LeisureTech Enterprises Pty Ltd v Arthur Peter Stein

[2003] APO 54

OFFICIAL NOTICE

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Application  :          No. 739808 in the name of LeisureTech Electronics Pty Ltd

Title:          A Distributed Stereo System

Action:          Opposition by Arthur Peter Stein under section 59 of the Patents Act 1990

Decision:          Issued  05 December 2003.

Abstract

Invention relating to a distributed stereo system where remote amplifier and speaker sets are connected to a common audio source and power supply via the twisted pairs of a Category 5 cable (or similar).

Inventive step; evidence found insufficient to support a finding that the claimed invention was obvious in light of common general knowledge whether alone or together with specific instances of prior art information. Grounds in relation to novelty and section 40 also dismissed. Direction that the application proceed to sealing.

PATENTS ACT 1990

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Re:Patent Application No. 739808 by LeisureTech Electronics Pty Ltd and opposition by Arthur Peter Stein under section 59 of the Patents Act 1990.

BACKGROUND

1. The present application was filed as PCT/AU98/00647 on 14 August 1998 by LeisureTech Electronics Pty Ltd (LTE) and claims priority from Australian provisional number PO8621 filed on 15 August 1997. On 18 October 2001 the application was advertised accepted and a notice of opposition was filed by Arthur Peter Stein on 17 December 2001.

1. A Statement of grounds and particulars was served on 18 March 2002, followed by service of evidence in support. The applicant advised that it would not file evidence in answer and the matter came to hearing in Sydney on 21 August 2003. The applicant was represented by its patent attorney, Mr C O'Sullivan of F B Rice & Co, Sydney while the opponent was represented by Mr T Dredge, patent attorney of Intellpro, Brisbane. The opponent and the proprietor of LTE were also present.

SPECIFICATION

1. The specification indicates that the present invention relates to a distributed stereo audio system such as may be used to provide stereo sound to several rooms or areas in a building from a single source of audio signals.

1. As background art, the specification refers to the use of several sets of speakers in various locations and connected to a common audio source usually including an audio device such as a CD player and an amplifier unit. Connecting multiple speaker sets to such a source generally involves the use of an impedance matching device although the system may allow different set of speakers to be switched in and out. While the sound volume is generally controlled by the central amplifier unit, the prior art also is said to include attenuation devices located in the vicinity of the speaker sets to enable adjustment of the sound volume in that particular location.

1. The claims of the application, at acceptance, read as follows:

"1.       A distributed stereo audio system, including: two or more speakers for the broadcast of stereo audio signals, a source of stereo audio signals, a stereo amplifier to amplify stereo audio signals and drive the speakers, and a mains operated electrical power supply to provide power to the amplifier; where the amplifier is located in the same room as the speakers, and remote from the signal source and power supply; and where the amplifier is connected to the signal source and power supply by means of a category 5 four pair twisted cable (or similar) which provides, in respective conductors of the twisted pairs, right channel audio signals, from the signal source to the amplifier, left channel audio from the signal source to the amplifier and DC power from the power supply to the amplifier.

2.        A distributed stereo audio system according to claim 1, where amplifier and speaker sets in several rooms receive signals from a single source of audio signals.

3.        A distributed stereo audio system according to claim 1, where the source provides a selection of components, such as radio or CD, and different audio signals are provided to different rooms.

4.        A distributed stereo audio system according to claims 1, 2 or 3, where
the volume is set differently in each room.

5.        A distributed stereo audio system according to any preceding claims, where the amplifier is based on an integrated circuit amplifier.

6.        A distributed stereo audio system according to claim 5, where the amplifier is constructed to fit into a standard electrical light switch housing.

7.        A distributed stereo audio system according to claims 1, 2 or 3, where the amplifier output level is controlled by the output level of the source components.

8.        A distributed stereo audio system according to claims 1, 2 or 3, where a manual volume control is included with the amplifier.

9.        A distributed stereo audio system according to claims 1, 2 or 3, where a hand-held remote control is provided to transmit infrared signals to a receiver mounted with the amplifier.

