Lockwood Security Products Pty Ltd v Doric Products Pty Ltd

[2006] HCATrans 322

[2006] HCATrans 322

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S13 of 2006

B e t w e e n -

LOCKWOOD SECURITY PRODUCTS PTY LTD

Applicant

and

DORIC PRODUCTS PTY LTD

Respondent

Application for special leave to appeal

GUMMOW ACJ
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 16 JUNE 2006, AT 2.01 PM

Copyright in the High Court of Australia

MR A.J.L. BANNON, SC:   I appear for the applicant, if the Court pleases, with my learned friends, MR S.C.G. BURLEY and MR J.S. COOKE.  (instructed by Phillips Ormonde Fitzpatrick)

MR D.K. CATTERNS, QC:   May it please the Court, I appear with my learned friend, MS S.J. GODDARD, for the respondent.  (instructed by Sprusons & Ferguson)

GUMMOW ACJ:   Let us revisit this patent.

MR BANNON:   There are two factual findings of the learned trial judge which were not disturbed by the Full Court but which exposed what we submit is the unsustainability of the conclusion of the Full Court – the second Full Court – that the solution to the problem identified in the patent was in fact part of the common general knowledge before the priority date.  The first of those appears at application book page 72, paragraph 178, about the third sentence in:

Doric had worked on locks of this type in 1995 and earlier when the safety release feature was not part of the design brief, but nonetheless it did not occur to those engaged in the design process (which included Mr Alchin and Mr Garland) –

the two witnesses called by the respondent –

to incorporate that feature although it is said to be both beneficial and obvious . . . 

I find that the new Lockwood 001 with safety release feature was the inspiration for the Doric products.  I do not accept that the Doric products were independently conceived.  I accept, however, that Mr Alchin did not set out to copy that product, beyond taking the bare idea of the inclusion of a lock release means whereby the inside lock would be released by the operation of the outside actuator.

That is, any lock release means.  In other words, the idea of adopting integer 6 and including it with the prior art, to overcome the problems with the prior art, was something which this skilled worker was not possessed of prior to the priority date, but the Full Court finds effectively on the basis of the implied admission in the patents specification that it was part of the common general knowledge, which meant it must have been part of this particular skilled worker’s ken or ordinary working knowledge.  That finding is completely inconsistent with that.

To similar effect is the finding at 69 of the application book in paragraph 166 where his Honour said:

In 1995 Mr Garland was set the specific task by Doric of designing a rim mounted deadlatch to compete with the old Lockwood 001.  The solution to the problem referred to in the Patent did not occur to him at that time.  If the idea had then occurred to him he would have mentioned it to Doric, even though he was working to a brief, and the resolution of the problem referred to in the Patent did not form part of that brief.  He was then aware that the “locked in” problem was a serious problem but the solution to it did not come to his mind.

Again, that is inconsistent with the finding of the Full Court based on an inference.  The Full Court’s finding presented a conundrum, and perhaps just to complete that, that finding of the Full Court appears in paragraph 156 of their judgment at 250:

Accordingly, nothing that Mr Alchin or Mr Garland said about “the solution” was to the contrary of the fact that it was understood at the priority date that a solution to the problem was to use the outside key to release the inside lock.

To similar effect at line 35 on that same page in paragraph 157:

We have already expressed our disagreement with his Honour’s view that the claim that the corollary was common general knowledge was inconsistent with Mr Freestone’s “too hard basket” evidence.

So they have concluded, as we have submitted in our written outline, that in fact the solution, as identified in claims 1 and 13 was already part of the common general knowledge.  That finding, of course, presented a conundrum, given the widely recognised problems with the prior art lock.  If it was the case that skilled workers knew the solution to the problem why had not anybody implemented it before Lockwood?

The Full Court’s explanation was that the respondent had never suggested that the means of implementing the solution were not inventive, and that explanation appears at page 249 of the application book at the end of paragraph 153:

While Mr Alchin did not realise until after the release of the new Lockwood that the problem could be solved in the manner shown by the new lock, Doric’s submission has never been that that was obvious.  It has always been that the concept . . . was obvious –

and to similar effect, the last sentence of paragraph 155 at application book 250.  Now, that explanation is just simply flatly wrong, because they had pressed an assertion that all the claims were obvious including the preferred embodiment claims.

GUMMOW ACJ:   At the moment, Mr Bannon, what you are saying seems to present this as a visitation case rather than a case involving any particular dispute as to principle.  Is that right?

