Superior Modular Products Inc v Krone Ag

[1999] APO 34

OFFICIAL NOTICE

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Application  :          No. 666932 in the name of SUPERIOR MODULAR PRODUCTS, INC

Title:          Low Cross Talk Electrical Connector System

Action:          Opposition under section 59 (Patents Act 1990) by KRONE AKTIENGESELLSHAFT

Decision:          Issued            .

Abstract

The principal document relied on is a "whole of contents" document, previously the subject of a wholly successful opposition, and currently under appeal.  The parties' respective declarants both have extensive relevant experience in Australia, and are in substantial agreement as to the common general knowledge, yet differ regarding whether or not the invention is obvious.  Evidence of commercial success considered.

Grounds of lack of novelty, obviousness, and not a manner of new manufacture not made out.  Relatively minor section 40 defects found.  Opportunity to amend.

PATENTS ACT 1990

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Re:Patent Application No. 666932 by SUPERIOR MODULAR PRODUCTS, INC and opposition thereto by KRONE AKTIENGESELLSHAFT

BACKGROUND

Patent application 666932 (the application) was filed as 38145/93 on 18 March 1993 under the provisions of the PCT by SUPERIOR MODULAR PRODUCTS, INC (Superior), claiming priority from a US application filed 23 March 1992.  Acceptance was advertised on 29 February 1996.

On 20 May 1996 a notice of opposition was lodged by KRONE AKTIENGESELLSHAFT (Krone), followed by a statement of grounds and particulars on 20 August 1996.  Service of the evidence in support was completed on 20 December 1996.

A second notice of opposition was lodged on 29 May 1996, however no statement of grounds and particulars was lodged, and the opposition was dismissed without objection on 24 February 1997.

An amendment to the statement of grounds and particulars was requested on 20 December 1996. Following objection and hearing, the amendment was allowed in a decision dated 3 June 1997. The grounds relied on are sections 18(1)(a) and 18(1)(b)(i) and (ii), Patents Act 1990.

The evidence in answer was completed on 3 September 1997, and there is no evidence in reply.  Also lodged on that date was a section 104 request to amend the specification, including the claims, and allowance was advertised on 21 May 1998.  Following an application from Superior, further evidence was filed on 22 January 1999.  There was no response from Krone.

The hearing was held in Melbourne on 3 March 1999.  Superior was represented at the hearing by Mr Tony Mizzi, patent attorney of Griffith Hack, Perth, and Krone by Mr Chris Mitchell, patent attorney of Davies Collison Cave, Melbourne.

SPECIFICATION

The invention relates to the so-called "modular" plugs and jacks now commonly fitted to telephone and computer data transmission equipment.  Typically these connectors will have two or more pairs of conductors, the plug is fitted to a lead from computer or telephone equipment, the jack is wall-mounted and may have a small printed circuit board (PCB) attached for connection to network cabling in the building.  The connectors are small and the conductors in them necessarily close together and, at the high frequencies used for data communications, cross talk between the conductor pairs becomes a problem.  In addition to occurring in the plug and jack, cross talk can also occur between the tracings on the PCB.
So far as PCB cross talk is concerned, the prior art (see figure 3) tries to minimise this by separating the tracing pairs as far as possible, which of course does nothing for cross talk occurring in the connectors themselves.  While this is sufficient (the specification says) to meet the current industry standards, it is anticipated that should the standard be raised, prior art constructions would be inadequate.  The invention proposes to cancel cross talk which occurs in the plug/jack connectors by a disposition of the PCB tracings.

At page 8 lines 7-17 the specification states:

"Applicant has found that the cross talk induced within the plug … and jack … connectors because of the closely spaced parallel conductors may be substantially reduced by changing the tracings on the circuit board so that rather than isolating the signal pairs, each cross talking conductor path in one signal pair is actually placed adjacent to the opposite conductive path of the other signal pair and the cross talk is substantially cancelled by cross talk energy which is effectively 180 degrees out of phase with the cross talk energy induced by the plug and jack connectors."

The specification concludes with 20 claims; the independent claims are as follows.

