Leonardis & Anor v Theta Developments P/L & Ors No. Scgrg-93-344
[2000] SASC 402
•23 November 2000
LEONARDIS & ANOR v THETA DEVELOPMENTS P/L & ORS
[2000] SASC 402
WILLIAMS J.
INDEX
Par No.
Introduction 1
The undisputed background 13
The inventor’s explanation 21
The principal patent claims and their integers 22
The accused spacers described
(a) Introduction 26
(b) Podfix 2 27
(c) Podfix 1 36
(d) Bottom cover spacer
(Aust Reg Design No105053) 37
6................ The engineering evidence
(a) Introduction 43
(b) Concrete flow 47
(c) The meaning of “adjacent” 51
(d) Other engineering evidence 53
The issues 61
Characterisation of Claim 1 - Product or process claim? 62
Identification (in pith and marrow) of the essential
integers of the patent claims in the accused spacers 70
The conduct of the corporate defendants 78
Liability for contributory (or indirect) infringement 86
Liability of personal defendants 102
The dependent claims, their integers and infringement 108
The significance of the Full Court decision in Sartas No. 1 114
Agreed evidence (Exhibit P 14) 123
(a) The Brochure 124
(b) The correspondence of Reinforcement Bar Spacer Co. 127
(c) The correspondence of the personal defendants 133Principles of construction of patents 145
Summary 153
Appendices:
A Extracts from Plaintiff’s patent
B Extract from Registered Design No 105053
C Extract from RBS Co Brochure
Introduction
This is an action for infringement of patent.
In accordance with a Master’s order the action came to trial upon the basis that the trial Judge determine the issue of liability on the claim and counterclaim and reserving any questions of damages. A counterclaim raised questions under the Fair Trading Act 1987 (SA) and the Trade Practices Act 1974 (Cth). The defendants by way of defence assert that the male plaintiff’s patent is invalid and liable to be revoked. This allegation has not been particularised and there is no counter claim for revocation in accordance with s 121 of the Patents Act 1990 (Cth). However the defendants have foreshadowed a late application to amend their pleadings in order to raise such a claim based upon s 138(3)(b) and (f) of the Patents Act 1990. At trial (and at the request of the parties) I ordered that certain limited questions arising upon the statement of claim should be determined before other issues. The defendants will not proceed with their application to amend until I have dealt with these questions (see pt 14 of these reasons). I have not yet been required to consider the difficulties which may be associated with such an application.
By my order I am now required to decide whether the activities of the defendants respectively with respect to three products have infringed the patent of Leonardis undermentioned. These products (sometimes referred to by counsel as the accused spacers) are building formwork spacers called respectively Podfix 1, Podfix 2 and “the Bottom Cover Spacer” (Australian Registered Design No.AU-S-105053). It is alleged that the corporate defendants manufacture and sell these products with instructions for use in some cases. The defendant Mr St Alban is a director of the defendant Reinforcement Bar Spacer Co (“RBS”) and the defendant Mr Beales is a director of Theta Developments; each of them is also a director of the defendant Podfix Pty Ltd. It is alleged that the personal defendants have authorised or made themselves party to the acts of infringement by virtue of their respective control of the activities of one or more of the corporate defendants.
The Patents Act 1990 contains no definition of infringement. In terms of s 13 (and subject to the Act) a patent confers upon the patentee the exclusive rights during the term of the patent to exploit and to authorise another person to exploit the invention within the patent area (relevantly Australia). It may be concluded that infringement occurs when a person does an act which breaches the monopoly of the patentee.
The liability for infringement which would otherwise apply in respect of the use of an invention is extended by s 117 so as to render a supplier of an article liable for patent infringement in respect of anticipated use by customers (sometimes called contributory infringement) when the conditions set out in the section are satisfied. As now relevant the corporate defendants as supplier of a spacer are alleged to have issued to their customers a sales brochure containing “instructions for the use of” the accused spacers. To the extent that the plaintiff’s invention is a method or process, it is argued that liability for infringement arises by virtue of the application of s 117(2)(c). It is also alleged that the defendants have set out to induce customers of the corporate defendants to directly infringe the patent by using the spacers in a way which fairly falls within the area of the statutory monopoly; it is alleged that procurement of infringement by customers may be inferred. (The tortious liability for procuring an infringement is discussed in WEA International Inc v Hanimex Ltd (1987) 77 ALR 456 at 465 et seq and Sartas No. 1 Pty Ltd v Koukourou & Partners Pty Ltd & Anor (1994) 30 IPR 479 at 493).
I note that if a person takes the patent invention “in substance”, this conduct will suffice to constitute the infringement which occurs when the accused product or process embodies all the essential features of the patent claim. In Clark v Adie (1875) LR 10 Ch App 667 at 675 James LJ said:
“The patent is for the entire combination, but there is, or may be, an essence or substance of the invention underlying the mere accident of form; and that invention, like every other invention, may be pirated by a theft in a disguised or mutilated form, and it will be in every case a question of fact whether the alleged piracy is the same in substance and effect, or is a substantially new or different combination.”
The Leonardis patent is of a type conventionally referred to as a “combination patent” in which the combination of known integers act on or with each other so as to produce a new product or process (or method). The question of alleged infringement of such a patent may be approached in light of the comment of Gummow J in Nicaro Holdings Pty Ltd & Ors v Martin Engineering Co & Anor (1990) 16 IPR 545 at 559-560:
“It is important for a patentee to claim only the essential integers in a combination and to distinguish what is essential from what is unessential. This is because to establish infringement of a combination patent the patentee must show that the defendant has taken each and every one of the essential integers of the plaintiff’s claim; if on its true construction the claim is for a particular combination of integers and the alleged infringer omits one of them, the infringer escapes liability: Populin v HB Nominees Pty Ltd (1982) 59 FLR 37 at 41. Further, where what is in question is an inessential integer, a device which contains the essential integers will fall within the claim, whether or not an inessential integer is replaced by an obviously equivalent device or omitted altogether, hence, the expression “mechanical equivalent”. Walker v Alemite Corp (1933) 49 CLR 643 at 650, 657; Sunbeam Corp v Morphy-Richards (Australia) Pty Ltd (1961) 35 ALJR 212 at 217; Blanco White, Patents for Inventions, 4th ed, para 2-208.”
The question in this case is whether the substantial idea of the Leonardis patent has been pirated in a mutilated form, or whether the refinements which may be observed in an accused product are to be regarded as giving rise to a combination of integers which is materially different from that which is protected by a patent claim.
The principles relating to patent construction are well known. As a starting point counsel assembled some important references; I have summarised some of these quotations in pt 16 of these reasons. However, the process of construction is complicated in this case by the fact that the Leonardis patent has already been subject to construction by the Full Court of the Federal Court of Australia which has had regard to the significance of the patent diagrams as an aid to construction. In response to the allegation in the statement of claim that the patent is valid, the defendants by way of defence rely upon this previous Federal Court decision.
Examples of the accused spacers are in evidence together with the letters patent of Leonardis. The plaintiffs rely largely upon admissions in the pleadings and upon the contents of agreed documents but there was some oral evidence from two engineering experts. I have been troubled as to the content of the material upon which the plaintiffs relied which, in some respects, is sketchy. The defendants did not give evidence but their counsel made available, inter alia, an original coloured brochure as being a brochure published by the defendant RBS. No reservation was attached to that tender and I am prepared to draw from it inferences which might not be available by reference to the photostat documents of uncertain provenance which were available to the plaintiffs’ expert; two pages from the brochure purporting to show “Podfix systems” is Appendix C hereto.
During final address the plaintiffs’ counsel pointed out the difficulties which confront a patentee seeking evidence of patent infringement in a case such as this where so much may depend upon what passes between the defendant distributor and its customer. A “trap order” (placed with the authority of the patentee or his licensee) would be inappropriate bearing in mind the significance of the patentee’s authorisation under s 13(1) of the Patents Act 1990. Likewise seeking to obtain evidence from a customer is unlikely to be fruitful in practice - particularly in a competitive environment where the patentee hopes to secure future business. Therefore the reservation which I have expressed as to the paucity of the evidence should not be regarded as any criticism of anyone connected with the conduct of the proceedings. However, the evidentiary difficulties (on the facts of this case) facing a patentee to prove the wrongful exploitation of the invention should be appreciated.
It may be argued that the accused spacers superimpose a degree of inefficiency upon that which is contained in the Leonardis patent. At least in one instance (Podfix 2) the modification or difference is claimed by the defendants to offer some practical advantages. At the end of the day I must decide how in the circumstances the comments of Menzies J might be applied, see Commonwealth Industrial Gases Ltd v MWA Holdings Pty Ltd & Ors [1970] 180 CLR 160 at 167-168:
“...the modification so made did not prevent equipment manufactured and sold thereafter from constituting an infringement of the letters patent. Patent rights are not to be set at nought by such a subterfuge which I am satisfied added nothing to the equipment and was made merely in an attempt to take full advantage of the invention while avoiding infringement of the plaintiff’s letters patent by a modification so small as to be insignificant. I find that the base of the mixer chambers, which the defendants manufactured and sold after the middle of 1966, was so close to the plaintiff’s specification in that the degree of concavity was so slight that such manufacture and sale continued to amount to infringement.
The cases do establish that, if the alleged infringement differs materially from an essential feature of the plaintiff’s claim, there can be no infringement. This principle emerges from the recent case of Rodi & Wienenberger AG v Henry Showell Ltd, and the High Court decision in Shave v HV McKay Massey Harris Pty Ltd.”
The undisputed background
The plaintiff Mr Nicola Leonardis is the proprietor of Australian Letters Patent No.591816 sealed by the Commissioner of Patents on 14 September 1991. It is entitled “Improvements relating to Building Foundation Form Work”. In accordance with s 105 of the Patents Act 1990 the patent was amended by the order of Gummow J (sitting in the Federal Court of Australia) on 24 January 1997 in proceedings known as Sartas No1 Pty Ltd v Koukourou & Partners Pty Ltd and Anor. In that action Sartas No.1 alleged that Koukourou and Leonardis were making unjustified threats with respect to patent infringement. The decision of Gummow J (2 December 1994) at first instance in that case is reported (1994) 30 IPR 479. (Mr Leonardis was a respondent to those proceedings). An appeal by Mr Leonardis to the Full Federal Court (decided by Burchett, Hill and Tamberlin JJ on 13 June 1996) is reported under the title Leonardis v Sartas No.1 Pty Ltd and Anor (1996) 35 IPR 23. In the result the validity of the patent was upheld subject to the excision of eight claims. For present purposes I have referred to the amended claim numbers (1-13) as they appear upon the face of the patent after bringing to account the abovementioned order. Subject to some modification, the content of Claim 7 as recited by Gummow J became Claim 1 and the content of Claim 12 became Claim 6 after amendment. The passages which I have quoted from this earlier decision (see pt 14 below) must be read in this light.
The statement of claim alleges that in 1987 Mr Leonardis granted a licence to Ezyline to use the patent. Ezyline is the trading name adopted by Mr Leonardis and his co-plaintiff whose interest as a party does not require further mention with respect to the immediate issues. In Martin Engineering Co & Anor v Nicaro Holdings Pty Ltd & Ors (1991) AIPC 90-799 at page 37583 Burchett J notes the different position of the patent holder and the exclusive licensee in terms of loss resulting from patent infringement and explains their separate interests in an action for infringement.
The present trial was conducted against the background of the earlier Federal Court litigation involving Sartas No.1. In his reasons Gummow J (at p 488 of the report) notes the existence of the present proceedings. On all trials much is taken by all parties as assumed and only those facts really in dispute strictly proved. In such cases what is assumed is in proof: in Re Robson [1952] SASR 101 at 105 per Napier CJ citing R v Higham 119 ER 1352 at 1355. In the present case this reference is apt to describe the efficient way in which counsel have approached and identified the issues and then confined the evidence to essentials; they have taken me to the recitation of fact by Gummow J as a useful starting point for my own deliberations but based upon the evidence led before me from the two same principal engineering witnesses who also gave evidence before Gummow J in the Federal Court.
