Peter Pan Electrics Pty Ltd v Newton Grace Pty Ltd

zps l i czb le

subzect

m a t t e r

prccedure f o r

IN THE FEDERAL COURT OF AUSTRALIA

) )

VICTORIA DISTRICT REGISTRY

)

NO.

VG 1 2 2 of 1985

)

GENERAL DIVISION

)

BETKEZN:

FETTER FAN ELECTRICS FTP. LTD.

Applicant

AND:	NEXT019 GRACE PTY. LTD.

Respondent

JUDGE MAKING ORDER: LOCKHART J.

WHEXE MADE:	MELBOURNE
DATE OF ORDER:	31 MAY 1985

MINUTE OF ORDER

THE COURT ROTES

THAT:

. ..

1. The applicant by its counsel has undertaken to the Court to FEY to any party adversely affected by the undertakings hereafter mentioned such compensation (if any) as the Court thinks just in

such manner as the Court directs.

2 .

The respondent

by its counsel has undertaken to the Court that

until the

final determination of this proceeding

it will not

whether by

itself, its directors, officers, servants cr agents

or otherwise howsoever:

2 .

(a) manufacture or cause

be manufactured,

import into

Australia, distribute,

supply, advertise, offer

for sale

or sell, mattress

covers

get-up or

packaging

substantially

identical

wlth or misleadingly

deceptively similar to the ?et-up or packaging of the

applicant's mattress covers;

(b)

advertise, offer for sale or sell mattress covers under

in connection

with the words "another first

from Linda";

any

means

that

the respondent's ,

mattress CGVEi-S are of the standard or quallty of the applicant's mattress covers ~r have the performance

n	characteristics anci	beneflts of the applicant's mattress
covers ;	..

( d l

represent

in the course of manufacture,

importation,

. -

distribution, supply or sale

mattress covers, or in

connectlon

wlth the promotlon

the supply or use of

mattress covers, that the respondent's mattress covers

are

the appllcant's mattress covers,

have the sponsorship

or approval

of the appllcant,

or that the respondent is

aifillated with, or has the sponsorship or approval of the

appllcant;

(e)

infringe the copyright in any or all

of the literary and

artistic

works

referred

to in

paragraph 19 of the

Statement of Clalm herein, and in particular, make or

import into Australla or offer for

sale, expose for sale

or sell mattress covers in con~unction

with the packaging

inserts, warranty leaflets or labels referred to in the particulars of paragraph 20 of the Statement of Claim

herein, provicied

that the respondent may include in

its

warranty card, all or part

the literary

work being

Appendix A

of the hustralian Standard 3164-1981 and may

include on the label attached to any mattress cover all or part of the literary work, being paragraph 15.1 of the said Standard.

3 .

The

respondent

by Its counsel has undertaken to the

Court

that pendlng the

final

determinatien of this proceedlng it

- . ..

will keep an account of all sales by it of products Seing a combination of electric blankets and tufted woollen underlay

,	and of all moneys derlved from such sales.

THE COURT ORDmS THAT

1. This matter be adjourned for directions to a date to be fixed by the Registrar;

The costs of the

motion

for

interlocutory

in~unctlve

relief

be costs in the proceeding;

The exhibits retained

the Court

may be.returned to the

Parties after

days unless

application for leave to

appeal from the Court‘s judgment is lodged in the

meantime.

NDTE: Settlement and entry of orders is dealt with ir! Order

36 of the Federal Court Rules.

IN THE FFDEF.P.L COURT OF AUSTRALIA

) )

VICTORIA DISTRICT REGISTRY

)

No.

VG 122 of 1985

)

GENE2AL DIVISION

)

EFTG\TEEN:

FETER FFN ELECTRICS PTY. LTD.

Applicant

N E W O N GRACE PTY.

LTD.

Respondent

LOCKHART J.

This is a dispute

between txo manufacturers of heat

controlled under-blankets.

The applicant's proeuct

1s called "Duet"

and the

respondent's

product

1 s called "Harmony". The applicant

complains that the respondent is supplying and advertising its product

. - .

- . . -

in	a get-up subsLant1ally identical or deceptively similar to the

get-up of

the

applicant's

product

and that

the

respondent

contravening S.

52 of the Trade Fractices Act

1974.

