Re NV Philips Gloeilampenfabrieken's Patent (No 1)

[1966] HCA 43

HIGH COURT OF AUSTRALIA

Windeyer J.

RE N.V. PHILIPS GLOEILAMPENFABRIEKEN'S PATENT (NO. 1)

(1966) 121 CLR 70

15 July 1966

Patents

Patents—Extension of term—Loss of opportunity of developing invention—Invention delayed by wartime activities of inventor—Invention superseded by wartime development—Patents Act 1952-1962 (Cth), s. 95 (1)*.

Decision

July 15.
WINDEYER J. delivered the following written judgment:-
This is an application by N. V. Philips Gloeilampenfabrieken, the patentee of letters patent No. 146514, for an extension of the term of sixteen years which expired on 15th March 1964. What is now sought is a re-grant for a further term commencing on that date. These proceedings, which were started in 1963, are brought under s. 95 of the Patents Act 1952-1962 (Cth). A petition was also lodged seeking an extension on the ground of inadequate remuneration (ss. 90 and 94); but this is not being proceeded with pending the determination of the present application. (at p71)

2. Section 95 (1) is as follows:

"Where, by reason of hostilities between Her Majesty and a foreign state, a patentee as such has suffered loss or damage, including loss of opportunity of dealing in or developing his invention, the patentee may, after advertising, as prescribed, his intention to do so, apply to the High Court or to the Commissioner for the extension of the term of the patent." (at p71)

3. These words seem to me to refer to a situation in which the events of war or the conditions of wartime deprived a patentee of the opportunity of gaining advantages that he would otherwise have derived from his monopoly. In the present case the patented invention, the actual discovery, was not made until 1947. It was made in Holland and the invention was first patented there. The Australian patent is dated 14th March 1949, that is after the hostilities relied upon, the war of 1939-1945, had ended. As I see the matter, the patentee cannot establish loss or damage to it as a patentee by reason of hostilities that had ended in 1945 unless it can prove that some abnormal condition, caused by the war and continuing after it had ended, prevented it from exploiting its monopoly as otherwise it would have done. It is not enough, it seems to me, to shew that if there had not been a war the world would have been different, that people's ways and the things they used might have been different, and that if the inventor had invented his invention in that different world he might have gained more from it than, in the post-war world, he was able to do. (at p72)

4. The invention in question relates to the composition of glass for use in cathode-ray tubes. Put very briefly, it prevents the discolouration of the glass support of the luminescent screen that occurs when very high voltages are employed in a cathode-ray tube. Discolouration impairs the transparency of the glass. Cathode-ray tubes are used in television apparatus and it is in this field that the invention has practical utility. There are two methods or systems by which television broadcasts can be received and seen. They may be called the projection method and the direct viewing method. In the former the image is formed upon a small viewing screen, having a diameter of about six inches, at the end of a cathode-ray tube. Thence it is projected and by optical apparatus enlarged upon a larger viewing screen. To attain a light intensity in the cathode-ray tube that will enable this to be done a very high voltage must be employed. The invention is therefore of use in apparatus in which the projection method is used. But, unfortunately for the patentee, this method has been superseded. The ordinary domestic reception of television is now by the direct viewing method. In this the apparatus has a tube of sufficient dimension and arrangement for the images to be seen directly upon its viewing screen. As it is not necessary in this form of instrument to compensate for the loss of light that occurs in the projection system, the voltage employed can be much less. Therefore the glass of the screen is not adversely affected in the way it is in the projection system. Therefore there is no need to use the invention in the kind of apparatus ordinarily used today for receiving black and white monochrome television, such as is now broadcast in Australia. There would, however, be a use for it in any apparatus for receiving colour television. Colour television depends upon reproducing an image in a combination of three primary colours, red, blue and yellow. Technical aspects of various processes by which this can be done are described in the affidavits tendered in evidence. It is enough to say here that the evidence is that it was not until about 1950 that the Radio Corporation of America satisfactorily solved the problem of large direct view colour television tubes. It did this by a technique by which the scanning electron beams are intercepted by a mask, as described in the affidavit of Ernest Gordon Beard (par. 10) and referred to in the affidavit of Johannes de Gier of 24th June 1964 (par. 4 (d)). Whatever method be adopted for receiving colour television, the viewing apparatus must contain cathode-ray tubes of very high voltage compared with the direct viewing apparatus ordinarily used for black and white reception. Moreover, discolouration of the glass of the screen is especially disadvantageous in colour reproduction. Had colour television existed in Australia during the life of its patent the applicant would have reaped a rich harvest. With a hope that it may still be able to do so, it brings this application. (at p73)

