EWT Trade and Business Consultants NZ Limited v Quickcut Pre Press Network Pty Limited, ACP Publishing Pty Limited, Keyset Phototype Pty Ltd, Sinnott Bros Pty Ltd and Trading Post Group Pty Limited - [2007] APO 31

ABSTRACTS OF DECISIONS

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Application : No. 758954 in the name of EWT Trade and Business Consultants NZ Limited

Title  :Placing Advertisements in Publications
Action  :Oppositions under s 59 by Quickcut Pre Press Network Pty Limited, ACP Publishing Pty Limited, Keyset Phototype Pty Ltd, Sinnott Bros Pty Ltd and Trading Post Group Pty Limited
Decision:          Issued 17 September 2007.

Abstract

The invention relates to an Internet-based method of placing display advertisements in publications. The particular enhancement presented by the specification is to put the responsibility for creation of content upon the advertiser, who by virtue of templates which satisfy the requirements of both the advertiser and the publisher may design, book and place their own advertisements via the Internet.

The opposition was partly successful. It was held that claims 1, 3 to 6 and 8 to 11 did not possess an inventive step in light of the AdLizard Functional Specification.

The grounds that the specification did not comply with section 40 and that the application was not in respect of a manner of manufacture were not upheld.

Applicant allowed sixty days in which to propose appropriate amendments.

PATENTS ACT 1990

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Re:Patent Application No. 758954 by EWT Trade and Business Consultants NZ Limited; and oppositions thereto by Quickcut Pre Press Network Pty Limited, ACP Publishing Pty Limited, Keyset Phototype Pty Ltd, Sinnott Bros Pty Ltd and Trading Post Group Pty Limited.

BACKGROUND

EWT Trade and Business Consultants NZ Limited (“EWT”) filed patent application 758954 (19761/01) on 6 December 2000 through the provisions of the Patent Co-operation Treaty. The application claims priority from two NZ patent applications, the earliest of which was filed on 6 December 1999. Following examination, the application was advertised as accepted on 3 April 2003.

Twenty parties filed notices of opposition. Subsequently, one opposition was dismissed for failure to serve a statement of grounds and particulars and fourteen oppositions were withdrawn. Quickcut Pre Press Network Pty Ltd (“Quickcut”), ACP Publishing Pty Limited (“ACP”), Keyset Phototype Pty Ltd (“Keyset”), Sinnott Bros Pty Ltd (“Sinnott”) and Trading Post Group Pty Limited (“Trading Post”) are the five remaining opponents. There have been numerous extensions of time granted in which the parties could serve evidence. The evidentiary stages of evidence in support, evidence in answer and evidence in reply were completed on 16 May 2006. Further evidence was also filed by Quickcut on 17 January 2006, and this was allowed in part on 24 March 2006.

On 17 January 2006 Quickcut wrote to the Commissioner, proposing that they be allowed to rely on evidence filed by all other opponents. Accordingly, on 8 February 2006, a direction was made that evidence which was served in any of the oppositions was deemed to be served in the other oppositions. In the event that any of the oppositions was withdrawn, the remaining opponents would be able to rely on any evidence already served by the other opponents.

The matter was set down for a hearing on 27 November 2006. The applicant was represented by Mr Glenn McGowan of counsel, instructed by Mr Ross McFarlane and Mr Rob McMaster of the firm Phillips Ormonde & Fitzpatrick. Quickcut was represented by Mr David Yates of counsel, instructed by Mr Paul Massey of the firm Spruson & Ferguson. Mr Yates also represented Trading Post, instructed by Mr Christopher Bird and Mr Anthony Selleck of the firm Allens Arthur Robinson. ACP was represented by Mr Chris O’Sullivan of FB Rice & Co, assisted by Mr Scott Sloan of Dibbs Abbott Stillman. Fraser Old & Sohn, the agent for Keyset and Sinnott advised that it had been instructed not to attend or make independent written submissions, but would instead rely on the evidence previously filed.

THE SPECIFICATION

The invention relates to an Internet-based method of placing display advertisements in publications. As background to the invention, the specification refers to the use of advertising agencies by advertisers for the steps of designing, typesetting, proofing and the placement of display advertisements in publications. This method of placing advertisements may be considered inefficient, as there is a significant lead time in accomplishing all of the steps, and there is a significant cost to the advertiser in corresponding with the agency.

The solution presented by the specification is to put the responsibility for creation of content upon the advertiser, who by virtue of templates which satisfy the requirements of both the advertiser and the publisher may design, book and place their own advertisements via the Internet.

There are 11 claims, which read as follows:

“1.    An Internet-based method of placing display advertisements in publications, including the following steps:
(a)     a facilitator provides an Internet site which can be accessed by advertisers who wish to insert advertisements in publications;
(b)     two or more advertisement templates of differing sizes are defined for an advertiser, each advertisement template having a style and appearance approved by or on behalf of the advertiser;
(c) when desiring to place an advertisement in a publication, the advertiser accesses the Internet site and selects a publication in which the advertisement is to appear together with size and placement details;
(d)     the advertiser selects one of the templates which is of a size suitable for placement in the selected publication, and enters details of the advertisement into the template; and
(e) the advertisement is then forwarded by the facilitator either directly or via an intermediary to the selected publication together with instructions indicating the advertiser's selections.

2. A method according to claim 1 wherein the advertiser uses the advertiser's computer to access the Internet site, wherein further the step of entering details of the advertisement into the template involves the sub-steps:
(a)     the advertiser downloads the template from the Internet site to the advertiser's computer;
(b)     the advertiser enters details of the advertisement into the template on the advertiser's computer; and
(c) the advertiser uploads the completed advertisement to the Internet site.
3. A method according to claim 1 or claim 2 wherein the Internet web site further includes data concerning the available advertisement types, sizes and prices for the publications into which advertisements may be placed, and wherein further the choice of templates presented to the advertiser after a particular publication has been selected is a group of templates which match the advertisement types and sizes available in that publication.
4. A method according to any one of claims 1 to 3 wherein, after the advertiser has entered details of the advertisement, an account for the cost of the advertisement is automatically generated and forwarded to the advertiser.
5. A method according to any one of claims 1 to 4 wherein the step of the advertiser entering details of the advertisement includes the advertiser uploading one or more images for use in the advertisement.
6. A method according to any one of claims 1 to 4 wherein the step of the advertiser entering details of the advertisement includes the advertiser selecting and placing in the advertisement clip-art, text, images and/or other design elements in accordance with a range of design constraints specified by the template.
7. A method according to claim 2 wherein the prices and/or other information which an advertiser sees when accessing the Internet web site are individually tailored to that particular advertiser, reflecting any pricing agreements which may exist between the advertiser and the publication(s) and between the advertiser and the facilitator.
8. A method according to any one of claims 1 to 7 wherein the publication or publications are one or more of the following types:
(a)     Newspapers;
(b)     Magazines;
(c) Journals;
(d)     Catalogues;
(e) Directories; or
(f) Other forms of printed publications.
9. A method according to any one of claims 1 to 8 further including a facility for designing and ordering documents, including the following steps:
(a)     One or more document templates are defined for each advertiser, each document template having a style and appearance approved by or on behalf of the advertiser;
(b)     When desiring to design and order a document, an advertiser accesses the Internet web site, selects one of the advertiser's templates, and enters or amends the document contents within the template; and
(d)     The document design is then forwarded by the facilitator either directly or via an intermediary to a printer, signwriter or other document producer.
10.     A method according to claim 9 wherein the document is one of the following types of documents:
(a)     business stationery;
(b)     a sign;
(c) a leaflet or brochure.
11.     A method according to any one of claims 1 to 10 further including a facility for laying out newsletters or parts of newsletters, including the following steps:
(a)     One or more newsletter templates are defined for each advertiser, each newsletter template having a style and appearance approved by or on behalf of the advertiser, and partially pre-written content provided by a newsletter writer;
(b)     When desiring to lay out a newsletter, an advertiser accesses the Internet web site, selects one of the advertiser's newsletter templates, and enters or uploads one or more newsletter articles into the template; and
(c) The newsletter layout and content is then forwarded by the facilitator either directly or via an intermediary to a printer for printing.”