MR BANNON:   Yes, we rely on visitation, definitely.  We also say there is an error of principle.  The visitation point is – or what I am taking your Honours to is important to identify that as a matter of substance we are right.

GUMMOW ACJ:   What do you say about the primary judge’s treatment of section 7?  I think the Full Court said he got that wrong?

MR BANNON:   The Full Court said that his Honour asked the wrong question.

GUMMOW ACJ:   Yes.  I am looking at – it is called CGK + 1 – yes, paragraph 167.  Do you dispute that?

MR BANNON:   Yes, in this sense – that first sentence in 167, no, but the problem ‑ ‑ ‑

GUMMOW ACJ:   I am sorry, you have to read 167 with 166, obviously, and there are two reasons, and then they go on to 167.

MR BANNON:   The error which their Honours identified at the top of 253 in 166 that his Honour:

erred in his considerations of common general knowledge by failing to distinguish between the CGK claims and the preferred embodiment claims.

We say that is just an error that just clearly was not made.  They say that the error is identifiable at 211 of his Honour’s judgment which appears at page 80 of the application book.  The asserted error that his Honour failed to appreciate whether the inventive step involved simply any lock‑release means or a particular lock‑release means, but within a space of six paragraphs, starting at 211, one can see that his Honour was perfectly alive to the issue.  Paragraph 211 is clearly dealing with what are described as the CGK claims, not referred to a specific embodiment, and that is apparent from 211, 212, and then the very next paragraph his Honour goes on to deal with the “Preferred embodiment claims”.

GUMMOW ACJ:   What do you say about paragraph 222, page 83?

MR BANNON:   Of his Honour’s judgment?

GUMMOW ACJ:   Yes, it is that which attracted criticism in the Full Court.

MR BANNON:   That is on the 7(3) point.

GUMMOW ACJ:   Practical constraints, yes.

MR BANNON:   Claim 13 is the claim which is the subject of dispute.  On the obviousness of taking out claim 1 is gone by.  Claim 13 is a claim which embraces the Lockwood 001.  It does not include the storeroom locks, and a Lockwood 001 is a rim mounted lock.  So that his Honour did ask the right question and asked this question, attempting to solve the problem which was solved by the patent, which is identified by the patent, which relates to a Lockwood 001 which is a claim 13 lock, would it be relevant to look at under the 7(3) test, storeroom locks?

Now, there was no evidence from any witness from the respondent to say as a person skilled in the art would have looked at storeroom locks.  Mr Garland’s evidence was – and his Honour made a finding – that he would have looked at a lock called DS60 not storeroom locks.  That finding appears at 194 of his Honour’s judgment, and that is the trial judgement – at application book 75:

Mr Garland does not say in terms that the storeroom locks provided the solution to the problem described in the Patent, or a step toward that solution.  Rather, Mr Garland points to the DS60 ‑ ‑ ‑

GUMMOW ACJ:   But the question in 7(3) becomes one of could “be reasonably expected to have ascertained, understood and regarded”.

MR BANNON:   Yes, and what one was presented with, the only item which was part of common general knowledge was the 001 lock – that was his Honour’s finding – the storeroom locks and the fact that they had a release means was specifically found by his Honour not to be part of the common general knowledge.  So the question is would someone in considering a problem with a 001‑type lock have reasonably thought to go to a storeroom lock, which were not part of the common general knowledge, and their witness said, “Well, I would not have gone to a storeroom lock.  All I would have gone to was something else called a DS60”, and that was the case they pushed on 7(3) before his Honour.

By the time they got to the Full Court – or the first Full Court and the second one, they had abandoned that and their focus had now switched to a storeroom lock, and in relation not only did they have no evidence but their own witness had given evidence which was antithetical to that.  To say his Honour made an error in that regard is simply wrong, and I should add too, that in their Honours’ treatment of the CGK + 1 point that it is infected by their finding at paragraph 181, appeal book 257, in considering the question which is the addition to common general knowledge, they say that “the common general knowledge” they are considering being added to is that “referred to at [159]”.  If one goes to 159 ‑ ‑ ‑

GUMMOW ACJ:   Where are you reading from, Mr Bannon?

MR BANNON:   Application book 257, paragraph 181, and this is the key conclusion ‑ ‑ ‑

GUMMOW ACJ:   This is a finding, really.