10.      A distributed stereo audio system according to claim 9, where the amplifier is mounted with a speaker.

11.      A distributed stereo audio system according to claim 9, where the amplifier is mounted inside a standard electrical light fitting and the fascia plate includes an infrared receiver.

12.      A distributed stereo audio system according to claim 11, where the fascia plate also includes status indicators for the amplifier and the audio signal source components.

13.      A distributed stereo audio system according to claims 9, 11 or 12, where infrared signals received by the amplifier are transmitted to the source components through a fourth twisted pair in the category 5 cable.

14.      A distributed stereo audio system according to claim 13, where the signals are modulated before transmission to an infrared emitter which directly controls the audio components.

15.      A distributed stereo audio system according to claim 13, where the signals are demodulated and provided as data signals to the audio components.

16.      A distributed stereo audio system according to^, claim 1, where the amplifier accepts standard line level signals from the audio source components.

17.      A distributed stereo audio system according to claim 1, where the amplifier accepts speaker signals from another amplifier.

18.      A distributed stereo audio system according to claim 1, where the amplifier includes a switchable muting system.

19.      A distributed stereo audio system according to claim 1, where the amplifier includes an adjustable input level trim device."

1. The advantages of the invention are said to lie in the decentralisation of amplification, permitting an amplifier or amplifiers to be located remotely from the signal source and close to corresponding speakers so that cable loss is reduced and system damping factor increased. Providing power to the amplifier with the audio signals through respective twisted pairs of a Category 5 (Cat-5) four pair twisted cable (or similar) means that the amplifiers do not need to be located near a voltage source and, with integrated circuitry, can be of compact design. This allows, for example, amplifiers to be located in a standard electrical light switch housing. If supplied by line level signals with a high impedance at the amplifier input, there will be a reduction in induced noise and no need for impedance matching devices. The specification does however contemplate supplying the remote amplifiers with low impedance speaker signals. The cable itself is said to be "very simple and easy to install", can carry a variety of signal types and is adaptable to many different configurations and new technologies. As is apparent from the dependant claims above, further enhancements can include IR control arrangements with the 4^th twisted pair of the cable carrying control signals from an IR receiver that is co-located with the amplifier to the signal source components.

STATEMENT OF GROUNDS AND PARTICUARS

1. The Statement of Grounds and Particulars lists two grounds and a multitude of particulars, most of which go to the clarity of the description and claims. In addition it asserts that the specification lacks sufficiency, the claims are not fairly based, and the claimed invention is not a manner of manufacture, is not novel and is obvious.

EVIDENCE

1. The evidence in support consists of statutory declarations (dated 17 September 2002 and 19 December 2002) made by the opponent, Mr Stein, and, as exhibits, copies of a number of documents being principally extracts for trade journals such as Australian Hi-Fi Best Buy’s as well as user manuals and supporting declarations in relation to the SYSTEMLINE and KNEKT products. Mr Stein indicates that he is in the business of the design, manufacture, distribution and sale of distributed stereo systems such as that described in the present application.

1. Mr Dredge at the hearing also sought leave to file further evidence. This comprised a further declaration by Mr Stein (dated 21 August 2003) with exhibits, including original copies of the journals from which extracts had been provided earlier, and declarations by Mr Dredge and his associate Mr Chia. In the event Mr O'Sullivan however indicated that the applicant only objected to my admitting Mr Stein's declaration as it related to APS-18. This is said by Mr Stein to be a brochure bundle made available by him to the public before the priority date of the present application.

1. The present proceedings are governed by Chapter 5 of the regulations and regulations 5.10(4) and (5) require that before allowing a request to adduce further evidence I must be reasonably satisfied that the serving of further evidence is appropriate in all the circumstances. In deciding whether to exercise my discretion in this regard I am mindful of the well known principles set out in A Goninan & Co Ltd v Commissioner of Patents 38 IPR 213 and Ferocem Pty Ltd v Commissioner of Patents 28 IPR 243 as affirmed in National Starch & Chemical Company v Commissioner of Patents [2001] FCA 33. Hence, in determining what is appropriate, I must give weight to a number of competing considerations including the interests of the parties as well as the public interest.

