Iluka Midwest Ltd v Technological Resources Pty Ltd

Case •

[2002] FCA 1233

•

4 OCTOBER 2002

FEDERAL COURT OF AUSTRALIA

Iluka Midwest Ltd v Technological Resources Pty Limited [2002] FCA 1233

PATENTS – opposition proceedings – interim decision of a Delegate of the Commissioner of Patents upholding opposition but granting leave to amend the specification to cure deficiencies in the specification – no appeal brought against the interim decision - final decision to grant the patent – whether opponent is entitled to rely on a ground of appeal that relates to a matter decided by the interim decision – whether claims fairly based on the specification

Patents Act 1990 (Cth) ss 59, 60 and 61

Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd (2001) 75 ALJR 518 - cited
R v Smith (Commissioner of Patents); Ex parte Mole Engineering Pty Ltd (1981) 147 CLR 340 – applied
Iluka Midwest Ltd v Technological Resources Pty Limited [2002] FCA 49 - applied
Coopers Animal Health Australia Ltd v Western Stock Distributors Pty Ltd (1987) 15 FCR 382 - cited
Sami S Svendsen Inc v Independent Products Canada Ltd (1968) 119 CLR 156 - cited
Genetics Institute Inc v Kirin-Amgen Inc (1999) 92 FCR 106 - cited
Commissioner of Patents v Microcell Ltd (1959) 102 CLR 232 - cited

ILUKA MIDWEST LTD (formerly known as RGC MINERAL SANDS LIMITED) v TECHNOLOGICAL RESOURCES PTY LIMITED
V 1056 OF 2001

MERKEL J
4 OCTOBER 2002
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

V1056 OF 2001

BETWEEN:

ILUKA MIDWEST LTD (formerly known as RGC MINERAL SANDS LIMITED)
APPLICANT

AND:

TECHNOLOGICAL RESOURCES PTY LIMITED
RESPONDENT

JUDGE:

MERKEL J

DATE OF ORDER:

4 OCTOBER 2002

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT the appeal of the applicant be dismissed with costs.

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

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

V1056 OF 2001

BETWEEN:

ILUKA MIDWEST LTD (formerly known as RGC MINERAL SANDS LIMITED)
APPLICANT

AND:

TECHNOLOGICAL RESOURCES PTY LIMITED
RESPONDENT

JUDGE:

MERKEL J

DATE:

4 OCTOBER 2002

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

  1. The applicant (“Iluka”) has appealed, pursuant to s 60 of the Patents Act 1990 (“the Act”), against a decision by a delegate of the Commissioner of Patents (“the Delegate”) that patent application 678375 (46915/93) filed by the respondent (“Technological Resources”) on 12 August 1993 (“the patent application”) be sealed.  In order to appreciate the issues arising on the appeal it is appropriate at the outset to outline the pre-grant opposition of Iluka, the issues arising for determination by the Delegate, the findings of the Delegate and the steps taken by Iluka to challenge those findings.

  2. Acceptance of the patent application was advertised on 29 May 1997. On 27 August 1997 Iluka filed a notice of opposition to the patent application pursuant to s 59 of the Act. Iluka’s statement of grounds and particulars of opposition filed on 28 November 1997 listed the following grounds:

    “Ground 1: The invention, so far as claimed in any claim of the opposed application, is not a patentable invention because it does not comply with paragraph 18(1)(a) or (b) of the Patents Act 1990.

    Ground 2: The specification filed in respect of the application does not comply with sub-section 40(2) or (3) of the Patents Act 1990.”

  3. The grounds were accompanied by a number of particulars. Iluka did not rely on all of the particulars. The ground of opposition that is relevant to the present appeal is that the invention, the subject of the patent application, is not a patentable invention because, when compared with the prior art base at the priority date in respect of the claims in the specification, it is not novel: see s 59(b) and s 18(1)(b)(i) of the Act. On the basis of the findings of the Delegate the priority date in respect of the claims is 14 August 1992, but only in so far as the claims are “fairly based on matter disclosed” in Iluka’s provisional specification which was filed at the Patents Office on 14 August 1992 (“the provisional specification”): see ss 43 and 7(1) and para (b)(ii) of the definition of “prior art base” in Sch 1 of the Act and reg 3.12(1)(b) of the Patents Regulations 1991.

  4. The priority date of 14 August 1992 is of some importance.  The Delegate found that if the priority date was later than 16 December 1992 the invention would lack novelty as a result of the disclosures and claims made in the provisional specification relating to Australian Patent Application 676682 (45513/93) by RGC Mineral Sands Limited, which have a priority date of 16 December 1992.  That priority date pre-dates the claims of Technological Resources in its second provisional application (PL 7913), which the Delegate found were fairly based on the disclosures in that application.

