and the Full Court of the Federal Court.  The judgments below, in this respect, reveal no error of law.  The issue is resolved by examination of the claim for the petty patent and of the provisional application.  Whether the issue was correctly resolved in fact is not a question which warrants the grant of special leave.  As the High Court, constituted by Chief Justice Mason, and Justices Dawson and Toohey said in Yamazaki Mazak Corporation v Interact Machine Tools (NSW) Pty Limited, on 22 April 1994:

The Full Court of the Federal Court is the final court of appeal in matters of intellectual property, subject only to this Court exercising its exceptional jurisdiction to grant special leave to appeal.  This Court will only grant special leave to appeal in matters of intellectual property when the proposed appeal raises an important question of principle, and no such question arises here.  In our view, the outcome of the case depended on questions of construction of documents, and in resolving those questions the Full Court did not make any significant error of principle.

That passage is applicable to the present case.  Special leave should therefore be refused.

MR CATTERNS:   May it please the Court, we ask for costs, your Honour.

BRENNAN J:   Yes.  Mr Garnsey?

MR GARNSEY:   I have nothing to say.

BRENNAN J:   It will be refused with costs.

AT 10.12AM THE MATTER WAS CONCLUDED.