Termite Tite (NZ) No 2 Limited v Term-Seal (Aust) Pty Limited

FEDERAL COURT OF AUSTRALIA
Termite Tite (NZ) No 2 Limited v Term-Seal (Aust) Pty Limited
[2007] FCA 1493
INTELLECTUAL PROPERTY – PATENTS – Infringement proceedings pursuant to s 120 Patents Act 1990 (Cth) – where applicants proprietors of patent for membranous termite barrier – where first and second respondents manufactured, sold, installed, offered for sale or installation, advertised, promoted and marketed termite barrier system – where third respondents authorised, procured and directed such conduct – whether permissible to construe independent claims in patent by reference to subsequent dependent claims – whether respondents infringed applicant’s patent.
Held:   Infringement turns on a comparison between the applicants’ patent and respondents’ product – subsequent dependent claim no assistance in interpretation of independent claims in circumstances – respondents’ product contains all integers in claims of applicants’ patent alleged to be infringed – respondents infringed applicants’ patent.
INTELLECTUAL PROPERTY – PATENTS – Counter-claim for revocation of patent pursuant to s 121 Patents Act 1990 (Cth) – where applicants proprietor of patent for membranous termite barrier – where combination patent – where prior art information –whether invention embodied in patent a patentable invention within s 18 Patents Act 1990 (Cth) – whether prior art anticipates invention – whether invention lacks novelty within s 7(1) Patents Act 1990 (Cth) – whether prior patents or patent applications part of common general knowledge within s 7(2) Patents Act 1990 (Cth) - whether invention was obvious within s 7(2) Patents Act 1990 (Cth) – whether invention lacks inventive step within s 7(2) Patents Act 1990 (Cth) – whether invention is useful within s 18(1)(c) Patents Act 1990 (Cth).
Held:   No prior art information anticipated invention – invention taken to be novel – evidence does not establish prior patents and patent applications part of common general knowledge – invention not obvious – invention taken to involve inventive step – invention embodied in patent properly construed useful – invention embodied in patent a patentable invention – patent valid – counter-claim dismissed.
Patents Act 1990 (Cth) ss 7, 13, 18, 97, 120, 122
Patents Act 1952 (Cth) s 100
Federal Court Rules O 29, r 2
Allsop Inc v Bintang Ltd (1989) 15 IPR 689 referred to
Bristol-Myers v F H Faulding (2000) 97 FCR 524 referred to
Commissioner of Patents v Emperor Sports Pty Ltd (2006) 149 FCR 386 referred to
Elconnex Pty Ltd v Gerard Industries Pty Ltd (1991) 32 FCR 491 referred to
Emperor Sports v Commissioner of Sports (2005) 146 FCR 159 referred to
Firebelt Pty Ltd v Brambles Australia Ltd (t/as Cleanaway) (2002) 76 ALJR 816 referred to
General Tire and Rubber Company v Firestone Tyre and Rubber Company Limited [1972] RPC 457 referred to
Hill v Evans (1862) 4 De G F & J 288 referred to
ICI Chemicals v Lubrizol Corporation Inc (2000) 106 FCR 214 referred to
Kanzal v Lee (1936) 58 CLR 670 referred to
Martin Engineering v Trison Holdings (1989) 14 IPR 330 referred to
Meyers Taylor Pty Ltd v Vicarr Industries Ltd (1977) 137 CLR 228 referred to
Minnesota Mining and Manufacturing Co v Beiersdorf (Australia) Ltd (1980) 144 CLR 253 referred to
Necaro Holdings v Martin Engineering (1990) 16 IPR 545 referred to
Norton and Gregory Ltd v Jacobs (1937) 54 RPC 271 referred to
Palmer v Dunlop Perdriau Rubber Company Limited (1937) 59 CLR 30 referred to
Radiation Ltd v Galliers and Kleirr Pty Ltd (1938) 60 CLR 36 referred to
Sunbeam Corporation v Morphy Richards (Aust) Pty Ltd (1961) 180 CLR 98 referred to
Tidy Tea Ltd v Unilever Australia Pty Ltd (1995) 32 IPR 405 referred to
Vickers, Sons & Co Ltd v Siddell [1890] 15 App Cas 496 referred to
Welch Perrin Co Pty Ltd v Worrel (1961) 106 CLR 588 referred to
Wellcome Foundation Ltd v VR Laboratories (Aust) Pty Ltd (1981) 148 CLR 262 referred to
J D Heydon Cross on Evidence (7^th Australian ed, 2004)
TA Blanco White Patents for Inventions and the Protection of Industrial Designs (5^th ed, 1983)
Ian Freckelton and Hugh Selby, Expert Evidence (3^rd ed, 2005)
TERMITE TITE (NZ) NO 2 LIMITED AND YORK NOMINEES PTY LIMITED ACN 001 056 453 v TERM-SEAL (AUST) PTY LIMITED ACN 104 603 983, STATEWIDE PEST CONTROL PTY LIMITED ACN 079 470 518 AND PHILIP HANNAY AND ROGER FRANKLIN
QUD 274 OF 2005
BESANKO J
28 SEPTEMBER 2007
ADELAIDE (HEARD IN BRISBANE)

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

QUD 274 OF 2005

BETWEEN:

TERMITE TITE (NZ) NO 2 LIMITED
First Applicant

YORK NOMINEES PTY LIMITED ACN 001 056 453
Second Applicant

AND:

TERM-SEAL (AUST) PTY LIMITED ACN 104 603 983
First Respondent

STATEWIDE PEST CONTROL PTY LIMITED ACN 079 470 518
Second Respondent

PHILIP HANNAY AND ROGER FRANKLIN
Third Respondents

JUDGE:

BESANKO J

DATE OF ORDER:

28 SEPTEMBER 2007

WHERE MADE:

ADELAIDE (HEARD IN BRISBANE)

THE COURT ORDERS THAT further consideration of the orders to be made in light of these reasons be adjourned to a date to be fixed.
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 274 OF 2005

BETWEEN:

TERMITE TITE (NZ) NO 2 LIMITED
First Applicant

YORK NOMINEES PTY LIMITED ACN 001 056 453
Second Applicant

AND:

TERM-SEAL (AUST) PTY LIMITED ACN 104 603 983
First Respondent

STATEWIDE PEST CONTROL PTY LIMITED ACN 079 470 518
Second Respondent

PHILIP HANNAY AND ROGER FRANKLIN
Third Respondents

JUDGE:

BESANKO J

DATE:

28 SEPTEMBER 2007

PLACE:

ADELAIDE (HEARD IN BRISBANE)

