Tidy Tea Limited v Unilever Australia Limited

[1995] FCA 589

CATCHWORDS

PATENTS                 )
INTERLOCUTORY INJUNCTIONS ) - application for interlocutory injunction for infringement of petty patent - principles - grounds of invalidity alleged - whether serious question to be tried - construction of claim - use of specification as context - use of wider context of practice of the industry - anticipation - false suggestion - fair basis - obviousness - effect of s. 7(2) and (3) of the Patents Act 1990 - long felt need and commercial success as evidence of inventiveness - balance of convenience - effect of respondent having chosen to market its product knowing of the applicants' claim to be entitled to a patent.

Patents Act 1990, ss. 7, 40 and 138

CCOM Pty Ltd v Jiejing Pty Ltd (1994) 51 FCR 260
NV Philips Gloeilampenfabrieken v Mirabella International Pty
  Limited (1993) 44 FCR 239
Martin Engineering Co v Nicaro Holdings Pty Ltd (1991) AIPC
  37,578
Martin Engineering Co v Trison Holdings Pty Ltd (1989) 14 IPR
  330
Martin Engineering Co v Trison Holdings Pty Ltd (1988) 81 ALR
  543
Beecham Group Limited v Bristol Laboratories Pty Limited
(1968) 118 CLR 618
George Laurens (WA) Pty Ltd v Laurens & Co Australia Pty Ltd
(1994) 16 ATPR 42,358
Prestige Group (Australia) Pty Ltd v Dart Industries Inc
(1990) 95 ALR 533
Elconnex Pty Limited v Gerard Industries Pty Limited (1991) 32
  FCR 491
Minnesota Mining and Manufacturing Company v Beiersdorf
  (Australia) Limited (1980) 144 CLR 253
Peter Pan Electrics Pty Ltd v Newton Grace Pty Ltd (1985) 8
  FCR 557
Uprising Dragon Ltd v Benedict Trading & Shipping Pty Ltd
(1987) 16 FCR 93

TIDY TEA LIMITED & ANOR v UNILEVER AUSTRALIA LIMITED
NG 387 of 1995

Burchett J.
Sydney
8 August 1995

IN THE FEDERAL COURT OF AUSTRALIA )
  )
NEW SOUTH WALES DISTRICT REGISTRY )    NG 387 of 1995
  )
GENERAL DIVISION                 )

BETWEEN:TIDY TEA LIMITED AND LYONS TETLEY LIMITED

Applicants

AND:     UNILEVER AUSTRALIA LIMITED

Respondent

CORAM: Burchett J.
PLACE: Sydney
DATE : 8 August 1995

ORDER OF THE COURT

THE COURT ORDERS THAT the applicants bring in, on a date to be fixed, short minutes of orders appropriate to reflect the reasons of the Court.

NOTE:     Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA )
  )
NEW SOUTH WALES DISTRICT REGISTRY )    NG 387 of 1995
  )
GENERAL DIVISION                 )

BETWEEN:TIDY TEA LIMITED AND LYONS TETLEY LIMITED

Applicants

AND:     UNILEVER AUSTRALIA LIMITED

Respondent

CORAM: Burchett J.
PLACE: Sydney
DATE : 8 August 1995

REASONS FOR JUDGMENT

BURCHETT J.:

The petty patent the subject of this application is concerned with the elimination of the slops spilt on kitchen bench tops and floors upon the withdrawal of tea bags from tea cups.  Some persons find it aesthetically displeasing to produce this mess when preparing a beverage which, in Japan, has been treated as too exquisite to be accorded less than the ceremonial setting that might invest a performance by a chamber orchestra.  Sceptics should perhaps be silenced by the commercial success of the first applicant's device for a dripless tea bag. 

What is before me is an application for an interlocutory injunction to restrain the marketing by the respondent of a tea bag, of which sales commenced a little while ago in Queensland and more recently in New South Wales, known as the Lipton squeezable tea bag.  The first applicant is the registered proprietor of the petty patent, of which the second applicant is the exclusive licensee.  The petty patent was sealed on 30 March 1995.  It appears that the respondent, knowing of the existence of an application for a patent by the first applicant, had in Queensland about 20 February 1995 released the allegedly infringing product for retail sale, and has since commenced marketing it in New South Wales, with firm plans for expansion to other parts of Australia.  The managing director of the second applicant's associated company, Lyons Tetley Australia Pty Ltd, through which its own product is being marketed in Western Australia under the Tetley name, and is to be marketed in the rest of the country, has given evidence that he became aware in December of an intention on the part of the respondent to market such a product, but did not learn any details until mid March 1995, in respect of the Queensland sales, and until early May in respect of the sales in New South Wales.  The respondent, which is the market leader in Australia in respect of tea bags, intends to extend its sales to the remaining states and the Northern Territory over a period of time between now and some date in 1996.  The second applicant, for its part, has plans for the extension, through its associated company, of sales of the patented product throughout Australia, as a test market, with a view to future sales by members of the international group to which it belongs, should the group's Australian experience prove encouraging. 