Tlie applicant

also alleges that the respondent

passing-off lts product

as the

applicant's product,

infrlnging the applicant's copyright in certain

printed matter

that

accompanies or

attached to the applicant's

product,

and

1 s infringing the applicant's

petty

patent

for

invention entitled "mattress cover".

The proceedings

were instituted last week

and the appllcant

now applies

for

lnterlocutory

relief

pendlng

the

flnal hearing.

Counsel for

the respondent informed the Court

early in the hearing

which commenced

last Wednesday ( 2 9 May 19B5) that the respondent was

prepared to offer undertakings

to the Court, to subsist until

the

final determination

of the

matter, to the effect that

it would not

engage in

the conduct

of which

the applicant complains. Folloxing

discussion in

Court between counsel for

both parties and the Court

about the terms of the undertakings

it emerged that the respondent

was

prepared to give

undertakings

substantially

accordance

with

paragraphs l(a), (b), (c), (e) and (g) of the

applicaticn.

Some

qualifications

and

variations were suggested by counsel

f o r

the

respondent, but

I need not pause to nention them now.

was

common ground that the only matter in dispute

for

presently relevant purposes arose from

the fact that the

resp0nder.t

was not

prepared

undertake

that

would

not lnfrlnqe

the ,

applicant's petty patent primarily because t5e respondent seeks

challenge its

validity.

The respondent argued that to be restrained

from infringing the petty patent would effectively prevent it from manufacturlng and sellinq. it5 product at all, at least durinq the period of the restrainl;. The matter of the pecty patent therefore, vas the substantlal issue before the Court.

The apFlicant

sells

range

of produccs which includes

numerous types of

fans and electric blankets.

The appllcant has

manufactured and sold electric blankets throughc>ut Australia slnce

about 1969, and they

represent a skbstantial portion

of its business.

The applicant spends

a large sum of money on advertlsing its products.

Since about

1978 or 1980 (the evidence is a little Imprecise

as to which is the

correct date) pure wool under-blankets have been

marketed in Australia by certaln manufacthrers and distributed under a

i	3 .
j

I	variety of brand names and sone of then have been sold and advertised
I
!	as an alternative, rather than as complimentary to, an electric
i	blanket.
i

Mr. Tibor Winter, the managing director

of the applicant,

conceived the idea of joining

an electric blanket and

a woollen

under-blanket enabllng the user to derive the benefit of	each as well
as the following benefits:

"(a) Froduct

flexibility.

A user

could

choose

between both products or use	them	in
conjunction with one another.

The dlEtriburors

of the uneerblankets claimed

that

the

pure

wool

underblanket

absorbed

moisture whereas with

an electrlc blanket the

moisture could be then expelled during the pre

heat cycle.

The lumpy

effect of

the heating elements

contalned. in the electric	blanket would be
covered up by the use of the	overblanket.

The actual heat produced b'y the

electric

blanket would

be distributed more evenly under

the underblanket.

There would be

no need to remove the electric

blanket in summer as the underblanket had the

ability to absorb

moisture and thereby create

a	cooler sleeping envlronment during summer

conditions.

An Increased element

of saf9t.y by

comparison

with electric blankets

which were removed in

summer and stored incorrectly."

With the aid of some

others, Mr. Winter set about devising

method whereby the

two products could. be permanently and safely loined

together.

Various

experincents

were

conducted, but

problems

were

encountered and initially the project did not seem feasible for varlous reasons. Durlnq the course of developmental work Several samples wefe produced each of which exhiblted dlfferences in both the

method of attzchment and z,r,pea:-an#-E

f r ~ m

the flEz1 prduct

4 .

Greater difficulties were encountered

with the double, queen

and king size products than with the single bed size. Finally the product known as the “Duet Heat Controlled Under-Blanket“ was produced. It was first released upon the market on about 8 March

”

1985.

The manufacture of the applicant’s product also required some

modification to the applicant’s manufacturing processes: its

factory

was redesigned and several

new mzchlnes were installed.

The sales of the

“Duet” have been substantial in

both number

and value.

The aFplicant expects its sales throughout the forthcoming

winter season to be large.

Early this month Mr. [<inter was informed that the

“HarnonF“

product

had

entered the market. Mr. D.R. Hollhnd

1 s

the national

sales manaqer of Linda Electrlc Industries, a business conducted by the respondent which mhnufactures electrlc blankets, electrlc slippers and electric kettles and which are sold under the name “Llnda”. He

said in

his affidavit that

ths “Harmony“ under-blanket was flrst

marketed on or about 26 April 1985.