STATEMENTS OF GROUNDS AND PARTICULARS

The statements of grounds and particulars lists as grounds of opposition the non-compliance with the following provisions of the Patents Act 1990: paragraph 18(1)(a) (non-patentable invention), paragraph 18(1)(b) (novelty and inventive step) and section 40.

EVIDENCE

A very large body of evidence has been served in this matter. The evidence in support is quite substantial, comprising several dozen declarations and exhibits. ACP served evidence in support from Ms Carol McLarty and Mr David Stubbs. Trading Post served evidence from Mr Martien Verbruggen, Mr Brian George Simpson, Mr Christopher John Bird and Dr Ross Hamilton Wood. Keyset and Sinnott served evidence in support from Mr Andrew Leeder, Mr Ron Hoolahan and Dr Ross Hamilton Wood. Quickcut chose not to file any evidence in support.

Declarations by Mr Seth Robert Watts, Mr Richard Gregory Cooke, Mr Kevin Noel Leighton, Mr Steven Lindsay Hollings, Mr Andrew Charles Ailwood, Mr Geoffrey Hugh McCarthy, Mr Roy Melvyn Gibson, Mr Kieran Power, Mr David Hall Powell and Mr Timothy Handfield were served as evidence in support by the other opponents who have subsequently withdrawn.

EWT’s evidence in answer consists of nine statutory declarations from Mr Adrian Fittolani, Mr Kim Ford, Mr Seth Robert Watts, Mr Peter Charles Smith, Mr Michael William Camfield, Mr Andrew Peter Robertson, Mr Roger Tidmarsh, Mr Peter Penfold Simpson and Mr Toby Ralph.

Quickcut served evidence in reply from Mr Grant Patrick Schuetrumpf, Mr Peyer O’Hanlon and Mr Paul Douglas Massey. Trading Post served evidence in reply from Dr Ross Hamilton Wood. ACP, Keyset and Sinnott chose not to file any evidence in reply.

Declarations by Mr Peter Richard Wallace and Mr John Tompkins were served as evidence in reply by Fast Art Bureau Pty Ltd before they withdrew their opposition on 14 November 2006.

EWT’s further evidence consisted of statutory declarations by Mr Kim Ford and Mr Peter Penfold Simpson.

SUBMISSIONS

The submissions made were extensive and I will refer to them where necessary in my decision. However it became clear during the hearing that the main ground of contention was the novelty and inventive step of the independent claim. So far as the grounds of novelty and inventive step were concerned, the arguments focussed primarily on one of the cited particulars, namely the “AdLizard Functional Specification” (Exhibit GPS-3).

At the hearing Mr McGowan made a request to file further submissions regarding the relevance of the “AdOnline” system. All parties in attendance were amenable to the request provided that they were also accorded the opportunity to respond. Consequently, leave was granted to all parties to make further submissions in relation to the “AdOnline” system by 27 December 2006. The applicant filed their further submissions on 11 December 2006, while Trading Post and Quickcut jointly filed their further submissions on 22 December 2006.

DECISION

Onus of proof

In proceedings such as these before the Commissioner the onus rests with the opponents to clearly establish their case in reaching a conclusion on any issue, and the standard of proof required is the civil standard of proof on the balance of probabilities (see, for example, Dunlop Holding's Ltd.'s Application (1979) RPC 523). As a tribunal, I am entitled to act on any material which is “logically probative” (T. A. Miller Ltd. v The Minister for Housing and Local Government and Another (1968) 1 WLR 992). In F. Hoffman-La Roche AG v New England Biolabs Inc (2000) FCA 283, Emmett J of the Federal Court found that in opposition proceedings the Court (and by implication the Commissioner of Patents in her role as a tribunal) should be “clearly satisfied that the patent, if granted, would not be valid”. Where questions of fact such as obviousness and existence of invention are involved “the grant should not be refused unless it has been clearly shown that the grounds of opposition have been clearly made out” (Montecatini v Eastman Kodak (1971) 45 ALJR 593).

A considerable amount of the evidence and the submissions in this matter concerned the interpretation of claim 1. I will need to resolve these issues due to their potential impact on novelty and inventive step.

Section 40

Section 40(3) of the Act provides that the claim or claims of a specification must be “clear and succinct”. One particular submission made by Mr Yates on behalf of Trading Post concerned the lack of clarity of the terms “display advertisement” and “facilitator”. Resolution of this ground of attack by the opponent raises questions of construction. In Flexible Steel Lacing Company v Beltreco Ltd 49 IPR 331 at 347-350 Hely J provided an extensive and useful review of the general principles governing the interpretation of patent specifications. It is not necessary to set out that passage in full, except to note his Honour's observation that the specification must be read as a whole while recognising that as a whole it is made up of several parts that have different functions.

Hely J also observed (at 349) that the hypothetical addressee of the specification is the non-inventive person skilled in the relevant art before the priority date. Bowen CJ, Deane and Ellicott JJ said in Populin v HB Nominees Pty Ltd (1982) 41 ALR 471 (at 476-477) that the complete specification must not be read in the abstract but should be construed by adopting a common sense approach to what the words used convey in the context of the then-existing published knowledge. The facts in Catnic Components Ltd v Hill and Smith Ltd (1982) RPC 183 are illustrative of this situation, and the remarks of Lord Diplock (at 242-243) as to a "purposive" rather than a "purely literal" construction may be understood in that light.

Mr Yates contended that the phrase “display advertisement” should be construed in a broad sense, and that any difference between these and classified advertisements, based on appearance, was largely illusory. In response, Mr McGowan emphasised that the critical distinction between “display” and “classified” advertisements (or “line advertisements” as they are also known) is that display advertisements are created independently of the publisher and allow a level of customisation unobtainable with classified advertisements.

In order to attribute a precise scope to the expression “display advertisement”, it is necessary to read the specification as a whole and consider the context in which the expression is used. I must also consider the connotation created by the words themselves, as well as take into account the evidence of the experts in the field on what meanings the person skilled in the art would give to technical or scientific terms and phrases and on unusual or special meanings given by such persons to words which might otherwise bear their ordinary meaning.

The specification at pages 2 and 3 provides some indication regarding the manner in which “display advertisements” differ from “line” or “classified” advertisements. With the former, advertisers are able to apply a “corporate style” to their advertisements. This style typically consists of a set of rules applying to the appearance of advertisements, including such features as “…typefaces, font sizes, colours, appearance and relative locations of graphic elements, text and images, and other similar features.” In contrast, the characteristics of a “line” or “classified” advertisement “…are determined by the publication’s standard appearance.”.