The Leonardis invention relates to building foundation form work and provides for a method and a device called a “spacer” to position cardboard box formwork for the purposes of a concrete pour. The unstable soil conditions which are common on Adelaide building sites has led to the development of a concrete footing design in which on a levelled site a grid system of beams with a covering horizontal slab (known as a “waffle raft”) is integrally cast in concrete on and above the ground surface. The form work for this system is laid on the ground and avoids the need for labour intensive trenching. The form work for such a system may be provided by laying cardboard boxes in an appropriate pattern on the ground so that the boxes form and define the sides of channels into which the concrete is poured so as to mould the structural beams of the waffle raft. The upper surface of the boxes also fill the voids as the slab is poured over the underlying beams and cardboard form work. This latter material is sacrificed in the sense that it becomes lost when permanently incorporated into the concrete structure. This system of constructing cardboard box formwork is itself the subject of patent rights obtained by engineers Koukourou and partners (for example: Patent No 584769).
It is necessary that the cardboard boxes when employed as form work be retained in position during the concrete pour. The problem is exemplified at the point where two channels intersect - one channel running (say) north-south and the other running (say) east-west. The typical channels in accordance with building practice are 110 mm in width. (One engineer suggested that this was related to the standard dimensions of manufactured building materials). Four boxes are placed and held in position but the correct distance apart at the proposed corners of this intersection would provide the appropriate mould or form work into which the concrete may be poured. A similar situation will be encountered at the junction of two channels (where a T shape will be formed by the gaps between the boxes). There will be other configurations but the standard intersection of the channels can be used for illustrative purposes.
Owing to the inwards pressure where the concrete is being laid and compacted, it is necessary that the boxes at each of the four corners of the intersection be kept apart and in position.
A celltex brick (a type of concrete brick) placed in each channel near the intersection (or junction) would achieve this purpose. However in such an arrangement at the point where the face of the brick touches the underlying surface of the ground, there will necessarily be a break in the continuity of the concrete. In this vicinity moisture may gain entry to the structure and to the steel reinforcement and create or aggravate a potential point of weakness in structural strength in the concrete footing, particularly as it flexes in bearing its load.
This is the state of the prior art which the Leonardis’ invention advances so as to provide a spacer and a method of working which enables the concrete to extend so as “to form an integral portion of concrete below the main body of any spacer” (see patent specification).
The inventor’s explanation`
The consistory clauses of the patent read as follows:
“The invention accordingly can be said to reside in a building foundation form work arrangement in which a plurality of cardboard boxes are located on a supporting level surface, and are kept apart to leave channels between each side of each of the boxes by spacers within the channels between the boxes, at least one spacer engaging against both sides adjoining a corner of a first box, and at the same time against both sides adjoining a corner of a second box adjacent the first box.
In preference, the spacer engages against both sides adjoining a corner of each of four adjacent boxes with the corners at a common location.
In a further form, the invention can reside in the method of preparing a form work arrangement for the pouring of a foundation for a building which comprises the steps of locating within a boxed area and over a substantially level area of supporting surface, a plurality of boxes each of which are kept apart one from the other to leave channels between the respective sides of the boxes, locating within the respective channel shapes a spacer such that the spacer engages against both sides adjoining a corner of a first box, and at the same time against both sides adjoining a corner of a second box adjacent the first box, effecting support within the channels, on the spacer, of a reinforcement rod, and then pouring concrete into the channels and over the boxes to effect a building foundation.”
The patent claims and their integers
The plaintiffs allege infringement of two independent Claims, Numbers 1 and 6. Although the point is not free from doubt, my conclusion (as discussed below) is that Claim 1 should be characterised a method or process claim and Claim 6 as a product claim. (This is relevant to the operation of s 117 of the Act). Claim 1 concerns an arrangement with respect to the application of a spacer (as described) to cardboard boxes so as to maintain them in position as holding formwork. Claim 6 is with respect to a spacer. However, the spacer described in Claim 6 does not have the same necessary characteristics as that described in Claim 1. The plaintiffs also allege infringement of claims 2 and 3 (which are dependant upon claim 1) and infringement of claims 7, 8 and 9 (which are dependent upon claim 6). The two relevant independent claims as set out in the patent schedule so as to define the invention read as follows:
“1..... A building foundation form work arrangement in which a plurality of boxes are located on a supporting level surface and are kept apart to leave channels between each side of each of the boxes by spacers within the channels between the boxes, at least one spacer engaging against both sides adjoining a corner of a first box and at the same time against both sides adjoining a corner of a second box adjacent the first box, the arrangement being further characterised in that the spacer includes outermost planar surfaces engaging against the sides of respective adjacent boxes and frame members holding such outermost engaging surfaces which frame members have a lowermost edge which is substantially above the supporting level surface.
....
6...... A spacer for a building foundation form work arrangement wherein a plurality of boxes are located in spaced apart relationship to define there between channels, the spacer including outermost engaging surfaces adapted to engage against both sides adjoining a corner of a first box, and at the same time against both sides adjoining a corner of at least a second box adjacent the first box, the spacer being characterised in that each of the outer most engaging surfaces is held by a frame member extending between at least one other of the outermost engaging surfaces each of the frame members having a lowermost surface which is substantially above a lowermost edge of each of the engaging surfaces such that concrete can extend continuously beneath each of the frame members.”
For the purposes of this action the plaintiffs’ solicitors (by letter dated 25 November 1998 to an expert Mr Combe) in a convenient form have identified the essential integers of the various claims numbered 1-9. That analysis has not been challenged and represents common ground between the parties as the basis of argument. The integers have been numbered consecutively in that letter and I have adopted the same system.
Counsel on each side was content to argue the case by reference to Claims 1 and 6. The essential integers of these two claims are as follows:
Claim No 1
Integer(i) - a building foundation form work arrangement in which a plurality of boxes are located on a supporting level surface
Integer (ii) - and are kept apart to leave channels between each side of each of the boxes by spacers within the channels between the boxes
Integer (iii) - at least one spacer engaging against both sides adjoining a corner of a first box
Integer (iv) - and at the same time against both sides adjoining a corner of a second box adjacent the first box
Integer (v) - the arrangement being further characterised in that the spacer includes outermost planar surfaces engaging against the sides of respective adjacent boxes
Integer (vi) - and frame members holding such outermost engaging surfaces
Integer (vii) - which frame members have a lowermost edge which is substantially above the supporting level surface.
....
Claim No 6
Integer (xv) - a spacer for a building foundation form work arrangement wherein a plurality of boxes are located in spaced apart relationship to define there between channels
Integer (xvi) - the spacer including outermost engaging surfaces adapted to engage against both sides adjoining a corner of a first box
Integer (xvii) - and at the same time against both sides adjoining a corner of at least a second box adjacent the first box
Integer (xviii) - the spacer being characterised in that each of the outer most engaging surfaces is held by a frame member extending between at least one other of the outermost engaging surfaces
Integer (xix) - each of the frame members having a lowermost surface which is substantially above a lowermost edge of each of the engaging surfaces
Integer (xx) - such that concrete can extend continuously beneath each of the frame members.
(The dependant claims and their integers are set out in pt 13 of these reasons).
Preferred embodiments of the invention are explained in the patent by reference to a series of drawings appended to the patent. Exhibit P2 (coloured black) is a spacer (called Podlock) produced by the plaintiffs to embody the invention. Appendix A (figures 1 and 3) hereto contains two of these drawings. Figure 1 is a plan view showing a typical building foundation form work arrangement incorporating this invention. It shows at item 22, a typical intersection of channels as above described and other conformations at items 37 and 47. Figure 3 shows an embodiment of the Leonardis invention but with a “bar chair” mounted on it with upwardly open slots for accommodating standard steel reinforcing rods laid along the centre line of the channels in both directions (north-south and east-west). These elements are described in the patent claims 2 and 3 (see below) but the bar chair is not itself crucial to the present argument.
The accused spacers described
a. Introduction
For the purpose of isolating the relevant features of the accused spacers, it is convenient to describe them with reference to the Leonardis’ patent and the embodiment of the invention appearing in the patent drawings. As those drawings are reflected in Podlock (Exhibit P2) it is useful also to have regard to Podlock although strictly speaking the relevant comparison is between the terms of the patent and the accused spacers. The various engineering components of Exhibit P2 (and the drawings in Appendix A hereto) have been identified by Gummow J in the earlier proceedings. His Honour has identified and described the “frame members” referred to in the patent (see 30 1PR at 489-492). I have already observed that the present proceedings have been conducted against the background of the earlier proceedings so as to narrow the dispute. However, there remains an issue as to how the centre fin or tab structure of Podfix 2 (Exhibit P3) - including the turret (or tower) of which the fin or tabs form a part - affects the characterisation of the diagonal beams (whether as two or four). In other respects counsel are on common ground in identifying in the exhibits and drawings the various structural components by reference to the language used in the patent.
(b) Podfix 2.
Podfix 2 (Exhibit P3) has been in use since early 1993 and is still in use. There are two versions of Podfix 2. One has a circular centre and the other has a cruciform centre with a consequential difference in the way in which the protruding tabs or fins are developed. It is not suggested that this difference has any relevance to the issues in the case. The arguments can be applied to either arrangement.
The embodiment of the Leonardis’ invention as set out in the patent diagrams contains a concept without physical measurements. However, the general dimensions of the Leonardis’ Podlock spacer (Exhibit P2) on the one hand and Podfix 1 and Podfix 2 on the other hand are very similar. No doubt this is largely dictated by the common function in a standard building application which the products perform. For example, in the ordinary course, a spacer (to replace the Celtex brick) must fit into and maintain a formwork channel 110mm in width).
By way of introduction it is convenient to observe the general configuration of Podfix 2 alongside the plaintiffs’ spacer as appears from Figure 3 of Appendix A. To the eye of a lay person each spacer appears to be constructed around a square frame having a pair of jaws set into the frame at each of the four corners of the square. (Neither the patent nor the engineering witnesses use these terms. The jaws are the “outmost planar surfaces” or “outermost engaging surfaces” described in the claims. The engineers describe as the “orthogonal members” the components of the frame which I identify as forming a square). According to the patent the “engaging surfaces” (of the jaws) are “of substantial cross sectional area each being preferably 55mm wide and 55mm high”. This description is generally consistent with Exhibit P2 and Exhibit P3. The jaws are held in position by two groups of small beams or frame members. The orthogonal members which I have already mentioned are to be distinguished from the diagonal members which traverse the structure at 45 degrees to the orthogonals. Whether the diagonals in Exhibit P3 should be regarded as creating two beams or four beams is at issue.
In the plaintiffs’ product Podlock (Exhibit P2) the lower faces of the orthogonal beams and the diagonal beams (“frame elements”) are in fact elevated more than 20mm above the underlying surface when the spacer sits on that level surface or “deck”. (The largest stone aggregate commonly used in domestic footings is 20mm). However, the claim in the plaintiffs’ patent makes no mention of the height of the beam (or frame member) above the deck as being critical in terms of any particular measurement. The patent speaks of the beams being raised “significantly” or “substantially” and explains this by reference to concrete flow so as to allow concrete to set below. With a knowledge of building practice (in terms of composition of concrete) it is not difficult to identify the advantage to be gained by elevating the beam sufficiently high to allow the largest particles of standard coarse aggregate to pass beneath a beam. The patent itself does not mention aggregate sizes. I make the observation that the clearance below the beams of Podlock (Exhibit P2) is approximately 35mm. To the extent that the beams in Podfix 2 (Exhibit P3) are elevated, the clearance is only 14mm or thereabouts.
The upper surface of the beams or frame elements in Podfix 2 are considerably below the level of the highest point of the jaws. In the patent diagram (Fig 3) and in Podlock, a characteristic can be observed which is described in the body of the patent specification as follows:
“The respective frame members [marked 30 on the diagram] have an upper surface which lies flush with the upper surface [marked 32 on the diagram] of the surface typically at [24 on the diagram]”.
This characteristic (which I will refer to as “complete elevation of the upper surfaces of the beams”) is absent from Podfix 2.
The differences and similarities to be observed between Podfix 2 on the one hand and the spacer to be seen in Exhibit P2 and the diagrams included in Patent 591816 on the other hand may be summarised as follows:
1...... In the Leonardis spacer (Podlock Exhibit P2) and the patent diagrams the orthogonal beams as well as the diagonal beams are elevated; in Podfix 2 only the diagonal beams are elevated and then only by 14mm above the deck. A skirt has been introduced on the orthogonals of Podfix 2 so as to block entirely the flow of concrete beneath the skirts and all orthogonal beams.