  5. The determination of whether the claims are fairly based on the provisional specification requires a comparison between the matter described in that specification and the claims that define the scope of the invention in order to decide whether the claims as expressed “travel beyond’ the matter disclosed in the specification: see Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd (2001) 75 ALJR 518 at 522.

  6. The invention described in the provisional specification relates to:

    “…the removal of impurities from naturally occurring and synthetic titaniferous materials for the purpose of enhancing the behaviour of the materials in industrial chlorination systems, as used in the production of titanium metal and titanium dioxide pigments.

  7. The provisional specification states:

    “Embodiments of the present invention have the common feature of roasting of titaniferous materials in the presence of additives and at temperatures which encourage the formation of a siliceous liquid phase, followed at some stage by cooling and aqueous leaching as steps in an integrated process.”

  8. The provisional specification outlines the problems caused by impurities in industrial chlorination processes using titanium dioxide bearing feedstocks.  It discusses a number of prior art processes where a sulphuric acid or hydrochloric acid leach is used.  According to the specification, vanadium, aluminium and silicon removal is not fully effective when these acid leaches are used.  The specification states that:

    “…there is a considerable incentive to discover methods for upgrading of titaniferous materials which can economically produce high grade products almost irrespectively of the nature of the impurities in the feed.”

    and:

    “Accordingly the present invention provides processing steps which may be incorporated into more general processes for the upgrading of titaniferous materials, rendering such processes applicable to the treatment of a wider range of feeds and producing higher quality products than would otherwise be achievable.”

  9. The provisional specification states:

    “The processing steps of interest are:

    (i)mixing of titaniferous materials with additives which encourage the formation of a siliceous liquid phase and titaniferous solid phases upon subsequent heating to temperatures below 1300oC.  (This process step will generally be necessary but might not be important for some materials which can spontaneously produce siliceous liquid phases upon heating).

    (ii)heating of the mixture resulting from step (i) to temperatures sufficient to produce a siliceous liquid phase and a solid titaniferous phase, followed by cooling at a sufficient rate to ensure susceptibility of the solidified material to the removal of silica in step (iii).

    (iii)leaching of the product of step (ii) in a leaching step in which the effective leach reagent is either an alkali metal hydroxide or water, depending on the composition of the liquid phase of step (ii), conducted in such a manner as to remove at least a portion of the contained silicon.

    It has been discovered that the above processing steps have the effects of allowing effective removal of silica, and phosphorus, partial removal of alumina, and complete removal of vanadium.  In concert with other processing steps (particularly involving hydrochloric acid) it is possible to obtain almost complete removal of iron, silicon, aluminium, phosphorus, magnesium and other alkaline earths, alkalis, rare earths, thorium and radioactivity, which impurities form an almost comprehensive list of impurities in titaniferous mineral sources.  From most materials a product purity of greater than 97% TIO2 can be obtained.”

  10. The first hearing before the Delegate took place on 22-23 April 1999. On 2 August 1999 the Delegate published his decision (“the interim decision”) upholding Iluka’s opposition. However, the Delegate found that there is “patentable subject matter contained in the specification” and allowed Technological Resources 60 days to file amendments overcoming the objections that he had upheld. The objections related to the removal of any claim for an acid leach in the absence of alkaline or water leaching and a limitation of the invention to a siliceous liquid phase. Thus, although Iluka succeeded in its opposition, its success was only partial as the Delegate found that if the deficiencies he identified were overcome, the patent application, as amended, might be able to proceed to grant. Any appeal against the interim decision was to be brought within 21 days (see s 60(4) of the Act and O 58 r 4(2)) but no appeal was brought by either party.

  11. The amendments filed by Technological Resources in response to the Delegate’s decision narrowed the claims by replacing the words “liquid oxide phase” with “siliceous liquid phase” throughout the claims.  Otherwise, the main amendments made by Iluka to the claims (showing additions as underlined and striking out deletions) were as follows:

    “1.A process for upgrading a titaniferous material by removal of impurities which process includes the steps of:

    (i)heating the titaniferous material to a temperature of less than 1300oC to produce a solid titaniferous phase and a siliceous liquid oxide phase containing impurities;

    (ii)cooling the solid titaniferous phase and the siliceous liquid oxide phase produced in step (I) to form a solidified material comprising the solid titaniferous phase and an impurity bearing phase that is formed from the siliceous liquid oxide phase and is leachable in an acid and/or an alkaline leachant;

    (iii)leaching the solidified material with an acidic and/or leachant and an alkaline leachant or with an alkaline leachant to leach at least a portion of the impurities from the impurity bearing phase.

