Dyno Nobel Asia Pacific Ltd v Orica Australia Pty Ltd

[1999] FCA 1369

FEDERAL COURT OF AUSTRALIA

Dyno Nobel Asia Pacific Ltd v Orica Australia Pty Ltd [1999] FCA 1369

PATENTS – revocation – explosives – whether “method of blasting” is a patentable invention – meaning of “invention” – whether manner of manufacture – prior art documents –obviousness – meaning of “person skilled in the relevant art” – common general knowledge – whether “diligent searcher” – novelty – prior use

Patents Act 1990 (Cth)
Patents Act 1952 (Cth)

N V Philips Gloeilampenfabrieken v Mirabella International Pty Ltd (1995) 183 CLR 655
Commissioner of Patents v Microcell Limited (1958-59) 102 CLR 232
National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252
Advanced Building Systems Pty Ltd v Ramset Fasteners Aust Pty Ltd (1997-8) 194 CLR 171
Minnesota Mining and Manufacture Co v Beiersdorf (Aust) Ltd (1980) 144 CLR 253
Graham Hart (1971) Pty Ltd v S W Hart & Co Pty Ltd (1978) 141 CLR 305
Technograph Printed Circuits Limited v Mills and Rockley (Electronics) Limited (1972) RPC 346
Beecham Group Limited’s (Amoxycillin) Application [1980] RPC 261
Re Cooper’s Animal Health Australia Limited v Western Stock Distributors Pty Ltd (1986) 67 ALR 390
Bristol-Myers Company (Johnson’s) Application [1975] RPC 127

DYNO NOBEL ASIA PACIFIC LIMITED (FORMERLY DYNO WESFARMERS LIMITED) (ACN 003 269 010) AND DYNO NOBEL INC v ORICA AUSTRALIA PTY LTD (FORMERLY ICI AUSTRALIA PROPRIETARY LIMITED) (ACN 004 117 828)

QG 47 of 1996

DOWSETT J
5 OCTOBER 1999
BRISBANE

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QG 47 OF 1996

BETWEEN:

DYNO NOBEL ASIA PACIFIC LIMITED (FORMERLY DYNO WESFARMERS LIMITED) (ACN 003 269 010)
First Applicant

DYNO NOBEL INC
Second Applicant

AND:

ORICA AUSTRALIA PTY LTD (FORMERLY ICI AUSTRALIA PROPRIETARY LIMITED) (ACN 004 117 828)
Respondent

JUDGE:

DOWSETT

DATE OF ORDER:

5 OCTOBER 1999

WHERE MADE:

BRISBANE

THE COURT ORDERS THAT:

Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QG 47 OF 1996

BETWEEN:

DYNO NOBEL ASIA PACIFIC LIMITED (FORMERLY DYNO WESFARMERS LIMITED) (ACN 003 269 010)
First Applicant

DYNO NOBEL INC
Second Applicant

AND:

ORICA AUSTRALIA PTY LTD (FORMERLY ICI AUSTRALIA PROPRIETARY LIMITED) (ACN 004 117 828)
Respondent

JUDGE:	DOWSETT
DATE:	5 OCTOBER 1999
PLACE:	BRISBANE

REASONS FOR JUDGMENT

THE APPLICATION AND INDEX

1. The second applicant holds Australian Patent No 639562.  The priority date is 7 June 1990.  The first applicant holds an exclusive licence to exploit that patent in Australia.  They seek a declaration that the respondent has infringed the patent and consequential relief.  The respondent cross-claims for revocation of the patent.  Only that issue is presently before the Court. 

2. The following is an index to the judgment:-

   ·THE APPLICATION AND INDEX  pars 1-2

   ·THE PATENT – GENERAL  par 3

   ·EXPLOSIVES – HISTORY  pars 4-8

   ·EXPLOSIVES – USE  pars 9-10

   ·REACTIVE ORE   par 11

   ·REACTIVE ORE – THE LITERATURE   pars 12-29

   ·UREA IN EXPLOSIVES  par 30

   ·UREA - THE LITERATURE  pars 31-48

   ·SIGNIFICANT WITNESSES

   ·Mr Harriespars 49-65

   ·Dr Oxley  pars 66-68

   ·Mr Moxon  par 69

   ·Mr Lee   par 70

   ·Mr Sujansky  par 71

   ·Dr Cranney  pars 72-93

   ·Mr Bellairs  pars 94-99

   ·Dr Rumball  pars 100-103

   ·OBSERVATIONS AS TO CREDIBILITY  pars 104-109

   ·ASAHI PATENT  pars 110-114

   ·THE PATENT – MEANING  pars 115-129

   ·THE PATENT – VALIDITY   pars 130-228

   ·A Patentable Invention  pars 131-171

   °Addition of Urea to Emulsions for Use in

   Reactive Ore  pars 160-163

   °Use of Emulsions Containing Urea in

   °Reactive Ore  par 164

   °The Applicants’ Arguments  pars 165-171

   ·Inventiveness  pars 172-212

   °A Person Skilled in the Relevant Art  pars 177-179

   °Common General Knowledge  pars 180-182

   °Prior Art Documents  pars 183-196

   °Prior Art Documents as Part of Common

   General Knowledge  pars 197-198

   °Conclusions on Inventiveness  pars 199-212

   ·Novelty  pars 213-223

   ·Insufficiency  pars 224-227

   ·Inutility  par 228

   ·SUMMARY  par 229

   THE PATENT - GENERAL

3. The patent is for a method of blasting in “reactive ores” containing compounds called “sulphides” (which are composed of sulphur in combination with other elements) “and/or pyrites” (which term describes chemical compounds of iron and sulphur).  The patented method involves the use of an emulsion containing an explosive (usually ammonium nitrate), urea and fuel oil, although there may be variations and/or other constituents.  The following aspects of the patent claims are significant:-

   ·     With the exception of claim 14, they claim invention of a method of blasting, not an explosive agent.

   ·     The method is limited to blasting in reactive ores, using an emulsion explosive.

   ·     The method involves the use of urea, which in all claims other than claim 14, is in the discontinuous phase.  I will explain this term at a later stage.

   ·     Claim 14 comprises the addition of urea to an emulsion explosive for use in reactive ores.

   EXPLOSIVES - HISTORY

4. An explosive is a substance which undergoes a rapid chemical change on being heated or shocked, producing gas.  The volume of gas produced is relatively large compared to the volume of the original explosive.  When detonation occurs in a confined space, the gas creates great pressure.  Until the 1860s, the primary commercial explosive was black powder.  This is a finely ground mixture of potassium nitrate, sulphur and charcoal (carbon).  In the 1860s, Alfred Nobel invented dynamite, which is based on nitroglycerine.  He then developed blasting gelatine, using nitrocellulose as a gelatinizing agent.  Later, fuel and oxidizing agents such as sodium nitrate were added.  Later still, ammonium nitrate (“AN”) replaced sodium nitrate because it was cheaper and safer.  AN is a chemical compound containing nitrogen, hydrogen and oxygen.  During the Second World War, AN was produced in large quantities for use in munitions, but post-war demand was so low that it was sold as a fertilizer in its “prilled” (granulated) form.

5. In about 1956, a United States company successfully mixed diesel fuel with AN to produce an explosive known as ANFO (an acronym for “ammonium nitrate and fuel oil”).  The fuel oil “sensitises” the AN by utilizing the oxygen produced from its chemical decomposition after detonation.  I infer that the fuel oil becomes involved in the explosive effect by burning rapidly, consuming the oxygen.  ANFO is also supplied in prilled form.  The prills are porous and absorb fuel oil and moisture.  The latter may reduce blasting performance and handling.  These problems were overcome to some extent in the 1950s by the development of anti-caking agents, greatly increasing the practical use of ANFO.  By the mid-1960s it had replaced nitroglycerine as the preferred explosive in most mining operations in Australia. 

6. During the 1950s and early 1960s, explosives in the form of “water gels” or “slurries” were developed in which AN, sensitised with fuel, is dissolved in water.  Additives may be used to overcome the adverse effects of the water.  In 1964 an American company patented a water-in-oil emulsion explosive.  An emulsion is formed when two immiscible liquids, such as water and oil, are mixed so that one liquid forms droplets in the other.  If the mixture is not stabilized, the droplets may separate out so that the two liquids resolve into discrete layers.  An emulsifier may be added to the two immiscible liquids to maintain the separation.  In an emulsion, one of the liquids will be “continuous” whilst the other will be in droplet (or “discontinuous”) form.  In this context, “continuous” describes the liquid which apparently “fills” the vessel in which the emulsion is contained, whilst “discontinuous” describes the liquid which is dispersed, in droplet form, throughout the “continuous” liquid.  The expressions “continuous phase” and “discontinuous phase” are also used with similar meanings.  In an oil-based emulsion, the continuous phase will usually be fuel oil.  The discontinuous phase will often be AN in water.  Other combinations are possible, and there are usually other additives.

7. By the late 1970s, emulsions were replacing water gels and slurries for use in “wet” holes (ie where the presence of water would impede the effectiveness of ANFO).  It should be noted, however, that ANFO continues to be, by far, the most widely-used explosive.  At the priority date of the patent in suit (7 June 1990), ANFO still accounted for about 80 per cent of explosives used in Australia.  (See consolidated affidavit of Mr Harries at par 1.54.)  An emulsion achieves a relatively high degree of inter-facial contact between the two liquids, accelerating the chemical reaction between them and the consequential explosion.  This concentrates its effect.  Another advantage of emulsions is that the outer, continuous phase (oil) protects the AN in the discontinuous phase from excessive exposure to water from external sources.  As previously mentioned, such exposure can reduce its effectiveness. 

8. It has been known for many years that AN in ANFO can react when in contact with some ores.  This is undesirable as it may cause fires and/or premature detonation.  It was thought that the oil phase in emulsions would prevent such reaction, but this proved not to be so.  Bore-hole liners, made of a synthetic material, are used to solve this problem.  They prevent physical contact between the explosive and the ore.  However they are expensive and prone to tearing.  Another solution is to use pre-packaged explosives, but this approach has the same shortcomings.  Ores which react in contact with AN are called “reactive ores”.  Water may promote this undesirable reaction.  Heat may be generated by one or other of the chemical reactions or may come from other sources.  Heat and/or the chemical products of reactions in reactive ore may cause degeneration of AN, leading, as I have said, to the possibility of fires and/or premature detonation. 

   EXPLOSIVES - USE

9. This case is concerned primarily with the use of explosives in quite large ore bodies, usually located in fairly remote sites.  It emerged in the course of evidence that explosives are often put in place days, weeks, or even months before they are detonated.  Such a delay in detonation provides the opportunity for reaction between reactive ore and AN explosives.  Mine-site blast holes are commonly between 200 and 500 millimetres in diameter and between 20 and 70 metres in depth.  The quantity of explosive material may be substantial.  Explosives are therefore often supplied in bulk and mixed on site.  This may involve their being pumped into a blast hole from a truck or mobile mixing unit.  Such a large scale of operation explains the concern about expense associated with the use of bore-hole liners and pre-packaging.  However only a very small fraction of bore-holes require such treatment.

10. Major suppliers of explosives also provide consultative services to their client-purchasers.  From time to time, it is necessary for the supplier and the client to work together to solve problems arising at particular sites.  For example, much of the evidence in this case concerns the resolution of a problem which arose in blasting at a mine site in Western Australia called Mt Whaleback.  There is similar evidence concerning a problem at Mt Lyell. Such resolution inevitably involves interaction between explosives experts employed by the supplier and on-site mining personnel employed by the client.  It seems that it is also not uncommon to utilize university research personnel and facilities. 

    REACTIVE ORE

11. An aspect which consumed considerable time at the trial is the meaning of the expression “reactive ores”.  I have already explained the term in a general way.  This is an important question because the term is used as one of the major defining features of the claims in the patent.  The essence of the claimed invention is the addition of urea to explosives for use in reactive ore bodies, the purpose of such addition being to counter problems experienced as a result of reaction between such ore and AN or other similar explosives.  The applicants’ witnesses generally asserted a more precise and limited meaning for the term than did the respondent’s witnesses.  By that observation, I do not mean to imply any preference for the evidence of either side.  Without wishing to reflect adversely on any of the witnesses, there is the possibility of partisanship with respect to most of them.  I do not necessarily mean that any of them deliberately favoured a party, but rather that there may have been unconscious identification with a cause.  In general, use of the term “reactive ores” in the witnesses’ evidence and in the documentary evidence suggests that it might have an almost ambulatory meaning, dependent upon the context.  Obviously, the use of the term in literature produced for purposes other than the present litigation will be of substantial assistance.  A consideration of that literature will also help to identify in more detail the nature of the problem which the patent claims to solve.  I stress that I am, at this stage, seeking to provide background information.  I am not presently addressing the “prior art” questions which arise pursuant to par 18(1)(b) of the Patents Act 1990 (Cth) (the “Patents Act”).