There

is a

considerable body of

affidavit evidence in the

proceeding

before me, principally led by

the applicant, which

described the steps taken by the applicznt to perfect what It claims was its invention, and to manuiacture and market the “Duet“ product.

I need not refer

to the evidence In m y detail.

The get-up of the applicant's

product, the "Duet", is as

follows: the electric blanket is folded Inside

a transparent plastic

carrier container so that the outer surface

of the blanket is visible.

Inside the plastic carrier container

1s a cardboard insert, at the top

of vhich is a multi-coloured logo and underneath there

is a plcture on

the insert Itself of a hand

holding the corner and pulling it back in

order to dlsplay the

heating sectlon underneath rhe upper layer.

There are four different sizes of the "Duet" product, single, double. queen and king size and the particular size of the blanket is

displayed on the

insert.

An Australian

made

symbol

and

a fire

resistant symbol also appear an<, in between these,

there is a space

which, when there

is permission to u s e It, will

display a wool mark.

Inslde the packaging there is

a Garranty leaflet

xhich sets out

various terms under

which a warran;y

is grented and

xhich has a

drawing showing the

blanket and how It is fixed

to the bed. A label

is also attached to the product.

. .

The applicant asserts

that the respondent has engaged in the

wholesale copying of the "Duet" including its packaging and get-up,

the wa;ranty

leaflet and the label. Furthermore, it is alleged by the

applicant that

the

"Harmony" product

has

been advertised on radlo

misleadingly as "another first fro% Linda", thereby incorrectly giving the impresslon that the corrblned electrlc blankets and tufted Woollen

bed

covers originated

with the

respondent, vhereas in fact they

originated with the appllcant.

The respondent is selllng its product

at a

lower prlce than

the appllcant's product and there is evidence

that the applicant

has already lost sales by reason of the entry into

the market of the "Harmony" product.

However, the Harmony blanket

ha5

been sold In relatively small nurbers.

Mr. Holland said in

his affidavit:

"As a result of the complaint made

by the applicant

(whlch was first notified by service of the Application) the respondent has ceased selling its product in the original packaging. Steps have been taken to redesign the cardboard insert so that it bears no resedlance to that of the applicant and

to reword the warranty.

The respondent's product

Kill not be sold until those changes	have been
effected.

The respondent hopes to be able to complete those changes and reintroduce its freshly packaged

product

to the market in approximately two weeks

time. It is important for it to do so in order to ensure that it does not lose	wmter sales	of the
product. "

Counsel for

the respondent informed me that the rlspondent

would also chanqe its label attaching	to the "Earmony" product to
overcome the complaints of the applicant.

The first

quEstlon-that-I shall conslder

1 s the appropriate

interlocutory relief

to be granted to the asplicant, excluding for the

moment the consideration of

the question of whether the respondent is

infrinqing the applicant's petty patent.

The

respondent proffers undertakings to

the Court that it

shall not, penaing the final determlnatlon of this proceeding, by itself, its directors, officers, servants or agents or otherwise howsoever:

"(a) Manufacture or cause

to be manufactured,

import into Australia,

dlstribute,

supply,

advertlse, offer for sale or sell mattress covers-In a get-up or packaging substantially

identical with, or mlslehdingly

deceptively

sxnilar

to, the get-up or

p6rkaTing

Gf the cpFl!cant'c

mattress

C G V F L - 5 .

Advertise, offer for sale

sell mattress

covers under or

in connection

with the words

‘another first from Linda’.

Falsely

represent

any

means

that

the

respondent‘s mattress

covers

are of the

standard or quality of

the

applicanz’s

mattress covers or have the performance characteristics and benefits of the applicant‘s mattress covers.

Represent

the

course

manufacture,

importation, distrlbution, supply or sale of mattress covers or in connection with the

promotion of the supply

or use

of mattress

covers, that the

respondent’s mattress covers

are the

applicant’s mattress covers or

have

the sponsorship or approval of the applicant,

or that the respondent is

affilkted wizh, or

has the

sponsorship

or approval

of the

applicant.