    2.A process according to claim 1, wherein the liquid oxide phase is a liquid glassy phase as described herein.

    3.A process according to claim 2, wherein the liquid glassy phase is a siliceous liquid phase.

    …

    2224   A process according to any one of claims 1 to 17 wherein step (iii) claim 23 wherein comprises leaching the alkaline leached solidified material with an acidic the alkaline leachant and subsequently with the acidic leachant.

    23A process according to any one of claims 1 to 17 wherein step (iii) comprises leaching the solidified material with the acidic leachant and subsequently with the alkaline leachant.”

  12. At the second hearing before the Delegate the parties were in agreement that it was only open to the Delegate to address those issues arising out of specific deficiencies found in the earlier decision and anything consequential upon amendments to correct those deficiencies: see R v Smith (Commissioner of Patents); Ex parte Mole Engineering Pty Ltd (1981) 147 CLR 340. However, the parties were not in agreement as to the specific deficiencies found by the Delegate in the earlier decision. Iluka contended, inter alia, that as a result of the Delegate’s findings the claims should have defined, but did not define, the alkaline leaching as involving the removal of a portion of the contained silicon from the siliceous liquid phase.

  13. The Delegate, by his decision published on 10 September 2001 (“the final decision”), rejected Iluka’s further submissions and concluded that the amendments overcame the deficiencies he identified in the interim decision.  Relevantly, the Delegate stated:

    “It is clear from the decision that the issue was approached on the basis that ‘acidic and/or alklaline leachant’ can be notionally rewritten as acidic leachant; or alkaline leachant; or acidic and alkaline leachant.  I held that there was no real and reasonably clear disclosure in the provisional specification of an acid step alone.  It followed that there was no fair basis for a process having an acid leach in the absence of any alkaline leaching step.

    While there is reference in my earlier decision to the provisional specification describing a process for removing silicon in the alkaline leaching step, there was no finding that the claims of the complete specification lacked fair basis because they did not specifically define silicon removal in the leaching step.  In fact, there is nothing in the decision to even suggest this point was at issue.  The decision found that claim 1 was not fairly based on TR prov 1 because TR prov 1 only described a process in which a siliceous liquid phase is formed and an alkaline or water leach is employed, with or without an acid leach.  The claims have been amended to define formation of a siliceous liquid phase and the use of an alkaline leach, with or without an acid leach.  Therefore, the amendments address the specific deficiencies found in my earlier decision.”

  14. The Delegate’s Abstract of the final decision stated:

    “The amendments made to the specification by the applicant overcome the deficiencies identified in the decision of 2 August 1999.  That decision held that there was no disclosure of an acid leach in the absence of an alkaline leach in the first provisional specification.  The amendments have removed the possibility of an acid leach alone from the claims.  The claims have also been amended to define formation of a siliceous liquid phase, in conformity with the decision of 2 August 1999.  There was no finding in the decision of 2 August 1999 that the claims needed to specifically define removing silica impurity in the alkaline leaching step.

    The definition of an acid leach subsequent to an alkaline leach in new claim 23 was encompassed by ‘an acidic and/or alkaline leach’ in the claims as accepted.  This had already been considered to be fairly based on the first provisional specification in the original decision and was not open to reconsideration.

    As the deficiencies in the decision of 2 August 1999 have been overcome, the claims as amended are now fairly based on provisional application PL4105 filed 14 August 1992.  This is before the priority date of the prior art information contained in Australian patent application 676682, which was found to be 16 December 1992.  Therefore all of the claims as now amended are novel.

    Direction that the application be sealed after 30 days from the date of this decision.  If the Commissioner has been served with a notice of appeal before that time, direction that sealing not occur until the appeal has been decided or discontinued.

    Costs relating to the final determination awarded against the opponent.”

  15. On 1 October 2001 Iluka appealed against the interim and the final decisions.  Technological Resources claimed that the appeal was out of time in respect of the interim decision and was incompetent in so far as the grounds of appeal related to issues decided by the Delegate in the interim decision.  Iluka accepted that it had not brought any appeal against the interim decision but contended that, as the appeal was a hearing de novo in respect of the Delegate’s decision to grant the patent, it was open to it to rely on any ground upon which that decision may be challenged under the Act. Iluka also applied to the Court to amend its notice of appeal by adding the grounds not pursued at the first hearing as well as grounds that had not been previously raised at either hearing. Iluka moved the Court for orders that it have leave to file and serve its amended notice of appeal and, in so far as its appeal was out of time in respect of the interim decision, that the time for filing and serving its notice of appeal be extended under O 58 r 4(3) of the Federal Court Rules 1979 (Cth) (“the Rules”).