MR BANNON:  

Had the hypothetical skilled worker considered the common general knowledge referred to at [159] together with –

et cetera.  If one goes to 159 to see the common general knowledge they were referring to, the last sentence of 159, it includes “the storeroom locks”.

GUMMOW ACJ:   That is conceded, I think, in the Full Court elsewhere to have been an error or conceded to have been an error by your opponents?

MR BANNON:   Exactly, but my friend accepts that was not a finding open to them, but they made the finding that that was the common general knowledge, but when they come to the 7(3) point they say, in considering the addition of storeroom locks to the common general knowledge, it is an addition of storeroom locks to common general knowledge which they say already includes storeroom locks.  So with the greatest of respect that is a nonsensical sentence, firstly, and then secondly, if one goes up to 179 on page 257, in the second sentence it says:

Perusal of the Lockwood brochures would disclose products described as locks where the use of the key on the outside locks or unlocks both knobs.

That statement exhibits an infection with their impermissible finding that the skilled worked already appreciated that the solution was defined an outside key which operated an inside lock.  So if you start the search knowing that you are looking for a product which includes a feature which has the outside actuator unlocking the inside lock, yes, you may well find it.

GUMMOW ACJ:   Do you say anything about the Full Court’s reliance on Winner, is it, the case about the ‑ ‑ ‑

MR BANNON:   Yes.

CRENNAN J:   This is the corollary point, is it not?

MR BANNON:   Yes.  What we say is that they have attempted to invest this decision of implied corollary admissions with its own heritage – instance heritage of legitimacy by saying that Winner and Bristol‑Myers support the approach they have taken.  We say they do not, but the difficulty with subsequent courts and practitioners is it is going to be very hard to put that argument in front of a Federal Court judge when we have this latest Federal Court decision saying that is what it does.

The point of principle one comes to, beyond visitation, is to say that it is permissible in an obviousness case to rely on an implied admission, which is putting a gloss on the specification contrary to a normal principle, to achieve an admission in this case, not about a product which is sold, about something which is in the heads of skilled workers which is unpublished and unimplemented.  There would be a fundamental evidentiary difficulty as to someone expressing an opinion about that or an assertion about that, and what this judgment represents is an invitation and praying in aid, purportedly Winner and Bristol‑Myers, is that this is a permissible way for courts to approach the obviously very important significant impression of obviousness, and we say it is completely impermissible.  Obviousness is a quintessential jury question to be decided on the basis of evidence and not judicial intuition armed with the difficulties of hindsight.

The learned trial judge made no errors, we submit, in relation to the treatment of the obviousness questions.  He did not confuse them, firstly.  Secondly, he rightly relied on the evidence, and in particular, the absence of any evidence from any person – and this is the incontrovertible fact which one is left with, that there is an absence of any witness who said, “This proposition or this solution was always in my head.  I just never implemented it”.

There is one last point, may I say, that the conundrum which that conclusion poses‑ in other words, if you have a situation where a person is – all these skilled workers know the solution but do not implement it, one has to ask why?  Before this Court at page 159 of the application book, in paragraph 31 accepted an outcome of an approach taken by the respondent on the sufficiency issue, and the third sentence it is recorded:

No broad attack based on the failure of the Patent to say how a suitable lock release means could be constructed was made -

in other words, they did not attempt to say that it was beyond the ken of the skilled worker as to how to make a lock‑release means, and as this Court accepted, that was within the knowledge of a skilled addressee, and as the trial judge said, any allegation of that kind would have contradicted Doric’s Case on obviousness, and the reference for that is given, and that is a matter his Honour referred to and relied upon.  So that the approach of this Full Court cannot stand with that acceptance of that proposition by this Court.

GUMMOW ACJ:   Now, the claims that were revoked for lack of inventive step are set out at page 264 – there are quite a few of them.  Do you have findings in your favour on infringement of some one or more of those claims if they are valid?

MR BANNON:   Yes.  There was no contest about that before – that issue has been finally determined in our favour, if the claims are valid.

GUMMOW ACJ:   Were there other issues that could have been decided in Mr Catterns’ favour, but were not in the Full Court?  There was a sufficiency argument, was there not?

MR BANNON:   Yes, all issues presented by both parties were decided and the only one in my learned friend’s favour was this obviousness one.

GUMMOW ACJ:   All right.  What other issues were there?

MR BANNON:   There was what was described as fair basis in 2 which got short shrift – I am not sure if I am allowed to say that.  It did not do well.

