W R Grace & Co v Asahi Kasei Kogyo Kabushiki Kaisha
[1993] FCA 123
•10 MARCH 1993
Re: W.R. GRACE and CO.
And: ASAHI KASEI KOGYO KABUSHIKI KAISHA
No. V G360 of 1991
FED No. 123
Number of pages - 45
Patents
(1993) AIPC 90-974
(1993) 25 IPR 481
COURT
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Northrop(1), Lockhart(1) and Cooper(1) JJ.
CATCHWORDS
Patents - validity of patent for thermoplastic multilayer packaging film - construction of specification in suit - invention - inutility - novelty - obviousness - Statute of Monopolies s. 6 - Patents Act 1952 ss. 6 and 40.
Patents Act 1952: ss. 6 and 40
Statute of Monopolies: s. 6
HEARING
MELBOURNE, 5 to 9 October 1992
#DATE 10:3:1993
Counsel for the Appellant: Dr J. Emmerson QC, Mr B. Caine
Solicitors for the Appellant: Davies Ryan De Boos
Counsel for the Respondent: Mr R. Macaw QC, Ms K. Howard
Solicitors for the Respondent: Blake Dawson Waldron
ORDER
THE COURT ORDERS THAT:
1. The appeal be dismissed; 2. The appellant pay the respondent's costs of the appeal.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
Introduction
NORTHROP, LOCKHART AND COOPER JJ. This is an appeal from a single Judge of the Court (Heerey J.) whereby his Honour held that Australian Patent No. 582902 was invalid, primarily on the ground of obviousness. His Honour also held the patent invalid on the ground that the invention as claimed was not an invention within the meaning of s. 6 of the Statute of Monopolies and s. 6 of the Patents Act 1952 ("the Act"). At the trial, the validity of the patent was attacked on a number of other grounds but his Honour found in favour of the appellant (who is the patentee) on those grounds. The respondent by its notice of contention raises other questions which fall broadly into two groups. One group is directed to the construction of the specification in suit and related objections with respect to s. 40 of the Act, and an objection of inutility. The second group raises a number of objections of want of novelty.
The respondent petitioned under s. 99 of the Act for revocation of the patent in suit. The priority date is 30 September 1985, the date on which application for an Italian patent was made. The invention and technical terms
The invention relates to thermoplastic multi-layer packaging films, and bags or pouches made therefrom. The significance of the word thermoplastic is simply that the material from which the film is made softens when heat is applied to it; this is important in the manufacturing process. The significance of the films and bags being multi-layer is that they are made up of several layers of different plastic materials, and the reason for using multi-layer film in some cases rather than single layer film is that all the desired properties for some applications cannot be obtained using only a single layer of film. The film and the bags have a property which is known as heat shrink. This property is created in the processing of the film by stretching the film in all directions. By the subsequent application of heat, the film or bag made from the film, shrinks back to its normal size. This is important for packaging food, in particular, meat. The use to which bags made in accordance with the invention can be put is that meat is placed in the bag; and, meat being ordinarily rather irregular in shape, heat is applied to the bag, usually with hot water, the bag shrinks around the meat and so assumes the shape of its contents, this process gives the whole package a much better appearance and, in particular, avoids the unsightly appearance of moisture seeping from the meat into a corner of the pack. Other properties which the film or bags made from the film have are called cold seal properties. This simply refers to the strength of the seal on the bag when the bag is cold. Originally, sealing was carried out by means of stapling; but this had disadvantages, so the idea occurred of making something that seals to itself. The particular material with which this case is concerned has a sealing layer, a function of which is that when two sealing layers are put together and heat and pressure are applied to them, a seal is achieved. A seal is required twice in making the one bag: once during manufacture of the bag when the bag is open at one end but otherwise sealed; a second seal is applied at the packaging plant after the goods have been inserted into the bag. The seal must be of satisfactory strength.
Where the film is used for packaging food a number of other properties are important. The film should have good optical qualities so as to present the product attractively to the retail purchaser. It must be capable of receiving print. It must have sufficient toughness to withstand abuse in handling. Where the product is perishable the film must be impermeable to air and water vapour.
Heat shrinkable multi-layer films normally comprise at least three layers of film: a protective layer, a barrier layer and an internal heat sealing layer. Often they also include a tie or adhesive layer. The patent in suit is concerned with improved properties said to be achieved by a particular composition of the heat sealing layer.
