Esco Corporation v PAC Mining Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Esco Corporation v PAC Mining Pty Ltd [2008] FCA 640

PATENTS – infringement – construction – wear assemblies attaching to excavator buckets – meaning of “opening extending therethrough” – meaning of “digging edge” – meaning of “rigid lock”.

PATENTS – invalidity – novelty – meaning of “shoulders” – whether prior patent had “shoulders”.

PATENTS – invalidity – obviousness – use of screw to eliminate looseness in earlier wear assemblies – person skilled in the art – common general knowledge – whether starting point of invention obvious – whether looseness in earlier wear assemblies a design flaw – evidence of obviousness given in hindsight – whether evidence should be accepted.

PATENTS – invalidity – fair basis – real and reasonably clear disclosure of the invention – lock with adjustment assembly disclosed.

WORDS AND PHRASES – “opening extending therethrough” – “digging edge” – “rigid lock” – “shoulders”    

Patents Act 1990 (Cth) ss 7(1), 7(2)

Aktiebolaget Hässle v Alphapharm Pty Ltd (2002) 194 ALR 485 cited
Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd (2001) 201 CLR 1 cited
Lockwood Security Products Pty Limited v Doric Products Pty Limited (2004) 217 CLR 274 cited
Lockwood Security Products Pty Limited v Doric Products Pty Limited (No. 2) (2007) 235 ALR 202 considered
Meyers Taylor Pty Ltd v Vicarr Industries Ltd (1977) 137 CLR 228 considered
Populin v HB Nominees Pty Ltd (1982) 41 ALR 471 cited
Stena Rederi Aktiebolag v Austral Ship Sales Pty Ltd (2007) 73 IPR 257 cited
Technograph Printed Circuits Ltd v Mills-Rockley (Electronics) Ltd [1972] RPC 346 considered

ESCO CORPORATION AND BRADKEN RESOURCES PTY LTD (ABN 82 098 300 988) v PAC MINING PTY LTD (ABN 11 007 694 895) AND CENTRAL QUEENSLAND MINING SUPPLIES PTY LTD (ABN 11 010 402 990)

NSD 1084 OF 2006

TAMBERLIN J
12 MAY 2008
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 1084 OF 2006

BETWEEN:

ESCO CORPORATION
First Applicant/First Cross-Respondent

BRADKEN RESOURCES PTY LTD (ABN 82 098 300 988)
Second Applicant/Second Cross-Respondent

AND:

PAC MINING PTY LTD (ABN 11 007 694 895)
First Respondent/First Cross-Applicant

CENTRAL QUEENSLAND MINING SUPPLIES PTY LTD (ABN 11 010 402 990)
Second Respondent/Second Cross-Respondent

JUDGE:

TAMBERLIN J

DATE OF ORDER:

12 MAY 2008

WHERE MADE:

SYDNEY

THE COURT DIRECTS THAT:

1.The parties consult with a view to agreeing upon and sending to my Associate in chambers Short Minutes of Order giving effect to these reasons for judgment.

2.The parties, if unable to agree on Short Minutes of Order giving effect to these reasons for judgment, send to my Associate in chambers competing Short Minutes of Order with brief reasons.

THE COURT ORDERS THAT:

3.Costs be reserved.

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


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 1084 OF 2006

BETWEEN:

ESCO CORPORATION
First Applicant/First Cross-Respondent

BRADKEN RESOURCES PTY LTD (ABN 82 098 300 988)
Second Applicant/Second Cross-Respondent

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Details
Case
[2008] FCA 640
Decision Date

CaseChat Overview and Summary

Esco Corporation took action against PAC Mining Pty Ltd in court over allegations of patent infringement concerning wear assemblies for excavators. The patents in question, known as the Jones Patents, were developed by Mr Larren Jones, a former employee of Esco. The respondents disputed the validity of these patents, arguing that they were not novel, did not involve an inventive step, and were not adequately described in the patents’ specifications. The court had to determine whether the patents were valid and if they had been infringed by the respondents’ products.

The primary legal issues addressed by the court included the interpretation of the patent claims, the validity of the patents, and whether the respondents’ products infringed on these patents. The court examined the evidence presented by both parties, particularly the conflicting interpretations of the patent claims by the expert witnesses. The applicants argued that their products met the criteria of the patent claims, while the respondents claimed that their products did not infringe on the patents.

The court found that the applicants’ interpretation of the patent claims was more persuasive and that the patents were valid. The court concluded that the patent specifications provided sufficient disclosure for the claimed adjustment assembly and that the respondents' products did indeed infringe on the patents. The court directed the parties to consult and agree on the Short Minutes of Order to reflect these findings. If the parties could not agree, they were instructed to submit competing Short Minutes of Order for the court's consideration. Costs were reserved for further determination.

In summary, the court ruled in favor of the applicants, confirming the validity of the patents and finding infringement by the respondents. The final orders directed the parties to collaborate on the Short Minutes of Order and reserved costs for later determination.