2.At the centre or intersection of the line of the diagonals on Podfix 2 there are a series of base fins (or tabs). There is a suggestion in the evidence that the fins extend to the level of the underlying ground surface but on Exhibit P3 there is in fact a small clearance. This may be due to a distortion caused by slight twisting of the plastic frame. It will suit the defendants’ argument to regard the fins as extending to the ground (or at least as being “not raised substantially”). However, in a report dated 19 October 1998 the plaintiffs’ engineer Mr Combe noted that in the example available to him Podfix 2 had fins “elevated by 4mm and did not appear to provide any inherent ground support”. The defendants contend that support is provided by this appendage or structure so that issue is joined. (Compare Mr John’s report Exhibit 14 p 233 par 3 and Mr Combe’s report at Exhibit 14 p 29 par 2.2).
(I was supplied by counsel with an extra copy of Podfix 2 for my own use at trial; the elevation of the fins is quite evident in that example; the clearance beneath the fins would be in the order of about 4 mm.)
3...... As part of the standard frame, Podlock (as shown in Exhibit 2 and illustrated in the patent diagrams) includes beams which extend fully across its diagonals so as to create the diagonal beams which link the pairs of jaws which are diagonally opposite each other within the square. In Podfix 2 the diagonal beams are joined to a central cruciform or circle in one or other of its versions.
The patent specification refers to the diagonal beams in the following terms:
........ “The diagonal frame members 31 provide of course cross bracing, and also because of their general thickness will provide substantial support for such reinforcing rods, once again however being raised so as to be significantly above any ground supporting level so as to allow firstly for concrete to pass fully beneath such frame members, and also to ensure an effectively continuous thickness which will effectively resist localised fracturing under stress conditions and therefore resist capillary water egress to the metallic reinforcing rods.”
4...... When Podfix 2 spacer is placed on the ground to stabilise waffle raft formwork, the diagonal beams although raised above the underlying ground surface (so as to create a clearance) are not raised as high as in the case of Exhibit P2. This height is not specified “quantitatively” in the patent. In the earlier proceedings the inclusion of reinforcing rods in the patent diagram was relied upon as providing some general indication of the intended clearance. The concrete matrix is able to pass below these diagonal beams of Podfix 2 (except where interrupted by the fins or tabs) but the passage of the largest of the coarse aggregate will be impeded or blocked.
5...... In Exhibit P2 and the patent diagram the “complete elevation of the upper surfaces of the beams” is noted whereas in Podfix 2 this is absent. I make this observation in response to the argument of the defendants. The characteristic in my opinion is irrelevant to the case and needs no further mention.
(In making this comparison I rely upon the evidence relating to Podfix 2 (Exhibit P3) in its standard form for use at channel intersections. However, my observations will apply mutatis mutandis in other configurations).
After considering the evidence and arguments of counsel, I conclude that Podfix 2 will perform the same task as Podlock although Podfix 2 will be less efficient. It is argued for the defendants that the skirts and fins of Podfix 2 provide supplementary ground support for the beams which is not to be found in Podlock. However, whether Podlock has any unidentified structural weakness might depend upon how it is manufactured. I remind myself that I am required to compare Podfix 2 with the patent although an examination of Podlock (Exhibit P2) is helpful. It is not to be assumed that Podlock will always be manufactured with beams of the size or mass in Exhibit P2 or indeed with any particular specific dimension.
Podfix 2 is designed so that one standard product can be cut up “on the job” to meet the design variations needed to fit the junctions of channels and channel ends as well as the standard intersection of channels. On the other hand Podlock provides separate articles for each of these applications. In this respect Podfix 2 claims an advantage (which the plaintiffs would treat as irrelevant to the issues in the case).
The points of particular importance are that Podfix 2 has skirts on the orthogonals and it has central fins or tabs extending to about 4 mm above the ground. These items will impede locally the free flow and continuity of concrete. The raised diagonal beams on Podfix 2 (with clearance below them of 14mm) will allow concrete matrix to extend continuously beneath the beams where raised although the presence of the beam (by reason of its limited height) will provide an obstruction to the passage of the larger pieces of coarse aggregate.
(c) Podfix 1
Podfix 1 (Exhibit P4) does not have skirts on its orthogonal members. In all other respects as now relevant it is the same as Podfix 2. The height (or ground clearance) of the lower surface of the raised frame members (orthogonal and diagonal) is common. Upon my examination I conclude that this clearance is approximately the same in Podfix 1 as it is in Podfix 2. Exhibit P4 has an x-shaped arrangement of tabs or fins at the bottom of its central turret so as to reproduce in this respect one version of Podfix 2 as abovementioned. In Exhibit P4 the elevation of the fin by about 4 mm is apparent. In this respect it is different from the side view of the spacer shown in Appendix C hereto; in that latter case the drawing shows the bottom of the fin as extending down to line up with the bottom of the spacer. However, a clearance of only 4 mm may not show up on such a drawing. In making these observations I appreciate that Appendix C may not in fact be a representation of Podfix 1 or Podfix 2 (see pt 15a) below).
(d)... Bottom cover spacer (Aust Registered Design No. 105053)
This design in terms of diagrammatic representation is contained in Appendix B hereto. The representations respectively entitled top perspective view, the bottom perspective view, the side view and the bottom view are of particular interest. The design is incorporated into Exhibit P5.
In a sales brochure issued by the second defendant (RBS) there is an illustration of this item shown in the bottom perspective view.
The accompanying marketing documentation indicates that the spacer is intended for use in the Waffle Raft Footing System as patented by Koukourou and Partners Pty Ltd (Australian Patent No.584769). (The defendants argue against this construction of the marketing brochure).
In this application of the bottom cover spacer, the orthogonal and diagonal frame members are elevated. When so used the spacer is capable of holding the form work boxes apart and the clearance created under the frame by the elevation of the frame members (namely a clearance of 14mm or thereabouts) will allow concrete to pass without obstruction; “continuity” in the concrete will then be achieved. The combined surface area of the “jaws” of the bottom cover spacer is only about two thirds the area proposed in the Leonardis patent so as to “grip” the cardboard boxes. There is an argument as to the effect of this difference.
When the spacer is positioned as shown in the top perspective view (as abovementioned) then the relevant surface of all frame members (orthogonal and diagonal) will be flush with the underlying supporting ground surface. If one studies Appendix B (and Exhibit P5) each of the members there shown (whether orthogonal or diagonal) will impede concrete flow when the spacer is set up as in the top perspective view. For the purpose of this examination the “bottom perspective view” should be treated as functionally relevant bearing in mind the application of the spacer in the manner shown in the advertising or sales brochure.
The plaintiffs complain that as shown on the sales brochure the bottom cover spacer infringes the Leonardis patent.
The engineering evidence
(a) Introduction
Although the construction of the patent is a matter for me there are two contentious matters in particular where I have looked to the views of the engineers in order to test my own tentative conclusions. Views expressed by the defendants’ engineer (Mr John) reinforce the approach which I would otherwise have reached upon two issues.
There has been debate between counsel as to the extent of the ground clearance or beam elevation envisaged in the Leonardis invention which is expressed in qualitative rather than quantitative terms - “lowermost edge which is substantially above the supporting level surface” (see Claim 1 (integer (vii)) or “lowermost surface which is substantially above a lowermost edge of each of the engaging surfaces” (Claim 6 integer (xix)).
There was also debate as to which of the four sets of “jaws” at the corners of the (square) frame are “adjacent”. The patent (both in the body and in its claims) refer to the respective “adjacent” boxes and the planar surfaces (ie jaws) which engage against the sides of “respective adjacent boxes” (see for example Claim 1 integers (iv) and (v) and Claim 6 integer (xvii)).
Upon each of these topics I will treat the undermentioned as statements which I am prepared to adopt as the basis for conclusions on each issue as mentioned below.
(b) Concrete flow
In his report dated 1 October 1998 Mr Trevor John, a Consulting Engineer engaged on behalf of the defendants described some background facts which as applied to the plaintiff’s invention do not constitute any advancement over the common knowledge as at December 1985. Mr John says (pp 19-20):
“7.9 SPACERS INTERRUPTING CONCRETE FLOW
Spacers in reinforced concrete construction, and which are intended to remain permanently in place have typically fallen into 2 types-those which interrupt the flow of concrete between the reinforcement and the adjacent concrete face, and those which effectively allow the concrete to be continuous save for a small interruption where the actual spacer material exists.
It is preferable to allow the concrete to flow around the reinforcement with the minimum of interruption to minimise any potential crack propagation and reduce the risk of ingress of air and/or water. The thickness of concrete between any spacer element and the concrete surface is not critical provided it is sufficient to allow the sand/cement matrix to flow continuously. There is no requirement for the maximum size coarse aggregate in the concrete to flow under the “frame members” of the spacer, provided that the material under the “frame members” is of a similar strength to the general concrete.
If the sand/cement matrix, together with the smaller particles of coarse aggregate, is prevented from flowing under the spacer then there is a greater risk of moisture penetrating the concrete section along the spacer/concrete interface. This has not been found to be a significant problem where concrete spacers have been used as bonding between the concrete spacer and the cast in-situ concrete will occur. When other materials are used which will not bond to the poured concrete then it is preferable that the exposure of the spacer to the concrete face is minimised. In the particular case of isolated bar chairs which do not extend across the width of a section to any significant extent then the risk of concrete shrinkage cracking and tensile cracking is reduced to a negligible level.”
In construing claims in the patent I will do so in light of Mr John’s observations. Claim 1 refers to frame members having a lowermost edge which is substantially above the supporting level surface. Claim 6 contemplates a situation in which the relevant clearance (although differently identified in terms of the description of the reference points) is such that concrete can extend continuously beneath each of the frame members. I draw attention to the difference in language used in claim 1 (lowermost edge) and claim 6 (lowermost surface) and the consequential differences.
In my opinion, in this context whether the lowermost edge of a frame member is substantially above the supporting level surface depends upon the relevant consideration - namely whether the sand/cement matrix is able to flow continuously and whether the material which gathers and sets under the frame member is of a similar strength to the general concrete irrespective of whether maximum size coarse aggregate can pass under such frame member. Assuming that the maximum size of coarse aggregate is 20mm it is accordingly unnecessary for the gap between the lower edge of the frame member and the underlying “supporting level surface to be as great as 20mm”; however, the gap must be sufficient so that (as mentioned in the patent specification) “much concrete is allowed to flow and set below such frame members thereby maintaining as much as possible the structural integrity of the concrete”. In this respect I consider that the language of Claims 1 and 6 are addressing the same concept but in a different way.
Mr John points out (report 1 October 1998) that the grade of concrete aggregate size, slump, cement type admixtures and any other specific requirements will be in practice, a matter for the supervising engineer for the job. On all the evidence, I consider that the clearance which I observe in the accused spacers (including the bottom cover space when used as shown in the sales brochure) is sufficient to allow concrete to flow continuously as now relevant in the immediate vicinity of the spacer except as blocked by the skirt and fins in Podfix 2 spacer and by the fins in Podfix 1. In the case of the bottom cover spacer, when used in accordance with the top perspective view in Appendix B, concrete matrix would not be able to flow continuously and set in the context to which I now refer.
(c) The meaning of “adjacent”
The question in effect is whether as a matter of construction a corner of a square may be regarded as “adjacent” to the corner diagonally opposite the first corner. Although the term must take its meaning from its context, Mr John’s observations are of interest although he subsequently altered his opinion. In his report (P23) dated 2 march 1994 (prepared for the purposes of this action on behalf of the defendants) Mr John said:
“Framing between adjacent boxes
In the following diagram I have given consideration as to which boxes are adjacent to box 5, ie. Whether only the boxes side by side (2, 4, 6, 8) are adjacent or whether the diagonal boxes (1, 3, 7, 9) are also adjacent.
1 2 3 4 5 6 7 8 9
There is no technical definition of the term “adjacent” which could be applied in this case, and I have considered the Macquarie Dictionary definitions which are as follows:-
Adjacent - “lying near, close, or contiguous; adjoining; neighbouring”
Adjoining - “bordering; contiguous”
Contiguous - “touching, in contact” or “in close proximity without actually touching, near”.
Neighbouring -.. “living or situated near”
“The Claims defining the Invention” Clause 2 states “....of four adjacent boxes....”.
The “Complete Specification”, page 8, line 26, states “....four corners of respective adjacent boxes by frame elements 30 and 31”.