After the product is placed in the bag, the surrounding air is evacuated and the bag is sealed. The bag is laid on a hot "seal bar" and the edges of the internal or heat sealing layer are clamped together. Correct temperature is critical. If too hot, the film might stick to the seal bar. If not hot enough, the film might not seal. A desirable characteristic of the film for heat sealing is "hot tack", namely, that the seal has sufficient strength to withstand handling stresses while still hot, with the consequence that the production process need not be delayed waiting for the seal to cool. It is important that an effective seal is made despite the presence of contaminants such as blood and grease. After sealing, the bag is heat shrunk in the way already described.
The case is concerned with various plastics known as polymers. A polymer is a material consisting of many units, each of which is a monomer. They tend to come in long chain molecules, that is, molecules which are much longer than they are wide, rather like the appearance of pieces of string.
Monomers are comprised of atoms of carbon and hydrogen, called hydrocarbons. Carbon has a valency or bonding ability of four, that is to say it tends to form four links with other atoms. Hydrogen has a valency of one.
Ethylene is a monomer consisting of two carbon and four hydrogen atoms. The carbon atoms have two bonds linking them. This is termed a double bond. But carbon prefers to be linked to four individual atoms than double bonded to another carbon atom. The propensity of the double bond to open and form hydrocarbons without the double bond results in the formation of polymers.
After ethylene, there is a series of monomers distinguished by the number of carbon atoms in the monomer e.g.
propylene - 3
butene - 4
pentene - 5
octene - 8
Monomers of the type mentioned are termed olefins. They are called olefins because the double bond of the carbon atoms is between the first and second atom.
The joining of monomers to form a polymer is called polymerization. Polymers may be homopolymers, consisting of only one monomer type, or copolymers, where two or more monomers are used. In this context the different monomer types used are referred to as comonomers.
The density of a polymer is a function of the number of branches in the chain of the polymer. The double bond of the olefin constitutes the backbone of the chain and the single bond carbons form the side branches. As the number of branches increases, the density lowers. A homely analogy adopted by one of the expert witnesses was that of wood being loaded in a trailer; the fewer the twigs and branches, the more wood can be packed and the denser the load.
Depending on the amount of comonomer, that is the second monomer used along with ethylene, the density can be controlled. As comonomer content increases, density decreases.
When monomers join together by the opening of double bonds, a linear chain is produced. One such linear polymer is linear polyethylene, first discovered in 1933. Initially this linear chain was formed with both short and long branches of carbon atoms. Discoveries in the 1950s lead to much milder conditions of reaction being used to convert ethylene into polyethylene. Because there were relatively few branches, this form of polyethylene was known as high density polyethylene (HDPE). Branched (and thus low density) polyethylene therefore came to be called low density polyethylene (LDPE).
In order to make polyethylenes with a more controlled structure and a lower density, copolymers were produced consisting of ethylene and another monomer type (comonomer) such as butene. This gave a linear molecule with side chains of two units (ethyl), this led to a similarity between these copolymers and the original polyethylene. The name linear low density polyethylene (LLDPE) was coined to distinguish polymers made by the more controlled process from the original high pressure, high temperature polyethylenes (LDPE). LLDPE and HDPE do not contain the long chain branching of the original LDPE. Also, the length of the side chain branching is controlled by the choice of comonomer. Thus, a longer side chain branch is given by octene than by butene.
The converting industry is concerned with the production of plastic goods, including plastic films, from resins supplied by resin manufacturers.
The production of resins is itself an area of high technology, where new products may only emerge after many years of intensive research and development. This point is illustrated by the fact that polyethylene was first discovered in 1933, whilst the resin with which this case is concerned appeared as late as 1984.
In the converting industry, density of resins has commercial significance. Resins are usually purchased by weight and the resultant plastic products sold by quantity - length of film, number of bags etc. A less dense resin can be turned into a greater quantity of finished products. Accordingly, if the price of the resins are the same and the physical properties of both acceptable, a lower density resin has an obvious attraction.