As this is an interlocutory proceeding, my findings and views about the dispute have been reached only on a provisional basis.  I have not heard all the evidence and arguments on which the parties might desire to rely at a final hearing.

The petty patent is a divisional of an accepted patent application, which is presently subject to an opposition proceeding pursued by the respondent.  The claim of the petty patent, identical with claim one in the complete specification, reads as follows:

"An infusion package comprising a closed bag containing an infusible substance for infusion in a liquid, the bag being formed from panels of porous material sealed together at their peripheral margins; and a pair of drawstrings, each of which extends into the interior of the bag through a seal between the panels on the peripheral margins, and extends across the interior of the bag to an anchoring point at a generally opposed location on the peripheral margins without any intermediate interengagement with the said panels of the bag; wherein each drawstring is anchored by being held between two sealed together portions of the panels, the arrangement being such that pulling each drawstring out through the said seal between the panels, and pulling the drawstrings in generally opposite directions causes the bag to collapse, thereby to express liquid absorbed by the infusible substance during infusion."

An understanding of this claim is assisted by a glance at figures 1 and 2 of the figures attached to the specification, and I append a copy of them.  Figure 1 depicts the tea bag as if laid flat on a table.  When figure 1 is looked at, it should be appreciated that the strings shown entering the tea bag at the points marked with the numbers 13 and 14 pass through the interior of the bag, and through the tea contained within it, in one version of the invention, to points marked 15 and 16 respectively, while in another version of the invention, the strings cross over within the tea bag so that the string which enters at point 13 is anchored at point 16 and the string which enters at point 14 is anchored at point 15.  Figure 2 looks at the bag from one of the narrow sides and depicts the strings in its interior crossing over.

Some expressions used in the claim require a little consideration.  "Peripheral margins" is such an expression.  I think, in the context, the word "margin" is used in the first sense given in the Shorter Oxford English Dictionary (3rd edition, 1980), "That part of a surface which lies immediately within its boundary".  The adjective "peripheral", according to the same dictionary, may mean "Of, pertaining to, or situated in, the periphery", and "periphery" has here I think the figurative meaning, also given by the dictionary, of "The external boundary or surface of any space or body".  Applying these meanings, I think the precise import of the expression "peripheral margins" in the claim is the part of the surface of each of the panels, which are joined together to make the bag, lying immediately within their boundaries.  Except where two panels are formed from one piece by folding, instead of by sealing two pieces of material together, the margins may generally be pictured as the parts that are sealed together so as to create a bag.  Those parts are, of course, at and just within the external boundaries or edges of the two surfaces that form the bag.

The other expression requiring comment, upon even a fairly cursory examination of the claim, is the expression "formed from panels".  A tea bag, as a matter of common knowledge, is not ordinarily made like a box with six sides.  It is commonly formed of what, on the analogy of a container such as a box, might be called two sides, or panels, joined together at all four pairs of edges.  There are two obvious and simple ways of making such a bag.  A single piece of material may be folded over, so as to create three pairs of edges which may then be sealed.  Or, alternatively, two pieces of material may be brought together, so that, in this case, four pairs of edges require sealing.  The question is whether the claim envisages each of these methods, or only one of them.  Indeed, there is a further question, whether, if a bag with a folded edge is envisaged, the claim yet excludes the case of a drip free tea bag, working precisely as described, in which the edge selected for the anchoring of the strings is the folded edge.  The Lipton squeezable tea bag is of this kind, although it should be emphasized that the claim may not be construed with reference to the alleged infringement: CCOM Pty Ltd v Jiejing Pty Ltd (infra, at 267-268).  The word "panel", as the Shorter Oxford English Dictionary makes clear, is, in English, a word with many meanings.  Some of them are transferred or figurative.  But a relevant meaning, given in the same dictionary, is: "A distinct portion of some surface, etc., usually contained in a frame or border" (emphasis added).  An example of that usage is: "A distinct compartment of a wainscot, door, shutter, cover of a book, etc., often sunk below or raised above the general level, set in a border or frame".  There is plainly no need for a thing described as a "panel" to be an entire object; it may be a part of an object, so long as it can be perceived as a separate part of the sort indicated by the dictionary.  When a single piece of material is folded over to produce, by fastening the edges, a two-sided bag, precisely similar to a bag produced by fastening two separate pieces of material, it may be thought not at all inapt to describe each of the sides as a "panel".  Particularly if the margins of the two halves created by the fold are also fused at some point or points close to the fold, as well as along the other three sides of each of them, two bags made in these two ways will appear almost identical to the eye, and they will in general be identical so far as function is concerned.