GUMMOW ACJ:   Yes, what else?

MR BANNON:   That was it.  All other claims – there was infringement which my learned friend won on.  That was on other issues not the subject of obviousness claims, and we do not pursue that, but we got a favourable finding on infringement on these obviousness claims which we are pursuing.  So if we win ‑ ‑ ‑

GUMMOW ACJ:   I am just wondering what the potential is for cross‑appeals, that is all?

MR BANNON:   None.  In other words, if we win – if we get leave, and our obviousness finding was overturned, we would have a finding of infringement.  If it please the Court.

GUMMOW ACJ:   Yes, Mr Catterns.

MR CATTERNS:   May it please the Court.  Your Honours, no question of law arises.  Indeed, our friends, with respect, only faintly put one forward, and we would respectfully submit this is not a visitation case.  The question of obviousness here turns on the construction of the specification based on some basic findings of Justice Hely which we will go to, and the application of some passages of evidence about which there was a debate on the construction, so to speak, but which was further evidenced, which the Full Court rightly held, supported the case on obviousness.

Now, your Honours, so far as obviousness goes, of course this Full Court is with us on obviousness.  As the High Court pointed out in the fair basis case the other Full Court was virtually with us in obviousness and criticised his Honour’s reasoning on obviousness.  That is why we ended up with a different Full Court and, your Honours, we respectfully submit that his Honour Justice Hely was with us on obviousness at first where his Honour said, “My initial impression is that this is obvious”, but then he changed that initial impression ‑ ‑ ‑

GUMMOW ACJ:   Where do we see that, Mr Catterns?

MR CATTERNS:   Your Honour, that is at page 79, paragraph 207 where his Honour says:

Guided by Re Raychem Corp’s Patents and Winner v Ammar Holdings –

which is the corollary point as her Honour pointed out –

my initial impression was that the generality of the description of the invention in claim 1 –

and that also applies to claim 13 –

and in particular feature (vi) –

which is the lock‑release means –

was sufficient to lead to the conclusion that the alleged invention as claimed is obvious.

Then, your Honours, his Honour mixed up the bare conception, which is merely a corollary of the fact that the problem, the deficiency of the lock, was known, and the workings of particular lock‑release means which were the preferred embodiment claims.  In 208 his Honour says it has to be determined on the evidence.  In 209 his Honour says where others:

“fail to arrive at the claimed construction” –

Now, as your Honours know, they are the two paragraphs of evidence that our friends – or three paragraphs that our friends took your Honours to copying/failure to arrive.  Your Honours, they are secondary indicia of obviousness.  Like long‑felt want you set up a proper case of long‑felt want.  They are by no means determinative of obviousness.

Then, your Honours, his Honour then quoted from a passage in Bristol‑Myers Squibb where their Honours are not dealing with inventiveness, but are dealing with manner of manufacture, the so‑called threshold quality of inventiveness.  Your Honours remember, of course, Ramset and Philips v Mirabella.  Then, your Honours, the critical paragraph which downs us and, your Honours, this is the paragraph which is the source of our friend’s argument that the Full Court said that the specification admitted that the solution was obvious, they do not.  They meet his Honour’s paragraph 211:

No witness deposes to the fact that it was understood at the priority date that a solution to the problem identified in the specification was to use the outside key –

His Honour means “obvious” there, your Honour.  That is what “understood” means there, we respectfully submit –

It was not obvious to Mr Freestone or Mr Wilson.  The fact that resolution of the problem was placed in the “too hard” basket by Mr Freestone is inconsistent –

Their Honours in the Full Court say if resolving the problem put in the “too hard” basket you have already got the invention, because the invention is solve the problem that the outside lock does not undo the deadlock.

GUMMOW ACJ:   This is at page 231, is it?  That is taken up in submissions at ‑ ‑ ‑

MR CATTERNS:   Yes, your Honour, they are the submissions.  Your Honour, where the Full Court makes a finding – the way the court deals with Justice Hely’s paragraph 211, your Honour ‑ ‑ ‑

GUMMOW ACJ:   Paragraph (r) at 231, and then where do we go from there?