    REACTIVE ORE – THE LITERATURE

12. Many of the more import documents in the case are contained in ex “GH1” to the affidavit of Mr Harries.  I will refer to that exhibit as “GH1”.  A CSIRO paper entitled “The Reaction of ANFO Explosives with Mineral Sulphides”, written by Dr G M Lukaszewski and published in December 1968, refers to “reactive … ground”.  As the title implies, the paper is concerned with ANFO explosives.  The abstract appears at p 46 of GH1.  It states:-

    Ammonium nitrate – fuel oil (ANFO) explosives are unstable in hot, reactive sulphide-rich ground at Mt Isa.  Under certain conditions associated with background heat, moisture, and chemical impurities from natural oxidation, ANFO composites in contact with hot ground disproportionate and the ammonium nitrate can undergo rapid exothermic reactions with sulphide.

    Reactions can occur in confined charges from prolonged contact with reactive sulphides, or by contamination with sulphide in loading.  Partial interaction can result in mis-fires or premature detonation.  Spilt, scattered and unpropagated explosive will undergo further reaction in sulphide-rich environments.  ANFO-sulphide interaction is invariably exothermic and causes an irreversible chemical transformation of the ore.

    The heat generated during reaction may be dissipated, heating the environment, or rapidly accumulated to yield hot spots or areas in excess of 400° C.  These can result in forced ignition of bulk sulphide and sustained combustion. 

13. The word “exothermic” describes the generation of heat by a chemical reaction.  At p 47 of GH1, there is reference to “investigations … undertaken … to define the factors in ANFO-sulphide reactivity and the rapid oxidation of sulphide ore in hot ground …”.  At p 49, Dr Lukaszewski says, under the heading “Hot Ground Processes”:-

    Type

    Thermo-chemical investigations have shown that hot ground phenomena are associated with three chemically-different, but physically and thermally interacting processes.  These are:

    (1)      low temperature oxidation of sulphides (hydrolysis oxidation),

    (2)      explosive (ANFO) – sulphide interactions, and

    (3)      high temperature combustion of sulphide ore constituents.

    Clearly, the author is discussing a number of related problems involving chemical reactions and the effects of heat.

14. The US Bureau of Mines has published a number of reports, one in 1968, The Reactivity of Ammonium Nitrate – Fuel Oil with Pyrite-Bearing Ores, a second in August 1976, The Reactivity of Aluminized ANFO with Pyrite-bearing Ores, a third in 1979, Reactivity of ANFO with Pyrite-containing Weathering Products and a fourth report in 1982, Reactivity of ANFO with Pyrite-containing Weathering Products – Evaluation of Additional Inhibitors.

15. The 1968 report is located at pp 297 et seq of ex “JCO1” to the affidavit of Jimmie Carol Oxley.  I will refer to that exhibit as “JCO1”.  At p 299 of the exhibit (in the abstract of the report) the writers assert:-

    The recent occurrence of fatal accidents in copper mines, presumably due to premature ignition of loaded holes by the heat from reacting ammonium nitrate-fuel oil (ANFO) and pyrite-bearing ores, has led to an examination of this reaction.  The reactivity of prilled ANFO mixtures with pyrite-bearing ores and the effects of water, dilute sulphuric acid, and potential inhibitors on reactivity of the mixtures were evaluated.

16. The 1976 report appears at p 84 of GH1 and states:-

    The recent trend in the mining industry to strengthen ANFO by the addition of aluminium metal raised the question regarding the effect of aluminium in ANFO in the presence of pyrite-bearing ore.  Laboratory work, similar to that done previously, demonstrated that the temperature of a self-sustaining reaction in the presence of ANFO-ore-aluminium is not lower than that for a comparable ANFO-ore mixture.  However, as might be expected from known thermochemical data, once initiated, the resulting reactions between ANFO, aluminium and pyrite are much more vigorous than those observed for ANFO and pyrite alone. 

17. The report continues at p 88 of GH1:-

    Ammonium nitrate-fuel oil (ANFO) mixtures are extensively used as blasting agents for underground mining of pyrite-bearing ores.  Following fatal accidents in such situations, the Bureau of Mines reported the results obtained in an investigation of the reactivity of ANFO with pyrite-bearing ores.  It was demonstrated that temperatures in excess of 100° F could lead to reactions between ANFO and the pyrite in the ores, that temperatures produced during reaction between ANFO and pyrite-ores readily exceeded the temperatures at which electric blasting caps are thermally initiated (250-300° F) and it was postulated that this was the cause of the accident.

18. The abstract of the 1979 report (at p 116A of GH1) records:-

    Ammonium nitrate-fuel oil (ANFO) mixtures are used as blasting agents in mining pyrite-bearing ores.  The temperature of these ores can increase by the continuous, though at times slow, oxidation weathering of the pyrites.  At elevated temperatures, ANFO reacts exothermically with pyrite, and the reaction becomes self-sustained at 120° + 10° C.

    The Bureau of Mines has conducted an investigation to determine the reactivity of mixtures of ANFO with pyrite containing ferrous sulphate.  The results of tests in a heated vessel simulating a hot bore-hole demonstrate that small amounts of ferrous-sulphate, a major product of pyrite-weathering, initiate a self-sustained exothermic reaction with ANFO at 80° C.

19. At p 125A of GH1, the authors conclude:-

    Bore-hole simulation tests of ANFO-pyrite or ferrous-sulphate combinations demonstrate that when these mixtures are heated slowly, they start to react at around 80° C.  Small amounts of ferrous-sulphate (2.75 wt-pct) are sufficient to bring this about.  The equivalent of ferrous-ion is 1 wt-pct.  In other words, very small amounts of soluble ferrous salts, weathering products of pyrite, are detrimental to ANFO charges. 

20. In 1986, Mr Harries (one of the respondent’s witnesses), Mr Bellairs (one of the applicants’ witnesses) and Mr Stewart presented a report entitled The Reaction of Ammonium Nitrate with Black Pyritic Shale at Mt Whaleback, referring to the investigation which I have previously mentioned.  This paper was delivered at a Large Open-Pit Mining Conference held in October 1986.  It appears at pp 75-6 of GH1.  After reciting the circumstances of the misadventure at Mt Whaleback, the authors state:-

    Reactions between ammonium nitrate (AN) and pyrite had been found at temperatures as low as 66°C when 5 per cent of .34 per cent sulphuric acid was added … .  A reaction was found at 66°C between AN and pyrite when 5 per cent of ferrous sulphate was added.  …  A reaction between AN and black pyritic Mt McRae shale was found after 11.8 hours at 52°C … when 1.6 per cent of water was added.  The temperature in all these tests was found to rise very rapidly as soon as the reaction was initiated.  This rapid temperature rise would melt the TNT in the booster at 80°C and the PETN in the detonating cord and the booster at 140° C.  AN melts at 169°C and starts to decompose at 200°C with the evolution of N₂O.  At 220°C molten AN can be detonated with a 40g pentolite booster … .

    The pyritic black shale blast holes on Mt Whaleback had been charged with ANFO for at least 72 hours and moisture was present as it had been raining providing conditions very close to the previously described laboratory tests in which reaction occurred.  It is therefore not surprising that the blast holes also reacted.  This would lead to melting and decomposition of the AN.  An explosion of the melting AN could be caused by the detonation of PETN which occurs at 200-220°C … . 

1. At the same conference, a paper was presented by Messrs Rumball, Thornber and Davidson entitled A Study of the Chemical Reactions Leading to Spontaneous Combustion of Pyritic Black Shale at Mt Whaleback Western Australia.  This appears at p 39 of GH1.  Doctor Rumball gave evidence on behalf of the applicants.  The abstract of the paper identifies the following conditions as necessary for spontaneous combustion of pyritic black shale:-

   ·     A critical mass of pyritic black shale.

   ·     Acidity.

   ·     Fine shale particle size.

   ·     A high ambient temperature.

   ·     The exclusion of air during the preparation of a calorimeter charge.

2. The paper states:-

   The reaction is characterized by an initial incubation period during which an unknown phase is produced.  The build-up and oxidation of this phase results in a chain reaction culminating in ignition.  The mechanism is believed to involve the interaction of pyrite, sulphuric acid, ferrous sulphate, or metastable oxy-sulphates with ammonium nitrate.

   The recommended strategy for prevention of premature detonation is to neutralize the acids in the shale with quick and slow release alkaline materials.

3. United States Patent No 3708356 (the “Mason patent”) deals with a similar problem to that with which we are now concerned.  See p 127 of GH1.  The patent application was filed in 1970.  It appears to have been granted in 1973.  The abstract of the patent refers to:-

   An ANFO explosive which is modified by the presence of small amounts of urea so that the explosive will not adversely react with pyrite in pyrite-bearing mines.

4. The patent goes on to describe the use of ANFO as an explosive and states:-

   It cannot be safely employed in mines with relatively high temperature where significant pyritic minerals are present … because pyrite tends to react with the ANFO explosive, and causes fumes, fires or even initiates premature detonation.

5. In 1982 the Asahi Chemical Industry Company Limited filed an application for a patent in Japan.  The patent was opened to public inspection in Australia in 1984.  The body of the patent (the “Asahi patent”) offers an explanation of the problem.  It recites (at p 130 of GH1):-

   Conventional hydrous explosives contain 5 to 20 per cent of water and it was confirmed that they are hard to be thermally decomposed compared with dynamite and powdery explosives.  However, if such an explosive happens to come into contact with an ore containing sulphur such as iron sulphide, or if there exists a heat source such as pressurization in the blast hole, it can be easily decomposed depending on blasting conditions.  If such decomposition reaction occurs at the time of blasting, a sudden spontaneous explosion occurs or, if there is a combustible gas around it, a gas explosion threatens to happen. 

6. The inventor then poses as his problem the development of:-

   … a hydrous explosive which cannot be easily decomposed even under a condition liable to cause decomposition … .

7. At pp 131-2, he describes his claimed invention in this way:-

   The hydrous explosive composition obtained as described above is excellent in thermal stability because it is not easily decomposed even if heat is applied to it when it has been brought into contact with an ore containing sulphur such as iron sulphide or pressurized.  Therefore the hydrous explosive composition can be used also in coal mines etc. .

8. As I have said, numerous expert witnesses offered opinions as to the technical meaning of the expression “reactive ores”.  Their evidence was generally consistent with the usage demonstrated in the documents although, for one reason or another, there were subtle differences in emphasis.  I suspect that the differences were, to some extent, provoked by the perception that the relevance of the Asahi patent might depend upon the meaning given to the expression.  In particular, the applicants suggest that the problem posed by “reactive ores” as described in the patent in suit are not those with which the Asahi patent is primarily concerned.  The respondent asserts to the contrary.  I will return to this patent at a later stage.

9. For present purposes, it is sufficient to say that the expression “reactive ores” describes sulphide ores, including pyrites, which are apt to undergo chemical changes, the products of which may cause or contribute to degeneration of AN if in contact with it.  Weathering may initiate those changes in the ore.  Heat often plays a part in the total process, which heat may be produced in the course of the various chemical reactions in the ore or come from some external source.  The presence of water in contact with the ore may also contribute to the problem.  The process may result in fires or early detonation.  I am satisfied that all of the literature discussed above deals with the same general problem.  Dr Lukaszewski’s paper demonstrates that there are different chemical reactions which may be involved, but they are all part of this widely-known problem.