If, nevertheless, doubt remains whether a tea bag constructed by folding a single piece of material, and then sealing the three pairs of unattached edges so created, would fall within claim 1, the applicants say light is thrown on the question by the specification.  In CCOM Pty Ltd v Jiejing Pty Ltd (1994) 51 FCR 260 at 268, it is stated in the joint judgment of Spender, Gummow and Heerey JJ.:

"Whilst it is the task of the claim to define the scope of the monopoly, it is legitimate to incorporate as part of the claim passages from the body of the specification by way of a `dictionary' ... ."

I considered the extent to which the body of a specification may be used as a context for the understanding of an expression in a claim in my dissenting judgment in NV Philips Gloeilampenfabrieken v Mirabella International Pty Limited (1993) 44 FCR 239 at 285-287. What I said on that topic was not at odds with the majority judgment. One matter, apart from the immediate context of the specification, to which I drew attention in that passage is "the wider context of the established practice of the industry", that is, where there is such an established practice. This "must be taken into account if the claim is to be construed, `not as a matter of abstract uninformed construction', but making `a common-sense assessment' of what it would convey to the skilled reader: see Populin v HB Nominees Pty Ltd (1982) 59 FLR 37 at 42; Allsop Inc v Bintang Ltd (1989) 15 IPR 686 at 693". As regards the present problem, it would appear to be the case that the skilled reader would know that tea bags are made in each of the ways I have mentioned, and it is well arguable that a common sense assessment of the claim would not perceive any difference, from the point of view of the invention, between a tea bag manufactured in the one way and a tea bag manufactured in the other. This view of the question receives support if the body of the specification is read. For there the skilled reader would find the statement:

"It is contemplated that an advantageous property of the tea bags of the present invention is that they will lend themselves to efficient manufacture on a large scale.  Conventional tea bag manufacture involves the use of continuous webs of porous material, and, in one known process, a single web of porous material is gradually folded in half and then heat sealed along a line transverse to the fold to form a pocket into which tea is inserted.  The sides of the pocket are then heat sealed in like fashion and the completed tea bag is then cut from the web or perforated to allow subsequent separation.  In another method of manufacturing tea bags, two continuous webs of porous material are brought together and are heat sealed together.  The method of preparing the tea bags of the present invention can be substantially the same as outlined above in respect of conventional tea bags, but will differ in that the drawstring or strings is or are laid into the space between the two individual webs or the two halves of the folded over web prior to the heat sealing steps."

It will be observed that, in this description of the processes, the one involving folding is not merely put as an alternative, but has actually been stated first by the patentee.

It is now appropriate to describe the Lipton squeezable tea bag, the allegedly infringing article.  It is a rectangular bag with two strings protruding from an end, one string from a point near each corner, though not at the corner.  As supplied, the bag has the strings, the distal ends of which are attached to opposite ends of a small piece of light cardboard, wound partially round the tea bag and lightly tacked to it.  This is obviously neat, and avoids any risk of several tea bags getting tangled with each other by the strings.  When the tea bag is used, the small piece of cardboard with the strings will be pulled away from the light
tacking to the bag, so that the bag will dangle from the strings in an upright position, ready to be dipped into the tea cup.  The edge at which the strings protrude from the bag will, of course, then be the top edge of the bag, as it will be suspended by the strings.  When the tea bag is held in that position, the strings are seen as extending from the top to the bottom of the bag, inside it where the tea leaves are.  Within the bag, the strings descend not quite vertically, but tending outwards towards the bottom corners.  They do not cross.  The bottom of the Lipton squeezable tea bag is formed by a fold in the material, as previously discussed, while the sides and top are formed by a narrow border produced by the sealing together of the folded material at its three edges.  Each of the strings goes right to the bottom of the bag, and then bends at right angles towards the centre following the crease of the fold.  It can be seen that in fact there is but one piece of string, the two ends of which I have been following in the description I have given up to this point.  When the two strings (as it is still convenient to call them) reach points near the bottom of the bag, they are anchored by the sealing together of the two sides of the bag.  The strings are firmly held at these points.  Between their points of entry at the top of the bag through the top seal and the anchor points at the bottom of the bag, the strings are lightly tacked to one side of the bag, but they are not sewn into it, and in use that light tacking releases before the strings start to perform their designed function.  The strings then operate to pull on the bottom of the bag, causing the side walls to crumple as the strings are drawn through the holes in the top seal, from which they protrude, by being pulled horizontally in opposite directions.  As the bag walls crumple and press together, the volume of the tea bag is greatly reduced and the liquid is expelled.  The result is a dripless tea bag.  In practice, for ease of pulling the strings in opposite directions, the light piece of cardboard to which their ends are attached is torn in half first.