However, the standard appearance of a classified advertisement may be adjusted according to the preferences of an advertiser, a point recognised in Dr Wood in his declaration of 26 August 2004 at paragraph [37]:

“I do not believe that any of the terms used in claim 1 have a specialised meaning within the publishing and advertising industries, except for the term ‘display advertisement’. I understand a ‘display advertisement’ to be an advertisement in which space in a publication must be specifically purchased. Display advertisements usually include text as well as graphics, such as logos, photographs and other artwork. They may be contrasted with a ‘line advertisement’ or a ‘classified advertisement’ that does not require space in the publication to be purchased, beyond the lineage space needed. However, conventional classified advertisements have for many years included options for selection of text types (eg bold fonts), rudimentary additional graphic features (such as boxed ads) and selective graphic elements (in particular, photographs). There is therefore some blurring between the precise meaning of ‘display’ and ‘classified’ advertisements.”

Other possible meanings for the phrase “display advertisement” have been suggested in the evidence. Mr Schuetrumpf at paragraph [52] characterises display advertisements in the following way:

“The term ‘display advertisement’ is used in the advertising industry to mean an advertisement in a publication such as a newspaper or magazine. A display advertisement may contain text or both text and graphics.”

Mr Leighton at paragraph [14] suggests that the hypothetical addressee would understand:

“…the term ‘display advertisement’, as used in the advertising and publishing industry generally, to mean advertisements that (i) are created outside the publisher's computer system and are placed in the publication after the newspaper or magazine pages have been created; (ii) usually contain a border and are a mixture of text and graphics, although some display advertisements contain text only (eg product recall advertisements); and (iii) are priced on the basis of their size, as measured by the centimetre and column.”

These explanations suggest that line advertisements may vary from display advertisements in several ways. Even though each declarant has focussed on a different set of characteristics that differentiate line advertisements from display advertisements, there is nothing inconsistent between each of the rationalisations provided. Most importantly, the explanations are in accord with Mr Camfield at paragraph [10], who states on behalf of the applicant that:

“There is a significant difference between lineage advertising and display advertising. Lineage advertising is simpler and usually consists only of text. The advertiser is limited to fonts and typesetting offered by the publisher. Sometimes, a limited range of graphics may be made available by the publisher for insertion into lineage advertising. Lineage advertisements can be very easily generated merely from the text (copy) which is to appear in the advertisement. Display advertising allows the advertiser total control over elements such as fonts, typesetting, graphics and colour.”

Thus the line of reasoning advanced by Mr Yates that the phrase “display advertisement” is sufficiently broad to encompass line advertisements would require considerable strain to be placed on the plain meaning of the language used in the specification. There is simply no foundation for construing the phrase “display advertisement” as incorporating, or subsuming “line advertisements”, and I see no reason to depart from the plain meaning of the phrase “display advertisement”.

It was also contended by Mr Yates that the exact meaning of the term “facilitator” was unclear. In considering the scope of the term, Mr Yates stated that:

“Presumably, a facilitator can include a publisher, an advertising agency or any other person providing an Internet site.”

In response, Mr McGowan elaborated on the distinction between a facilitator, advertiser and publisher in the following terms:

“Having a facilitator in between an advertiser and a publication provides a real advantage. It first of all frees up both the advertiser and publication…from having to store bulky templates…It also frees up advertiser and publication from having to make ads that understand each other…”

As noted by Mr Yates, of critical importance is the distinction which exists between a “publisher” and a “publication”. The explanation provided by the applicant clearly allows for the possibility that a publisher may also be a facilitator. This view is also consistent with my reading of the specification, which places no limitation on the facilitator other than the requirement that they provide an Internet site (page 3, line 15) and be interposed between the advertiser and publication (page 5, line 5). There is no suggestion in either the description or claims that suggests a publisher cannot be a facilitator, and I believe it would not be legitimate to confine the scope of the claims in this manner. I also consider that the term “facilitator” could also include advertising agencies that act as agents for advertisers in the placement of display advertisements in publications.

It was also argued by the opponents that there was no clear antecedent for the phrase “the advertiser’s selections” at the end of claim 1. In the context of the claim, it appears that this phrase refers to the size and placement details chosen by the advertiser, and I note that this is the interpretation placed upon the phrase by the majority of declarants who apparently had no trouble construing the claim. If I am to accept their evidence as being truly reflective of the skilled addressee, it would be rather difficult to say that claim 1 is unclear when, as persons skilled in the art, they clearly have had little difficulty in ascribing meaning to it.

In conclusion, I find that the claims are clear and succinct.

The law on Novelty

It is well established that the test for novelty is the reverse infringement test. The classic formulation of this test is that given by Aickin J in Meyers Taylor Pty Ltd v Vicarr Industries Ltd (1977) 137 CLR 228 at 235:

“The basic test for anticipation or want of novelty is the same as that for infringement and generally one can properly ask oneself whether the alleged anticipation would, if the patent were valid, constitute an infringement.”

This test is satisfied if the alleged anticipation discloses all the essential features of the invention as claimed (Nicaro Holdings Pty Ltd v Martin Engineering Co 16 IPR 545 at 549). A feature is essential if the applicant has made it an essential feature by the terms of the claim when properly construed (see Catnic, supra). I do not think there is any doubt that every feature of claims 1 to 11 is essential, and no party put a contrary view.

Section 7(1) of the Patents Act 1990, as in force at the relevant time, provided:

For the purposes of this Act, an invention is to be taken to be novel when compared with the prior art base unless it is not novel in the light of any one of the following kinds of information, each of which must be considered separately:
(a)prior art information (other than that mentioned in paragraph (c)) made publicly available in a single document or through doing a single act;
(b)prior art information (other than that mentioned in paragraph (c)) made publicly available in 2 or more related documents, or through doing 2 or more related acts, if the relationship between the documents or acts is such that a person skilled in the relevant art in the patent area would treat them as a single source of that information;
(c)prior art information contained in a single specification of the kind mentioned in sub-paragraph (b)(ii) of the definition of prior art base in Schedule 1.

At the time relevant to this case, "prior art base" was defined in Schedule 1 to the Act to mean:
(a)in relation to deciding whether an invention does or does not involve an inventive step:
(i)information in a document, being a document publicly available anywhere in the patent area; and
(ii)information made publicly available through doing an act anywhere in the patent area; and
(iii)where the invention is the subject of a standard patent or an application for a standard patent—information in a document publicly available outside the patent area; and
(b)     in relation to deciding whether an invention is or is not novel:
(i)information of a kind mentioned in paragraph (a); and
(ii)information contained in a published specification filed in respect of a complete application where:
(A)     if the information is, or were to be, the subject of a claim of the specification, the claim has, or would have, a priority date earlier than that of the claim under consideration; and
(B)     the specification was published after the priority date of the claim under consideration; and
(C)    the information was contained in the specification on its filing date and when it was published.

As mentioned previously, as far as the grounds of novelty and inventive step were concerned, the arguments focussed primarily on the “AdLizard Functional Specification”. Following a brief perusal of the remaining relevant evidence, such as the Quickprint User Guide (Exhibit GPS-1), PageStore User Guide (Exhibit GPS-2), WO 1999/063452 (Exhibit GPS-7), QuarkXPress Reference Manual (Exhibit GPS-8), US 5864823 (Exhibit PDM-2), WO 1998/008176 (Exhibit PDM-5), Technical Specification “Place an Ad” (Exhibit MV-1), and US 5890175 (Exhibit CJB-3), I am satisfied that the invention of claims 1 to 11 is not disclosed by these documents.