REASONS FOR JUDGMENT

Termite Tite (NZ) No 2 Limited and York Nominees Pty Ltd (“the applicants”) have brought proceedings in this Court against Term-Seal (Aust) Pty Ltd, Statewide Pest Control Pty Ltd and Mr Philip Hannay and Mr Roger Franklin. The applicants claim a declaration that the respondents have infringed certain claims in a patent of which the applicants are the proprietors, namely, Australian Patent Number 758879, entitled Membranous Termite Barrier, (“the Patent”), and an order that the respondents, whether by themselves, their servants or their agents, be restrained during the term of the Patent and any extension of it from manufacturing, selling, or offering to sell or install, the Term-Seal FRM system described in the applicants’ Statement of Claim without the licence of the applicants. The applicants also seek damages for infringement of the Patent or, at their election, an account of profits and all necessary inquiries into such damages or an account of profits. They seek delivery up to their solicitors or, alternatively, destruction on oath of all components of the Term-Seal FRM system in the possession, custody or power of the respondents or either of them and all brochures, flyers, catalogues, price lists and other materials promoting or marketing for sale or hire such system. The applicants seek other relief of an ancillary nature but it is not necessary to set out the details of that relief.
The first and second respondents have counter-claimed seeking an order revoking the claims they are said to have infringed on the ground that they are invalid.
On 23 June 2006 a Judge of this Court ordered pursuant to O 29, r 2 of the Federal Court Rules that the questions of the validity of the Patent and the infringement of the Patent by the respondents be determined separately from, and prior to, any other issues in the proceeding.
Background facts and the general issues
A number of the facts alleged by the applicants are not in dispute.
Termite Tite (NZ) No 2 Ltd is a company duly incorporated in New Zealand, and York Nominees Pty Ltd is a company duly incorporated in Australia. Term-Seal (Aust) Pty Ltd (“Term-Seal (Aust)”) and Statewide Pest Control Pty Ltd (“Statewide Pest Control”) are companies duly incorporated in Australia. At all material times, the third respondents, Mr Philip Hannay and Mr Roger Franklin, have been directors of Term-Seal (Aust) and have held all the shares in that company. Since at least 28 October 2004 Statewide Pest Control has carried on a business of domestic and commercial pest and weed control using the business name, “Statewide Pest Control (Shepparton)”.
A company called Termite Tite Pty Ltd ACN 076 847 811 was the patentee under the Patent. The Patent had a term of 20 years from 8 December 1999 and a priority date of 21 December 1998. Termite Tite Pty Ltd changed its name to ACN 076 047 811 Pty Ltd and subsequently assigned the Patent to Termite Tite (NZ) Ltd. Termite Tite (NZ) Ltd assigned the Patent to the applicants and a company called TJT (NSW) Pty Ltd. The latter company has assigned its interest in the Patent to the applicants.
From at least January 2004, Term-Seal (Aust) has manufactured, sold, installed or offered for sale or installation, a termite barrier system known as Term-Seal FRM.
The Term-Seal FRM system is described in a colour brochure published by Term-Seal (Aust) called “Term-Seal Termite and Damp Coarsing [sic] Management Systems” as:
“… a specialised, non-toxic termite resistant and waterproof compound that is impregnated into a geotextile fabric. TERM-Seal FRM has a unique bonding band of 40mm that is used with Term-Seal Multi‑ Purpose to adhere the TERM-Seal FRM to concrete slabs and masonry construction to form a full and continuous physical termite barrier and damp course around the perimeter cavities for all types of construction.”
From at least January 2004, Term-Seal (Aust) has advertised, promoted, marketed or has offered to install (either directly by Term-Seal (Aust) itself or indirectly through licensees) or has authorised the sale and installation (through its licensees) of the Term-Seal FRM so that it extends between the mortar slab of a masonry wall and an adjacent concrete slab. In their statement of claim the applicants refer to drawings entitled “Footings Slab, Monolithic Slab/Waffle Pod and Infill Slab Construction” shown on page 2 of the colour brochure previously referred to and Term-Seal (Aust)’s website, which advertises and promotes the Term-Seal FRM system and includes the said drawings.
From at least 28 October 2004, Statewide Pest Control has acted as a licensee of Term-Seal (Aust) for the sale and installation of that company’s products including the Term-Seal FRM and it has sold, installed or offered to sell or install the Term-Seal FRM. The Term-Seal (Aust) website identifies Statewide Pest Control as a licensee and installer of Term-Seal (Aust) products, including Term-Seal FRM.
Term-Seal (Aust) and Statewide Pest Control admit that they do not have the authority of the applicants or either of them to sell, install or offer to sell and install the Term-Seal FRM system, but they deny any need for them to have such authority and they assert that the Term-Seal FRM system was at all material times the property of Term-Seal (Aust).
There are 14 claims in the Patent and the applicants allege the respondents have infringed claims 1, 2, 3, 5, 6 and 9. Those claims are in the following terms:
1.A membranous termite barrier which is adapted to extend between the mortar course of a masonry wall and an adjacent concrete slab, said membranous 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 wherein said membranous termite barrier is in the form of a longitudinally extending strip which can be rolled out over an upper coarse of the masonry wall and can be adhered to the adjacent concrete slab.
2.A membranous termite barrier extending between the mortar course of a masonry wall and an adjacent concrete slab, said membranous 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.
3.A membranous termite barrier as claimed in claim 2, wherein the membranous termite barrier is in the form of a longitudinally extending strip rolled out over an upper coarse of the masonry wall and adhered to the adjacent concrete slab.
…
5.A membranous termite barrier as claimed in any one of the preceding claims, wherein the matting is fabricated from natural or artificial fibres, or mixtures thereof, which are formed in small discrete lengths or long fibres woven into fabrics.
6.A membranous termite barrier as claimed in any one of the preceding claims, wherein the matting is woven fibreglass, polyester or polyethylene wadding, or geofabric.
…
9.A membranous termite barrier as claimed in any one of the preceding claims, wherein the termite resisting product additionally includes a waterproofing compound, other additives and/or diluents.”
The respondents deny that they have infringed any of these claims.
The respondents admit that the conduct of Term-Seal (Aust) has taken place at the direction of the third respondents, Mr Hannay and Mr Franklin. The applicants allege that the acts infringing the claims in the Patent have caused loss and damage to them. That allegation is denied by the respondents. The applicants allege that the respondents threaten and intend to, and will unless restrained, continue to infringe the said claims of the Patent, thereby making profits for themselves and causing damage to the applicants. The respondents admit that they intend to continue to manufacture, market and sell their barrier system but they deny any infringement of the claims in the Patent and they deny causing damage to the applicants.
The first issue is whether the Term-Seal FRM infringes claims 1, 2 3, 5, 6 and 9 of the Patent.
The cross-claim brought by Term-Seal (Aust) and Statewide Pest Control raises three issues. To avoid confusion, I will continue to refer to these companies as the first and second respondents although they are, in fact, cross-claimants on the cross-claim.
The first and second respondents claim a declaration that claims 1, 2, 3, 5, 6 and 9 of the Patent are, and have been at all material times, invalid and an order that the claims be revoked. In their particulars of invalidity they refer to claim 1 in the Patent and allege that each other claim is dependent on claim 1. As to claim 1, they allege that it lacks novelty and an inventive step because of prior art. It is alleged to lack an inventive step because it was obvious. In connection with those allegations, they refer to what they say are seven pieces of relevant prior art and one form of common procedure by persons skilled in the art prior to the priority date. The second issue is novelty and the third issue is obviousness. The first and second respondents also allege that the relevant claims of the applicants are invalid by reason of the fact that they cannot be made to work as described in the Patent specification and therefore the invention in those claims is not useful. The fourth issue is utility.
Although not the subject of the infringement action, the first and second respondents submit that claims 4, 8 and 10 of the Patent are relevant to the claims in issue. Those claims are in the following terms:
“4.A membranous termite barrier as claimed in any one of the preceding claims wherein an edge of the matting has an associated inspection band welded or adhered thereto which prevents damage to the matting when the mortar joint is racked and which prevents the edge of the matting action as a passageway through which the impregnated termite resisting product could escape by evaporation or leakage, or be diluted by moisture adsorption from the air.
…
8.A membranous termite barrier is [sic] claimed in any one of the preceding claims, wherein the termite resisting product is selected from the group consisting of pyrethrums, chlorpyrifos and chlorfos.
…
10.A membranous termite barrier as claimed in claim 9, wherein the additives are selected from creosote and orminoid®.”
Relevant legislative provisions
The applicants are the proprietors of the Patent and they have the exclusive rights during the term of the Patent to exploit the invention and to authorise another person to exploit the invention: s 13 of the Patents Act 1990 (Cth) (“the Act”). “Exploit” in relation to an invention is defined in Schedule 1 – Dictionary to the Act (“the Dictionary”) in the following terms:
“exploit, in relation to an invention, includes:
(a)where the invention is a product—make, hire, sell or otherwise dispose of the product, offer to make, sell, hire or otherwise dispose of it, use or import it, or keep it for the purpose of doing any of those things; or
(b)where the invention is a method or process—use the method or process or do any act mentioned in paragraph (a) in respect of a product resulting from such use.”
The term “invention” is defined in the Dictionary in the following way:
“invention means any manner of new manufacture the subject of letters patent and grant of privilege within section 6 of the Statute of Monopolies, and includes an alleged invention.”
Infringement proceedings are governed by Chapter 11 of the Act and, in particular, s 120 and s 122. A defendant to infringement proceedings may (as the first and second respondents have done here) apply by way of counter-claim in the proceedings for the revocation of the patent: s 121 of the Act. The grounds upon which the Court may revoke the patent, “either wholly or so far as it relates to a claim” are set out in s 138(3) of the Act. The only ground in that subsection which is relevant in this case is that the invention is not a patentable invention. A “patentable invention” is defined in the Dictionary to mean an invention of the kind mentioned in s 18.
Section 18 relevantly provides:
“(1)Subject to subsection (2), an invention is a patentable invention for the purposes of a standard patent if the invention, so far as claimed in any claim:
(a)is a manner of manufacture within the meaning of s 6 of the Statute of Monopolies; and
(b)when compared with the prior art base as it existed before the priority date of that claim:
(i)        is novel; and
(ii)       involves an inventive step; and
(c)       is useful; and
(d)is not secretly used in the patent area before the priority date of that claim by, or on behalf of, or with the authority of, the patentee or nominated person or the patentee’s or nominated person’s predecessor entitled to the invention.”
Subsection 7(1) and the Dictionary deal with when an invention is not novel. Subsection 7(1) provides as follows:
“(1)For the purposes of this Act, an invention is to be taken to be novel when compared with the prior art base unless it is not novel in the light of any one of the following kinds of information, each of which must be considered separately:
(a)prior art information (other than that mentioned in paragraph (c)) made publicly available in a single document or through doing a single act;
(b)prior art information (other than that mentioned in paragraph (c)) made publicly available in 2 or more related documents, or through doing 2 or more related acts, if the relationship between the documents or acts is such that a person skilled in the relevant art would treat them as a single source of that information;
(c)prior art information contained in a single specification of the kind mentioned in subparagraph (b)(ii) of the definition of prior art base in Schedule 1.”
The Dictionary contains definitions of the terms, “prior art information” and “prior art base” and those definitions are in the following terms:
“prior art base means:
(a)in relation to deciding whether an invention does or does not involve an inventive step or an innovative step:
(i)information in a document that is publicly available, whether in or out of the patent area; and
(ii)information made publicly available through doing an act, whether in or out of the patent area.
(b)in relation to deciding whether an invention is or is not novel:
(i)information of a kind mentioned in paragraph (a); and
(ii)information contained in a published specification filed in respect of a complete application where:
(A)if the information is, or were to be, the subject of a claim of the specification, the claim has, or would have, a priority date earlier than that of the claim under consideration; and
(B)the specification was published after the priority date of the claim under consideration; and
(C)the information was contained in the specification on its filing date and when it was published.
…
prior art information means:
(a)for the purposes of subsection 7(1)—information that is part of the prior art base in relation to deciding whether an invention is or is not novel; and
(b)for the purposes of subsection 7(3)—information that is part of the prior art base in relation to deciding whether an invention does or does not involve an inventive step; and
(c)for the purposes of subsection 7(5)—information that is part of the prior art base in relation to deciding whether an invention does or does not involve an innovative step.”