1. In this case the evidence found in APS-18 appears to be documents that were in the possession of Mr Stein and I do not see why they could not have been served as evidence in support. Furthermore, as the applicant has indicated it will seek to file answering evidence, the resolution of this matter will be delayed. Nevertheless if the evidence was of the character that it is likely to contribute to a more correct, just, or expeditious result this may have justified allowing further evidence. This is not the case here. The evidence relates to a brochure with loose inserts that Mr Stein asserts was made available to the public about the end of July 1997. He however admits that he cannot verify the publication date and in general I do not see that this materially advances his case significantly beyond the evidence in APS-4 which in any case I have found not to be determinative of the opposition as indicated below. The delay in raising this evidence at such a late stage is prejudicial to the applicant and not demonstratively in the public interest and consequently I refuse the opponent’s request for leave to serve it as further evidence.

DECISION

Section 40

1. I find that the many of the clarity matters raised by the opponent under the heading of section 40, at least in the statement of particulars, are speculative and can be readily dismissed when the normal rules of construction are applied. One of these rules is that a patent specification must be construed in the light of the common general knowledge in the relevant art at the priority date of the application - see Welch Perrin v Worrel (1961-62) 106 CLR 588 at 610, DecorCorp v Dart Industries 13 IPR 385 and Melbourne v Terry Fluid Controls Pty Ltd (1994) AIPC 91-058. Another is that where there is a choice between two meanings, one should, if possible, reject the meaning that leads to an absurd result (Henriksen v Tallon Ltd [1965] RPC 434) and one should read the specification liberally and be "willing and wishing" to understand the specification (Philpot v Hanbury (1885) 2 RPC 33). Most significantly, if, as Mr Dredge submits, I am to adopt Mr Stein's evidence as being uncontested and truly reflective of the person skilled in the art, it would be rather difficult to say the description and claims are unclear when, as an addressee, he clearly has had little difficulty in ascribing meaning to it.

1. One particular submission made by Mr Dredge was that the invention was misleading because certain prior art was not referred to in the specification. The argument is then that the true nature of the invention, asserted here to be merely the substitution of Cat-5 cable for analogous cable types in a known device, would not otherwise be apparent. In this Mr Dredge appears to be relying on the well known decision in Sami S. Svendsen Inc. v Independent Products Canada Ltd. (1968) 119 CLR 156 and also on May v Higgins [1916] HCA 8; (1916) 21 CLR 119. However it is also the case under Australian law that a specification generally does not need to state the advantages of the invention over the prior art nor, in relation to a combination, to distinguish what is new from what is old (British United Shoe Machinery Co Ltd. v A Fussel & Sons Ltd (1908) 25 RPC 631). It is, I think, rather easy in hindsight to categorise the present invention as the mere improvement to a known device and one should be rather cautious in finding that the description sets out to mislead. In particular I note the words of Kitto J. from Sami S. Svendsen, supra:

"I do not mean that in every case of opposition it is a function of the Commissioner to investigate for himself the question how the actual invention compares with the invention as claimed. What I have said is based upon the circumstance that the evidence of Mr Flomen, one of the actual inventors, contains clear admissions, indeed positive assertions, of facts which leave no room for doubt that the specification both in its description and in its claims disobeys s 40 (1). The nature of the disobedience is such that the specification is likely to mislead, and for that reason the application ought to be refused..."

In Colin Peter Nelson v Hillmark Industries Pty Ltd 19 IPR 628 the Commissioner's delegate found the description misleading on this authority but again based on evidence given by the inventor himself. Here I do not have clear evidence or admissions as to what was known to the inventor or how the invention came into being. Rather, I have assertions by the opponent as to what the inventor must have known and, in the circumstances, I believe this is insufficient to support a finding of lack of compliance with section 40(2)(a).