AdLizard Functional Specification November 1998 (Exhibit GPS-3)

Though the exact publication date of this document is uncertain, Trading Post asserts that it was printed and distributed publicly before 6 December 1999. The applicant argued that as there was no clear evidence of publication or prior use this piece of alleged prior art should be dismissed, particularly as the footer on each page of the Functional Specification stated that unauthorised disclosure was prohibited. I was referred to JMVB Enterprises Pty Ltd v Camoflag Pty Ltd [2005] FCA 1474 at paragraphs [53] and [54], where Crennan J noted that prior art will only be relevant to the consideration of novelty or inventive step if it was “made publicly available” before the priority date of the claim in question. There is no doubt that the opponent bears the onus of proof with respect to establishing that the prior art information was “publicly available” at the relevant priority date.

The publication status of the AdLizard Functional Specification was previously addressed in Quickcut Pre Press Network Pty Limited v EWT Trade and Business Consultants NZ Limited [2006] APO 11 (24 March 2006). That decision concerned an objection by EWT to a request by Quickcut to serve further evidence. The evidence consisted of three statutory declarations, two of which had originally been filed as evidence in reply. Quickcut sought to adduce this as further evidence as a precautionary measure, even though they believed the evidence to have been strictly in reply. Paragraphs [46] to [50] of the decision are as follows:

“46. Mr Massey’s second declaration is accompanied by two exhibits. Exhibit PDM-1 is a copy of a first email from Mr Brian Anderson of Lizard Research Pty Ltd to Mr Massey, dated 8 August 2003. Exhibit PDM-2 is a copy of a second email, originally sent by Mr Brian Anderson to Mr Kieran Power of Griffith Hack, Sydney. The second email was accompanied by an electronic copy of the AdLizard Functional Specification.
47. Mr Gibbs [EWT’s attorney] argued that the declaration did not materially assist the opponent’s case, as the AdLizard document was already in evidence. I note that in his declaration, Mr Massey states that "...the content of the AdLizard Functional Specification of PDM-2 is identical in content to the AdLizard Functional Specification of annexure GHM 6 of Geoffrey Hugh McCarthy’s Declaration...". I agree with the applicant that another copy of material previously filed adds nothing to the case.
48. It was also submitted by Mr Gibbs that Mr Anderson’s second email was little more than hearsay, and that this evidence should have been provided in declaratory form. Though this is highly desirable, it is clear from the decision in T.A. Miller Ltd v the Minister for Housing and Local Government and Another (1968) 1 WLR 992 that the Commissioner is entitled to act on "hearsay" evidence that would not be admissible in court. In my view the Massey No. 2 declaration with the Anderson email exhibited is "evidence" of what Mr Anderson stated in his email to Griffith Hack. Though Mr Gibbs believes this to be "hearsay" evidence I am satisfied that it meets the requirements of regulation 22.12. The issue then is not whether it is admissible but how much weight the "hearsay" evidence should be given in the proceedings. It is the relevance of the evidence, rather than its format, which is of significance.
49. The email from Mr Anderson states that the AdLizard Functional Specification "...was in circulation since July 1998...", and I believe this information could assist in establishing the date of publication of this document. I can certainly see the merit in taking measures to avoid arguments at the substantive hearing regarding the publication date of supporting documents. However, I believe that there is sufficient evidence already filed which clearly establishes when the AdLizard Functional Specification was published. The Anderson email adds nothing new to the case.
50. I am therefore willing to accept Mr Gibbs’ contention that the Massey No. 2 declaration, while clearly relevant, does not provide any new evidence that is likely to have any real impact on the hearing or that is likely to contribute to a more just or correct decision. In saying this, my expectation is that there would be no disagreement at the substantive hearing regarding the publication date of the AdLizard Functional Specification. Should the applicant question the publication data of the AdLizard Functional Specification at the substantive opposition, it is highly likely that Massey No. 2 would be admitted if required.”

In every instance where publication is in issue, it is a question of fact to be decided by reference to the civil standard of proof. Even if I were to agree with the applicant’s current submission that I should regard Mr Massey’s evidence as indirect and equivocal, this does not alter the finding that, on the balance of probabilities, the AdLizard Functional Specification was published prior to the relevant priority date. The evidence of declarants such as Mr Schuetrumpf and Mr McCarthy has already been considered, and found to corroborate Mr Massey’s evidence that this piece of prior art had been published as alleged before the priority date. On the totality of the evidence concerning the Functional Specification, I find that publication of the AdLizard Functional Specification as alleged before the priority date 6 December 1999 has been sufficiently proved. The applicant did not seriously challenge this reasoning.

Lizard Research's product AdLizard is a browser based online display advertising system, which enables customers of publishers to logon to a system that is installed on the publisher's server, and with templates built by the publishers, to create their own advertisements. According to the specification at page 4:

“The primary objective of AdLizard is to completely de-skill the ad makeup process to the point that an office receptionist can key in and compose professional looking ads. Our aim is to eliminate any requirement for the advertiser to setup an internal display ad makeup facility, or to contact an external third party production house.
The advertiser does not need to invest in specialised DTP hardware, software and people. The only requirement is that the advertiser has a Mac or PC, with one of the standard WWW browsers, and a connection (permanent or dial up) to the Internet.”

The size, shape and typography of an advertisement are defined in the advertisement template chosen by the advertiser. Advertisement templates are available from either a public library which can be accessed by all advertisers, or a private area which stores templates which can only be accessed by an individual advertiser. In the private area, elements such as borders, styles, logos and addresses according to the advertiser’s corporate design are stored. Images and graphics may also be uploaded by the user or a co-operative source (such as a subcontracted photographer) into the private area on the host.

AdLizard provides a WYSIWYG (what you see is what you get) picture of the advertisement under construction to the advertiser via the browser. This is achieved by returning a highly compressed screen-based “soft proof” to the browser each time the advertiser modifies the appearance of an advertisement. No high-resolution data, such as fonts or images are sent from the publisher’s server to the advertiser or vice-versa. As stated on page 20:

“We are [sic] specifically do not include the ability to incorporate images and graphics from the user’s PC directly into the ad. AdLizard is a thin client approach where all the data – ads, logos, images and line work exist at the host. If the user has a local image, then it needs to be uploaded to the host so it can be used.”

Because of the way that the AdLizard host communicates with the client, performance is fast, even over dial-up Internet connections. Advertisers are immediately provided with PDF proofs.

The applicant disputed the view that AdLizard was a system suitable for the placement of advertisements over the Internet, noting the statement at page LB3 which in their view “expressly indicates that delivery by the Internet is not practicable”. The statement on page LB3 is made in relation to the transmission of EPS files, a file format created by Adobe in the mid 1980’s which is ideal for information exchange between pre-press applications.

Encapsulated PostScript (EPS) is a standard file format for importing and exporting PostScript files. It is usually a single page PostScript program that describes an illustration or entire page that can be placed within another PostScript document. EPS files may be generated by all drawing applications as well as most layout applications, and must conform to the Adobe Document Structuring Conventions (DSC). An EPS file can contain any combination of text, graphics and images, which can result in very large file sizes. At the time when the AdLizard Functional Specification was drafted, broadband services were prohibitively expensive for most users and to my mind the statement at page LB3 is no more than a reflection of that climate. Even though the document clearly does not recommend the transmission of EPS-files over the Internet, it describes an Internet-based method of placing display advertisements, and in my view that is sufficient to reject the applicant’s argument.