It is conceded by counsel for the respondent that there is a serious question to be tried on the issue of infringement, but it is argued that the case is a weak one, and further that there is a strong argument in favour of the cross-claim for revocation of the petty patent.  I have already indicated one of the respondent's points when discussing the meaning, in the claim, of "peripheral margins".  The respondent asserts that its anchoring points near the fold in the material should not be regarded as being "at a ... location on the peripheral margins" within the meaning of the claim.  What I have already said is sufficient to indicate why, as at present advised, I do not think this argument is sufficiently strong to constitute a major obstacle in the applicant's path to interlocutory relief.  It would be in keeping with the definition in the dictionary to regard the margins as areas within the boundaries.  A further point made by counsel relied on the immediately following words in the claim: "without any intermediate interengagement with the said panels of the bag".  It is suggested that the light tacking of the strings to one side constitutes, for each string, an intermediate interengagement with a panel forming a side of the bag.  As at present advised, I do not consider this argument to be a significant obstacle in the applicants' path either.  They are able to say, with some force, that the tacking is only a superficial addition to the bag, possibly making manufacture easier but having nothing to do with function, which pulls loose immediately a user of the tea bag starts to use it in the intended way.  Since it does pull loose, and the tea bag can then be used exactly in accordance with the petty patent, the principle applies which was stated in Martin Engineering Co v Nicaro Holdings Pty Ltd (1991) AIPC 37,578 at 37,582-3: there is here a tea bag which is capable of use as an infringing device. See also s. 117 of the Patents Act 1990. Furthermore, the word employed in the claim is not "engagement", but "interengagement". The prefix "inter", as the Shorter Oxford English Dictionary indicates, is a Latin preposition meaning "between, among, amid, in between, in the midst".  The addition of this prefix to the word "engagement" suggests much more than a mere loose tacking.  Otherwise, why was the prefix added?  Finally, if the word is ambiguous, reference to the context of the body of the specification suggests it was used to refer to a firm fixing to the wall of the bag, such as by sewing.

On validity, the respondent submits "that at least two pieces of prior art called Murphy and Lundgren are very close on novelty".  Obviousness is also raised, together with ambiguousness, lack of fair basis and false suggestion.  On the balance of convenience, the respondent relies particularly on the delay of two months which occurred between the grant of the petty patent and the commencement of proceedings, although it is admitted that the respondent had commenced selling earlier with knowledge of the applicants' claim to be entitled to the protection of a patent.

Murphy is a United States patent for which application was made on 17 April 1958.  It describes a tea bag with two strings, inserted through two holes spaced apart in the top of the tea bag, passing down one side and underneath it to return round the bag and through two other holes in the top of it, adjacent respectively to each of the first two holes.  By pulling the strings, the user can tighten them around the bag so as to expel the liquid.  But the drawings illustrating the patent themselves show the effect as being to constrict the bag into three segments (as if a sausage had two tight strings tied around it in two places along its length), so that between the constrictions and at either end the bag bulges and might possibly, depending on its size and shape, tend to retain liquid which might continue to drip or ooze onto any surface on which the discarded bag might be placed.  Whether or not Murphy's own drawing is in fact less than fair to the efficaciousness of his invention, the applicant suggests there is also a practical difficulty, from the point of view of manufacturing costs, about a device involving the lacing of string through holes in a tea bag at four points.  In any case, it seems to me that the proper conclusion, at this interlocutory stage, and while further examination at a final hearing might reveal other aspects of the matter, is that Murphy is not an anticipation of the petty patent, nor would it suggest to an uninventive workman in the field the principle of the petty patent.  It appears to work by an entirely different principle, involving as it does a kind of sling around the bag which tightens like a noose to squeeze the bag at two points, whereas the applicants' invention operates to crumple the bag from inside, so as to tend to produce a rather less localized compression on the tea leaves. 
     Lundgren is also a United States patent.  It was filed on 9 September 1965.  The abstract of the disclosure says that it relates to an

"infusion beverage bag comprising a body of permeable material, a channel about the periphery of said body which forms a central chamber for the material to be steeped, an infusion material in said central chamber and a single string means in said channel encircling the periphery of said body whereby the periphery is constricted and the surface area of the said bag is reduced simultaneously upon pulling the string ends."