It is my opinion from the above that all eight boxes (1, 2, 3, 4, 6, 7, 8, 9) are adjacent to box 5, and similarly the four boxes which are in contact with a particular spacer have been considered in the Patent, and correctly so, as adjacent boxes (adjacent to the spacer and adjacent to one another).”
In the context of the Leonardis pattern I consider that the “jaws” which are diagonally opposite to each other are “adjacent”. I refer in particular to the use of this word in Claim 1 and Claim 6 where the patent describes “second box adjacent the first box” (Claims 1 and 6) and “planar surfaces engaging against the sides of respective adjacent boxes” (Claim 1).
(d) Other engineering evidence
`In some respects the engineering witnesses in the course of this evidence have effectively stated in engineering terms the arguments advanced for the party which called the witness. I have had regard to this evidence although it does not provide decisive assistance on the questions of construction except as mentioned in the preceding paragraphs of this part.
I conclude that for present purposes the central tabs on Podfix 1 and Podfix 2 should be treated as part of the central turret (see Mr John at T 248) and as possibly providing some support for it. In those cases where the fins are elevated (by some 4 mm above the plane of the lowest surface of the spacer as previously observed) I question whether support is provided unless the structure flexes and distorts with weight upon it. However, it is not realistic to suggest that foundation workers would be inclined to walk in the formed channels (see John T.244) although workers could walk in the external channels (which might be 200-300 mm in width). To the extent that it may be relevant, I am not impressed by argument which suggest that the central tabs below Podfix have anything to do with strength. So far as I can judge, the real utility of the tabs is to fuel an argument as to a claimed point of distinction between Podfix and the Leonardis invention. The evidence does not provide a reason for the elevation of the tabs by 4 mm. However, I note that it might be argued that the tab is neither “on the deck” nor is it “substantially above the supporting level surface” (see patent Claim 1); it may therefore be seen as having a forensic purpose. No argument has been addressed thereto.
In my view the tabs or fins are insubstantial in terms of their effect on the continuity of the concrete. The fins effectively “allow the concrete to be continuous save for a small interruption where the actual spacer material exists” (see John’s report of 10 October 1998 par 7.9 quoted above).
So far as the skirt on the orthogonal members of Podfix 2 is concerned I do not consider upon the evidence that the skirt has any substantial effect upon the continuity of the concrete. This is confirmed by Mr John to whom it would be immaterial whether Podfix 2 or Podlock were used - see Mr John’s cross-examination at T 235-236:
“Q.... You know these frame members on the Podfix to continue all the way to go the ground so far as the orthogonal frame member is concerned.
A.Yes.
Q...... That fact, is this right, is immaterial to you in approving a formwork for a concrete pour on a waffle pod construction.
A.Yes.”
and at T 238:
“Q.... Is the reason you are able to take that view about those tabs under the turret, the reason that, although they are there, sand/cement matrix is able to flow around the tabs and thereby provide some protection for the reinforcement.
A.Yes. The sand/cement cannot flow around with the same ease as if the tabs weren’t there, but the sand/cement can flow around the tabs.
Q...... To a sufficient degree for you to regard the spacer as acceptable.
A.Yes, I’ve said that it’s acceptable.”
As regards the identification of the features of the accused spacers in relation to the patent integers, Mr Combe did not regard the central structure essentially as being part of the “beams” and I consider his characterisation to be appropriate.
There was evidence as to how the diagonal beams as shown on the patent diagrams and as included in the accused spacers should be classified. I am satisfied that the diagonal beams shown on the patent diagrams (or identified in the specification or claims) are reproduced in substance on the accused spacers. It does not matter whether one counts two beams or four beams; the number of beams is the same in pith and substance in each case. In my view, the evidence is merely an exercise in semantics in terms of any difference between the parties. I do not consider that the inclusion of the central tower structure on Podfix 1 and Podfix 2 (but omitted from the bottom cover spacer) affects the position. I do not consider that the central cruciform which is developed on the diagonal from members of the bottom cover spacer affects my characterisation of the frame members as incorporating frame members having the features of the spacer identified in Claims 1 and 6 respectively.
Evidence was given by the experts as to the suitability of the bottom cover spacer for use in foundations and in elevated applications. In my opinion the brochure speaks for itself as to how the bottom cover spacer might be (and was intended to be) used - namely in a way which infringes the monopoly rights of the patentee plaintiff.
I conclude that the skirt in Podfix 2 and the central tower and fins in that product and in Podfix 1 are modifications which are so small as to be insignificant in terms of avoiding infringement of the monopoly rights attaching to the Leonardis patent. I consider that as now relevant, the accused products do allow concrete to flow continuously. The elevation of the raised beams in each of the three accused spacers is sufficient so as to meet the test of being substantially above the supporting level surface (Claim 1) - integer (vi) and also so as to contain the integers (xix) and (xx) of Claim 6.
The issues
Although I have already anticipated and commented upon some issues, it is now convenient to summarise the principal issues:
1...... What is meant by “substantially above” in terms of the elevation of beams (or “frame members”) contemplated by the patent claims?
2. What is meant by “adjacent” in the patent claims?
3...... Does Claim 1 of the patent require that each and every beam or frame member be elevated?
4.How are the details of the accused spacers to be characterised in the context of the patent integers already identified and in light of the answers to the abovementioned questions. In particular how does the central structure (whether circular or cruciform) of the accused spacers affect the treatment of these products as relevant to the alleged infringement?
5...... In the event of infringement being established against Claim 1, how is that claim to be characterised for the purposes of s 117 of the Patents Act 1990 (ie is it to be treated as a process claim (as the defendants would contend) or as a product claim?
6.Do the activities of the corporate defendants exploit the patent monopoly?
7...... Are the directors of the corporate defendants liable for authorising the infringements?
Characterisation of Claim 1 - Product or Process claim?
In Sartas No1 v Koukourou (1994) 30 IPR 479 at 495, Gummow J noted that the Patents Act 1990 draws a distinction between those cases where the claimed invention is a product and those where it is a method or process (see definition of “exploit” in Schedule 1 to the Act). For the purposes of applying s 117 of the Act, His Honour treated claims for certain arrangements (which upon the amendment of the patent have now become incorporated into Claim 1) as being claims for a method or process.
In my view Claim 1 is a method or process claim but using for that purpose, a product as therein described-namely a spacer which includes frame members which “have a lowermost edge which is substantially above the supporting level surface.” (I note that a method claim may be limited by reference to an apparatus or product - Rescare Ltd v Anaesthetic Supplies Pty Ltd (1992) 111 ALR 205 at 241).
Counsel for the plaintiff contended that Claim 1 is a product claim. He contended that the subject matter of Claim 1 was a physical phenomenon the creation of which could be observed laid out on the ground. The genesis of his argument can be seen in the NRDC case (see below in 102 CLR at 276-277) although counsel did not so express it.
The Patents Act 1990 retains in s 18 the long-standing notion that (subject to certain other requirements) a patentable invention is an invention, that (so far as claimed in any claim) is a “manner of manufacture within the meaning of s 6 of the Statute of Monopolies”. Since Crane v Price & Ors (1842) 134 ER 239 it has been accepted that manufacture within the Statute of Monopolies encompasses both an invention for a process and for a product. However, the scope of the Statute continued to be troublesome until the review by the High Court of Australia in National Research Development Corporation v Commissioner of Patents [1959] 102 CLR 252 especially at 270-277. The Court considered it to be unsatisfactory to attempt to define the ambit of s 6 of the Statute of Monopolies by the fetters of an exact verbal formula (see at 271). In this context product will “extend to every end produced” (see 276) and at 277 the Court (when dealing with an invention regarding weed killer) said:
“...the view which we think is correct in the present case is that the method the subject of the relevant claims has as its end result an artificial effect falling squarely within the true concept of what must be produced by a process if it is to be held patentable. This view is, we think, required by a sound understanding of the lines along which patent law has developed and necessarily must develop in a modern society. The effect produced by the appellant’s method exhibits the two essential qualities upon which “product” and “vendible” seem designed to insist. It is a “product” because it consists in an artificially created state of affairs, discernible by observing over a period the growth of weeds and crops respectively on sown land on which the method has been put into practice. And the significance of the product is economic...;”
It is not “every end produced” which is capable of being treated as a product as relevant to the exploitation of an invention. To do this would be to blur the distinction between an invention constituting a “product” and one which constitutes a “process” in the definition of “exploit” in the schedule 1 Dictionary.
In my view when the 1990 Patents Act was drafted, the test for a patentable invention as provided by the Statute of Monopolies was retained. The exclusive right of the patentee to make, use, exercise or vend the invention under the repealed legislation was reflected in the new Act of 1990 by reference to an exclusive right to “exploit” the invention in terms of s 13 of the Patents Act 1990; with this must be read the definition of “exploit” contained in Schedule 1 to the Act.
This definition distinguishes between a “product” as an invention and a “method or process” as an invention and identifies in each case that conduct which will constitute “exploitation”. It is this conduct by a person other than a patent holder (or licensee) which constitutes a breach of the exclusive right to exploit contained in s 13 and hence an infringement of patent right. It is tempting in light of the history of the Patents Act to conclude that the 1990 Act is simply adopting but restating concepts which have been worked out over a long period of time as being the two classes of invention to which s 6 of the Statute of Monopolies by judicial interpretation has been applied. As already noted, the ambit of s 6 (encompassing both product and process or method) defies the fetters of an exact verbal formula. Consequences attaching to the categorisation of an invention (whether falling within one or other of the two classes of invention mentioned in the definition of “exploit”) requires that the division be recognisable between claims for a patent and claims for a process or method. I conclude that whether an invention is patentable within s 18 of the Patents Act 1990 and the Statute of Monopolies involves a different approach from that which applies when labelling for the purposes of the Patents Act 1990 a claim contained in a patentable invention. The imprecision attached to the identification in terms of exact verbal formula of a patentable invention (by reference to claim) is to be distinguished from the precision associated with the labelling of a claim under such a patent as being for a product on the one hand or for a method or process on the other hand.
The language of Claim 1 is complicated by the fact that it describes an “arrangement” and then describes the significant article which makes the arrangement work. The essence of the claim is that boxes are “located” and are “kept apart” by spacers. The notion of “keeping apart” in this context suggests to me that a process and not a product is here being described.
Identification (in pith and marrow) of the essential integers of the patent claims in the accused spacers
In order to establish patent infringement of a combination patent (as in the present case) the patent holder must show that the defendant has taken each and every of the essential integers attaching to the claim upon which the plaintiff relies and has exploited them together. If upon true construction of the claim the alleged infringer omits one of these features then the alleged infringer escapes liability (see Populin v HB Nominees Pty Ltd (1982) 59 FLR 37 at 41).
An essential integer of Claim 6 is that each of the frame members has a lowermost surface which is substantially above a lowermost edge of each of the engaging surfaces (see integer xix abovementioned). There is no dispute that the orthogonal members in Podfix 2 are “frame members” and do not have the clearance necessary so that concrete can extend continuously beneath each of the frame members. Accordingly Podfix 2 lacks an essential integer of Claim 6.
However, it is my view that Podfix 1 and also the bottom cover spacer (when used in the configuration shown in the sales brochure) contain all integers of Claim 6. The clearance below each of the frame members (both orthogonal and diagonal) is sufficient to allow the concrete to extend continuously beneath each of the frame members (integer xx) even though the largest 20mm pieces of aggregate will not be able to pass (assuming that this size aggregate is used).
The outer most engaging surfaces (ie the faces of the jaws) in the case of the Bottom Cover Spacer are considerably smaller in area than the preferred specification mentioned in the patent (5.5 cms wide and 5.5 cms high). The jaws on the bottom cover spacer (Exhibit P5.) are about 30mm in height compared with a height of about 50mm in the case of Podfix 1. (The length of the jaws of Podfix are about the same as in the Bottom Cover Spacer ie approximately 68 mm). I do not consider that this matters. In my opinion the jaws of the bottom cover spacer would appear to have “engaging surfaces adopted to engage against both sides adjoining a corner” (of a box) and have characteristics corresponding to all integers of Claim 6 when the bottom cover spacer is used in the manner shown in the marketing brochure (Exhibit D10).