Subsections 7(2) and (3) and the Dictionary deal with when an invention is taken to involve an inventive step. Subsections 7(2) and (3) provide as follows:
“(2)For the purposes of this Act, an invention is to be taken to involve an inventive step when compared with the prior art base unless the invention would have been obvious to a person skilled in the relevant art in the light of the common general knowledge as it existed in the patent area before the priority date of the relevant claim, whether that knowledge is considered separately or together with the information mentioned in subsection (3).
(3) The information for the purposes of subsection (2) is:
(a) any single piece of prior art information; or
(b)a combination of any 2 or more pieces of prior art information; being information that the skilled person mentioned in subsection (2) could, before the priority date of the relevant claim, be reasonably expected to have ascertained, understood, regarded as relevant and, in the case of information mentioned in paragraph (b), combined as mentioned in that paragraph.”
There is no definition or statement in the Act as to when an invention is “useful” within s 18.
The Patent
The Patent specification is divided into various sections and includes three drawings described respectively as figures 1, 2 and 3. The Patent contains an abstract, a section dealing with the background of the invention, a section describing the prior art, sections describing the object of the invention and summarising the invention, a detailed description of the invention, a brief description of the drawings forming part of the Patent, a description of preferred embodiments and the 14 claims defining the invention.
The abstract provides:
“A termite barrier which extends between the mortar course of a masonry wall and a concrete slab of a building. The barrier has a membranous structure which is impregnated with a termite resisting material such as chlorpyrifos. An inspection band can be incorporated along one longitudinal edge of the barrier.”
In the section dealing with the background of the invention, the following statement appears:
“This invention relates to the protection of buildings from subterranean termites and is particularly concerned with membranous termite barriers for incorporating into concrete slab-on-ground buildings having a masonry veneer cladding, during their construction.”
There is then a reference to the behaviour of termites and the damage which they can cause. There is reference to the current Building Code which is said to be laid down in Australian Standard 33460.1-1995. There is reference to three systems for protecting concrete slabs from termite penetration which are permitted under the Standard. Those three systems – use of stainless steel mesh, graded stone or chemicals – are discussed in some detail as are the problems associated with them.
One item of prior art and the disadvantages said to be associated with it are then discussed. The object of the invention is stated to be “to provide a termite barrier which has all the advantages of the termite barrier of Australian Patent Application No 64411/96 but which does not have the disadvantages referred to above.”
The following statement appears in the summary of the invention:
“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 course 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.”
In the context of a detailed discussion of the invention, the following statement appears:
“The membranous termite barrier is easy to install because of its flexible characteristics and can be sold in convenient coiled rolls. Impregnation with the termite resistant product can be made either prior to sale or, preferably, at the site of installation.”
Reference is then made to a second aspect of the invention which is a method of installing the membranous termite barrier in situ.
There is a detailed description of the invention and that includes statements as to the composition of the membranous termite matting and the termite resistant product, the nature of the inspection band and other characteristics of the membranous termite barrier.
The drawings in the Patent specification are as follows:
A brief description of what is shown in the drawings is as follows:
1.Figure 1 is a cross-sectional view of a membranous termite barrier fitted between a brick course and a raft slab. Figure 2 is a cross-sectional view of a membranous termite barrier fitted between a brick course and an infill slab according to one method, and figure 3 according to another method.
2.In figure 1, the brick course is 10, the concrete raft slab is 11, the cavity is 16 and the foundation is 12. The base plate of the building is 13. The membranous termite barrier is 20. In figure 2 there is no cavity, and the membranous termite barrier, which is 21, is laid flat across the top of a horizontal portion of a rebate in the concrete slab. Figure 3 shows the same masonry/slab construction as figure 2, but the membranous termite barrier is curved upwards.
By way of example, in the case of figure 1 a possible entry path for termites is from the ground outside the building, through the brick course or masonry wall, up the cavity to the base of the building and the timber. The membranous termite barrier is said to be a physical and chemical barrier to entry.
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 amendment of the claims in the Patent
The claims in the Patent were amended during the course of the proceedings in this Court and it is necessary to outline how that came about.
There is a procedure in Chapter 9 of the Act whereby the complete specification of a standard patent may be re-examined by the Commissioner of Patents. The re-examination may come about in three different ways. First, on request a complete specification may be re-examined before the patent is granted: s 97(1). Secondly, the complete specification may be re-examined on request after the patent has been granted: s 97(2). Thirdly, and it is this procedure which is relevant in this case, a Court before which the validity of a patent is disputed may direct the Commissioner to re-examine the complete specification, and the Commissioner must re-examine the specification accordingly: s 97(3).
Section 98 provides for what the Commissioner is to do on a re-examination. It is in the following terms:
“98 Report on re‑examination
(1)On re‑examining a complete specification, the Commissioner must ascertain and report whether, to the best of his or her knowledge, the invention, so far as claimed in any claim and when compared with the prior art base as it existed before the priority date of that claim:
(a) is not novel; and
(b) does not involve an inventive step.
(2)For the purposes of subsection (1), the prior art base is to be taken not to include information made publicly available only through the doing of an act (whether in or out of the patent area).”
[Note: see also section 7.]
The patentee of a patent which is re-examined has the right to file a statement disputing the whole or any part of a report adverse to him: s 99. The report and any statement by the patentee is to be given to the Court which made the direction: s 100. Section 105 provides that in any relevant proceedings in relation to a patent, the Court may, on the application of the patentee, by order direct the amendment of the patent, the patent request or the complete specification in the manner specified in the order.
On 14 October 2005, Dowsett J directed the Commissioner of Patents to re-examine the Patent in accordance with Chapter 9 of the Act and provide a written report to the Court as soon as practicable. When he made that order Dowsett J noted an undertaking by the respondents not to challenge the validity of the Patent on the grounds set out in a letter of request to be sent to the Commissioner by the respondents in the event that the Commissioner did not report adversely on the complete specification pursuant to s 99 of the Act. The Commissioner re-examined the complete specification and he provided a report by way of three letters dated 18 November 2005, 28 November 2005 and 27 January 2006 respectively. The Commissioner’s report was adverse to the applicants in terms of a number of the original claims.
The Commissioner’s report led to an application by the applicants to amend the claims in the Patent. While they maintained that the Commissioner’s conclusions were incorrect, they applied to amend the claims because (they said) they wished to expedite the proceedings and avoid unnecessary expenditure of costs.
On 15 June 2006 Collier J made an order pursuant to s 105(1) of the Act that the claims in the Patent be amended in the manner specified in an attachment to the order. That was done and the claims as I have set them out are the claims as amended by that order.
The respondents submit that the amendments did not remove the features which led the Commissioner to conclude that certain claims were invalid and that I should place considerable weight on the Commissioner’s opinion. It was submitted that I should conclude that the Commissioner was correct. The applicants submit that the Commissioner’s report is irrelevant.
The Commissioner concluded that a number of the original claims were not novel in light of one item of prior art. She concluded that one claim involved a known workshop variation and therefore lacked an inventive step. The Commissioner also concluded that two of the original claims lacked an inventive step in light of the item of prior art previously referred to. The item of prior art which led to the conclusions of a lack of novelty and a lack of an inventive step was a Japanese patent number H5-346047. The inventor of the invention protected by the patent was Joji Ogawa. I will refer to this patent as “the Ogawa patent”. In due course, I will need to examine the Ogawa patent in more detail because the respondents rely on it as part of their case that the claims in the Patent are not novel and were obvious.
The re-examination procedure under Chapter 9 of the Act was discussed by Lindgren J in Emperor Sports v Commissioner of Sports (2005) 146 FCR 159 (“Emperor Sports”) and then on appeal by the Full Court of this Court: Commissioner of Patents v Emperor Sports Pty Ltd (2006) 149 FCR 386. The particular facts of that case were different from those in this case in that in Emperor Sports the Commissioner of Patents was asked to re-examine a complete specification under s 97(2) of the Act. She did so and she decided to revoke the patent. The patentee appealed against the Commissioner’s decision under s 101(4) of the Act. Lindgren J allowed the appeal. He referred to the purpose of the re-examination provisions. In that context he referred to the report dated 29 August 1984 of the Industrial Property Advisory Committee, “Patents, Innovation and Competition in Australia” to the Minister for Science and Technology, and relating to the introduction of post-grant re-examination. He referred to the position in the United States and in that context he referred to a statement in Congress (HR Rep No 96-1307 at 3-4) on the purpose of the re-examining statute (35 USC §302) (at [104]-[105]). Speaking generally, it seems that the re-examining procedure enables a party to utilise the expertise of the Patent Office to decide appropriate questions with a view, if possible, to avoiding the expense of legal proceedings.
In Emperor Sports the patentee had a right of appeal against the Commissioner’s decision whereas, in this case, proceedings in a relevant court are pending and, despite her conclusions, the Commissioner could not revoke the Patent: s 101(3). All she could do was provide a report to the Court under s 100. That may be of assistance to the parties in terms of their approach to the proceeding and one possibility (as happened here) is that the patentee will apply to the Court for an order that the patent be amended under s 105(1). However, if no action, or no other action, is taken by the parties then it is up to the Court to determine the validity issue on the evidence before it and the Commissioner’s report does not in any way bind the Court. It may be something the Court takes into account and I note that on the appeal in Emperor Sports, the Full Court said that the appeal was a hearing de novo and the Court went on to say (at 392 [24]):
“On an appeal by way of hearing de novo the judge would not be a person credited with technical expertise of his or her own. In such event the judge may be able to take into account conclusions of the Commissioner based on his or her expertise, subject of course to the rights of other parties to call rebutting or supporting evidence.”
Although the procedure in a case like the present is quite different from that in Emperor Sports, it seems to me that in an appropriate case the court could take into account a Commissioner’s report. However, even if it is appropriate to do that, there would be no onus on a party to show that the Commissioner’s report is wrong and the decision is one for the Court. In this case I place no weight on the Commissioner’s report. Not only have the claims been amended since the report, but I have substantial evidence before me as to novelty and obviousness. As will become apparent I have concluded that the relevant claims in the Patent are valid. I have concluded that the Ogawa patent is not a novelty-defeating piece of prior art and it is not a part of common general knowledge for the purpose of obviousness.
Infringement
It is convenient to start with the infringement issue, although had invalidity been established my conclusions on infringement would have been irrelevant.
The claims that the respondents are alleged to have infringed are claims 1, 2, 3, 5, 6 and 9. I have already set out the integers of those claims. Claims 1 and 2 are independent of each other. Claim 3 incorporates the integers in claim 2 and adds to them. Claims 5, 6 and 9 incorporate the integers in previous claims and adds to them.
Claims 1 and 2 are each claims for a combination. Each claim consists of a number of integers no one of which was not known at the priority date. However, the applicants submit that they are so arranged and related that they work together to produce a single result or a new thing. In Kanzal v Lee (1936) 58 CLR 670 Dixon and McTiernan JJ said (at 687):
“Although the principles relied upon are old and simple and the features, separately considered, are used in daily practice for all sorts of purposes, the production of a new implement by their judicious use may involve an inventive step or display inventive ingenuity, if the integers are so combined and related that they work in co-operation to effect a purpose or provide an appliance which is new.”
See also Palmer v Dunlop Perdriau Rubber Company Limited (1937) 59 CLR 30 and Sunbeam Corporation v Morphy Richards (Aust) Pty Ltd (1961) 180 CLR 98 (“Sunbeam Corporation”) at 101 per Windeyer J.
The relevant comparison for determining if a claim has been infringed is between the applicants’ Patent and the respondents’ product. The comparison is not between the applicants’ product and the respondents’ product: Sunbeam Corporation at 101 per Windeyer J.
The test for determining if a claim has been infringed by a defendant’s product was stated by Dixon J (as his Honour then was) in Radiation Ltd v Galliers and Kleirr Pty Ltd (1938) 60 CLR 36 (at 51-52):
“But, on a question of infringement, the issue is not whether the words of the claim can be applied with verbal accuracy or felicity to the article or device alleged to infringe. It is whether the substantial idea disclosed by the specification and made the subject of a definite claim has been taken and embodied in the infringing thing. It is, no doubt, sometimes the case that an inventor explains in his specification steps or methods involving an idea, conception or principle of wider application or of deeper significance than that for which he claims. Sometimes a claim, particularly a claim for a combination, is expressly confined to a particular form of construction or the like, and in such a case it is useless for the patentee to complain that his idea of what he calls his principle has been applied in a different construction or has been expressed by means of a mechanical equivalent of some element which his claims make of the essence of his monopoly. Such cases are well illustrated by the decisions of this court in Walker v. Alemite Corporation and Shave v. H. V. McKay Massey Harris Pty Ltd But the words of James L.J. in Clark v. Adie, p. 675 must not be forgotten: ‘The patent is for the entire combination, but there is, or may be, an essence or substance of the invention underlying the mere accident of form; and that invention, like every other invention, may be pirated by a theft in a disguised or mutilated form, and it will be in every case a question of fact whether the alleged piracy is the same in substance and effect, or is a substantially new or different combination.’”
It is necessary at this point to describe the respondents’ product, the Term-Seal FRM, in some detail.
Pursuant to a notice to produce, samples of the Term-Seal FRM (or fibre re-inforced membrane) were produced and tendered on the hearing before me. The membrane before the application of Term-Seal Multi-Purpose became exhibit A2, three samples of the membrane with the Term-Seal Multi-Purpose applied to it (that is, what I will call the Term-Seal FRM) became exhibits A3, A4 and A5 respectively. The Term-Seal Multi-Purpose in a bucket became exhibit A6 and the same product in a jar became exhibit A7. The “recipe or formula for the Term-Seal Termite Resistant Product which is applied to the Term-Seal FRM” is part of exhibit A1. On occasions the membrane was referred to as the Mopet, which is a brand name.

