Osmose New Zealand v Zelam Limited

Case •

[2015] APO 62

•

21 September 2015

IP AUSTRALIA

AUSTRALIAN PATENT OFFICE

Osmose New Zealand v Zelam Limited [2015] APO 62

Patent Application:                2010237067

Title:Insecticidal composition and method

Patent Applicant:                   Zelam Limited

Opponent:  Osmose New Zealand

Delegate:  O L Haggar

Decision Date:  21 September 2015

Hearing Date:  30 June 2015 in Canberra 

Catchwords:  PATENTS – opposition to the grant of a patent – construction of the claims – characterisation of a “when used” claim – whether the claims are clear – whether the claimed invention is novel – whether to take account of a document pursuant to regulation 5.23 – whether the claimed invention involves an inventive step – application of a problem-solution approach to obviousness – whether the claimed invention is useful – whether the specification fully describes the invention – opposition unsuccessful on all grounds – costs awarded against the opponent

Representation:  Patent applicant: James Samargis of counsel instructed by Dr Chris Molloy of Pipers

Opponent: Andrew Fox of counsel instructed by Dr Andrew Baker of A J Park 

IP AUSTRALIA

AUSTRALIAN PATENT OFFICE

Patent Application:                2010237067

Title:Insecticidal composition and method

Patent Applicant:                   Zelam Limited

Date of Decision:                   21 September 2015

DECISION

I dismiss the opposition and award costs according to Schedule 8 of the Patents Regulations against Osmose New Zealand.  Subject to any appeal of this decision, I direct that the application proceed to grant.

REASONS FOR DECISION

Background

  1. Patent application 2010237067 was filed by Zelam Limited (Zelam) on 25 March 2010 under the provisions of the Patent Cooperation Treaty as international application PCT/NZ2010/000057 with a claimed priority date of 17 April 2009.  The application was advertised as accepted on 2 September 2013.  Zelam filed a request to amend the completion specification on 15 April 2014 and the proposed amendment was advertised as allowed on 14 August 2014. 

    The opposition

  2. Osmose New Zealand (Osmose) filed a notice of opposition to the application on 2 August 2013 and a statement of grounds and particulars on 4 November 2013.  A request to amend the statement of grounds and particulars was allowed on 3 February 2014.

  3. The opposition was heard in Canberra on 30 June 2015.  James Samargis of counsel instructed by Dr Chris Molloy of Pipers appeared on behalf of Zelam.  Andrew Fox of counsel instructed by Dr Andrew Baker of A J Park appeared on behalf of Osmose.

    Grounds of opposition

  4. The statement of grounds and particulars identifies multiple grounds of opposition, but Osmose’s submissions in chief were confined to the following grounds:   

    • the claimed invention is not novel;
    • the claimed invention does not involve an inventive step;
    • the claimed invention is not useful; and
    • the specification does not comply with subsection 40(3) in that the claims are not clear.

  5. The hearing for the most part proceeded on this basis.  However, as a consequence of the way in which the issues in dispute were argued during the course of the hearing, Mr Fox advised that Osmose additionally relied upon the ground that the specification does not comply with subsection 40(2).    

    The claims under consideration

  6. Zelam’s submissions at [275] signal an intention to amend the claims.  On 26 June 2015 the parties were advised in writing that, as the amendments proposed by Zelam had no formal status, the hearing would be directed to the claims as they stand.  Mr Samargis confirmed at the commencement of the hearing that Zelam did not wish to formally pursue any amendment to the claims at this stage of the opposition.  The claims under consideration for present purposes are consequently those filed on 15 April 2014.          

    The evidence

  7. The parties rely upon the evidence set out below.

    Evidence in support consisting of declarations by:

    • James William Creffield dated 13 January 2014 (Creffield 1) with Exhibits JWC-1 to JWC-3;
    • Stephen James Crimp dated 31 January 2014 (Crimp 1) with Exhibits SJC-1 to SJC-9;
    • James William Creffield dated 3 February 2014 (Creffield 2) with Exhibits JWC-4 to JWC-7; and
    • Scott James Gardiner dated 3 February 2014 (Gardiner) with Exhibit SJG-A.

    Evidence in answer consisting of declarations by:

    • Craig Kay dated 7 May 2014 (Kay);
    • George William Mason dated 9 May 2014 (Mason);
    • Christopher Molloy dated 9 May 2014 (Molloy);
    • Andreas Frederik Siraa dated 9 May 2014 (Siraa) with Exhibits AFS-1 to AFS-8;
    • Terry L Amburgey dated 23 May 2014 (Amburgey 1) with Exhibits TLA-1 to TLA-6; and
    • Terry L Amburgey dated 7 June 2014 (Amburgey 2) with Exhibits TLA-7 and TLA-8.

    Evidence in reply consisting of declarations by:

    • Richard Siew Kee Chay dated 8 September 2014 (Chay) with Exhibit RC-1;
    • James William Creffield dated 8 September 2014 (Creffield 3) with Exhibits JWC-8 to JWC-11; and
    • Stephen James Crimp dated 8 September 2014 (Crimp 2) with Exhibits SJC-10 and

    SJC-11.

  8. I will refer to the relevant parts of the evidence where appropriate.  For the moment I note that there is no real dispute between the parties as to the credibility of any of the declarants, and I accept that in view of their particular expertise all of them are knowledgeable of the matters on which they have commented.  However, I am mindful of the fact that where the evidence is conflicting it may be necessary for me to form an opinion on whether the knowledge of one declarant is superior to that of another in the context of the issue to which their evidence is directed.  This simply reflects the general principle that as an administrative decision-maker it falls to the Commissioner to decide what weight to attach to evidence having some probative value (Minister for Immigration and Ethnic Affairs v Pochi [1980] FCA 85; 31 ALR 666 at 689).

    The specification

  9. The specification indicates that the invention generally relates to an insecticidal composition and its method of use for surface treatment of timber or wood products.

  10. By way of background, the specification explains that many timber and wood-containing products are subject to insect damage, with the most problematic insects being termites, ants, boring insects, weevils and various beetles.  Timber and wood products may be protected against insect damage by the application of insecticides.

  11. Traditional methods of timber protection involve aqueous impregnation with inorganic preservatives such as copper chrome arsenic, or the use of carbon-based preservatives in a solvent delivery system.  Both approaches produce high levels of active ingredient penetration but are expensive and less than ideal.  New generation non-repellent insecticides including certain members of the neonicotinoid insecticides (for example imidacloprid), phenylpyrazoles, anthranillic diamide insecticides, spinosyns, chlorenapyr and indoxacarb are now the active ingredients of choice for eradication of collections of problematic ground-dwelling insects such as termite and ant colonies.  This is because foraging members of the colony that encounter the insecticide (within an appropriate bait) are not repelled and instead are able to consume the insecticide, carry it back to the colony, and spread the insecticide among other members of the colony before they die.