  16. Technological Resources moved the Court for orders that, to the extent the appeal and any grounds of appeal were based on the interim decision the appeal be dismissed under O 20 r 2 or as incompetent.  It also claimed that leave to appeal out of time should be refused and leave to amend the notice of appeal should also be refused in so far as the amended grounds of appeal related to the grounds not pursued at the first hearing, the grounds pursued at the first hearing and the new grounds that were applicable to the unamended application.

  17. In my interlocutory decision, ([2002] FCA 49), after considering the Act and reviewing the relevant authorities, I stated at [45]-[51]:

    “45.     In my view it is at least implicit, if not explicit, in the authorities to which I have referred that, to the extent that … issues have been determined by an interim decision in a manner that it is unfavourable to the interests of either party, it is incumbent upon that party, if it so desires, to appeal the decision.  If it fails to do so then it is not open to that party to appeal, whether directly or indirectly, against the interim decision of the Commissioner out of time without leave of the Court.  Accordingly, an appeal out of time against the interim decision without leave would be incompetent.  Further, a failure to appeal against the matters decided adversely to a party in an interim decision can preclude that party from seeking to re-agitate those matters as grounds of appeal against a final decision unless those matters were also dealt with in, and were also decided by, the final decision.  It must follow, for the purposes of O 20 r 2, that it is an abuse of process and vexatious for a party to rely, in an appeal against a final decision, on grounds of appeal that only relate to matters decided in the interim decision if no appeal has been brought in respect of the interim decision.  Put simply, a party cannot achieve indirectly what it is not permitted to achieve directly.  Of course, leave can always be sought to appeal out of time, but that raises separate issues under O 58 r 4(3)(b).

    46.      In the present case the interim decision dealt with and determined Iluka’s opposition to the unamended application.  Adopting the approach of Fullagar J in BHP v American Can (at 147-148), the interim decision concluded, expressly or by necessary implication, that:

    ·the invention disclosed by the present specification was not shown to be fairly based and novel;

    ·the present specification did contain patentable subject matter;

    ·the deficiencies in the present specification could be cured by amendment;

    ·the applicant was to be allowed to file amendments overcoming the deficiencies;

    ·nothing further was to be decided until the amendments were considered;

    ·the applicant was to pay the costs of the opposition.

    47.      It is plain that the interim decision decided the “case” as the case was at that time constituted.  To the extent Iluka wished to challenge the decisions that the specification contained “patentable subject matter”, that the deficiencies could be cured by appropriate amendments to the claims, and that such amendments were to be allowed to be made within 60 days, it was incumbent upon it to do so within 21 days of the decision.  As Iluka failed to do so it was only at liberty to appeal against the “case” decided by the interim decision by leave.

    48.      The final decision, expressly or by necessary implication, decided:

    ·to allow the amendments requested by Technological Resources;

    ·the specification as amended was fairly based and novel;

    ·subject to appeal, the patent application be granted.

    49.      Plainly, the “case” and the issues decided by the final decision are distinct from the “case” and the issues decided by the interim decision.  It follows from the foregoing that, in so far as the present grounds of appeal, or any of the proposed amended grounds of appeal relate to or seek to re-agitate matters decided only by the interim decision those grounds ought only to be able to be relied upon if leave to appeal against the interim decision out of time is granted.

    50.      In my view, in the context of the statutory scheme in respect of an opposition, the interim decision is to be taken as dealing with and generally deciding the grounds of novelty and fair basis under ss 18 and 40 which were stated to be Iluka’s grounds of opposition, rather than only with the specific grounds of novelty and fair basis particularised, argued or pressed by Iluka at the hearing before the Delegate. In that regard it is relevant that the opposition is a proceeding between the applicant and the opponent in which the Commissioner is to adjudicate on whether the patent application should be granted (see s 61(1)). A patent is not to be granted if the invention is not novel or the claims are not fairly based on the specification (ss 18 and 40). In that context it is appropriate to view the interim and final decisions as relating to the grounds of opposition of novelty and fair basis generally, and as not restricted to novelty and fair basis as particularised, argued or pressed at the hearing. A narrow approach to the decisions (ie deciding only the matters particularised, argued or pressed) is not consistent with their content, would tend to undermine the statutory objective of finality and expedition, is inconsistent with the approach to opposition proceedings taken in the English and Australian cases (and, in particular, with the view taken by Fullagar J at 147-148 in BHP v American Can) about matters decided by an interim decision and is not mandated by the Act. Thus, prima facie, it does not appear to be open to Iluka, without leave, to rely upon the grounds of novelty or fair basis not pursued at the first hearing, the grounds of novelty or fair basis pursued at the first hearing, or any new novelty or fair basis grounds that were only applicable to the unamended application, as such grounds must be taken as having been decided by the interim decision.

