Innovia Security Pty Ltd v OVD Kinegram AG

Case •

[2016] APO 73

•

21 October 2016

IP AUSTRALIA

AUSTRALIAN PATENT OFFICE

Innovia Security Pty Ltd v OVD Kinegram AG [2016] APO 73

Patent Application:                2012228526

Title:Multi-layer Body

Patent Applicant:                   OVD Kinegram AG

Opponent:  Innovia Security Pty Ltd

Delegate:  M. G. Kraefft

Decision Date:  21 October 2016

Hearing Date:  16 August 2016, in Melbourne

Catchwords:  PATENTS – section 59 – opposition to grant of a patent – document security features – optically variable devices - amendment under regulation 5.16 to statement of grounds and particulars allowed - whether claimed invention was novel – “whole of contents” novelty considered - whether claimed invention had inventive step – claims novel and inventive – certain claims not fairly based and not clear – opportunity to propose amendments allowed.

Representation:  Patent attorney for the applicant:  Dr Mark Horsburgh of Fisher Adams Kelly Callinans.

Patent attorneys for the opponent:  Mr Nigel Pereira and Mr J Roger Green of Watermark, and Mr Ian Lindsay, IP manager of Innovia Security Pty Ltd.

IP AUSTRALIA

AUSTRALIAN PATENT OFFICE

Patent Application:                2012228526

Title:Multi-layer Body

Patent Applicant:                   OVD Kinegram AG

Date of Decision:                   21 October 2016

DECISION

The claimed invention, on the available evidence, is novel and has an inventive step.  Furthermore the specification describes the invention fully and the claims define the invention.  The opponent was unsuccessful under these grounds.

Claim 4 is not fairly based and claim 11 is not clear.

These defects are clearly capable of remedy by amendment.  The applicant is allowed two (2) months from the date of this decision to propose suitable amendments to overcome the defects.

Costs in accordance with Schedule 8 awarded against the applicant, OVD Kinegram AG, up to and including the date of allowance, 4 February 2016, of the Section 104 amendments filed 14 October 2015, and against the opponent, Innovia Security Pty Ltd, from that date of allowance onwards.

REASONS FOR DECISION

BACKGROUND OF PATENT APPLICATION

  1. OVD Kinegram AG (“the applicant”) filed patent application 2012228526 on 7 March 2012.  The application is based on a German application filed on 15 March 2011 (“the priority date”).  Application 2012228526 was advertised accepted on 30 October 2014.

  2. Innovia Security Pty Ltd (“the opponent”) filed a notice of opposition on 30 January 2015.  A statement of grounds and particulars followed on 30 April 2015.

  3. On 14 October 2015 the applicant filed a statement of proposed amendments under Section 104 to amend the specification.  The request to amend was allowed on 4 February 2016.

  4. The parties completed the evidentiary stages on 22 December 2015.

    SPECIFICATION

  5. The specification describes the invention as relating to a multi-layer body.  The body may particularly be in the form of a transfer film, a laminating film, a packaging film, a decoration element or a security element.  A process for producing such a multi-layer body is also envisaged.

  6. The specification states that security documents with a diffractive security element are known.  In such security elements, diffraction gratings are moulded into a layer of a multi-layer body and overlaid with a metallic reflective layer.  The diffraction of the incident light at these diffraction gratings generates an optically variable effect which is determined by the spatial frequency of the diffraction gratings as well as their azimuthal angle.

  7. A further possibility for producing an optically variable effect is mentioned in the specification.  In this case an achromatic surface structure may be combined with a thin-film structure in an overlapping manner.  The achromatic structures have an order of magnitude in which diffraction phenomena influence the optical properties only slightly and thus the structures act essentially like tilted mirrors.  The security element has partial surfaces overlaid with different achromatic surface structures, for example saw-tooth structures which, in a first partial surface, have an azimuthal angle different from that of a second partial surface.  These different partial surfaces are overlaid with a thin-film layer structure.  The result is that different colour and contrast changes are generated in the partial surfaces and the impression of a defined, almost discrete colour change forms for the observer during rotation or tilting.

  8. The specification states the object of the invention to be the provision of a film body, as well as a process for the production thereof, which is characterised by an optically variable effect which differs from the known optically variable effects described above and thus has corresponding advantages for decoration and security applications.

  9. The specification, as amended, concludes with 23 claims.  The independent claims are claims 1 and 22.  These claims read as follows:-

    1.Multi-layer body with a first layer with a first surface and a second surface opposite the first surface, wherein the first surface of the first layer defines a base plane spanned by coordinate axes x and y, wherein moulded into the second surface of the first layer in a first area are a large number of facet faces, wherein each of the facet faces has a minimum dimension of more than 1 µm and a maximum dimension of less than 300 µm, wherein each of the facet faces is determined by the parameters: form F of the facet face, area size S of the facet face, spacing H of the centroid of the facet face from the base plane, position P of the centroid of the facet face in the coordinate system spanned by the x-axis and the y-axis, angle of inclination Ax of the facet face about the x-axis towards the base plane, angle of inclination Ay of the facet face about the y-axis towards the base plane and azimuthal angle Az of the facet face defined by the angle of rotation of the facet face about a z-axis perpendicular to the base plane, wherein one or more of the parameters F, S, H, P, Ax, Ay and Az of the facet faces arranged in the first area is varied pseudorandomly within a variation range predefined in each case for the first area, and wherein a reflective second layer is applied to each of the facet faces and wherein the multi-layer body generates an optically variable first item of information and, to generate the first item of information, the angles of inclination Ax and Ay of the facet faces in the first area are varied according to a function F(x,y).

    22.Process for producing a multi-layer body comprising the steps of:

    providing a first layer with a first surface and a second surface opposite the first surface, wherein the first surface of the first layer defines a base plane spanned by coordinate axes x and y,
    moulding a large number of facet faces into the second surface of the first layer, in particular by means of a stamping tool, wherein each of the facet faces has a minimum dimension of more than 3 µm and a maximum dimension of less than 300 µm and wherein each of the facet faces is determined by the parameters: form F of the facet face, area size S of the facet face, spacing H of the centroid of the facet face from the base plane, position P of the centroid of the facet face in the coordinate system spanned by the x-axis and the y-axis, angle of inclination Ax of the facet face about the x-axis towards the base plane, angle of inclination Ay of the facet face about the y-axis towards the base plane and azimuthal angle Az of the facet face defined by the angle of rotation of the facet face about a z-axis perpendicular to the base plane, and wherein one or more of the parameters F, S, H, P, Ax, Ay and Az of the facet faces arranged in a first area are varied, in the first area, pseudorandomly within a variation range predefined in each case for the first area, and applying a reflective second layer to the large number of facet faces,
    determining the angles of inclination Ax and Ay of the facet faces in the first area by an additive superimposition of the angles of inclination Ax and Ay determined by a function F(x,y) with the pseudorandom variation of the angle of inclination Ax and/or of the angle of inclination Ay within the respective variation range predefined for the first area, wherein the function F(x,y) is chosen such that it varies the angles of inclination Ax and Ay to generate an optically variable first item of information.