One of the third respondents, Mr Philip Hannay, described how the Term-Seal Multi-Purpose or paste is applied to the membrane or Mopet. He said:
“A moppet [sic] supplied in 800 to 1000 metre rolls. It passes through a series of rollers to make ti [sic]flat and taut. It then goes on to a level plane into a set of stentors on either side. The stentors are to hold it into place and to keep it taut. It then passes under a knife that we spent a considerable amount of time developing. Now, because it's moving away from you, it's dragging underneath the knife. We then have a process in which we force the paste to the knife. The material picks the paste up and pushes itself against the knife, and the knife spreads it, not unlike getting some butter on a piece of bread. The roller goes through a bank - a series of drying banks. It's rolled up on the other end. We then get that roll and take it back to the other end and turn it over, and spread it on the other side.”
Mr Hannay said in cross-examination that the paste applied to the membrane or Mopet is not the same as the Term-Seal Multi-Purpose in the bucket which became exhibit A6. The paste was a manufacturing compound that differed from the Term-Seal Multi-Purpose in terms of the fibres, a different viscosity and “some of the fillers are a different size”. He said that “the polymers are changed very slightly to allow for softness”. Later, in cross-examination, the position was clarified. Mr Hannay agreed that the manufacturing compound applied to the membrane or Mopet was, for all relevant purposes, the same as the Term-Seal Multi-Purpose save that the manufacturing compound did not have all the fibres that are present in the Term-Seal Multi-Purpose. It was not suggested either in evidence or in submissions that that difference was material to the issues in this case.
The formulation data for the Term-Seal Multi-Purpose shows that one component of it is disodium octaborate.
Before turning to the evidence of the witnesses as to the composition of the Term-Seal FRM, it is relevant to note the claims made about the product by the first respondent on its website. There are two versions, one in 2004 and the other in 2006. There are differences between the two which Mr Hannay explained were partly due to these proceedings. Other than the removal in the 2006 version of a reference in the 2004 version to the membrane being a geotextile fabric, which Mr Hannay considered inappropriate, the nature of the differences were not explored in the evidence. There is no suggestion in the evidence that there were significant changes to the Term-Seal FRM between 2004 and 2006.
In the material appearing on the website in 2004, the Term-Seal Multi-Purpose and the Term-Seal Fibre Re-inforced Membrane (FRM) are described.
The description of the Term-Seal Multi-Purpose is as follows:
“Term-Seal Multi-Purpose compound is a single component acrylic based liquid which on curing, forms a seamless flexible, termite resistant and waterproof membrane.”
The description of the Term-Seal Fibre Re-inforced Membrane (FRM) is as follows:
“A specialised, non-toxic, termite resistant and waterproof compound that is impregnated into a geotextile fabric.
…
FRM has a unique bonding band of 40 mm that is used with Multi-Purpose to adhere to [sic] the FRM to concrete slabs and masonry to form a full and continuous physical termite barrier and damp course around perimeter cavities for all types of construction.”
(Original emphasis.)
Both the material appearing on the website in 2004 and in 2006 includes drawings showing the use of Term-Seal FRM in the cavity between masonry wall and concrete slab.
Dr Peter Fredericks gave evidence on behalf of the applicants. He was qualified to express the opinions he did and there was no suggestion he was other than an honest and straightforward witness. I accept his evidence.
Dr 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:
1.Based on visual inspection the membrane or Mopet was matting and this was confirmed by the Product Description sheet which describes the product as “100 polyester thermal smooth-bond spun bond non-woven”.
2.After applying the Term-Seal Multi-Purpose it was clear that it had penetrated or permeated through the matting (being unwoven polymer fibres about 20µm in diameter) and filled most of the voids between the fibres. The Term-Seal Multi-Purpose had a granular nature and this is consistent with the formulation data for Term-Seal Multi-Purpose which states that Multi-Purpose contained more than 40 per cent w/w of powered inorganic materials.
These conclusions were drawn after an examination by Dr Fredericks using an Environmental Scanning Electron Microscope and a secondary electron detector.
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.
Dr 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.
The samples provided to Dr Fredericks did not contain the additional integer in claim 4. As far as the additional integers in claim 5 are concerned, Dr Fredericks said that the matting in the samples was fabricated into a non-woven mat from synthetic (artificial) fibres, but Dr Fredericks had no information as to the length of the fibres. As far as the additional integer in claim 6 is concerned the samples were polymeric (that is, polyester) and are non-woven materials and, in the opinion of Dr Fredericks, could be described as polyester wadding or as geofabrics as used in the claim. As far as the additional integer in claim 7 is concerned, the samples did not have matting which appeared to be multi-layered. As far as claims 8, 9 and 10 are concerned, Dr Fredericks did not think the Term-Seal Multi-Purpose infringed claim 8 because having regard to the formulation data it did not contain a product from the group consisting of pyrethrums, chlorpyrifos and chlorfos or claim 10 because it does not contain creosote or orminoid. As to the additional integer in claim 9, Dr Fredericks said that the Term-Seal Multi-Purpose largely comprises an acrylic resin (a polymer) which will, when cured, be waterproof and he noted that the first respondent’s website material shows that Term-Seal FRM is advertised as a waterproof barrier or damp course.
Dr Fredericks was asked to comment on a claim made by the respondents that claim 4 of the Patent implied that the termite resisting product as referred to in the earlier claims is an aqueous liquid and remains as a liquid impregnated into the matting, whereas Term-Seal Multi-Purpose cures to form a solid matrix which has termite resistant properties. It was said by the respondents that on curing, the Term-Seal Multi-Purpose cannot leak out, evaporate or be diluted with water. Dr Fredericks expressed the opinion that for the purposes of claims 1 and 2 the termite resisting product need only be liquid at the time it is applied to the matting. He said that followed from the position of the word, “liquid” in those claims. Furthermore, a requirement that the termite resisting product remain in liquid form was said by Dr Fredericks to be inconsistent with, first, the need for the termite barrier to last for a long time and, secondly, with an earlier reference in the Patent specification to the membranous termite barrier being sold after being impregnated, in “convenient coiled rolls”. Dr Fredericks said that his interpretation of claims 1 and 2 was also supported by what is said in the Patent specification about the preferred embodiments of the invention and, in particular, the reference to the use of creosote, chlorpyrifos and orminoid and the fact that when allowed to dry these materials as a mixture harden to a solid flexible material and cease to be a liquid.
Dr 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.
Mr Philip Hannay is the managing director of Term-Seal (Aust). He was an honest and straightforward witness.
Mr Hannay has been in business in the termite and pest extermination industry for about 30 years. He outlined his working history and said that he was instrumental in developing the Termguard Reticulation system. That system involves piping being installed around the perimeter of a building and, in some cases, across and under the slab of a building. The system is charged with appropriate termiticide which flows from the piping through openings in the piping into the soil to create a chemical barrier, under and around the base of the building.
Mr Hannay described changes in the termite prevention industry in the 1990s and, in particular, the change in about 1995 whereby a concrete slab could be incorporated as part of a termite barrier. He described a product which involved a geotextile skirt being placed around a pipe (which is called a penetration in a concrete slab) and that geotextile skirt being saturated with termiticides. Mr Hannay described how he and Dr Franklin developed the Term-Seal product. Counsel for the applicants submitted that his evidence on this topic was irrelevant. I received the evidence subject to an argument about relevance. In the end, I do not think the evidence about how the Term-Seal FRM was developed assists me in resolving the issues in this case. Mr Hannay said that in developing what he called the FRM system, an essential part of the system had been patented by Mr Paul Jeynes and, in early 2003, he and Dr Franklin approached Mr Jeynes and purchased his patent. In 2003, Mr Hannay started marketing and distributing the Term-Seal FRM Multi-Purpose system and he approached and secured a number of licensees.
Mr Hannay said in cross-examination that the Term-Seal FRM is sold in strip form which is rolled up and available to be applied between the masonry wall and the concrete slab of a new construction in conjunction with the Term-Seal Multi-Purpose which is used to stick it to the concrete slab. He agreed that the Term-Seal Multi-Purpose has disodium octaborate in it. Mr Hannay identified the patent application which covers the Term-Seal FRM. He considered his invention was something of a breakthrough. Mr Hannay was asked about various statements in the patent application and the extent to which the Term-Seal membrane or material and Term-Seal Multi-Purpose conformed with it. He agreed that the patent application does “cover” the Term-Seal FRM, which I take to mean that he agrees that it falls within the claims in the patent application. It is not necessary for me to set out any further details.
Dr Roger Franklin is the other third respondent. He also was an honest and straightforward witness, although I do not accept all of the opinions which he expressed. Dr Franklin has qualifications in chemistry with particular expertise in synthetic organic chemistry. For the last 22 years he has been involved in the development and manufacturing of pesticide. Like Mr Hannay, he gave evidence of his involvement in the development of the Term-Seal FRM. Again, counsel for the applicants objected to that evidence on the grounds of relevance. I received the evidence subject to ruling on relevance. Again, I do not think the evidence assists me in resolving the issues in this case. Dr Franklin said that one of the key findings of his research was the discovery that geotextile fabrics were unsuitable substrates for Term-Seal Multi-Purpose.
Dr 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.
Dr Franklin also gave evidence relevant to novelty, obviousness and utility and I will discuss his evidence on those topics in that context.
For the most part, evidence in chief in this case was given by way of affidavit. In the case of Dr Franklin his counsel sought to lead oral evidence from him as to the results of certain field tests of termite proofing material. The trials were conducted near termite nests using both treated and untreated material. Some of the trials were up to four years old. Counsel for the applicants objected to the leading of this evidence on the basis that he had no notice of the evidence and the underlying material had not been provided to the applicants. He said that as his experts had left Brisbane, it would be very difficult for him to obtain instructions on the evidence without an adjournment of the hearing. I refused to allow the evidence to be led in those circumstances. Orders had been made for the filing and serving of evidence in chief some time ago and if I had allowed the evidence to be led it would have been necessary, at the very least, to adjourn the hearing. More than that, I was satisfied that it was a real possibility that had the applicants been given notice of the evidence the respondents sought to adduce they may have conducted their case differently.
The first integer in claim 1 is “a membranous termite barrier which is adapted to extend between the mortar course of a masonry wall and an adjacent slab”. That is a feature or characteristic of the Term-Seal FRM, a fact which is admitted by the respondents. They admit that one version of the Term-Seal barrier system is a Term-Seal fibre reinforced membrane used or installed to extend between the mortar course of a masonry wall and an adjacent concrete slab.
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 third integer in claim 1 is that the matting is to be sufficiently absorbent to facilitate its impregnation with the liquid termite resisting product. The satisfaction of the second integer proves part of this integer in that since the matting was in fact impregnated with the termite resisting product then the matting was sufficiently absorbent for that to occur. The respondents’ submission in relation to this integer is that it envisaged not only that the termite resisting product would be a liquid but also that it would remain a liquid. It is submitted that the Term-Seal Multi-Purpose, when applied to a fibre reinforced membrane, settled and cured and at that point was not a liquid.
The respondents sought to support their submission by referring to claim 4. They submitted that the reference to the termite resisting product escaping by “evaporation” or “leakage” in the context in which it appears strongly implied that the termite resisting product referred to in the earlier claims would remain in liquid form even after it had been impregnated into the matting.
For the purposes of the present issue of infringement it would be sufficient to determine whether claims 1 and 2 include a liquid which sets or cures and becomes a solid. Even if those claims also included a liquid which remained a liquid that would not mean that the respondents’ product did not infringe the claims. However, the question of whether claims 1 and 2 include a termite resisting product which is and remains a liquid is relevant to the question of utility and it is appropriate to address the construction of claims 1 and 2 at this point.
The starting point is the proper construction of the relevant integers in claim 1. The same analysis applies to claim 2 because for the purposes of the present argument the relevant integers are the same. I propose to start by considering the construction of claim 1 without regard to claim 4. Claim 1 refers to the impregnation of the matting with a “termite resisting product” and a “liquid termite resistant product” in the context of the absorbency of the matting. The applicants submit that there is nothing in claim 1 that requires the termite resisting product to be a solid or a liquid either on impregnation or thereafter. I do not think that that is a proper construction of the claim and I think that it does require the termite resisting product to be in liquid form at the time of impregnation. However, I agree with the applicants that there is nothing in the claim which means that it does not cover a termite resisting product which is a liquid on impregnation but thereafter becomes a solid. In fact, in my opinion and leaving aside claim 4, that is what claim 1 covers and it does not cover a liquid which remains a liquid. It seems to me that follows from the body of the specification which refers to impregnation prior to sale, and sale in convenient coiled rolls. The question then arises as to whether claim 4 dictates or even suggests a different conclusion.