Orders

Orders of the court

3. Costs be reserved.

Background

Background to the litigation

The respondents’ Defence and Cross-Claim responds to the applicants’ allegations of infringement, and pleads that the relevant claims of the applicants’ patents are invalid on the grounds that they are not novel, do not involve an inventive step and are not fairly based on the descriptions in the patents’ specifications. The respondents seek appropriate declarations of invalidity. BACKGROUND The patents in suit are referred to as “Jones Patents” because they are part of a series of patents of which Mr Larren Jones, a former employee of Esco, is named as an inventor. In addition to Jones II and III, which are the patents in suit, it is also relevant to note the registration of United States Patent number 5,088,214, which is known as “Jones I”. This patent is an important piece of prior art that is expressly incorporated by reference into Jones II and Jones III. Jones I was applied for in 1991 and granted in 1992. The corresponding Australian patent was applied for in 1992 and claimed priority based on the 1991 application. The commercial embodiment of Jones I, which was a product known as “Toplok”, was first sold in Australia in 1991. By 6 November 1995, which is the priority date for both Jones II and Jones III, Toplok had been sold in large quantities and was used on excavators operating in mines around Australia. It had been advertised and promoted in trade shows and trade publications. The applicants say that, by the priority date of Jones II and Jones III, Toplock’s technology was common general knowledge in Australia. One of the problems encountered by the Jones I design was that looseness occurred between the lock, the boss and the inside walls of the opening which extends through to the shroud where it wraps around the digging edge of the bucket. This problem apparently arises both from the fact that cast parts are used in the manufacture of Toplok and also from general wear and tear during operation. As noted above, Jones I, Jones II and Jones III are concerned with wear assemblies for the digging edges of excavators. Wear assemblies are constituted by the combination of several replaceable parts (namely, shrouds, adapters and teeth). Not every wear assembly contains every type of replaceable part. Some configurations of large excavator buckets are fitted with shrouds only, as it is desirable to have a single continuous edge along the excavator bucket. Depending on the nature of the work to be performed by the excavator, however, a combination of shrouds and teeth may be used. In such situations, the teeth are attached to adapters which form part of or are attached to the lip of the excavator bucket. The function of all configurations of wear assemblies is to provide digging edges which can be replaced when damaged or worn. Such functionality avoids the more expensive and time-consuming option of repairing or replacing the whole excavator bucket. In order to accommodate the attachment of shrouds, adapters and teeth, the digging edge of the excavator bucket is usually bevelled or rounded. The adapters are welded onto, or are somehow otherwise attached to, the lip of the bucket at certain intervals along the digging edge. The teeth then fit onto the adapters and are fastened in position by pins extending through the teeth and into the adapters. For the portion of the digging edge exposed between each adapter, a shroud wraps around it.

Evidence

Evidence Before The Court

The evidence from each party was largely directed to the conflict between the different interpretations of the claims in suit favoured by the parties’ respective expert witnesses. I found the expert witnesses on both sides to be well-versed in their field.Applicants’ evidence Affidavit evidence was filed by the applicants. The deponents whose affidavits were read were Messrs John Alden, Indradeep Battacharya, Robert McClanahan and Ms Karen Gillard. Mr Alden was called by the applicants as an expert. His evidence related chiefly to the interpretation of the specifications of the patents in suit. I accept his qualifications and experience, which were of a high order and not significantly challenged by the respondents, as grounding his expertise in this area. Four affidavits of Mr Alden were read, and his evidence was the subject of detailed cross-examination. Three of his affidavits concerned issues of construction and infringement, while the fourth related to novelty. In relation to construction and infringement, Mr Alden deposed in detail to the differences and similarities he perceived between the claims in suit and the respondents’ products, namely the PAC and CQMS Systems, the Hensley System and the CQMS Lower Wing System. In broad terms, Mr Alden concluded that the respondents’ products did have the features of the claims in suit. He also gave evidence in response to the evidence of an expert witness retained by the respondents, Professor Wightley. Mr Alden concluded that Professor Wightley erred in his evidence by treating shear forces and compressive forces as interchangeable, and that, in any event, to refer to a “shear member” to describe the lock in the present case is overly simplistic because the forces which are transferred through the lock are not confined to shear forces. In a later affidavit, Mr Alden also took issue with the way in which Professor Wightley defined and used the terms “digging edge” and “opening extending therethrough”. Finally, on the issue of novelty, Mr Alden deposed that he is unable to agree with Professor Wightley’s conclusion that the invention is novel, and set out in detail the reasons why he reached the opposite conclusion. Generally, Mr Alden’s evidence was not significantly shaken on cross-examination. However, on one matter, Mr Alden’s evidence did not withstand cross-examination entirely unshaken. His interpretation of the phrase “opening extending therethrough” was largely one of subjective impression and, in my view, was shown to be weak. I do not find Mr Alden’s reasoning as to how he reached his interpretation of this expression persuasive. An affidavit of Mr Battacharya was read in this proceeding. He is a legal representative for the applicants. His affidavit exhibited several photographs and a video recording of the installation of the PAC and CQMS Systems onto the lip of an excavator bucket. This affidavit was illustrative because it demonstrated how the attachment of the wear assembly takes place. Mr Battacharya was not required for cross-examination.

Decision

Reasons for decision

TAMBERLIN J
I do not accept this submission of the respondents. For reasons given above, I consider the disclosure is not limited to a rigid lock which operates as a “shear” member. Rather, it includes a lock with an adjustment assembly which in fact operates in the way claimed. Accordingly, the specification provides a sufficient disclosure for the adjustment assembly in the terms of the claim.CONCLUSION I direct the parties to consult with a view to agreeing upon and sending to my Associate in chambers Short Minutes of Order giving effect to the above reasons. If the parties are unable to agree, they are to send to my Associate in chambers competing Short Minutes of Order with brief reasons. I will hear the parties on costs at a date to be arranged, or on the papers if appropriate.

Ratio Decidendi

Legal Principle Established

Established by: TAMBERLIN J

Full text does not contain this section.