  10. The term “pseudorandom” is defined in the specification (page 3 lines 12-16) to mean that the respectively varied parameters F, S, H, P, Ax, Ay and Az cannot adopt all possible values, but only values from a more narrow, predefined variation range.  The pseudorandom variation can take into consideration all values from such a predefined variation range with equal probability.

  11. At page 3 lines 24-28, the specification further describes the optically variable effect, according to the invention, to be characterised, for example depending on the choice of reflective layer, by a characteristic depth effect and/or characteristic colour and/or glitter effects.  In particular, the optically variable effect is characterised in having no, or almost no, disruptive diffractive components, for example rainbow effects.  Essentially the inventive features of the multilayer body are such that wavelength-dependent light diffraction effects are negligible.  Incident light is thus, in the main, achromatically reflected and the optically variable effect may be said to be largely achromatic.

    STATEMENT OF GROUNDS AND PARTICULARS

  12. The opponent listed five grounds of opposition.  The grounds were that the claims were not novel, were not inventive, that the complete specification did not describe the invention fully, that the claims did not define the invention and that the claims were not clear, succinct or fairly based on the matter described in the specification.  The statement included particulars against each of these grounds.

  13. Shortly before the hearing date the opponent requested under Regulation 5.16 to amend the statement of grounds and particulars.  The primary purposes of the request were to take into account the Section 104 amendments made by the applicant during the opposition proceedings and to take into account additional documents exhibited and referred to in evidence in reply.  The grounds of opposition were unaltered.  The opponent’s amendment sought only to remove, alter or add several particulars.  After hearing submissions from both parties at the hearing, I determined there was no impediment under Regulation 5.16 and I was satisfied the amendment should be made.  Accordingly at the hearing, I allowed the amendment.  This was formalised by official letter to both parties the day after the hearing.

    EVIDENCE IN SUPPORT

  14. The opponent filed evidence in support from Dr Robert Arthur Lee.  Before the priority date Dr Lee had accumulated more than 35 years of experience as a research scientist with the Commonwealth Scientific and Industrial Research Organisation (“CSIRO”).  He worked in several divisions of the CSIRO on optically variable devices (“OVDs”).  Dr Lee joined the CSIRO in 1975, initially to work on a Currency Note Research and Development (“CNRD”) project.  For a period of time in the mid-1970s, Dr Lee worked at the Reserve Bank of Australia (“RBA”) on OVDs as part of the CNRD project.  Subsequently Dr Lee continued working on optical security micro-structure developments and filed several patent applications in this field, culminating in a micro-mirrors project in 2000.  Devices referred to as a pixelgram® and an exelgram® were amongst the developments for which Dr Lee filed patent applications.  Between 2002 and 2006, Dr Lee filed patents on biometric OVD technologies.  From 2008, Dr Lee worked as an OVD specialist for the predecessor of the opponent.  His work included development of OVD technologies, including micro-mirror technologies.

  15. In his declaration (“Lee #1”), Dr Lee discussed the developments of various types of OVDs over a considerable period of time.  He also discussed features of OVDs that were well-known at the priority date and itemised each of the accepted claims of the application as defining features that were known, or logical or obvious progressions. 

    EVIDENCE IN ANSWER

  16. The applicant filed evidence in answer in the form of two declarations from Ir Karel Johan Schell (“Ir” being the abbreviation for higher level Netherlands engineering graduates).  Before the priority date, Ir Schell had been an owner/director of his own consultancy company since 1993.  His consultancy work had been in the field of document security ranging from currency to passports for organisations such as central banks, government institutes and security printers and suppliers.

  17. In his first declaration (“Schell #1”), Ir Schell described developments in the document security field over approximately three decades preceding the priority date.  To counter increasing counterfeit risks from advanced colour copiers with laser printers and home reproduction units, OVDs were introduced which ultimately resulted in diffractive optically variable image devices (“DOVIDs”).  The latter comprised a range of diffractive structure types developed over several years including Kinegram®, hologram, exelgram®, pixelgram®, and their derivatives.  Ir Schell referred to several patent publications to group the relevant background art as the Kinegram® patents and the achromatic micro-mirror/matt structure patents.  He further expressed opinions on the advantages and disadvantages of the two groups.

  18. In his second declaration (“Schell #2”), Ir Schell expanded on the background discussion introduced in Schell #1.  He also countered the opponent’s statement of grounds and particulars and evidence in support in respect to the teachings of the background art and specific prior art as compared to the claimed invention.

    EVIDENCE IN REPLY

  19. The opponent filed evidence in reply from Dr Lee.  In this evidence (“Lee #2”), Dr Lee exhibited several publications related to the use of micro-mirrors in OVDs to contend how well-known such types of OVDs were at the relevant time.  Furthermore, in the light of the applicant’s Section 104 amendments to the specification during the opposition proceedings, Dr Lee now referred to the claims as amended.  His conclusions regarding the claims were largely unchanged from the conclusions in his evidence in support.

    BACKGROUND ART

  20. As indicated above, the evidence in this case described OVDs in the art before the priority date principally in two groups.  These were DOVIDs and micro-mirror arrays.  Much of the following information on DOVIDs is taken from an extract of a book filed in evidence by Dr Lee.  The book was “Optical Document Security: Third Edition” by Rudolf L. van Renesse, Artech House 2005 (exhibit RAL-25). 

  21. In the DOVID group, the pixelgram® consisted of a regular matrix of rectangular diffractive pixels.  Each pixel was composed of diffraction lines that continuously varied in period and orientation.  As a result, different locations in each pixel would diffract light and colours in different directions.  Thus, by modulating the diffraction grating frequency and orientation within a pixel, a pixel palette with continuously varying scale of brightness was obtained, which allowed the design of continuous tone portraits on the level of the image element, that is, the individual pixel.  The diffractive pattern within each pixel was designed to correspond with the original RGB palette of the input artwork.  Levels of observed intensity between black and white corresponded to line curvatures between straight and highly curved.  The exelgram® was composed of lines of parallel, diffractive tracks.  Within these tracks, the diffraction pattern varied in frequency and orientation.  Exelgram® tracks could be interlaced so that two or more different images were viewed under different angles of observation, thus forming a multi-channel DOVID.  Unlike the adjacent, parallel tracks of an exelgram®, the Kinegram® was composed of diffractive lines oriented in different directions.  When the Kinegram® was observed using a point source, a particular kinematic element could be seen in only one direction of observation.  The next phase of the kinematic animation was displayed by an adjacent kinematic element having a slightly different fringe orientation.  So the next element came into view after a slight rotation of the Kinegram®.  Thus each element in turn appeared and disappeared, resulting in an apparent motion.  The Kinegram® displayed kinematic effects such as translation, rotation, expansion, contraction and complete transformations from one graphical element into another.  Many other DOVIDs displayed kinematic effects.

  22. Micro-mirror technology avoided the need for hot stamping foils that were required for traditional DOVIDs by replacing the diffraction gratings of DOVIDs with micro-mirrors.  The micro-mirror arrays were created with micro-mirrors in two different orientations, one to display the pixels of one image, the other to display the pixels of another image.  Thus, the two images could only be viewed at two different angles.  The pixels were made highly reflective, usually by embossing these micro-structures into substrates pre-coated with reflective inks.