It cannot be contended that if claim 4 is based on the assumption that the termite resisting product is a liquid which remains liquid therefore claims 1 and 2 only cover the same type of product. Claims 1 and 2 are earlier, broader and independent claims. Claim 4 is a later dependent claim. It might be contended that if claim 4 is based on the assumption that the termite resisting product is a liquid which remains a liquid then that type of product is at least included in the types of product within claims 1 and 2. However, even if that is a legitimate process of reasoning, it is necessary to examine the assumption. On the face of it, the reference to “evaporation” and “leakage” suggests a liquid which remains a liquid but, having regard to Mr Langley’s evidence in cross-examination on this topic, I am not at all confident that this is so. In those circumstances, I would not use claim 4 to interpret claims 1 and 2. In my opinion, the termite resisting product referred to in claims 1 and 2 is a liquid on impregnation which sets or cures and becomes a solid.
The fourth integer in claim 1 is that the membranous termite barrier is in the form of a longitudinally extending strip which can be rolled out over an upper course of the masonry wall and that is not in dispute. Nor is the fifth integer in claim 1, that the longitudinally extending strip can be adhered to the adjacent concrete slab, in dispute.
The Term-Seal FRM also contains the three integers comprising claim 2. That claim deals with the membranous termite barrier in situ and the first integer – a membranous termite barrier extending between the mortar course of masonry wall and an adjacent concrete slab – is admitted and the second and third integers are present for the reasons I have given in connection with the same integers in claim 1.
The Term-Seal FRM also contains the additional integers identified in claim 3 in that the membranous termite barrier is in the form of a longitudinally extending strip rolled out over an upper course of the masonry wall and adhered to the adjacent concrete slab.
The Term-Seal FRM also contains the additional two integers in claim 5. The matting is fabricated from natural or artificial fibres. Dr Fredericks examined the samples and he concluded that the matting was fabricated into “a non-woven mat from synthetic (artificial) fibres”. As to the second integer, I agree with counsel for the applicants that when the fibres are teased out it is apparent that long fibres have been woven into the fabric. It is permissible for me to draw conclusions from my own inspection of the alleged infringing product: Minnesota Mining and Manufacturing Co v Beiersdorf (Australia) Ltd (1980) 144 CLR 253 (“Minnesota Mining”).
The Term-Seal FRM also contains the additional integer identified in claim 6, namely, that the matting is woven fiberglass, polyester or polyethylene wadding, or geofabric. I accept the opinion of Dr Fredericks that the matting of the Term-Seal FRM can properly be described as such and, in particular, as polyester wadding or as geofabric.
The Term-Seal FRM also contains the additional integer identified in claim 9, namely, that the termite resisting product additionally includes a water-proofing compound, other additives and/or diluents. Dr Fredericks said, and I accept, that the Term-Seal Multi-Purpose largely comprises an acrylic resin (a polymer) which will, when cured, be waterproof. The Term-Seal Multi-Purpose does not contain as additives, creosote or orminoid, as referred to in claim 10, but the applicants do not allege an infringement of claim 10 and there is no reason to read down claim 9 by reference to claim 10. Claim 10 is a later claim with additional integers.
The respondents have infringed claims 1, 2, 3, 5, 6 and 9 of the Patent, assuming these claims to be valid. The third respondents’ liability rests on the fact that, as admitted, they authorised, procured and directed the relevant conduct of the other respondents.
Validity of claims
Novelty
The terms of subs 7(1) are set out above ([23]). An invention is to be taken to be novel compared with the prior art base unless it is not novel in light of certain information. In this case that information is information made publicly available in a single document (subs 7(1)(a)). It is not said that prior acts are relevant in this case. Furthermore, there is no evidence that there are two or more documents or two or more acts which a person skilled in the relevant art would treat as a single source of information and therefore as “related” within subs 7(1)(b). Subsection 7(1)(c) is not relevant.
I must consider each prior publication separately and distinctly from the others and it is not permissible to “mosaic” multiple publications.
It is well-established that the basic test for anticipation or want of novelty is the same as that for infringement and “one can properly ask oneself whether the alleged anticipation would if the patent were valid, constitute an infringement”: Meyers Taylor Pty Ltd v Vicarr Industries Ltd (1977) 137 CLR 228 at 235 per Aickin J. In that case his Honour said that as no prior document or object involved or incorporated all the integers of any one of the claims there could not possibly be an infringement.
In Bristol-Myers v F H Faulding (2000) 97 FCR 524 at 546, Black CJ and Lehane J considered the case in which the anticipation was a paper anticipation. Their Honours referred with approval to the following passage from the speech of Lord Westbury in Hill v Evans (1862) 4 De G F & J 288; 45 ER 1195:
“The question then is, what must be the nature of the antecedent statement? I apprehend that the principle is correctly thus expressed: -- the antecedent statement must be such that a person of ordinary knowledge of the subject would at once perceive, understand, and be able practically to apply the discovery without the necessity of making further experiments and gaining further information before the invention can be made useful. If something remains to be ascertained which is necessary for the useful application of the discovery, that affords sufficient room for another valid patent.
…
The invention must be shewn to have been before made known. Whatever, therefore, is essential to the invention must be read out of the prior publication. If specific details are necessary for the practical working and real utility of the alleged invention, they must be found substantially in the prior publication.
Apparent generality, or a proposition not true to its full extent, will not prejudice a subsequent statement which is limited and accurate, and gives a specific rule of practical application.
The reason is manifest, because much further information, and therefore much further discovery, are required before the real truth can be extricated and embodied in a form to serve the use of mankind. It is the difference between the ore and the refined and pure metal which is extracted from it.
Again, it is not, in my opinion, true in these cases to say, that knowledge, and the means of obtaining knowledge, are the same. There is a great difference between them. To carry me to the place at which I wish to arrive is very different from merely putting me on the road that leads to it. There may be a latent truth in the words of a former writer, not known even to the writer himself; and it would be unreasonable to say that there is no merit in discovering and unfolding it to the world.
Upon principle, therefore, I conclude that the prior knowledge of an invention to avoid a patent must be knowledge equal to that required to be given by a specification, namely, such knowledge as will enable the public to perceive the very discovery, and to carry the invention into practical use.”
Black CJ and Lehane J, after referring to more recent authorities, said (at 548 [67]):
“What all those authorities contemplate, in our view, is that a prior publication, if it is to destroy novelty, must give a direction or make a recommendation or suggestion which will result, if the skilled reader follows it, in the claimed invention. A direction, recommendation or suggestion may often, of course, be implicit in what is described and commonly the only question may be whether the publication describes with sufficient clarity the claimed invention or, in the case of a combination, each integer of it.”
In the well known case of General Tire and Rubber Company v Firestone Tyre and Rubber Company Limited [1972] RPC 457 (“General Tire”), the Court of Appeal said (at 486):
“If, on the other hand, the prior publication contains a direction which is capable of being carried out in a manner which would infringe the patentee’s claim, but would be at least as likely to be carried out in a way which would not do so, the patentee’s claim will not have been anticipated, although it may fail on the ground of obviousness. To anticipate the patentee’s claim the prior publication must contain clear and unmistakeable directions to do what the patentee claims to have invented: Flour Oxidizing Co Ltd v Carr & Co Ltd ((1908) 25 RPC 428 at 457, line 34, approved in B T H Co Ltd v Metropolitan Vickers Electrical Co Ltd (1928) 45 R P C 1 at 24, line 1). A signpost, however clear, upon the road to the patentee’s invention will not suffice. The prior inventor must be clearly shown to have planted his flag at the precise destination before the patentee.”
In ICI Chemicals v Lubrizol Corporation Inc (2000) 106 FCR 214, the Full Court of this Court (Lee, Heerey and Lehane JJ) referred to the metaphor involving the flag and said (at 230 [51]):
“In those circumstances, and in the absence of relevant expert evidence, we think that the primary judge was correct to conclude that Williamitis did not anticipate the claims of the patent in suit. A familiar metaphor illustrating the concept of anticipation is that the prior inventor must clearly be shown to have planted his flag at the precise destination before the patentee: General Tire at 485-486. In the present case, the appellants' argument involved the skilled addressee rummaging through the Williamitis flag locker to find a flag which Williamitis possessed and could have planted.”
In the case of a combination, it is the combination which must be disclosed in the prior specification: Necaro Holdings v Martin Engineering (1990) 16 IPR 545 at 549 per Lockhart J; TA Blanco White Patents for Inventions (5^th ed, 1983) para 4.107.
The respondents referred to a number of alleged anticipations but emphasised three in particular.
The Kennedy and Hitchen patent (published 22 May 1997)
The abstract of this patent is in the following terms:
“A method for preventing or precluding migration of termites or insects through a possible area of migration for example between a concrete slab (13) and a brick wall (28) erected on the slab (13) including the step of applying to a possible area of migration as for example a join line (15) between the slab (13) and wall (28), a settable or curable barrier material which defines a barrier to termite or insect migration through said area. The barrier material may define a physical barrier or may incorporate a chemical to define a chemical barrier. The method may be used also for preventing termite penetration along pipes (19) penetrating a slab (13) by providing beads (68) around the pipe (19) within the slab (13) or at the junction between the pipe (19) and slab (13).”
The specification states that the invention in its first aspect provides a method for preventing or precluding migration of termites or insects, the method includes the step of applying to a possible area of migration, a settable or curable barrier material, the material defining a barrier to termite or insect migration through the said area. The barrier material may define when cured or set a physical barrier or a chemical barrier or a combination thereof. The specification states that the barrier material may be in the form of a paste, gel, liquid or a matrix mix. The specification gives as an example of the barrier material, “a unicellular membrane, that is a membrane in which a cellular chemical agent such as a termiticide is encapsulated”. The specification goes on to make the following statements about the barrier material:
“The settable or curable barrier material may, after application, be either flexible or rigid and may be applied to a building or component in any suitable manner, for example by being sprayed, painted, trowelled, brushed or by splatter machine. Alternatively, where appropriate, the settable or curable barrier material may be supplied in a cartridge tube or the like for application in the nature of a mastic.”
Claims 1 and 2 (which are relevant to each of the remaining claims) are in the following terms:
“1.A method for preventing or precluding migration of termites or insects, said method including the step of applying to a possible area of migration, a settable or curable barrier material which defines a barrier to termite or insect migration through said area.
2.A method according to Claim 1 wherein said area of migration is defined by cracks, fissures, perpends or joins in a building having a concrete slabs [sic] and brick walls and wherein said fissures, cracks perpends or joins are filled or sealed by said settable or curable barrier material.”
The respondents sought to rely on what was shown in the figures in the Kennedy and Hitchen patent. However, on a proper reading they do not assist the respondents as what they suggested was that a termite barrier was in fact no more than a conventional flashing.
The Ogawa patent (published 27 December 1993)
The specification refers to the industrial use of the invention and states that it “pertains to ant-resistant sheets, and antproofing and humidity proofing methods to prevent damage to buildings, etc, by termites”. After referring to existing problems it refers to the method of the invention as involving “an ant-resistant sheet with complex layers of film or sheets comprising beneficial woven or unwoven fabric and synthetic resin as a protective layer of humidity-resistant sheet or film which comprises the humidity resistant layer, and a greater effective surface area by fixing and holding the microencapsulated ant-resistant chemicals”.
Under the heading “Configuration” the nature of the ant-resistant sheet is described and its placement is described and in each example the sheet is placed face-up across the total surface of the foundations under the floor. The specification states:
“A complex ant-resistant sheet with a humidity-resistant sheet comprising a synthetic resin film or sheet and a woven or unwoven fabric layer that fixes and holds the ant-resistant chemicals, which are microencapsulated. The antproofing method is as follows: the humidity-resistant sheet layer of the ant-resistant sheet described above is placed face-up across the total surface of the foundations under the floor, and the joins between the edges of the ant-resistant sheets, the ant-resistant sheet edges, and the building foundations and concrete blocks or other joins between the various building constructions are joined together and sealed off using adhesive tape, or the humidity-resistant sheet layer of the ant-resistant sheet described above is placed face-up across the total surface of the foundations under the floor, and the joins between the edges of the ant-resistant sheets, the ant-resistant sheet edges, and the building foundations and concrete blocks or other joins between the various building constructions are joined together and sealed off using adhesive tape, or the humidity-resistant sheet layer of the ant-resistant sheet described above is placed face-up across the total surface of the foundations under the floor, and then covered in gravel, or concrete laid on the top.”
The fact that the method of use is across the total surface of the foundations under the floor is reiterated in two of the statements of application appearing under the heading “Scope of Patent Application”.
The specification refers to the fixing and maintaining of ant-resistant chemicals in the porous woven or unwoven fabric. There is reference to the fact that the use of unwoven fabric comprising polyester and polypropylene long fibres is ideal. It is said that the ant-resistant sheet is lightweight and easy to process and that it “prevents the invasion of termites and guards the building from humidity”.
The Groom patent (published 2 August 1990)
The abstract of this patent is in the following terms:
“A combination moisture/termite barrier in sheet form comprising moisture protection membrane(s) and integrated, bonded or sandwiched poisonous or repellant chemicals.”
The specification states that the purpose of the barrier is to protect buildings and materials from both moisture and attacks from termites or other pests. The invention is a fabricated membrane that is placed under ground-slabs, through walls or elsewhere as protection is required. It performs the function of a damp-proof course, that is, a moisture barrier, and the treatment of soils, that is, a termite barrier. The description of the combination moisture and termite barrier is as follows:
“The combination Moisture/Termite Barrier is sheet or strip barriers placed in a similar manner to the conventional moisture membranes or damp proof courses. The invention can be constructed in monolithic, laminated or sandwich form. The poison or repellent (a compatible chemical solution or powder) providing the termite protection is integrated with, bonded to or sandwiched between membrane/s providing the moisture protection. All laps and penetrations would be sealed with a purpose-made tape or purpose made pretreated moulded fittings offering the same protection to form an unbroken barrier.”
One of the three forms of the invention is a flexible underlay quality, or damp-proof course quality, moisture barrier impregnated with the repellant or poison. Another form involves the sandwiched layer impregnated with the repellant or poison being sandwiched between two layers of flexible underlay quality or damp-proof course quality moisture barriers.
Other prior art referred to by the first and second respondents was as follows:
1.The Hoechst Schering AgrEvo Pty Limited patent published on 5 March 1998 which involved a laminar pesticidal barrier for covering the ground beneath a building or cultivated area.
2.The Sapsford (Chemical Enterprises) (Aust) Pty Ltd patent published on 16 May 1989 which involved a blanket treated with pesticide or pest repellant and placed under or adjacent to a building.
3.The Alterm Termite barrier which is a physical perimeter barrier made up of a metal strip against subterranean termites.
4.The Saddington patent which is an aluminium or metal (and therefore impervious) ant or termite barrier.
A number of witnesses gave evidence as to whether the claims in the Patent were novel in light of the prior art referred to above. The construction of documents is for the Court but it seems clear that if appropriate the Court can be assisted by a person skilled in the relevant art at the relevant date. In General Tire the Court of Appeal said (at 485):
“The earlier publication and the patentee’s claim must each be construed as they would be at the respective relevant dates by a reader skilled in the art to which they relate having regard to the state of knowledge in such art at the relevant date. The construction of these documents is a function of the court, being a matter of law, but, since documents of this nature are almost certain to contain technical material, the court must, by evidence, be put in the position of a person of the kind to whom the document is addressed, that is to say, a person skilled in the relevant art at the relevant date.”
In his second affidavit Dr Franklin expressed the opinion that the Patent lacks novelty or inventiveness having regard to prior art and he refers to the Kennedy and Hitchen patent, the Ogawa patent, a patent called the Kordon patent, the Groom patent and the Sapsford patent. He also expressed the opinion that the patent is not useful. The applicants submitted that I should not receive Dr Franklin’s second affidavit. He had not complied with the practice note relevant to experts’ reports and, moreover, he would be giving expert evidence in a case in which he was a party. I would waive compliance with the practice note. The applicants have had an adequate opportunity to respond to Dr Franklin’s affidavit. As to the other point raised by the applicants, unless it is a particularly serious case of bias which might enliven the discretion to exclude, the fact that Dr Franklin is a party goes to the weight to be accorded to his evidence, not the admissibility of the evidence: J D Heydon, Cross on Evidence (7^th Australian ed, 2004) (at [29080]) and cases cited therein; Ian Freckelton and Hugh Selby, Expert Evidence (3^rd ed, 2005) (at 26 and 315-16) and cases cited therein.