  12. Most surface treatment operations are carried out in a saw mill or a wood processing mill.  Post-treatment operations including sawing or drilling occur mainly on building sites or in a factory such as a frame and truss manufacturing facility where timber is sawn to length to produce framework such as trusses and other preassembled structures.  These post-treatment operations expose surfaces that have not been treated directly with insecticide.  It is therefore common practice to recommend a secondary treatment operation in which the newly exposed surfaces are treated with insecticide before the structural members are nailed or otherwise fixed into place, but this involves additional time, expense and risk to workers.

  13. The specification continues as follows:

    “The prior art teaches that non-repellent insecticides used as a surface treatment for timber or wood products are unable to prevent insect damage to any untreated surfaces and to avoid the need for secondary insecticide treatment of newly cut surfaces, for example on a building site, it is necessary to use surface treatment compositions and methods that utilise insecticidal active ingredients that are both lethal to the target insects and repellent with respect to the target insects.  This is based on prior art observations that untreated wood surfaces exposed after the initial surface treatment operation, for example the ends of sawn timber, provide a point of entry for insects unless an insecticide with repellent activity is present on neighbouring treated surfaces.  Insecticides with repellent activity that may be used in surface treatments include synthetic pyrethroids such as permethrin, deltamethrin, cypermethrin and bifenthrin.  Unfortunately these active ingredients have relatively high mammalian toxicities and workers handling products containing these active ingredients commonly experience paresthesia or skin irritation to varying extents.”

  14. The specification indicates that the object of the invention is to obviate or minimise the disadvantages identified above or else to provide a useful alternative.

  15. According to the specification, the invention has originated from the unexpected finding that timber and wood products which have been surface treated with new generation non-repellent insecticides, then sawn to expose new untreated surfaces, remain fully protected against insects such as termites without a secondary insecticide treatment of the newly exposed surfaces.  This is said to remove the need for workers to handle insecticides during secondary treatment of surfaces freshly sawn or otherwise exposed which, coupled with the low toxicities of the abovementioned non-repellent insecticides, delivers greater levels of safety over existing compositions, treatment methods, and treated timber and wood products.

  16. The specification ends with 18 claims.  The independent claims are in the following terms:

    “1. A wood protectant composition comprising as sole insecticidal active ingredient an insecticidally effective amount of one or more non-repellent insecticides selected from non-repellent neonicotinoids, phenylpyrazoles, diamide insecticides, spinosyns, indoxacarb, and a combination thereof when used in a single, surface treatment for a timber or wood product whereby said composition provides, in a single surface treatment, protection against insect damage to all surfaces without any need for a secondary insecticide treatment of one or more new, untreated surfaces wherein a post-treatment processing operation is performed and whereby the single, surface treatment is characterised in that:

    i.non-repellent insecticide is surface applied to the timber or wood product at an active ingredient loading of greater than 0.10 gai/m3, and

    ii.no part of the one or more new, untreated surfaces resulting from a post-treatment processing operation is more than 50 mm from any neighbouring treated surface, or the combined area of the one or more new, untreated surfaces comprises less than 33% of the total surface area of the timber or wood product.

    12. A method for surface treatment of timber or a wood product that provides protection against insect damage to all surfaces without any need for a secondary insecticide treatment of one or more new, untreated surfaces generated by post-treatment processing operations including sawing, cutting, drilling, bevelling, planning, sanding and/or a combination thereof, the method comprising applying to the surface of the timber or wood product an insecticidally effective amount of a composition according [to] claim 1; the method being further characterised in that:

    i.the non-repellent insecticide is surface applied to the timber or wood product at an active ingredient(s) loading of greater than 0.10 gai/m3, and

    ii.no part of the one or more new, untreated surfaces resulting from a post-treatment processing operation is more than 50 mm from any neighbouring treated surface, or the combined area of the one or more new, untreated surfaces comprises less than 33% of the total surface area of the timber or wood product.”

  17. As can be seen, both independent claims in effect stipulate the application of the non-repellent insecticidal composition according to claim 1 in an insecticidally effective amount to the surface of the timber or wood product to be treated.  The specification at page 10 states that the term “insecticidally effective amount” is to be understood as indicating:

    “a concentration or product loading at which the non-repellent insecticide provides acceptable protection of the surface-treated timber or wood product in a standardised test method.  For example, concentrations or product loadings may be expressed in terms of grams of active ingredient per cubic metre (gai/m3) or grams of active ingredient per square metre (gai/m2).  Alternatively concentrations may be alternatively expressed on a mass basis as % m/m (mass of ingredient / mass of timber or wood product).  What is considered “acceptable” protection varies from one test method to another.  For example, sample pieces of untreated timber and surface-treated timber at different product loadings subjected to a termite trial are weighed before and after a 3 to 6 month exposure to termites to determine the mass loss of the samples resulting from termite attack.  An average mass loss of less that 5% for a set of treated samples may be considered an acceptable level of protection in a trial where the average mass loss of the untreated samples is greater than 30-50%.”      

    Standard of proof

  18. Examination of the application was requested on 24 January 2012.  As a result, substantive amendments of the Patents Act brought about by the Intellectual Property Laws Amendment(Raising the Bar) Act 2012 (the RTB Act) do not apply.  This includes the amendment to subsection 60(3A) that allows the Commissioner to refuse an application if satisfied on the balance of probabilities that a ground of opposition exits.

  19. Consequently, the former standard for opposition proceedings applies and Osmose must establish that it is clear or practically certain that a valid patent cannot be granted (F Hoffman La RocheAG v New England Biolabs Inc [2000] FCA 283; 50 IPR 305 at 311, 319; Commissioner of Patents vSherman [2008] FCAFC 182 at [18], [22]; 79 IPR 46; Genetics Institute Inc v Kirin-Amgen Inc [1999] FCA 742; [1999] 92 FCR 106 at [17]).

    Construction and clarity of the claims

  20. There are a number of significant points of contention between the parties on the proper construction of the claims and the meaning to be ascribed to them.  It is necessary to first deal with these issues.

  21. The principles to be applied in claim construction are well established (Flexible Steel Lacing Company v Beltreco Ltd [2000] FCA 890; 49 IPR 331 at [70] – [81], Pfizer Overseas Pharmaceuticals v Eli Lilly and Company [2005] FCAFC 224; 68 IPR 1 at [247]-[250], HLundbeck A/S v Alphapharm Pty Ltd [2009] FCAFC 70; 81 IPR 228 at [118]-[120]). Of particular note is that the words used in a claim are to be given the meaning a skilled person would attach to them, having regard to their own personal knowledge and to textual disclosures in the body of the specification which, together with the claims, must be read as a whole.