The properties of plastic material made out of polymers will depend in part on the shape and interaction of the molecules. It is possible to carry out an operation known as cross-linking which joins together adjacent strands or molecules in the plastic material so that, instead of getting something analogous to a lot of separate pieces of string, tangled or stretched as the case may be, the result is achieved analogous to a three dimensional network where there are molecules touching, and being joined together chemically by the process known as cross-linking. Different physical properties are obtained depending on whether the copolymer is or is not cross-linked. Cross-linking is achieved in the factory, so far as presently relevant, by subjecting the film to high energy radiation. There are references in the specification in suit to irradiated and non-irradiated film. Where irradiated film is specified, the effect of the radiation is to produce cross-linking. Where non-irradiated film is referred to, it is not cross-linked. So far as the invention in suit is concerned it can work whether or not there is a cross-linked film. The first material referred to in the specification is a laminate known as ethylene vinyl acetate copolymer (EVA) which is a copolymer of ethylene and vinyl acetate, well known in Australia before the priority date as an outer layer and heat sealing layer. The core layer is to be distinguished from either of the outer layers of a thermoplastic multilayer packaging film. Normally the core layer is the barrier layer. One of the outer layers, if it is to be heat sealable, will be the sealing layer. The other, normally referred to as the outer layer, needs certain properties such as toughness because it is the layer which is placed on the outside of the bag and which is knocked by anything with which the bag comes into contact. When the film is made into bags, the sealing layer must be on the inside of the bag. The outer layer must be capable of receiving print.
Appellant's Development
21. The appellant, W.R. Grace and Co. ("Grace"), is part of a large international group based in the United States. One of its members is an Italian corporation at Passirina, near Milan. It was there that the appellant carried out the work which lead to the application for the patent in suit. This work was done under the leadership of Sig. Cesare Quacquarella, who gave evidence in this proceeding.
From 1972 until 1984 the appellant used a multi-layer film to make shrinkable bags which were sold as the BBI bag. This had EVA as the sealing layer. These bags were (and still are) used for a variety of packaging applications. EVA had good heat sealing characteristics. However, in the presence of grease contamination, its heat sealability was only fair and in the presence of blood, poor.
In about 1984 Grace developed a new four layer bag called, the BB4 bag which had Surlyn (a product of DuPont sold under the trade name "Surlyn") as the sealing layer. Compared with the BB1 bag, this bag had better hot shrink characteristics and better sealability in the presence of grease contamination, but it had significantly diminished cold seal strength.
The next step was the BB4/L bag which was made in accordance with the invention disclosed in the patent in suit. Commercial production of the bag commenced in 1986. In this bag the sealant layer includes a very low density polyethylene (VLDPE) in the form of a copolymer of ethylene and 19% octene as the sealing layer. Its shrinkability is better than that of either the BB1 or BB4 bags. Its hot seal strength and heat sealability is satisfactory even in the presence of grease or blood contamination, and its cold seal strength is at least equivalent to that of the BB1 bag.
It is the appellant's case that the work on the film used in the BB4/L bag commenced in about mid September 1984 when it was brought to Sig. Quacquarella's attention by a colleague that Union Carbide in the United States had produced a new resin which it called "very low density polyethylene" (VLDPE). This product had a lower density than linear low density polyethylene (LLDPE) as a result of having a higher comonomer content. It was marketed by Union Carbide under the name UCAR 1137. Sig. Quacquarella caused work to be done to test the possible use of VLDPE as the sealing layer in a multi-layer heat shrinkable barrier film. Initial experiments, despite some processing problems, found an extrusion indicated good seal strength. Extensive chemico-physical characterization of the UCAR 1137 resin was carried out on 26 November 1984. It was noted that the properties were markedly different from those of conventional LLDPE: improvement had been made in processability at the orientation stage, in shrink properties and in optics. In mid December 1984 tests were carried out on UCAR 1137 in a variety of structures, both as a sealing layer and elsewhere in film laminates. These tests confirmed good performance as a sealing layer, but there was still considerable difficulty in processing.
In about early December 1984 the appellant, in accordance with its general policy, sought a European supplier of VLDPEs. Another reason for this step was that the appellant hoped that such a product might be easier to process than the Union Carbide resin. The appellant found that a Dutch company, DSM Kunststovvbe, produced a resin called Stamylex 08-076. This had comparable qualities to UCAR 1137, but its claimed higher melt flow index indicated that it would be easier to extrude. Testing confirmed that the DSM product was superior to UCAR 1137 in this respect. These tests were carried out at the appellant's establishment at Epernon in France on an industrial extrusion line.
Sealability tests were conducted at Epernon on 14 January 1985 which indicated that the cold seal strength of a structure containing Stamylex 08-076 was better than the existing BB4 bag formulation which included Surlyn as a sealant. Further tests involving consideration of mechanical properties, shrinkability and interlayer bonding were completed by 28 January 1985. These showed that UCAR 1137 based shrink bag structures had good seal strength, but when comparison tests showed that the major attributes of UCAR 1137 and Stamylex were similar, it was decided to cease work with UCAR 1137. This decision was made at the end of January 1985.