    51.      I have indicated above that “prima facie” Iluka cannot as of right rely upon grounds that must be taken to have been decided by the interim decision.  I have used that expression as it may be arguable that some grounds now sought to be relied upon arise out of, or directly relate to, the amended specification and, as such, are not to be taken to have only been dealt with and decided by the interim decision.  It should be noted, however, that senior counsel for Iluka conceded that the amendments narrowed the scope of the claims.  Accordingly, subject to the issue of leave to appeal out of time, it is appropriate to afford the parties an opportunity to consider these reasons and, in particular, whether any of the grounds that I regard as prima facie not open to Iluka ought to be permitted as grounds of appeal against the final decision.”

  1. I also refused leave to Iluka to appeal out of time.  In that regard, I stated at [54]-[56]:

    “54.     The present matter is one in which both parties are experienced and well-resourced patent litigants and have been represented at all stages of the opposition and in the court proceedings by legal representatives who are competent, experienced and well-versed in patent law and practice.  Notwithstanding these matters no explanation has been proffered by Iluka as to why it did not file an appeal against the interim decision.  The most that can be said is that senior counsel for Iluka argued that, as Iluka was the successful party in respect of that decision, it was not incumbent upon it to appeal against it.  Iluka, so it was argued, was entitled to await the final decision.  Iluka, however, was not successful in so far as the Delegate decided that, with appropriate amendments, the deficiencies he identified could be cured.  In any event counsel’s argument was not supported by any evidence that Iluka, albeit erroneously, desisted from appealing against the interim decision because it regarded itself as the successful party and considered it was entitled to await the final decision before appealing.

    55.      In my view it is likely that, for its own reasons, Iluka elected not to appeal the interim decision.  It is also likely that Iluka or its legal representatives were aware that the interim decision was an appealable decision and that a failure to appeal might have adverse consequences further down the track.  Even if Iluka was of the view that the prosecution of an appeal against the interim decision should await the final decision it was open to it to file an appeal, but request the Court not to proceed with it until after the final decision.

    56.      In any event, Iluka has not discharged the onus upon it to establish that there are “special circumstances” for the purposes of O 58 r 4(3)(b).  Even if I were in error in reaching that conclusion, having regard to the above observations and notwithstanding the matters put forward on Iluka’s behalf for the grant of leave, I would not exercise my discretion in Iluka’s favour in the present case.  The absence of an explanation and the inferences of Iluka’s knowledge and awareness of its rights that I am prepared to draw outweigh the factors relied upon by Iluka.  While an explanation for the failure to appeal in time is usually required, its absence in the present case is particularly significant.  As was pointed out by Lloyd-Jacobs in Rose Bros., it would bring the pre-grant opposition jurisdiction “into disrepute”if a party were allowed, without good cause shown, to allow the substance of an interim decision to be reviewed on appeal out of time when the interim decision has been accepted and proceeded upon by the parties.”

  2. After the interlocutory decision Iluka filed an amended notice of appeal.  Although Technological Resources did not object to the filing of the amended notice of appeal it reserved its right to contend at trial that Iluka is precluded from appealing on the grounds set out in the notice.  When the appeal came on for hearing Iluka narrowed its appeal to two “fair basis” grounds.

  3. The first ground is that the Delegate ought to have found that claim 1 was not fairly based on the provisional specification in that it did not define the alkaline leach as involving the removal of at least a portion of the contained silicon.  Iluka contended that it is entitled to rely on that ground as of right.  Its contentions may be summarised as follows.  On a fair reading of the interim decision, the Delegate correctly found that an important aspect of the invention disclosed in the provisional specification was that the alkaline leaching step removed a portion of the contained silicon from the siliceous liquid phase.  Accordingly, when the Delegate refers in his first decision to the alkaline leaching step that is “employed” or is “effective” that should be taken to be referring to the alkaline leaching step that removes a portion of the silica.  The amendments allowed by the Delegate relating to the “alkaline leaching step” should therefore be taken implicitly, if not explicitly, to be referring to the silicon removal brought about by that step.  As no such amendment was made it was open to Iluka to raise that as a ground of opposition at the second hearing because the amendments did not address all of the relevant findings in the interim decision.  Further, as all of the relevant findings in the interim decision of the Delegate on this issue were favourable to Iluka, there was nothing for it to appeal against.  It must follow that at the second hearing Iluka was entitled to object to the failure of Technological Resources to make the requisite amendment and the ground of appeal raising that issue before the Court is open to Iluka as of right.  It is not an answer to that objection for the Delegate to find, as he did at pp 4-5 of the final decision, that “the process defined by claim 1 will inherently leach the alkali leachable impurities”.