5. The evidence was given by affidavits, all filed on behalf of the applicant. Some of them were tendered in part only, omitting statements that were made only in answer to affidavits filed on behalf of Corning Glass Works, an American company which had given notice that it would oppose the application but which afterwards withdrew its opposition. This could create a somewhat unsatisfactory position. I have not seen, and think I ought not to see, the affidavits filed on behalf of a party who chooses to withdraw. Yet I am aware that some statements in affidavits filed on behalf of the applicant, which now stand uncontroverted, were at one stage controverted by sworn evidence. To meet this position I, when dealing with an interlocutory summons, gave liberty to the Commissioner to tender as his evidence any affidavits made on behalf of the party that had withdrawn, provided that he, the Commissioner, gave notice to the applicant of his intention to do so. This was to enable the applicant to ask if it wished that the deponents attend for cross examination. Counsel for the Commissioner informed me, however, that the Commissioner did not think that there was any matter disclosed by the affidavits of the erstwhile opponent that was of sufficient importance to make it necessary that he tender them, especially as had he done so the attendance of the witnesses for cross examination would then probably be demanded with consequent delay and expense. It seems that the only facts that could be in dispute relate mainly, if not wholly, to matters that are largely irrelevant to an application under s. 95 whatever might be their bearing in an application under s. 94. Much of the evidence tendered on behalf of the applicant seemed to me to have very little bearing on the question under s. 95. Counsel for the Commissioner did not object to its reception, conceiving that it was not his function to do so. I have not ignored any matter that seemed to me even remotely relevant: but the essential facts seem to be within a fairly narrow compass. (at p73)

6. The case for the applicant was put in alternative ways. First, evidence was given that before and during the war the applicant had, by its skilled officers, been engaged in Holland in extensive research in problems connected with cathode-ray tubes for projection television: that this work was impeded or interrupted by the war: that if that had not happened, the applicant's form of cathode-ray tube for projection television (having glass made according to the invention) would have been fully developed by 1941: that mass production could then have been undertaken: that projection television would thereupon have become the established method to meet the needs of the public. All this, it is said, was frustrated by the war. And the claim went further. The war not only delayed the date when the applicant developed its invention and could exploit it commercially, it also gave an impetus to the direct viewing method because of wartime advances in electronics. The argument is set out in a passage in one of the affidavits of Dr. Johannes de Gier, the chief engineer of the applicant's electric tube division and the man mainly responsible for the projection tubes. He said:

"The work on projection tubes for use in household television receivers was started before the war in the research laboratory at Philips in Holland. The delay caused by the war had a very detrimental effect on the chances of the projection tube to become a mass production item, as during the war other techniques such as the wide angle direct viewing tube were able to come into large scale use in radar. And even the war itself promoted direct viewing tube techniques as those were developed and industrialized by the use on a mass production scale of direct viewing radar tubes in both Great Britain and the United States of America. In my opinion without the war and without the threat of war the projection tube for mass production would have been ready in 1941 or 1942. In fact it was not so ready until 1948. By 1941 or 1942 the subject invention would also have been made so that the patent would have been applied for eight years earlier. The projection tube would have dominated the market from 1941 to 1942 onwards for quite a number of years and it would have taken direct viewing picture tubes so many years to develop and compete that the Patentee would have been able to sell projection tubes without much competition from direct viewing tubes for maybe 8 to 10 years." (at p74)

7. Even assuming that all that the witness says might have happened would but for the war have happened, this does not bring the case within s. 95. A person who is not a patentee does not suffer loss as a patentee because, being occupied in wartime tasks, he was unable until after the war to make his invention and become a patentee: cf. Re Ransburg's Patent (1960) RPC 242 . And a patentee who finds that his invention, made and patented before or during the war, has after the war been superseded by a process or apparatus which was developed or improved during the war in response to wartime needs, does not, in my view, thereby suffer a loss that is within the contemplation of s. 95. And the applicant is up against still another difficulty. Dr. de Gier said in another affidavit: "A decision was made in my company to promote the development of the projection tube as opposed to the direct viewing tube." This was apparently at some date in 1944 or afterwards. Both systems were at the time well known. Indeed as Lloyd-Jacob J. has pointed out in a judgment to which I shall refer later, the possibility of competition between the two systems had been plain long before the applicant's invention was made. The fact is that the applicant, knowing this, chose to put its money and effort into promoting the projection method. It expected that this would be the profitable way to meet a demand for television receivers in the future. Television came. The demand came. But it was for receivers of the other kind. (at p75)