This appears to have reduced Murphy's pair of strings to a single string encircling the bag at one point, but to have added the complication that the string, rather than being laced through holes in the bag and then brought round the bag, is held within a channel or hem in the material comprising the bag.  The applicants say, with some force, that this is simply not the principle of the applicants' invention, nor does it suggest that principle - unless it be imagined that the mere use of string would suggest an entirely different device involving string.  But tea bags have had strings for a great many years. 

The respondent relied also on ss. 40 and 138 of the Patents Act 1990. A claim is required to be "clear and succinct", and also to be "fairly based on the matter described in the specification". It was argued that here the claim is ambiguous, that it is not fairly based, and further that the patent was obtained by "false suggestion or misrepresentation". Counsel argued that certain references in the specification to the United States patent, previously referred to as Murphy, were incorrect. The specification criticized the tendency of Murphy "to exert a very localised squeezing effect", suggesting that it "consequentially does not efficiently express fluid from the bag". It goes on to refer to "the complexity of the string harness, and in particular the need for it to be sewn into the fabric of the bag", as making efficient and economical production extremely difficult. The specification then says that it

"is an object of the present invention to overcome the aforesaid problems by providing a tea bag which has means for efficient removal of excess liquid from the bag.  In particular it is an object of the present invention to provide means for removing excess liquid from the tea bag such that the tea bag thereafter does not drip.

A further object of the present invention is to provide a tea bag having the aforesaid characteristics which can be manufactured efficiently on a large scale. 

The present inventor has found that these objects can be met by providing a tea bag with drawstrings which are so arranged that when pulled, the tea bag collapses in on itself, the reduction in volume of the bag serving to force excess liquid out of the bag.  Since it is the walls of the tea bag, rather than the string, which exert the main squeezing effect, liquid is expressed from the tea bag more efficiently than is the case when the string itself exerts the squeezing effect.  Furthermore, the present inventor has also found that by arranging the drawstrings such that they are anchored in the sealed margins on one side of the bag, and passed through the interior of the bag and out through the sealed margins at an opposing side of the bag, without interengaging the side walls of the bag, the construction of the tea bag is considerably simplified.  Such a construction avoids the need to sew the strings into the walls of the bag, for example as is the case with the tea bag disclosed in [Murphy]."

So far as the respondent's contention depends upon false suggestion, the relevant principles were expounded in Prestige Group (Australia) Pty Ltd v Dart Industries Inc (1990) 95 ALR 533, where Lockhart J. (with the agreement of Northrop and Gummow JJ.) stated (at 537) the test as being "whether the conduct constituting the false suggestion or representation materially contributed to the Commissioner's decision to grant the patent even if other circumstances or causes also played a part in the making of that decision". But the first point to be decided, of course, is whether there is anything false about the statements made. There is a question about this which really cannot be answered at the interlocutory stage. I have already indicated that, on the face of the Murphy drawings, there appears to be a basis for the claim concerning efficiency, but a problem of this kind is peculiarly suitable
for expert investigation by experimental techniques.  The matter remains to be determined.  If the patentee is in error, the extent, nature and effect of the error will also require to be determined.  The issue raised by no means, in my opinion, deprives the applicant of a sufficient case, if that is otherwise made out.

The respondent's case on fair basis and lack of clarity is also, in my opinion, far from negating the case otherwise made out by the applicant.  The claim appears "succinct".  There was no demonstration of any apparently clear reason to think it was not fairly based on the specification.  Some reliance was placed by counsel for the respondent on what was said to be a lack of definition of the points where the strings passed through the seal and of the points where the strings are anchored "at a ... location on the peripheral margins".  As to the latter, there is a further indication given in the claim by the words "wherein each drawstring is anchored by being held between two sealed together portions of the panels".  The specification points out that "it will be readily apparent to the skilled man that numerous modifications and alterations may be made to the illustrated tea bags without departing from the principles underlying the present invention".  It is not apparent to me that the precise location of the anchoring points is what matters; rather the specification seems to indicate that they must be in an area described by the word "margin", the dictionary meaning of which makes it an appropriate word to express a location that is not exact.  The invention, as described, does not seem to depend upon exact points, but rather upon the string being anchored at points in a particular area.  It is at least strongly arguable that the skilled workman would have no difficulty at all in understanding what is intended, and that the claim fairly reflects the device disclosed in the specification.