    APPLICABLE LAW

  23. As a consequence of the Intellectual Property Legislation Amendment (Raising the Bar) Act 2012 (“the Amendment Act”), there are substantial changes to the Patents Act 1990.  The date of effect of those changes was 15 April 2013.  The application of the Amendment Act in the present case depends on the date of the request for examination.  The applicant filed its request for examination on 4 April 2013.  Consequently the Patents Act as in force immediately before 15 April 2013 applies in the present case.

  24. This means the former standard for opposition proceedings applies and the opponent bears the onus of establishing that it is clear or practically certain that a valid patent could not be granted (F Hoffman-La Roche AG v New England Biolabs Inc [2000] FCA 283; 50 IPR 305 at 311, 319; Commissioner of Patents v Sherman [2008] FCAFC 182; 79 IPR 426; Genetics Institute Inc v Kirin-Amgen Inc [1999] FCA 742; [1999] 92 FCR 106 at [17]).

  25. Section 18 of the Patents Act 1990 relates to patentable inventions.  Relevant parts of subsection (1) appear below.

    (1)Subject to subsection (2), an invention is a patentable invention for the purposes of a standard patent if the invention, so far as claimed in any claim:

    (a)   is a manner of manufacture within the meaning of section 6 of the Statute of Monopolies; and

    (b)   when compared with the prior art base as it existed before the priority date of that claim:

    (i)is novel; and

    (ii)involves an inventive step; and

    (c) is useful; and ………

  26. Subsections 40(2)(a), (b) and (3) at the relevant time were as follows.

    (2)A complete specification must:

    (a)   describe the invention fully, including the best method known to the applicant of performing the invention; and

    (b)   where it relates to an application for a standard patent - end with a claim or claims defining the invention; and …

    (3)The claim or claims must be clear and succinct and fairly based on the matter described in the specification.

    NOVELTY

  27. Under subsection 7(1), an invention is taken to be novel unless it is not novel in the light of the prior art base.  Information in a document forms part of the prior art base for the purposes of novelty if it was published before the priority date of a claim, or the information was contained in a specification published after the priority date of the claim under consideration and, if that information is, or were to be, the subject of a claim of the specification, that claim has, or would have, a priority date earlier than that of the claim under consideration (referred to as “whole of contents” novelty).

  28. It is well established that the general test for lack of 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] HCA 19; 137 CLR 228 at 235 [20]:

    “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”.

  1. This test is satisfied if the alleged anticipation discloses all the essential features of the invention as claimed (see Nicaro Holdings Pty Ltd v Martin Engineering Co, [1990] FCA 40; (1990) 91 ALR 513 at 517). In order to meet this requirement, the prior art must "contain clear and unmistakeable directions to do what the patentee claims to have invented" (The General Tire & Rubber Company v The Firestone Tyre and Rubber Company Limited, [1972] RPC 457 at 486). In a similar vein, what a prior art document teaches is to be distinguished from what might be “included” or “encompassed”. “A prior broad disclosure thus may not be sufficient ‘in the absence of the skilled addressee understanding or perceiving’ the later claimed invention therein” (Sanofi-Aventis Australia Pty Ltd v Apotex Pty Ltd (No. 3), [2011] FCA 846 at [180]).

  2. The opponent principally relied on the following documents.

    D1 – AU 2010327032 - Published 9 June 2011 – Priority Date 4 December 2009

  3. This document is in the “whole of contents” category mentioned above, having been published later but having an earlier priority date than the priority date of the present application.  D1 relates to a security element comprising a carrier with a reflective surface area divided into a multiplicity of reflective pixels.  Each pixel comprises at least one reflective facet formed in a surface of the carrier.  The reflective facets reflect light incident along a predetermined direction on the surface area in a direction of reflection predefined by the orientation of each of the facets.  The orientations of the facets of different pixels have a substantially random variation over the reflective surface area.  Moreover the random variations are around different average orientations predefined in a region-based manner over the reflective surface area.

  4. Figures 2 and 3 of D1 are illustrative and are reproduced below.

  5. At [0078] of D1, the inclination α of the facets 6 is identical in each individual pixel 51, 52 and 53.  On the other hand, the inclination of facets 6 of neighbouring pixels 51, 52 and 53 is different.  Furthermore the grating period d3 of the saw-tooth structure of the pixel 53 is also different from the grating periods d1 and d2 of the saw-tooth structures of the pixels 51 and 52.  Due to the different orientation of the facets 6 of the individual pixels 51, 52 and 53, light incident along a predetermined direction R is reflected by each pixel 51, 52 and 53 directionally in different reflection directions.  Thus there is obtained for the viewer a glittering effect or an effect comparable with a metallic lacquering.

  6. At [0079], the different orientation of the facets 6 can be adjusted not only by the choice of the angle of inclination α of the facets 6, but also by different azimuth angles ϕ.  Relative to the direction P1 in Figure 2, the azimuth angle ϕ1 of the facets 6 of the pixels 51, 52 and 53 is 90o.  The azimuth angle ϕ2 of the facets 6 of pixel 54 is approximately 120o while the azimuth angle ϕ3 of the facets of pixel 55 is approximately 280o.

  7. At [0083], the azimuth angles can be chosen randomly for the individual pixels 5.  For the slope α of the facets 6, the choice can also be random from a range say -20o to 20o.  The latter clearly meets the definition of pseudorandom variation of one of the angles of inclination Ax or Ay.

  8. Figures 8 and 9 of D1, reproduced below, are also relevant in the present case.

  9. At [0088] of D1, in security element 1, the orientation of the facets 6 is so chosen that they respectively have only a relatively small angle of inclination in the region of the middle stripe represented in white (Figure 8b).  Looking perpendicularly and upon perpendicular illumination, in Figure 8b, the digits appear brighter in the middle, as indicated by stripe 20, than in other regions.  The further away the facets 6 are from the middle, the greater the average angle of inclination becomes, whereby the angles of inclination continuously increase in the upward direction in Figure 8b and continuously decrease in the downward direction in Figure 8b. 

  10. The effect may be described as follows.  At [0090], on tilting the security element 1, the stripe 20 apparently rolls upward or downward.  In Figure 8a, the tilted position is such that the lower region of the security element is tilted into the sheet plane.  In this case the stripe 20 has apparently travelled upwards.  In Figure 8c the tilt is opposite and the stripe has apparently travelled downwards.  The effect is known as a “rolling bar” effect.

  11. The arrangement in Figure 9 produces a similar effect and illustrates the arrangement where the security element 1 is oriented such that the same tilting motion as for Figure 8 results in the vertical stripe 20, which extends perpendicularly to the tilting axis in this case, moving along the tilting axis from the left to the right. 

  12. One would conclude from the above description for Figures 8 and 9 that there is a regional-based average orientation of the facets of different pixels in D1 such that the average angle of inclination around one axis, x or y, increases absolutely and continuously towards the extremities of the security element from the middle.  Thus the variation of an angle of inclination Ax or Ay according to a function F(x,y) is disclosed. 