Dr Franklin’s area of expertise is chemistry, although I accept that he has acquired some knowledge of termite barrier systems by reason of his association with Mr Hannay. He had never installed a termite barrier system – either physical or chemical or both – before the priority date. It seems that he received the prior art from Mr Geoffrey Habel, an experienced patent and trademark attorney, and it is likely he has been influenced by his discussion with Mr Habel about the prior art. I am not suggesting that there is anything improper about that; simply that it is unlikely he has any real expertise in the interpretation of the prior art. In those circumstances, I do not think Dr Franklin’s evidence as to a lack of novelty because of prior art is of any assistance. As to lack of an inventive step or obviousness his evidence is of no assistance because it relies on material (that is, paper anticipations) which, for reasons I will give, was not part of general common knowledge within s 7(2) of the Act.
Mr Michael Angliss is a registered patent and trade mark attorney. He gave evidence for the applicants and he was cross-examined at some length about a number of the paper anticipations. He was an honest and straightforward witness and I accept his evidence. As to the Kennedy and Hitchen Patent, he said that that patent did not involve placing a barrier between a brick course and a concrete slab and that what counsel for the respondents suggested to him was a barrier was, in fact, a conventional flashing. As to the Ogawa patent, Mr Angliss said the material referred to in that patent was laid under the totality of the building, “not in any perimeter way”. As to the Groom patent, he said that it was unclear in that specification what was meant by cavity protection and there is uncertainty as to what “membrane” means, and whether any matting was involved. As to the Saddington patent, he agreed that the specification clearly described “a physical barrier being introduced across the void between slab and brick work” but, relevantly, what was not present was a chemical barrier.
Mr Christopher Langley is a termite consultant who has been involved in the pest management or control industry for most, if not all, of his working life. He has a good deal of practical experience in dealing with termites. His experience includes giving expert evidence on termites. He was an impressive witness and I accept his evidence.
Mr Langley is familiar with all the main types of commercial termite barrier systems used in Australia in December 1998 and at the present time, and he is familiar with the regulatory requirements and standards applying to termite barrier systems in New South Wales and Queensland at those two times.
Mr Langley reviewed the prior art insofar as it consisted of patents or patent applications.
As to the Kennedy and Hitchen patent, Mr Langley referred to various statements in the patent and said that the obvious differences between this patent and the applicants’ Patent were as follows:
“1.The Kennedy and Hitchen patent provides for a settable or curable termite barrier mixture. The patent only provides for the use of matting in limited circumstances and there is nothing to suggest that the mixture is to be impregnated through the matting in the way suggested in the Patent.
2.The termite barrier system can be sold in prefabricated rolls whereas the Kennedy and Hitchen application involves applying the settable or curable mixture to the relevant surfaces in situ.”
As to the Ogawa patent, Mr Langley referred to various statements in the patent and he concluded that by contrast with the Patent, which is a perimeter defence method confined to a barrier between the masonry wall and the concrete slab, the Ogawa patent is a termite barrier which is applied under the foundations of a building.
As to the Groom patent, Mr Langley referred to various statements in the patent and said that although it was not entirely clear, the patent suggested that the primary purpose of the barrier was for it to be placed under the slab of the building and it did not seem to be used as a perimeter defence in the way described in the Patent. He also said that the exact composition of the barrier was unclear.
As to the Hoechst Schering AgrEvo Pty Ltd patent, Mr Langley referred to various statements in the patent, and said that like the Ogawa patent it differed from the Patent in that it is an under-the-slab system and not a perimeter defence system.
As to the Saddington patent, Mr Langley referred to various statements in the patent and concluded that it was broadly similar to the Alterm termite barrier system and, further, it did not disclose the use of matting or the use of termite resistant product impregnated through matting.
As to the Sapsford patent, Mr Langley referred to certain statements in the patent and stated that unlike the Patent it was not a perimeter defence system and there was no mention of it being used between the masonry wall of a building and the adjacent concrete slab.
As to the Alterm termite barrier system referred to in the CSIRO Building Products and Systems Appraisals, Technical Assessment 239, Mr Langley said that it differed from the invention in the Patent because it was a physical barrier made of a metal strip.
Mr John Worthington gave evidence on behalf of the respondents. He is a building consultant and has had over 40 years’ experience in the building industry. He has been involved in over 20,000 building and pest inspections, as an expert or consultant and he has given expert evidence on a number of occasions. He was asked to consider if the applicants’ invention as disclosed in the Patent would work and whether the invention disclosed in the Patent was novel. It seems to me that insofar as his evidence is relevant, it is relevant to obviousness rather than novelty. He does not seem to have analysed any of the prior art referred to the respondents’ particular of invalidity.
Mr John Thorpe holds a Bachelor of Science Degree in Entomology and he has completed post graduate studies in urban entomology and urban pest control. He was asked to read various patents and express an opinion on whether the claims in the Patent were novel. He approached the matter by identifying the first three integers in claim 1 and then said that each of the other claims depended on claim 1. He then considered as prior art the Kennedy and Hitchen patent, the Ogawa patent, the Groom patent, the Saddington patent, the Sapsford patent and the Hoechst Schering AgrEvo Pty Ltd patent and, as I understood it, he concluded that the invention disclosed by the relevant claims was not novel. He also said that there is no novelty in manufacturing a barrier system in a roll and then rolling out suitable lengths of the material or cutting the material into appropriate lengths and rolling these lengths up.
Although he was an honest and straightforward witness, I do not accept Mr Thorpe’s opinion as to novelty. He seems to have concluded that the invention was not novel because the integers of the various claims are found in the patents or patent applications he identifies even if (as I think is the case) not all of the integers are found in the one patent or patent application. As I have said, that is not a permissible approach in determining novelty.
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.
2.The barrier under the Patent can be sold in prefabricated rolls, whereas the barrier under the Kennedy and Hitchen patent sets or cures after the mixture is applied to the relevant surfaces on site.
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 Groom patent is not novelty-defeating. There is no reference in this patent to “matting” or matting impregnated with termite resisting product and the essential integers of the Patent are not present. Furthermore, although there is reference to cavity protection there is no clear statement in the Groom patent that the invention was adapted to be used or would be used to extend between the mortar course of a masonry wall and an adjacent concrete slab.
None of the other items of prior art are novel-defeating. Many of them lack a number of the integers in the relevant claims. It is unnecessary to go through them all, and a reference to the principal difference in each case will be sufficient. The Hoechst Schering AgrEvo Pty Limited patent and the Sapsford (Chemical Enterprises) (Aust) Pty Ltd patent relate to an invention for covering the ground beneath a building or cultivated area and are not concerned with perimeter defence. The Alterm Termite barrier is a physical barrier made up of a metal strip and the Saddington patent is for an aluminium or metal barrier which would be impervious.
The first and second respondents have failed to show that the relevant claims lack novelty.
Obviousness
The terms of subss 7(2) and (3) of the Act are set out above ([25]).
The words of s 7(2) make it clear that the onus to establish the absence of an inventive step is on the party challenging validity.
In this case there is no information which falls within the terms of s 7(3). None of the witnesses who gave evidence relevant to the question of obviousness identified prior art information, either a single piece or a combination, which they said a person skilled in the relevant art could before 21 December 1998 (that is, the priority date of the Patent) be reasonably expected to have ascertained, understood and regarded as relevant (or, in an appropriate case, combined). In those circumstances it is not necessary to consider the extent of the relaxation of the rules under the repealed s 100(1)(c) of the Patents Act 1952 (Cth) effected by s 7(3): Elconnex Pty Ltd v Gerard Industries Pty Ltd (1991) 32 FCR 491 (“Elconnex”); Tidy Tea Ltd v Unilever Australia Pty Ltd (1995) 32 IPR 405 (“Tidy Tea”); Firebelt Pty Ltd v Brambles Australia Ltd (t/as Cleanaway) (2002) 76 ALJR 816 at 821-823 [31]-[36] (“Firebelt”).
It follows from the above that the knowledge which is to be attributed to the person skilled in the relevant art is the “common general knowledge”. That does not include a specification open for public inspection unless there is evidence that the disclosure in question was part of the common general knowledge before the priority date. Aickin J (with whom the other members of the Court agreed) made that point in Minnesota Mining. In this case there is no evidence that any of the prior disclosures identified for the purposes of the submissions as to novelty were part of the common general knowledge before the priority date. Indeed, Mr Christopher Langley, who I considered an impressive witness on the question of obviousness, had not seen many of the disclosures put to him in cross-examination before he began to prepare for this litigation. None of the prior disclosures advanced on the case as to novelty are relevant as such on the case as to obviousness because they are not part of the common general knowledge.
The common general knowledge is what is known or used by those in the relevant trade or field of endeavour. In Minnesota Mining, Aickin J said (at 292):
“It forms the background knowledge and experience which is available to all in the trade in considering the making of new products, or the making of improvements in old, and it must be treated as being used by an individual as a general body of knowledge.”
The attributes of the person skilled in the relevant art for the purposes of s 7(2) have been referred to in a number of authorities. For present purposes it is enough to say that the hypothetical worker must be taken to be non-inventive, although skilled in the relevant art. By reason of the conditions which prevail in modern industry, he or she may be part of a sophisticated research team, with a great amount of information available to it (Wellcome Foundation Ltd v VR Laboratories (Aust) Pty Ltd (1981) 148 CLR 262 at 270 per Aickin J (with whom the other members of the Court agreed); Elconnex at 507 per Burchett J).
The next question is what is meant by the word “obvious” in s 7(3). The meaning of that word in patent legislation has been considered in many authorities, although it is necessary for me to mention only a few.
An appropriate starting point is the decision of the Full Court of this Court in Allsop Inc v Bintang Ltd (1989) 15 IPR 686. After referring to the fact that there must be an inventive step, although it can be a small one, and the fact that the cases time and again have warned against the “seductive clarity of hindsight”, the Court said (at 701):
“But although a simple idea may be inventive, it is essential for validity that there be inventiveness. Though small, it must be present. As was said in Graham v John Deere Co, supra, at 15, there is a ‘requirement that the subject matter sought to be patented must be beyond the skill of the calling’. The question, as Lord Herschell said in Vickers, Sons & Co Ltd v Siddell [1890] 15 App Cas 496 at 502 is whether the subject of the patent ‘was so obvious that it would at once occur to anyone acquainted with the subject, and desirous of accomplishing the end, or whether it required some invention to devise it’. In R D Werner & Co Inc v Bailey Aluminium Products Pty Ltd (1989) 13 IPR 513 at 523; 85 ALR 679 at 689, Lockhart J said: ‘There must … be some difficulty overcome, some barrier crossed’. He cited a dictum of Cotton LJ that ‘it must be a question of whether there is sufficient invention to justify a monopoly being granted by the Crown in the particular thing’.
When the principles which surround that question have been stated, the question itself remains one of fact involving an evaluation of the claimed invention in the light of the evidence. It has been described as a ‘jury question’: Wellcome Foundation case at (CLR) 280.”
In Elconnex, Burchett J said (at 507):
“While the hypothetical skilled worker, against whose efforts the claimed invention is to be tested, may be taken to have extensive knowledge, he must be uninventive. Even a small inventive element is sufficient to sustain a patent. However, there is a great difference between the simple idea which really breaks new ground and an unimaginative extension of well-known techniques into a closely similar area. Of course, if the area is not closely similar, so that an imaginative leap (even perhaps a small one) is required to perceive that the techniques are applicable to it, there will be invention.”
(See also Tidy Tea at 413-415.)
The particular question of the test of obviousness when faced with a patent involving what is said to be a new combination made up of old integers was discussed by Aickin J in Minnesota Mining. His Honour said (at 293):
“In the case of alleged lack of an inventive step the question of making a mosaic must operate (if at all) in a very different matter. An allegation of want of inventive step is not made out by saying you may take one or two, or twenty-one or twenty-two, prior publications and then select from them appropriate extracts or pieces of information, which will add up to the invention claimed and so demonstrate that it was obvious. So to proceed is to mistake the nature of an invention and the nature of the objection of obviousness. The question is, is the invention itself obvious, not whether a diligent searcher might find pieces from which there might have been selected the elements which make up the patent. If this were not so, there could never be a valid patent for a new combination of old integers. The proper question is not whether it would have been obvious to the hypothetical addressee who was presented with an ex post facto selection of prior specifications that elements from them could be combined to produce a new product or process. It is rather whether it would have been obvious to a non-inventive skilled worker in the field to select from a possibly very large range of publications the particular combination subsequently chosen by the opponent in the glare of hindsight and also whether it would have been obvious to that worker to select the particular combination of integers from those selected publications. In the case of a combination patent the invention will lie in the selection of integers, a process which will necessarily involve rejection of other possible integers. The prior existence of publications revealing those integers, as separate items, and other possible integers does not of itself make an alleged invention obvious. It is the selection of the integers out of, perhaps many possibilities, which must be shown to be obvious.”
Part of the above passage was cited with approval by the High Court in Firebelt at [21]. See also Aktiebolagett Hässle v Alphapharm (2002) 212 CLR 411, at 421-432 [42]-[49] (Gleeson CJ, Gaudron, Gummow and Hayne JJ).
I turn now to apply these principles to the facts.
Mr Langley gave the clearest and most concise evidence as to what was the common general knowledge in the relevant art before the priority date. The facts I now set out are based on his evidence.
In 1969, termite barriers in the pest control industry were mainly chemical barriers and they involved treating the ground on which the building was to be constructed with termiticide. After the building had been constructed the chemical would be applied to the adjacent perimeter. Some physical barriers were also used and one of those barriers was the Termimesh system which is a stainless steel woven mesh, which is sufficiently fine to prevent termites from passing through it. The Termimesh would be laid under the concrete slab of the building before the slab was poured. Stainless steel is relatively expensive.
There were two important developments in the mid-1990s. The first was the banning of the use of certain chemicals apparently for environmental reasons. The second was a change to the relevant Australian Standard, AS2870, which had the effect that in the case of residential slabs monolithic (slab on ground) concrete slabs, the slab, because it was to be constructed to a higher standard, could be incorporated into the barrier system.

