Term-Seal (Aust) Pty Limited v Termite Tite (NZ) No 2 Limited
[2008] FCAFC 95
•11 June 2008
FEDERAL COURT OF AUSTRALIA
Term-Seal (Aust) Pty Limited v Termite Tite (NZ) No 2 Limited
[2008] FCAFC 95PATENTS – appeal – infringement properly found – no anticipation of invention properly found
Termite Tite (NZ) No 2 Ltd v Term-Seal (Aust) Pty Ltd (2007) 74 IPR 16; [2007] FCA 1493 upheld
Coulton v Holcombe (1986) 162 CLR 1 citedTERM-SEAL (AUST) PTY LIMITED ACN 104 603 983, STATEWIDE PEST CONTROL PTY LIMITED ACN 079 470 518 and PHILIP HANNAY AND ROGER FRANKLIN v TERMITE TITE (NZ) NO 2 LIMITED and YORK NOMINEES PTY LIMITED ACN 001 056 453
QUD 17 OF 2008
HEEREY, GYLES, GREENWOOD JJ
11 JUNE 2008
BRISBANE
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
QUD 17 OF 2008
ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN:
TERM-SEAL (AUST) PTY LIMITED ACN 104 603 983
First AppellantSTATEWIDE PEST CONTROL PTY LIMITED ACN 079 470 518
Second AppellantPHILIP HANNAY AND ROGER FRANKLIN
Third AppellantsAND:
TERMITE TITE (NZ) NO 2 LIMITED
First RespondentYORK NOMINEES PTY LIMITED ACN 001 056 453
Second Respondent
JUDGES:
HEEREY, GYLES, GREENWOOD JJ
DATE OF ORDER:
11 JUNE 2008
WHERE MADE:
BRISBANE
THE COURT ORDERS THAT:
1.The appeal be dismissed.
2.The appellants pay the costs of the respondents.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
QUD 17 OF 2008
ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN:
TERM-SEAL (AUST) PTY LIMITED ACN 104 603 983
First AppellantSTATEWIDE PEST CONTROL PTY LIMITED ACN 079 470 518
Second AppellantPHILIP HANNAY AND ROGER FRANKLIN
Third AppellantsAND:
TERMITE TITE (NZ) NO 2 LIMITED
First RespondentYORK NOMINEES PTY LIMITED ACN 001 056 453
Second Respondent
JUDGES:
HEEREY, GYLES, GREENWOOD JJ
DATE:
11 JUNE 2008
PLACE:
BRISBANE
REASONS FOR JUDGMENT
THE COURT:
This is an appeal (by leave) against a decision of Besanko J finding infringement of claims 1, 2, 3, 5, 6 and 9 of Australian Patent No 758879 by the appellants and dismissing a cross-claim for revocation of the patent (Termite Tite (NZ) No 2 Ltd v Term-Seal (Aust) Pty Ltd (2007) 74 IPR 16; [2007] FCA 1493).
The summary of the invention in the specification of the patent in suit is as follows:
“According to one aspect of the present invention there is provided a membranous termite barrier which is adapted to extend between the mortar course of a masonry wall and an adjacent concrete slab, said membranous termite barrier comprising a matting impregnated with a termite resisting product, said matting being sufficiently absorbent to facilitate its impregnation with the liquid termite resistant product.
The matting is typically in the form of a longitudinally extending strip which can be rolled out over an upper coarse of the masonry wall (which at this stage of construction is only a few courses high) and can be adhered to the adjacent concrete slab.The edge of the matting strip which is adapted for location on the upper coarse of the masonry wall, within the mortar joint, preferably has an associated inspection band welded or adhered along its edge in order to enable the mortar joint to be racked without destroying the edge of the matting, and to ensure that the termite resistant product embedded therein is not lost by evaporation to the air or diluted by moisture absorption from the air.
According to a second aspect of the invention, there is provided a method for installing a membranous termite barrier of the aforementioned type, in situ, which method comprises the steps of:
(i)adhering an inspection band to the horizontal outer edge of a masonry course which lies adjacent a concrete slab,
(ii)laying a continuous bead of termite resistant adhesive along the upper surface of the inspection band and also along a face of the concrete slab to which the membranous termite matting is to be joined,
(iii)placing the membranous termite matting between the beads of adhesive so as to extend lengthwise between the upper surface of the masonry course and the concrete slab, and
(iv)coating and/or impregnating the membranous termite matting with a termite resistant product.”
The relevant portion of the detailed description of the invention in the specification is as follows:
“The membranous termite matting can be fabricated from natural or artificial fibres, or mixtures thereof, which can be formed in small discrete lengths or long fibres which are woven into fabrics. Particularly suitable mattings include fibreglass matting, polyester and polyethylene waddings and fabrics such as geofabrics, and combinations of these materials.