The first extensive evaluation of bag structures containing Stamylex commenced on 25 January 1985. The principal purpose of this evaluation was to test the comparative cold seal strengths of the various bags and to see whether the approved cold seal strength found with UCAR 1137 could also be obtained with Stamylex. Also tested were the seal quality of the materials at different temperatures, using variable pressure hot burst test (VPHB), and shrink performance. The cold seal strength of the Stamylex bag was found to be very much greater than that of the BB4 bag. Bags were also submitted to an evaluation of sealability through grease and blood contamination and in VPHB tests on grease and blood contaminated factory seals, the Stamylex bag appeared to have good seal resistance. In this respect performance was better than the BB1 or the BB4 bag. This work was completed by 22 April. Testing continued. Two variations of the Stamylex resin were obtained from DSM.
Evaluation of the physical packing behaviour of further new three layer structures was carried out on 5 April utilising both the earlier Stamylex resin, but with different layers, and two new Stamylex resins. It was found that as the percentage of octene decreased, so too did the shrinkability of the film over a range of temperatures. Tests of sealability through contaminants were conducted.
On 20 May twelve new structures were extruded in order to test whether structures based on the VLDPE sealing layers with various other resins as structural layers would show improved cold seal strength and mechanical properties. These were evaluated for seal resistance, puncture resistance and shrink. Further structures were evaluated on 24 June. Application was made for the approval of food regulatory authorities in a number of European countries. After the filing of the patent application in Italy on 30 September 1985 another year was required to optimise the appellant's processing of the product. This involved an exercise in fine tuning the properties of the structure based on experience in production.
The Union Carbide Articles
31. Towards the end of 1984, news of Union Carbide's new VLDPE resin appeared in a number of trade magazines circulating within the plastics industry. These magazines were published in the United States and were found by the learned primary Judge to have been available to converters in Australia at or shortly after the time of publication. In the reasons for judgment of the primary Judge portions of the articles are set out, and certain extracts from them appear later in these reasons.
It is sufficient for present purposes to say that there are four Union Carbide articles with which this case is concerned:-
(i) Plastics Technology - September 1984, p 113 "Introducing 'Very Low Density PE'";
(ii) Plastics Technology - October 1984, pp 13-15 "New Kind of Polyethylene Combines Flexibility, toughness, heat resistance";
(iii) Modern Plastics International - October 1984, pp 6-8 "Can 'VLDPE' outperform EVA, other copolymers?";
(iv) Plastics World - October 1984 "UC Researchers Smash 0.915pe Density Mark".
The Japanese Patents
33. There is evidence of two Japanese patents which were said to be relevant on the issue of novelty.
Kokai 1, published on 16 April 1981, disclosed a heat shrinkable multi-layer film.
Kokai 2, published on 14 November 1983, disclosed a lower-temperature heat shrinkable multi-layered barrier film.
The Patent in Suit
36. The priority date for the patent in suit is 30 September 1985, the date on which application for an Italian patent was made. As most of the terms of the patent in suit are set out in the reasons for judgment of the primary Judge, we shall not restate them, except the first claim which is in the following terms:
"1. A thermoplastic multi-layer packaging film having superior heat shrink and cold seal properties comprising at least an outer polymer layer, an inner heat sealing layer and optionally an oxygen barrier layer between said inner and said outer layer, characterized in that the heat sealing layer comprises a copolymer of ethylene and x to y% by weight, based on the copolymer, of an -olefin with 4 to 8 carbon atoms per molecule, wherein x = 0.5nc + 8 and y = 1.25nc + 15 with nc being the number of carbon atoms in the - olefin, said copolymer having a density of 915 kg/m3 or less."
The other 13 claims are subsidiary claims. The case is primarily concerned with the first claim.
Findings of the Primary Judge
37. The primary Judge found that the invention the subject of the patent in suit was obvious and was not an invention within the meaning of s. 6 of the Statute of Monopolies (and therefore s. 6 of the Act) and he made an order wholly revoking the patent and ordered the appellant to pay three-quarters of the respondent's costs.