    Construction

  22. Claim 1 requires the non-repellent insecticidal composition it defines to be applied in “an insecticidally effective amount” to the surface of the timber or wood product to be treated.  As mentioned earlier, the specification has imposed its own meaning to this phrase as indicating a concentration or product loading at which the non-repellent insecticide provides acceptable protection of the surface-treated timber or wood product in a standardised test method.  It is convenient here to gain an understanding of what is meant by “insecticidal” in the context of the specification.  Mr Creffield has adopted a narrow view in this regard.  Creffield 3 at [138] states that (with original emphasis):

    “The normal meaning of the term ‘insecticidal’ is that the active is effective to control insects, which includes termites.  Having read the opposed patent specification I would interpret the term ‘insecticidal’ to mean that the active has to be effective against borers and termites.  The reason for this interpretation (quite apart from the fact that termites are insects) is that the opposed patent specification is focused on termites.  For example, all of the examples in the patent specification relate to the treatment of timber against termite attack.”

  23. It is true that in exemplifying the invention the specification is restricted to describing the performance of the subject non-repellent insecticidal composition when used to treat timber exposed to termite attack.  This is quite understandable as the evidence establishes that termites are regarded as a particularly problematic wood-destroying insect.  Nevertheless, the specification makes it perfectly clear that the invention has wider application in protecting timber or wood product against attack by insects other than termites, such as ants and borers.  I consequently do not accept Mr Creffield’s contention that in the present context the descriptor “insecticidal” can be read down as only including actives that are termiticidal.

  24. The standards which determine the “effective amount” of insecticide to be applied are set out in the “Protocols for Assessment of Wood Preservatives” issued by the Australasian Wood Preservation Committee (the AWPC).  A copy of these protocols has been exhibited as JWC-3.  The purpose of the protocols is to provide procedures for determining the biocidal efficacy of wood preservatives intended for use in Australia and New Zealand.  To this end the protocols set out test procedures that are aligned to Australian standard “hazard classes” (see AFS-2) which broadly speaking relate to the insect conditions to which the treated timber will be exposed.  Thus, for instance, the lowest level of hazard class (H1) requires protection against borers but not termites, whereas the next level (H2) requires protection against both species of insects.  Most relevantly, the protocols establish that what constitutes an “effective amount” of insecticide is entirely dependent upon the extent of protection against insect attack sought to be attained.

  25. Claim 1 includes the further requirement that the non-repellent insecticide is surface applied to the timber or wood product at an active ingredient loading greater than 0.10 gai/m3 (grams of active ingredient per cubic metre of treated timber or wood product).  It therefore becomes apparent that claim 1 sets two requirements in relation to the loading or amount of non-repellent insecticide to be applied to the wood or timber product: an “effective amount” and a loading of greater than 0.10 gai/m3.  However, I do not see any conflict between these requirements.  The combined effect of them is that the greater insecticide loading or amount applies.  So, for example, where the active ingredient loading as determined by a standardised test procedure is found to be effective at say 5 gai/m3, then this is the minimum loading set by claim 1.  

  26. There is no dispute between the parties as to the proper construction of the term “non-repellent insecticides”.  However, in Creffield 2 at [11], Mr Creffield states that “non-repellent insecticides may exhibit repellent effects … when applied to wood at higher doses than their toxic threshold levels”.  This may be so, but the fact remains that in specifying the use of non-repellent insecticides the claimed invention has effectively excluded these higher doses.

  27. As a final point, I note that the specification at page 5 states that the term “surface treatment“ which appears in claims 1 and 12 refers to the application of the subject non-repellent insecticidal composition onto any surface of a timber or wood product such that the composition coats or covers the surface.  This has been widely referred to in the evidence as an “envelope” treatment.  When taken in context the reference in the claims to a single surface treatment means that no secondary treatment of any newly exposed surfaces of the initially treated timber or wood product is needed.

    Clarity

  1. Osmose contends that claim 1 is unclear as it “does not define a ‘product’ invention simpliciter”.  Mr Fox took the matter further at the hearing in submitting that although having the appearance of a product claim, the words “when used” in claim 1 imported overtones of a Swiss-style claim which meant that it should be treated as a method or process claim (per Otsuka Pharmaceutical Co Ltd v Generic Health Pty Ltd (No 4) [2015] FCA 634 at [120]). He then argued that an ambiguity would arise if claim 1 was construed as a product claim since infringement would not occur unless a person used the product according to the “method” features of the claim which are expressed in very broad terms. It is said that in these circumstances infringement could occur “in a myriad of ways”.

  2. I agree that it is appropriate to treat claim 1 as a disguised method or process claim.  This is due to the limiting effect of the words “when used” (Wellcome Foundation Ltd v Commissioner of Patents [1980] HCA 21; 1A IPR 261 at 266). What this means is that the “method” features of claim 1 in issue (viz. features i and ii) cannot be dismissed as arbitrary limitations as suggested by Mr Fox. I am also not convinced that claim 1 can be characterised as a Swiss-style claim. As stated in Otsuka at [101], the generalised form of such a claim is “the use of compound X in the manufacture of a medicament for a specified (and new) therapeutic use”. Claim 1 clearly does not accord with this generalised form. However, as nothing turns on it I do not intend to pursue the matter further.

  3. Mr Fox is correct in saying that features i and ii of claim 1 are broadly defined, but I do not consider that this causes any uncertainty.  The requirement for the claims to be clear does not mean that they must be couched in language which is precise or absolute.  As noted for example in Flexible Steel Lacing at [81:

    “Lack of precise definition in claims is not fatal to their validity, so long as they provide a workable standard suited to the intended use … the consideration is whether, on any reasonable view, the claim has meaning … In determining this, the expressions in question must be understood in a practical, common sense manner … Absurd constructions should be avoided … and mere technicalities should not defeat the grant of protection …”

  4. This involves a practical determination, rather than a strictly literal exercise, of whether the skilled person can understand what acts fall within the scope of the claim.  In the present case the expert evidence does not show that the skilled person would experience any difficulty in determining the ambit of features i and ii of claim 1.

  5. Osmose further contends that when properly construed the phrase “sole insecticidal active ingredient” in claim 1 implies that the presently defined wood protection composition comprises only one non-repellent insecticide selected from the list of non-repellent insecticides set out in the claim.  Osmose submits that an inconsistency therefore arises when claim 1 goes on to speak of a selection of more than one, including a combination, of the listed non-repellent insecticides.  I do not agree.  It seems to me that when viewed in a practical sense, claim 1 is simply saying that the constituency of the insecticidal active ingredient is restricted to, but can include one or a mixture of, the non-repellent insecticides it lists.

  6. The same reasoning applies equally to claim 12.  It also extends to claim 7 which Osmose asserts provides for the inclusion of an additional insecticide in the wood protection composition according to claim 1.  This is presumably a reference to the “insecticidal synergists” which claim 7 lists as one of a number of components that can be added to the claimed composition.  However, an insecticidal synergist by definition operates to improve the efficacy of an insecticide but by itself is inactive.  I therefore fail to see how claim 7 can be said to be in conflict with claim 1.

  7. The final criticism pressed by Osmose in relation to the clarity of the claims stems from the words “when derived from” in claim 18.  However, it is plainly evident that the effect of these words is to limit the claim to a timber or word product only when obtained or produced by the method of claim 12 (cf. Kirin-Amgen Inc v Roche Diagnostics GmbH [2002] RPC 1 at [283]).