  13. The present specification also includes a description of an arrangement of facet faces according to a function F(x,y) that generates the “rolling bar” effect.  For example, Figure 8a illustrates an arrangement of facet faces in the form of a reflective cylinder.  The angles of inclination Ay of the facet faces vary about the y-axis while there is no variation in the angles of inclination Ax of facet faces about the x axis.  At the hearing, the applicant pointed out that the claims though defined that the angles of inclination Ax and Ay are varied according to a function F(x,y).  The applicant submitted the language of the claims should not be read to say that Ax is varied according to a function F(x,y) and that Ay is kept constant, or that Ay is varied according to a function F(x,y) and that Ax is kept constant.  Rather the claims refer in the plural that Ax and Ay are varied according to a function F(x,y).  The applicant thus pointed out that Figure 8a, for example, of the present specification was not captured by the claims.  Similarly I find that D1’s arrangement of facets for generating the “rolling bar” effect is not within the scope of the claims.  The independent claims clearly require a variation of both of the angles of inclination Ax and Ay according to a function F(x,y). 

  14. In the alternative the opponent suggested the curved facets in pixel 56 of Figure 2 met the condition of variation of both angles of inclination Ax and Ay according to a function F(x,y).  The claimed invention defines the base plane spanned by coordinate axes x and y.  Furthermore the angles Ax and Ay are also defined as the angles of inclination of the facet faces about the x axis and y axis, respectively.  Thus, a variation of the angles of inclination Ax and Ay means the facet faces vary in inclination around two orthogonal axes.  On the other hand, paragraph [0085] of D1 describes the facets of individual pixel 56 as slightly curved.  Similarly paragraph [0020] describes facets that can be configured as curved area elements but that the curvature is low.  While there may arguably be a section of the facets at the right hand side of pixel 56 that may be inclined substantially about the x-axis, the curvature of the facets is clearly insufficient to have any sections thereof also inclined about the y-axis.  At best, the angles of inclination at various points of the facets of pixel 56 are about axes that have x and y directional components.  Similarly for the facets of individual pixels 54 and 55, which have azimuthal angles other than 90o relative to direction P1 in Figure 2, the angles of inclination are about axes with x and y directional components, not about both the x and y axes.  In any case, whether looked at for facets in individual pixels, or collectively across all pixels in Figure 2 or elsewhere in D1, there is no clear disclosure of variation of both of the angles of inclination Ax and Ay of facets according to a function F(x,y).

  15. The opponent also referred in D1 to paragraphs [0053] and [0054].  These paragraphs mention the security element generating further optical effects such as kinetic effects and three-dimensional effects.  The opponent drew an inference that the three-dimensional effects required variation of the angles of inclination Ax and Ay according to a function F(x,y).  On the other hand, such an inference is not borne out by D1.  The above passages refer to the inventive security element of D1 and a security feature based on magnetically aligned pigments as showing corresponding three-dimensional effects.  Additional to the difference of the claimed inclination of facets against the disclosed alignment of magnetic pigments, there is again no clear disclosure in D1 of angles of inclination about both the x and y axes according to a function F(x,y).

  16. I conclude the claimed invention is novel over D1.

    D2 – WO 2006/125224

  17. This document relates to an image presentation system that in an exemplary embodiment is formed of an array of micro-structured icon elements in a polymer film.  Together with an array of focusing elements, specifically micro-lenses, D2 further describes a synthetic magnification micro-optic system.  Use of the system as a security device for overt and covert authentication of currency, documents and products as well as visual enhancement is also discussed in D2.

  18. The opponent referred to page 32 of D2 to note that individual micro-lens diameters were preferably less than 50 µm and the interstitial space between lenses was preferably 5 µm or less.  Furthermore an icon element was one element of a periodic array of icon elements having periods and dimensions substantially similar to those of the lens array. 

  19. While not expressly described in D2, it appeared the opponent equated the micro-structure icon elements of D2 with the facet faces of the claimed invention.  For instance, the micro-structure icon elements can take a wide variety of forms and geometries, including but not limited to random rough and pseudo-random rough patterns (page 93, first paragraph).  In the latter respect and with reference to Figure 34 at 829, these patterns are illustrated in D2 as randomly jagged relief structures in the icon layer.  I think it could not fairly be said that facet faces were involved. 

  20. Other forms and geometries of micro-structure icon elements from Figure 34 include asymmetric void patterns 822, symmetric void patterns 823, nominally flat-surfaced patterns 830, and concave 831 and convex 832 patterns, amongst other things.  While some or all of these forms may arguably present facet faces, the angles of inclination of the elements around an x-axis or y-axis are not discussed in D2.

  21. The opponent further referred to a description of the icon layer incorporating an array or pattern of homogeneous microstructures, for example solely asymmetric void patterns 822.  Alternatively the icon layer can incorporate an array or pattern of two or more microstructure embodiments 822-832.  The array of microstructure icon elements may collectively form an image similar to a group or array of pixels forming a conventional printed image (page 93, second paragraph).  The opponent’s contention was that this described the claimed multi-layer body generating an optically variable first item of information by the angles of inclination Ax and Ay of the facet faces varying according to a function F(x,y).  On the other hand, this contention is not borne out in D2.  The icon elements may be illustrated with different forms, geometries and inclines but D2 is silent in respect to angles of inclination of facet faces being varied according to a function F(x,y).

  22. Alternatively the opponent noted that the icon images may incorporate triangles that may be randomly placed within the icon zones (page 82, second paragraph).  These triangles are stated to represent covert information in the icon images.  The placement of the triangles is such that they do not substantially match the period of the icon zones or the period of the micro-lens array.  The pattern of triangles will thus not create a coherent image and will not be visible in the observed image.  Even if the triangles could be regarded as facet faces, as claimed in the present case, D2 appears to be silent in respect to the dimensions of the triangles.  Moreover D2 does not disclose variations of the angles of inclination of the triangles according to a function F(x,y).

  23. I conclude the claimed invention is novel over D2.

    INVENTIVE STEP

  24. Subsection 7(2) of the Patents Act states that an invention is taken to involve an inventive step unless it would have been obvious to a person skilled in the art in the light of the common general knowledge, considered alone or together with the prior art. A document, or two or more related documents if a person skilled in the art would treat them as a single source of information, is prior art for this purpose if "a skilled person mentioned in subsection (2) could, before the priority date of the relevant claim, be reasonably expected to have ascertained, understood, regarded [the document] as relevant" (Subsection 7(3) at the relevant time).

  25. The test for whether an invention is obvious is whether it would have been a matter of routine to proceed to the claimed invention. In Wellcome Foundation Ltd v VR Laboratories (Aust.) Pty Ltd, [1981] HCA 12, 148 CLR 262 at 286 [45], Aickin J stated:

    "The test is whether the hypothetical addressee faced with the same problem would have taken as a matter of routine whatever steps might have led from the prior art to the invention, whether they be the steps of the inventor or not."

  26. The High Court in Aktiebolaget Hässle v Alphapharm Pty Ltd, [2002] HCA 59, (2002) 56 IPR 129 at [50] – [53], appeared to approve of the Wellcome test.  In discussing what was meant by a matter of routine the High Court noted and accepted an affinity with the approach in Olin Mathieson Chemical Corporation v Biorex Laboratories Ltd, (1970) 87 RPC 157, of whether the person skilled in the art would directly be led as a matter of course to try what was claimed in the expectation that it might well produce a useful alternative. In Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [No. 2], [2007] HCA 21, (2007) 235 ALR 202, general principles regarded to be of continuing relevance, at [50] – [52], were that “obvious” means “very plain”, a scintilla of invention remains sufficient to support the validity of a patent, there must be some difficulty overcome, some barrier to be crossed, and an invention must be beyond the skill of the calling.