The parties differed at the trial as to the proper construction of the specification. The expression "superior heat shrink and cold seal properties" was found by his Honour to mean a superiority, all other things being equal, when the specified heat sealing layer is used and that it is not a reference to some sort of global superiority. The word "comprise" in Claim 1 was found by his Honour to mean "consists of" and would not cover claims in respect of an infinite number of substances which might be added to the specified copolymer.
The respondent relied on the specification's alleged failure to comply in a number of respects with the requirements of s. 40 of the Act. Section 40(1)(a) requires that the complete specification shall fully describe the invention, including the best method known to the applicant of performing the invention. His Honour rejected the argument of the respondent that this requirement was not complied with in various respects. Section 40(1)(b) provides that the specification shall end with a claim or claims defining the invention. The claims must be "clear and succinct": s. 40(2). His Honour rejected the argument of the respondent that the claims made in the patent in suit did not comply with s. 40(1)(b).
Section 40(2) requires that the claims shall be fairly based on the matter described in the specification. His Honour rejected the argument of the respondent that there was an absence of fair basing.
The respondent also asserted that the invention lacked novelty, an argument advanced largely on the basis of the Union Carbide articles. Again his Honour rejected this argument of the respondent.
On the question of obviousness (s. 100(1)(e)) his Honour placed heavy reliance upon the Union Carbide articles. He found that the Union Carbide articles were part of the common general knowledge within Australia relevant to the subject matter of the patent in suit as at the priority date. His Honour found that:
"Given the addition to common general knowledge that was made by the Union Carbide articles, I do not think the steps which were taken by Grace amounted to inventiveness in the relevant sense."
He found that a new product was taken (First Union Carbide's UCAR 1137 and then the DSM equivalent) and was tried out in place of an existing component (EVA) in an existing product (multi-layered heat shrinkable packaging film). There was nothing inventive in selecting the new product, particularly as it was specifically promoted as an improvement on EVA. It is part of a converter's craft to try out new resins. What the appellant did in the course of construction and testing film with the new materials, did not involve new or inventive techniques. The ascertainment of comonomer content and the consequences of using certain proportions of comonomer were routine work. The blending extrusion and testing of samples were not suggested to have involved any new process and nor did it take very long. At most, the end result was a heat shrinkable bag, better not because of any inventive discovery of the appellant, but because the new product of somebody else, put on the market for uses which included that manufacture, produced better results than expected. These are the essential findings of his Honour on obviousness.
For essentially the same reasons as were given by his Honour in relation to obviousness, he found that the patent in suit was not an invention within the meaning of s. 6 of the Statute of Monopolies (and therefore s. 6 of the Act). He also found that there was no more than a new use of a particular known product, the known attributes of which would make it suitable for that purpose: his Honour applied Commissioner of Patents v Microcell Limited (1959) 102 CLR 232 at 246-9, 250. His Honour found against the respondent on its assertions of inutility.
Issues and Submissions
44. In this appeal, the first question is whether the invention is obvious, and the second question is whether there is an invention at all.
Counsel for the appellant argued that his Honour erred in a number of findings, having the cumulative effect of a wrong conclusion. It was said that his Honour oversimplified what happens in making the invention and what was common general knowledge at the priority date, that he misinterpreted the evidence and erred in his findings of fact. In considering the question of obviousness, the only relevant prior art is prior art which has been shown to form part of the common general knowledge in Australia at the priority date of the specification in suit: Minnesota Mining and Manufacturing Company v Beierserdorf (Australia) Limited (1980) 144 CLR 253. This was not disputed by counsel. It was submitted that none of the prior art relevant to this case was shown to have been part of the common general knowledge in Australia at the priority date. In particular, it was argued by counsel for the appellant that:
(a) the properties of VLDPE did not form part of common general knowledge in Australia at the priority date;
(b) it was not part of common general knowledge in Australia at the priority date that VLDPE could be used in the heat sealing layer of a heat shrinkable multi-layered thermoplastic packaging film or bag so as to give an improved combination of the following advantages when compared with known materials:
(i) shrinkability;
(ii) maximum shrink temperature;
(iii) cold seal strength.