The respondent also contended that the petty patent is invalid on the ground of obviousness.  I endeavoured to state what I understand by this ground in Elconnex Pty Limited v Gerard Industries Pty Limited (1991) 32 FCR 491 at 507, as follows:

"As the Latin derivation (obvius, in the way) makes plain, something is obvious if it is lying in the way, so that one who takes the ordinary route will be likely to come upon it.  The doctrine which goes by the name of obviousness is concerned with testing whether there is anything out of the way, in the sense of requiring inventive ingenuity, in the claimed invention.  Some of the leading principles were discussed in the joint judgment of the Full Court in Allsop Inc v Bintang Ltd (1989) 15 IPR 686 at 700 et seq. The court there cited the test of obviousness stated by Aickin J in Wellcome Foundation Ltd v VR Laboratories (Aust) Pty Ltd (1981) 148 CLR 262 at 270:

`It is as well to bear in mind that the question of obviousness involves asking the question whether the invention would have been obvious to a non-inventive worker in the field, equipped with the common general knowledge in that particular field as at the priority date, without regard to documents in existence but not part of such common general knowledge.'

The court emphasised that, while the hypothetical worker in the field must be taken to be non-inventive, he should be assumed to be skilled in the relevant art.  Under the conditions which prevail in modern industry, he may be part of a sophisticated research team, with a great amount of information available to it.

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."

I added (at 510):

"When it is said that `no smallness or simplicity will prevent a patent being good' (Meyers Taylor Pty Ltd v Vicarr Industries Ltd (1977) 137 CLR 228 at 249), it must, of course, be possible to identify some small or simple idea which is inventive."

In Elconnex I could not find any such idea. 

The Patents Act 1990 added, by s. 7(2) and (3), a new consideration to be taken into account in assessing inventiveness, which modifies, as regards the final phrase, the passage I took in Elconnex from Wellcome Foundation. Subsections (2) and (3) of s. 7 provide:

"(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 either of the kinds of information mentioned in subsection (3), each of which must be considered separately.

(3)For the purposes of subsection (2), the kinds of information are:

(a)prior art information made publicly available in a single document or through doing a single act; and

(b)prior art information 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 in the patent area would treat them as a single source of that 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 and regarded as relevant to work in the relevant art in the patent area."

These provisions in s. 7 seem to be designed to overcome the rejection in Minnesota Mining and Manufacturing Company v Beiersdorf (Australia) Limited (1980) 144 CLR 253 at 295 of the availability, when obviousness is being considered, of specifications of prior patents not actually proved to be part of common general knowledge at the relevant time. But it is one thing to say that the rule forbidding the use of such a specification is relaxed; it would be another to say that in all circumstances such a specification may be used to some relevant effect. The new provisions are limited by the words "being information that the skilled person ... could, before the priority date of the relevant claim, be reasonably expected to have ascertained, understood and regarded as relevant to work in the relevant art in the patent area." And if a prior specification passes those tests, it must still be able to be said that, if that specification had been considered by the hypothetical skilled person together with the common general knowledge at the relevant time, "the invention would have been obvious". In Minnesota Mining and Manufacturing Company at 294 Aickin J. said:

"It may be noted that even in England where the process of making a mosaic out of prior publications is regarded as permissible under the Patents Act 1949 it is still necessary that the mosaic must be one which `can be put together by an unimaginative man with no inventive capacity' - see per Lord Reid in Technograph Printed Circuits Ltd. v Mills and Rockley (Electronics) Ltd. [1972] RPC 346, at p. 355."

I do not think s. 7 avoids this. If there be any doubt about it, reference may be made to the explanatory memorandum circulated when the Patents Bill 1990 was before the Senate, in which the following statement appears (at 3):

"In assessing whether an invention involves an inventive step, publicly available information from a prior document or prior use may be considered together with the common general knowledge, provided that the information would have been ascertainable, understandable and seen as relevant by a person skilled in the relevant art."