  8. On the basis of the foregoing I find that Osmose has not succeeded in establishing that the claims lack clarity.

    Novelty

  9. A claimed invention is deprived of novelty if it has been given to the public before the priority date, either by prior use of a product or process, or by publication of information that equates to the claimed invention (Danisco A/S v Novozymes A/S (No 2) [2011] FCA 282; 91 IPR 209 at [248]). It is well established that the general test for anticipation or want of novelty is the reverse infringement test (Meyers Taylor Pty Ltd v Vicarr Industries Ltd ([1977] HCA 19; 137 CLR 228 at [19]), and this test is satisfied if the alleged anticipation discloses all of the essential features of the invention as claimed (Nicaro Holdings Pty Ltd v Martin Engineering Co ([1990] FCA 40; 16 IPR 545 at [19]).

  10. To meet this requirement, the prior art must contain “clear and unmistakable directions” to produce the invention as claimed (Pfizer Overseas Pharmaceuticals v Eli Lilley and Company [2005] FCAFC 224; 68 IPR 1 at [314]). However, if the prior publication contains a direction which is capable of being carried out in a manner which would infringe the claimed invention, but would at least as likely be carried out in such a way that would not do so, the invention as claimed will not be anticipated (General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd [1972] RPC 457 at 485-486; 1A IPR 121 at 138, Novozymes A/S v Danisco A/S [2013] FCAFC 6; 99 IPR 417 at [177]).

  11. The same level of disclosure is required of an alleged prior use of the invention as claimed (Damorgold Pty Ltd v JAI Products Pty Ltd [2015 FCAFC 31 at [33-[34]; Old Digger Pty Ltd v Azuko Pty Ltd [2000] FCA 676; 51 IPR 43 at [152]). It is also the case that the alleged prior use must be strictly proved (Aspirating IP Limited v Vision Systems Limited [2010] FCA 1061 at [200]).

  12. Osmose relies upon the prior use of a product known as “Guardian”, and the prior disclosure of AU 2002215690 (document D1) in support of its case on novelty.

    Prior use

    The Guardian product trials

  13. Osmose undertook a variety of commercial trials between 2006 and 2008 to establish the efficacy of the Guardian product (Crimp 1 at [7]).  All but one of these trials was conducted in New Zealand.  During this period Osmose also made a number of presentations to New Zealand companies detailing the products and services it offered.  Crimp 1 at [16] states that these presentations “included a description of the Guardian product such as the actives and application rate to timber”. 

  14. One such presentation was made to Pan Pac Forest Products Ltd on 6 December 2006 and is exhibited as SJC-4.  As shown by this exhibit, the presentation briefly refers to a proposal to treat timber using a boron-imidacloprid mixture.  It will be recalled that imidacloprid is one of the non-repellent insecticides listed in claim 1.  The mixture was at that time largely untested (and as yet unnamed: see Crimp 2 at [30]).  For example, paragraph 9 on page 13 of the presentation refers to the need to reseal newly cut ends of the timber.  It is in any event to be noted that the presentation is marked as “Confidential” thereby indicating that any information conveyed during it, and hence all such presentations, had not become publicly available in the relevant sense.

  15. Crimp 2 at [6] implies that the composition of the boron-imidacloprid mixture was kept confidential at least until its registration was applied for with the New Zealand Environmental Risk Management Authority (the Authority) on 22 November 2007.  Subsection 4.1 of the Authority decision on the application for registration (AFS-8) states (with added emphasis) that the purpose of the application:

    “… is to seek approval for the importation or manufacture of Boron Glycol Options 1 to 5, which are timber treatment formulations containing the active ingredient boron, other confidential active ingredients, an ethylene glycol carrier and other constituents.  The timber treatment formulations will be used in the treatment of wood or wood based products from wood destroying insects (e.g. beetles, borers and termites).”   

  16. The Authority decision is dated 12 June 2008.  At Section 3 it states that the application for registration of the abovementioned boron glycol options was released by the Authority for public comment and submissions, but there is nothing in the decision to suggest that the public were made aware of the nature of any of the “other confidential active ingredients” during this preliminary stage of the formal approval process.  The only information regarding the composition of the boron glycol options for which registration was sought is found in the appendix to the application for registration exhibited as SJC-3.  The appendix establishes that one of the confidential active ingredients contained by them was imidacloprid.  However, the appendix is marked as “Confidential” and thus it seems clear enough that the composition of the boron glycol options remained unknown to the public even when the Authority ultimately approved their registration.      

  17. The evidence confirms that the commercial trials undertaken by Osmose in New Zealand were specifically designed to determine the ability of the Guardian product to resist attack by borers.  Termites are apparently not a significant problem in New Zealand (Molloy at [96b]; Crimp 2 at [40]).  However, this is not the case in the United States which is one of the markets “Osmose was chasing” (Crimp 2 at [31]).  As a consequence, Osmose commissioned the University of Hawaii to perform a termite test. 

  18. SJC-1 verifies that the purpose of the termite trial was to ascertain the level of imidacloprid, when added to a boron preservative, required to protect timber against termite attack.  The trial involved treating a number of test samples provided by Osmose (coded as samples A to E) with a boron-imidacloprid preservative.  As explained in the background section of this exhibit:

    “The high boron loadings required to protect timber against termites in America, without additional actives, are not achievable with a spray-on treatment, and therefore an insecticide is also required.  Imidacloprid has been proposed as the appropriate insecticide.”

  19. There is considerable debate between the parties regarding the functionality of the boron active. Osmose argues that as reflected by the above statement, boron was included as a fungicide (Crimp 1 at [11]; Creffield 2 at [67]; Crimp 2 at [15-[21]). Creffield 3 at [139] reasons that imidacloprid was used as the sole insecticidal agent “because the boron in the Guardian product is not present in an insecticidally effective amount to prevent termite attack”. For its part Zelam has argued that boron is known to have both fungicidal and insecticidal activity (Molloy at [88]; Siraa at [175]; Amburgey 2 at [12]). It submits that the imidacloprid therefore acted as a co-biocide, and not as the sole insecticidal active ingredient as required by claim 1.

  20. The results of the termite trial are set out in a report dated September 2007 a copy of which has been exhibited as SJC-2. They indicate that all samples treated with imidacloprid exhibited a high degree of resistance to termite attack and, more particularly, that this was the case with test sample E whose newly cut ends were not resealed with the preservative. The report is inconclusive as to the extent to which, if at all, these results were influenced by the presence of imidacloprid. Mr Samargis pointed out that boron is inherently migratory. This is confirmed for example by Siraa at [20]). On this basis he submitted that even though not applied to the newly exposed ends of test sample E, the boron would still diffuse into and migrate throughout all regions of the sample to effectively reseal its ends. Mr Siraa contends at [178] that this action would of itself have provided some protection against termite attack, a contention that is resisted by Crimp 2 at [37].