Counsel submitted that the evidence established that the only source of knowledge about the properties of VLDPE in Australia at the priority date was constituted by the four articles known as the Union Carbide articles and these were not part of common general knowledge in Australia. It was said that the extent of experience in making heat shrinkable multi-layered thermoplastic films was very limited. There was no evidence that any work was going on in Australia to obtain improved films of the type with which the invention is concerned. It was submitted that there was no evidence that anyone in Australia thought that the specific improvements which are the subject of the invention in suit were possible. Properly construed, the Union Carbide articles would not have conveyed to a relevant addressee in Australia at the priority date that VLDPE could be used in the heat sealing layer of a heat shrinkable multi-layered thermoplastic packaging film or bag so as to give the combination of advantages possessed by the claimed invention. For a variety of reasons it was submitted that knowledge of LLDPE's in Australia at the priority date would not have encouraged any relevant addressee to make the invention. It was submitted that in all the circumstances it cannot properly be concluded that the invention in suit was obvious to a person in Australia skilled in the art at the priority date.
Counsel for the appellant also argued, with respect to the question of invention or not under the Statute of Monopolies, that the claimed invention cannot properly be described as merely a new use for a known substance, the properties of which made it suitable for that purpose. Reliance was placed upon Microcell and Blanco White, Patents for Inventions, 5th ed., 4-907.
Counsel for the respondent contended that the patent in suit was the result of a process of routine testing of commercially available new resins which cannot support the monopoly claimed in the patent. It was argued that in substance, what the appellant has sought to monopolize is a conventional multi-layer packaging structure with routinely tested UC1137 or DSM resins included in the sealing layer. The claim to that monopoly was said to be bereft of inventive merit.
As to obviousness, counsel for the respondent contended that the finding that the Union Carbide articles formed part of common general knowledge was not only open but amply supported by other findings of his Honour and the evidence on which they were based. Alternatively, it was argued that the relevant hypothetical addressee is a process engineer employed by the appellant, armed with the knowledge of its overseas affiliate or notionally placed in the position of other Australian converters who routinely do their own experimental work, who would be likely to know of important new resins and their qualities. The finding that it was obvious to use the VLDPEs as a sealing layer was not only open, but is clearly justified having regard to the disclosure in the Union Carbide articles.
It was argued by counsel for the respondent that a finding of obviousness was independently justified by the acknowledgments in the specification in suit at certain pages of the well-known properties of LLDPE which it is said were used extensively in Australia. It was well known that the good seal strength of LLDPE was related to its comonomer content; the correlation between density and comonomer content also was well known. Biaxial orientation of LLDPE film was known. Accordingly, subject to confirmatory testing, the characteristics of LLDPEs, including their sealing qualities, would be assumed for a lower density LLDPE. Further, it was said that the specification acknowledges that the sealability of VLDPE was known. The finding of his Honour that the additional integers of the subsidiary claims merely incorporate common practice and involve no inventive step were not only open, but well based.
It was argued on behalf of the respondent that the invention was not one sufficient to warrant the grant of a monopoly (s. 6) under the Statute of Monopolies, that VLDPE was a known product and that the specification itself acknowledges it as a commercially available lower density LLDPE which was known to have good sealability. It was the sealability of VLDPE which made it suitable for use as a heat sealing layer in a heat shrinkable multi-layer packaging film. Other characteristics of VLDPE published in the Union Carbide articles made it especially suitable for this purpose. Further, the Union Carbide articles suggested substitution of VLDPE for EVA as a heat sealing layer. The claim to monopoly was said to be devoid of inventive merit.
On the question of novelty, counsel for the respondent argued that his Honour's findings as to what the Union Carbide articles would have conveyed were well based, that each of the articles contains not only a "signpost", but a clear recommendation to use the new VLDPE as the heat sealing layer in a multi-layer film and that speaking generally the articles clearly directed the relevant skilled addressee to try VLDPE as a substitute for EVA which was widely used as a heat sealing layer in multi-layer films.
As to utility and s. 40, it was argued on behalf of the respondent that the expression "superior heat shrink and cold seal properties" in the claim renders the claim unclear, especially if all that is required is a comparison of the totality of properties. It was also argued on behalf of the respondent that the claims are not fairly based.