   UREA IN EXPLOSIVES

10. Claims 1 to 13 of the patent in suit teach the inclusion of urea in the discontinuous phase of an emulsion explosive, in the droplets of AN and/or other nitrates in solution.  (As AN is the principal nitrate used in explosives, I will use the term “AN” to include all such nitrates.)  The purpose of urea, according to the abridgment, is “to reduce the reactivity of the nitrate salts”.  Alternatively, claim 14 teaches the addition of urea to the emulsion.  It is not clear whether this will result in the urea being distributed through the continuous phase, ie the fuel oil in which the droplets of AN solution are suspended, or through both phases.  It is necessary to consider the literature describing the use of urea in explosives to ascertain the state of knowledge prior to publication of the claimed invention.  Once again, I am not presently having regard to the prior art base for the purposes of par 18(1)(b).  The literature discloses substantial research concerning the stability of AN, the phenomenon of reactive ore and the identification of possible stabilizers for use with AN in reactive ore.  It suggests three different roles for urea in AN explosives.  They are:-

    ·     Urea may be mixed with AN or other nitrate salts to take advantage of its “eutectic behaviour”.  This means that a mixture of appropriate proportions of ammonium nitrate and urea will “melt” at a lower temperature than would ammonium nitrate by itself.  I understand “melt” to mean that the mixture changes from solid to liquid state.  In the patent in suit, it is suggested that this eutectic effect is valuable because it means that less water is necessary in the ammonium nitrate solution.  This is desirable.  I accept that urea has this eutectic effect and that this is beneficial in the use of ammonium nitrate as an explosive. 

    ·     Urea may neutralize the acid products of decomposition of reactive ore.  It has been suggested that such acid products may contribute to the degradation of AN.  Therefore the neutralization of them may be a useful step.  Urea is a “base” or “alkali” which,  by definition, means that it neutralizes acids, but it is not strongly so.  It would seem to follow that if this “neutralizing” function were its sole contribution other, stronger, alkalis would be better suited to the role.  However it seems that this function of urea may not be directly related to its alkaline properties.  It is not necessary to discuss the mechanism in question.

    ·     Urea decreases the reactivity of AN, thus slowing or avoiding the process of degradation which may lead to fires or premature detonation.

    UREA - THE LITERATURE

11. Again, I stress that I am not presently addressing “prior art” questions.  In his work, Explosives, published in London in 1917, Arthur Marshall discusses methods for dealing with the products of decomposition of explosives with a view to extending their lives.  At p 25 of GH1, this passage appears:-

    Basic compounds, to neutralize the acids formed, are not the only substances that have been added to explosives to increase their stability.  There are also various other substances, which can react with the oxides of nitrogen to form innocuous compounds.  Amongst the substances that have been studied in this connection are urea and its derivates … .  Urea has been used extensively as a stabilizer for celluloid, and was at one time a constituent of American military powders.  It reacts with nitrous acid to form carbon dioxide and nitrogen … but it also attacks the nitro-cellulose, and is no longer employed as an ingredient of explosives.

    The neutralization of oxides of nitrogen and/or nitrous acid appears also to be one of the functions of urea for present purposes. 

12. In an article published in 1959 in the Journal of Applied Chemistry of the USSR entitled Inhibition of the Thermal Decomposition of Ammonium Nitrate (see GH1 at p 30), the authors observe that such thermal decomposition may be retarded by the addition of ammonia during heating and that the addition of urea produces ammonia.  Urea is described as being one of two substances which are “very effective inhibitors of nitrate decomposition, being far superior to all the other substances tested.”  The article then seeks to explain the inhibiting action of urea, (at p 32 of GH1), attributing it to two causes, namely:-

    ·     Urea decomposes when heated, with liberation of ammonia.  The extent of decomposition, and therefore of ammonia liberation, increases with rise of temperature.  The liberated ammonia neutralizes the nitric acid formed by dissociation of the nitrate, and also removes nitrogen dioxide.  Nitrogen dioxide is formed by thermal decomposition of nitric acid.  Removal of nitrogen dioxide is most important, because it catalizes the decomposition of ammonium nitrate. 

    ·     In addition, nitrogen dioxide may react directly with urea, with liberation of nitrogen in carbon dioxide.  Obviously, this further reduces the amount of nitrogen dioxide.

    Although nitrous acid is different from nitric acid, this description tallies substantially with Marshall’s.

13. In the Lukaszewski paper (1968) to which I have previously referred, at p 50 of GH1, the author states:-

    In general, organic materials undergo thermal dissociation and combustion above 250°C and are unsuitable as oxidation inhibitors and flame suppressants for sulphide.  Some amines and amides such as urea are capable of stabilizing ANFO in the presence of moisture and sulphide.

    …

    In general, it is easier to control the effects, ie combustion, rather than the occurrence of ANFO sulphide deflagration, especially if ground temperatures exceed 125° C.  As a rule ANFO explosive is unsuitable for hot ground in excess of 100° C.  ANFO may be stabilized against sulphide contamination by the addition of 5-10 per cent borate to the nitrate prill prior to mixing with fuel oil.  The simultaneous incorporation of .5-1 per cent urea thermally stabilizes the composite to over 150° C.  ANFO chemically stabilized in this manner can be used in hot pyrite-chalcopyrite environments between 50-125°C and up to 150°C providing charge residence in the hole is restricted to less than 15 minutes before firing above 125°C. 

    The combined use of stabilized ANFO and the pre-treatment (with aging) of neighbouring ore, ie surface of charge hole should eliminate the chance of ignition and occurrence of incandescence ore.  It should be noted, however, that the effect of the abovementioned additives on the detonative and fracturing properties of the explosive are as yet undetermined. 

14. This paper teaches the use of borate to neutralize the acid products of the reactive ore and urea for thermal stability of the “composite”.

15. The 1968 report of the US Bureau of Mines deals extensively with the use of inhibitors, in particular urea, calcium carbonate, zinc oxide and magnesium oxide.  Tests were carried out using both AN mixed with ore and ANFO mixed with ore.  At p 302 of JCO1 the authors record:-

    The temperature of incipient reaction of mixtures of AN and pyrite ore was similar to that of mixtures of ANFO and ore, both dry and with water or acid, except that the reaction of the oil-free mixtures was more exothermic.  In mixtures composed of ANFO containing 12 per cent fuel oil and ore, the temperature of incipient reaction increased, and the degree of reactivity decreased relative to mixtures of ANFO containing 6 per cent fuel oil and ore.

16. At p 306 of JCO1, the following discussion of the use of inhibitors appears:-

    The ability of urea and calcium carbonate to inhibit reactivity was also observed in the simulated bore-hole experiment.  In general, .5 per cent urea added to the AN-ore mixture increased the temperature of incipient reaction about 100°F; .5 per cent calcium carbonate increased this temperature to a greater extent than urea.  Also .5 per cent of zinc oxide or magnesium oxide had about the same effect as calcium carbonate, as observed by Rozman and Mason and others.

    The initial thermal decomposition of AN was postulated by Rozman to be auto-catalytic in nature with formation of ammonia and nitric acid from an acid hydrolysis.  On this basis, further decomposition could be acid-catalyzed, either by the self-produced nitric acid or by acid introduced from an external source, such as sulphuric acid, resulting from the oxidation of pyrite in the presence of water.  Although the exothermic decomposition of chemically pure AN normally occurs above 430°F, the addition of sulphur and of chloride ion as potassium chloride to AN produces an exothermic reaction as low as 240°F, as measured by DTA procedures.  In the same study, the addition of urea, zinc oxide, or other basic salts to the AN-sulphur-potassium chloride mixture stabilized the exothermic reaction to about 550°F, probably due to inhibition of acid-catalysed exothermic reactions.  The inhibiting behaviour of urea, calcium carbonate, zinc oxide, and magnesium oxide observed in mixtures of ANFO and pyritic ore probably occurs through direct combination with the acid or nitrogen dioxide, since at the temperatures and pH involved, reaction with AN to produce free ammonia is unlikely.

    Since reactivity is being used as a measure of the potential hazard from reactions between ANFO and pyritic ores, the lower the temperature of incipient reaction, the greater the potential hazard.  …

    A survey of the auto-initiation temperature of several US manufacturers’ detonators showed that detonators will thermally initiate when the temperature of the shell exceeds about 260-300°F.  The maximum temperature reached during the reaction of mixtures of ANFO and pyrite-bearing ores in the absence of inhibitors exceeded this temperature range in every instance.

    Two related items of interest must also be considered.  The first of these is the use of plastic liners in the drill holes to separate the ANFO from the ore.  While this method reduces the chance of reaction between ANFO and pyrite, the generation of static electricity during pneumatic loading through a non-conductive liner presents a problem of equal concern.  …

    …
      CONCLUSIONS

    Mixtures of prilled AN or ANFO with pyrite-bearing ores have been observed to react at temperatures as low as 185°F.  The addition of 5 per cent dilute sulphuric acid to these mixtures can decrease this reaction temperature to 150°F.  Preliminary results indicate that the addition of .5-1 per cent of calcium carbonate, urea, zinc oxide or magnesium oxide decreases the reactivity of ANFO-pyrite mixture.  …

17. The Mason patent (1973) also identifies the possible use of urea with ANFO.  At p 127 of GH1, the abstract discloses:-

    An ANFO explosive which is modified by the presence of small amounts of urea so that the explosive will not adversely react with pyrite in pyrite-bearing mines.

18. The 1979 report of the US Bureau of Mines deals extensively with the use of urea as a stablilizer with ANFO.  At p 123A-4 of GH1 it appears that three inhibitors were chosen for testing - potassium oxalate, alloxan and urea. Urea was chosen because of reports “of its ability to slow down AN decomposition.”  Alloxan was apparently selected because it forms a complex with ferrous sulphate and hydrolizes to urea.  It is reported that:-

    Urea reacts with nitrous acid; as an acid amide, it can form salts with mineral acids and with metallic salts, and thereby neutralize them.  More important, urea can form complexes and double salts with ferrous sulphate and other compounds.

19. The reaction of urea with nitrous acid relates to its role in reducing the reactivity of AN (from which the nitrous acid is derived).  Its reaction with ferrous sulphate relates to its role in neutralizing the results of decomposition of reactive ore  (which yields the sulphur for the sulphate).  The writers seem to suggest that the latter is a more important function than the former.

20. At p 125 it is said that:-

    One wt-pct urea was not enough to prevent the initiation of an exothermic reaction, although initiation was not noted before approximately 130°C.  Five wt–pct urea completely prevented an exothermic reaction among the ingredients when the test mixture was heated up to 180°C.  …

    The role of urea in significantly increasing the apparent pH of various basic and acidic solutions with and without buffers is known but not well understood.  Careful measurements … indicate that urea, a weak base, decreases proton activity in solution throughout the entire pH range. …  Our results indicate that urea inhibits reaction between ANFO and ferrous sulphate by combining with one or more of the ingredients in the original reaction mixture.  Only when enough urea is present is reaction prevented.  Urea can undergo many reactions.  Urea replaces water of crystallization in many salts, including sulphates, thereby forming new compounds with a different stability than the original salt. …

21. At p 125A the writers conclude:-

    Of the three inhibitors tested, urea was found to be a good inhibitor.  It could be mixed with ANFO prills prior to introduction of the charge into a bore-hole.

    CONCLUSIONS

    …  In other words, very small amounts of soluble ferrous salts, weathering products of pyrite, are detrimental to ANFO charges.

    One wt-pct urea, when added as an inhibitor to the ternary mixture, increased the temperature at which initiation of self-sustaining reaction started from 80° to 125° C.  This is the temperature at which ANFO reacts with pyrite free of ferrous sulfate.  Thus, it appears that urea or its cyanate isomer combines with the ferrous sulphate and prevents its reaction with AN-FO, at least until AN-FO reacts with pyrite.

    Five wt-pct urea prevented any exothermic reaction in the ternary mixture, at least until 180° C.  The ability of urea to form adducts with fuel oil and to combine with mineral acids also may play a role in preventing some of the reactions, as long as enough urea is present to accomplish this.

22. Australian Patent 517818, in the name of A E C I Limited (the “AECI patent”), which appears to have been printed in 1981, provides for the inclusion of urea in an emulsion explosive for the purpose of forming an eutectic melt with ammonium nitrate, with a melting point lower than that of ammonium nitrate in isolation.  In other words, urea is used for a specific purpose, not directly related to the problems experienced in reactive ore.  See pp 140-155 of GH1.  United States Patent 4,722,757 (the “ICI-US patent”) filed in 1987 and granted in 1988, contemplates the addition of urea for the same purpose.  See p 158 of GH1.  United States Patent 4,338,146 (at pp 192-194 of GH1) (the “Nitro Nobel patent”) also contemplates the use of urea in an eutectic melt.  It was granted in 1982.  See p 193 of GH1, par 6 at lines 35-40.  United States Patent 4,500,369 (the “Norsk patent”) also provides for the use of urea.  See GH1 at p 200.  The patent was granted in 1985.