1. The claims do however present a small difficulty in relation to the dependency of claims 2, 3 and 4 to claim 1. Claim 1 is restricted a distributed stereo system having only a single remote amplifier connected to a signal source and a power supply by the Category 5 or similar cable. Claims 2 to 4 however relate to the case where amplifier and speaker sets are located in several rooms and hence the relationship between the two is not readily apparent at first glance. Nevertheless, I believe the intention is clear and I construe claims 2 to 4 to relate to the system of claim 1 in which there are further amplifier and speaker sets in additional rooms or locations and which are all connected to the signal source and power supply using the specified cable. Any other interpretation would ignore the clear intent of the specification read as a whole. I should add in this regard that I do not believe that the invention in its basic form must have multiple amplifier and speaker sets or remote volume control as submitted by Mr Dredge. The specification does not assert that the invention in its basic form addresses all problems identified in the prior art and otherwise the claimed invention is not required to do so.

Manner of Manufacture

1. Mr Dredge's submission in relation to this ground is that the claimed invention merely involves the substitution of one type of known cable with another known cable for its known characteristics relying on the decision in Commissioner of Patents v Microcell (1959) 10 CLR 232. The High Court held in that case that there was "in truth nothing but a claim for the use of a known material in the manufacture of known articles for the purpose of which its known properties make that material suitable. A claim for nothing more than that cannot be subject-matter for a patent, and the position cannot be affected either by the fact that nobody thought of doing the thing before, or by the fact that, when somebody did think of doing it, it was found to be a good thing to do". This seems to be something quite different to the situation now before me however if the opponent's case is that the claimed invention somehow lacks a threshold requirement of inventiveness on the face of the specification (Bristol-Myers Squibb Co v F H Faulding & Co Ltd [2000] FCA 316) I think it must fail in any event. The question of whether four pair twisted Cat-5 cable or distributed stereo systems such as MRS were common general knowledge is not answered by the description but is a matter of evidence to be considered appropriately in the determination of obviousness under section 18(1)(b)(ii).

Novelty

1. The basic test for anticipation and lack novelty is the "reverse infringement" test - see General Tire & Rubber Co. v Firestone Tyre & Rubber Co. Limited [1972] RPC 457 and Meyers Taylor Pty. Ltd. v Vicarr Industries Ltd. (1977) 137 CLR 228 at 235. In applying this test I must ascertain whether each and every one of the essential features of the claimed invention is provided by the prior disclosure (Rodi and Wienenberger AG v Henry Showell Ltd. [1969] RPC 367, Flour Oxidising Co. Ltd. v Carr & Co. Ltd. (1908) 25 RPC 428).

1. I do not think there is any doubt that every feature of claim 1 should be considered essential. A feature is essential if the applicant for the patent has made it an essential feature by the terms of the claim, properly construed (Catnic Components v Hill and Smith Ltd [1982] RPC 183), and this seems to me to be the case here. Neither party put a contrary view.

1. The opponent has referred to a number of published journal articles in his evidence which largely relate to a distributed audio system called MRS or Multi-Room System which from the Best Buys ’94 publication clearly involved most of the features of the present claimed invention but most notably used a 40-conductor IDC flat ribbon cable as found in many computer applications. This, for ease of use in house hold installations, could be folded lengthwise in three and wrapped in plastic. However, this cable is not a four twisted pair Cat-5 cable nor would a skilled addressee considered it to be, in terms of claim 1, similar to such cable. Significantly Mr Stein does not assert that is has the same characteristics of Cat-5 cable either.

1. For this reason Mr Dredge at the hearing attempted to link publication and use of the MRS system with publication and use of a component called MRSCAT5 which apparently was an adaptor to allow the use of Cat-5 cable with other MRS components designed for connection to 40-conductor flat cable. The difficulty for the opponent is that there is no conclusive evidence for publication, offer for sale or public use of this device in conjunction with MRS before the priority date and, at best, it is apparent only that parts for the adaptor may have been ordered or held by Mr Steins company ME Sound Pty Ltd before the relevant date. If information was published it was likely to be merely as a separate parts list showing a picture of the device with the words “MRSCAT5 Cat-5 Cable Adaptor”. However, even if Mr Stein’s evidence was clear and conclusive on the publication or use of this device in the system, it would still not demonstrate public disclosure of a distributed stereo system where the “amplifier is connected to the signal source and power supply by means of a category 5 four pair twisted cable or similar which provides, in respective conductors of the twisted pairs, right channel audio signals, from the signal source to the amplifier, left channel audio from the signal source to the amplifier and DC power from the power supply to the amplifier.” Rather, the only detailed description of the adaptor (on untitled and undated sheets in APS-4) indicates that the adaptor is used to allow the 40-conductor cable to be replaced by three runs of Cat-5 cable with one cable for each of the left and right channels and one cable for the power and remote functions. This is very different to the arrangement claimed and as such there is no basis to assert that an instance of publication or use of MRS disclosed to a skilled addressee the invention including each and every one of the essential features of the invention claimed.