The applicant also disputed the view that the Functional Specification disclosed that two or more templates of differing sizes were defined for the advertiser and that the style and appearance was approved by the advertiser. I was referred to the evidence of Mr Fittolani, who is currently the Chief Technical Officer of Lizard Research Pty Ltd, the developers of AdLizard. At paragraph [14] he states that though the advertiser could make up his own templates, there is nothing in the AdLizard Functional Specification requiring that two or more templates of differing sizes be defined for an advertiser. However, I note that page LB8 discloses the use of a context and content specific dialogue screen which allows the advertiser to select an advertisement template from amongst a number of advertisement templates of various lengths and column widths. I therefore find that the feature of two or more templates of differing sizes has been disclosed.

However, it is less clear if these templates are “approved”. Trading Post submitted that “approval” is not defined within the specification and that it may “…simply be a mental decision by the advertiser to use a particular one of a suite of the different templates made available by the facilitator”. I note that the specification fails to define, either expressly or implicitly, the exact nature of the approval. The specification as a whole also places little emphasis on the feature in question, and the claims are wholly silent on the approval process. I therefore conclude that the exact nature of the approval is not essential to the invention, and accept Trading Post’s argument that mere use of the template by an advertiser is sufficient to constitute approval.

I am satisfied that this document discloses all of the integers specified by parts (a), (b), (d) and (e) of claim 1. However, part (c) of claim 1 stipulates that the advertiser “…selects a publication” in which the advertisement is to appear, suggesting that the advertiser chooses from two or more available publications. Though there is no express disclosure of “selects a publication” in the citation, Trading Post directed my attention to the figures on pages LB19 and LB29 of the AdLizard Functional Specification. The figures are not numbered, but may be readily identified by the text which accompanies them – “AdLizard includes a database tracking system which quickly locates all ads matching defined criteria” (page 19) and “All administrative functions such as scheduling, killing and performing transactions on ads are easily handled by AdLizard” (page 29). The figures are a “screen grab” of the AdLizard system in operation, and show, respectively, the results of a database search and the booking of an advertisement in the “Sydney escape weekend” publication.

There is no reason why a drawing or drawings alone should not be capable of disclosing an invention (as per C Van der Lely NV v Bamfords Ltd [1963] RPC 61). Nevertheless, the opponents have provided scant evidence as to what the figures would have disclosed to a person skilled in the art at its publication date. To my eye the figures merely display the results of a database search and the booking of an advertisement in a single publication. There is no clear disclosure, either by virtue of the figures or elsewhere in the document, of the step of selecting a publication in which the advertisement is to appear. The level of evidence before me is therefore insufficient to conclude that the selection of a publication by the advertiser has been disclosed, and I accept the applicant's submission that there has been no recital of the feature in question.

As the feature of selecting a publication is an essential feature of the claimed invention, the AdLizard Functional Specification would seemingly fail the "reverse infringement test". However, the opponent contends that it has always been the “…intention to be able to book ads in specified publications…” and an “obvious” improvement, in effect obliquely suggesting that this feature is common general knowledge, and that the person skilled in the art would perhaps read the Functional Specification as disclosing this feature.

In my opinion, any argument of this nature can be readily dismissed. Even though I accept that the feature of selecting publications is common general knowledge, I consider there would not be any basis upon which to find that claim 1 lacked novelty. The authorities have clearly stated that to render a claim not novel the prior art must positively disclose each essential claimed feature, usually citing the well known quote from General Tire & Rubber Co. v Firestone Tyre & Rubber Co. Limited [1972] RPC 457 that:

"To anticipate the patentee's claim, the prior publication must contain clear and unmistakable directions to do what the patentee claims to have invented ... A signpost, however clear, upon the road to the patentee's invention will not suffice. The prior inventor must be clearly shown to have planted his flag at the precise destination before the patentee."

The issue was also considered in Canadian General Electric Co., Ltd v Fada Radio Ltd (1930) 47 RPC 69, where it was said:

"Any information as to the alleged invention given by any prior publication must be for the purpose of practical utility, equal to that given by the subsequent patent. The latter invention must be described in the earlier publication that is held to anticipate it, in order to sustain the defences of anticipation. Where the question is solely one of prior publication, it is not enough to prove that an apparatus described in an earlier specification could have been used to produce this or that result. It must also be shown that the specifications contain clear and unmistakable directions so to use it. It must be shown that the public have been so presented with the invention that it is out of the power of any subsequent person to claim the invention as his own."

This requirement that each essential feature be disclosed holds, in so far as novelty is concerned, even where the additional matter defined by the claim is common general knowledge or a workshop variation, provided it is an essential feature of the claim in question - Nicaro Holdings Pty Ltd v Martin Engineering Co, (1990) 91 ALR 513 and RD Werner & Co Inc v Bailey Aluminium Products (1989) 25 FCR 565. The opponent has tried to get around this by a process of adding common general knowledge to the disclosure of the AdLizard Functional Specification (although it has attempted to characterise it more as a process of reading the prior art in light of the common general knowledge). This cannot give rise to anticipation, although, as is said in General Tire & Rubber Co. v Firestone Tyre & Rubber Co. Limited (supra), it may cause the claim to fail on the ground of obviousness.

In conclusion, I find that claim 1 is novel in light of the prior art. As claims 2 to 11 are dependent from claim 1, they must also be found novel.

Inventive Step

The effect of subsections 7(2) and 7(3) of the Patents Act, at least in the case of applications filed before 1 April 2002, is that a claimed invention will lack an inventive step if it is obvious to a person skilled in the relevant art in the light of:
(a)common general knowledge, or
(b) common general knowledge considered together with information in a single document or through doing a single act, provided that the document or act could reasonably be expected to have been ascertained, understood and regarded as relevant to work in the relevant art in the patent area by the person skilled in the art.

The Person skilled in the art

In this case, the parties were in general agreement that the relevant “person skilled in the art” was either an individual or team of people with a practical interest in media placement, advertisement creation and Internet technologies.

General principles concerning inventive step

The principles relating to “inventive step” and “obviousness” were recently considered by the High Court in Lockwood Security Products Pty Ltd v Doric Products Pty Ltd(No. 2) [2007] HCA 21. In that case, their Honours noted at [122] and [150] that the standard by which obviousness is to be determined is by reference to the understanding of a person skilled in the relevant art, who, at the relevant priority date, would possess common general knowledge in that art, and who would have had regard to any additional information referred to in section 7(3).

The High Court stated at paragraph [111] that it is not the role of a court to substitute its own conclusion for the objective test laid down by sections 7(2) and (3), except in the rarest of circumstances. Rather, the task for the court is to look forward from the prior art base to what a person skilled in the relevant art is likely to have done when faced with the problem which the patentee claims to have solved. The Court noted at paragraphs [115] and [116] the importance of secondary evidence, such as commercial success of the invention, or the failure of others to find a solution to the problem when considering whether an inventive step has occurred. Their Honours at [115] also refer to the necessity for a court to consider the scope and extent of the prior art, and to determine the precise advance over that which was previously in existence, when assessing the level of that prior art.

At paragraph [152], the High Court stated:

“Given the history, context, purpose and specific words of limitation in s 7(3), all of which were addressed by this Court in Firebelt, the phrase "relevant to work in the relevant art" should not be construed as meaning relevant to any work in the relevant art, including work irrelevant to the particular problem or long-felt want or need, in respect of which the invention constitutes an advance in the art. The phrase can only be construed as being directed to prior disclosures, that is publicly available information (not part of common general knowledge) which a person skilled in the relevant art could be expected to have regarded as relevant to solving a particular problem or meeting a long-felt want or need as the patentee claims to have done. Otherwise the words of limitation in the last 40 words of s 7(3) would have no role to play. Any piece of public information in the relevant art would be included, as is the case with the much broader and quite different formulation in the cognate provisions in the United Kingdom, which do not depend on the standard of a skilled person's opinion of the relevance of the information.”