23. The US Bureau of Mines again addressed the issue of reactive ore in its 1982 report, entitled Reactivity of ANFO with Pyrite-containing Weathering Products – Evaluation of Additional Inhibitors.  At p 7 of GH3 the report states:-

    However, because urea increases the hydroscopicity of AN, it may affect the handling and flow properties of ANFO prills when added to them.  Moisture can impair the structural stability and handling of AN prills, even in the absence of urea.  Various additives and coating materials are routinely added to explosive-grade AN prills during manufacture, to prevent the deleterious effects of moisture.  Fuel oil, when added to AN prills, also retards moisture absorption by the prills.  Because ANFO charges with added urea freeze in cold weather – owing to presence of adsorbed moisture – another reliable inhibitor would be welcome.

1. In the Condensed Chemical Dictionary (10^th Ed) (received by the ICI Research Library in Australia on 15 December 1983), urea is identified as a stabilizer in explosives.  See pp 34 and 35 of GH1.

2. The Asahi patent, apparently published in Japan and Australia in January 1984, teaches the use of, amongst other things, urea as a “decomposition inhibitor” in an AN emulsion.  As I have said, the applicants seek to construe the Asahi patent in a very narrow way, asserting that it is primarily concerned with the effects on AN of heat from external sources, rather than heat from reactions in reactive ore.  It seems to me, however, that the inventor was clearly concerned with reactive ore, with or without the presence of heat, although he may also have been concerned with the question of preventing degradation as the result of heat alone.  The patent, in effect, teaches the very invention claimed by the applicants.  See pp 46-52 of GH1.  I will return to this matter at a later stage.

3. In the 1986 paper by Rumball, Thornber and Davidson, delivered to the Large Open Pit Mining Conference  (at p 44 of GH1) the authors identify various chemical inhibitors as follows:-

   The most appropriate way to prevent reaction is to neutralize the acid.  Alkaline compounds, such as calcium carbonate, magnesium carbonate, sodium hydroxide and urea successfully inhibited the reaction when added at 10 pct-wt.  Oxides such as zinc oxide and magnesium oxide which have an alkaline character prevent a reaction but aluminium oxide did not.  One of the cheapest alkaline materials, dried red mud residue from alumina production, also prevented the reaction.

4. At p 45, under the heading “Strategy for Control of Premature Detonation”, the authors suggest:-

   The obvious way to prevent spontaneous ignition is to destroy the acids in the black shale by incorporating a soluble alkali in with the ANFO.  This alkaline material should be a combination of a quick release, easily soluble alkali, with a more slowly released alkali.  The red mud waste from the alumina industry consist of such a combination.  However much of it is inert solids and it may be more practical to use a mixture of sodium carbonate with calcium carbonate.

5. For present purposes it is possible to summarize the literature as follows:-

   ·     It was known for many years before the priority date of the patent in suit that urea had a stabilizing effect on AN, including AN in ANFO, reducing the tendency to degenerate when in contact with reactive ore.

   ·     Before the priority date, patents taught the use of urea in AN-based emulsive explosives

   ·     The Asahi patent teaches the use of urea in AN-based emulsive explosives for the purpose of suppressing the effects upon AN of reactive ore and/or heat.

   SIGNIFICANT WITNESSES

   Mr Harries

6. The principal expert witness for the respondent was Mr Gwyn Harries who has spent virtually all of his working life in the field of explosives.  He first qualified as a chemist in 1950 and took a degree in science at London University in 1951.  I do not propose to outline the balance of his qualifications.  I accept that he is well qualified, theoretically and in practice, in the chemistry and engineering of explosives.  I also accept his outline of the position as at the priority date, which appears at pars 1.53-1.58 of his consolidated affidavit as follows:-

   1.53.    The use of urea in ANFO explosives to control reaction with reactive pyrite-containing ores was well known to me and, in my opinion, well known to explosives engineers at the Priority Date.  The work of the US Bureau of Mines was known to such engineers. …

   1.54     At the Priority Date 80 per cent of all explosives manufactured and sold in Australia were ANFO explosives.  At the priority date the major manufacturers of explosives in Australia were ICI (associated with the respondent) and the first applicant. …

   1.55     The use of urea in ANFO explosives to inhibit reactivity in the pyrites was in my view well known to chemical engineers in the explosives industry from the work carried out by the CSIRO and reported by Dr Lukaszewski.  ,,, The remaining 20 per cent of explosives were either packaged emulsions (which included a liner and detonator) or bulk emulsion explosives which are pumped straight into the blast hole.  Ten per cent of the bulk emulsions were pumped into water-filled or partially water-filled holes.  Any reaction with pyrites did not occur in these holes because the level of ground water prevented reactivity. 

   1.56     If at the Priority Date I had been asked to consider possible solutions to the problem posed by the use of explosives in reactive ores at a particular untested mine site, my initial reaction would have been to suggest that bore-hole liners be used until, at the very least, small scale field test work had established the appropriate inhibitor to be used.  At the Priority Date, only small scale lab tests and experiments had been conducted on the use of inhibitors in explosives to prevent unwanted reactions and I would not have considered it appropriate to adapt the results of those tests to any new mine site immediately.

   1.57     I was aware at the priority date from the work carried out by the US Bureau of Mines … that sulphidic/pyritic ores were extremely variable.  Experiments conducted at one part of a mine could not necessarily be relied on in relation to other areas of a mine or other mine sites.  Despite this, it was generally accepted that laboratory experiments would be a useful indicator to attempt field tests.  I regarded the work carried out by the US Bureau of Mines as applicable to Australia.  Indeed I note that reference is made in the article … ‘The Reactivity of Ammonium Nitrate-Fuel Oil with Pyrite-Bearing (Ore)’ … to the experience in Australia at Mt Isa Mines … .  Before field tests could be undertaken it would be necessary to persuade mine management of their safety and for mine management to persuade the Mines Inspectorate of the relevant government statutory body.

   1.58     At the Priority Date I knew, and I believed chemical engineers in the explosives industry would have known, to test a number of possible inhibitors to overcome the possibility of a reaction between the ammonium nitrate and the reactive ore.  The inhibitors I would have tested would have been borates, urea, zinc oxide, magnesium oxide and dolomite (MgCO₃)[1].  If the desired explosive to be used was an ANFO explosive I would have tested each of these inhibitors.  However, if it was proposed that an emulsion explosive was to be used I would have tested only the water-soluble inhibitors, such as urea, because the inhibitor would be in intimate contact with the ammonium nitrate.  Urea and borates are soluble while zinc oxide, magnesium oxide and dolomite are not soluble.  Faced with the choice between borates and urea as an inhibitor I would have preferred urea because it is cheaper to produce and safer to handle than the borates which are poisonous.

   [1] Magnesium carbonate.

7. There are a number of matters arising from this extract which are of significance in understanding the evidence in this case and the problems which it poses.  They are:-

   ·     At the priority date, ANFO was the explosive most widely used in Australia, comprising 80 per cent of all explosives used.

   ·     The remaining 20 per cent comprised emulsion explosives.

   ·     The inhibiting effect of urea upon AN in ANFO was well known at that date, although such use posed hygroscopic problems. 

   ·     Emulsions are generally used where the bore-holes are “wet”.  (See par 1.27 of Mr Harries’ affidavit.) 

   ·     It is not the presence of reactive ore which dictates the use of emulsions.  Paragraph 1.58 of Mr Harries’ affidavit (above) demonstrates this. 

   ·     It is common ground that only a very small number of sites pose reactive ore problems. 

   ·     As Mr Harries points out, and common sense suggests, conditions vary, even within particular mines.  The thrust of Mr Harries’ evidence is that for this reason, problems concerning the use of emulsions in reactive ore should be solved by designing an emulsion appropriate to the particular problem. 

   ·     This approach will inevitably involve some field testing.  Before testing can take place, it will be necessary to persuade mine management and the relevant government authority that it is safe to do so. 

   ·     There is also the option of using bore-hole liners.

8. Before the priority date of the patent in suit, as Mr Harries demonstrates, an explosives expert would have chosen an emulsion for use in wet ground.  It is possible that such a product may have contained urea, added for its eutectic effect.  Presumably, in reactive ore where no liner was used, the urea would also have assisted in reducing the reactive effect.  The applicants do not dispute that the respondent may continue to supply emulsions containing urea for its eutectic properties.  They assert, however, that such supply must not be for use in reactive ore as that would infringe the patent in suit. 

9. Mr Harries says that it was common in the industry for the US Bureau of Mines reports to be available “on any large mine site”.  He also says that he had encountered the AECI patent, the ICI-US patent, the ICI-Aust patent, the Nitro Nobel patent and the Norsk patent in the course of his professional reading before the priority date. 

10. Other relevant matters appearing from Mr Harries’ evidence are:-

    ·     As at June 1990 the identified solution to the problem of blasting in reactive ore was to use bore-hole liners or packaged explosives.  These solutions were expensive but tolerable, having regard to the relatively infrequent occurrence of reactive ore problems.  Experience would indicate whether liners were required on a particular site.

    ·     Mr Harries has no knowledge of urea-inhibited emulsions being used in reactive ore without bore-hole liners. 

    ·     On occasions, inhibitors have been added to ANFO to prevent reaction in the event that a liner tears or the explosive is spilled on the surface during loading.

11. A major aspect of Mr Harries’ cross-examination was his involvement in the project at Mt Whaleback.  This evidence can best be followed by reference to exhibits 6 to 14.  Dr Lukaszewski had written a report concerning the problems at Mt Whaleback in 1984, indicating that hot spots had occurred as early as 1975, leading to misfires in blasting.  By September 1984 the respondent, or an associated company, was considering the problem.  Mr Harries was involved.  Exhibit 6 (dated 14 September 1984) shows that the respondent was looking for solutions to three different problems - blasting in black pyritic shale, blasting in wet ground and avoiding increases in drilling and blasting costs.  Exhibit 6 suggests that the respondent believed that the client considered the problems to have been solved for the short term, that in the intermediate term, it expected improvements to the short term solutions and in the long term (possibly 2-3 years), it wanted to “reduce cost/increase safety and operability plus compatible with below water table operation”.  This suggests that water was not then as significant a problem as it was expected to become in the future.  This may have been relevant to the question of using ANFO rather than AN emulsion.

12. Exhibit 7 (dated 14 September 1984) appears to be a summary of discussions concerning the problem with the black McRae shale at Mt Whaleback.  Two primary investigations were under way, one involving lining of the holes and the other involving development of a new explosive.  Four lines of further inquiry were identified.  The first related to the possibility of producing cheaper liners.  The second related to the testing of various explosives, including emulsions.  (EP means “emulsive preparation”.  AP is an emulsion.)  Thirdly, the researchers were to attempt to improve knowledge of the mineralogy of the shale and its interaction with explosives.  Fourthly, the respondent was to seek to develop a blasting system from first principles to accommodate the outcome of the mineralogy study.  It is fairly clear from ex 7 and from some of the other contemporaneous documentation that the Mt Whaleback situation was seen by the respondent as a serious problem in customer relations.

13. Exhibit 8 is a memorandum from Mr Harries dated 19 September 1984, reporting the results of various tests carried out at Mt Whaleback.  On p 2 Mr Harries reports:-

    We need experiments with emulsion.  Should give lowest possible explosive conductivity if not broken down in presence of shale.

14. He also reports that:-

    Answer has to be fool-proof (miner-proof) acceptable in wet and dry conditions. 

15. He then repeats that:-

    Emulsions must be tested.

16. Exhibit 9 is an invitation (dated 24 November 1984) to numerous persons to participate in a “brainstorming sessions”.  It refers to “the problem fires in reactive black shale”.  Exhibit 10 (dated 4 October 1984) is a summary of the outcome of the so-called “brainstorm”.  Dr Lukaszewski attended the session.  In Pt 2 of the summary the following appears:-

    George Lukaszewski’s experience here was invaluable and pointed to a number of issues which need to be resolved.  Don Fensom has put together a list of ‘key issues’ (attached) noted at the meeting.  GL’s contention that the dominating reaction is simply acid/catalyzed combustion seems to make sense to most of us, and help to clarify the ‘wood from the trees’ – but we can’t overlook the prevailing opinions as to the possible importance of electro-chemical phenomena. 