The termite resistant product is not a “termiticide” of the type which has been used in the past which was toxic to humans, but a product which is environmentally friendly but nevertheless toxic to termites. A range of such products are now commonly available and these include the pyrethrums, chlorpyrifos and chlorfos.
Suitably, the termite resistant product incorporates a waterproofing compound, or mixture of such compounds and/or other active ingredients, additives or diluents. Typical examples of such additives include petroleum by-products such as creosote, and polyurethane based water repelling agents such as orminoid®.”
The trial judge helpfully analysed the relevant claims as follows (Termite Tite (NZ) No 2 Ltd 74 IPR 16; [2007] FCA 1493 at [37]–[40]):
“Claim 1 has the following integers:
1.A membranous termite barrier which is adapted to extend between the mortar course of a masonry wall and an adjacent concrete slab;
2.The said membranous termite barrier comprising a matting impregnated with a termite resisting product;
3.The said matting being sufficiently absorbent to facilitate its impregnation with the liquid termite resistant product;
4.The said membranous termite barrier is in the form of a longitudinally extending strip which can be rolled over an upper course of the masonry wall;
5.The said membranous termite barrier can be adhered to the adjacent concrete slab.
Claim 2, which deals with the membranous termite barrier in situ, has the following integers:
1.A membranous termite barrier extending between the mortar course of a masonry wall and an adjacent concrete slab;
2.The said membranous barrier comprising a matting impregnated with a termite resisting product;
3.The said matting being sufficiently absorbent to facilitate its impregnation with the liquid termite resistant product.
Claim 3 has the integers of claim 2 and two further integers as follows:
1.The said membranous termite barrier is in the form of a longitudinally extending strip rolled out over an upper course of the masonry wall;
2.The said membranous termite barrier adhered to the adjacent concrete slab.
Claims 5, 6 and 9 add integers to any one of the preceding claims as follows:
Claim 5
1.Wherein the matting is fabricated from natural or artificial fibres or mixtures thereof;
2.Which fibres are formed in small discrete lengths or long fibres woven into fabrics.
Claim 6
1.Wherein the matting is woven fibreglass, polyester or polyethylene wadding or geofabric.
Claim 9
1.Wherein the termite resisting product additionally includes a waterproofing compound, other chemicals and/or diluents.”
The issues on this appeal are confined. There is no need to refer to much of the evidence and many of the arguments dealt with in the judgment below.
INFRINGEMENT
The issue is whether the appellants’ product contains the second integer of claim 1 and claim 2 and, in particular, whether the matting was impregnated with “a termite resisting product”.
The trial judge’s finding on this aspect was as follows (Termite Tite (NZ) No 2 Ltd 74 IPR 16; [2007] FCA 1493 at [82]–[83]):
“The second integer is that the “membranous termite barrier comprises a matting impregnated with a termite resisting product”. The fact that the matting is impregnated with the product is established by the evidence of Dr Fredericks. Furthermore, it is a matter asserted in the material that the first respondent had on its website in 2004. The fact that the Term-Seal Multi-Purpose is a termite resistant product is established by the fact that it contains 12 per cent w/w of disodium octaborate (20 per cent) and in the opinion of Dr Fredericks that is a well known insecticide. I note that the material on the first respondent’s website in 2004 referred to the Term-Seal Multi-Purpose as “termite resistant”. It is true that Dr Franklin said that the purpose of the disodium octaborate in the Term-Seal Multi-Purpose was to act as a preservative or fungicide rather than a termiticide and that Term-Seal made no claims whatsoever that the disodium octaborate acted as either an insecticide or termiticide. He also said that Term-Seal FRM is promoted as a physical barrier to termite entry. However, I do not accept that Term-Seal Multi-Purpose is not a termite resistant product. I refer to the opinion of Dr Fredericks. In addition, I note that the third respondents’ own patent application, which Mr Hannay accepted covered the Term-Seal FRM, refers to the adding of termiticides to the product “to enhance the termite resistant properties of the material”. There is reference to various types of termiticides and a statement that inorganic compounds are preferable to organic compounds. The preferred additive is said to be a boron-containing compound and, in particular, boric acid. As I have said, disodium octaborate is a compound of boron. In the specification it is said that the invention provides a waterproof, insect-proof and vermin-proof barrier and that a termiticide can be added to the composition. Furthermore, Mr John Thorpe, whose evidence is primarily relevant to the issues on the cross-claim, said that, depending on the rate, disodium octaborate was an effective termiticide.