An unimaginative person, according to the patentees' case, who looked at Murphy or Lundgren would be directed away from, rather than towards, the simple but ingenious combination of strings which the petty patent utilizes to collapse a tea bag from within, and to do so by an arrangement that appears to be uncomplicated and easy to manufacture.  In support of the proposition that there is present here the "smallness" of invention which is sufficient, if only it be present, the applicants rely on the well known proposition that the commercial success of a device which fulfils a long felt want, not before satisfactorily met, is in itself a powerful indication of inventiveness.  I discussed this contention in Elconnex (supra, at 510-511), saying:

"I accept that this kind of argument may, in many cases, be very powerful.  If a rival has vainly sought to solve a problem for some time, and then, upon publication of a patent, has immediately produced an infringing article, the inferences may be irresistible.  But the argument is very like the argument ... from long-felt want.  In both cases, inferences can only be drawn when the circumstances are known.  It was pointed out in Allsop Inc. v Bintang Ltd (1989) 15 IPR 686 at 702-704 that arguments of this kind assume attempts were being made to overcome the problem solved by the patent."

I also referred to Blanco White, Patents for Inventions and the Protection of Industrial Designs (5th ed., 1983) ss. 4-221 and 4-228, to Martin Engineering Co v Trison Holdings Pty Ltd (1989) 14 IPR 330 at 351-352 and to Tetra Molectric Ltd v Japan Imports Ltd [1976] RPC 547 at 583.

In the present case, the applicants say there have been strong sales since a product in accordance with the invention was launched in Western Australia, demonstrating a need.  Previously, repeated survey results had forecast that this would be so.  Reliance is also placed on the long line of prior patent specifications, which do not seem to have proved practicable, or at any rate practicable enough to have been taken up in Australia or by the very large companies concerned
in this case, as indicating that, at least since 1958 (the year of Murphy), the need has been recognized and attempts have been made to provide a solution.  There are said to be some 51 relevant patents.  It is indicated that about seven years ago a squeezable bag was tested in the United Kingdom, which was not commercially viable.  Other versions have been tried since.  And now that the merits of the invention have finally been appreciated, the respondent's own documents appear to acknowledge it as innovative, and the respondent has been prepared to pay it the supreme compliment of close imitation, despite the obvious commercial and legal hazards that entails.  These are strong arguments. 

The applicants also place reliance on the fact that the respondent, despite its expertise in the field, did not immediately, so it seems, recognize the merits of the invention.  The point, as I understand it, is that the invention was not obvious to some experts, even with the benefit of hindsight and explanation.  Its effectiveness was, the applicants argue, only appreciated by the respondent after a considerable lapse of time, suggesting perhaps that indeed the invention was very far from obvious.

A number of considerations were put to me as bearing on the balance of convenience.  Although it has been said that "generally delay will not of itself be a defence in proceedings for interlocutory relief" (Selectrode Industries Inc v Selectrode Pty Ltd (1994) 30 IPR 399 at 405), for the respondent, reliance was placed on the applicants' delay between the grant of the petty patent on 30 March 1995 and the institution of proceedings on 31 May 1995. However, it was accepted that the respondent went into the matter with its eyes open, well aware of the applicants' claim to be entitled to the grant of a patent, and it was clear from the outset that the sole purpose of their obtaining the petty patent was "in order for the applicants to commence proceedings against the respondent for infringement". That is no doubt true, and it follows that the respondent must have expected the proceedings, so that the delay of two months could not have misled the respondent, which continued on the course it had already chosen.

It seems to me that damages will be very difficult to calculate, whether they fall to be assessed in the event of the applicants being ultimately successful, not having been granted an interlocutory injunction, or in the event of the respondent being ultimately successful, having had an interlocutory injunction granted against it upon the usual undertaking as to damages (which has, of course, been proffered in this case).  In that situation, I give substantial weight to the consideration that the respondent deliberately took the applicants' innovation, knowing of the claim that this was an invention entitled to protection.  I accept that Beecham Group Limited v Bristol Laboratories Pty Limited (1968) 118 CLR 618 at 626 was a stronger case.
However, the principle stated in the joint judgment of Kitto, Taylor, Menzies and Owen JJ. is persuasive:

"Any goodwill the defendant may since have built up for hetacillin would of course be destroyed or damaged by granting an injunction, but that was a risk the defendant took with its eyes open.  If it be not restrained, it will presumably take advantage of the time before the hearing to subject the goodwill of the plaintiff's established trade in ampicillin to the prejudice of competition from a product which the defendant maintains has some points of superiority.  In no meaningful sense could matters be said to be kept in statu quo if in these circumstances the defendant were left free to pursue its course, merely keeping an account of the profits it makes."