  4. Iluka’s second ground is that claim 23, by providing for the acidic leach to be followed by the alkaline leach, was not fairly based on the provisional specification. Iluka contended that claim 23 was a new claim that was first made after the interim decision and, contrary to the Delegate’s view, it was therefore open to it to challenge the claim on the ground it was not fairly based on the provisional specification.  Iluka contends that the claim is not fairly based as, while there is a disclosure in the provisional specification that the alkaline leach may be followed by the acid leach (claim 22), there is no disclosure that the acid leach may be followed by the alkaline leach.  It claims that, although it is unusual for a limitation of a claim to be challenged on a “fair basis” ground, there is no reason in principle why that cannot occur: see Cooper Animal Health Australia Ltd v Western Stock Distributors Pty Ltd (1987) 15 FCR 382 at 390 and 400.

  5. Iluka contends that it follows that the claims, all of which depend on claim 1, are not entitled to the early priority date of 14 August 1992 and that, hence, they lack novelty.

  6. Technological Resources disputes Iluka’s contentions. Its contentions may be summarised as follows.  The fair basis ground upon which Iluka now relies in relation to claim 1 was able to be raised in opposition to the unamended claims considered by the Delegate at the first hearing but was not raised, or sought to be raised, by Iluka as a ground of opposition.  It was therefore too late to first raise it at the second hearing.  Further, the Delegate made it quite clear in his interim decision that the only objections he had to the claims were that they were not fairly based in so far as:

    ·they defined an acid leach in the absence of any alkaline leaching step; and

    ·they defined the formation of a liquid oxide phase as distinct from a siliceous liquid phase.

  7. It may have been open to Iluka to appeal against the interim decision on the ground that the amendments allowed failed to require a further narrowing of the claims to define the alkaline leaching step as involving the removal of a portion of the contained silicon.  However, as a result of the failure of Iluka to appeal the interim decision it was not open to it to rely on that ground, which related to a matter decided adversely to it in the interim decision, before the Delegate at the second hearing or as a ground of appeal without leave of the Court.

  8. On the merits Technological Resources contended, inter alia, that claim 1 did not travel beyond the disclosure in the provisional specification that the alkaline leaching step removed a number of impurities, including silicon.  It also claimed that, in any event, any failure to specifically mention silicon removal in claim 1 is of no significance and therefore cannot, properly, found a lack of fair basis objection.  In particular, it was said that a person skilled in the art would know that removal of silicon is an inherent quality of alkaline leaching and stating that that is so in the claim is unnecessary.

  9. In the course of the hearing Technological Resources did not pursue its earlier claim that Iluka was not entitled to oppose claim 23 but, rather, it contended that there is no substance in the challenge because claims 22 and 23 do no more than make specific provision for the possible orders of leaching disclosed in the provisional specification.

  10. Both parties accepted that the principles enunciated in the interlocutory decision were to be applied.  Accordingly, their respective cases before the Court concerning Iluka’s entitlement to challenge claim 1 depended upon whether the interim decision decided that the amendments that were required to overcome the Delegate’s objections included defining the alkaline leach in claim 1 as removing a portion of the contained silicon.

  11. There are a number of difficulties with Iluka’s contentions concerning the Delegate’s interim decision.  It was part of Iluka’s case before the Delegate that the provisional specification disclosed that an acid leach is only a secondary leach with the alkaline or water leach being the effective leach agent.  However, the proposition that the provisional specification discloses that the alkaline or water leach removes a portion of the silicon, rather than a “portion of the impurities” (as claimed in claim 1), did not appear to form any part of Iluka’s opposition on the ground of lack of fair basis.  As was pointed out by the Delegate in his final decision, the fair basis objection concerning silicon removal had not been raised as an issue before him at the first hearing.  While Iluka may be correct in claiming that silicon removal was raised as an issue, as I shortly explain, it was only raised before, and considered by, the Delegate in relation to limiting the claims to a siliceous liquid phase and to steps that include alkaline or water leaching.

  12. In any event, in the interim decision the Delegate stated that the provisional specification disclosed that the steps involving leaching by an alkaline or water agent “allow effective removal of silica and phosphorus, partial removal of alumina, and complete removal of vanadium” and in “concert with other processing steps, particularly involving hydrochloric acid, almost complete removal of most impurities in titaniferous material is said to be possible” (see p 15 of the interim decision).  In my view, in the context of the “fair basis” objections, when the Delegate refers in his interim decision to the alkaline leaching step that is “effective” or “employed” he is referring to that step being “effective” or “employed” for the removal of a portion of the impurities to which he referred, rather than just to the removal of a portion of the contained silicon.  The specific references by the Delegate to the importance of the removal of silicon need to be understood in that context.