  21. Having carefully considered the opposing lines of argument, in my opinion I do not need to form a concluded view on either of the issues presently in dispute.  SJC-2 states that the termite trial report was prepared for Osmose which to my mind strongly suggests that the report was “an internal document” and as such did not enter the public domain.  There is no evidence to support a contrary finding.

    Sale of the Guardian product

  22. Crimp 1 at [16] states that no Guardian treated wood was sold in Australia since “the treated wood product did not meet the Australian Standard”.  Nevertheless, Dr Crimp goes on to state at [17]-[18] that Osmose sold a total of 10,000 litres of Guardian between 29 March 2008 and 10 March 2009 to a New Zealand company by the name of Blue Mountain Lumber Ltd (BML).  The sale of Guardian to BML on at least two occasions between these dates is corroborated by the copies of the invoices exhibited as SJC-5 and RC-1.  Mr Chay, a former manager with BML, confirms that he ordered the Guardian product from Osmose.  At [5]-[6] he states (with emphasis added):

    “I was aware that the Guardian product contained boron and an insecticide.  I did not know the name of the insecticide in the Guardian product, but I knew that it was an anti-termite active.  We used the boron in the product to act as a fungicide … We sold [the treated timber] domestically to meet the H3 market in New Zealand, and we were also looking at the US market.”

  23. There is no direct evidence that the Guardian product was ever used by BML.  Mr Siraa states at [124] that “I am based in NZ … but I have never heard of this product”.   However, I am satisfied that the multiple purchases of large volumes of Guardian over an extended period of time as evidenced by the sales invoices (and see also SJC-6) are indicative of an ongoing use of the product by BML upon its receipt from Osmose.

  24. The composition of the Guardian product sold to BML is not as straightforward.  Mr Chay has inferred that the identity of the insecticidal component of the product was not revealed to him, and nor is this evident from SJC-5 or RC-1.  Crimp 2 at [32]-[33] states that:

    “For the New Zealand [H3] market the Guardian product did not contain imidacloprid.  However, for the US market we added imidacloprid into the Guardian product.  We sold [BML] Option 3 Guardian formulation of Exhibit SJC-3 as they were intending to sell product into the US which has termites and therefore requires imidacloprid.”

  25. Dr Crimp is here referring to the third Osmose boron glycol option which was approved for registration by the Authority.  This option includes imidacloprid.  However, as I have previously found, its composition was not made publicly available.  As evidenced by SJC-7, BML was granted approval by the New Zealand Timber Preservation Council (the Council) to surface treat specified timber sizes to NZ hazard class H3.1 using Guardian.  This exhibit also does not assist Osmose since it simply confirms formal approval for BML to use “Guardian boron treatment”, and makes no mention of imidacloprid.  Osmose next turns to SJC-8 which is a copy of the warranty supplied by it to BML.  The exhibited copy of the warranty is unsigned.  SJC-11 confirms that a draft warranty was forwarded to Mr Chay by email on 14 March 2008, but there is no evidence that this document was actually sighted by him or indeed formally executed. 

  26. These evidentiary shortcomings are to some extent remedied by clause 1 of SJC-8 which stipulates that all wood products are to be treated by BML “to a minimum cross-section retention of 0.50% m/m boric acid equivalent [BAE] and 0.05% g/m2 imidacloprid with Guardian wood preservative”.  It transpires from Crimp 1 at [23]-[24] that on the basis of the results of the termite trial, the BML warranty essentially differed from the standard Osmose warranty (cf. clauses 5 and 6 of SJC-9) by omitting the requirement to retreat any newly exposed surfaces of the wood products to which Guardian had been applied.  As already discussed, the termite trial results did not conclusively establish whether protection of the newly exposed surfaces against attack was afforded by the imidacloprid active as opposed to the diffusive and insecticidal action of boron.  At best the results indicate that imidacloprid may have acted as a co-biocide and, not as specified by claim 1, the sole insecticidal active ingredient.   I note here from Siraa at [125] that the minimum BAE retention specified by SJC-8 is more than adequate to control borers. 

  27. Furthermore, and with respect to Mr Chay’s reference to the New Zealand H3 hazard class, no product loadings are explicitly apparent.  However, it is clear that boron was employed as an active present in an insecticidally effective amount for treatment to NZ H3.1 requirements.  This is supported by the Council approval of SJC-7 where boron is listed as the sole active, and by the fact that all NZ hazard classes require borer control (Siraa at [187]).  Boron is not one of the non-repellent insecticides called for by claim 1.

  28. In light of the foregoing considerations, I find that Osmose has not established to the requisite level of certainty that the commercial trials and sale of the Guardian product constituted anticipatory use. 

    Prior publication

    Preliminary issue

  29. This aspect of Osmose’s attack on novelty is grounded upon document D1 alone which poses an immediate problem for it since document D1 does not form part of the evidence in these proceedings.  Nevertheless, I advised the parties that regulation 5.23 confers a discretionary power by virtue of which the Commissioner may rely upon a document not formally in evidence based on a preliminary assessment of its relevance.  The hearing proceeded as if document D1 had been brought into the opposition.

  30. Both parties have adduced extensive evidence and submissions which address the content of document D1, and I also note that it is the only document relied upon by Osmose for the purposes of subsections 7(1) and 7(3).  It therefore seems to me that reliance on document D1 may well change the outcome of the opposition in a significant way (cf. Merial Limited v Bayer Intellectual PropertyGmbH [2015] APO 16 at [24]-[25]), and I therefore intend to take account of document D1 pursuant to regulation 5.23.

    The disclosure of document D1

  31. Document D1 relates to the treatment of timber using a mixture comprised of a preservative and a carrier.  A wide variety of preservatives is contemplated and includes insecticides, termiticides, fungicides, mouldicides and mixtures thereof.  Synthetic pyrethroids and imidacloprid are among the examples briefly mentioned.  The carrier is preferably a drying oil such as linseed oil or fish oil.  Importantly, the carrier is selected such that it remains mobile within the treated timber thereby allowing for migration of the preservative.  The significance of this feature is explained on page 4:

    “The applicant has found that the … mixture of preservative and ‘mobile’ carrier provides an effective wood preservative which has a ‘self healing’ effect.  Since the carrier remains mobile within the wood, it is capable of redistributing the active components of the preservative … By providing such a migratable material, it is not necessary for the ends of the timber to be retreated after cutting since the active components of the material will be provided to the freshly cut ends with the migrating carrier oil.  Via this ‘self healing’ effect, the carrier/preservative migrates to any freshly cut or exposed surfaces of the wood to thereby redistribute and treat such a surface with the preservative and hence maintain integrity of the treatment envelope.”