In 1998, the main types of termite barrier systems for masonry veneer constructions were as follows:
1.The first type of termite barrier system was the Termimesh system previously described. The Termimesh system involved a physical barrier and it could be placed in the cavity between the external masonry wall and the slab. This would impede termites from entering the cavity from ground level and then proceeding along the side of the slab into the frame of the building. The disadvantages of the Termimesh system were that it was relatively expensive, it was relatively inflexible, and if it came away from the slab a potential entry point for termites was created.
2.The second type of termite barrier system was the use of graded stone. The graded stone was made up of particles of crushed or igneous or metamorphic stone (usually granite) of a uniform size. Termites could not penetrate the particles or transport them.
The graded stone was placed in the cavity between the masonry wall and the slab. There were difficulties with the graded stone if, because of the configuration of the slab and masonry, it needed to be placed externally, that is, immediately adjacent to the external face of the masonry or brick wall.
3.The third type of termite barrier system was a chemical barrier. The chemical barrier involved hand spraying the area adjacent to the external sides of the building with appropriate termiticides. Penetrations in the slab such as plumbing also meant that it was necessary to apply the chemical barrier underneath the slab. There were problems, after certain chemicals were banned, with the use of chemicals reacting with alkaline soils which led to amendments being introduced in 2001 requiring chemical barriers to be replenished on a regular basis by, for example, installing a reticulation system.
4.The fourth type of termite barrier system was ant capping which had been in use for many years. The system involved the use of metal capping strips usually of steel or aluminium. They were commonly used in relation to suspended floor designs but not used for slab on ground designs.
In his second affidavit and in cross-examination, Mr Langley agreed that in addition to the Termimesh system, there were other physical barriers to termite entry in use before the priority date. These included the Alterm termite barrier system (initially made of aluminium but now stainless steel) and the Termite Tite physical barrier system (also initially made of aluminium). Mr Langley agreed that providing conventional flashing was properly adhered to the slab, it too could constitute a physical barrier to termite entry. It was then put to Mr Langley that having regard to the Kennedy and Hitchen, Groom and Saddington patents, the idea of providing both a physical and chemical barrier to termite entry in the cavity between the masonry wall and concrete slab was obvious. The Kennedy and Hitchen patent referred to a settable or curable barrier which may be a physical barrier, a chemical barrier or both. The Groom patent referred to a barrier in sheet form comprising moisture protection membrane(s) and integrated, bonded or sandwiched poisonous or repellant chemicals. The Saddington patent referred to an ant/termite barrier which in particular configurations, may also perform the functions of a damp-proof course and flashing.
Mr Langley said that he thought it was a good idea to augment a physical barrier with a chemical barrier and that he would have placed the chemical in the soil around the relevant area.
The difficulty with the respondents’ contention is that they have not shown that the Kennedy and Hitchen, Groom or Saddington patents were part of the general common knowledge before the priority date. Indeed, in Mr Langley’s case, he did not become aware of the Kennedy and Hitchen patent until 2005, and the Groom patent until 2006. It is unclear when he became aware of the Saddington patent.
In my opinion, having regard to the evidence before me as to the common general knowledge before the priority date it has not been established by the respondents that the invention embodied in the relevant claims in the Patent would have been obvious to a person skilled in the relevant art. Without necessarily indicating any preference for how the test as to obviousness should be expressed, it has not been established by the first and second respondents that the invention “was so obvious that it would at once occur to anyone acquainted with the subject, and desirous of accomplishing the end …” (Vickers, Sons & Co Ltd v Siddell [1890] 15 App Cas 496 at 502 per Lord Herschell). In fact, had it been necessary to do so I would have found that the contrary was established. The idea of a matting impregnated with liquid termite resisting product and used to protect the cavity between masonry wall and concrete slab and thereby forming both a physical and chemical barrier to the entry of termites involved an inventive step having regard to the common general knowledge as I have found it to have been at the relevant time.
Although Mr Worthington expressed his conclusion in terms of novelty, it seems that his opinions address the question of obviousness. In addition to saying the invention described in the Patent was not a novel invention, he said that it was “merely an adaptation of an existing detail of construction using another type of material”. That opinion appears to be based on the fact that the Termimesh system was in use and the positioning of a damp-proof course and flashing. Those matters do not mean that the invention in the relevant claims was obvious. Nor do the other matters he referred to such as Alcore (which is a roll of aluminium sheets), vapour barriers (which are impervious sheets laid under the slab and up the edge of the slab) and shower damp-proofing mean that the invention disclosed by the relevant claims was obvious.
Insofar as Mr Worthington expressed the opinion that the invention in the Patent was obvious, I reject that opinion.
Mr Thorpe gave evidence of termite protection or barrier systems before the priority date. He referred to the common termite or ant cap which was usually made of galvanized metal and placed across wall cavities, on top of piers and under barriers and joists. He said that in 1992 the Granitgard Company of Victoria developed a system of termite control “which as part of its detail used an aluminium strip shielding which was coated with bituminous paint in the wall cavity”. He said that the notion of forming a barrier across a cavity with some form of impervious material perhaps coated with a bituminous or some other material “is not a new or novel idea”. He also said that the idea of a membrane impregnated or coated with a termite resistant material was not a new or novel idea and he referred to a “Denso Termite wrap”, a standard issued by Main Roads Western Australia and products sold by the Polyguard Company in the United States of America. In cross-examination he agreed that the Denso Termite wrap did not have within it a chemical compound that was resistant to, or capable of, killing termites when they ate it and that it was designed and used as a physical barrier for penetrations that went through slabs such as pipes, conduits and plumbing. Mr Thorpe did say that none of his examples were “intended to make a direct comparison to the patent in question”.
Mr Langley agreed that before the priority date bituminous coated aluminium strips were used as flashing or damp courses in the cavity between masonry wall and slab. However, they were not used as a primary termite barrier and they were not adhered to the slab in a way which would foreclose termite entry. Mr Langley also said that before the priority date termite shielding was most commonly used for suspended floors, which allowed clearance for inspection. I am satisfied having regard to Mr Langley’s evidence in reply to Mr Thorpe’s evidence that there is no reason to change my summary of the termite barrier systems in use before the priority date.
In my opinion, the first and second respondents have failed to establish that the invention embodied in the relevant claims was obvious or lacked an inventive step.
Utility
In their particulars of invalidity and under the heading “Claim cannot work” the respondents claim that the invention embodied in claims 1, 2, 3, 5 6 and 9 cannot work and therefore is not useful. They base that assertion on the following:
1.Claim 4 (a claim not the subject of these proceedings) implies that the termite resisting product is present as an aqueous liquid and remains as a liquid impregnated into the matting. Furthermore, the only termite resisting product identified in the claims by reference to claim 7 (again, a claim not the subject of these proceedings) is chlorpyrifos because pyrethrum is not a recognised pesticide group and chlorfos is no more than a brand name of chlorpyrifos, and there is no means provided to prevent chlorpyrifos from evaporating or being diluted by moisture.
2.Claim 10 (again, a claim not the subject of these proceedings) refers to additives selected from creosote and orminoid, and yet the Patent specification does not describe “the means by which the compound or additives would be held within the matting or membranous barrier and not leak out through the face of the surface of the barrier or evaporate from the barrier”.
As the hearing proceeded, it became clear that the respondents’ basic contention was that on the proper construction of the claims in issue the termite resisting product was to be in liquid form on impregnation into the matting and was to remain in liquid form thereafter. That meant it was subject to evaporation, leakage and dilution by moisture (it was said that claim 4 recognised as much) and if that happened it would lose its effectiveness as a termite barrier. Once the termite resisting product was removed, the membrane would be all that was left and that would not constitute a barrier. At best it would be an impediment; a proposition with which Mr Langley agreed in cross-examination. Dr Franklin gave evidence in support of that basic contention.
I have already discussed the relationship between claims 1 and 2 on the one hand and claim 4 on the other (see [86]-[88] above). As a matter of construction, the claims cover a termite resistant product which is a liquid on impregnation and which becomes a solid thereafter. In those circumstances, the argument that the invention is not useful must fail. Had I construed claims 1 and 2 to include a termite resisting product which was in liquid form on impregnation and in a solid or liquid form thereafter then a real question of utility would have arisen (Norton and Gregory Ltd v Jacobs (1937) 54 RPC 271; Martin Engineering v Trison Holdings (1989) 14 IPR 330 at 337 per Burchett J). However, I would wish to make two points in connexion with that. First, such resulting inutility would be a reason not to construe claims 1 and 2 in that fashion, when the construction not resulting in inutility, which I have adopted, is open: Welch Perrin Co Pty Ltd v Worrel (1961) 106 CLR 588 at 602 per Menzies J. Secondly, it is not to be assumed that had it been necessary to deal with the question, inutility would have been made out on the facts. The respondents bore the onus on the issue of utility and there was no evidence before me as to types of liquid, evaporation rates and atmospheric conditions in the cavity. In the circumstances, it is not necessary for me to resolve that issue.
I am satisfied that the invention in claims 1, 2, 3 5, 6 and 9 is useful. Mr Langley expressed the opinion, which I accept, that the invention would have a number of advantages, including the flexibility of the membrane and the ease with which it could be trimmed and cut and adhered to the concrete slab, the fact that the barrier would operate as both a physical impediment and chemical barrier to the entry of termites, the fact that the membrane could include waterproofing agents and the fact the termite barrier system would not be subject to corrosion and would be relatively inexpensive compared with stainless steel products like the Termimesh system.
Conclusions
The respondents’ cross-claim must be dismissed. The applicants have established that the respondents have infringed claims 1, 2, 3, 5, 6 and 9 of the Patent. I will hear the parties as to the appropriate orders.