In my opinion, the Term-Seal Multi-Purpose is a compound which includes a termite resisting product. The second integer of claim 1 is present in the Term-Seal FRM.”
The earlier references in the judgment to the issue were as follows (Termite Tite (NZ) No 2 Ltd 74 IPR 16; [2007] FCA 1493 at [68], [69], [72] and [78]):
“68Dr Fredericks is an associate professor within the Faculty of Science of the Queensland University of Technology. He trained as an organic chemist and he has worked and continues to work as an analytical chemist with particular experience in spectroscopy. He was provided with the samples of the Term-Seal FRM which became exhibits in the proceedings. He inspected and carried out tests on the samples. The opinions he formed may be summarised as follows:
…
3.The formulation data for the Term-Seal Multi-Purpose states that the Multi-Purpose includes 12 per cent w/w of disodium octaborate (20 per cent) and that is a well-known insecticide. Dr Fredericks said that he expected that it is likely a barrier constructed using Term-Seal Multi-Purpose would have a high degree of termite resistance.
69Dr Fredericks expressed the opinion that based on the above observations the matting had been “impregnated” with Term-Seal Multi-Purpose and the matting was sufficiently absorbent to facilitate its impregnation. Therefore, when the Term-Seal FRM (assuming it is the same as the samples) was used as a termite barrier extending between the mortar course of a masonry wall and an adjacent concrete slab it possessed all the features of claim 2 in the Patent. Dr Fredericks also expressed the opinion that the Term-Seal FRM possessed the additional integers in claim 1 and the additional integer in claim 3. In expressing these conclusions, Dr Fredericks also had regard to the material appearing on the first respondent’s website.
…
72Dr Fredericks said that he disagreed with the respondents’ claim that the disodium octaborate in Term-Seal Multi-Purpose is there to act as a preservative (fungicide) rather than a termiticide, and that Term-Seal is promoted as a physical barrier to entry. I am satisfied from Dr Fredericks’ evidence that disodium octaborate can act as a very effective termiticide. It is a compound of boron, and compounds of boron are effective termiticides. Borates including a borate compound such as disodium octaborate tetrahydrate, act by poisoning the microorganisms in a termite’s digestive tract that are needed to break down the wood’s cellulose. The termites starve to death. The reference to a tetrahydrate simply means that the disodium octaborate is in crystalline form including some water and it does not affect the operation of the disodium octaborate. Dr Fredericks expressed some further views about the interpretation of claims 8 and 10 but it is not necessary to mention those views because those claims are not in issue in the proceedings.
…
78Dr Franklin stated that the presence of disodium octaborate in Term-Seal Multi-Purpose was to act as a preservative (fungicide) rather than a termiticide and that Term-Seal FRM was promoted as a physical barrier to termite entry. It was part of a termite management system in which “the physical barrier is designed to force termite activity into the open where it can be detected by regular inspections and dealt with accordingly”. He also stated that neither creosote nor orminoid is present in Term-Seal Multi-Purpose.”
The appellants submit that the phrase “a termite resisting product” means a substance that will, in use, actually act as an effective chemical barrier to termites. It is then submitted that there was no such finding made by the trial judge in relation to the appellants’ product and that the evidence did not enable such a finding to be made.
It is submitted for the respondents that this argument was not put below. If so, it should not be permitted to be raised on appeal (Coulton v Holcombe (1986) 162 CLR 1). It is not necessary to resolve that issue as, in our opinion, integer 2 in claim 1 and claim 2 should not be construed in the manner proposed by the appellants. It involves an unexpressed limitation of the integer said to be akin to a limitation based upon result. In other words, there is no infringement unless the appellants’ product is effective. The appellants argued a variation on that theme in that the relevant claims should be construed as requiring an effective chemical barrier, whereas their product utilised a physical barrier. We can see no warrant for reading such limitations into any of the relevant claims.
The appellants also sought to rely upon the evidence that disodium octaborate was included in their product in order that it act as a fungicide rather than termiticide. The relevance of that contention is elusive. Purpose can hardly affect construction of the claims or infringement of them where purpose is not part of any claim. Even Dr Franklin did not deny that disodium octaborate could act as both a fungicide and a termiticide.
The findings by the trial judge to which we have referred establish that disodium octaborate is a termite resisting product and was present in the appellant’s product in an appreciable quantity. That is all that was required to establish that integer. The challenge to the finding of infringement fails.
NOVELTY
The trial judge set out the applicable principles without error (Termite Tite (NZ) No 2 Ltd 74 IPR 16; [2007] FCA 1493 at [96]–[102]). The appellants submit that the invention claimed was anticipated by each of two prior patent specifications.