  1. It is therefore readily apparent that the efficacy of the treatment mixture disclosed by document D1 is critically dependent upon this migratory action and the self-healing effect it produces, and owes nothing to the specific use of non-repellent insecticides.  Indeed, there is no clear direction in document D1 to use an insecticide as the preservative as opposed to a termiticide, fungicide or mouldicide, and then to select a non-repellent insecticide such as imidacloprid from among that broad class of preservatives.  I note here that the only insecticides referred to in the preferred embodiments are permethrin and delta (deltamethrin) both of which are repellent insecticides.

  2. At the hearing Mr Fox asserted that applying the disclosure of document D1 would inevitably result in features i and ii of claim 1.  An implicit disclosure is enough to destroy novelty (Imperial Chemical Industries Pty Ltd v Commissioner of Patents [2004] FCA 1658 at [63], cited with approval in Pfizer at [317]). However, Mr Fox has again relied on the proposition that these features are mere arbitrary limitations, or “accretions to knowledge” as alternatively described in Otsuka (at [321]). I have already explained why this proposition is not well-founded.

  3. In any event I do not agree that that either feature has been implicitly disclosed.  With regard to feature i, Creffield 2 at [82] has calculated the range of preservative uptake for timber products dipped in the treatment mixture disclosed by document D1 in litres/m3.  At [55] of its submissions Osmose converts these uptakes to gai/m3, with the result that the “bottom of this range is 2000 times higher than the minimum active ingredient loading of 0.1 gai/m3 of claim 1 and 10 times higher than the maximum rate of the aqueous composition tested in Example 11 [of the present specification].”   

  4. Regarding feature ii, Creffield 3 at [311] states:

    “The features of sub paragraph f would inevitably be features of D1.  This is because the dose claimed is broad, and because the self healing effect claimed in D1 would necessarily mean that none of the untreated surfaces would be >50 mm from any untreated surface, nor soul [sic] the untreated surfaces account for >33% of the total surface area of the wood product.”

  5. It is of interest that the relevant portion of claim 1 requires that “no part of the one or more new, untreated surfaces resulting from a post-treatment processing operation is more than 50 mm from any neighbouring treated surface”.  This is more limited than Mr Creffield’s broad reference to “none of the untreated surfaces” which is directed to the untreated surfaces as a whole.  Furthermore, Mr Creffield states that none of the untreated surfaces in document D1 would comprise more than 33% of the total area of the wood product, but does not draw on any evidence which supports this bald assertion. 

  6. For the above reasons I find that document D1 does not anticipate claim 1, and hence any of claims 2 to 18.

  7. This ground therefore does not succeed.

    Inventive step

  8. According to subsections 7(2) and 7(3) as they were before the commencement of the RTB Act, the invention is in the present case taken to involve an inventive step, when compared to the prior art base, unless the invention would have been obvious to the person skilled in the relevant art in the light of common general knowledge within Australia either considered alone or together with the information specified in subsection (3). This information includes one or a combination of two or more pieces of prior art information being information that the person skilled in the art could be reasonably expected to have ascertained, understood and regarded as relevant by the person skilled in the relevant art.

  9. Osmose submits that the claimed invention lacks an inventive step in light of the common general knowledge considered separately or together with D1.  Mr Samargis acknowledged that document D1 would have been ascertained and understood by the skilled person, but questioned whether it would have been regarded as relevant.  I will return to this matter in due course.  The test for whether an invention is obvious (non-inventive) is to ask if it would have been a matter of routine to proceed to the claimed invention.  In Wellcome Foundation Ltd v V.R. Laboratories (Aust) Pty Ltd [1981] HCA 12 at [45]; 148 CLR 262 at 286, it was stated:

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

  10. The High Court in Aktiebolaget Hassle v Alphapharm Pty Ltd [2002] HCA 59; 212 CLR 411 at 433 stated that it is also permissible to use the “Cripps question”:

    “Would the notional research group at the relevant date, in all the circumstances, which include a knowledge of all the relevant prior art and the facts, directly be led as a matter of course to try the invention as claimed in the expectation that it might well produce a solution to the problem.”

  11. It is clear that any potential solution to a problem will not be obvious unless it would have been a matter of routine to try that solution, but with the significant caveat that there must be an expectation that the potential solution “might well” solve the problem.  It is not necessary that success is guaranteed.

    The person skilled in the relevant art

  12. The question of whether a claimed invention involves an inventive step is to be determined through the eyes of the person skilled in the relevant art.

  13. In Root Quality v Root Control Technologies Pty Ltd [2000] FCA 980; 49 IPR 225 at [71], the person skilled in the relevant art was generally said to be “the person who works in the art or science with which the invention is connected.” As further explained:

    “In Catnic Lord Diplock said (at 242) that skilled addressees are ‘those likely to have a practical interest in the subject matter of [the] invention’.  A variety of people may have that interest.  There are those who might wish to make or construct the invention, those who may wish to compound the invention and those who may wish to use the invention.”

  14. The identity of the person skilled in the relevant art is determined in the light of the problem the invention is intended to solve.  

  15. Before directing any further attention to this issue, I should mention that Mr Fox submitted with reference to Otsuka at [416] that a problem-solution approach to obviousness was not apposite in the present circumstances. I have mentioned on a number of occasions that the claims in that case bear little resemblance to those presently under consideration. Furthermore, although not entirely clear, it seems that Mr Fox’s submission stems from the implication in Creffield 1 at [66]-[69] that there was no long felt need in the industry to retreat newly exposed surfaces of wood or timber products. However, I note Mr Creffield’s apparent acknowledgement at [67] and [70] (and see also Creffield 2 at [6]) of the imperative for supplementary treatment of these surfaces where there is a high risk of termite attack. Consequently, I see no reason why a problem-solution approach cannot be legitimately applied in the present case. The tests prescribed in Wellcome and Alphapharm are clearly supportive of such an approach. 

  16. In AstraZeneca AB v Apotex Pty Ltd [2014] FCAFC 99 at [202]-[203], the approach to be taken in determining the problem or “starting point” for assessing inventive step was stated as follows:

    “If the problem addressed by a patent specification is itself common general knowledge, of if knowledge of the problem is s 7(3) information, then such knowledge or information will be attributed to the hypothetical person skilled in the art for the purpose of assessing obviousness.  But if the problem cannot be attributed to the hypothetical person skilled in the art in either of these ways then it is not permissible to attribute a knowledge of the problem on the basis of the inventor’s ‘starting point’ such as might be gleaned from a reading of the specification as a whole.”

  17. The nature of the problem postulated by Zelam is stated at [136] of its submissions as “… preventing insect damage to untreated surfaces whilst avoiding the need for secondary treatment of newly cut surfaces”.  However, the evidence shows that this problem had already been solved by repellent insecticides, and so I think it is more correct to reformulate the problem put forward by Zelam as also relating to the need to minimise mammalian toxicity.  Osmose has not proffered an alternative view, and I am persuaded from the weight of the evidence that the problem even as reformulated was commonly understood by those engaged in the art. 