MR CATTERNS:   Your Honour, may I come back to Justice Hely in a moment but the Full Court’s ratio appears at 243 at paragraph 136:

Doric accepts that it did not call witnesses to give evidence –

on the ultimate question –

but it disputes that there was no evidence of obviousness.  It first relies on admissions in the specification –

which of course one can.  Then in 137:

Doric does not claim that the specification expressly admits that claim 1 . . . is obvious.  Rather it says that the specification admits that it was common general knowledge that, in the typical lock, the outside key did not release the inside lock.

It says so four times on pages 1 and 2, and Justice Hely held that in paragraph 198 that that is what the specification amended:

Doric goes on to contend that given that admission, there was no inventive step merely to conceive of remedying that defect by any means using an outside actuator.  That submission should be accepted –

just like Justice Heerey’s decision in Winner.  If I could just skip, that is the corollary.  So, your Honours, here it is obvious that the key does not undo the lock, solve it, and that is the inventive step, and that is a matter ultimately for the court, as our friends rightly say, a jury question.

Then, your Honours, in the next 20 paragraphs, the Full Court answers his Honour Justice Hely’s reasoning in paragraph 211 that I just took the Court to and in paragraph 140 their Honours say, well, as to the first sentence that is true, but do not forget that the corollary of the admission is solve it, which as your Honours remember Justice Wilcox said the same thing in the first Full Court.  Their Honours then deal with the rest of his Honour’s paragraph bit by bit.  The proposition that was not obvious to Mr Freestone and Mr Wilson your Honours see at line 43:

So far as the second sentence –

goes, then their Honours analyse Mr Wilson’s evidence over the next page and a half, and at paragraph 144 hold – it is clear that Mr Wilson was not talking about the bare idea of lock‑release means.  He was talking about the preferred embodiment, the mechanics.  Then their Honours answer the next part of Justice Hely:

So far as the second sentence in the passage set out at [139] relates to Mr Freestone –

then their Honours go through all of that where Mr Blanch had said, “Let’s do auto unlocking”, in some minutes of a meeting that we tendered.  The minute you say “auto unlocking” that is claim 1 and claim 13 and he said the same orally to Mr Freestone.  Then at 150 their Honours deal with “conclude”, that Freestone was directing his mind to:

the mechanics or nitty‑gritty –

as their Honours say.  Then their Honours go to the next part of Justice Hely and make a conclusion that what Mr Freestone put aside was not the bare idea but how to make the key do the job, how to adapt the particular lock, the 001.  Our friends had a complicated little lock.  Then in paragraph 153 their Honours say as to the fourth sentence of his Honour’s reasons, picking up the copying, that it was the copying of the idea, but their Honours say:

The word “manner” is thus directed to the way in which Lockwood produced its new product.

Your Honours, this was precisely the criticism that the first Full Court made but did not, so to speak, crystallise in a finding of obviousness, that his Honour Justice Hely in that paragraph 211 mixed up the mechanics of the solution with the conception of the bare idea because the minute somebody says, “Let’s do auto unlocking”, they have the whole of invention.  If they say, “Let’s do auto unlocking in the 001”, they have claims 1 and 13.

Now, the matter his Honour the Acting Chief Justice raised in relation to section 7(3) we submit is a complete killer point for us, because his Honour Justice Hely did make a clear error on page 83 in dealing with section 7(3) and it reflects the earlier error his Honour made in dealing with the question of obviousness ‑ ‑ ‑

GUMMOW ACJ:   You may be right about that, but Mr Bannon says that in turn the Full Court made an error about section 7 as well in 159.

MR CATTERNS:   Your Honour, that is clearly a slip, we accept, and it does not infect the section 7(3) reasoning.  In 159 their Honours say ‑ ‑ ‑

GUMMOW ACJ:   Where is their 7(3) reasoning?

MR CATTERNS:   Your Honour, it begins at 160, and their Honours point out the error in his Honour’s reasoning, and as I think your Honour pointed out, the error in his Honour’s reasoning was that he said these would not have been ascertained because you would need to buy a lot of them and pull them apart to work out how they work.

GUMMOW ACJ:   Anyhow, the Full Court’s critical finding is at paragraph 179, is it not?

MR CATTERNS:   Yes, your Honour, precisely, and it is based on a setting out of a large amount of evidence of the storeroom locks having been sold in large numbers, each of the three witnesses being aware of one or other of them and being aware that in none of those was the mechanical problem present because in each case the outside key did unlock the inside deadlock and, of course, may I remind your Honours the patent is not directed just to front door locks.  It includes storeroom locks and it includes window locks.