1. The remaining disclosures referred to including those in relation to the SYSTEMLINE and KNEKT systems also do not disclose all the essential features of the claimed invention and consequently I find that the opponent’s assertions as to lack of novelty have not been made out.

Obviousness

1. When considering the question of obviousness in relation to a combination it is the inventiveness of the combination as a whole that must be looked at rather than that apparent from examining each integer in turn (Minnesota Mining & Manufacturing Co v Beiersdorf (1980) 144 CLR 253). Nevertheless in Winner v Ammar (1993) AIPC 971 it was said that:

"Notwithstanding that the inventive step may lie in the choice and management of integers in a combination patent (Wellcome Foundation at 281), where one starts with a known article or thing and merely substitutes or adds a known device or means to facilitate the better use of the thing, there is a risk of want of inventive step 'unless the combination is substantially a new thing' ".

Similarly Burchett J said in Elconnex v Gerard Industries at 105 ALR 266 that:

"... this is not the case of a new combination, although of old integers, but of an old combination which has been, at most, subjected to slight variations. The question must be whether those variation are other than obvious."

1. The general test to be applied in determining obviousness is whether the invention would have been obvious to a non-inventive worker in the trade equipped with the common general knowledge in the trade as at the priority date (The Wellcome Foundation Limited v. V R Laboratories (Aust) Pty Ltd (1980-1981) 148 CLR 262 at 270). It was also stated in the Wellcome case, supra, at 286 that:

"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."

In considering what might be considered a simple technical improvement I must also remember that "no smallness or simplicity will prevent a patent being good" (Meyers Taylor Pty Ltd v Vicarr Industries Ltd (1977) 137 CLR 228 at 249) and that I should be wary of any ex post facto dissection of the invention (Minnesota Mining and Manufacturing v Beiersdorf 144 CLR 253).

1. As indicated above, in this matter I am being urged by the opponent to look on the claimed invention as merely an old combination with sight variations but I find that the facts do not support that conclusion. What is claimed appears to be a combination with a new interaction of integers and it is the selection of the integers of that combination out of perhaps many possibilities that must be shown to be obvious. To look at the invention in any other way would, in my view, be to fall into the trap of ex post facto analysis so often warned against.

1. For current purposes I am prepared to accept that the MRS system excluding Cat-5 cable connectivity was common general knowledge in the art in Australia, at least as is apparent from the published journal articles, with the 40 conductor ribbon cable of that design carrying DC power to the remote amplifiers. Similarly, the use of Cat-5 cable for audio uses also appears to have been generally known. In coming to this conclusion I do give weight to the uncontested evidence of Mr Stein and find this to be corroborated somewhat by publications in the relevant trade journals including Australian Hi-Fi Best Buys and the CEDIA Newsletter. However this does not mean I put his evidence on the same footing as an independent expert evidence. Mr Stein is the opponent and his evidence is clearly couched in that light. I would say also at this point that I do not believe Mr Tindall's evidence adds anything to the opponent's case being far too devoid of specifics to be relied upon.