Infringe the copyright In any or

all Gf the

llterary

and artistic

Gorks referred to in

paragraph 19 of the StatemeRt of Claim herein

and in

particular

make

import

into

Australia er offer for sale, Expose for sale or cell mattress covers In conIunction wlth the packaging inserts, warranty leaflets or

labels referred to in t‘ne particulars to paraFraph 20 of the Statement of Claim, provided that- the respondent may include in its warranty card all or part of the literary

work being Appendlx P

of Australian Standard

3164-1981 and may

include

on the

label

attached. to any mattress cover

all or part of

the literary work being paragraph	15.1 of the
said Standard.

The applicant

is content

to accept these undertakings, bdt

says that they

do not c;o far enough to ensure full protection to

it.

The applicant	additionally	seeks	injunctions	to	restraln	the
respondent:

“(i) from engaging in the course

of the business of

manufacture, Importatlon, Cistrlbution, supply or sale of mattress covers in conduct that is

misleading

deceptlve

1 s

likely

..	mislead or decelve;

(ii) from passing off or enabling the passing off of respondent's mattress covers as and for the applicant's mattress covers."

The respondent opposes the grant of those injunctions on the

grounds that they are too wide and unduly oppressive in the carrying

on of its business.

In the

alternative, counsel for the applicant submitted

that,

if I concluded

that the

two

additional injunctions should not

granted, then

it would probirbljr be sufficient protection to the

-.applicant if the

first undertaklng that i mentioned ((a) above) was

extended to speclflcally restrain the use by the respondent of the name "Harmony" or any other name substantially Identical thereto, in

connection	wlth che	get-up or	packaging of the resFondent's rival
product.

Counsel

for the respondent opposed this alternative course

and stated that the respondent

did not intend to

continue using the

name "Harmony" in association wlth the product in suit.

Notwithstanding this statement by counsel, in my opinlon the

undertakings

proffered by the respondent

adequately

protect

the

applicant pending the final determinatlon of this proceeding. it

therefore unnecessary

make the addlclonal orders sought by the

applicant.

The applicant cannot complaln

about t h e respondent's Use

of the

name "Harmony" if the respondent's conduct does not otherwise

impair the applicant's

rights or contravene the Trade Fractices

Act @r

other law.

Althwqh each of the words

"Duet" and "Harmony" is a

musical expression- (doubtless intended to evoke In association

wlth

the product, VisioTs

Gf mutual contentment

In shared hdren slumbet-)

l . :

. -

9 .

the mere

use by the respon den

.t of t

.he word

"Harmony"

in association

with its product should not

be restrained.

This

leaves the patent question. On

5 December

1984 the

applicant's

applFcation for a petty

patent was filed. ?.f ter

investigation by

the Patent Office, w h c h

included raising two items

of prior art, the petty petent

was granted cn 21 March 1985. The term

of the petty patent is for

12 months commencing on 21 March 1985.

The

title of the invention is "Mattress Cover" and the specification for the Invention is described In the following statement:

"The present inventlon relates to mattress covers

and relates speclflcally	to novel heated mattress
covers.

The use of electrlc

blankets

has achieved

widespread acceptance by the

cmmunity

over many

years.

The blankets usually consist

of a wire or

wires which extend in locps between layers

of a

blanket materlal.

The wires can be keated Ly AC or

DC power a d usually include a

three-position, or

variable

heater

control.

To avold

overheating

caused by rucking or puckering of the electric blanket the product includes tapes to secure the

blanket

to a mattress

ensure

rigidity

and

maintenance of

flatness.

It has been found that

, the overheating of electric blankets

is, in many

cases, attributable to the

tapes

not

being

adequately secured	which	allows the blanket to
'bunch up'.

As electric blankets

should alvzys remain flat it

is preferred that they always remain

the bed.

Many people remove electric blankets

from

their

beds during

summer

End

store

them.

Incorrect

storage can also cause dlstortlon

of the electrlc

blanket which may result in overheating.

Many people also have a fear of Electrlc blankets

as they can

feel

the heating wlres through their

bodily contact therewlth.

The wires can be quite

uncomrortable and may leave marks

or lndentatlons

on the skln

where heavy contact 1 s made.

10.

Furthermore the use

of woollen mattress protectors

have also become popular, especially

with elderly

people

and

general

sufferers

of arthrltic and

rheunatic

complalnts.

These protectors usually

comprlse a coarse base material

with woollen fibres

stitched thereto. In use, the protector is placed in direct contact with the top of the mattress with the base material being in contact therewith. The inter-positloning of the protector between mattress

and person, via a sheet, together with the insulation and sweat-absorbent qualities of wool will provide a very comfortable nights sleep.