    Perhaps priority needs to be given to
    - which mineral sulphides are present?

    - is the reaction acid-catalyzed?

17. There is a list of actions to be taken, many of which relate to the continuing mineralogy study.  There is a proposal to “rank” the propensities of the various ICI products to react spontaneously with reactive sulphide.  In particular, it is proposed that there be a comparison of ANFO, emulsions and other explosives and consideration of the addition of thermal stabilizers to ANFO and “pH buffer capacity” to emulsions.  It is noted that ammonium borate was used by Mt Isa Mines in active sulphides but was very expensive and discontinued for reasons which were not then known.  Ideas flowing from the “brainstorm” are grouped under four headings:- “Lining”, “Stop Reaction Explosive”, “Stop Spontaneous Reaction” and “Other”.  In connection with “Stop Reactive Explosive”, one possible step is said to be the use of urea or zinc oxide in ANFO.  The possibility of using emulsions is also identified.  Various other treatments of ANFO and emulsions are mentioned.  Under the heading “Stop Spontaneous Reaction”, there is a suggestion that borate might be used, but no suggestion that urea might be appropriate.

18. Exhibit 11 (dated 22 October 1984) is an internal memorandum from the respondent (or from within the respondent’s organization).  Included in the first paragraph is the following:-

    I attended the meeting last Thursday (as discussed) at which CRL were requested to do the ‘ranking’ experiment I proposed.  Our aim is to spend no more than a couple of days of Bob Sheahan’s time to fill in the great gap in our knowledge as to whether emulsion is significantly different to ANFO in its reactivity to reactive sulphides.

    We are therefore going to test against a ‘standard’ (weathered and very reactive) sulphide material
    ANFO
    vs emulsion AP 303

    We will measure temperatures, times and pH.

    David Yates believes there is a fair chance that AP 303 could do the trick.

    Depending on the result, we may then see whether we can alter the reactivity of either, by adding eg a buffer, a de-sensitizer, or an anti-oxidant.   (This latter work we have yet to agree and will hinge on the first results.)

19. Exhibit 12 contains minutes of a meeting held on 18 October 1984, which dealt with various considerations relating to liners, other methods of treating blast-holes and the mineralogy work.  At “Action No 4” there is discussion of testing emulsions at Mt Whaleback.  (Energan EP and AP 303 are emulsions.)  There is also a suggestion that more “scientific” tests are to be carried out.  It is indicated that there will be further testing using Lukaszewski’s standard reactive compound (which I take to be a sulphide compound) and “a series of ICI explosives including ANFO and inhibitors in order that they may be ranked.”  Zinc oxide is mentioned as an ideal inhibitor. 

20. Exhibit 13 is a memorandum from Bob Sheahan (now deceased) to Mr Harries dated 19 April 1985, detailing the results of the experimental work carried out following the discussions to which I have been referring.  It reports the results of various tests using AN and emulsions.  The following paragraphs occur on the first page:-

    Some further tests on emulsion/pyrite mixtures were performed to see if a water-proof, pyrite-compatible explosive looked possible.  Poor pyrite compatibility was generally observed.  Explosives tested were EP 100, EP 100 and urea, Tovex pH 8 and genuine CBS emulsions, and Powergel 1500 water gel.

    Powergel 1500 gave (sic) no low-temperature exotherms when cross-linked before mixing with pyrites, but did give a strong exotherm at about 120°C when uncross-linked.  The urea containing emulsion was the only one to display any resistance to low temperature exothermic decomposition; it may be a useful starting point if we need a pyrite-resistant emulsion in the future.  (emphasis added)

21. Exhibit 14 contains a summary of a further meeting held on 20 May 1985.  It summarizes much of Mr Sheahan’s report.

22. These documents demonstrate that in a relatively short period of time, the respondent’s research personnel had identified the possibility of using urea in an emulsion to suppress the problem of reaction between AN and reactive ore “if we need an emulsion in the future”.  Mr Harries did not consider that use of an emulsion was indicated at that time, presumably because the Mt Whaleback project was not then concerned with “wet” holes.  It is not clear why the respondent did not return to this solution at some later stage.  Mr Harries suggests that the client was satisfied to adopt bore-hole liners as the solution to the problem and was not willing to incur the expense of the further field testing which would have been incurred in finding another solution.

    Dr Oxley

23. Dr Oxley is an American scientist, presently employed at the University of Rhode Island but previously employed in research work at the Research Centre for Energetic Materials (“RCEM”), part of the New Mexico Institute of Mining and Technology.  RCEM is supported by most of the major explosives manufacturers in the United States, including companies associated with the applicants and with the respondent.  It conducts research and reports on results to its supporters.  At the relevant time, it reported biannually, in April/May and October/November.  Between 1986 and 1989, Dr Oxley carried out research work concerning the thermal stability of AN.  In the course of this research she considered AN in its pure form, in ANFO and in emulsion.  Her general conclusion was that thermal decomposition of AN occurs in substantially similar ways in all three forms.  The applicants seek to distinguish between the chemical and thermal stability of AN.  Dr Oxley and Mr Harries consider that any such distinction is irrelevant for present purposes.  The literature certainly suggests that the effects of heat and chemical reactions are closely inter-related in the processes which create the reactive ore problem.  I prefer the evidence of Dr Oxley and Mr Harries on this score to the views of the applicants’ witnesses.  Dr Oxley demonstrates the point at par 1.17 of her consolidated affidavit.

24. In 1989 a company called South-West Energy asked Dr Oxley to investigate the effects of pyrite ore on AN emulsions.  At some stage, South-West Energy specifically suggested the use of urea as a stabilizing agent.  In August 1989 Dr Oxley reported to South-West Energy that the addition of 3 per cent of urea to AN emulsion, mixed with 10 per cent pyrite ore, retarded the decomposition reaction.  She also reported that:-

    The US Bureau of Mines has shown that certain pyrite ores have a detrimental effect on the thermal stability of ammonium nitrate slurries and ammonium nitrate fuel oil (ANFO).  This report confirms that a similar effect is seen when ammonium nitrate emulsions are exposed to pyrite ores.  …  The presence of urea markedly improves the stability of the emulsion/ore mixture but the emulsion/10 per cent ore combination with 3 wt pct urea still decomposes significantly faster than the emulsion without ore.

1. As a result of these examinations Dr Oxley concluded that urea had a stabilizing effect upon ammonium nitrate in contact with ore, whether the AN was in isolation, in ANFO or in emulsion.  She reported to the members of RCEM in April 1990, although I am not suggesting that the conclusion as to uniformity of effect set out in the last sentence was expressly contained in the report.  Representatives of companies associated with the applicants (including Dr Cranney) and with the respondent were present on this occasion.  Dr Oxley had previously visited Dr Cranney in December 1989 and had discussed her work with him.  He recalls her mentioning work involving the use of urea in connection with the reactive ore problem.  I will refer to this evidence in more detail at a later stage.  In cross-examination Dr Oxley said that after she had satisfied the requirements of South-West Energy, she continued her investigations using money from other sources.  She said that RCEM was entitled to publish its research results, provided none of the individual members objected.  She did not understand her work for South-West Energy to have been confidential. 

   Mr Moxon

2. Neville Thomas Moxon is an employee of the respondent.  In his experience, “an additive which produces an effect in an ANFO explosive will produce the same effect in an AN emulsion.”  This was his view as at the priority date.  See par 1.27 of his consolidated affidavit.  Immediately prior to 1990, companies representing the respondent would have been responsible for about 75 per cent of the market for explosives in Australia, whilst companies representing the applicants would have been responsible for about 20 per cent.  There were other, smaller suppliers.

   Mr Lee

3. Andrew Kenneth Lee, a former employee of the respondent, has scientific qualifications and experience.  He worked with Mr Bob Sheahan (now deceased) in connection with an incident which occurred at the Mt Lyell copper mine, involving explosives supplied by the respondent.  In the course of that work he was directed to a file relating to work done by Mr Sheahan in conjunction with Mr Harries for the Mt Whaleback project.  I have already dealt with this material.  Between March and June 1990, Mr Lee conducted experiments using AN emulsion containing urea.  He found that urea had an inhibiting effect on the tendency of such ore to react when in contact with AN emulsion.  Further work was proposed.  At par 34 of his affidavit Mr Lee asserts, in answer to Dr Rumball’s concerns regarding the effect of adding urea to an emulsion (to which evidence I will later refer), that it is well known that concentrations of urea (higher than those discussed by Dr Rumball) have been successfully added to emulsions without adverse effect.  In the course of his evidence-in-chief he said that this passage reflects his state of knowledge as at the priority date of the patent in suit.  His evidence on this score is broadly similar to that of Dr Cranney and Mr Bellairs, witnesses called by the applicants.  See ts 719 ll 5-6, ts 743 ll 4-6 and ts 855.  Some attempt was made to discredit Mr Lee in this respect, and also because of the sequence in which notes occur in his notebook, with other associated matters.  I am not, in the end, inclined to treat Mr Lee as other than a reliable witness.  His explanations appear plausible,  and his demeanour was reasonably convincing.

   Mr Sujansky

4. Vladimir Sujansky is an explosives technology consultant.  He says that the respondent supplied emulsion explosives (containing an eutectic melt of ammonium nitrate, sodium nitrate and urea) to Mt Isa Mines between 1988 and 1990.  As early as December 1987, the respondent advised the acting Chief Inspector of Explosives in the Queensland Department of Mines that it proposed to test an explosive containing a non-aqueous emulsion phase incorporating an eutectic melt of ammonium nitrate, sodium nitrate and urea. 

   Dr Cranney

5. The principal scientific witness for the applicants was Dr Don H Cranney, an employee of the second applicant.  He is a highly qualified and widely experienced scientist in the area of explosives.  Some part of his evidence has been incorporated into the history given at the commencement of this judgment.  He claims to be one of the inventors of the current invention.  To his knowledge, the first incident involving reaction between an emulsion explosive and reactive ore occurred in 1987.  He considers that emulsion explosives differ substantially and significantly from ANFO explosives with respect to their physical state, chemistry and thermo-dynamics.  He identifies those differences at par 1.49 of his consolidated affidavit.  As far as I am aware there was no challenge to the correctness of these observations.  However Dr Cranney did not attempt to explain the mechanism by which any of these differences might have indicated to him that the well-documented inhibiting effect of mixing urea with ANFO might not be replicated if urea were mixed with AN emulsion. 

6. It is helpful to consider Dr Cranney’s description of the events which led to the claimed invention.  This appears at pars 1.57 to 1.102 of his consolidated affidavit.  He was aware that ore bodies containing significant amounts of certain sulphides or pyrites, such as iron pyrites, might react with AN or other nitrate salts.  He was also aware that in some cases, these reactions could cause premature detonation of AN-based explosives when loaded into bore-holes in such ore.  In July 1989 he received an inquiry from BP Minerals America (BPM) in connection with blasting in hot geothermal ore at Lihir Island in New Guinea.  On 12 July 1989 he responded to the inquiry, saying that exothermic reaction was known to occur between nitrates and some ores containing sulphur.  He advised that since sulphides were present in the Lihir ore, it might not be possible to use explosives containing nitrates without taking special precautions.  He suggested the use of packaged explosives or bore-hole liners.  Dr Cranney also indicated that if those solutions were not appropriate, consideration could be given to the development of alternative explosives not typically reactive with sulphide ores, although this would be substantially more costly.  He was not then aware of any other precautions available to prevent premature detonation as a result of exothermic reactions between nitrate-based explosives and reactive ore.  Unless such steps were taken, it would be necessary to monitor the temperature of bore-holes, leave the loading of hot bore-holes until last, and detonate as soon as possible after loading.  He said that this represented the state of technology in the United States and elsewhere as at the priority date. 