The Kennedy and Hitchen patent
The first was the Kennedy and Hitchen patent which related to a method and means for preventing or minimising termite attack or infestation which is particularly but not exclusively suited to applications in buildings.
The trial judge analysed the patent at [104]–[106], discussed some evidence in relation to it and went on to hold as follows (Termite Tite (NZ) No 2 Ltd 74 IPR 16; [2007] FCA 1493 at [132]):
“I do not think any of the prior patents or patent applications are novelty-defeating. As far as the Kennedy and Hitchen patent is concerned there are clear differences between that patent and the invention embodied in claims 1, 2, 3, 5, 6 and 9 of the Patent. They are:
1.The barrier in the Kennedy and Hitchen patent is a settable or curable termite barrier mixture which is applied in situ to certain parts of the building. It may be in the form of a paste, gel, liquid or a matrix mix. It may be applied by any suitable means including being sprayed, painted, trowelled, brushed or by splatter machine. Once applied, it sets or cures to form a termite barrier. There is a reference to matting where larger cracks or fissures are encountered and additional support is required. It said that that additional support may be provided by a matting such as a fibreglass matting or other material “which may initially be laid over the larger crack or fissure and thereafter the compound liquid or substance deposited on the mat”. It is said that this would provide sufficient support to the compound liquid or substance to act as a barrier for termites or insects.
There is no suggestion in the Kennedy and Hitchen patent that the matting is impregnated in any way.”
The appellants sought to overcome the last point by submitting that fibreglass matting would absorb (and be impregnated with) the barrier mixture placed upon it. In the first place, that conclusion does not rise above possibility or speculation. In the second place, it is not clearly (or at all) disclosed or taught by Kennedy and Hitchen. The matting is no more than support for the barrier mixture in the limited case where use of it is described.
There is no error in Besanko J’s finding on this issue.
Ogawa patent
The second alleged anticipation was the Ogawa patent. The invention was said to pertain to ant-resistant sheets, and ant‑proofing and humidity proofing methods to prevent damage to buildings, etc, by termites (AB125). The trial judge analysed the patent at [107]–[110]. His Honour referred to the evidence of Mr Langley and Mr Angliss (both of whom he accepted as witnesses) to the effect that it disclosed a barrier applied across the whole of the foundation, under the floor of the building rather than “perimeter defence” claimed in the patent in suit ([118], [123]). The trial judge went on to hold (Termite Tite (NZ) No 2 Ltd 74 IPR 16; [2007] FCA 1493 at [133]):
“A similar conclusion should be reached in relation to the Ogawa patent. The invention in that patent is used in quite a different way from the invention in the Patent. The Ogawa patent was for under-slab protection whereas the Patent is clearly directed towards a barrier system that incorporates the concrete slab as part of the barrier. The Patent envisages a barrier which is adapted to extend between the mortar course of a masonry wall and an adjacent concrete slab and in the form of a longitudinally-extending strip which can be rolled out over an upper course of the masonry wall and can be adhered to the adjacent concrete slab. The different methods of use are significant. The alteration of the Australian Standard and Building Code in about 1995 whereby a monolithic concrete slab could be incorporated into the barrier system was a significant development and, according to the evidence of Mr Langley, was viewed as such at the time.”
The appellants point out that the trial judge was not correct in saying that the Ogawa patent was for under-slab protection. Rather, it was for under-floor protection. However, Besanko J emphasised the “perimeter” nature of the barrier to which the patent in suit is directed and, most importantly, expressly referred to the connection between the mortar course of the masonry wall and an adjacent concrete slab to which the patent in suit is directed. That is to be contrasted with the complete under floor coverage of the barrier in the Ogawa patent. The argument that the greater includes the lesser is not sound in relation to anticipation in circumstances such as this. Example 3 in the Ogawa patent, illustrated by figure 5, is said by the appellants to have the features of the patent in suit. However, it does not describe or depict a connection between the mortar course of a masonry wall and an adjacent concrete slab. Indeed, no concrete foundation slab is described or depicted.
The finding that the relevant claims in the patent in suit were not anticipated by Ogawa should stand.
CONCLUSION
It follows that infringement was properly found, and the case for revocation is not established. The appeal will be dismissed with costs.
I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Heerey, Gyles, Greenwood. Associate:
Dated: 11 June 2008
Counsel for the Appellants: Mr DK Catterns QC, Mr M Hall Solicitor for the Appellants: Viney Williams Lawyers Counsel for the Respondents: Mr SCG Burley SC Solicitor for the Respondents: Bennett & Philp Solicitors
Date of Hearing: 22 and 23 May 2008 Date of Judgment: 11 June 2008
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