Woollen

mattress protectors enable the user

retain warmth but do not generate heat

of their own

accord.

External heat to bedding

can

only

generated by an electric blanket.

It is an object of tine present invention to provide the warnth of an electric blanket together with the

insulatlire and therapeutic effects of	a pure wool
mattress protector.

A further object of the invention is to reduce the

chances of an electric

blanket

from

being

positioned in a non-flat orientatlon when

on a bed.

A still further oblect is

to provide m electric

blanket where che heating	wlres cannot be felt by a
person l y m g thereon.

An additional ob3ect of the inventlon is to provide an electrlc blanket.. which does not require removal

from the bed because

of seasonal changes.

With these objects in

view the invention provides

mattress cover, said cover including a base materlal to which is stitched a woollen y&rn to form a carpet-llke blanket, an electric blanket

including oppoeed facing layers of Ioined material with at least one heating wlre located betzeen sald

layers, at least the periphery

a part of

the

periphery of sald electrlc blanket belng secured

sald base materlal to

forn a dual

layer mattress

cover

bath

said electric blanket in close

face

abutment with said base material."

Tnere follows a statement of what is described

as a gractlcal

embodiment of

the lnventicn with reference to accompanying drawings

which I need not

mentlon.

Tne clalm

defining

the

inventlon

expressed as follows:

11.

"A mattress cover, said cover including a base material to which is stitched a wollen yarn to form

a carpet-llke

blanket,

an electric

blanket

includlng opposed facmg

layers of joined material

wlth at

least one

heating wire located between said

periphery of said electric blanket being secured to

layers, at least the periphery or a part of the

said base material to

form a dual layer mattress

cover

with

said electric blanket in close

face

abutment wlth the said

base material."

The respondent denies that it is infringing the petty

Patent

because, although the respondent's mattress cover includes a base material to which is stitched a woollen yarn to form a blanket, it does not answer the description of "a carpet-like blanket" within the

clalm defming the

invention.

It was

said

that

the

expression

"carpet-like" necessarily conrotes somethlng inflexible or stlff Like

carpet, unlike t5e "Harmony" product. Couzsel

for

the applrcant

submitted that	the expression "carpet-like" musr be construed In the
context Gf the	claim, namely a bed cover, and simply means a backlng

materlal wirh tufted woollen-fibres.

. The respondent attacked the validity of the petty Patent and foreshadowed its intention

seek

revocation

on the following

grounds.

First, by calling In aid paragraph lOG(l)(c) of the Fatents

Act 1952 which affords as a ground of revocation that the petty Patent

specification does not comply with the requirenents of S . 40.	Section
40, as far as it is relevant, provldes:

"(1A) P.

petty patent specification -

(a)	shall fully describe the inventlon, lncludlng the best method of performlng the invention which is known to the appllcant; and
(b)	shall end with a single claim deflning the inventlon.

12.

( 2 )

The

claim

claims

shall

be clear

and

succinct and shall be fairly based	on	the matter
described in the specification."

Counsel

for the respondent

submitted that, although

the

specification for

the alleged invention stated that there were

four

objects of the invention, none of them are stated in

the claim itself,

that

the

claim

is much wider

than

the

object

stated

the

specification, that no inventive step was involved, and that it was obvious that the two components (namely, the mattress cover and the electric blanket) could be used in con]unction with each other. It follows, so It was submitted, that there wzs a failure to cornply with

the requirements of S. 40.

Counsel for the

applicant submitted.

that

t h e

respondent

confused the functions of the claim and the specificatlon.

It is the

function of a petty

patent

speciflcation

to fully descrlbe

the

invention, lncluding the best method

of performing the inventlon kno&?n

to the applicant, and

to end vith a

single claim defining the

invention,

and that the claim is simply

define the invention

itself,' namely, the joining of the electrlc Slanket with the mactress cover "in close face abutment". The ob~ects stated ir? the specification are, so counsel submitted, thereby achieved.

The second

grljund of

revocation relied on by the respondent

was

that the invention claimed in the claim

the petty patent

speciflcation was obvious and

dld not involve an inventlve step having

regard t o what was

known or the materlals used

In Australia On

before the prlority date

the claim. Counsel for the respondent

submltted

that

the

alleged

lnventlve

step

of Gniting the

two

. .