The use of Podfix 2 (as a building method or process for the purpose of exploitation in accordance with the diagram in Appendix C) in my opinion contains all the integers of the invention described in Claim 1. Unlike Claim 6, the spacer described in Claim 1 has “frame members holding such outermost engaging surfaces which frame members have a lowermost edge which is substantially above the supporting level surface”. It is sufficient for the purposes of Claim 1 that some frame members are elevated, whereas in Claim 6 each of the frame members is required to be elevated. I note that in its body the patent refers to the spacer as having “frame members” as described in Claim 1 without any requirement for each or all the frame members to have this characteristic. The patent drawings show all the frame members (including the orthogonals) as substantially elevated. Being the “preferred embodiment” it is not surprising that this is so because any obstruction would create an inefficiency. However, I consider that the change in language as between Claim 1 and Claim 6 (“frame members” as opposed to “each of the frame members”) is a deliberate choice so as to achieve a different outcome in each case in terms of the identification of the essential integers of the claims. In reaching this conclusion I note the uncontroversial propositions as to construction of patents which were summarised by Gummow J in Sartas No.1 (30 IPR at 486) and in particular:
“In reading the specification as a whole the different functions of the claim and the rest of the specification should be observed. The claim, cast in precise language, marks out the legal limits of the monopoly granted by the patent: and “what is not claimed is disclaimed”. The specification describes how to carry out the process claimed and the best method known to the patentee of doing that. Although the claims are construed in the context of the specification as a whole, it is not permissible to restrict, expand or amend the clear language of a claim by reference to a limitation or gloss in the language used in the earlier part of the specification, but not repeated in the claim itself...”
Although Podfix 2 has orthogonal beams which by virtue of their skirts do not meet the criteria of Claim 1, its diagonal beams are sufficient to bring Podfix 2 within the integer because some of the frames of Podfix 2 are substantially elevated so that the concrete matrix may pass beneath the beams.
An argument was addressed with respect to the identification of the “adjacent” jaws for the purposes of Claim 1 (and also Claim 6). The defendants’ submission is that the jaws diagonally opposite to each other are not adjacent to each other; the thrust of this submission is that only the orthogonal frame members (and not the diagonal frame members) are referred to in the claim ie being those which support the jaws associated with respective adjacent boxes. However, as mentioned in pt 6(c) of these reasons I have rejected this interpretation of “adjacent”.
In the result the exploitation of each of the three accused spacers will infringe claims in the patent. Podfix 2 infringes only the method Claim 1. Podfix 1 and the Bottom Cover Spacer infringe the product Claim 6 as well as the method Claim 1.
The conduct of the Corporate Defendants
The brochure (D10) is dated May 1994 and issued in the name of Reinforcement Bar Spacer Co and Podfix Pty Ltd both of 49 Jacobsen Crescent Holden Hill SA. The two companies share a common telephone number. The brochure contains illustrations of the Bottom Cover Spacer and something closely resembling Podfix 1 (see further the discussion in pt 15(a) of these reasons). A side view of Podfix 1 in the brochure shows a central fin (or tab) extending downwards to the underlying supporting surface. The defendants’ pleadings assert that Podfix 1 has not been applied commercially since January 1993 and that the Bottom Cover Spacer has not been exploited since about August 1992. The defence admits that Podfix 2 has been manufactured and offered for sale since early 1993 and that its commercial application is continuing. Correspondence from the defendants’ solicitors treats the brochure as current in 1997. The conclusion which I reach upon the evidence is that Podfix 2 (in substitution for Podfix 1) is offered for sale in terms of the brochure as a “Podfix Cruciform” although the skirts on Podfix 2 do not appear in the brochure. The extent of the sales since 1993 confirm that this must be so in view of the defendants’ assertion that Podfix 1 has not been applied commercially since January 1993 and having regard to the date of the brochure.
In view of the contents of the brochure, it is my view that the conduct to be inferred in relation to the marketing of all three items (typified by P3, P4 and P5) will amount to “exploitation” as now relevant.
The defendants’ pleadings (see defence and counterclaim) show that the defendant Theta is a retailer of Podfix 1 and of Mesh and Bar Locators and that RBS is a manufacturer and retailer of Podfix 1 and Podfix 2 and Mesh and Bar Locators. Podfix Pty Ltd is a manufacturer and retailer of Podfix 1 and Podfix 2. According to the defendants Theta has not been “commercially active” since about June 1993 and Podfix Pty Ltd only commenced commercial activity since about July 1993. The moulding of the Bottom Cover Spacer (Exhibit P5) is stamped with the name “Reinforcement Bar Co Pty Ltd”. Podfix 1 (Exhibit P4) carries the name RBS Co Pty Ltd and the abovementioned telephone number (alongside a map of Australia) and is endorsed “Podfix System” (being a system described by that name in the brochure). Podfix 2 (P3) carries the name of Reinforcement Bar Co Pty Ltd and the map of Australia is partly obscured by one of the orthogonal skirts (as also is an endorsement “Podfix system”). The brochure describes Mr Graham Beales as “Sales Manager”. It describes the Podfix systems in detail.
Mr Beales is the same person who is a defendant in this action and a director of two of the corporate defendants. His presence is a significant link in the evidentiary chain.
It is apparent from the brochure that the Podfix system includes “elevated floor slab applications”. The brochure is dealing with a system which claims to be “providing superior floor units to live and work on and also refers (in a heading) to “concrete waffle floor structures”. According to the brochure, some of the products there shown are for use in vertical reinforcement applications but “all plastic slab on ground spacers” and “all plastic bottom cover spacers” are declared to have specific load bearing capacities. The quality assurance section of the brochure notes how the extraneous forces can vary enormously. With some exceptions which are not here relevant, I find on all the evidence that products mentioned in the brochure (including the accused spacers) are being marketed for use inter alia in conjunction with the Waffle Raft Footing System although they may have other applications. In reaching my conclusion as to the inferences which I am prepared to draw from the evidence, I have had regard to the fact that the defendants have not called evidence from Mr Beales or Mr St Alban who might reasonably be expected to throw light on matters raised by the plaintiffs’ case.
Correspondence dated 27 January 1998 from the defendants’ solicitors to the plaintiffs’ solicitors discloses that the spacers manufactured by Reinforcement Bar Co Pty Ltd are as set out in the brochure; sales totalling $11 709 076.71 between 1993 and 1997 are particularised but according to the correspondence, Theta Developments has not dealt in any relevant product since 17 June 1993.
No undertakings have been proffered by any defendant. Sufficient has been established in respect of the conduct of each of the corporate defendants to justify declaratory and injunctive relief against all the corporate defendants in event that the accused spacers are shown to infringe the Leonardis patent. If the accused spacers incorporate all essential integers of any of the claims then there has been exploitation by the corporate defendants contrary to the exclusive rights of the holder of the patent No.591816 conferred by s 13 of the Patents Act 1990. Offering Podfix 1 and the Bottom Cover Spacer for sale will infringe the product claim of Claim 6. The liability for infringement is evident from par (a) of the definition of “exploit” in Schedule 1 to the Act.
The conduct of the corporate defendants in offering Podfix 2 for sale with instructions to use it in a Waffle Raft Footing System (Patent 584769) remains to be considered separately in relation to the process Claim 1 of the patent.
Liability for contributory (or indirect) infringement
In the previous section I have concluded that the corporate defendants RBS and Podfix Pty Ltd have offered Podfix 2 for sale in terms of a brochure which is in evidence. (The brochure includes an illustration of Podfix 1 and the bottom cover spacer). This raises the question as to the distributors’ liability for aiding abetting or procuring the infringement of a process claim where the only link between the defendant and the infringing use of the process is the fact of sale together with instructions for use; bearing in mind the limited practical application of Podfix 2, the further question also arises as to the consequences of selling an article so as to procure (rather than merely facilitate) a patent infringement by the customer.
The point is covered by s 117 of the Patents Act 1990 when read in conjunction with s 13(1) and the definition of “exploit” in the dictionary to the Act (Schedule 1 and S.3). The provisions read as follows:
“117(1).... If the use of a product by a person would infringe a patent, the supply of that product by one person to another is an infringement of the patent by the supplier unless the supplier is the patentee or licensee of the patent.
117(2)A reference in subsection (1) to the use of a product by a person is a reference to:
(a).... if the product is capable of only one reasonable use, having regard to its nature or design-that use; or
(b) if the product is not a staple commercial product-any use of the product, if the supplier had reason to believe that the person would put it to that use; or
(c).... in any case-the use of the product in accordance with any instructions for the use of the product, or any inducement to use the product, given to the person by the supplier or contained in an advertisement published by or with the authority of the supplier.”
Section 13(1) provides:
“Subject to this Act, a patent gives the patentee the exclusive rights, during the term of the patent, to exploit the invention and to authorise another person to exploit the invention.”
“Exploit” is defined in Schedule 1 as follows:
““exploit”, in relation to an invention, includes:
(a).... where the invention is a product-make, hire, sell or otherwise dispose of the product, offer to make, sell, hire or otherwise dispose of it, use or import it, or keep it for the purpose of doing any of those things; or
(b) where the invention is a method or process-use the method or process or do any act mentioned in paragraph (a) in respect of a product resulting from such use;””
Section 117 has been drafted to cover a number of situations. I need only address that which arises where the relevant conduct is the sale (or offer for sale) of a product together with some instructions in circumstances where it may be anticipated that the instruction (if obeyed) will involve the use of a patented method or process and therefore an anticipated exploitation.
In case of an invention in respect of a method or process claim, the patentee has the exclusive right (inter alia) to use the method or process. The application of the patented process to any article would amount to an infringement and it is irrelevant for this argument whether the article itself is the subject of patent rights.
Section 117 contains a definition clause which deals with the manner of use of an article in particular circumstances for the purpose of considering infringement. If the manner of use of an article by the distributor himself in accordance with instructions would infringe a patent then the supply of the article in those circumstances (with instructions for use) will also infringe; that is the effect of s 117(1).
A contrary view was expressed by Gummow J in Sartas No1 v Koukourou and in Rescare Ltd v Anaesthetic Supplies and upon appeal Lockhart J affirmed that approach. Heerey J in Bristol-Myers Squibb v Faulding also took the same approach as did Gummow J. However, on appeal in Bristol-Myers SquibbCo v FH Faulding & Co Ltd (2000) FCA 316 the Full Court of the Federal Court rejected the views expressed by Gummow J in Rescare and reiterated in Sartas.
In Bristol-Myers Squibb the appellant relied upon a method claim for the administration of the drug Taxol for the treatment of cancer. The properties of Taxol had been known for many years but its administration presented problems in terms of side effects. The invention lay in a method of infusing a limited and specific dosage over a comparatively short and specific time so as to enable it to be suitable for outpatients use. It was argued that use of Taxol in accordance with the respondent’s product information guide would involve infringement of the appellant’s invention.
In upholding the appellant’s argument under s 117(2)(c) that there was infringement by the supply of the drug with instructions, the Full Court, Black CJ and Lehane J, said at pars 87 and 88:
“Paragraph (c) raises a more complex question. The appellant’s argument commenced with the uncontroversial proposition that use of taxol in accordance with the product information guide or the protocols would infringe the petty patents; the next step was that the guide and the protocols were instructions (in the sense of directions or recommendations) given by the respondent for the use of the taxol which it supplied, and we accept that proposition. Then, it was said, s 117(1) applied, having regard to the dictionary in subs (2), as follows:
“If the use of [taxol] by a [medical practitioner], in accordance with any instructions for the use of taxol...given to the [medical practitioner] by the [respondent]..., would infringe [either of the petty patents], the supply of that [taxol] by [the respondent] to [the medical practitioner] is an infringement of the [petty patent] by the [the respondent] unless [as was not the case] the [respondent] is the patentee or a licensee of the [petty patent].”
It may be said immediately that there is considerable force in that way of looking at it. It involves, after all, a literal application of the words of s 117. The respondent, however, contended for a different approach, the one adopted by Heerey J. According to that approach, the starting point is not s 117 but the definition of “exploit”. Where an invention is a method or process, use of a product exploits the invention only if the product is one which results from use of the method or process. Section 117, the argument proceeds, is concerned only with a case where the use of a product by a person would infringe a patent (because the person, not the patentee or a licensee, exploited it); and, where the patent is for a method or process, that will not be so unless the product is one which results from the use of that method or process.”