  13. At p 16 of the interim decision the Delegate stated that the provisional specification is “directed to a process involving the formation of a siliceous liquid phase and the subsequent removal of the contained silicon by leaching”, but that reference was made in the context of the disclosure that “a siliceous liquid phase is produced” and is not concerned with the function of alkaline or water leaching as such.  The reference by the Delegate to silicon removal at p 17 of the interim decision is in the context of whether there is a disclosure in the provisional specification of acid leaching alone.  In that context the Delegate accepted the evidence of Professor Hayes that, where some of the impurities are acid leachable and others alkaline or water leachable, the order of leaching was not important and that:

    “[w]hat is important is that the alkaline or water leach is carried out at some stage to remove at least a portion of the contained silicon.”

  14. The acceptance of the evidence of Professor Hayes was a step in the Delegate’s reasoning in concluding at pp 17-18 that claim 1 is not fairly based insofar as it claims an “acidic leachant” alone, because the provisional specification describes a process in which

    “a siliceous liquid phase is formed and an alkaline or water leach is employed, with or without an acid leach.”

  15. The removal of silicon, as one of the impurities to be removed in the siliceous liquid phase, formed part of the Delegate’s reasoning in concluding that the claims are not fairly based insofar as they:

    “define an acid leach in the absence of any alkaline leaching step and in that they define the formation of a liquid oxide phase as distinct from a siliceous liquid phase.”  [see p 24 of the interim decision]

  16. I do not accept Iluka’s contention that the Delegate also objected to the claims insofar as they did not define the alkaline leaching step as involving the removal of a portion of the contained silicon.  On a fair reading of the interim decision I have concluded that Technological Resources is correct in its contention that the only objections of the Delegate to the claims were the two objections set out above, which he specified with clarity and precision at p 24 of his interim decision.  The Delegate did not, explicitly or implicitly, also specify the failure to define alkaline or water leaching as involving removal of a portion of the silicon as a further deficiency in the claims in their unamended form.  It follows that I am of the view that the Delegate was correct in reaching the conclusion at p 4 of his final decision that

    “the amendments address the specific deficiencies found in my earlier decision.”

  17. It follows that the finding by the Delegate that the objections stated by him at p 24 of the interim decision were the only objections that needed to be overcome by the amendments, was a finding that was adverse to the case Iluka now wishes to put and, in that sense, was unfavourable to its interests.  Further, the ground Iluka is now seeking to pursue in relation to claim 1 was open to it on the unamended claims and does not arise as a result of any of the amendments to the claims made by Technological Resources after the interim decision.  Accordingly, that ground of appeal was only applicable to issues that were determined in the interim decision and, in accordance with the principles enunciated in my interlocutory decision, it was incumbent upon Iluka to appeal against the interim decision on that ground and its failure to do so precluded it from raising that objection at the second hearing before the Delegate or as a ground of appeal before the Court without leave being obtained.  While Iluka may be correct in contending that it was not its responsibility to propound a particular limitation that must be placed on the claims to make them fairly based, it is not correct for it to contend that it is not incumbent upon it to appeal against the interim decision because it did not put the particular matter decided in issue before the Delegate.  As explained at [47]-[50] of the interlocutory decision it was incumbent on Iluka to appeal any issue decided unfavourably to it or to its interests by the  Delegate.

  18. The question of Iluka applying for leave to amend its grounds of appeal was specifically raised by me at the hearing of the appeal but Iluka did not apply to the Court for any such leave.  Its explanation for not doing so is that it had nothing further to put in support of leave, which leave had been refused in the interlocutory decision.  In refusing leave to appeal I stated, inter alia, that I inferred that it was likely that Iluka was aware that a failure to appeal the interim decision may have had adverse consequences and that it is also likely that, for its own reasons, Iluka elected not to appeal the interim decision.  Iluka has had a further opportunity of placing before the Court material offering some explanation as to why it did not appeal the interim decision on the ground upon which it now relies or why there are special circumstances that would warrant the grant of leave to raise that ground, but it has elected not to do so.  Plainly, in those circumstances, there is no proper basis for the Court to allow Iluka to rely on a ground of appeal which is not open to it as of right and in respect of which it has not sought leave.

