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Jupiters Ltd v Neurizon Pty Ltd

Jupiters Ltd v Neurizon Pty Ltd

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FEDERAL COURT OF AUSTRALIA
Jupiters Ltd v Neurizon Pty Ltd [2005] FCAFC 90
INTELLECTUAL PROPERTY – patents – respondent’s patent related to a prize awarding system used in electronic gaming machines – whether first appellant’s prize awarding system infringed the patent – whether patent’s claims too wide to be fairly based on the specification – whether patent anticipated by other prize awarding systems – whether invention lacked novelty by reason of an enabling public disclosure through a third party’s prior use – whether patent lacked an inventive step – whether finding of infringement precluded by an issue estoppel
Patents Act 1990 (Cth) ss 7, 15, 18, 40, 119, 138
Patents Act 1977 (UK) s 2
Arrow Pharmaceuticals Ltd v Merck & Co, Inc (2004) 213 ALR 182 cited
Asahi Kasei Kogyo KK’s Application [1991] RPC 485 cited
Azuko Pty Ltd v Old Digger Pty Ltd [2001] FCA 1079 cited
Blair v Curran (1939) 62 CLR 464 cited
Bristol-Meyers Squibb Company v FH Faulding & Co Ltd (2000) 97 FCR 524 cited
CCOM Pty Ltd v Jeijing Pty Ltd (1994) 51 FCR 260 cited
Cullen v Welsbach Light Co of Australasia Ltd (1907) 4 CLR 990 discussed
Décor Corp Pty Ltd v Dart Industries Inc (1988) 13 IPR 385 cited
Electric & Musical Industries Ltd v Lissen Ltd [1938] 56 RPC 23 cited
Flexible Steel Lacing Company v Beltreco Ltd (2000) 49 IPR 331 cited
Glaverbel SA v British Coal Corporation [1994] RPC 443 cited
Grove Hill Pty Ltd v Great Western Corp Pty Ltd [2002] FCAFC 183; 55 IPR 257 cited
Interlego AG v Toltoys Pty Ltd (1973) 130 CLR 461 cited
Kimberley-Clark Australia Pty Ltd v Arico Trading International Pty Ltd (2001) 207 CLR 1 cited
Kuligowski v Metro Bus (2004) 208 ALR 1 cited
Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (2004) 212 ALR 1 applied
Longworth v Emerton (1951) 83 CLR 539 cited
Lux Traffic Controls Ltd v Pike Signals Ltd [1993] RPC 107 discussed
Merrell Dow Pharmaceuticals Inc v HN Norton & Co Ltd (1995) 33 IPR 1 discussed
Meyers Taylor Pty Ltd v Vicarr Industries Limited (1977) 137 CLR 228 cited
Murphy v Abi-Saab (1995) 37 NSWLR 280 cited
Neurizon Pty Ltd v LTH Consulting & Marketing Services Pty Ltd (2002) 58 IPR 93 considered
Olin Corporation v Super Cartridge Co Pty Ltd (1977) 180 CLR 236 cited
Pall Corporation v Commercial Hydraulics (Bedford) Ltd [1990] FSR 329 cited
PLG Research Ltd v Ardon International Ltd [1993] FSR 197 discussed
Quantel Ltd v Spaceward Microsystems Ltd [1990] RPC 83 discussed
Rehm Pty Ltd v Websters Security Systems (International) Pty Ltd (1988) 81 ALR 79 cited
Sartas No 1 Pty Ltd v Koukourou & Partners Pty Ltd (1994) 30 IPR 479 cited
Stanway Oyster Cylinders Pty Ltd v Marks (1996) 66 FCR 577 cited
Welch Perrin & Co Pty Ltd v Worrel (1961) 106 CLR 588 cited
Pearse & Geddes, Statutory Interpretation in Australia (5^th ed, 2001)
Oxford English Dictionary (2

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2005] FCAFC 90
Decision Date: 23 MAY 2005

CaseChat Overview and Summary

The appeal in Jupiters Ltd v Neurizon Pty Ltd involved a dispute over the interpretation of a patent related to an electronic gaming machine (EGM) jackpot system. The primary judge had previously ruled on the validity of the patent and now the appeal focused on the infringement of the patent by Jupiters. The court had to determine whether Jupiters' use of the Cougar RTP jackpot system constituted infringement of the Neurizon patent. The legal issues centered on the interpretation of the term "an elapsed period of time" as used in the patent claims, particularly whether it required a predefined period of time or could be a shorter duration. The primary judge had adopted the construction of the term as defined by Dowsett J in a previous case, which was considered self-evident and not requiring further clarification from the patent specification. The court found that the primary judge's interpretation was consistent with the evidence and submissions presented and did not misapprehend the principles of patent construction. The appeal was partially upheld, with the cross-claim for revocation being remitted for further consideration of the ground of lack of inventive merit. The first appeal was otherwise dismissed, and the appellants were ordered to pay the respondent's costs of the second appeal.

Orders

Orders of the court

1. The appeal from the judgment and orders of 5 August 2004 (the first appeal) be upheld in part.

2. The order made on 5 August 2004 dismissing the cross-claim for revocation and dealing with costs relating to the cross-claim be set aside.

3. The cross-claim for revocation be remitted to the primary judge for consideration of the ground of lack of inventive merit.

4. The first appeal be otherwise dismissed.

5. The appellants pay the costs of the first appeal, excluding costs of the appeal in relation to the cross-claim for revocation.