The Full Court cited with approval an article by Ms Ann Monotti in (1995) 6 AIPJ 217 where she deals with the fallacy which she perceived in the approach of Gummow J in Rescare Ltd and Sartas No 1. In the latter case Gummow J said at 495:
“Further, where... what relevantly is claimed is a method or process, exploitation occurs, other than by use of the method or process, only by the doing of an act mentioned in par (a) of the definition of ‘exploit’. There must be an act done ‘in respect of a product resulting from such use’. Here, unlike the situation with the chemical process example, there is no such product derived from the activity of the customer, still less any such product supplied by Sartas so as to attract the operation of s 117. In my view, s 117 has no application to the claims in question.”
However, as Ms Manotti points out, the definition of exploit in the case of a method claim includes “the use of the method or process” which means that applying a patented method to an article (whatever its origin) must result in an infringement (if not authorised by the patent holder). Therefore if the manufacturer were to use a spacer itself in accordance with the instructions there will be an infringement; likewise (by applying the definition in s 117(2)(c)), supplying a product in such circumstances to another with instructions constitutes infringement.
In Bristol-Myers at par 95 the joint judgment continues:
“...it is perhaps a pity that the drafter chose to use the phrase “use of a product”, which contains such a clear reference to the terminology of par (a) of the definition of “exploit”. But s 117 provides its own dictionary, in subs (2). And our paraphrase of s 117(1), incorporating subs (2)(c), shows, in our view, that the construction urged by the appellant is not only a possible construction but a literal one. That literal construction being consistent with the apparent purpose of the provision, it is, in our view, plainly to be preferred.”
I note that on this issue Finkelstein J was in agreement with the other members of the Court (see par 162).
I will treat Bristol-Myers as having now determined the issue and binding upon me. The Full Court judgment only became available after I had reserved my judgment but counsel has drawn it to my attention.
In these circumstances, the corporate defendants in the present case will be liable if they distributed Podfix 2 with instructions for use which infringed the method or process Claim 1 of the Leonardis patent.
The sales brochure (Exhibit D10) shows how Podfix should be used. In my opinion there is an infringement arising from the offering of Podfix 2 for sale in accordance with the brochure. The method of use is explained by the diagram which may be seen in Appendix C hereto (which is an extract from Exhibit D10); that diagram must be considered in conjunction with the accompanying text.
Although it may not now be necessary to decide the point, it seems to me that the plaintiffs make out their case that the second and third defendants threaten to procure the use of Podfix 2 in breach of s 13(1) of the Patents Act 1990 under which the patent holder has the exclusive right “to authorise another person to exploit the invention”. In Ramset Fasteners (Aust) Pty Ltd v Advanced Building Systems Pty Ltd (1999) 164 ALR 239 the Full Federal Court at 258-259 said:
“...Where a vendor sets out to make a profit by the supply of that which is patented, but omitting some link the customer can easily furnish, particularly if the customer is actually told how to furnish it and how to use the product in accordance with the patent, the court may find the vendor has “made himself a party to the [ultimate] act of infringement”. He has indeed procured it. So to hold is not in any way to trespass against the established line of authority which, as Dixon J made clear in Walker v Alemite, is based upon the need to confine a monopoly to the precise area in which it operates. That protects the mere vendor of an old product, though selling with knowledge of the purchaser’s intention to infringe a combination patent; but it affords no excuse to the person who sets out to induce customers to do what falls fairly within the area of the monopoly.”
and at 257 (commenting upon CBS Songs Ltd v Amstrad Consumer Electronics Plc [1988] AC 1013) the Federal Court continued:
“...the law as declared by Lord Templeman is concerned with more than what is involved in a common design; it extends to procurement through inducement or persuasion. His Lordship’s remarks must be understood in the context of the case he was considering. The impugned transactions involved the sale of tape recorders which could be used for recording generally. Unless appropriate individual circumstances were proved, the mere advertising of their capabilities could not amount to a general invitation, inducement or persuasion to the carrying out of acts in breach of copyright. If, on the other hand as in Innes v Short, purchasers or would-be purchasers of goods are not merely told their properties or capabilities, but are told how to use them to infringe a specific right, then, depending on the circumstances, there seems no reason why inducement should not be found...”
In my view upon the evidence a primary use of Podfix 2 as a foundation formwork spacer is an application which, if exploited will infringe Claim 1 of the patent. There is evidence which would support the granting of an injunction quia timet despite the fact that there may be some other non-infringing application for which it is suitable.
12. Liability of Personal Defendants
The plaintiffs submit that the personal defendants by reason of their day to day control of the corporate defendants are to be treated as having authorised the infringements of patent committed by the corporate defendants. The plaintiffs rely upon Kimberley-Clark Australia Pty Ltd v Arico Trading International Pty Ltd & Ors (1998) 42 IPR 111 at 129 per Burchett J:
“The final issue is authorisation. Section 13(1) of the Patents Act 1990 provides that the patentee has the exclusive rights, during the term of a patent, to exploit the invention and to authorise another person to exploit the invention. The applicant says that the second respondent, Arie Kliger, authorised the first respondent to do the acts which constituted infringement of the patent. Mr Kliger was at relevant times a director of the first respondent, together with his wife. But his own affidavit acknowledges that she did not play any active role in its operations. He obtained a patent attorney’s advice, on the basis of which he concluded that the “Baby Sitter” did not involve any infringement of the patent. As he swore in his affidavit:
I then made the decision to commence importing the disposable nappy with the pocket design.
In my opinion, the proper conclusion is that Mr Kliger personally directed the acts which constituted the infringement. In the language of Dixon J in Walker v Alemite Corp (1933) 49 CLR 643 at 658, he “made himself a party to the act of infringement”. It may be that s 13 embraces actions amounting to less, but at least it does embrace that: Rescare Ltd v Anaesthetic Supplies Pty Ltd (1992) 25 IPR 119; 111 ALR 205 at 243, per Gummow J. In King v Milpurrurru (1996) 66 FCR 474 at 480-1; 34 IPR 11 at 15 Jenkinson J said, speaking of the liability of a director for authorisation under the Copyright Act 1968 (Cth)
But for tortious liability to be imposed on the respondents what is required is that they confer...their authority to commit the torts so that they can be said to have agreed in the commission.
In the same case, Lee J, who was in dissent on the facts, said (at FCR 486; IPR 20):
......... Obviously a director who expressly procures or directs the commission of a tort by a corporation will be personally liable for the tort of the corporation.
This was the view which I had taken, in a patent case, in Martin Engineering Co v Nicaro Holdings Pty Ltd (1991) 100 ALR 358, and it was also adopted by Lindgren J, in the copyright context, in Microsoft Corp v Auschina Polaris Pty Ltd (1996) 71 FCR 231 at 245-6; 36 IPR 225. See also Australasian Performing Right Association Ltd v Jain (1990) 18 IPR 663; 96 ALR 619 at 625-7.
In my opinion, the second respondent, by procuring and directing the actions taken by the company, the first respondent, authorised those acts within the meaning of s 13 of the Patents Act 1990.”
In my opinion the facts are insufficient upon the balance of probabilities to establish liability on the part of the personal defendants. As there is more than one person involved in the overall operation giving rise to the conduct pointing to infringement, it is not possible to sheet home an individual responsibility. To what extent the fourth and fifth defendants have each played a part is unclear particularly with regard to the production of the sales brochure. I am not satisfied that any particular individual personally directed the acts of infringement or by his conduct made himself party to such acts.
The personal defendants are not in partnership so as to be liable for torts of each other committed in the course of the partnership business.
They are individually directors of two separate companies and they are common directors of a third company (Podfix Ltd). Even if all corporate defendants have committed acts amounting to patent infringement (as I consider to be the case) it may be that one of the personal defendants left the detailed decision making (as now relevant) to the other or to some employed person. Beyond knowledge of the legal ability of the personal defendants to exercise control I know little else. In my view there is before me insufficient information as to the degree of individual personal involvement of the fourth and fifth defendants to establish upon the balance of probabilities that either of them was party to the infringement by the corporate defendants. It may be that one or other of them or someone else produced the brochure and conducted the marketing. The defendants together and to some extent individually were able to exercise control but the manner and extent to which they did so is unknown.
The links between the two personal defendants are strong as are their links with the corporate defendants. I note the position of Mr Beales as Sales Manager and I note the effect of the correspondence.
The personal defendants have not given evidence. Although this might make it easier to draw an inference the material is insufficient to establish liability. The claim against the personal defendants fails.
The dependent claims, their integers and infringement.
Although the action was fought upon a consideration of the independent Claims 1 and 6 it is necessary to deal with the action as pleaded based upon the dependent Claims 2 and 3 and 7, 8 and 9.
The dependent claims are as follows:
“2..... A building foundation form work arrangement as in claim 1 in which the spacer includes means to support and locate a reinforcement rod within a channel.
3.A building foundation form work arrangement as in the last preceding claim wherein the means for providing support for a reinforcement rod include a portion of the spacer that has an upwardly open slot.
7...... A spacer as in the last preceding claim further characterised in [that] the spacer is of cruciform shape in plan having thereby eight engaging outermost surfaces adapted to engage respectively against both sides adjoining a corner of each of four adjacent boxes with the corners at a common location.
8.A spacer as in the last preceding claim further characterised in that there is included an upwardly extending medially positioned part having an upwardly open U-shape slot therein adapted to support and hold a reinforcing rod thereby.
9...... A spacer as in any one of the last three preceding claims further characterised in that the spacer is moulded from plastics material.”
The essential integers of these claims are:
“Claim No 2
Integer (viii) - a building foundation form work arrangement as in claim 1 in which the spacer includes means to support and locate a reinforcement rod within a channel.
Claim No 3
Integer (ix) - a building foundation form work arrangement as in the last preceding claim wherein the means for providing support for a reinforcement rod include a portion of the spacer that has an upwardly open slot.
Claim No 7
Integer (xxi) - a spacer as in the last preceding claim further characterised in the spacer is of cruciform shape in plan
Integer (xxii) - having thereby eight engaging outermost surfaces adapted to engage respectively against both sides adjoining a corner of each of four adjacent boxes with the corners at a common location.
Claim No 8
Integer (xxiii) - a spacer as in the last preceding claim further characterised in that there is included outwardly extending medially positioned part
Integer (xxiv) - having an outwardly open U-shape slot therein adapted to support and hold a reinforcing rod thereby.
Claim No 9
Integer (xxv) - a spacer as in any one of the last three preceding claims further characterised in that the spacer is moulded from plastics material.”
Essentially all these dependent claims involve the addition of the bar chair or a form of turret above the frame members to carry and locate the reinforcing rods.
I deal with these matters at the request of the plaintiffs as the defendants’ foreshadowed application to amend pleadings may involve an attack upon the validity of the claims. Therefore all should be the subject of my judgment.
It is now sufficient to conclude that the relevant exploitation of Podfix 2 infringes Claims 2 and 3 in addition to Claim 1.
Likewise, the exploitation of Podfix 1 infringes claims 1, 2 and 3. It also infringes Claim 6 as well as Claims 7, 8 and 9.
The Bottom Cover Spacer does not have a turret and supporting bar chair and therefore does not infringe any of the dependent claims although its exploitation would infringe Claims 1 and 6.
The significance of the Full Court decision in Sartas No 1
The defendants base an argument upon the manner in which the patent was construed by the Full Court of the Federal Court in Sartas No 1. If a different construction is to be given to the patent, then the defendants assert that this may affect the validity of the patent. As the defendants have foreshadowed a possible attack upon validity, the basis of my decision on infringement (in the light of Sartas No.1) is important to the defendants in deciding whether to pursue an application to amend the pleadings. I noted in the introduction to these reasons the manner in which I had proceeded to determine limited questions at this stage. The Court in Sartas No.1 upheld the appeal of Mr Leonardis as to the validity of his patent upon the basis that a disputed essential integer was sufficiently disclosed in and fairly based upon the provisional patent application when reference was made to the accompanying drawings.
The defendants’ submissions directed to the meaning to be given to the words “substantially above” in claims 1 and 6, may be summarised as follows:
(a).... “The patent claims have already been construed by a Court. That must be decisive of the construction. The construction of a patent claim is constant and the claim is not construed with an eye to the infringer. The claims that define the monopoly confer rights in rem or, as it was put by Gummow J; the specification operates to confer rights in rem (at 488 line 34). The Court has defined those rights by construing the claims, where appropriate in the light of the specification and the provisional specifications and the invention disclosed in the provisionals and described in the body of the specification. That construction does not logically alter depending on the circumstances of an infringement action. This goes further than the question of stare decisis.”