  19. Iluka submitted that if the limitation upon its right to appeal was discretionary the discretion should be exercised in its favour as there was a “public interest” in the Court ensuring that a patent that ought not to proceed to grant, does not proceed to grant (see Sami S Svendsen Inc v Independent Products Canada Ltd (1968) 119 CLR 156 at 165). There are two answers to Iluka’s submission. The first is that there is nothing in the decided cases that suggests that the limitations on Iluka’s rights of appeal outlined in the interlocutory decision are discretionary. Rather, any discretion concerning the grounds of appeal resides in the Court’s power under O 58 r 4 of the Rules to grant leave to rely on grounds that are not available as of right. Public interest considerations may constitute special circumstances that might lead to the grant of leave to raise a ground that cannot be raised as of right but Iluka has not sought that leave at the present hearing.

  20. The second answer is that the public interest consideration raised by Iluka is one of the reasons why the Act provides for pre-grant opposition as a relatively swift and economic means for resolving third party disputes as to validity: see Genetics Institute Inc v Kirin-Amgen Inc (1999) 92 FCR 106 (“Genetics Institute”) at 112. Further, the function of a pre-grant opposition is to determine whether “it appears practically certain that letters patent granted on the specification would be held invalid”: see Commissioner of Patents v Microcell Ltd (1959) 102 CLR 232 at 244-245 and Genetics Institute at 112. As I explained in the interlocutory decision, the entitlement of an opponent in a pre-grant opposition to oppose the grant of a patent has been circumscribed by the requirement that it is incumbent upon the opponent to raise all grounds that are open to it before the Commissioner or his delegate, and to appeal any aspect of a decision arising out of that hearing that it is unfavourable to it or is adverse to its interests. Put simply, the latter requirement prevents an opponent from keeping its “powder dry” for another day. It also ensures that the pre-grant opposition is a swift and economical means of settling disputes that would otherwise need to be dealt with by the courts in more expensive and time-consuming post-grant litigation and also protects against the potential use of pre-grant opposition proceedings to delay improperly the grant of a patent: see Genetics Institute at 112. Thus, it is in the public interest that the principles enunciated in the interlocutory decision are adhered to.

  21. For the above reasons I have concluded that Iluka’s appeal in respect of claim 1 must fail.  I would emphasise that the failure of the ground is solely on the procedural point that the ground is not available to Iluka without leave.  Although extensive submissions were made by both parties on the merits it is undesirable that I make any observations about those submissions as given the litigious propensities of the parties the point will, more likely than not, arise again after the grant of the patent.

  22. Finally, I turn to consider whether claim 23 travels beyond the matter disclosed in the provisional specification.  Pages 6-7 of the provisional specification disclose that alkaline or water leaching allows effective removal of silica and phosphorus, partial removal of alumina, and complete removal of vanadium.  They also disclose that the present invention provides processing steps which may be “incorporated into” more general processes for the upgrading of titaniferous material.  It is also disclosed that:

    “In concert with other processing steps (particularly involving hydrochloric acid) it is possible to obtain almost complete removal of iron, silicon, aluminium, phosphorus, magnesium and other alkaline earths, alkalis, rare earths, thorium and radioactivity, which impurities form an almost comprehensive list of impurities in titaniferous mineral sources.”

  1. In my view, relevantly, the real and reasonably clear disclosure made in the provisional specification is that use of the acidic leachant may follow or precede use of the alkaline leachant.  Accordingly, the claims to that effect in claims 22 and 23 do not travel beyond the matter disclosed in the provisional specification.  Although, unlike claim 22, no example is given of an alkaline leach following the acid leach, claim 23 does not travel beyond the disclosures to which I have referred at pp 6-7 of the provisional specification.  Put another way, the examples given do not limit the earlier disclosures at pp 6-7 of the provisional specification.  Accordingly, I am not satisfied that claim 23 is not fairly based on the provisional specification.

  2. For the above reasons the appeal is to be dismissed with costs.

I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Merkel.

Associate:

Dated:            4 October 2002

Counsel for the Applicant: DK Catterns QC with
AJ Maryniak
Solicitor for the Applicant: Freehills as agents for Clayton Utz in Perth
Counsel for the Respondent: Dr J Emmerson QC with
PW Collinson
Solicitor for the Respondent: Allens Arthur Robinson
Date of Hearing: 20, 23 and 24 September 2002
Date of Judgment: 4 October 2002
Most Recent Citation
Cases Citing This Decision

18

Cetinkaya v Official Trustee in Bankruptcy [2011] FMCA 288
Bradken Resources Pty Ltd v Lynx Engineering Consultants Pty Ltd [2012] FCA 944
Airsense Technology Ltd v Vision Systems Ltd [2007] FCA 828