1. In applying the problem-solution approach espoused in Wellcome, Mr Dredge encouraged me, in line with other of his submissions, not to adopt the problem recited in the patent specification but to formulate the problem based on what was known to a person skilled in the art at the priority date and particularly in this case Mr Stein. The problem then articulated by Mr Dredge was "how to substitute cat 5 for the ribbon cable". While it is true that the problem may be inferred from the specification in light of surrounding facts as discussed by the delegate in Emory University v Biochem Pharma Inc [1999] APO 50 (5 August 1999), there would appear to be no basis for adopting the highly specific formulation presented by Mr Dredge. In particular, there is no suggestion that the MRS system was the industry standard or was otherwise the only effective distributed stereo system known in the art and it should not be read into the problem. If I was to follow the opponent's line of argument I think, at best, the problem could be formulated as how to implement a distributed stereo system with remote amplification using Cat-5 cable.

1. The evidence indicates that Mr Stein himself addressed this problem, and indeed the more specific one posed Mr Dredge, but arrived at quite a different solution. That is, as I have already discussed above, he chose to implement a system with 40 conductor ribbon cable and then substituted that with three Cat-5 cables not one, as perhaps would be expected given the larger number of conductors required to implement his system. Similarly I think it is likely that the skilled person faced with the notional problem above and with knowledge of the MRS system would be influenced by its complexity, including its requirement for four balanced stereo audio channels, and would be likely not to have arrived at a solution with the two channels and power in a single Cat-5 cable. If they would have considered a simpler implementation of such a distributed stereo system it has not been made clear to me on the evidence why this would have been preferred above other alternatives. Mr O'Sullivan asserted also that the skilled person would not consider using Cat-5 to carry low voltage DC power however this assertion was not supported by evidence and hence I do not give it particular weight.

1. Nevertheless, the other systems including SYSTEMLINE and KNEKT that are said to use Cat-5 or analogous cabling implement it with the various components in a different way to that claimed and, in particular, with the remote amplifiers powered from AC sources at their locality not through the cable. As such, were this information to be considered under section 7(3) by the skilled person in seeking to solve the problem, it is likely to suggest that power should not be carried on the same cable as audio signals and hence to lead them away from the claimed solution rather than to it. In fact nothing in the evidence suggests why a four pair cable solution with remote power supply would be chosen "as a matter of routine" at the priority date. In the absence of more specific evidence from Mr Stein on what may or may not have influenced the choices of a skilled addressee on this point, I am inclined to the view that the implementation of Cat-5 cable in a system with distributed amplifiers and using respective twisted pairs for the audio signals and amplifier power supply was in fact not the obvious and inevitable choice that it is painted to be, even though superficially it may seem so.

1. Consequently I find that it is not clear on the available evidence that the claimed invention is obvious. To the extent that Mr Dredge argues that I must accept Mr Stein’s evidence as uncontested and determinative of the obviousness question I must say that the onus on the opponent cannot merely be satisfied on the conclusions of an expert witness even if unchallenged by other experts in the field. That question ultimately is one to be decided by the tribunal on the relevant principles of patent law in light of the expert evidence before it (Minnesota Mining & Manufacturing Co v Tyco Electronics Pty Ltd(2002) 56 IPR 248). In this regard I believe that Mr Dredge's conclusion that Firebelt Pty Ltd v Brambles Australia Ltd [2002] HCA 21 "affirmed the approach of accepting an opinion of a person skilled in the art as the sole basis for finding lack of inventive step" to be quite misguided. To make out its case the opponent must establish a credible case on the evidence as a whole that proves the ground of opposition to the required standard. The evidence presented fails to support such a case and consequently I dismiss this ground of opposition also.

CONCLUSION

1. The opponent has failed to provide evidence sufficient to support a finding that the claimed invention lacks novelty or is obvious. Grounds in relation to section 40 have also not been proved and accordingly I dismiss Mr Stein's opposition. As I am otherwise unaware of anything on the file that would prohibit the grant of a patent I direct 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, I direct that sealing not occur until the appeal has been decided or discontinued.

COSTS

1. Costs should follow the event. Consequently, I award costs against Arthur Peter Stein.

P M Spann

Delegate of the Commissioner of Patents

05 December 2003

Patent attorneys for the applicant  :   F B Rice & Co, Sydney

Patent attorneys for the opponent   :   Intellpro, Brisbane