13.

components

the applicant's product was obvlous, and that the

evidence of

the applicant itself indicated that any ingenuity on

the

part of the applicant in relation to the "Duet" blanket related

t o the

solution of

its manufacturing problem rather than

to the method

attachment of the two components of the product.

Reliance was placed upon the judgment of the Hig3- Court in Minnesota Mininq 2nd Hanufacturinq ComDanv

v. Eeiersdorf (Australia)

Limited (1980) 144 C.L.R.

253.

Counsel for the applicant submltted

that the

argument of the

counsel

for

the

respondent

failed

, -

distinguish between

two

separate

questions,

namely, what is

the

invention, on the one

hand, and the work required to put the invention

into practice on the

other,

the

former

golng

the

issue

obvlousness. the latter not. Counsel said that Minnesota

Mlnlnc: and

Manufacturinq Companv was

dlstingulshable, if not totally Irrelevant,

to the present case. Counsel sald that a more relevant exposition of principle was to be found in the judgment of Aicken J. in Fevers

Tavlor

Ptv. Limited v. Vicarr Industries Limited

(1976-1977)

137

C.L.R. 228 at pp. 242 and 243,

xhere his Honour said:

"I have set	out these ans'ners in full because they
seem to me	to state in relation to the present

patent

very

clearly the application

the well

known principle that subsequent analysis of the invention - "the dissection of the invention" - is not often helpful in resolving the question of

obvlousness. it

has been criticized

as being a

rr.istaken approach see Blanco Wnite, Patents for Inventions, 4th Ed. (1074) at par. 4-214. This matter was also discussed by Nenzies J. m

Commonwealth

Industrial

Gases Ltd. v. M.W.A.

Holdings Pty. Ltd.

(11) where he commented

on the

undesirabillty of analysls by hindslght because

once cne sees

an Invention it

may very often appear

very simple and one may then wonder why no one previously had thought of so simple an improvement or device. I would add that frequently the answer

to that question will

be that the device Involved

1nver.tlve strn,

thougn c:

cc,:rse

t h a t

1 s not

necessarily or always S Q . "

14.

The third ground of revocation foreshadowed

cn behalf of the

respondent was

that the invention clalmed in the clalm ~f the pezty

patent specification was not novel in Australia

on the priorltg date

of the claim.

It was

submitted that the alleged inventive steps were

in the

nature of improvements in the arrangement and execution of a

well-known method	of fastening, namely stitchlnq,	raizher than an
inventive step.

Reliance was

placed upon the judgment GC the High Court in

Griffin v. Isaacs, which Zppears to be reported only In the Offlclal Journal of Fatents, Trademarks and Designs, 7 May 1942, 739 and, in particular, upon the jusgment as reported there of Dlxon J. and

Starke J..

Counsel for the

applicant submtted that this case was not

presently relevant, that It was a case which invnlved

mere

improvements to the

workshop and not a case li!:e the presezt,

involving the conjoining of	two components never loined before m the
relevant context.

The fourth

ground of revocation relied on by the reSpOndent

was that the invention, so f a r

as claimed in the

claim of the petq

patent

specification,

was

not

useful.

Counsel

for

the

applicant

submitted that the attack of the respondent was mlsconceived in that it was based on the assumption that paragraph 100(l)(h) of the Fatents

Act

distinguished between commerclal and non-commercial usefulness.

whereas in

truth, the distinctlon is

drabin between an mvention a5

claimed in the specification that is not use fu l at all and one that	1s
useful .

15.

There was argument before

me as

to the principles

which

govern the grant or refusal of interlocutory relief. I was referred, in particular, to the ~udgment of the High Court in Eeecham Group

Limited v.

Bristol Laboratories Pty. Limited (1967-1968) 118 C.L.R.

618, especially at pp. 623 and

624; to what was said to be a somewhat

different approach adopted by

the House @f Lords In American Cvanamid

Co. v.

Ethicon Ltd. C19753 A.C.

396, and to a numher of slu.bsequent

judgments of courts of this country.