In other words, attention must be directed to prior disclosures (that is publicly available information which is not part of common general knowledge), which a person skilled in the relevant art could be expected to have regarded as relevant to solving a particular problem. This essentially eliminates from the inventive step prior art base any work in the relevant art that is not directed to solving the same or analogous problem as that being faced by the applicant or patentee.

If a document is considered to form part of the inventive step prior art base, it still remains to be determined whether the claimed invention is actually obvious in view of the prior art document. In Lockwood, the Court reviewed the general principles of relevance to the question of “obviousness”, and went on to re-affirm that the step over the prior art need not be large and that a “scintilla of invention” remains sufficient in Australian law to support the validity of a patent.
I will apply the above principles to the present case.

The admitted common general knowledge

Several of the opponents submit that the claimed invention is not inventive in light of the common general knowledge when considered alone. In Minnesota Mining and Manufacturing Company and Another v Beiersdorf (Australia) Limited 144 CLR 253, Aickin J provided a widely accepted definition of the common general knowledge at 292:

"The notion of common general knowledge itself involves the use of that which is known or used by those in the relevant trade. It forms the background knowledge and experience which is available to all in the trade in considering the making of new products, or the making of improvements in old, and it must be treated as being used by an individual as a general body of knowledge."

The state of the common general knowledge is a question of fact which must, in general, be determined on the basis of evidence from persons whose background enables them to testify authoritatively as to the common general knowledge in the particular art. Indirect evidence such as widespread publication or admissions made in patent specifications may also serve to indicate something is common general knowledge.

ACP’s primary contention is that the claimed invention is not inventive in light of what the specification states is known. The issue has been considered in Bristol-Myers Squibb Co v F H Faulding & Co Ltd (2000) 46 IPR 553, where it was said at 564 that:

"If a patent application, lodged in Australia, refers to information derived from a number of prior publications referred to in the specification or, generally, to matters which are known, in our view the court - or the commissioner - would ordinarily proceed upon the basis that the knowledge thus described is, in the language of s 7(2) of the 1990 Act, part of 'the common general knowledge as it existed in the patent area'. In other words, what is disclosed in such terms may be taken as an admission to that effect."

That statement suggests that if the specification asserts a matter is common general knowledge, then that assertion can be accepted unless there is evidence to the contrary. Accordingly, I am willing to accept ACP’s argument that the “typical transaction” described on pages 1 and 2 of the specification represent part of the common general knowledge at the priority date. The typical transaction can be summarised as:

a.Advertiser identifies the publication(s) in which to place the advertisement;
b.Advertiser identifies the desired size of the advertisement;
c.Advertiser contacts agency for price;
d.Agency informs advertiser of indicative costing;
e.Advertiser books advertisement with agency;
f.Agency books space with publication(s);
g.Advertiser prepares copy;
h.Agency typesets the advertisement;
i.Agency forwards typeset advertisement to advertiser for approval;
j.Advertiser confirms proof;
k.Agency sends final advertisement to publication(s);
l.Publication places the advertisement.

The specification at page 2 also acknowledges the use of the Internet in the production and transmission of classified advertisements as follows:

m.Publication creates an Internet site for placement of line advertisements;
n.Advertiser types in the copy for the proposed advertisement;
o.Advertiser may request minor variations for an additional charge;
p.Publication checks proposed advertisement meets guidelines;
q.A satisfactory payment method is executed;
r.Publication places the advertisement.

There are three features missing from the list (a) to (r) which allows the invention of claim 1 to be distinguished. Specifically, there is no provision of two or more templates approved by or on behalf of the advertiser, no ability to select a publication and no ability to select size and placement details. I am therefore satisfied that the specification itself does not admit that the combination of claim 1 was common general knowledge.

The state of the art

News Limited’s Mr Hollings provides an extensive analysis on the development in the processes used to design and place display advertisements in publications. His experience as an Advertising Executive with News, as General Manager of the advertising firm Armstrong’s NSW and as a representative of News on the Australian Bureau of Circulations (ABC) suggests that he may be considered as an appropriate person skilled in the art.

Mr Hollings indicates that complete display advertisements started to be transmitted to publishers in a digital format through the use of an Integrated Services Digital Network (ISDN) hub provided by Quickcut Pre-Press Network Pty Ltd in 1994. The release of the Internet to the global public in 1995 also meant that the copy could be received by the advertising agencies from corporate advertisers in digital format by email rather than on computer disk or via direct dial-up modem. However, publishers were not accepting complete display advertisements via the Internet because, unlike the Quickcut ISDN hub, the Internet did not provide a pre-flighting facility to ensure that the proposed advertisement met the publisher’s requirements. Dial-up Internet lines were also too small in capacity to shift large graphics files, compared with the dedicated ISDN lines of the Quickcut network.

By late 1995 corporate advertisers dealing with Armstrong's used digital templates in relation to display advertisements that did not vary significantly from week to week. Examples of such advertisements were employment, real estate and retail advertisements, and involved the corporate advertiser entering the copy directly into a simplified version of the template that Armstrong's would later use to create the display advertisement. Once the corporate advertiser entered the copy directly into the simplified template, it was converted to a text‑only file with tab stops. The text‑only file was then transmitted to Armstrong's by computer disk or as an email attachment via the Internet. The advertising agency would then create the display advertisement by using software provided by Quark Software Pty Ltd (known as QuarkXtensions) to automatically import the copy from the text‑only file into the selected template that Armstrong's had created in the Quark software program.

Further support for the use of advertisement templates as discussed by Mr Hollings is provided by Mr Leighton (at paragraphs [34] and [42]), Mr McCarthy (at paragraph [18]), Mr Wood (declaration of 26 August 2004 at paragraphs [81], [83] and [87]). Based on the extensive use of advertisement templates throughout the advertising industry I am prepared to accept that the use of these was common general knowledge before the priority date of the application. The evidence from these declarants also unequivocally supports ACP’s argument that the ability to select a publication and select size and placement details was common general knowledge at the time.

However, it is less clear that it was common general knowledge to provide two or more templates which had “a style and appearance approved by or on behalf of the advertiser” as required by claim 1. ACP asserted that the process for preparing and placing display advertisements in publications had been established over many decades of industry practice and, importantly, included the step of advertisers specifically pre-approving template advertisements (with an agency or other party) to be used in the creation of future advertisements.

The declarations by Ms McLarty, Mr McCarthy and Mr Wood are most relevant to this issue. Ms McLarty suggests at paragraph [13] that the process of choosing between two or more templates was known before the priority date. She states that the “desired size and style of the particular advertisement are selected by the advertiser”, which to my mind indicates that the advertiser must choose from a set of templates approved by the publication or publisher, rather than the advertiser. While it is conceivable that the templates had been pre‑approved by an advertiser, I have no evidence before me that confirms this. I also note that this process relies on the use of hard-copy (paper-based) templates by the advertiser, rather than digital templates.