8. Now, however, the applicant sees colour television as a brightness upon the horizon. Looking hopefully to this, it advances a different argument based on s. 95. The absence of colour television in Australia today is, it contends, a result in the relevant sense of the war that ended in 1945. In support of this proposition I was furnished with a copy of a judgment of Lloyd-Jacob J. in Philips Electrical's Patent (1967) RPC 113 . In that case an associated company of the present applicant (which is the patentee in the United Kingdom of the same invention) had sought an extension of its patent on the ground of war loss. His Lordship granted an extension for four years and nine months from its expiry date in 1964. He did so on the ground that "it is not in doubt that the war imposed some bar to the initiation in the United Kingdom of colour television transmission for general reception": and he heard some evidence that this could now be expected within two years. It was urged for the applicant before me that I need do no more than follow this lead. But I cannot deal with the case in that way. His Lordship's judgment is of interest and assistance: and I need not say that I appreciate the importance of any pronouncement by him upon the law relating to letters patent. But the discretion that I am asked to exercise under s. 95 is exercisable if, and only if, the conditions there stated exist in fact. The facts must be proved. On a question of law I may follow a decision of his Lordship. But I cannot simply adopt his findings of fact made in relation to England and assume them to be applicable to Australia. I turn therefore to the evidence and the applicant's argument which, as I understood it, may be summarized as follows: (at p76)

9. Broadcasting of monochrome television for public reception began in Australia in 1956. Had it not been for the war it would have been in operation earlier. The subject patent was granted in 1948. It could not be exploited in Australia until television began in 1956: therefore the applicant says that it for eight years had no opportunity of dealing in its invention: and of this period three years, that is until 1951, are it says attributable to the war. In the United States colour television has followed monochrome television and it is expected to do so in the United Kingdom. Therefore, the argument runs, it may be expected that at some time in the future colour television programmes will be broadcast in Australia: and as the war delayed the coming of monochrome television it is to be inferred that colour television has been correspondingly delayed: therefore the patentee should have three years in which to exploit its patent from the time when colour television broadcasting begins in Australia: this it is predicted will be in 1971: add three years, you reach 1974. Therefore, says the applicant, the patent should be extended for ten years from its expiry date to enable it to make good in the years 1971 to 1974 a loss or damage now occurring by reason of hostilities that ended twenty-one years ago. (at p76)

10. This proposal is, on the face of it, surprising. It does not become less so when the several propositions set out above are examined and some of them are seen to be unproved assertions of fact and others barely disguised non sequiturs. I turn to the facts that I think were established by the evidence. (at p76)

11. Television broadcasting began in Australia in 1956. As early as 1941 some consideration had been given to its introduction by the Joint Parliamentary Committee on Broadcasting: see also the Australian Broadcasting Act 1942 (Cth). The matter lapsed because of the war until late in 1944 when it was revived before the Committee. From 1946 to 1948 proposals for the establishment of a television service or services were under consideration in the Postmaster-General's Department and by the Government. In 1949 the Australian Broadcasting Control Board was established pursuant to the Australian Broadcasting Act 1948 (Cth). Television was one of the matters with which the Board was to be concerned. The Board recommended that television services should be established in the capital cities in Australia, and the Government announced that a national television service was to be instituted as soon as possible. It was not the policy of the Government then in office that stations established and controlled by private enterprise should be permitted. It wanted only a nationally owned and controlled service. This policy, however, was not espoused by the Government which came into office after the elections in 1949. A change was forecast. But early in 1952 the Government decided that the introduction of television must for the time being be postponed because of changes in the state of the national economy. In 1953 a Royal Commission was appointed to investigate various aspects of proposals for television. Its report was presented in May 1954. Part of this report has been put in evidence before me (Ex. D) and from it I have collected the facts set out above. The Royal Commission recommended that television broadcasting be established gradually, commencing with national and commercial stations in Sydney and Melbourne. This was in fact done pursuant to the Television Act 1953 (Cth). The first stations came into operation in 1956. Stations are now operating in all the capital cities and some regional stations have been established and there are proposals that others be established. All are, it seems, capable or could without great modifications be made capable of transmitting images in colour if the Government should wish that this be done. For a variety of technical and other reasons, including more pressing tasks for the nation arising from the war, it would no doubt have been impossible for television stations to have been set up and television broadcasting to commence in Australia during the war or within two or three years afterwards. Only in that sense can it be said that the war delayed the advent of television services in Australia. I was referred to two cases in which the question was considered in this Court. (at p77)