So, your Honours, we respectfully submit that our learned friends – and our learned friends do not point to any error of law in the application of section 7(3) so we respectfully submit that it is clear that the skilled addressee would have ascertained – they all knew these types of locks.  It is admitted on the specification and his Honour Justice Hely held that it was admitted on the specification that it was known that the problem was – the mechanical problem – was that the key did not undo the lock.

May I remind your Honours of 198 of his Honour Justice Hely.  It is at page 76.  Your Honours, this is the use of an admission in the specification which was the heart of our friend’s written approach to this question.  At the bottom of 76 his Honour says:

The specification discloses that in typical latch assemblies, key operation of the latch from outside the door does not release the lock on the inner handle . . . That disclosure is made in the context of a discussion of the practical disadvantages involved in the use of typical latch assemblies so as to suggest that it is a matter well known to skilled workers in the trade.

But our case does not depend just on the admission because his Honour says:

One only has to operate the old Lockwood 001 –

always agreed to be common general knowledge –

to observe that the inner handle remains locked notwithstanding key operation –

It was also found to be common general knowledge at 186 and his Honour at the bottom of 201 notes our submission:

if the problem identified by the Patent arises and is known to arise because the outer actuator does not release the inside lock, the obvious solution is to change the device so that the operation of the outer actuator achieves that result.

The specification does not admit that claim 1 is obvious –

but it does as common general knowledge –

-key operation of the latch from the outside of the door does not release the inner handle -

So, your Honours, we respectfully submit that there is nothing in our learned friend’s admission point, and then the two paragraphs that our friends took the Court to were, as I have submitted, paragraphs of secondary indicia.  One was copying, fair enough, you can rely on that.  It rises above a debating point.  Secondly, copying of the bare idea.  The other is that Mr Garland, while working on a different product, did not come up with this, but many people came up with the idea of the outside key undoing the lock, that is why claim 1 is not novel.  Claim 13 is novel because it has a slightly different mechanism of the way the cam works, but the crucial inventive step was present in multiplicity of other locks.  So we are well ahead of our learned friends so far as secondary indicia go, we respectfully submit.

Your Honours, may I just remind your Honours that at page 3 of the four passages where in the specification this admission which was the basis of our learned friend’s written outline arose, your Honours can immediately see it is not limited to doors, certainly not to rim mounted locks.  In fact the picture on page 2 is not of a rim mounted lock.  At line 14 of the patent lines, 25 of the book:

In particular, key operation of the latch from the outside of the door will not release the lock . . . 

It is an object of the present invention to provide a key controlled latch which can be released –

So, your Honours, that is the corollary just like Winner v Ammar.  Then their Honours set out the typical lock over the next paragraph, the inventors, and in four lines from the bottom say:

In normal latch assemblies of the foregoing kind operation of the outer or second actuator does not affect the operation of the locking means.  That locking means remains active in spite of operation –

that is the third, your Honours, and then at the top of the next page, at 4 of the book, at line 5 of the patent:

The second or outer actuator may also include a key operated tumbler lock, but in conventional assemblies of the foregoing kind operation of that lock does not influence operation –

then the consistory clause which was referred to in the High Court’s judgment -

According to the present invention, a latch assembly of the foregoing kind is characterised in that it includes lock release means which is responsive ‑

as opposed to is not responsive.  So, your Honours, the inventive step is to supply a remedy – and reminding, your Honours, any remedy – for a known deficiency, and in the end that is a jury question for the court, and really, your Honours, I know the Evidence Act lets us have evidence on the final question and that proved to be significant in Firebelt v Brambles in the cross‑examination supplying the missing link about the combination being obvious but, your Honours, we respectfully submit that in a simple case like this to say – when you admit in the specification, and it is held by his Honour that anybody who handles the lock sees the deficiency, if you admit that that is the mechanical problem with the device, to fix it is not inventive.

May I remind your Honours, just for the wording of that integer is “it is the bare idea” is at page 13 in claim 1, lines 9 to 11, the initial five elements of the lock and then:

and lock release means which is responsive to said operation of the second actuator so as to thereby render said locking means inactive.

Your Honours, the claim that we did not infringe was claim 7 and that got down to the mechanics of how – and we won in that in both levels – in the 001 lock a very nice spring and trigger mechanism operated so that when

you turned the key one cam pushed down a lever, that released a trigger, the spring drove the cam around and the thing got unlocked.