It is true that, in the present case, neither company marketing tea bags apparently in accordance with the invention has established more than a foothold in the market.  However, the second applicant's associated company has done that, and has planned a major extension of its foothold.  The respondent has deliberately attempted to take the innovator's place during the period while the patent application was proceeding, and after the petty patent had issued.  At the present time, the status quo is that a patent application has been accepted, though opposition proceedings are still pending, and a petty patent has issued.  The issue of a petty patent was provided for by Parliament as a measure of law to meet a need, and to provide a form of protection; this is an aspect of a case like the present which should not be left out of account.  It can be said, as was said by Ipp J. in George Laurens (WA) Pty Ltd v Laurens & Co Australia Pty Ltd (1994) 16 ATPR 42,358 at 42,361-42,362, that "the defendant proceeded with its conduct
in the full knowledge that it would face an application by [the plaintiff] for an injunction.  It becomes difficult then for the defendant to rely on losses [caused as a consequence]."  The same point was made by Gummow J. in Martin Engineering Co v Trison Holdings Pty Ltd (1988) 81 ALR 543 at 554, where he referred to the loss of goodwill by reason of an interlocutory injunction in a patent case as "a risk taken by the respondents with their eyes open".

Martin Engineering v Trison is an authority where Gummow J. also set out (at 547 et seq.) the principles upon which an application for interlocutory injunctive relief must be determined in a case where infringement is alleged of a standard patent the validity of which is put in issue.  Very much of what he said is also applicable here.  See, too, Martin Engineering Co v Matflo Engineering Pty Ltd (1987) 17 FCR 132 and ANI Corporation Ltd v Celtite Australia Pty Ltd (1990) 19 IPR 506. I note the "somewhat different emphasis" which petty patent cases involve as compared with standard patent cases: Martin Engineering v Trison at 549, citing Peter Pan Electrics Pty Ltd v Newton Grace Pty Ltd (1985) 8 FCR 557 at 566-567; Uprising Dragon Ltd v Benedict Trading & Shipping Pty Ltd (1987) 16 FCR 93 at 97. It is clear from these authorities that I should not consider the issue whether there has been shown a sufficiently serious question to be tried, and the issue whether the balance of convenience favours an order, in strict isolation from each other. Rather the
strength or weakness of the case in one respect will affect my consideration of it in the other.

I bear in mind, when considering the aspect of the balance of convenience, the respondent's argument that the first applicant's damages would be limited to loss of royalties, and that the second applicant is not actually the company which has commenced marketing Tetley tea bags in accordance with the invention.  However, the second applicant is the company which spent a very large sum developing the product, and I infer without hesitation that it has a commensurate commercial interest in the project.  I think, too, the second applicant, as a member of a group of companies, is entitled to say that it would be involved in loss (which would be very hard to calculate and might be irrecoverable) if the marketing plans of its associated company were disrupted.  There is another matter I should take into account.  The respondent's own documents show those advising it took the view that it was important to be considered (apparently by the public) as an innovator in the market place.  I do not know how one could measure the loss to be suffered by the second applicant if it were deprived of the advantage of being a member of the group seen in that way in the market place in the circumstances of this matter, and if perhaps instead a rival were seen as actually being the innovator.

I have commented on various aspects of the respondent's defences to infringement, and of its attack on the validity of the petty patent.  In the end, I think a consideration of the sufficiency of the case made by the applicants must take account of them all cumulatively.  But whether considered separately or cumulatively, I do not think the matters raised on behalf of the respondent deprive the applicants of the serious question to be tried made out by them.  Weighing also all the matters that were put forward as bearing on the balance of convenience, I am left with the firm conclusion that in both respects the applicants have made out a case to obtain, in the proper exercise of my discretion, a grant of interlocutory relief.  Accordingly, an injunction will issue to restrain, from an appropriate date, the continued marketing of the Lipton squeezable tea bag by the respondent.  The only order that I make at this stage, however, is to direct the applicants to bring in, on a date to be fixed, short minutes of orders in accordance with these reasons.

I certify that this and the preceding twenty-six (26) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Burchett.

Associate:
     Date: 8 August 1995

Counsel for the Applicants:      Mrs A.C. Bennett S.C. with Ms K.J. Howard

Solicitors for the Applicants:    Sprusons

Counsel for the Respondent:      Mr D.K. Catterns Q.C. with Ms S.J. Goddard

Solicitors for the Respondent:    Mallesons Stephen Jaques

Date of hearing:                 5 July 1995