Mr McCarthy at paragraph [23] points out that “it was routine for me upon completing a new advertising template to have the overall appearance of the template approved by the client”, and his comments at paragraph [26] lead me to believe that this could also have included digital templates. Nevertheless, this evidence falls some way short of establishing that the provision of two or more approved templates was part of the common general knowledge at the priority date.

Mr Wood perhaps provides the strongest evidence, noting at paragraph [83] that advertising templates having a style and appearance approved for or on behalf of an advertiser were extremely well known in Australia at the priority date, and indeed such an approach was the universal approach in the industry, and had been for decades. At [86] he also asserts that advertising agencies would create predefined templates for each client that saved the details of the overall look of the advertisement as a Quark template document, and were specifically approved by the advertiser.

When presented with this alleged common general knowledge at the hearing the applicant did concede that “having a bunch of templates pre-approved by the advertiser is nothing new”. On the basis of all the declaratory evidence, as well as the applicant’s admission, I am prepared to accept that the provision of two or more templates which had a style and appearance approved by or on behalf of the advertiser was known. Furthermore, I am prepared to accept ACP’s contention that each of the features of the invention defined in claim 1 was common general knowledge in the art at the priority date of the present claims, and I am unaware of anything in the applicant’s evidence tending to suggest the common general knowledge was otherwise.

However, it does not follow automatically from this that the invention as defined is lacking an inventive step. The general test to be applied in determining obviousness is whether the invention would have been obvious to a non-inventive worker in the trade equipped with the common general knowledge in the trade as at the priority date (The Wellcome Foundation Limited v. V R Laboratories (Aust) Pty Ltd (1980-1981) 148 CLR 262 at 270). The High Court in Aktiebolaget Hassle v Alphapharm Pty Ltd 56 IPR 129 also noted with approval the test set out by Aickin J in Minnesota Mining & Manufacturing Co v Beiersdorf (Australia) Limited (supra), at page 293:

"In the case of a combination patent the invention will lie in the selection of integers, a process which will necessarily involve rejection of other possible integers. The prior existence of publications revealing those integers, as separate items, and other possible integers does not itself make an alleged invention obvious. It is the selection of integers out of, perhaps many possibilities, which must be shown to be obvious.”

The claims are for a combination, the interaction between the integers of which is the essential requirement for the presence of an inventive step. It is the selection of the integers out of ‘perhaps many possibilities’ which must be shown by the opponents to be obvious, bearing in mind that the selection of the integers in which the invention lies can be expected to be a process necessarily involving rejection of other possible integers. Accordingly there must be a motivation for the skilled person to apply what is disclosed in a relevant prior art document or what is common knowledge in the art with the expectation that it will produce the claimed result.

Inventiveness over the common general knowledge

On my reading of claim 1, there is not much to it. Nevertheless, in considering what might be considered to be a trivial combination of known integers I must also remember that "no smallness or simplicity will prevent a patent being good" (Meyers Taylor Pty Ltd v Vicarr Industries Ltd (supra) at 249) and that I should be wary of any ex post facto dissection of the invention (Minnesota Mining and Manufacturing Company and Another v Beiersdorf (Australia) Limited (supra)).

Bearing this in mind, I consider that the opponents have failed to provide sufficient evidence as to what a non-inventive person skilled in the art would do with these known integers. Even though I am satisfied that each of the individual steps of the method were known, nowhere do the declarants, such as Mr Wood at [99], explain why it would have been obvious to combine these steps in the particular way as claimed. In this matter I have been urged by the opponents to look on the claimed invention as merely an old combination which has been, at most, subjected to slight variations but I find that the facts do not support that conclusion. What is claimed appears to be a new combination of integers and it is the selection of the integers of that combination out of perhaps many possibilities that must be shown to be obvious. To look at the invention in any other way would, in my view, be to fall into the trap of ex post facto analysis so often warned against.

ACP argued that it required no inventive ingenuity to build an Internet-based system for placing display advertisements in publications, as the invention involved no more than the direct transposition of the conventional and universal process of display advertisement preparation and placement to an Internet platform. Any problems that would arise or functionality to be included could be overcome or provided by a person or team of ordinary skill.

This attack on the grounds of obviousness is largely based on the proposition that it was easy, with existing technology, to put the inventors’ idea into effect. In coming to a conclusion that the opponents have not made out a case of obviousness, one cannot help but be influenced by the amount of evidence provided that shows that many talented people were working in the field without having come up with the invention. For example, Mr Hollings’ comments at paragraph [57] regarding the major publishers’ refusal to accept advertisements over the Internet supports the applicant’s view that the provision of templates which satisfy the requirements of both the advertiser and the publication, though technically possible, was not obvious. Ms McLarty’s discussion at paragraphs [22] to [31] regarding a proposed Internet-based publishing system for ACP further supports the applicant’s contention that despite the level of interest in the field, the solution presented by the opposed application had not yet been considered. It is hard to ignore EWT’s comment that if what the inventors did was all that obvious, somebody else would have done it.

I accept the opponents' submission that the hypothetical skilled addressee would have been aware of the facts and circumstances (a) to (r) above. However, I am not satisfied that there was no inventive step in the inventors going beyond that knowledge to produce the invention of claim 1.

I will therefore turn to the prior art to assess inventive step.

Inventiveness over the Prior Art

It is clear from the evidence that the design, development and supply of advertising services is a competitive business, and one in which it is reasonable to conclude that participants would have a real interest in keeping abreast of their competitors' developments, both to maintain competitiveness and to avoid infringement. Given this, I do not think there is any doubt that the various documents which the opponents have established as being in the public domain before the priority date of the claims would be ascertained, understood and regarded as relevant by the person skilled in the art. The applicant did not challenge this reasoning.

As noted previously, the AdLizard Functional Specification is silent on the feature of the advertiser selecting a publication in which the advertisement is to appear. The opponents referred to the evidence of McLarty and others which indicates that the selection of a publication by an advertiser was well known to the non-inventive person skilled in the art before the priority date. To my mind the only remedy for a system that does not allow users to place advertisements in more than one publication is to allow users to place advertisements in multiple publications, and I agree with the opponents’ submissions that the solution is completely self-evident. Accordingly, I find that claim 1 fails for lack of inventive step.

Claims 5, 6 and 8 to 10 include features explicitly disclosed by the AdLizard Functional Specification. Page LB20 of the specification describes how images and graphics may be uploaded by the user or a co-operative source (such as a subcontracted photographer) into the private area on the host for use in an advertisement. Pages LB13 and LB24 describe the use of templates and fonts held under the publisher’s control, thus constraining the advertiser to certain design standards. Page LB2 specifies that the publication is a newspaper. Page LB26 describes the production of collateral material such as handouts, window displays and brochures, while page LB27 describes a selection of different templates for specific collateral purposes. Accordingly, I find that claims 5, 6 and 8 to 10 fail for lack of inventive step.

Of the remaining claims, the opponents argued that the features added by these claims were well known to the person skilled in the art and in some instances merely reflected standard practice. For some of the claims, the available evidence supports this contention. Claim 3 provides for data concerning the advertisement types, sizes and prices to be placed on the Internet site and for the templates presented to an advertiser to match the advertisement types and sizes available in a chosen publication. The specification suggests that such data was available from the “Trading Post” website and that this formed part of the common general knowledge at the time. Though the specification does not explicitly state that the provision of templates which matched the advertisement types and sizes available in a chosen publication was also known, I have no doubt that such a feature is implicitly disclosed. Production standards necessitate that any advertisement template must comply with the advertisement types and sizes available in a publication. It is inconceivable that any site, designed for clients to serve themselves, would offer anything but suitable templates. Claim 4 relates to the automatic generation and forwarding of an account to the advertiser. It was known that, following the booking of a display advertisement, an account for the cost of the advertisement is generated and forwarded to the corporate advertiser. The creation of the account may be considered ‘automatic’ in several senses, including that it was done by machine or that it occurred as a direct consequence of an advertisement being booked. I am satisfied that such an arrangement is within the common general knowledge of a skilled person, and therefore not inventive. Similar reasoning applies to claim 11, which merely stipulates that newsletter templates are used and some content is supplied by the advertiser. This involves no additional programming other than the design of an appropriate template for the advertiser.