  18. Zelam next submits that the appropriately skilled person is a formulator of insecticidal compositions to protect timber and wood products and could comprise a team including “… chemists, wood scientists and biologists”.  I consider this submission to be unduly narrow, and instead prefer the position advanced by Osmose that the person skilled in the art “is not limited to a manufacturer or developer of treatment products and methods’, but is “someone who is practising in that field”.

    Common general knowledge

  19. The notion of common general knowledge was described in Minnesota Mining & Manufacturing Co v Beiersdorf (Australia) Ltd [1980] HCA 9; 144 CLR 253 at 292 as involving:

    “… the use of that which is known or used by those in the relevant trade.  It forms the background knowledge and experience which is available to all in the trade in considering the making of new products, or the making of making improvements in old, and it must be treated as being used by an individual as a general body of knowledge.”

  20. The common general knowledge will encompass not only material that is retained in the memory of the skilled person, but also material that the person knows of, and to which they might refer as a matter of course, or habitually consult.  This material could include, for example, standard texts and handbooks (ICI Chemicals & Polymers Ltd v Lubrizol Corporation Inc [1999] FCA 345; 45 IPR 577 at [112]).

  21. The state of the common general knowledge is a question of fact which must be determined on the basis of expert evidence.

  22. Both parties have presented a list of matters which each says is representative of what may be regarded as commonly known by those working in the relevant art.  The majority of these are uncontroversial, and most relevantly include:

    • the known susceptibility of, and hence the need to protect, timber or wood products against insect attack;
    • the governance of the preservative treatment of timber or wood products in accordance with defined industry standards;
    • the preservative treatment selected is dependent upon a range of factors including the desired level of protection;
    • when surface applied to a timber or wood product, the preservative typically penetrates to a depth of 2-5 mm, but the penetration achieved by this “envelope” treatment can be enhanced using vacuum pressure impregnation (VPI) techniques or penetration enhancers such as oils and glycols;
    • the use of repellent insecticides such as synthethic pyrethroids as timber or wood preservatives;
    • examples of synthetic pyrethroids well recognised in Australia include bifenthrin and permethrin;
    • pyrethroids are both highly repellent and toxic to termites, and are effective at preventing termite damage when applied as superficial (envelope) treatments;
    • the use of active ingredient loadings greater than 0.10 gai/m3;
    • higher active ingredient loadings lead to greater efficacy; and 
    • more recently developed non-repellent insecticides include neonicotinoids such as imidacloprid.

  23. The level to which non-repellent insecticides were known to be utilised to combat insect attack is the subject of some disagreement between the parties, but I am satisfied from the evidence that prior to the relevant date these insecticides were not known for their use other than as a soil barrier or insect bait (Creffield 1 at [44]; Molloy at [46e]), or in glueline treatments to timber or wood products such as plywood, laminated veneer and particleboard (Molloy at [21]; Siraa at [22]).  This restricted usage clearly does not embrace the surface treatment of the claimed invention.

  24. Regarding the matter of active ingredient loadings, I should explain that AFS-6 outlines the usage rates for termiticides known before the priority date.  These products are identified as Premise 200SC and Termidor.  The usage rates for Termidor are given as 3 gai/m3 and 60 gai/m3.  Although the usage rates for Premise 200SC are not given in terms of these parameters, Mr Siraa provides a convenient conversion at [74] and arrives at the rates of 50 gai/m3 and 100 gai/m3 depending on the species of termite to be controlled.  In addition, the usage rates for Preventol while expressed in JWC-8 as pounds per cubic foot are equivalent to around 79 to 1600 gai/m3.

  25. Furthermore, the different usage rates for different termite species when using the Premise product would appear to support the claim that higher active ingredient loadings lead to greater efficacy.  The abstracts of AFS-5 and JWC-10, as well as the minimum retention rates specified in hazard classes H1 and H2 (see AFS-2), are also highly suggestive of this.

  26. The only other source of disagreement worth noting concerns the assertion maintained by Mr Creffield that at sufficiently high concentrations non-repellent insecticides may exhibit repellent activity (my emphasis).  JWC-9 and JWC-10 appear to support his point of view, although it is to be noted that both exhibits relate to termite behaviour in soil.   Most importantly, the claimed invention is clearly not underpinned by any notion of repellency, and so Mr Creffield’s assertion is in my opinion of no consequence to the obviousness question.

    Is the claimed invention obvious in the light of common general knowledge alone?

  27. Osmose submits at [114]:

    “The state of the art clearly pointed to the desirability of using ‘new generation’ non-repellent insecticides in the surface treatment of timber, in the knowledge and expectation that the use of such a treatment would not require a secondary treatment process for any new or exposed section of the timber product.”

  28. Zelam has complained that this generalisation impermissibly relies upon on hindsight analysis.  I share the same concern.  Where, as here, the question of inventiveness arises in respect of an invention involving a combination of features, it is the inventiveness of the combination as a whole that must be examined: the “inventiveness of particular integers is irrelevant to the inventiveness of a combination of them” (LockwoodSecurity Products Pty Ltd v Doric Products Pty Ltd [2004] HCA 58; 217 CLR 274; 212 ALR 1 at [78]).

  29. As already discussed, Osmose has not established that the features of claim 1 were individually known, let alone provided any reasoning as to why the skilled person would as a matter of routine have selected these features (while rejecting others) and arrived at the combination defined.  This course of action would have been completely contrary to the prevailing belief in the industry that it was the repellency of neighbouring timber surfaces treated with insecticides such as permethrin and bifenthrin that afforded protection to newly exposed surfaces without the need for secondary treatment.  Creffield 2 at [15] acknowledges that at the priority date there was no approval in Australia for surface treatment of timber with non-repellent insecticides.  In these circumstances there could be no expectation that non-repellent insecticides might well result in the same protection.  I finally note that Osmose’s submissions do not take account of feature ii of claim 1.           

    Is the claimed invention obvious in the light of common general knowledge and D1?

  30. As noted earlier, Mr Samargis has queried the relevance of document D1.  It is clear even from the abstract of this document that it discusses the same problem or at least one similar to that at hand.  I am therefore satisfied that the skilled person would consider document D1 relevant (per Beecham Group Limited’s (Amoxycillin) Application [1980] RPC 261 at 282).

  31. I have already found that document D1 fails to disclose features i and ii of claim 1.  In addition, Osmose has not demonstrated that the latter feature forms part of the common general knowledge or is otherwise obvious.    

  32. For completeness I note that, briefly put, document D1 relies on the self-healing effect produced by migration of preservative to newly exposed surfaces of the timber or wood product to effectively re-treat them.  This is fundamentally different from the claimed invention which relies solely upon the application of a non-repellent active ingredient to protect any surfaces exposed by a post-treatment processing operation against insect damage.  There is no re-treatment of the exposed surfaces.  The evidence adduced by Osmose does not contain the slightest suggestion that the skilled person would as a matter of routine have been led to in any way to alter the essential character of the treatment disclosed by document D1.   Even if it were assumed that when presented with the numerous alternatives disclosed the skilled person would be somehow motivated to use an insecticide as the preservative, it seems to me that conventional thinking in the art would be to discard a non-repellent insecticide in favour of a repellent insecticide.         