(b)“The reference to once again and significantly make it clear that the frame members must be raised sufficiently to allow for concrete to pass fully. Clearly the fully refers to all of the aggregate. This applies to all of the frame members and the object is to resist localised fracturing and capillary water.”
This lastmentioned submission is related to statements in the specification
(c).... “There is a requirement that each of the frame members have a lowermost surface “substantially above” a lowermost edge. This essential integer is separate from the extra limitation by result that the raising is such that concrete can extend continuously beneath each of the frame members. The expression “substantially above” as used in both claim 1 and claim 6 was construed in the Leonardis v Sartas case; it was held not to be uncertain because, in each case, it imported the purpose of being sufficiently above to permit the continuous flow of concrete.”
(d)If the course aggregate of 20mm cannot flow under a 15mm clearance it will dam up against the frame member and inhibit the concrete flow.
(e).... The basis for the decision in the Full Federal Court was that both claim 1 and 6 were fairly based on a drawing an examination of which makes clear that the fair basis was provided by the height of the orthogonal frame members.
The question at issue is what as a matter of construction was “disclosed” by the drawing which was before the Full Court and now included in the amended patent. The drawing does not stand alone but will be studied in light of the text of the specification. How high must the frame members be raised?
The Full Court commented in Leonardis at 32:
“Another matter to which reference should be made at the outset is the use of the word “substantially” in claims 7 and 12. In claim 12, the added words “such that concrete can extend continuously beneath each of said frame members” make it clear, in functional terms, how large the gap must be to meet the requirement conveyed by this word. It is not inadmissible to use in a claim an imprecise word, in an appropriate context, where it conveys the necessary meaning: cf Populin v HB Nominees Pty Ltd (1982) 41 ALR 471 at 473 (“relatively small”); Re Imperial Chemical Industries Ltd (Clark’s) Application [1969] RPC 574 at 583, 584 (“a minor amount of water...small in comparison with the total amount of other liquid constituents”); Vax Appliances Ltd v Hoover Plc [1991] FSR 307 at 309, 318 (“substantially dropwise” flow); Monsanto Co v Commissioner of Patents (1974) 48 ALJR 59 (“substantial effect”). The purpose of the integer conveyed by the words “substantially above” being plain, the dictum of Taylor J in Martin v Scribal Pty Ltd (1954) 92 CLR 17 at 97 applies:
........... ...it is right to construe a claim with an eye benevolent to the inventor and with a view to making the invention work-this is an application of the old doctrine ut res magis valeat quam pereat.
The difficulty which proved fatal for the appellant, in the view of the learned trial judge, was the absence of language in the two provisional specifications corresponding with such expressions in the complete specification as that appearing at the end of claim 12, revealing a raising of the frame members of the spacer so that concrete can flow beneath them. The first question involved in the appeal is whether this facet of the invention as claimed finds a fair basis in the first and second provisional specifications. One aspect of that problem is whether fair basis may be found in the drawings forming part of a provisional specification although the words, if taken alone, would not provide it. For here there are general references to the “pouring” of concrete and to an aim (conveyed by the expression “[i]n order to achieve” of “minimal interference with the total strength of any cement or concrete cast”, but there is no specific statement of the purpose dictating the raising of frame members, or of the fact that this permits concrete, when poured, to flow beneath them. There is a statement, in the second provisional specification, from which these things might be inferred by the attentive reader: “The concrete is then poured as appropriate and all of the spacing units are left in position to be integrated in the final cast foundation.” Integration in the foundation could only actually be achieved if concrete did flow beneath the raised members. Of course, the flat surfaces bearing against the cardboard form work would, like the form work itself, remain outside the body of concrete, but this is so obvious that no reader could be mistaken about it; the reference to the integration of the spacing unit in the final cast foundation must be taken as a reference to the frame of the unit to which those surfaces are attached, one embodiment of which includes also means for holding reinforcing rods.
But the second provisional specification does expressly take its reader to the drawings in the passage commencing:
For a better understanding of this invention it [ie the invention itself, not just the preferred embodiment to which reference is then made] will now be referred to with reference to a preferred embodiment in which...
By this language, which is similar to language used in the first provisional specification, the drawings are introduced, and they are made central to an understanding of the invention. The words themselves of the document do also make it plain that the drawings introduce new and significant ideas, not presented in the first provisional specification...”
and at 34:
“...While the drawings are not to scale, all the proportions indicated by them suggest the feature of a substantial raising of the frame of the spacer, sufficient to allow material, such as concrete, to pass beneath it. In fig 3, for example, the lowest portion of the framing members appears to be some two-thirds of the way up the height of the spacer. The height of the gap beneath the framing members is represented as much greater than the diameter of the reinforcing rod or of a metal pin shown as part of the device to secure the location of a superimposed box. As Aldous J said in Vax Appliances Ltd v Hoover Plc, supra, at 313, “patent drawings are not designed to be used to denote precise measurements unless so stated. They are there to illustrate the concept and the overall relationship of the parts.” But what is telling here is the overall relationship of the parts of the spacer.”
The Court concluded that there was a fair basis disclosed for the claims (see at 42).
And at 43:
“The feature in question was the very feature the subject of the fair basis argument, the substantial raising of the frame members of the spacer in order to permit continuity of flow of concrete beneath it.”
I see nothing in these reasons which requires the patent to be interpreted so as to equate “substantially” with “at least 21mm”. The drawing and the accompanying text (when examined by skilled person to whom they are addressed) disclose that the relevant integer which was there identified was the concrete extending continuously beneath each of the frame members. The judgment does not address a specific height for the clearance under the frame members. The topic is addressed by purpose. The evidence of Mr John (which I have identified in pt 5 of these reasons) establishes what elevation of the frame will suffice to achieve the relevant purpose. The clearance must be such as to allow the sand/cement mixture to flow continuously and set under the elevated frame members so that the material which there gathers and sets is of similar strength to the general concrete. In order to achieve this outcome, it is not necessary that the course aggregate be enabled to pass beneath the frame members so long as the smaller particles of coarse aggregate can do so. In my opinion, having regard to the purpose of the invention, concrete passes “fully” under the elevated frame members if the matrix has continuity and appropriate strength so as to blend into the general structure and ensure sufficient thickness of material to avoid localised fracturing and any entry point to capillary water.
In my view there is nothing in the Full Court judgment which is inconsistent with the approach which I have taken, based upon the engineering evidence before me and based upon my reading of the patent in light of its drawings. I have considered also the approach taken by Gummow J in Sartas No.1 (30 1PR at 507) where he treated the phrase “substantially above” as being used in a qualitative sense. I observe that Claim 6 contemplates that concrete should be able to “extend continuously beneath each of the frame members”. It is with a view to achieving continuity of the general concrete that concrete must flow or extend fully. This proposition is consistent with the views expressed by the Full Court and justified by the evidence before me.
The patent specification before me states that “The invention will be better understood when referred to preferred embodiments which shall now be described with the assistance of drawings...”. This must be read particularly in the light of the preceding explanations where the inventor identifies the problem of “access of water which through capillary action can reach the steel reinforcing rod or rods”. The inventor then explains how he has dealt with this problem as follows:
“This can be avoided by ensuring that concrete for the foundation extends to form an integral portion of concrete below the main body of any spacer. This is achieved by providing that each spacer while having a substantially large outermost engaging surface to bear against the side of a box, nonetheless has frame members which have an(sic) lowermost edge which are substantially above a lowermost edge of such outermost engaging surface and as such above any supporting ground level surface.
In this way, much concrete is allowed to flow and set below such frame members thereby maintaining as much as possible the structural integrity of the concrete.”
In my opinion a study of this explanation together with the patent diagrams in the light of the engineering evidence enables me to reach the opinion which I have already expressed.
Agreed evidence (Exhibit P14)
The parties handed up a book of agreed documents and that evidence deserves specific comment although I am now traversing ground which I have already covered in a general fashion.
(a) The Brochure
The book includes a photostat copy of the brochure to which I have already referred in Pt 1 of these reasons. However, I have relied upon the original coloured brochure (Exhibit D 10) which places the evidence in a different light than does the photostat copy. The document is bound with wire staples in a conventional fashion and four pages are printed against a distinctive pink background. These four pages deal with “Podfix systems”; the pink pages are perforated along their margin adjoining the staples - so as to suggest that these pages are designed to be torn out of the brochure and used separately. However, the “pink pages” are not mere inserts in the brochure; a study of the individual pages shows that the brochure has been printed as one document with the “pink or reddish flavour” appearing in a more subtle and restrained form in the earlier part of the brochure in the logos and other printing.
Appendix C hereto (photostated without colour) shows two of the pink pages. The brochure includes price lists of some items (shown in pink throughout the document). The “Top Spacers” referred to in Appendix C will also be found in other parts of the brochure.
The brochure contains a representation of the Podfix cruciform as well as the bottom cover spacer. This lastmentioned article in a sub heading is also called “Mesh and Bar Spreader” “Reference MBL”. The skirt of Podfix 2 is not evident in the drawing (see Appendix C); indeed the side view very closely resembles the example of Podfix 1 in Exhibit P 4 except that the central fin or tab extending downwards is of slightly different shape. The fin extends to the level of the underlying surface. The side view appears to correspond exactly with the “side view” of a Waffle Pod Spacer lodged with the Patent Office by RBS Co on 17 September 1992 (see Exhibit P 14 - p 158-159). The diagram on p 2 of Appendix C “explains” how the Podfix cruciform is to be applied and in my opinion, along with the other verbiage throughout the document, constitutes “instructions for use” in terms of s 117(2)(c) of the Patents Act. The pink pages under the printed heading “Acknowledgments” contains the following:
“Mr Peter Koukourou of Koukourou & Partners Pty Ltd., Consulting Engineers and originators of the Waffle Raft Footing System, have written to us to confirm ‘These spacers are to be used in conjunction with the approved Waffle Pod footing system, as patented by Koukourou & Partners Pty Ltd., the originators of the Waffle Raft Footing System. Australian Patent No 584769’”.
(b) The correspondence of Reinforcement Bar Spacer Co.
This correspondence confirms that in July 1992 RBS had a product called a “Mesh and Bar Locator” (MBL) which is sometimes called a Mesh [and Bar] Spreader. Compare the description above quoted from the Brochure.
A letter from Mr St Alban dated 14 August 1992 to a Queensland distributor says: [p 164]
“Second up the mesh & bar locators. We quoted you a special price of 50 cents each (cash), as against the list price of $1.20, on these as we were in the throes of finishing dies to make a greatly improved version on which we have registered the design. The old lot did not last too long at this price as you would imagine. However we will have the new dies in production early next week, and will honour the quoted price to you of 50 cents a piece for the order you have placed even though the new units are heavier duty all round. First pallet will be ready by Friday hopefully, rest early week following, all going well. They will be called a waffle pod spacer, and probably will sell for around the price of the old mesh & bar locators which they will replace in many circumstances.”
(Emphasis added).
I note that the bottom cover spacer - mesh and bar spreader - Reference MBL - Price for 10 - $12.00 appears at p 12 of the Brochure.
It seems a fair inference that the diagrammatic reproduction of the bottom cover spacer in the brochure in its “bottom perspective view” shows the intended application of the bottom cover spacer in the environment discussed in the letter of 14 August 1992. It is apparently intended for use in the waffle raft footing system as the plaintiff contends (see pt 5(d) of these reasons).
A letter dated 27 January 1998 from the defendants’ solicitors to the plaintiff’s solicitors acknowledges that the spacers manufactured by RBS Co are as indicated in the brochure (Exhibit P 14 p 47).
When all this material is examined together with the bundle of invoices issued by RBS Co between 22 August 1992 and 17 January 1993 (Exhibit P 14 pp 165-185), I conclude that the inference should be drawn (contrary to par 4.4 of the defence) that the bottom cover spacer has been offered for sale to be used in building foundation formwork since August 1992.