12. One is In re Electric and Musical Industries Ltd.'s Patent (1949) 79 CLR 643 Webb J. there dealt with an application for extension, by re-grant, of a patent for an element in television apparatus. The patent had been granted in 1933 and had already expired. His Honour allowed an extension for seven years, being apparently of the opinion that television would be established in Australia by 1951 and that the delay until then could be attributed to the war. As things were when his Honour heard the evidence a prediction of 1951 for the advent of television was justified for that accorded with what had been the intention of the Government. It was not until later, under a new administration, that a new policy was adopted and the establishment of television broadcasting was deferred. (at p78)

13. The other case is In the Matter of Parker's Patent (Patent No. 140509) (1960) ALR 615 , a decision of Menzies J. His Honour had before him an application for the extension of a patent, which was on the eve of expiry, relating to television receivers. Until 1956 there was no market at all in Australia for this invention because there was no television broadcasting. His Honour in the circumstances allowed an extension for three years. Some remarks that he made, based on the evidence that he heard, accord with the conclusions that I have drawn from the evidence that is before me. He said: "It may be conceded that there would have been television broadcasting in Australia earlier than 1956 if there had been no war" (1960) ALR, at p 616 ; but he said he was "quite unable to determine when television broadcasting would have commenced in Australia had there been no war" (1960) ALR, at p 617 . I am in the same position. His Honour also said that "if it had been Government policy to establish television broadcasting in Australia as soon as possible after the war, the effects of the war would probably have prevented its establishment before 1951" (1960) ALR, at p 618 . His Honour was speaking of what on the evidence before him seemed to him probable. He did not say that the year 1951 should be taken as fixing decisively the end of a period throughout which the absence of television in Australia can be attributed entirely to the effects of the war. He did say that because of the war it probably could not have been established before 1951; and in this conclusion I concur on the evidence before me. However that may be, it is I think a reasonable inference from the evidence before me that after 1951 and until 1956 the absence of television broadcasting in Australia was the result of economic and political considerations rather than a consequence of the war. Some of the economic considerations that influenced Government policy may have had some relation to, and possibly had their origin in, the happenings of wartime. But I am not satisfied that at any time after 1951 anyone knowing the facts could correctly say that it was by reason of hostilities that had ended in 1945 that there was still no television in Australia. (at p78)

14. But, says the applicant, this may be so, yet whenever colour television comes, if it comes, it will come later because of the war than otherwise it would have done. This was urged upon me as a necessary inference from the fact that monochrome television did not begin in Australia until after the war and its beginning was delayed by war. In the abstract the proposition will not bear examination. It may be conceded that monochrome television has elsewhere preceded colour television. But there is no fixed interval of time by which the one comes after the other. There is nothing to compel a conclusion that factors which delayed the one will, as of course, correspondingly delay the other. But counsel for the applicant was so persistent and pressing that this was a necessary conclusion that I resort to the metaphor of vehicles that counsel for the Commissioner suggested in answer to this proposition. If a train be late, all its carriages are late. But another train that is to come afterwards on the same railway line is not necessarily late too; and, if it is, it is not necessarily for the cause that delayed the first. (at p79)

15. There is no evidence that I can see that the reason why colour television is not now in operation in Australia is that the country was at war from 1939 to 1945. I do not think it necessary that I speculate upon the prophecies that are to be found in the affidavits. No doubt many factors, both of technical standards and economics, are involved in any consideration of proposals for the establishment of colour television services. Doubtless too there are conflicting interests and pressures of all kinds. The popularity and progress of monochrome television has itself one may reasonably think created a vested interest against early introduction of colour; for there is an immense amount of capital equipment in existence for the reception of monochrome television. All these things make me sceptical of precise predictions, however qualified their authors are said to be, that colour television will begin in Australia in 1971 or 1972 or at any other particular date. It is enough to quote an extract from a letter by the Australian Broadcasting Control Board (a copy of which, dated 15th December 1965, addressed to a representative of the applicant, was put in evidence, Ex. L) as follows:

"The Board has for some time been considering the question of the technical standards to be used for colour television if and when such a system is introduced in Australia. It is desired to stress that it should be understood that this action is related only to the question of standards for colour television and not to the introduction of a colour television service. The latter is a very different matter in which the most important questions will be of an economic nature and a decision on this will be a matter for the Government. It is relevant in this connection to refer to remarks made by the Postmaster-General in reply to a recent question in Parliament. The Minister said: -

'. . . The introduction of colour television will involve considerable expenditure on the part of the Government, the operators of stations, and the general public, and the effects of this on the economy must also be taken into account. At the present time I am unable to say when colour television may be introduced in Australia, but as I recently indicated, I do not think there is any early prospect of this type of television service in this country as everything suggests the desirability of a cautious approach to the matter. The Australian Broadcasting Control Board is keeping in close touch with developments in this field.' Any action which the Board will take concerning the determination of standards for Australia will depend upon the outcome of the conference of International Radio Consultative Committee (CCIR) to be held in Oslo in mid-1966, which conference will consider further the possibility of reaching an agreed standard for 625 line television systems." (at p80)