  33. This ground of opposition consequently does not succeed.

    Usefulness

  34. The question of usefulness or utility was considered in Lundbeck where it was said at [81]:

    “A claim is bad if it covers means that will not produce the promised or desired result, even if the skilled person would know which means to avoid.  That is to say, everything that is within the scope of the claim must be useful, otherwise the claim will fail for inutility (see William WMWrigley Junior Company v Cadbury Schweppes Pty Ltd [2005] FCA 1035; 66 IPR 298 at [138].”

  35. However, this does not mean that lack of utility can be appropriately tested by construing a claim so as to arrive at “a ridiculous or concocted result” (Austal Ships Pty Ltd v Stena RederiAktiebolag [2005] FCA 805; 66 IPR 420 at [238]).

  36. Osmose asserts that as indicated by the specification at page 4, the promised or desired result of the invention lies in the creation of “fresh untreated surfaces” which “remain fully protected”.  Zelam submits in response that the promise of the invention is instead “… the protection of timber from a single surface treatment of a non-repellent insecticide composition without the need for any secondary treatment of new, untreated surfaces after a post-treatment processing operation”.

    I consider that the overall thrust of the specification supports the position for which Zelam contends.  Furthermore, I do not understand Osmose to have interpreted “fully protected” in a literal sense.  Mr Fox conceded at the hearing that this term does not strictly mean 100% protection.  Mr Samargis reiterated Zelam’s written submissions at [234]-[235] (with original emphasis) that:

    “’Fully protected’ relates to performance in buildings where treated timber is utilised in real life, not just in a termite trial which is an artificial situation with intense termite pressure, and where the lowest treatment producing >95% wood remaining is recommended for approval (Creffield Exhibit JWC-3, page 17, ‘approval criteria’).

    The aqueous composition of Examples 1 and 11 has the approval of four regulatory agencies for commercial utilisation (Siraa, para 82).  Such approvals are issued in the expectation treated timber will be ‘fully’ protected in service conditions.”

  37. Mr Samargis is here referring to the exemplified examples of the invention which I will return to shortly.  There is some evidence to suggest that Mr Samargis is justified in saying that in the present context “fully protected” relates to the level of protection to be expected when the treated timber or wood product is put to practical use.  What the evidence does firmly establish is that this is in turn inferred by reference to efficacy demonstrated under the “artificial” conditions imposed by standardised testing protocols.  This brings me to Osmose’s underlying concern on the question of usefulness.

  1. The specification describes a number of preferred examples of the invention.  Examples 11 and 12 chiefly relate to trials undertaken by Zelam to determine the termite resistance of timber to which an imidacloprid treatment solution had been applied.  The results of these trials are set out in Tables 2, 3 and 5.  I note in passing that Mr Creffield has been particularly critical of the methodology employed, and hence the validity of the data obtained from the trials, but this is not to the point.  As indicated by the specification (and further supported by Siraa at [83]-[84]), the trials were conducted in accordance with the AWPC H2F (surface sprayed) protocol which comprises standardised testing methods for wood preservatives.  

  2. It is clear from an analysis of the trial results that some active ingredient loadings greater than 0.10 gai/m3, which is the loading specified by feature i of claim 1, did not provide protection against termite attack to the 5% or less mass loss required under the AWPC protocols.  The tables for example indicate mass loss levels of 8% or 55% (5.0 gai/m3 imidacloprid in Table 2 and 0.1 gai/m3 imidacloprid in Table 5, respectively).  This much is admitted by Mr Siraa at [97]-[98].  Some mass loss is apparent though for the trials involving conventional repellent insecticides such as bifenthrin which again suggests to me that Osmose has not applied a literal meaning to “fully protected”.  However, Osmose has seized on the trial results in its submission at [56]-[57] (with original emphasis) that as shown by them:

    “… the tested product did not remain ‘fully protected’ when the non-repellent insecticide is surface applied at an active ingredient loading between 0.10 gai/m3 up to 10.0 gai/m3 … Rather the results tables show that the promise was only achieved when an active ingredient loading of ‘at least 10.0 gai/m3’ was utilised …

    Accordingly, the claims, so far as they require that the active ingredient loading be ‘greater than 0.10 gai/m3’, do not meet the promise of the invention and therefore lack utility.”

  3. The trial results when taken at face value appear to substantiate this submission.  However, it is to be noted that the trial results are restricted to the performance of the invention against termite attack, whereas as noted earlier the claimed invention is not restricted to this purpose.  Most relevantly, it is quite apparent that Osmose has focussed on the requirement in claim 1 that the insecticidal active ingredient is applied to the timber or wood product at a loading greater than 0.10 gai/m3 to the exclusion of the other features of the claim.  This is an impermissible approach to construction (Fei Yutrading as Jewels 4 Pools v Beadcrete Pty Ltd [2014] FCAFC 117 at [37]). As I have said, claim 1 sets two requirements in relation to the loading of non-repellent insecticide to be applied to the wood or timber product, the second of these being an “insecticidally effective amount”. I have also discussed that the constitution of this amount is determined by standardised test methods and will depend entirely upon the degree of insect protection sought. I accordingly found that “the combined effect of [the dual requirements of claim 1] is that the greater insecticide loading or amount applies”.

  4. I am consequently of the opinion that the non-repellent insecticide loadings found to be ineffective by the trials undertaken in accordance with the AWPC protocols, and reported upon by the specification, do not fall within the scope of the claimed invention.

100. This ground of opposition is therefore unsuccessful.

Full description 

101. This issue was belatedly raised by Mr Fox in response to the submission made by Mr Samargis that, contrary to the claimed invention, the disclosure of document D1 principally relied upon the migratory nature of a carrier oil to provide a self-healing effect to newly exposed surfaces of the treated timber.  As best can be understood, Mr Fox asserts that the reference to penetration aids on page 22 of the present specification suggests that the invention is similarly dependent upon migratory action, yet this does not clearly emerge from a reading of the specification as a whole.  He added that the claimed invention does not exclude migratory action.

102. This criticism was not foreshadowed by the statement of grounds and particulars, but I think it can be quickly dealt with.  To my mind the entire specification is overwhelmingly to the effect that (and this is not challenged by Osmose’s expert evidence) the subject invention principally resides in the surface treatment of timber or wood products within predetermined limits by certain non-repellent insecticides, and it is through this treatment that newly exposed surfaces remain protected against insect attack unaided by any migratory action.

103. Accordingly I find that this ground of opposition does not succeed.

Conclusion

104. I have found that the opposition does not succeed on any of the grounds relied upon.  The opposition is therefore dismissed.

Costs

105. Osmose has not been successful and I can see no reason why costs should not follow the event.  I therefore award costs against Osmose.

O L Haggar
Delegate of the Commissioner of Patents

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