"1. A low cross talk electrical signal transmission system comprising an electrical connection apparatus including an intermatable connector and a substrate; said intermatable connector including a jack and a plug, with said jack connected to said substrate; said connection apparatus having at least first, second, third and fourth conductors; said first and second conductors forming a first signal pair; said third and fourth conductors forming a second signal pair; said first and second conductors being adjacent to and parallel to one another through at least a major portion  of said electrical connection apparatus; said third conductor being adjacent to and parallel to said first conductor, and said fourth conductor being adjacent to and parallel to said second conductor through at least a portion of said connector thereby forming a first group of signal paths thus inducing cross talk from one signal pair to another signal pair when signals are applied to either of said signal pairs;
    characterised in that said third conductor is adjacent to and parallel to said second conductor and said fourth conductor is adjacent to and parallel to said first conductor for at least a portion of said substrate forming a second group of signal paths, thereby cancelling a substantial amount of said cross talk by capacitance couplings between adjacent and parallel conductors in said second group of signal paths.

4. A low cross talk electrical signal transmission system comprising:
    at least four conductive paths formed by a first pair of conductors and a second pair of conductors; each pair of conductors being a part of a separate electrical circuit each conducting separate electrical signals;
    an intermatable electrical connector including a jack and a plug; first portions of each of said conductive paths being through said connector; said conducting paths being substantially parallel to one another through at least a part of said connector thereby causing pair to pair signal interference when an electrical signal is on at least one of said pairs;
    a substrate;
    second portions of each of said conductive paths being on said substrate;
    said substrate connected to said jack;
    characterised in that there is a capacitance located on said substrate for reducing the pair to pair signal interference.

10. An electrical connector system comprising:
    an intermatable connector having at least four parallel adjacent contacts; two of said contacts being inner contacts and forming a first contact pair; two other contacts adjacent to said inner contacts on the outside thereof forming a second contact pair; said intermatable connector including a jack and a plug
    a carrier; said jack connected to said carrier; said carrier including at least four conductors forming first and second conductor pairs; each of said conductors connected to one of said contacts; a first contact of said first contact pair connected to a first conductor of said first conductor pair; a second contact of said first contact pair connected to a second conductor of said first conductor pair; a first contact of said second contact pair connected to a first conductor of said second conductor pair; a second contact of said second contact pair connected to a second conductor of said second conductor pair;
    for a substantial portion of the length of said carrier said first conductor of said second conductor pair is adjacent to said second conductor of said first conductor pair, and said second conductor of said second conductor pair is adjacent to said first conductor of said first conductor pair whereby a substantial amount of pair to pair interference which is generated in said connector is cancelled by capacitance couplings on said carrier wherein said interference is substantially reduced in said system.

17. A low cross talk electrical connector system comprising:
    an intermatable electrical connector having at least two pairs of spaced apart electrical contacts thereby causing pair to pair cross talk when electrical signals are present on at least one of said pairs of said contacts; said intermatable electrical connector including a jack and a plug
    a carrier; said carrier connected to said jack; said carrier including at least four conductors; said conductors connected to said contacts; said conductors being physically arranged on said carrier to provide capacitance couplings for substantially reducing pair to pair cross talk originating in said connector."

It should be noted that the claims are not limited to the use of a PCB.  Claims 1 and 4 define a "substrate", which is further defined as a PCB in appended claims.  Claims 10 and 17 define a "carrier", which is further defined to be a length of cable in appended claims.

EVIDENCE

From Krone

· Declaration by George Georgevits with exhibits GG-1 to GG-22.  Mr Georgevits is an electrical engineer (communications) with over 20 years experience, principally as a communications engineer, and apparently works as an independent consultant.  The exhibits are primarily a variety of technical papers and extracts, and patent specifications, notably including AU 651028 ('028), published 2 September 1993 with a priority date of 24 February 1992.

· Declaration by Rosemary Hay, with exhibits RH-1 to RH-8.  Ms Hay is employed as a librarian by Krone's Australian patent attorneys, and the exhibits go to the publication dates in Australia of various of the Georgevits exhibits.