Some judges havs seen real

differences between the approach adopted

by the High Court in Eeecham

to that of the House of Lords in American Cyanamid; (see, for example,	-
Firth Industries Limited v . Folyalas EnuineerTns Ptv. Limlred (1975) 132 C.L.R. 489) whilst others have perceived cnly a dlfference In

emphas i

In my opinion, the preser.t

state of the

law is that the

principles hpplicable to

the grant or refusal

of int-erlocutory relief

are not essentially different where the subject matter of the case in

hand 1s a patent and there is a challenge to its validity. Cases of

this kind do not require or call for the substitution of a different

test; rather, they introduce, according to the circumstances

of -,he

partlcular case, different degrees of emphasis in

tine application of

these tests: see

The Australian Coarse Grain Pool Fty. Ltd.

v. I?1p

Barley Marketincr Board of Queensland (1983) 57 A.L.J.R. 425; ?aPPl€tCn

Papers IRC.

Tomasetti Pa-ser Ptv. Ltd.

(1983) 3 N.S.T.J.L.R. 205 ;

Ecitoma Pty. Ltd. v. Australasian Meat Industry Em?loyees Union (1984) 54 A.L.R. 730; and Durack v . Associated Fool Builders Pty. Limited (1983) 1 I.F.R. 545.

16.

I turn

first to inquire whether there is a.serious question

to be

tried.

this is not the

final hearlng it is not desirable

that I analyse in depth or express views in detail upon the evidence,

especially on the question of validity

the

patent.

I have

summarised already

the main arguments of counsel for the parties.

am satisfied that there is a	serlous question to be tried as to the
validity of the patent.

In relation

to the question of balance of convenience, the

applicant has

invested large sums of

money in developing, Improvin?

and marketing the "Duet" under-blanket.

The sales of the product have

been

substantial and

will

probably increase considerably over the

forthcomlng winter season.

The

applicant has already lost sales to

the respondent which include two major orders. If interlocutory rellef is not granted the applicant will probably lose future orders

to the respondent and further

existing

orders.

"he applicant and

the

respondent

are the

only

two

manufacturers in Austrlaia of heat-controlled

under-blankets.

Although the applicant's product

has been on

the market for

only a

short time before the respondent's product

- early March

as acainst

late April - the applicant was first in the field and it was through its endeavours, whether or not they resulted in

invention that a

product of thls kind was produced.

The respondent was, however, able

to enter the

field of competitlon as early as

it did largely because

it apisears to have

substantially copied the applicant's product. '3-e

respondent's sales of

1t5 "Harmony" under-blanket have been small and

it appears that there will

be no further Sale5 of any heat-controlled

under-blankets manufactured

by It for at least

a couple of weeks Until

17.

it has changed the get-up and

packaging

of the

product

and

restructured its warranty card and label.

However, the effect of the grant of interlocutory injunctive

relief will

be to prevent the respondent altogether

from producing and

selling any products of the kind in suit embodylng the alleged invention. It will be unable to compete at all with the applicant’s

product during

at least the imminent winter selllnq season.

Counsel for the respondent informed me that

his client offers

an undertaklng CO the court

pending the determmation of chis

proceeding,

that

will

keep an account of all

sales

heat-controlled under-blankets and	of all monies derlved from suc:?
sales.

If the validity

of the per;ty patent in suit

is finally upheld

the appllcant will be able to sue the respondent for damages and be entitled to recover much of the loss which it fears it will sustain in the absence of lnterlocutory relief.

the evidence before

me the respondent is

company of

substance, so any award of damages should be recoverable. I realise

however, that disruption to the applicant‘s market and to

its

marketing schedule,

say to

some extent lnjure the structure

of the

applicant’s business and not be adequately compensable

by an award of

damages; but

I must balance agalnst these conslderations the adverse

consequences to the

respondent of its

total exclusion from

the

relevant market during the perlod of the operation of interlocutory relief and the pos:~L;le danaur- t~ its k .us i r ; ezc structi:re t k t - G l F h

18.

Nor is the patent in suit

a standard patent or one

of long

standing.

It is a petty patent granted on 21 March 1985 for a tern of

12 months.

Standard

patents

are granted

after

exhaustive

and

elaborate examination of the specifications by expert examiners, and the investigation of various natters including prior art: see S. 48 of

the

Patents

Act. Opportunity exists for opposition before grant:

S. 59.

The term of a petty patent is

for a pcrlod of 12 months

commencing on the date of the

sealing of the patent, and, if the term

is extended in accordance

with the Patents Act for an additlonal

period of 5 years on the day immediately following the expiration of the initial 12 month period - a total life of 6 years: S . 68A.