  27. Where the invention lies in a combination of integers, the question is not whether each individual integer was obvious but rather whether the combination as a whole was obvious when compared to the prior art base.  In Alphapharm at [41], the High Court stated:

    “The claim is 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 Alphapharm 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.”

    Person Skilled in the Art

  28. In Root Quality Pty Ltd v Root Control Technologies Pty Ltd, [2000] FCA 980, Finkelstein J stated at [70] and [71] that the skilled addressee is the person to whom the patent is addressed and who must construe it. Such person works in the art or science with which the invention is connected or is likely to have a practical interest in the subject matter of the invention. A variety of people may have that interest. Finkelstein J further noted various descriptions given to the skilled addressee. These included the “uninventive skilled worker in the particular field” (Leonardis v Sartas No 1 Pty Ltd, (1996) 67 FCR 126) and the “person skilled in the art” (Genentech Inc v Wellcome Foundation Ltd, (1989) 15 IPR 423).

  29. The opponent submitted that the area of document security was a highly technological area and people in that field took care to familiarise themselves with the latest developments.  This included reviewing patent documents, textbooks, attending conferences and reviewing published papers.  The opponent further submitted that the field of multi-layered bodies that provided an achromatic non-diffractive effect using reflective facets was an advanced field that required specialist knowledge in physics.  The skilled addressee working in this area would have a post-doctoral degree or a tertiary degree in physics with significant industry experience in researching and developing optical devices.

  30. The applicant submitted that the opponent sought to establish a very high standard for the skilled addressee over the level of qualifications required in physics.  The applicant stated that similar, disputed applications between the parties to the present case have established that the relevant person skilled in the art was someone involved in the research and development of security devices.  The applicant cited Innovia Security Pty Ltd v OVD Kinegram AG, [2015] APO 26 (at [85]).

  31. The field of multi-layered bodies in document security applications involving OVDs is clearly a highly technological area.  Whilst I would not expect that post-doctoral qualifications were necessary, I would accept that the relevant person skilled in the art would have possessed tertiary qualifications in physics and specifically in optics together with industry experience in OVDs.

  32. Both parties accepted that the relevant person skilled in the art would further have been involved in research and development (“R&D”) of security devices.  I have no significant reason to digress from that position and therefore I accept the parties’ position.  The applicant submitted though that the opponent’s Dr Lee was not representative of the non-inventive skilled addressee. 

  33. Before the priority date, Dr Lee had clearly been at the forefront of R&D in OVDs for a considerable period of time.  He made significant contributions and developed significant advances in OVDs such as the pixelgram® and the exelgram®.  Dr Lee was also well-published and had filed a significant number of patent applications over various OVD technologies.  While I have accepted that the relevant person skilled in the art would have been involved in R&D, I would regard Dr Lee’s inventiveness and experience at the forefront or high end of R&D as somewhat above that of the notional person skilled in the art in the present case.  Consequently, while Dr Lee is clearly able to present evidence as to relevant factual information, I need to treat his evidence with a little caution in respect to what the notional person skilled in the art would have done at the relevant time.

  34. The opponent submitted that Ir Schell did not provide any evidence as to his experience in R&D of optical security elements, let alone in the field of micro-mirrors.  While this may be so, Ir Schell’s curriculum vitae, nonetheless, indicated that he had a strong background in the security printing industry.  During the late 1980s and early 1990s, Ir Schell, as a director, was also responsible for R&D and production of banknotes, passports, identification cards and general securities, whilst employed by a currency printing entity in the Netherlands.  Moreover, in evidence, Ir Schell provided detailed background of later technological developments in the field before the priority date, including in respect to DOVIDs and micro-mirror devices.  The opponent also suggested that Ir Schell’s evidence should be less preferred than Dr Lee’s evidence on the common general knowledge in Australia because Ir Schell was based overseas.  On the other hand, the opponent also acknowledged that the common general knowledge of a skilled person in Australia would not have been particularly different from that of a skilled person elsewhere.  I see insufficient reason to discount Ir Schell’s evidence in the present case.

    Common General Knowledge

  1. With reference to Dr Lee’s evidence, the opponent submitted the following aspects were common general knowledge at the relevant time.

  2. The use of micro-mirrors as an OVD and as an alternative to diffraction-based OVDs was commonly known (Lee #1 at [28.2]). 

  3. It was commonly known that optical diffraction effects were caused by the periodic nature of gratings or facet faces and that the diffraction effects could be removed by reducing or removing the periodic nature of the device.  At the relevant time, it was known that one approach for removing periodicity was by introducing a degree of randomness into the structure of the device.  Such randomness was known to remove the colour effects resulting from diffraction and thus provide an achromatic effect (Lee #1 at [25], [26] and [28.5]).

  4. Moulding including embossing, soft injection moulding, casting and stamping processes were all well-known processes in the field of optical security device manufacture at the relevant time (Lee #1 at [28.2]).

  5. The applicant accepted the above aspects were common general knowledge at the relevant time.  I have insufficient reason to come to an alternative view in this case and therefore similarly accept the above was common general knowledge.

  6. The opponent further submitted that facet faces with dimensions of 30 µm x 30 µm or 60 µm x 60 µm were common general knowledge and that it was routine to have the area of each micro-mirror as small as possible to create high resolution optical security devices (Lee #1 at [28.3]).  Moreover the opponent stated that metalized layers, which are examples of reflective layers, were commonly applied to facet faces (Lee #1 at [28.6]).  Finally, the opponent asserted the subject matter in two books was common general knowledge at the relevant time.  The books were “Optical Document Security: Third Edition” by Rudolf L. van Renesse, Artech House 2005 (exhibit RAL-25), and “Micromanufacturing and Nanotechnology” edited by N.P Mahalik, Springer-Verlag 2006 (exhibit RAL-29).

  7. The applicant acknowledged that facet faces of the above dimensions were known at the relevant time but submitted there was no evidence to suggest such dimensions were part of the common general knowledge.  On the other hand the applicant accepted that a 300 µm limit of perceptibility by the human eye was common general knowledge (for example Schell #2 at [4.9]).  Moreover the applicant acknowledged that reflective metal films were known but submitted there was no evidence that they were routinely applied to facet faces.  Finally the applicant accepted the van Renesse book was common general knowledge but did not accept the Mahalik book or its contents were common general knowledge at the relevant time.

  8. The opponent’s citing of the 30 µm x 30 µm or 60 µm x 60 µm facet face dimensions was taken from several articles presented in evidence by Dr Lee (exhibits RAL-19 to RAL-24).  Notably Dr Lee was the author or a co-author of each of the articles.  There was no evidence presented of widespread regard or use of these articles by persons skilled in the art.  I am unconvinced that the above dimensions for facet faces were common general knowledge at the relevant time.  It may be noted that claims 1 and 22 define the facet faces having a maximum dimension of less than 300 µm.  Since that is approximately the smallest dimension resolvable by the human eye, I would accept that 300 µm would have been a natural upper limit for facet face dimensions in document security applications.