From Superior

· Declaration by Kenneth Brownell, President of Superior, going to the licensing for and sales of, the present invention.

· First declaration by Peter Whalley, with exhibit PRW1.  Mr Whalley is an electrical engineer (communications) with extensive experience, as set out in the exhibit, and works with a firm of consulting engineers.  The declaration addresses various statements made in Mr Georgivits' declaration.

· Filed as further evidence, a second declaration by Mr Whalley, with exhibit PRW2.  The exhibit is US 5580270, owned by Krone, and the declaration relates to statements made by Krone during the prosecution of that patent, and by Mr Georgevits in the present case.

Note: '028 (GG-22) is the primary document upon which Krone relies to establish lack of novelty.  It also was opposed by Krone, and acceptance of the application was refused on the ground of obviousness (reported as American Telephone and Telegraph Co v Krone AG (1997) 38 IPR 582). That decision has been appealed, but at the date of issue of the present decision it apparently has not been finalised.

SUBMISSIONS

From Krone

· In the present circumstances '028 is a "whole of contents" document.  Regarding the issues raised by the definition of "prior art base" (Schedule 1,"prior art base", (b)(ii)(A) and (C)), Krone is entitled to rely on '028 as it proceeded through examination to acceptance.

· The present claims include a plug, whereas in the specific description of that invention, '028 does not.  However to the extent that the presently claimed plug does not relate to the rest of the claimed integers, it is inessential and should be ignored in a consideration of novelty.

· The terms "substrate" and "carrier" presently used need to be construed broadly so as to cover the claimed alternatives of a PCB or a short length of cable, and consequently also include the structure of spring block and lead frame used in '028 (see Fig 3).

· Fig 10 of '028 shows the cross-over of the lead frame conductors, the same as presently claimed.  Thus '028 discloses all the essential features of each of the independent claims and most of the dependent claims, excepting only those using a length of cable as a carrier, and these are a mere workshop variation of the structure of '028.

· Exhibits GG-1 to 6 show that plugs and jacks with substrates and parallel conductors were common general knowledge (cgk) at the priority date.  Exhibits GG-7 to 21 show that the crossing of parallel conductors to cancel cross talk was also cgk.

· The invention is just a combination of features of the cgk, without inventive ingenuity.  The problem was how to reduce cross talk in RJ-type connectors, as required (or as was anticipated would be required) by the relevant authority.  The external cables are not a problem as they use twisted pairs.  But the conductors in the connector are necessarily close and parallel; it is obvious (it was said) to transpose portions of the conductors external to the connector itself in order to cancel the unavoidable cross talk which occurs in the connector.

· Claims 13-15 are not clear and not fairly based as they introduce a further plug which is not properly distinguished from the plug already defined in the claim to which they are appended.

· The claims are not for a manner of manufacture, being a mere working direction to operate an old connector so as to produce an old result.

· Superior's further evidence is not relevant to establishing the patentability or otherwise of this general type of connector.

· Particulars not introduced into evidence are not relied on.  However section 40 particulars, not otherwise raised, are relied on if they are relevant following the section 104 amendments.

· Regarding Superior's evidence of commercial success, it was submitted that the figures are misleading as they are not in the context of the total sales of this category of connector, ie low cross talk, high speed systems.

From Superior

· Regarding '028, there is first of all no evidence that the whole of contents requirements are met.  The fact that the application was accepted does not establish this, as it is understood that examination does not involve an investigation of the correct priority date.

· In any case there would not be infringement as the present claims require a plug in addition to a jack, and also a substrate or carrier which is separate (in the sense of being a different component) from the jack.  The spring block in '028 is not equivalent to the substrate claimed; the former is part of the jack.

· While '028 was found to be obvious in opposition proceedings against it (which decision has been appealed), an important issue for the delegate in that decision were the backgrounds of the respective declarants, insofar as their statements regarding cgk were concerned.  Krone's declarant (Mr Georgivits as at present) was accepted by the delegate as suitably qualified and experienced to make statements as to what was cgk in the relevant art, but the applicant's declarant was thought to be more of a specialist in the unrelated fields of RF and microwave physics, and his statements were given much less weight.  However in the present case, Superior's independent declarant (Mr Whalley) has qualifications and experience equivalent to those of Mr Georgivits, and yet he comes to a different conclusion on obviousness.  The applicant should be given the benefit of the doubt.