7. Dr Cranney subsequently tested other explosive formulations, including chlorate-based explosives, water gels and prilled TNT.  These were apparently too expensive.  At one stage, he considered that the continuous oil phase in an emulsion might prevent reaction between AN in the discontinuous phase and ore, but this proved not to be the case.  He became aware of literature published in the United States concerning various chemicals, including urea, being used in conjunction with ANFO.  This was apparently after 30 October 1989.  Having considered the literature, he decided to experiment with urea, “because I considered it would be likely to be compatible with emulsions and relatively easily integrated into an emulsion explosive.” (par 1.83)  He says that:-

   The fact that urea was soluble in a nitrate solution was a major consideration in my decision to conduct experiments with it.  In my opinion it was not known what effect (if any) urea might have on an emulsion explosive coming into contact with reactive ore. 

8. At par 1.85 Dr Cranney says:-

   I did not regard it as obvious from the literature, or necessarily likely, that urea used in emulsions would act to inhibit reactivity with reactive ores notwithstanding it had been suggested in the literature that the addition of calcium carbonate or urea might inhibit the reaction between certain sulphide/pyrite ores and ANFO.  It was not clear from the literature in any event that urea was 100 per cent effective in suppressing such reactions between such ores and ANFO and in particular highly reactive ores such as the Lihir ores.  Further, the literature did not give any conclusive explanation as to how calcium carbonate or urea might work as an inhibitor with ANFO.  There were also significant chemical, physical and thermo-dynamic differences between ANFO explosives and emulsion explosives.

9. At par 1.91 Dr Cranney asserts:-

   Because of these differences, any inhibiting behaviour of urea in the case of ANFO in reactive ores could not simply be extended to the case of emulsion explosives and reactive ores.

10. He therefore conducted further tests with the Lihir ore.  At par 1.93, he says:-

    The results of one of these further tests with the most reactive Lihir samples and an emulsion containing urea, led me to the idea that because of the intimacy of the mixing of AN and urea in an emulsion and because of its high solubility in the oxidizer phase of an emulsion, a substantial amount of urea in an AN/SN (sodium nitrate) emulsion would be likely to produce a more effective inhibiting effect.  As far as I was aware this had not been done before and I regarded it as a possible breakthrough and decided to conduct further tests.

11. At par 1.95, Dr Cranney says:-

    The results of these experiments demonstrated that urea could be effective as an inhibitor of an exothermic reaction between emulsion explosives and reactive ores.  I regarded these results as surprising given the substantial differences in the physical, chemical and thermo-dynamic characteristics between emulsions and ANFO.  In many ways, sensitized  emulsions are more reactive than ANFO in that they have higher detonation velocities, smaller critical diameters and often require smaller minimum boosters.

12. Further tests were then conducted as to optimum quantities and in December 1989, detonation characteristics of the stabilized emulsion were tested.  As a result, on 9 January 1990, the inventors signed a disclosure of invention.  It seems that the intellectual and research work in respect of the use of urea was performed between, at the earliest, 30 October 1989 and 9 January 1990.  It should be noted that Dr Oxley visited the second applicant’s facilities in Utah on 15 December 1989 and spoke to Dr Cranney concerning her work on the thermal stability of AN formulations, disclosing her interest in urea. (ts 750 ll 6-15)  I will return to that evidence at a later stage.

13. At ts 676, Dr Cranney is referred to various statements in his affidavit said to describe the state of industrial knowledge in Australia and United States.  He agrees that he is able to make such statements about industry knowledge in Australia because the industry is largely an international industry.  Subsequently, however, especially at ts 676-678, he resiles somewhat from his claims to knowledge of the Australian position.

14. In the course of cross-examination Dr Cranney’s attention was directed to a passage which appears at p 196 of the documentary exhibits to his affidavit.  This is a report by him and his co-inventor, Mr Maxfield, dated August/September 1990 concerning their discovery.  After describing the testing of the Lihir Island ores with emulsion and other tests, the authors refer to US Bureau of Mines Reports which, it is said, “detail studies in which crystalline urea was added to AN or ANFO to repress the reaction with certain sulphide pyrite ores  Reference is also made to US patents which “detail the addition of up to 1 per cent powdered urea to dry AN or ANFO to suppress the reaction of such AN with reactive ores.”  Maxfield and Cranney then opine:-

    Although the mechanism of this effect was not fully understood, it seemed plausible that if urea in a crystalline form, crudely mixed with AN or ANFO could repress the reaction between the ore and nitrate salts, then urea dissolved into the oxidizer and therefore in intimate contact with the nitrate salt, might also improve compatibility.  An AN/urea/water oxidizer solution was combined (50/50) with the ore (LAAC1) and evaluated for compatibility by DTA.  The reaction of the ore with the AN was greatly reduced or even eliminated.

15. This, on its face, suggests a line of reasoning directly based upon the US Bureau of Mines Reports and US patents.  However, under cross-examination at ts 674, ll 15-20, Dr Cranney denies that the statement reflects his state of mind prior to the conduct of testing, asserting that the statement rather reflects his view following such testing.  I reject this explanation.  It is inconsistent with the wording of the report.  I consider that in referring to what “seemed plausible”, the authors are seeking to explain the logic which led them to conduct tests using urea.  Dr Cranney agrees that it was industry knowledge in June 1990 that ammonium nitrate in ANFO reacts with reactive ore and that water is an ingredient in the reaction, or at least that reactions involving ANFO and reactive ore often involve moisture.

16. As I have said, Dr Cranney asserts that there are significant differences between AN emulsions and ANFO and that he could not foresee the effect of adding urea to AN emulsion, although “… certainly it was worth a try.”  He says that he had considered all of the inhibitors disclosed in the Bureau of Mines literature, discarding all but urea.  He had not tested any other inhibitor.  He says that, “I thought about what would fit within the properties of an emulsion.”  Having done this, he chose urea because:-

    I felt like it was logical to me based on the connection I had made with the prior literature and the needs of the emulsion explosive in terms of incorporating an ingredient in that explosive, urea fit that mould.

17. The decision to try urea was made in early November 1989.  There was an early “quick and dirty”, but undocumented test.  The first real test was conducted on 14 November 1989. 

18. Dr Cranney does not concede that at the priority date, it was well known that there is a problem with the reactivity of AN-based emulsions (as opposed to ANFO) in contact with reactive ore.  He was obviously aware of the problem himself.  He concedes, however, that anybody who was aware of the problem would have appreciated that the difficulty arises because of reaction between the ammonium nitrate content of such an emulsion and reactive ore, especially in the presence of water. 

19. He asserts that AN emulsion is in a “different thermo-dynamic state” from ANFO and that it therefore did not follow automatically that what was effective with ANFO would be effective with an emulsion.  However he identifies no reason for suspecting that the use of urea was contra-indicated.  Indeed, as I understand his logic as previously outlined, he inferred that urea would be appropriate for use with emulsions.  This was the reason for testing it.  He considered that such an experiment was “obvious to try”.  He agrees that the reports of the US Bureau of Mines were “out in the industry”.  In particular, he was aware of the 1982 paper which recorded tests involving zinc oxide, calcium carbonate, urea and magnesium oxide.  He agrees that one of the disadvantages of using urea with ANFO, namely its hygroscopicity, is not a problem when urea is used in AN emulsion.  He agrees that at the priority date, it was well-known that urea can be used as a water substitute to lower the crystallization point in emulsions (ts 743 ll 4-6).  This is the eutectic effect to which I have previously referred.  Urea was also known to be a fuel, although not a good one.  Thus it would enhance, to some extent, the explosive effect.  Dr Cranney also agrees (ts 719, ll 5 and 6) that the technology for adding urea to AN emulsion was well-known at the priority date.  This evidence is of some importance.  I will return to it.

20. At ts 735, this passage appears in Dr Cranney’s cross-examination:-

    There is no disclosure in the patent, is there, of a method of loading which requires or advises that even with this inhibited emulsion, you should be loading or firing within a certain period of time, is there? --  “That’s something you would adapt, based on a specific situation.”

    There is no disclosure? --  You can’t – you can’t make a general – you can’t make a general statement about method without knowing the conditions that you’re going to be blasting in.

    It’s a simple question, there is no disclosure, is there?  That you may need – that you need to adopt a method of loading and firing, even though you are using this inhibited emulsion? --It wouldn’t make any sense to state a method because it would not be tailored to any given application. 

    Whether it make any sense or not, there is no mention of it, is there, in the patent?  I’m not sure.  I’d have to review what the patent says.

    Have a look.  You should have a copy of it there, that is the patent in suit?  ---  Well, it does talk about:

    The composition of the present invention can be delivered in bulk form to a bore-hole containing reactive sulphide or pyrite ores using methods well known in the …, or can be used in packaged form.

    Yes? --  So that is about as far as you can take it without knowing the exact requirements of the blasting site.  And having categorized the reactivity of the ore, if you are dealing with reactive ore and other aspects of the operation of blasting and drilling at that particular mine.

    And that is the best you can do in finding anything which refers to the need in using this inhibited emulsion to adopt procedures relating to the time between loading and firing? --  Like I say, it wouldn’t make any sense to write that down, you would just be laying yourself open for somebody to have a problem.

21. At p 736, this passage appears:-

    Before June 1990 there were procedures adopted with uninhibited emulsions and AN explosives which involved loading and firing on the same day, weren’t there? --  Yes.

    So it was common to put all AN explosives into ores with bore-holes which might react, but avoid the problem by firing and loading quickly – loading and firing quickly? --  I believe that approach was used, yes, along with some bore-hole liners.

    With a liner? --  It’s a long … I mean, once again we’re talking about customizing products to needs, and so it is impossible to generalize a method which applies to any number of needs out there.  That has to be done by the supplier with the mine.

22. At ts 737, ll 1-5, the witness says:-

    I guess, your Honour, to explain a little further, it was common practice to catalogue temperature bore-holes hole by hole on the whole pattern, and to treat individual bore-holes differently based on temperature or other evidence from geology or anything else. 

23. At ts 752-753 Dr Cranney suggests that he did not understand Dr Oxley to have expressly stated (at the April 1990 meeting of RCEM) that she was experimenting with the stabilization of AN emulsions in contact with reactive ores.  This appears to be inconsistent with his own minute concerning the meeting in which he said:-

    The thermal hazards section dealt quite extensively on the incompatibility of some ores, sulphides, with AN-based emulsions.  The results suggest it was the presence of iron rather than sulphide that promotes the incompatibility.  Unfortunately, it covered quite well the stabilization of these reactions by urea.

24. In any event, she had told him in December 1989 of the nature of her work. (ts 750 ll 6-15)  I am satisfied that from December 1989, Dr Cranney was aware that Dr Oxley was working on the use of urea with AN to inhibit reaction with reactive ores.  After the April meeting at the latest, he was aware that this included AN in AN emulsions.

25. At ts 760 Dr Cranney reflects Mr Harries’ view as to the occurrence of reactive ore.  He says at lines 13-15:-

    I mean, there’s only a fraction of a percent, probably, of sulphide ore out there that you would consider reactive in either the chemical sense or the functional sense.

1. The patent in suit teaches the addition of urea to the discontinuous phase of an emulsion in the proportion of 1 to 30 per cent.  At p 2 it is said that:-

   As indicated above the addition of urea to an emulsion explosive as a dry powder, dry prill or preferably dissolved in the oxidizer phase greatly reduces the reactivity of the nitrate salts in the emulsion with sulphide-pyrite ores.  As low as about 1 per cent dissolved or dispersed urea can have a dramatic effect on explosive/ore compatibility.  In practice, larger amounts are advantageous and urea levels up to about 30 per cent are feasible.  The degree of effectiveness generally is proportional to the amount of urea employed.  However, for reasons of optimizing oxygen-balance, energy and effectiveness, the preferred range is from about 5 to about 20 per cent urea.

2. The “oxidizer phase” is the “discontinuous phase”.  The wide range of urea content suggests strongly that the actual proportion of urea is not of great importance or that it may vary, depending upon factors such as the other ingredients in the emulsion or on-site conditions.