  9. Micro-mirror developments were well established in the art before the priority date and were a well-known OVD alternative to DOVIDs.  Ir Schell discussed the background developments of micro-mirror devices in evidence.  He also referred to the changing reflective properties of achromatic micro-mirror elements when reflection coatings or layers were used.  I am satisfied that reflective layers applied to facet faces would have been part of the common general knowledge at the relevant time.

  10. Both parties appeared to regard the Van Renesse book as a standard textbook of high regard and widely consulted in the industry.  Ir Schell had regard to the book, for example at [4.1] of Schell #1.  Dr Lee described the book, at [8] of Lee #2, as one that was referred to as a matter of course in the industry.  I would accept that the contents of the van Renesse book were common general knowledge at the relevant time. 

  11. In respect to the Mahalik book, Dr Lee described this book as a textbook that would have been very relevant to any research scientist in industry considering micro-mirrors and, therefore, the contents would have been referred to as a matter of course.  Dr Lee was the author of Chapter 7 of the book and would clearly have been in an advantageous position regarding the book’s contents.  On the other hand the applicant did not appear to refer to the book in evidence and did not accept that its contents would have been common general knowledge.  From the available evidence, I am unconvinced that the Mahalik book was common general knowledge in the present art at the relevant time.

    Whether Patent Documents Ascertained, Understood, Regarded as Relevant

  12. The opponent submitted that persons working in the field took care to familiarise themselves with developments through reviewing patent specifications, amongst other things (Lee #1 at [16] and Lee #2 at [7]).  The applicant submitted that Dr Lee (in Lee #2 at [7]) went on to explain that patent specifications may be a resource that would be referred to, and suggested this did not mean that the content was common general knowledge, only that it was publically available.  The applicant acknowledged though that it was not uncommon to conduct patent searches.  The latter position more closely aligns with subsection 7(3) that a skilled person could, before the priority date of the relevant claim, be reasonably expected to have ascertained, understood, and regarded [the document] as relevant.  The applicant’s Ir Schell referred to multiple patents in evidence when discussing the Kinegram® and the micro-mirror groups.  I am satisfied that the person skilled in the present art could, before the priority date of the relevant claim, be reasonably expected to have ascertained, understood and regarded the following patent documents as relevant.

    D3 – US 2010/0254007

  13. This document relates to a display which can be used for preventing forgery of articles such as cards, securities and brand-name products.  The display is a multi-layered body that includes a reflective layer.  The display comprises light-scattering regions.  Each region is provided with linear protrusions and/or recesses.  The protrusions and/or recesses extend in the same longitudinal direction within any one region but the directions of the linear protrusions and/or recesses are different across the multiple light-scattering regions.

  14. Figure 10 of D3 illustrates light-scattering region 20a constituted by light-scattering cells 21a in which the oriented direction of the light-scattering structures is parallel to the direction that forms a 45o angle in a counter-clockwise direction with respect to the x-axis. 

  15. With reference to [0103] of D3, the light-scattering region 20a forms the image “9” by using light-scattering cells 21a as pixels.  The light-scattering region 20b is constituted by light-scattering cells 21b in which the oriented direction of the light-scattering structures is orthogonal to those of light-scattering cells 21a.  The light-scattering region 20b forms a marginal part of the image “9” by using light-scattering cells 21b as pixels.  Accordingly the light-scattering cells may be seen to be facet faces.

  16. With reference to Figure 4, D3 describes that the light-scattering structures 25 within the light-scattering cells may be arranged regularly to some extent or randomly ([0073]). 

  17. For example if intervals, that is spacing, between the light-scattering structures 25 in a direction parallel to the light-scattering axis 27 are set randomly, the light-intensity distribution of the scattered light in a direction perpendicular to the oriental direction 26 is gentle.  Therefore, variation in whiteness and brightness according to the observation angle is restricted. 

  18. The opponent accepted that D3 did not specifically describe pseudo-randomly varying one or more parameters that define the facet face.  Through Dr Lee’s evidence though (Lee #1 at [31]), the opponent stated that since D3 disclosed randomly arranging light scattering structures, it would have been obvious that these structures could also be pseudo-randomly varied.  I am prepared to accept in this case that if the prior art disclosed random variation of a parameter of a facet face, then pseudo-random variation, that is random variation from within a narrower variation range, would not have been inventive at the relevant time.  On the other hand the difficulty for the opponent with D3 is that the random variation of the intervals between the light-scattering structures is not in respect to any of the parameters F, S, H, P, etc, of facet faces that are varied pseudo-randomly as claimed in the present case.

  19. Figures 12 and 13 of D3 illustrate, respectively, rectangular parallelepiped and ellipsoid protrusions in a light-scattering region 20/.  The protrusions in these embodiments may be seen as facet faces.

  20. There appear to be three different upper surface area sizes across all protrusions in each case.  Page 25 lines 8-10 of the present specification describes an embodiment where a parameter variation value is selected from a pseudo-random group of only three parameter variation values.  Accordingly D3 appears to illustrate a pseudo-random variation of area size, as defined in the present case, of the upper surfaces of the protrusions.  Similarly there appears to be a pseudo-random placement of protrusions across the light-scattering region.  It further appears that light-scattering structures reside on the upper surface of protrusions in Figures 12 and 13.  It may be noted that none of this is described in D3.  At best, one can only infer these points from the drawing figures.  Nonetheless the drawings appear sufficient to support the propositions.

  21. For the earlier embodiments involving linear protrusions and/or recesses, it may similarly be argued that some form of azimuthal variation of the light-scattering cells across multiple light-scattering regions is disclosed in D3.  On the other hand, the variation is in respect to the orientation of the light-scattering structures 25 within the light-scattering cells, not that the azimuthal angle of the light-scattering cells or the facet faces themselves is varied as claimed.  In any case, the variation of azimuthal angle in D3 could not fairly be said to be random or pseudo-random.

  22. Irrespective of how close some aspects of D3 come towards the claimed invention, the claimed variation of angles of inclination Ax and Ay of the facet faces according to a function F(x,y) remains at issue.  The opponent accepted that D3 did not clearly disclose this feature.  On the other hand, the opponent submitted that any arrangement of relief structures to provide an image would be an arrangement of facets with orientations that are varied according to a function F(x,y) and was common general knowledge at the relevant time. 

  23. The present claims clearly have the limitation in respect to F(x,y) that it is the angles of inclination of both Ax and Ay of the facet faces that are varied according to a function F(x,y).  D3 does not disclose such variation.  The opponent attempted to make up for this deficiency of disclosure in D3 by relying on D3 combined with the common general knowledge.  That is, that the angles of inclination Ax and Ay of the facet faces being varied according to a function F(x,y) was part of the common general knowledge.  The opponent referred to the Mahalik book (exhibit RAL-29).  Section 7.5.2 of the Mahalik book describes the origination of a micro-mirror OVD.  The procedure for producing a micro-mirror OVD involves two main phases – production of an image specific mask by electron beam lithography and the use of that mask within a photolithography exposure system to produce the required micro-mirror surface relief structure within a thick optical resist layer.  A colour-tone mask is subsequently described which is a pixelated array of individual mask elements.  The distribution of mask pixel elements within the pixelated array is controlled by a colour coded input “Picture File” where each colour coded pixel or “RGB Pixel” is a member of an “RGB Pixel Palette” and each member of the RGB palette is in one to one correspondence with each mask pixel of the mask palette.  One example of an RGB picture palette is shown resulting in a corresponding 3D micro-structure palette.  The construct (Figure 7.29) may be said to disclose angles of inclination Ax and Ay varying according to a function F(x,y).  The micro-structure palette may be used to construct a corresponding micro-mirror device.  On the other hand, since I have earlier found that the Mahalik book was not part of the common general knowledge, the opponent’s point is moot. 