· Of course '028 is not available in relation to any direct obviousness argument, as it was not published until after the filing date of the present application.

· It is not agreed that the problem to be solved is that put by Krone.  The problem to be solved is to reduce the cross talk otherwise induced between the internal conductors of an intermatable connector to less than -56dB.  It is not disputed that twisted pairs and intermatable connectors are known, but combining them does not produce the claimed result, just maintains the status quo.

· With particular reference to exhibits GG-18 and 19, these are patent documents and there is no evidence that they are part of cgk in Australia.  In any case they relate to reducing cross talk on circuit boards, not in a plug and jack.  Excepting '028, the other evidence concerning reduced cross talk also does not involve a plug and jack, and again excepting '028, the evidence that does involve a plug and jack is not concerned with reduced cross talk.

· Unlike in the proceedings against '028, here there is evidence of commercial success, and in fact a wholly owned subsidiary of Krone is a licensee of the present invention.  Regarding Krone's submission that this evidence is misleading, there was no evidence in reply which addressed this issue.

· Regarding section 40 matters, it is agreed that claims 13 and 14 lack clarity in view of the extra plug.  As regards the other matters, the features set out in 4.2 and 4.3 of the particulars are not essential, and the words "substrate" and "carrier" would be understood by the skilled addressee.

· The invention claimed is not a mere working direction, as the connector system claimed is not known, nor is the result of reducing the cross talk to -56dB.

· The further evidence is a US patent owned by Krone, for similar subject matter.  Its significance is that it weakens Krone's submissions regarding the obviousness of the present invention.

DECISION

Novelty

The only document that Krone relies on to establish lack of novelty is '028, which was published after the present priority date.  It was submitted by Superior that the evidence does not show that this document satisfies the requirements which follow from the definition of "prior art base" (Schedule 1, (b)(ii)(A)-(C)), and I agree with Superior that the fact an application has been accepted is not a reliable indication of any particular priority date.  I have informed myself on this matter by referring to the original case file, and I am satisfied that '028 does meet the "whole of contents" requirements.

The test for want of novelty is the "reverse infringement test" as set out in Meyers Taylor Pty Ltd v Vicarr Industries Ltd (1977) CLR 228 at 235 where Aikin J said:

"The basic test for anticipation or want of novelty is the same as that for infringement and generally one can properly ask oneself whether the alleged anticipation would, if the patent were valid, constitute an infringement…."

The general rule as to what constitutes an infringement has been expressed by Lord Upjohn in Rodi & Weinenberger AG v Henry Showell Ltd (1969) RPC 367 at 391 as follows:

"The essential integers having been ascertained, the infringing article must be considered.  To constitute infringement the article must take each and every one of the essential integers of the claim."

The invention presently and variously claimed is, in my opinion, a combination, and prima facie all of the integers in the combination are essential (Catnic Components v Hill & Smith Ltd (1982) RPC 183). However it was submitted that the plug, which is an integer of all claims, is inessential as it does not relate to the rest of the claimed integers, and consequently it is not a difference which needs to be taken into account when considering '028.

I note that '028 does disclose a plug (see Fig.1), though it is not part of the invention and is not claimed.  '028 is apparently mainly concerned with reducing cross talk which would otherwise occur in the jack, and make makes no specific reference to cross talk occurring in the plug.  In the present claims however, the arrangement is such that cross talk which occurs in the connector is reduced, and in every claim the connector is defined to include a jack and a plug.  It does not seem correct then to say that the presence of the plug has no bearing on the other claimed integers.  Also, this feature was introduced by a section 104 amendment after service of the evidence in support of the opposition, and it seems clear that, if nothing else, Superior has chosen to make the plug an essential feature (Catnic Components).  In my opinion the plug is an essential feature, and there is no equivalent disclosure in '028.