I certify that the preceding one hundred and sixty-five (165) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko.
Associate:
Dated: 28 September 2007

Counsel for the Applicants: Mr S Burley

Solicitor for the Applicants: Bennett & Philp

Counsel for the Respondents: Mr A Radojev

Solicitor for the Respondents: Viney Williams Lawyers

Dates of Hearing: 28, 29, 30 November, 1 December 2006

Date of Judgment: 28 September 2007

[2007] FCA 1493

28 September 2007

Key Legal Topics

Areas of Law

Patent Law

Civil Litigation & Procedure

Legal Concepts

Patent Infringement

Patent Validity

Jurisdiction

Summary Judgment

Compensatory Damages

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QUD 274 OF 2005

JUDGE:	BESANKO J
DATE OF ORDER:	28 SEPTEMBER 2007
WHERE MADE:	ADELAIDE (HEARD IN BRISBANE)

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QUD 274 OF 2005

JUDGE:	BESANKO J
DATE:	28 SEPTEMBER 2007
PLACE:	ADELAIDE (HEARD IN BRISBANE)

Counsel for the Applicants:	Mr S Burley
Solicitor for the Applicants:	Bennett & Philp
Counsel for the Respondents:	Mr A Radojev
Solicitor for the Respondents:	Viney Williams Lawyers
Dates of Hearing:	28, 29, 30 November, 1 December 2006
Date of Judgment:	28 September 2007