  24. As mentioned earlier, two or more related documents may constitute relevant prior art if the person skilled in the art would treat them as a single source of information.  On the other hand, in the present case, there appears to be insufficient basis for the person skilled in the art to have related D3 and the Mahalik book in such way.

  25. I conclude the claimed invention has an inventive step over D3.

    D4 – US 2008/0258456

  26. This document relates to an optically variable security element.  The security element includes a raster image composed of a plurality of pixels.  Each pixel includes a plurality of achromatically reflective micro-mirrors ([0041]).  In their simplest form, the micro-mirrors each exhibit a quadratic base area with a single, flat reflection area at a certain tilt angle with the surface of the security element ([0042]).  The micro-mirrors in a first set of pixels are tilted at a tilt angle while the micro-mirrors in a second set of pixels are not tilted ([0043]).  If the security element is viewed from the spatial direction in which the first micro-mirrors reflect, then the pixels with these micro-mirrors appear light.  The pixels with the second micro-mirrors, on the other hand, appear dark such that a black and white raster image is created ([0044]).  The micro-mirrors are sufficiently small that they cannot be resolved by the naked eye.   The micro-mirrors are also sufficiently large that wavelength-dependent light diffraction effects are negligible.  The incident light is thus achromatically reflected by the micro-mirrors without interfering colour effects ([0045]).  Dark pixels can also be achieved by a random orientation of the individual micro-mirrors in pixels ([0046]).

  27. The micro-mirrors may have more complex surfaces than flat surfaces. For example, the reflective surface areas may be curved convexly or concavely. Additionally the reflectivity of the micro-mirrors may be adjusted by the choice of reflective coating, or by matte patterns or other measures on the reflection surface. For example, the reflective surface area may be partially covered by a moth-eye pattern, that is, a pattern comprising knobs that effectively inhibit the reflection in that region. Finally the micro-mirrors may exhibit a relief shape having two or more reflection areas that are tilted in different directions against the surface of the security element, such as a dual-area roof form, or a multi-lateral pyramidal relief shape ([0052]-[0057]).

  28. As for D3, the opponent accepted that D4 did not clearly disclose variations of the angles of inclination Ax and Ay of facet faces according to a function F(x,y).  Similarly the opponent attempted to make up for this deficiency of disclosure in D4 by relying on D4 combined with the common general knowledge.  That is, that the angles of inclination Ax and Ay of the facet faces being varied according to a function F(x,y) was part of the common general knowledge.  Since I have found that this, and the referenced Mahalik book, was not part of the common general knowledge, the opponent’s point must also fail in respect to D4. 

  29. Similarly, in the present case, there appears to be insufficient basis for the person skilled in the art to have treated D4 and the Mahalik book as a single source of information.

  30. I conclude the claimed invention has an inventive step over D4.

    D2 – WO 2006/125224

  31. The opponent did not present any evidence about D2 or submissions about D2 on inventive step.  For the sake of completeness, having reviewed D2, I would similarly conclude that the claimed invention has an inventive step over D2.

    SUBSECTION 40(2)(a) – FULL DESCRIPTION

  32. The High Court in Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd, [2001] HCA 8, 207 CLR 1, provided a test for full description at [25] as follows:

    “The question is, will the disclosure enable the addressee of the specification to produce something within each claim without new inventions or additions or prolonged study of matters presenting initial difficulty?”

  33. The opponent submitted that the specification did not describe fully how the facets were oriented to achieve the desired and claimed effect of one or more parameters of the facet faces being varied pseudo-randomly.

  34. The problem expressed by the opponent was not apparent.  Pages 32 and 33 of the specification, together with Figures 5 - 7, describe and illustrate the variation of selected parameters of facet faces and the pseudo-random variation of the parameters for multitudes of facet faces in a layer.  I have little doubt that the person skilled in the present art would have been able to construct a body as in each claim without difficulty.  If the complaint were that the specification did not teach how the effect of generating an optically variable first item of information, as claimed, was achieved, then the same parts of the specification also appear adequate in this respect.  Even if that were not so, I have little doubt that the person skilled in the art would not have needed to conduct trials or studies beyond the routine to generate that effect.

  35. The opponent further submitted that the specification did not describe the invention of claim 4.  This appeared to be more of a fair basis issue which I will refer to below.  Under the ground of full description, page 35 line 28 to page 36 line 23 together with Figure 8e would appear to adequately enable the person skilled in the art to construct a body as in claim 4.

  36. I conclude the specification describes the alleged invention fully.

    SUBSECTION 40(2)(b) - DEFINING THE INVENTION

  37. The opponent submitted that claims 1-5 and 22 referred to a function F(x,y) but did not define what this function was.  It is clear that this definition is rather open.  In context, the claims are only limited by the angles of inclination Ax and Ay of the facet faces being varied according to a function F(x,y).  This means the facet faces simply vary in inclination around two orthogonal axes.  The specification exemplifies this with facet faces collectively forming structures akin to a reflective spherical lens (Fig. 8b), convex and concave reflective surfaces (Fig. 8c) and a cylindrical coordinate system (Fig. 8d).  Page 35 lines 21 and 22 describe the above examples as three-dimensional free-form surfaces.  Furthermore, the function F(x,y) may be based on a logo, an image, an alphanumeric character, a geometric figure or the function F(x,y) may describe the cut section of a surface of a three-dimensional object (Fig. 8e).  In short the specification enables the nature of F(x,y) to be quite open. 

100. I am satisfied the present claims adequately define the invention.

SUBSECTION 40(3) – CLARITY AND FAIR BASIS

101. The opponent raised clarity and/or fair basis issues against the majority of the present claims.  I will only discuss the points that I consider may arguably affect the validity of the claims.

102. The opponent submitted that claim 4 was not fairly based.  This claim defines the additional feature of the function F(x,y) describing a cut section of a surface of a three-dimensional object as a free-form element.  The adjacent maxima, of the free-form element in the direction of the z-axis relative to a projection onto the base plane, are defined as spaced apart from each other by, in particular more than 4 mm, further preferably more than 8 mm.  The opponent noted that the specification merely describes that the maxima of the free-form surface in the direction of the z-axis are at a distance from each other, with respect to their respective projection onto the base plane, of preferably between 4 mm and 40 mm (page 36 lines 11-16).  The opponent stated that the specification did not provide fair basis for the unbounded range for the separation between adjacent maxima as claimed.  The applicant responded that this objection could be addressed by amendment if necessary.

103. The opponent’s point has some merit.  While the particular spacing between 4 mm and 40 mm is described as preferable, it nonetheless is apparent from the specification as a whole, including the drawings, that the upper limit is not unbounded.  Accordingly I would concur that claim 4 is not fairly based on the matter described in the specification.