(c) The correspondence of the personal defendants
This correspondence shows that in December 1992 Theta Developments and Mr Beales were seeking to exploit the Podfix system as a substitute for the celltex brick spacer. About the same time RBS Co and Mr St Alban were working on the improvement of a mesh and bar locator to be called a waffle pod spacer. Mr St Alban seems acutely aware of perceived differences between the Podlock product and the Podfix product. Following the decision of the Federal Court but on an unknown date he wrote to Mr Leonardis and commented upon the outcome: [p 192]
“First up when you got your patent back from the full Federal Court it was because they believed the drawings were clear enough & they framed your new patent around that, which was fair enough & something we have never disputed. They also clearly stated what it was you had a patent for and joined some of the claims together & altered others.
The original claim 1 had no reference in it to spacers-(See page 1), but the patent that they gave you does now refer to spacers in the revised claim 1-(See page 2).
Your lawyers and patent attorneys must have explained to you that to infringe any claim all the parts of it must be infringed not just a part of it, which means that in claim 1 the spacer has to infringe as well as the method it is used in.
Now when Howard drafted your patent he clearly stated what & where the cross members were both in writing & in the drawings included in the patent. To make it easier for you to understand I’ve highlighted the details showing where the frame members are as your patent attorney showed them and which the Federal Court accepted as the basis for your patent. This gone into in more detail later in claim 6 which is about your spacer which has the unique feature of not only positioning the boxes & reo but also lets an uninterrupted flow of concrete underneath it. Ours does not & never has done. Blind Freddie can see that in all our spacers cross member 56 sits on the deck, even if some moron were to take it upon himself to turn it upside down for whatever reason, so there is no way the spacer we make could infringe if used in a claim 1 situation. Also the word “each” means every, so the fact that in some of the trial spacers-(Podfix L),-designed for elevated floors & walls had some of the cross members lifted to allow a better off form finish makes no difference as unless all the cross members are lifted irrespective of where & how they are used no infringement occurs.”
(It is apparent that Mr St Alban is aware of some differences between Claim 1 in the amended patent and Claim 7 as it stood before the Federal Court order).
Despite the obvious knowledge of the two personal defendants in a general sense, I do not consider that there is enough to sheet home personal responsibility for patent infringement to either Mr Beales or Mr St Alban (see pt 12 of these reasons).
In my opinion, in the absence of evidence from the defendants themselves it is a case where the principle of Jones v Dunkel & Anor (1958-59) 101 CLR 298 should be applied. As a result I have been prepared to draw inferences from the correspondence, invoices and marketing brochure.
The defendants argue that no sales based on the marketing brochure have been proved; I am prepared to draw the inference that the document stands in the market place as an inducement to would be customers to do business and to explain to them the use of the spacers. There appears to have been “exploitation” of the Leonardis invention. (I note in this respect the wide meaning given to “exploit” by s 3 of the Patents Act).
The defendants argue that their spacers have an application which is not confined to foundations. However, having regard to the contents of the brochure and Mr St Alban’s reference to “the deck” in his correspondence as quoted and the design features of the spacers, I conclude that the accused spacers are all intended for use in foundation formwork and have been so marketed. Some of the products shown in the brochure “are for use in vertical reinforcement applications and are not considered [by us ie RBS Co] to be suitable for supporting reinforcement.” However, certain units “are considered to be suitable for supporting reinforcement within the values shown.” These items are listed and appear to include the accused spacers.
The brochure contains an explanation of the Podfix system including the following:
“The Podfix Cruciform spacer has the highest load carrying capacity of any available waffle spacer. Its single immensely strong central tower section enables reinforcing elements to be placed with great ease, accuracy and security. If a T or L shaped spacer is required Podfix cruciforms can be easily cut, using tin snips or similar, to the required shape and offcuts used as separate spacers. Podfix top mesh spacers are designed to minimise damage to void surfaces when used in adverse conditions.
In elevated floor slab applications where suspended ceilings or duct work is to be installed beneath floor wrapping the central tower section of Podfix spacers with a suitable adhesive tape will readily afford attachment points after removal of temporary form-work.”
The possibility of some elevated slab applications is therefore contemplated by the brochure. I note that the brochure contemplates that in terms of design the relevant units are marketed for use with a 16 mm diameter steel [reinforcing] bar and to bear a static load of 100 Kg.
As regards the bottom cover spacer the brochure contains the following:
“Although extremely strong, the design permits minimum contact with the formwork, and is ideal for ‘off form’ finishes. When used in conjunction with out standard four leg plastic unit, plastic tipped wire spacer, or our wire mesh spacers with heavy duty plastic ferrules, they provide the ultimate in accurate placement of all reinforcing steel.”
The two photographs on the front of the brochure show on ground foundations as do four of five photographs on the back of the brochure.
The remaining photograph apparently shows an “elevated” application.
Mr John gave evidence (T.244) that Exhibit P3 has as one of its “primary uses” an application to building foundation formwork although it could be used in relation to suspended floors and in walls.
In my view the thrust of the brochure is towards promoting the use of the Podfix spacer in the manner shown on the diagram in Appendix C hereto.
Principles of construction of patents
In Sartas No.1 v Koukourou 30 1PR 479 at 485-6 Gummow J summarised some principles applicable to the construction of a patent. I have brought those principles to account in making my own decision along with the statement of the relevant rules as restated by Sheppard J in Decor Corporation Pty Ltd & Anor v Dart Industries Inc (1988) 13 IPR 385 at 400 where His Honour said:
“In summary, the relevant rules of construction which may be distilled from the authorities referred to are as follows:
(1)... The claims define the invention which is the subject of the patent. These must be construed according to their terms upon ordinary principles. Any purely verbal or grammatical question that can be answered according to ordinary rules for the construction of written documents is to be resolved accordingly.
(2)It is not legitimate to confine the scope of the claims by reference to limitations which may be found in the body of the specification but are not expressly or by proper inference reproduced in the claims themselves. To put it another way, it is not legitimate to narrow or expand the boundaries of monopoly as fixed by the words of a claim by adding to those words glosses drawn from other parts of the specification.
(3)... Nevertheless, in approaching the task of construction, one must read the specification as a whole.
(4)In some cases the meaning of the words used in the claims may be qualified or defined by what is said in the body of the specification.
(5)... If a claim be clear, it is not to be made obscure because obscurities can be found in particular sentences in other parts of the document. But if an expression 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.
(6)A patent specification should be given a purposive construction rather than a purely literal one.
(7)... In construing the specification, the court is not construing a written instrument operating inter partes, but a public instrument which must define a monopoly in such a way that it is not reasonably capable of being misunderstood.
(8)The body, apart from the preamble, is there to instruct those skilled in the art concerned in the carrying out of the invention; provided it is comprehensible to, and does not mislead, a skilled reader, the language used is seldom of importance.
(9)... Nevertheless, the claims, since they define the monopoly, will be scrutinised with as much care as is used in construing other documents defining a legal right.
(10)If it is impossible to ascertain what the invention is from a fair reading of the specification as a whole, it will be invalid. But the specification must be construed in the light of the common knowledge in the art before the priority date.”
In upholding the patent holder’s exclusive right of exploitation, the Court will not countenance evasion of patent rights by a deviation which represents a departure only from the literal words of a claim. The Court’s approach to the question of infringement has been expressed in various ways. In the face of the statutory language I accept counsel’s warning against the adoption of particular expressions as representing a mandatory approach. However, the following judicial comments are helpful.
In Sunbeam Corporation & Anor v Morphy-Richards (Aust) Pty Ltd (1961) 180 CLR 98 at 109, Windeyer J quoted the following passage from Radiation Ltd v Galliers & Klaerr Pty Ltd (1938) 60 CLR 36, 51-52:
“on a question of infringement, the issue is not whether the words of the claim can be applied with verbal accuracy or felicity to the article or device alleged to infringe. It is whether the substantial idea disclosed by the specification and made the subject of a definite claim has been taken and embodied in the infringing thing. It is, no doubt, sometimes the case than an inventor explains in his specification steps or methods involving an idea, conception or principle of wider application or of deeper significance than that for which he claims. Sometimes a claim, particularly a claim for a combination, is expressly confined to a particular form of construction or the like, and in such a case it is useless if the particular form is essential for the patentee to complain that his idea of what he calls his principle has been applied in a different construction or has been expressed by means of a mechanical equivalent of some element which his claims make of the essence of his monopoly. Such cases are well illustrated by the decisions of this court in Walker v Alemite Corporation and Shave v HV McKay Masey Harris Pty Ltd. But the words of James LJ in Clark v Adie must not be forgotten.”
In Olin Corporation v Super Cartridge Co Pty Ltd (1977) 180 CLR 236 at 246 Gibbs J said, with respect to part of the passages quoted by Windeyer J,
“The statements in these passages are still good law. However, as was pointed out in C Van der Lely NV v Bamfords Ltd, the principle that there may be infringement by taking the “pith and marrow” or the substance of an invention does not mean that there will be an infringement where the patentee has by the form of his claim left open that which the alleged infringer has done. And it does not affect the fundamental rule that there will be no infringement unless the alleged infringer has taken all of the essential features or integers of the patentee’s claim.”
In Minnesota Mining and Manufacturing Co & Anor v Beiersdorf (Australia) Limited (1980) 144 CLR 253, Aickin J said, at 286,
“Notwithstanding the undoubted fact that the doctrine of Clark v Adie (1875) LR 10 Ch App 667 concerning the taking of the pith and substance of an invention, but nonetheless staying outside the express words of the claim, is less often applicable at the present time than it was at the time of that decision, it remains the law that a defendant may not take the substance of an invention unless the wording of the claims makes it clear that the relevant area has been deliberately left outside the claim.”
In Melbourne v Terry Fluid Controls Pty Ltd (1994) 28 IPR 302 at 311 the Full Federal Court (Northrop, Gummow and Olney JJ) said, with respect of Catnic Components Ltd v Hill & Smith Ltd [1982] RPC 183, 242-243,
“In accordance with authority in Australia, what the defendants had done might well have been interpreted as an unsuccessful attempt to avoid trespass upon the literal meaning of the claim by a modification so small as to be insignificant and to have no material effect upon the way in which the invention, as claimed, worked; see Commonwealth Industrial Gases Ltd v MWA Holdings Pty Ltd Ors (1970) 44 ALJR 385 at 388, Rehm Pty Ltd v Websters Security Systems (International) Pty Ltd (1988) 11 IPR 289 at 300-302; 81 ALR 79 at 91-92. In Catnic, supra at 242-243 in the passage set out above, Lord Diplock formulated what he said was the question in each case in terms specifically apt to broaden the effect of a claim by, in effect, treating as inessential strict compliance with the claim where there was a variant which would have no material effect upon the way in which the invention worked.”
I observe that the test for identifying the essential integers of an invention and whether those are present in a prior disclosure appears to be the same as the test for determining whether patent infringement has occurred.
I note also the comment of Blanco White, Patents for Inventions and the Protection of Industrial Designs (5th Ed 1983) , p 45, par 3-004,
“If what the defendant has done does fall within the claim, it will infringe no matter what additional inventive features it contains. Infringement cannot be avoided by “the super-adding of ingenuity to robbery”.
Summary
The accused products - Podfix 1, Podfix 2 and the Bottom Cover Spacer - each contains all the essential integers of one or more of the claims in the Leonardis patent.
Upon the basis that the patent is valid, the conduct of the corporate defendants renders each of them liable for patent infringement. Podfix 1 and the Bottom Cover Spacer contain all the characteristics of the spacer described in product Claim 6.
The use of Podfix 2 in a Waffle Raft (or Pod) Footing System unless with the authority of the patentee, results in infringement of process or method Claim No.1; this use whether by a seller of Podfix 2 or customer constitutes infringement. Accordingly, the seller of Podfix 2 (with instructions for its use in terms of the sales brochure) is liable in terms of s 117 of the Patents Act 1990. The personal defendants have not been shown to have authorised infringement and they are not liable.
One would expect any issue as to validity of the patent (with any accompanying claim for revocation) to be determined at an early stage. I have not been asked to do this. However, in order to preserve the defendants’ position (as far as I am able) I will defer the making of any orders for the time being which might have the effect of shutting out the defendants’ foreshadowed application to amend the pleadings. The decision which I have made assumes the validity of the patent.
Having determined these issues I will hear counsel as to appropriate orders or as to the next step in the action.
The three appendices hereto cannot be scanned by the “Juris” system currently in use for electronic distribution of judgments. The parties will be provided with copies of these appendices. Others may obtain copies upon application to the Supreme Court Librarian.
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