6. The appeal from the judgment and orders of 27 October 2004 (the second appeal) be dismissed.

7. The appellants pay the respondent’s costs of the second appeal.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

HILL, FINN AND GYLES JJ

Nonetheless, it is agreed for the purposes of this appeal that in practice:(a)an EGM in the Cougar RTP jackpot system does not necessarily or always report turnover for only one game played on an EGM when it sends a turnover meter response; (b)the Cougar RTP jackpot system does not necessarily or always use the turnover from only one game played on an EGM to determine the probability of win; (c)the Cougar RTP jackpot system does not determine whether the turnover reported by an EGM, being the turnover since the last valid turnover meter response, has been received over one game or more than one game when determining whether the EGM has won the jackpot nor, more importantly, does it determine how much was wagered on each of the respective games; and (d)the system calculates the difference between the previous turnover meter response and the most recent turnover meter response and the Cougar RTP jackpot system uses the resultant figure in the probability of win calculation in relation to that EGM. THE PRIMARY JUDGE’S DECISION The infringement issue before her Honour centred upon the construction of the words “an elapsed period of time” of claim 1. It is common ground that integers (a) to (d) are found in Cougar. In Neurizon (No 1), Dowsett J defined “an elapsed period” (at [27]) to mean:“… any discrete and finite period of time which has passed, having both a beginning and an end.” His Honour considered this meaning to be “self-evident”, as not being vague, and he saw “no reason to look to the specification in order to ascertain the meaning of [the] term”: at [38]. The primary judge took a like view. She considered the term was not meaningless, or uncertain; it did not require going to the body of the specification to ascertain its meaning; and it would be understood as having a wide meaning as was given to it by Dowsett J. Her Honour commented, additionally, that (at [56]):“It may be added that even if one had recourse to the specification it would not follow that the words ‘an elapsed period’ must have a narrower, more closely defined meaning. The specification shows, Mr Miller [called by the appellants] points out, that the elapsed period is one of a certain duration and it is set by a timer. However, as Mr Johnson [a skilled addressee called by the respondent] explains, there are many ways in which an elapsed period might be determined in a gaming system or method. They would be clear to those skilled in the art from what is taught by the patent. A timer could be used to fix a periodic rate, say of 5 seconds, or the timer could run for a random period of time, between 5 to 10 seconds. The use of a timer is not essential. The occurrence of two events could be used to mark the beginning and the end of a period. Mr Johnson gave as an example the use made by an EGM manufacturer, who has implemented the invention, of losing games. An event could be a $20 wager on a single game, so that the elapsed period would be the period of time between two single games on which $20 was wagered. It cannot therefore be said that the Neurizon method depends on turnover over a predetermined elapsed period of time. Whilst the period must be predetermined in some way, the length of time does not have to be.”

Ratio Decidendi

Legal Principle Established

Established by: HILL, FINN AND GYLES JJ

We may add that the area of invention with which this proceeding is concerned is a particularly narrow one. It is one in which business rivals are striving to invent around the patented inventions of others and within narrow regulatory limits. In such a context it is, in our view, important to recognise that claims made for an invention may need to be formulated narrowly to avoid invalidity. While accepting the primacy of purposive construction in interpreting patents, such a construction may well provide little by way of illumination where, as here, the inventive context is a cramped one. It is not appropriate to take a claim carefully drawn to avoid invalidity and then permit a wider “purposive” construction of it for infringement purposes (Grove Hill Pty Ltd v Great Western Corp Pty Ltd [2002] FCAFC 183; 55 IPR 257 at [311]).(ii) Consideration It cannot reasonably be said, in our view, that the primary judge gave undue weight to the construction placed by Dowsett J on the Neurizon patent in Neurizon (No 1) or that she misapprehended the burden of the principles to be applied. Properly, for the reasons given by her Honour, it was appropriate for her to follow Dowsett J’s conclusions on the construction of the Patent unless she was convinced it was clearly wrong: but note the principles stated in Pearce & Geddes, Statutory Interpretation in Australia, [1.6]-[1.7] (5th ed, 2001). Nonetheless the primary judge considered it was necessary that Dowsett J’s “determination on questions of construction be considered in light of the respondents’ submissions”: at [35]. In the event, the primary judge quite obviously gave independent consideration to the meaning of “an elapsed period” in light of the submissions and evidence before her. Neither can it reasonably be said, in our view, that her Honour misapprehended the principles of construction relevant to the case before her. Her Honour’s summary of those principles betrays no error. The short issue raised by the infringement appeal is whether the construction given to “an elapsed period” in claim 1 was correct. Three witnesses, whom her Honour considered were skilled addressees, gave evidence as to the construction to be considered in relation to both infringement and fair basing. William Patrick Miller (“Miller”), who was called by Jupiters but who was not regarded as an independent witness whose evidence was entirely objective in all aspects, considered that in light of the specification an elapsed period meant a predefined period of time, of known duration and significantly longer than an EGM game cycle, during which multiple turnover events may be collected and used in a probability calculation. He regarded the preferred embodiment and two tables in the specification illustrating turnover being recorded in a 30 second “sliding time window” as indicating clearly what the Patent’s author intended. Arnold Barry Kopff (“Kopff”) was called by Neurizon. Having noted Jupiters’ claims, he stated in his second affidavit (at pars 40-41) that:“40.In my opinion, there is nothing disclosed in the specification in the Patent that requires the ‘elapsed period’ to be longer than the length of time it takes to play one game on an EGM. Further, that interpretation is not required in order to distinguish the patented invention from any prior art referred to in the specification, or any other that forms part of the prior art base. 41.None of the prior art uses turnover on a single EGM over any elapsed period of time in order to weight that EGM’s probability of winning the jackpot. All of the prior art that I have examined (that takes into account the amount wagered) always refers to just the amount wagered on the current game. In no prior art that I have seen is time a factor in the probability equation in the decision whether or not to award a jackpot prize.”