104. Claim 5 defines an option where the function F(x,y) is constant and differentiable in the area of each free-form element.  The opponent argued that it was not clear how the function could be constant and differentiable since the differentiation of a constant is zero. 

105. Sheppard J summarised the rules of construction for a patent specification in Décor Corporation Pty Ltd v Dart Industries Inc, [1988] FCA 399, (1988) 13 IPR 385 at 400 [14]. The Full Federal Court endorsed this summary in Pfizer Overseas Pharmaceuticals v Eli Lilly and Company, [2005] FCAFC 224 at [249]. The pertinent ones relevant to the present matter are that the specification should be read as a whole, a purposive construction should be employed rather than a purely literal one, and if an expression in a claim is not clear or is ambiguous, it is permissible to resort to the body of the specification to define or clarify the meaning of words used in the claim. Applying such rules in the present case, the opponent’s point is readily resolved. Firstly it would appear that the claim’s reference to a “constant” is in error. Secondly this is confirmed by the body of the specification. On page 36 at lines 11 and 12, there is discussion of the free-form surface, as shown in Figures 8a to 8d, being formed by a continuous and differentiable function. I think it would be apparent to the person skilled in the present art that the word “continuous” should be read in place of “constant” in claim 5. I am satisfied with the overall clarity of claim 5.

106. I am further satisfied the remaining submissions from the opponent against the clarity or fair basis of the claims have insufficient merit in the present case.

107. At the hearing, I raised an issue with claim 11.  In its broadest form, this claim further defines the multi-layer body with a grid width of the grid in the direction of the x-axis and/or the y-axis between 1.2 times and 2 times the dimension of the facet face in those directions.  On a plain interpretation, a grid width that is just, at most, twice the dimensions of a facet face in the corresponding direction would appear insufficient in size.  It would appear a further multiplier is missing from the claim.  For example, the grid width is between 1.2 to 2 times the dimension of a facet face, multiplied by the number of facet faces in the corresponding direction.  Put another way, the grid width is between 1.2 to 2 times the dimensions of the facet faces collectively in the corresponding direction. 

108. The applicant argued the grid width meant an edge of a grid cell, that is, an edge beside a single facet face.  On the other hand this would appear to be inconsistent with the normal meaning of a grid.  The online Oxford English Dictionary ( defines a grid as an arrangement of parallel bars with openings between them.  The online Macquarie Dictionary ( has a similar principal definition but also goes further for specific applications.  Relevantly, a grid is a network of horizontal and vertical lines designed to give fixed points of reference, as those superimposed on a map, on a printer’s layout or on an architect’s plan.  Applying such a definition to the present case, it would be clear that the array of facet faces in both the x and y directions make up a grid.  I find that claim 11 is deficient and unclear in its present form.

CONCLUSION

109. I have found that the claimed invention, on the available evidence, is novel and has an inventive step.  Furthermore I have found that the specification describes the invention fully and that the claims define the invention.

110. On the other hand I have found that claim 4 is not fairly based and that claim 11 is not clear.

111. These defects are clearly capable of remedy by amendment.  I allow the applicant two (2) months from the date of this decision to propose suitable amendments to overcome the defects.

COSTS

112. Both parties accepted the general principle that costs should follow the event.  Each party though also provided some qualification. 

113. The opponent noted that the applicant filed amendments during the opposition proceedings.  In the event that the application is allowed only in its amended form, the opponent submitted that costs should be apportioned accordingly.

114. The applicant made several submissions as to the apportioning of costs based in the event on factors such as only some grounds of opposition being successful, some Section 104 amendment being required, the nature of the opponent’s case compared with the statement of grounds and particulars, and the opponent’s late amendment thereof, amongst other things. 

115. The CSR Building Products Limited v United States Gypsum Company decision, [2016] APO 7, discussed reduced awards of cost. At [6] of that decision, citing H Lundbeck A/S v Alphapharm Pty Ltd (No.2), [2009] FCAFC 118:-

“… the adoption of an ‘issues’ approach is only appropriate where it is fair to do so, and the reduction in the award of costs is not an exercise in financial precision.  Rather, what is required is a search for a “fair estimate” of the quantum of any adjustment, based on the particular facts as a whole …”.

116. At [7] and [8] of CSR:-

“Another consideration is whether the successful party has engaged in any misconduct that would disentitle them to an award of costs.

The normal outcome of these principles is that success by an opponent on all grounds of opposition is not necessary for an award of costs.  Rather, success on a substantial ground of opposition will normally lead to an award of costs, but success on an insubstantial ground may lead to a reduced award of costs.”

117. In the present case, it may be that the opponent’s case was not exactly as presented in the original statement of grounds and particulars.  On the other hand, that would not be unusual as evidence came to hand and, in this case, where the applicant amended the specification during the opposition proceedings.  At the hearing, the applicant did not raise any significant detriment caused by the opponent’s approach to the opposition.  Similarly, any significant detriment with the opponent’s relatively late filing of its amendment to the statement of grounds and particulars was not apparent from the applicant.  As indicated earlier, that amendment was to principally address the applicant’s Section 104 amendments and to bring the statement of grounds and particulars in line with the filed evidence.  I expect the applicant would have been clearly aware of the nature of the opponent’s case from the opponent’s evidence and that the case had not substantially altered from the original statement of grounds and particulars.  Certainly I find it would be improper, on the available evidence and representations, to regard the opponent to have engaged in any misconduct that would disentitle them to an award of costs.

118. The opponent has been successful in this opposition on only two points, both under Subsection 40(3), as at the relevant time.  In CSR at [10], the delegate considered Section 40 grounds to be substantial grounds in that case.  While the Amendment Act applied in that case, I would similarly regard Section 40 grounds, in the main, to be substantial grounds in the present case.  Also at [10] of CSR though, the delegate commented on the opponent’s success on Section 40 grounds to a significant extent.  The present case though is more like the case in Meat & Livestock Australia Limited and Dairy Australia Limited v Cargill Inc. and Branhaven LLC, [2016] APO 26. In that case, the delegate determined that the opponent had been successful only on a minor issue of clarity with one claim, which could be rectified by amendment to remove the claim, and awarded costs against the opponent.

119. In the present case, I consider the opponent has been successful on only a minor issue under fair basis in respect to dependent claim 4.  The clarity issue with dependent claim 11, also minor to my mind, was not raised by the opponent.  I would consider that the opponent is not entitled to costs on these points alone. 

120. Turning to the applicant’s Section 104 amendments made during the opposition proceedings, the substantial change from those amendments brought the feature of the variation of the angles of inclination Ax and Ay according to a function F(x,y) into all claims.  As may be noted from the discussion above, that feature was instrumental in finding the presently claimed invention novel and inventive.  In this regard the opponent may be said to have been successful against the originally accepted claims.

121. I award costs in accordance with Schedule 8 against the applicant, OVD Kinegram AG, up to and including the date of allowance, 4 February 2016, of the Section 104 amendments filed 14 October 2015, and against the opponent, Innovia Security Pty Ltd, from that date of allowance onwards.

M. G. Kraefft
Delegate of the Commissioner of Patents

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