There is moreover another and clearer difference between '028 and the claims.  In the former the reduction of cross talk is effected by the crossing-over of certain conductors (called a "lead frame"), which are carried by a "spring block", in the jack itself - see Figs 3 and 10.  In the present claims the cross talk reduction is effected by the disposition of conductors on a substrate or carrier (which may be a PCB or length of cable) which is separate from the jack and attached to it.  In my opinion these structures are quite different, and the submissions from Krone that they are the same or equivalent must fail.

I conclude that the claims do not fail for want of novelty.

Inventive Step

According to subsections 7(2) and (3) of the Patents Act (so far as applicable in this case), a claimed invention will lack an inventive step if it is obvious to a person skilled in the relevant art in the light of:

(a) common general knowledge in the art; or

(b) common general knowledge together with information publicly available in a single document, provided that document could be reasonably expected to have been ascertained, understood and regarded as relevant to work in the relevant art in the patent area by the person skilled in the art.

Thus an essential step in establishing lack of an inventive step or obviousness is to establish the common general knowledge (cgk) upon which that determination is to be grounded.  In Minnesota Mining and Manufacturing Co v Beiersdorf (Aust) Ltd (1980) 144 CLR 253 at 292 Aikin J said:

"The notion of common general knowledge involves the use of that which is known or used by those in the relevant trade in considering the making of new products, or the making of improvements in old, and it must be treated as being used by an individual as a general body of knowledge."

The state of the cgk is a question which will normally be determined on the basis of evidence from persons with the appropriate background.  Both principal declarants in this case, Superior's Mr Whalley and Krone's Mr Georgevits, have very extensive relevant experience in Australia in the fields of telephonic and other communications engineering systems, and both are apparently independent of the parties to this case.  The evidence in support (excepting '028 which of course cannot be considered under this heading) broadly consists of documents which disclose a variety of plugs and jacks of the modular type, but not relating to problems of cross talk; documents concerning the issue of cross talk between adjacent conductors and ways of reducing it, including twisting and transposition; and particular applications of these techniques, such as in cables and PCB's.  Some of the documents are excerpts from texts and are fairly theoretical, and most of the applications are in patent specifications.  However the declarants appear to be in general agreement as to the cgk in Australia at the priority date, except for the crossing of conductors on a PCB.

In my opinion the evidence shows that modular connectors of the kind to which this invention relates, the problem of cross talk between adjacent conductors and reducing it by various schemes of conductor transposition, and at least the practical application of this to open wire telephone lines, was all cgk.

Much of the evidence in support in this case is the same as that served in the opposition to '028, and I was invited to reach the same conclusion as the delegate in that case, namely that the invention is obvious, for similar reasons.  But it seems to me that in this case it is not merely a matter of reducing cross talk between conductors by some scheme of transposing those conductors, in a connector in the case of '028, but of compensating for cross talk in a connector by the transposition of conductors outside the connector, and I would hesitate to find this obvious in view of the cgk I have identified.  But Superior submits that, in addition, there are two important differences in the evidence in answer served in the respective cases, firstly regarding the technical expertise of the principal declarants, and secondly regarding the existence or otherwise of commercial success.

Regarding the former, I have read the '028 decision and it is clear in the reasons that the delegate was of the view that the background of the applicant's principal declarant was significantly less relevant to the technical field of the invention than was the opponent's.  The delegate was also of the opinion that the evidence of the opponent's declarant was limited so far as it addressed the ground of obviousness.

As I have said, in this case both declarants have extensive relevant experience in Australia, are independent of the parties, are in substantial agreement as to the cgk, and yet differ as to whether or not the invention is obvious.  In paragraph 12 of his declaration Mr Whalley indicates why he thinks the invention is not obvious:

"However, I believe that without the benefit of hindsight, neither I nor most engineers of ordinary skill would have come up with the same solution put forward in the (present) specification.  In my view, most of such engineers would not have realised that significant cross talk was being generated within the plugs and jacks.  The plugs and jacks described in the (present) specification and as shown in Exhibit GG-1 have been, until recently, used predominantly in telephony work and in relatively low speed data communication systems.  In such systems, cross talk was either not a significant problem or the cross talk induced in cables attached between pairs of jacks or plugs is likely to have created substantially more problems than the cross talk within the connectors themselves.  In such instances, the obvious and common solution would have been to arrange cross overs in the cables (ie. to use twisted pair cables), or to increase the twist rate in twisted pair cables or to separate pairs of cables which constitute different signal pairs to reduce the cable induced cross talk without any thought to cross talk induced by the connectors."