The Commissioner is required by

S . 49A of the FatEnts Act to

consider the application for a petty patent and the specification, and

if he is satisfied that the appllcation and the specification comply with the requirements of the Patents Act and that the grant of the petty patent is not able to be refused under S . 155, he shall, sublect to sub-s. 49A(ii), accept the application. The sub-section prohibits

the Commissioner from accepting the appllcation

if he

is satlsfled

that there is a lawful ground of ob~ectlon

the grant of the petty

patent or

that the application or speclflcation does not comply

~ 1 1 t h

the requirements of the Patents Act.

The Commissioner is empowered to

make or direct the conduct

of such investigations as he thinks flt for

the purpose of considering the application

and the speciflcatlcn.

The procedures for examination of an application for a petty

patent and

a petty patent speclficatlon, are markedly dlfferent from

those prescrlbed by

S . 48 f o r

the examination of an application

f o r a

. -

- .

- - . . .

-.-,

__.

- _

- .”_ - . - .-.-.

19.

standard patent

and the complete specification,

which rsquires an

examiner to make

exhaustive

and

elaborate

examinatlon

the

application and complete specification and

to ascertain and report on

the various matters specified in the section.

Nor can the grant of a petty patent be opposed, although S.

68B

makes some provision

for

opposition to

the extenslon of the

inltial term of the petty patent.

Provision for petty patents was Inserted into

the Patents Act

by the Patents Amendment

Act

1979 (Act No. 9 of 1979) which

substantizlly adopted the relevant recommendatlons

of the Desians Lax

Review Committee in its

report relating to Utility Models (the Frank1

Committee Report of

1973) .

I have also had access to the second readi:;g

speech cf the

responsible Minister when

introducing the Patents Anendment BSI1 1979

into the House of Representatives

for

Its second reading,

and that

contains some

interesting and useful material

as to the rationale of

petty patents.

need not mention it further.

I was

referred by

counsel to

the decision of a supervislnq examiner of patents made on

14 May this year in the matter of an application under S. 6EB for an extension of the term of Petty Patent No. 533829 in the name of Ocean Farm Seafoods Pt.{. Limited. The supervlsing exzminer said in hls reasons for decision:

“Before considering the merits of the	Minister’s
appllcatlon for extenslon of the time	in which to

lodge the

sub-sectlon

6 8 B ( 3 )

notice

ccjnvenient to examine

prccedure

the

for

conslderatlon and acceptaxce of a petty patent

~ p p l i c ~ k ~ c r .

L r L e t

sectlcr-l

45;:

;nd

t h e p:-c.cEdu:-e

f r J r

20 .

extension of term of

a petty patent under sectlon

68B. Section 4 9 A sets out a procedure which In comparison with the procedure for examination of a

standard

patent

applicatlon

under

section

48,

should be relatively quick and cheap. However, the consideration of a petty patent application under

section 4 9 A may

not include a search

for

anticipation of the

claim nor can the seallng of

petty patent on an accepted application

be opposed.

To compensate for the possibility

of the absence of

a search and for the absence of opposition proceedings, section 68B provides for a form of 'belated opposition'"

A little later in his reasons, the supervising Examlner said:

are not necessarily

'I.. . petty patent

appllcations

suhjecr: to a rigorous search

before grant and to

that extent the public Interest

and the interest of

potential infringers have not been safeguarded

the same extent as they are in the case

of standard

patents

. "

The

matters to

which

I have

referred in relatlon to the

balance of convenience, includlnq

ny remarks about petty

Fatents, lead

me to conclude that in the exercise of the Court's

2iscretion In the

circumstances

of this case the balance

of convenience

favours the

refusal

of interlocutory relief with respect to the petty patent.

A s to costs, the applicant

has substantially succeesed In all

aspects

of the application

for interlocutory relief except

In relatlon

to the

petty patent. Much of

the affidavlt evidence

1s relevant to

all issues in the case.

Some of it concerns only the patent question

and

some

only the other questions. Most cf the argument this week

concerned

the

patent

question.

In all the clrcumstances, the

appropriate order for costs	of tYLis	appllcatlon is that they be costs
in the proceedings.

I certlfy that thls and the preceding nlneteen

pages are a true copy of

Judgmept hercln of the

Lockhart.

[1985] FCA 281

31 May 1985