16. I may at this point mention that I was referred to the case of Valensi's Patent (1964) RPC 385 . That was a petition heard by Lloyd-Jacob J. for an extension of a patent on the ground of insufficiency of remuneration. It seems to me to have little, if any, direct application to a case based on war loss. Nevertheless it is an illustration of what is meant by lack of opportunity to exploit an invention. The invention there was one for an apparatus for the transmission and reception of colour television. That was the only purpose that it would serve. Unless a colour television broadcasting system was in operation there could be no market at all for it. That position is quite unlike that which I have to consider, and the contrast is significant. The present applicant's invention of glass that does not discolour under high voltage electronics is not an invention of an apparatus designed specifically for colour television. It was designed to solve a problem connected with cathode-ray tubes used in the projection system. It so happens that there is now an unexpected use for it in direct viewing receivers for colour television of the kind that employ the invention made in 1950 or thereabouts by the Radio Corporation in the United States. (at p80)

17. I hold that the applicant has not made good its claim of war loss in relation to colour television. (at p80)

18. This leaves for consideration the relatively small matter of the use of the invention in flying spot scanning tubes used in television stations in connexion with transmitting films. For these tubes there is a small market. The evidence does not, I think, establish a loss in respect of them that is attributable to the war. It is true that until some form of television began there was no market for these tubes in Australia. And if one accepts that, but for the war, television would have begun in Australia by 1951 or earlier, then it may be said that the applicant was for the early years of the life of its patent deprived by the war of a potential market. But whether or not this is a significant matter depends upon the rate at which after 1956 transmitting stations were established and of their need of these articles. There is no satisfactory evidence that after 1956 the rate of progress of television in Australia did not compensate for any delay until 1951 that was caused by war. The total world market for these articles is small. Frans Christian Beunke, secretary of the applicant company, by his affidavit dated 24th June 1964 said of them:

"In the course of its business the Petitioner has made and sold tubes incorporating the invention to persons in various countries in the world (including Australia) as follows: - . . . . . . . . . . Flying spot scanning tubes 1959/60 164 1960/61 345 1961/62 28 1962/63 183 1963/64 165 Total 885

These have a limited use and are only used in television studios transmitting equipment."

The loss to the patentee in this field, if any loss there was because of the war, is not in my view such as would justify now an extension of the term of the patent. (at p81)

19. One other matter I should mention. This application for an extension was made as late as it well could be, having regard to s. 95 (5) which provides that such applications shall be made at least six months before the expiration of the term of the patent unless the Court or the Commissioner allows a later date. After the application had been initiated in 1963 a summons for directions was taken out pursuant to O. 66A, r. 20. But this was not done until 14th February 1964. An order on that summons was made by me on 25th March 1964. The applicant was not then ready to proceed and I allowed it until 30th June to file its affidavits. The intending opponent was allowed until 15th September to file affidavits in answer. These times were afterwards extended. The opponent withdrew its opposition in June 1965. The matter was again brought before me on an interlocutory summons; but not until 8th November 1965. It was then ordered that the hearing be set down for the Sydney sittings in March 1966. Counsel for the Commissioner now informs me, and I can well understand it, that delays such as have occurred cause difficulty for the Commissioner, especially when after a long lapse of time since the war ended it is alleged that a patentee has by reason of war lost an opportunity of dealing in or developing his invention. Counsel tells me that on several occasions courts have referred to lapse of time as an obstacle in these applications, e.g. Re Heide's Patent (1943) 61 RPC 4 . I can do no more than again draw attention to this. It seems the Commissioner can do little to expedite proceedings for extensions. He is to a large extent in the hands of applicants who seem able to take their own time except in so far as the Court may be able to push them into activity upon a summons for directions. Yet it is, generally speaking, against the public interest that there should be a long period after a patent has expired before it is known whether the invention is to become available to the public or to be for a further period the subject of a monopoly. And a patentee who today delays making an application under s. 95 until the last moment that the law allows ought I think to be ready then with the evidence in support of his application and not ask for further months in which to produce it. Evidence about the effect of a war given long after the war is over must often be viewed with caution and sometimes with scepticism. But in the present case it is not so much that the evidence of facts is doubtful as that there is an absence of evidence of essential facts that leads me to reject the application. (at p82)

20. The application is dismissed. The applicant must pay the Commissioner's costs. (at p82)

Orders

Application dismissed. Applicant to pay the Commissioner's costs.