3. If I am correct in concluding that the content of the Asahi patent is prior art information for the purposes of s 7(2), then it follows that the patent fails for want of inventiveness to the extent that it teaches the addition of between .1 and 5 per cent of urea to emulsive explosives for use in reactive ore.  This was already taught by the Asahi patent.  As to the addition of from 5 to 30 per cent, it would have been obvious at the priority date that there could be an increase in the proportion of urea, using known oxygen-balancing methodology.  Indeed, it may be that in advising against the use of urea in excess of 5 per cent because of oxygen-balancing problems, the inventor was implying that a greater proportion of urea might otherwise have been desirable.  I accept Dr Oxley’s evidence as to obviousness at par 1.21 of her affidavit.  It is true that Mr Harries says that he did not consider that it was obvious from the Asahi patent that urea could be added in the range of 1 to 30 per cent.  However I conclude, from reading the passages at ts 255 and ts 314-5 and from my observations of him as a witness that he is not using the expression “obvious” in the sense in which it is used in the Patents Act.  I understand him to mean merely that the Asahi patent does not demonstrate such use.  In any event I prefer the evidence of Dr Oxley in this regard.

4. Even if I am incorrect in inferring that the contents of the Asahi patent should be treated as prior art information for the purposes of s 7(2), the same result ensues.  It is convenient at this stage to summarize the content of the relevant documents which I have found to be part of common general knowledge as at the priority date.  Because there is an element of repetition in so doing I will keep the extracts fairly short.

   Lukaszewski at p 50 of GH1

   Some amines and amides such as urea are capable of stabilizing ANFO in the presence of moisture and sulphide.

   US Bureau of Mines 1968 report at p 307 of JCO1

   Mixtures of prilled AN or ANFO with pyrite-bearing ores have been observed to react at temperatures as low as 185° F.  The addition of 5 per cent dilute sulphuric acid to these mixtures can decrease this reaction temperature to 150° F.  Preliminary results indicate that the addition of .5 to 1 per cent of calcium carbonate, urea, zinc oxide or magnesium oxide decreases the reactivity of ANFO-pyrite mixture.

   Mason patent (1973) at p 127 of GH1

   An ANFO explosive which is modified by the presence of small amounts of urea so that the explosive will not adversely react with pyrite in pyrite-bearing mines.

   The patent speaks of urea content between .25 and 2 per cent by weight, and preferably .5 to 1 per cent by weight.

   US Bureau of Mines 1979 report at p 125 of GH1

   The role of urea in significantly increasing the apparent pH of various basic and acidic solutions with and without buffers is known but not well understood.  …  Our results indicate that urea inhibits reaction between ANFO and ferrous sulphate by combining with one or more of the ingredients in the original reaction mixture.  Only when enough urea is present is reaction prevented.  Urea can undergo many reactions.  Urea replaces water of crystallization in many salts, including sulphates, thereby forming new compounds with a different stability than the original salt.

   At p 125A

   Of the three inhibitors tested, urea was found to be a good inhibitor.  It could be mixed with ANFO prills prior to introduction of the charge into a bore hole. …

   Thus it appears that urea or its cyanate isomer combines with the ferrous sulphate and prevents its reaction with ANFO at least until ANFO reacts with pyrite.

   Five wt-pct urea prevented any exothermic reaction in the turnery mixture at least until 180° C. 

   Nitro Nobel patent (6 July 1982) at pp 192-4 of GH1

   This patent teaches the use of urea as a fuel in emulsion explosives.  The percentage appears to be about 5 per cent.  However there is also a suggestion that urea be added to the salt solution for a purpose which is not clear.  The salt solution would be in the discontinuous phase of a water-in-oil emulsion.

   The Norsk patent (19 February 1985) at pp 195-200 of GH1

   This patent teaches the use of a water-in-oil emulsion explosive containing 4 to 15 per cent by weight of a crystallization temperature lowering agent, preferably urea.  Elsewhere it speaks of a preferable urea content of 10 to 12 per cent by weight.  The urea is in the discontinuous phase.

   Paper by Rumball, Thornber and Davidson (1986) at p 44 of GH1

   The most appropriate way to prevent reaction is to neutralize the acid.  Alkaline compounds, such as calcium carbonate, magnesium carbonate, sodium hydroxide and urea successfully inhibited the reaction when added at 10 wt %. 

5. I might also add a reference to Dr Rumball’s thesis (ex 16).  Although it was published in 1991, he said (ts 959) that the following paragraph reflects his views and views commonly held in the industry as at June 1990.  The paragraph appears at p 349 as follows:

   Alkali and surfactant chemicals may be added to ANFO to decrease its interaction with partially weathered sulphides thereby reduce (sic) the risk of spontaneous explosions.  Zinc oxide and urea are effective due to their high alkalinity per unit mass, however uniform dispersal of the inhibitor throughout coarsely prilled ANFO is difficult to achieve using conventional mixing methods.  Future development incorporating the inhibitor within the ANFO prill or within an emulsion or slurried AN explosive may provide an acceptable product. 

6. Obviousness must be considered in the light of common general knowledge in conjunction with individual items of prior art information in this case, the AECI patent and the ICI-US patent. I presently exclude the Asahi patent upon the basis that it does not satisfy the test prescribed in subs 7(3). The AECI patent was published, at the latest, in 1981 and teaches the use of urea for its eutectic properties. The tables show the composition of the various explosives. They are a little confusing because compositions 1, 2 and 3 are not shown in percentages. The totality of parts in each case is 108. The totality of parts for each of the other compositions is 100. Thus the figures of 15.5 and 14.3 for urea in compositions 1 and 2 do not represent percentage compositions. In the case of composition 1, the percentage of urea is 14.35 per cent. In the case of composition 2, it is 13.24 per cent. The ICI-US patent teaches the addition of urea at 5 per cent of composition for its eutectic effect. In the end, the two prior art patents are probably not of much relevance. They take the matter no further than do the contents of those documents which were common general knowledge.

7. As I have previously indicated, those “common general knowledge” documents demonstrate that urea is a potential inhibitor of the undesirable reaction between AN in ANFO and reactive ore.  They also teach the inclusion of up to 15 per cent by weight of urea in AN emulsion for its eutectic effect.  Thus it was common general knowledge at the priority date that urea can be added to emulsion explosives (up to 15 per cent by weight) for its eutectic effect.  These patents teach the use of the various emulsion explosives generally, not excluding their use in reactive ore, although common knowledge teaches the need for bore hole liners or pre-packaging for such use.  When this knowledge is considered in light of the further common general knowledge that urea inhibits adverse reaction between AN in ANFO and reactive ore, it is difficult not to conclude, as did Dr Oxley and Mr Harries, that urea would probably have the same effect if added to an AN emulsion.  I find their opinions persuasive, particularly because, of the applicants’ witnesses, only Dr Rumball sought to advance any detailed reasons for not so concluding.  He subsequently accepted that his concerns were allayed by the knowledge that emulsions containing urea were well known at the priority date. 

8. I conclude, by reference to common general knowledge immediately before the priority date, and without regard to any other prior art information, that the use of urea in AN emulsions for its inhibiting effect in reactive ore was obvious.  That it had not previously been the subject of a patent suggests that, as Mr Harries said, the problem was not sufficiently common to cause concern, alternative solutions, namely the use of packaging and bore-hole liners being an acceptable alternative.  It is, in my view, impossible to contemplate the notional skilled person, aware of the inhibiting effect of urea with AN in ANFO and of the use of urea in AN emulsions for its eutectic effect, not concluding that urea in such emulsions would be likely to demonstrate the same inhibiting effect when used for blasting in reactive ore.

9. The appropriate test of obviousness was prescribed by Buckley LJ (Browne LJ concurring) in Beecham Group Limited’s (Amoxycillin) Application [1980] RPC 261 at 290-1 (quoted with approval by Wilcox J in Re Cooper’s Animal Health Australia Limited v Western Stock Distributors Pty Ltd (1986) 67 ALR 390 at 410-11) as follows:-

   Obviousness and inventiveness are antitheses.  What is obvious cannot be inventive, and what is inventive cannot be obvious. …

   It is clearly established that, for a particular step or process to be obvious for the purpose of either section, it is not necessary to establish that its success is clearly predictable … .  It will suffice if it is shown that it would appear to anyone skilled in the art but lacking in inventive capacity that to try the step or process would be worthwhile … .  Worthwhile to what end?  It must, in my opinion, be shown to be worth trying in order to solve some recognized problem or meet some recognized need.  The uninventive expert … should not be supposed to be attempting to discover something new, that is, to be striving for inventiveness.  Having been shown what was disclosed by the prior art, he must be supposed to be attempting to solve some problem or fulfil some need which has not been resolved or satisfied by the prior art but which appears to his uninventive mind to be possibly capable of solution or satisfaction by taking the step or doing the thing under consideration.  This, it seems to me, must involve the uninventive but skilled man having a particular problem or need in mind.  If on carrying out his test he finds that the new step has the sort of consequence he had hoped but in an unexpectedly high degree, this would or might not mean that the new step was inventive or other than obvious; it might merely mean that a new and obvious step has solved the problem or met the need unexpectedly well.  The question would, I think be one of degree.  If, on the other hand, the new step produces some unexpected result productive of an improvement or benefit of an unexpected kind it may well be held to be inventive, the association of the new step with its result not having been obvious.

10. To a layman, the opinions of Mr Harries and Dr Oxley are convincing.  See Mr Harries’ affidavit at par 1.58 and Dr Oxley’s affidavit at par 1.16.  Further, the test prescribed by Buckley LJ appears to fit the present case precisely.  Evidence of actual experience supports this conclusion.  Mr Sheahan, in connection with the Mt Whaleback problem (see ex 13), reported in 1985, after a relatively short period of research work:-

    The urea-containing emulsion was the only one to display any resistance to low temperature exothermic decomposition.  It may be a useful starting point if we need a pyrite-resistant emulsion in the future.

11. Similarly, as I have shown, Dr Rumball, in his thesis at p 349, recorded the same conclusion, saying that the views expressed in the thesis were those which were current in 1990.  We also know that in 1989, people in the American mining industry suggested to Dr Oxley that she test the use of urea in emulsions, apparently in reliance upon the reports from the US Bureau of Mines.  Finally, we know that in 1989, Dr Cranney went immediately to urea when faced with a particular problem and very quickly satisfied himself that it offered a solution.  This history strongly suggests that the use of urea was obvious. 

12. The applicants suggest that inventiveness is demonstrated by the fact that a long-recognized need had not previously been met.  It seems to me that the problem was not as acute or widespread as the applicants suggest, although the odd passage in the evidence, taken in isolation, may support that point of view.  It must be appreciated that emulsions are used relatively infrequently (in wet-holes).  Only where wet holes coincide with reactive ore is there a problem of the present kind.  Reactive ore occurs rarely.  Thus I conclude that Mr Harries is correct when he says that for wet holes in reactive ore, the use of liners or pre-packaged explosives is an acceptable solution despite the cost.  There is no real suggestion that AN emulsion with urea might be used instead of ANFO (with or without urea) for blasting in reactive ore when the holes are not wet.  There has been no attempt to demonstrate that the cost differential between ANFO and emulsion spoken of by Mr Harries in connection with his work at Mt Whaleback would be effectively off-set by the saving of the cost of liners or pre-packaging.  Indeed, as the patent in suit teaches the continued use of these precautions, there would be no such saving.  Thus there can be no suggestion that AN emulsion with urea is to replace ANFO as the explosive of choice in holes which are not wet.

13. To the extent that the patent in suit teaches the use in reactive ore of an emulsion explosive containing up to 15 per cent by weight of urea in reactive ore, that is taught by the Norsk patent which was common general knowledge at the relevant date.  As I have said, there is no suggestion in the patent that such emulsion should not be  used in reactive ore.  Such use was therefore obvious.  To the extent that the present patent teaches the use of a higher proportion of urea, it is also obvious.

14. It follows that the patent fails for want of inventiveness. 

    Novelty

15. Sub-section 7(1) provides:-

    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 two or more related documents, or through doing two 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 sub-paragraph (b)(ii) of the definition of prior art base in Schedule 1.

    The Dictionary relevantly defines “prior art information” to mean:

    information that is part of the prior art base in relation to deciding whether an invention is or is not novel; … .

    “Prior art base” means:-

    (i)information of the 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; … .