The heart of his Honour Justice Hely’s error is to mix up the bare conception of the integer of claim 1 with the mechanics of claim 7 and related claims, and sure claim 1 is now out of the case because it was not even novel which itself is, as I have submitted, a secondary indicator, and what gave 13 novelty – that is on the next page, your Honours, page 14 – is the direction in which the detent moves, which our friends do not submit adds anything to their obviousness case – is it so happened in the storeroom locks the detents moved axially as opposed to radially and therefore they were novel.

So, your Honours, we respectfully submit that on the section 7(2) ordinary obviousness case there is no error and no cause for a visitation, and on the section 7(3) case, our case is all the stronger because it cannot be said that the skilled addressees were not aware of these other locks which possessed that integer – other locks and brochures, of course, so we respectfully submit the application should be refused.

MR BANNON:   The only reason there is any focus on the terms of the specification is because there is simply no positive evidence caused by any witness in support of the obviousness case, and the whole of the attack on obviousness, assuming the onus lies with the attacker on obviousness still, they are driven to trying to find an implied corollary admission out of the specification, and that is what the Full Court did, and it is not there and it is not sufficient evidence to support an obviousness finding.

That implied corollary admission, which is the key point of principle, is the proposition which drives the whole of the Full Court judgment, because my friend says we can produce evidence on the ultimate issue, but we did not.  It is not the ultimate issue.  It is the proposition that people already knew that the solution was to use the outside key.  Nobody said it.  A whole string of witnesses came through the witness box, nobody said it.  That is what the learned trial judge took note of, and when presented with the proposition that there was an implied admission, his Honour said, “I am not going to find an implied admission out of a part of the specification which is asserting inventiveness”.  It is just not there.  It is not a permissible approach.  This judgment asserts the contrary.

Lastly, the reference at page 69 of the application book, dealing with Mr Freestone’s evidence with Justice Hely, at the top of page 69 line 10, that paragraph demonstrates that his Honour, as one would expect, is keenly alive to the difference in the issues in determining the question of obviousness in relation to the claim 1 claim, and hence claim 13 and the preferred embodiment claim.  That was the licence which the appellate

court took to engage in appellate interference with the trial judge’s findings.  If it please the Court.

GUMMOW ACJ:   We will take a short adjournment.

AT 2.42 PM SHORT ADJOURNMENT

UPON RESUMING AT 2.47 PM:

GUMMOW ACJ:   Mr Bannon, we want to ask you some fairly friendly questions about your draft notice of appeal.  Now, ground 5, is that really the sort of debate we should be getting into?

MR BANNON:   It is a conceded point, anyway.  The error is conceded so that ‑ ‑ ‑

GUMMOW ACJ:   Ground 5 would go out, would it not?

MR BANNON:   Yes, your Honour.

GUMMOW ACJ:   In grounds 2, 3 and 4 there does not seem to be – it may be there implicitly, but there does not seem to be explicit your complaint about the corollary point?

MR BANNON:   It is meant to be there, but it is not very well stated.  It is meant really to be in 3.

GUMMOW ACJ:   It is meant to be in 3, is it?

MR BANNON:   Yes.  So that if the word implied - “corollary” is added before “admissions”.  That would rectify that.

GUMMOW ACJ:   Yes.  If there is a special leave point beyond the visitation point it may be in ground 3, and this corollary theory?

MR BANNON:   Yes.

GUMMOW ACJ:   All right.  There will be a grant of leave in this matter, but the draft notice of appeal will require an amendment to remove ground 5 and to expand ground 3 or supplement ground 3 to deal with the corollary point as indicated.

MR BANNON:   If it please the Court.

GUMMOW ACJ:   The matter should be a one‑day matter.

MR BANNON:   Yes.  Your Honour, there was a stay granted by the Federal Court ‑ ‑ ‑

GUMMOW ACJ:   Yes, I was going to ask you about that.

MR BANNON:    ‑ ‑ ‑ up to and including – at 265 of the application book, and 9(b) is the current stay which ‑ ‑ ‑

GUMMOW ACJ:   We go from order 2 at page 264 over to 9(b).  Do we need to do more than extend the stay in 9(b) until the further order of this Court?

MR BANNON:   No, your Honour, and I am instructed to give the undertakings set out in paragraph 10 in the same terms to this Court.

GUMMOW ACJ:   Yes.  Upon those undertakings we will make that stay order extension as indicated.

AT 2.50 PM THE MATTER WAS CONCLUDED