However, claim 2 includes the step of the advertiser downloading a template to the advertiser’s computer. ACP suggested that as the AdLizard Functional Specification clearly discloses the downloading of data from the Internet to the advertiser’s computer, claim 2 was obvious. While it is true that data is downloaded to the advertiser’s computer, there is a significant difference between the solutions adopted by Quickcut and EWT. The EWT specification at page 8 describes how the advertiser downloads the template from a web server so that it may be edited by proprietary document editing software residing on the advertiser’s computer. The template is in fact a document in a proprietary word processing software format which automatically opens on the client's computer. As the applicant submitted, correctly in my view, the AdLizard system relies on WYSIWYG browser technology rather than the transfer of a template to the user. AdLizard thus teaches away from the claimed invention and accordingly I find that claim 2 is inventive.

In conclusion, I find that claims 1, 3 to 6 and 8 to 11 are not inventive in light of the prior art. However, claim 2 is inventive, and it follows that claim 7, which is appended to claim 2, must also be found inventive.

Manner of Manufacture

ACP submitted that the claimed invention involved no more than an evolutionary step which would have been expected to occur in the ordinary development of technology, in contrast to an artificial step that would not have occurred without invention.

This argument appears to raise questions of “newness” that are worthy of consideration. In the decision of the High Court in NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd 32 IPR 449, the majority of the High Court concluded that “newness” was imported into s 18(1)(a) to the extent that that s 18(1)(a) should be interpreted as retaining the threshold requirement of ‘an invention’ as excluding from a ‘patentable invention’ any claimed process, method or use which was not, on the face of the specification, a proper subject of letters patent according to traditional principles.
In the present case there is nothing on the face of the specification to suggest that the threshold requirement of inventiveness has not been met. To me the very existence of other patents for similar systems indicates that patentable subject matter may be present. The specification refers to some prior art, observes its disadvantages, and sets out objects for the invention which are directed at overcoming those disadvantages. Whilst individual features may be well known, there is nothing on the face of the specification that suggests that the combination claimed is not new. In my opinion, the question of whether such subject matter is new is best dealt with under the headings of novelty and inventive step. As the opponents have not demonstrated a lack of inventive step in light of what was known as revealed on the basis of the specification, they have not established that the threshold requirement of inventiveness per Philips is lacking.

In their final submission, ACP contended that the claimed invention was no more than a mere collocation of known technologies. It was argued that:

“…the invention claimed in claim 1 is no more than a collocation of these known technologies, and that there is no synergy between the elements demonstrated, or any other indication that an invention has been made that amounts to more than the sum of its known parts”.

The difference between a collocation and combination was set out in British Celanese Ltd. v Courtaulds Ltd. 52 RPC 171 at pages 193-194, where it was said:

"It is accepted as sound law that a mere placing side by side of old integers so that each performs its own proper function independently of any of the others is not a patentable combination, but that where the old integers when placed together have some working inter-relation producing a new or improved result then there is patentable subject-matter in the idea of the working inter-relation brought about by the collocation of the integers."

In my view the allegation that the invention is directed to a mere collocation is without foundation. The claimed invention plainly answers the description “patentable combination” since the features that make up the invention are functionally dependent on one another. Furthermore, no real evidence was presented by the opponent to support the proposition that there was no working interrelationship between the integers. I am also aware that many patents have previously been granted for similar systems, and consider that the present invention has no less synergism than the prior art systems. I am therefore of the view that the claimed invention is directed to more than a mere collocation of integers.

I conclude that all of the claims define a manner of manufacture.

Entitlement

During their discussion of manner of manufacture, ACP presented arguments that suggested that EWT was not entitled to the grant of the patent for the invention as Mr Toby Ralph and Mr Geoffrey Totham were not the “true inventors” of the claimed invention.

100.No evidence has been provided to suggest that EWT is not an eligible person as set out in section 15 of the Patents Act 1990, or that ACP is an eligible person in relation to the invention. Rather, ACP appears to be arguing that EWT is not entitled to the grant of the patent because it rides on the trend of migration of functionality to the Internet, and is therefore not inventive.

101.I am not persuaded by this argument. I note that the Patents Act 1990 contains several mechanisms by which a person other than a nominated person in a complete application in respect of an invention may be found to be or declared to be an eligible person. I consider that section 59(a) is one such mechanism, and believe that it is not appropriate to consider issues of inventiveness under this provision when inventiveness is already a ground of opposition by virtue of section 59(b).

102.Furthermore, the requirement that an applicant for a patent must be the actual inventor or their assignee must not be confused with the requirement of inventiveness. A person who independently invents a device or method can claim to be the actual inventor, even though another may have made the same invention at an earlier date, provided that the invention was not obtained from that other person or some other source. To a large extent, the question of who is the "true inventor" is rendered otiose by the more important question of who is the "actual inventor" of the claimed invention. With no evidence to the contrary before me, I must conclude that Mr Toby Ralph and Mr Geoffrey Totham are the actual inventors of the invention, and that EWT is entitled to the grant of a patent for the invention.

CONCLUSION
103.I have determined that the invention defined by claims 1, 3 to 6 and 8 to 11 is not inventive in light of the AdLizard Functional Specification. However, the specification was found to comply with s 40 and was for a manner of manufacture.

104.As there is clearly patentable subject matter within the specification I allow the applicant sixty (60) days from the date of this decision in which to propose suitable amendments to overcome the above findings. If suitable amendments are not proposed within that time I will refuse the application.

COSTS

105.The power of the Commissioner to award costs is based on section 210 and regulation 22.8. The power to award costs is discretionary, so I must take into account all relevant considerations.

106.It is a general principle in matters such as these that costs follow the event, and I see no reason to depart from this practice. I have found that ACP, Trading Post and Quickcut have been partly successful in respect of the obviousness of the claims. I therefore award costs in accordance with Schedule 8 against the applicant, EWT.

Keyset and Sinnott effectively took no part in the opposition subsequent to 25 November 2006 - when they notified the Commissioner that they would not be in attendance at the hearing. Despite the partial success of the opposition, I consider that this was not predicated or reliant upon the evidence filed by Keyset or Sinnott, and it is appropriate to take this into account in awarding costs. Accordingly, in the present case, I believe that these two opponents should each bear their own costs.

R. W. J. Finzi

Delegate of the Commissioner of Patents
17 September 2007

Patent attorneys for EWT:          Phillips Ormonde & Fitzpatrick, Melbourne
Patent attorneys for Quickcut:          Spruson & Ferguson, Sydney
Patent attorneys for ACP:                FB Rice & Co, Sydney
Patent attorneys for Trading Post:     Allens Arthur Robinson, Sydney
Patent attorneys for Keyset Phototype: Fraser Old & Sohn, Sydney
Patent attorneys for Sinnott Bros:      Fraser Old & Sohn, Sydney