16. The reference in sub-par (i) to par (a) is to the information relevant for the purposes of subs 7(3). Relevantly, this includes information in a document publicly available anywhere in the world and information made publicly available by doing an act anywhere in Australia. The test requires anticipation of the complete invention in one prior art document or act, par 7(1)(b) not being presently relevant. The following documents are relevant prior art documents:-

    ·     Lukaszewski report

    ·     US Bureau of Mines 1968 report

    ·     US Bureau of Mines 1976 report

    ·     US Bureau of Mines 1979 report

    ·     Mason patent

    ·     Nitro Nobel patent

    ·     Norsk patent

    ·     AECI patent

    ·     ICI-US patent

    ·     Asahi patent

    ·     Paper by Rumball, Thornber and Davidson

    ·     Paper by Harries, Bellairs and Stewart

17. Only the Asahi patent expressly teaches the use of an AN emulsion containing urea in reactive ore.  However, as I have demonstrated, numerous patents teach the use of AN emulsion explosive containing urea.  In particular, the Norsk patent teaches the use of urea in quantities up to 15 per cent by weight.  None of these patents excludes use of the relevant emulsion in reactive ore.  It follows that they teach such use and so anticipate the patent in suit, at least in so far as it teaches the use of urea in proportions up to 15 per cent.  It is not necessary to decide whether its teaching beyond 15 per cent should be taken to be novel in view of my conclusions as to method of manufacture and inventiveness.

18. The respondent also seeks to rely upon its supply to Mt Isa Mines between 1988 and 1990, of emulsion explosives containing urea.  See Mr Sujansky’s affidavit at pars 2.6 et seq.  The material indicates that these explosives contained varying quantities of urea.  Paragraph 2.13 refers to a product containing in excess of 1 per cent of urea.  The confidential tables for the product described as A 0413 show urea content of 3.2 per cent and 4.9 per cent.  I accept the evidence as to the possibility of reverse engineering and as to its being not uncommon in the industry.  There was known to be reactive ore at Mt Isa at the relevant time.

19. Prior to the enactment of the Patents Act, “prior user” was a relevant factor in connection with inventiveness.  See pars 59(1)(g) and 100(1)(e) of the 1952 Act.  It is a traditional aspect of patent law.  See Bristol-Myers Company (Johnson’s) Application [1975] RPC 127. The concept is still expressly contained in some parts of the Patents Act. See ss 9, 24 and 119. The term is not expressly used in s 7 or s 18, nor in the definition of “prior art base”, although the term “secret use” is used in s 18. Paragraph 18(1)(d) deprives an invention of protection if it is secretly used in the patent area before the priority date by or with the authority of the patentee, although this is subject to s 9. Section 18 seems to assume that non-secret user will have the same effect. Section 24 clearly contemplates that prior user will be relevant to both novelty and inventiveness. It seems probable that the word “act” in s 7 and in the definition of “prior art base” encompasses the notion of “prior use”. This conclusion is supported by the IPAC report at par 7.2 and the IPAC response at pp 4-5.

1. The concept of prior user was discussed by the House of Lords in Bristol-Myers.  At pp 155-9, Lord Diplock (Lord Kilbrandon concurring) gave an exhaustive history of the use of the words “use” and “used” in patent law.  That case involved an application for a patent for “a synthetic compound of value as an antibacterial agent”.  It appears to have been an improved form of penicillin.  The applicant (Bristol-Myers) claimed the patent in respect of one form of the substance.  The respondent (Beechams) claimed to have previously supplied that form of the substance, having unintentionally produced it in the course of producing another form of the same substance.  They claimed that such sale, even without knowledge of that fact, was a prior user sufficient to prevent the grant of a patent.  At p 157 Lord Diplock said:-

   So I would hold on principle and in accordance with the main stream of authority prior to 1949 that where … it is provided that one of the grounds of opposition to the grant of a patent shall be: “that the invention, so far as claimed in any claim of the “complete specification, was used in the United Kingdom before the priority date of that claim” any commercial sale by any trader before the priority date of a claim to a product as an invention is “use” of that invention within the meaning of that paragraph and, unless it falls to be disregarded as a “secret use” …, constitutes a bar to the grant of a patent for that product.  To sell the product by way of trade is to “use” it, notwithstanding the seller’s ignorance of its identity or his lack of knowledge of its composition …”.

2. At p 162 Lord Cross of Chelsea said:-

   It is, of course, true that they did not intend to produce trihydrate – indeed they did not even know that they had done so – but that fact does not involve the consequence that when they produced it, blended it with other forms of ampicillin and sold capsules made from the blend they were not “using” trihydrate within the meaning of that word in patent law.  A man ought not to be prevented by the grant of a patent to another from continuing to make something which he was making before the grant and the fact that he did not know the chemical nature of what he was making is, in principle, irrelevant.

3. The English legislation requires a further enquiry as to whether the use was “secret”.  In the Patents Act, that issue is addressed by the words “made publicly available” in subs 7(1). Secret use was considered by the House of Lords in Bristol-Myers.  Lord Diplock (Lord Kilbrandon concurring) considered that deliberate concealment was necessary to constitute secret use.  Lord Reid and Lord Morris of Borth-y-Gest considered that it meant simply “undiscovered” or “not known to the public”.  Lord Cross of Chelsea said at p 164:-

   In the Stahlwerk Becker case Lord Finlay said: “The law as to prior user seems to be this, that if the article has been manufactured and sold that gives the means of knowledge to the purchaser and that is enough to establish prior user.”  In that case, however, it was common ground that the composition of the steel could have been discovered by analysis and the only question argued was whether it was necessary for those relying on prior user to show that it had in fact been so analysed.  Their Lordships were not directing their minds to a case such as this where no purchaser could have discovered the presence of “trihydrate” in the capsule which he bought.  But it would, to my mind, be unreasonable to draw a distinction between a case in which analysis was, in the existing state of scientific knowledge, impossible and a case where although theoretically possible the chances of any purchaser or subsequent user attempting it were extremely remote.  If the sale of an article containing some substance ought ever to be regarded as a ‘secret use’ of that substance it would, I think, have to be on the ground that viewing the matter broadly as a jury question it was, to use Mr Terrell’s words, ‘practically impossible that the public should have become acquainted’ with the substance in question during the life of the Patent as a result of the sale of the articles containing it as an ingredient.  But to adopt that approach would mean that in all such cases the court would have to embark on a difficult and speculative enquiry and it is, to my mind, more satisfactory to hold that if a man by selling the article in question puts it out of his power to prevent a purchaser from discovering, if and when he can, the presence in it of the substance in question he has made a ‘non-secret’ use of the substance whatever be his own state of mind and whether or not analysis is, in the existing state of knowledge, possible.

4. His Lordship appears therefore to be in substantial agreement with the view expressed by Lords Diplock and Kilbrandon. 

5. The supply to Mt Isa Mines would appear to have been a prior use which was not secret. If subs 7(1) effectively adopts the same approach as that found in Bristol-Myers, then that supply would itself be sufficient to deprive the patent in suit of novelty, at least to the extent that urea was present in the products in question. However s 119 of the Patents Act causes some difficulty. I would have thought it at least arguable that s 119 prescribes the protection to be afforded to a person who has previously used the process or product in question. If such prior use were sufficient to deprive an invention of novelty, there would be little purpose in express protection of a person who has previously used it. Of course, the present respondent may not be protected by s 119 because the evidence does not establish that it was making or using the relevant product immediately before the priority date of the claim, but the construction problem remains. It is not presently necessary for me finally to determine this matter. As I do not consider that it received adequate consideration in the course of submissions, I do not propose to do so. Should the parties require that I make any further findings of fact in connection with this issue, I will do so.

6. I should mention two other matters. Firstly, there is some evidence of a secrecy clause in an agreement between the respondent and Mt Isa Mines. It is, however, not clear that the 1988-89 supplies were pursuant to that agreement. Secondly, prior user may also be relevant to the prior art base for the purpose of determining inventiveness, but no such submission was made in the present case. I assume that the respondent accepts that the supplies in 1988-9 would not be a matter which a skilled worker could reasonably be expected to have discovered for the purposes of subs 7(3).

   Insufficiency

7. The respondent submits that in any event, the specification is deficient in that it does not comply with the requirement of par 40(2)(a) of the Patents Act that it describe the invention fully, including the best method known to the applicant of performing the invention.  The criticism is primarily based upon the content of various documents published either by the applicants or by BHP, which company has purchased the relevant product for use.  That material demonstrates that it is thought highly desirable, if not necessary, that the loading of bore-holes and firing occur rapidly, perhaps on the same day, even where the alleged invention is used.  Further, temperature logging is thought to be desirable in reactive ore.  It is also pointed out that the patent says little or nothing about any method of blasting.

8. Throughout this trial, the distinction between a product to be used in blasting and a method of blasting has been regularly raised.  The patent purports to claim the invention as a method of blasting.  Claims 1 - 13 do so in terms.  Claim 14 speaks of “a method of reducing the reactivity of the nitrate salts in an emulsion explosive composition …”.  On the other hand, the bulk of the specification seems to deal with a blasting product.  For example, the invention title on the first page of the complete specification is “Emulsion that is compatible with reactive sulphide/pyrite ores”.  The specification commences on p 8 of GH1 with the words:-

   The present invention relates to an improved explosive composition.  More particularly, the invention relates to a water-in-oil emulsion explosive that has increased thermal compatibility with sulphide/pyrite containing ores that typically are reactive with nitrate salts, especially ammonium nitrate.

   The water-in-oil emulsion explosives of this invention contain a water-immiscible organic fuel as a continuous phase, an emulsified inorganic oxidizer salt solution as a discontinuous phase, an emulsifier, and from 1 to 30 per cent by weight of the composition of urea for stabilization against thermal degradation with reactive sulphide pyrite ores … .

9. It is true that it then continues:-

   The invention also relates to a method using such explosives for blasting in reactive ores containing sulphides and/or pyrites comprising using an emulsion explosive having an emulsifier; a continuous organic fuel phase; and a discontinuous oxidizer salts phase comprising inorganic oxidizer salt, and from 1 to 30 per by weight of the composition of urea.

   A further embodiment of the invention comprises a method of blasting in reactive ores containing sulphides and/or pyrites comprising loading a bore-hole with an emulsion explosive, having an emulsifier; a continuous organic fuel phase, and a discontinuous oxidizer salt solution phase comprising inorganic oxidizer salt, and from 1 to 30 per cent by weight of the composition of urea, and thereafter detonating the explosive.

10. I suspect that this ground of criticism cannot be resolved without re-visiting questions of construction, novelty and inventiveness.  It is not necessary to take this matter any further for present purposes.

    Inutility

11. This is a very narrow ground of attack and relates only to claim 1.  It is said that because the emulsion described in claim 1 does not contain a sensitizing agent, it would not work as an explosive.  The attack is based upon a passage in the evidence of Dr Cranney at p 789 which indicates that an emulsion without a sensitizer would not be considered in the industry to be an explosive.   Prima facie it appears that claim 1 may therefore fail for lack of utility.  It is not necessary to take this matter further for present purposes in view of the conclusions reached elsewhere in these reasons.

    SUMMARY

12. My findings are as follows:-

    ·The patent does not disclose a manner of manufacture within the meaning of s 6 of the Statute of Monopolies;

    ·The claimed invention does not involve an inventive step;

    ·The claimed invention is not novel to the extent that it teaches the inclusion in the discontinuous phase of up to 15 per cent of urea;

    ·As to whether it is novel to the extent that it teaches in excess of 15 per cent, it is not necessary to decide;

    ·As to whether the specification describes fully the invention, it is not necessary to decide;

    ·As to whether claim 1 lacks utility, it is not necessary to decide.

13. Upon publication of these reasons for judgment, I will adjourn the matter to enable the parties to consider whether or not they require any additional findings of fact and appropriate forms of order.  Should the parties require any further findings of fact, they are to confer in order to produce a list of such additional findings, with appropriate references to the evidence, and indicating whether the additional findings are opposed.  Should the applicants wish to proceed with their extant application to amend the patent or the specification or to make some new application for amendment, they are to notify the respondent accordingly within seven days of the publication of these reasons.

14. The matter is to be re-listed for hearing in respect of:-

    ·Further findings of fact;

    ·Any application as to amendment;

    ·Forms of order; and

    ·Costs.

I certify that the preceding two hundred and thirty-one (231) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett.

Associate:

Dated:            5 October 1999

Counsel for the Applicant:

Mr G A Thompson SC

Solicitor for the Applicant:

Gadens Lawyers

Counsel for the Respondent:

Mr A Bannon SC

Mr M Speakman

Solicitor for the Respondent:

Allen Allen & Hemsley

Dates of Hearing:

19-23 April 1999

27-30 April 1999

4-5 May 1999

Date of Judgment:

5 October 1999