I think that this opinion should be given significant weight.

The second of the differences between the cases advanced by Superior is that, unlike in '028, there is presently persuasive evidence of commercial success in Australia.  The evidence in answer includes a declaration by the President of Superior which indicates:

· sales of products by Superior which products "utilise the Invention" of more than US$66 million between 1 January 1994 and 1 August 1997;

· which includes sales of more than US$6 million to a wholly owned subsidiary of Krone (Krone, Inc);

· a licensing program which includes 14 licensees (of the Australian application and the US and Canadian equivalents), including Krone,Inc;

· which has generated just under US$6 million in royalties to Superior between 1 June 1994 and 1 August 1997.

There was some suggestion at the hearing that this evidence was misleading, however this was not elaborated on, and if there was an issue it should have been dealt with in evidence in reply (of which there was none).  While there was some evidence concerning commercial success served in '028, it involved only production numbers, and that apparently in the US.  The delegate in that case thought that it was not clear from the evidence whether the invention had enjoyed commercial success in Australia.

Prima facie the present evidence shows considerable commercial success for the invention, including in Australia.  While this is indicative of inventiveness, it is not conclusive, as it must be considered whether the commercial success is due to the invention itself or to extraneous causes.  Thus in Meyers Taylor (supra) at 239:

"Commercial success of itself can never be decisive of inventiveness but it is a material matter, the weight of which must be determined by reference to all the surrounding circumstances."

And in General Tire & Rubber Co v Firestone Tyre and Rubber Co Ltd (1972) RPC 457 at 503:

"Commercial success is, of course, not of itself conclusive on an issue of obviousness, but it has been treated in case after case as a valuable weight in favour of the patent."

However the onus is on the opponent to establish its case; there is no evidence before me to indicate that the evidence of commercial success is not as it seems, or that it is due to factors other than the invention itself, and I am inclined to give it also significant weight.

Superior submits that the evidence, particularly in relation to the differing opinions of Messrs Georgevits and Whalley, and to the above, at the least raises a very real doubt, which should be resolved in the their favour.

I agree; in my opinion Krone has not established that the invention claimed is obvious.

Manner of Manufacture

Krone submits that the claimed invention is a mere working direction to use a known connector to produce a known result.  Superior however says that neither the connector nor the result (cross talk down to -56dB) are known.  While there is nothing in the claims about the exact level of cross talk, I think that this ground must fail for the reasons set out under the heading of novelty; the connector system claimed is not known.

Section 40

I consider that the clarity and fair basis issues raised in the particulars to be of little substance and I do not support them.  The only matter raised with any emphasis at the hearing relates to the effect of the amendments made after acceptance, namely that claims 13 and 15 are not clear when appended to claim 10.  Claim 10 defines a plug, and the other claims define a further plug which is not clearly distinguished from that previously defined.  I think this is correct, and it was not disputed by Superior.  Consequential amendment of dependent claims may also be needed.

CONCLUSION

I have found that the grounds relating to novelty, obviousness and manner of manufacture have not been made out, but there are section 40 defects as set out above.  These should be easy to remedy.  Accordingly I allow 60 days from the date of this decision for the proposal of amendments which overcome these defects.

COSTS

In proceedings before the Commissioner costs normally follow the event.  Although the introduction of a plug into the independent claims by the section 104 amendments made after acceptance was a factor considered in this decision, it was not determinative of it, and the consequential clarity problem also introduced is relatively minor.  Consequently I award costs again the opponent, Krone AG.

RG Tolhurst
Delegate of the Commissioner of Patents

Patent attorneys for the applicant  :  Griffith Hack, Perth

Patent attorneys for the opponent   :  Davies Collison Cave, Melbourne