Obviousness
54. The tests to be applied when determining obviousness are well known. The question is invariably one of fact whether anything in the claim would have been obvious to the persons skilled in the relevant art at the priority date. The question is considered from the viewpoint of the hypothetical person skilled in the art, who possesses the common general knowledge of his or her art, but is not particularly imaginative. The expression "common general knowledge" means in patent law something which is "known to duly qualified persons engaged in that art or science" (British Thomson-Houston v Stonebridge Electrical Company Ltd (1916) 33 RPC 166 at 171) or that which is "part of the mental equipment of those concerned in the art under consideration" (Lektophone Corporation v S G Brown Ltd (1929) 46 RPC 203 at 225). The common general knowledge of the art or science represents the matters that the skilled person will have at the back of his or her mind when coming to consider the prior art, so that each document alleged to constitute the prior art is to be regarded as the addressee would regard it in the light of common general knowledge. Common general knowledge is relevant as distinct from mere public knowledge, a distinction noted in many of the cases including General Tire and Rubber Company v The Firestone Tyre and Rubber Company Limited (1972) RPC 457 where Sachs L.J. said at 482:
"The common general knowledge imputed to such an addressee (a skilled man reasonably well versed in the art) must, of course, be carefully distinguished from what in patent law is regarded as public knowledge. This distinction is well explained in Halsbury's Laws of England, vol 29, para 63. As regards patent specification it is the somewhat artificial (see per Lord Reid in the Technograph Case (1971) FSR 188 at 193) concept of patent law that each and every specification, of the last 50 years, however unlikely to be looked at and in whatever language written, is part of the relevant public knowledge if it is resting anywhere in the shelves of the patent office. On the other hand common general knowledge is a different concept derived from a common sense approach to the practical question of what would in fact be known to an appropriately skilled addressee - the sort of man, good at his job, that could be found in real life."
See in particular Minnesota Mining and Beecham Group Limited (Amoxycillin) Application (1980) RPC 261, especially per Buckley L.J. at 290-1. See also Blanco White, Patents for Inventions, 5th ed., 4-202 to 4-207.
The primary Judge correctly stated the tests of determining obviousness. In addition to the cases to which we have referred his Honour referred to the judgment of Wilcox J. in Coopers Animal Health Australia Limited v Western Stock Distributors Limited (1986) 6 IPR 545 at 565 as a recent statement of the relevant principles where his Honour reviewed the relevant authorities.
The attack made by the appellant upon his Honour's findings as to obviousness was essentially to select particular findings of fact made by his Honour, to put them together into a mosaic and to conclude that taken as a whole they established erroneous application of the principles and constituted wrong findings of fact in themselves. It is important therefore to examine closely the particular findings of fact made by his Honour which the respondent challenged before us. His Honour's findings with respect to obviousness were based largely upon the Union Carbide articles as constituting common general knowledge to the hypothetical skilled addressee in Australia at the priority date. The publications in which those articles appeared were described by his Honour as trade magazines sold by subscription in the library system in Australia: Courtaulds Australia Limited was given as one example of a company in Australia that subscribed to the three magazines that were circulated within the company and then filed in its library which was in a laboratory. His Honour said that, although the articles do not purport to be scientific treatises, they nevertheless contain a considerable amount of technical detail about the properties and processing features of the new Union Carbide resins as well as suggesting practical application. His Honour noted that there was no suggestion in the evidence that the material in the articles was inaccurate and he found that the Union Carbide articles were part of the common general knowledge within Australia relevant to the subject matter of the patent in suit as at the priority date. His Honour said that the fact that three different magazines about the same time all contain articles referring to the new Union Carbide resins would reinforce the collective effect of the news which the articles contain. It is necessary, of course, for the material in the articles to have become part of the stock of the common general knowledge of the hypothetical skilled addressee in the sense in which that person is described in the General Tire Case in the passage mentioned earlier and it is not sufficient that it is simply public knowledge. It must become part of the common stock of knowledge of the hypothetical skilled addressee in relation to the art or science.
His Honour said that "two prominent themes" run through the Union Carbide articles. He said:
"First, they claim that the new Union Carbide VLDPE has achieved a new low in density. This would have commercial importance for potential users, for the reasons mentioned above. Secondly, over and above every other existing product, a direct comparison is made with EVA. A converter using EVA might be expected to be particularly interested in the new product."
The articles in more than one case have titles which invite comparison between the new Union Carbide VLDPE with EVA and the claim is made that VLDPE performs better than EVA. Also there are tables of properties which directly compare the properties of the new VLDPE with EVA. These observations of his Honour are therefore well founded.
His Honour said (at 42):
"Grace pointed out that the new products referred to in the articles are suggested as being suitable for, as counsel put it, 'just about every application of thermo plastics materials'. But simply because the articles refer to a very wide range does not mean they have no significance in relation to any of the products in that range. Grace's argument could no doubt be put in cases involving patents or toys or drum liners or squeeze tubes or any other of the products referred to in the article. Pressed to its logical conclusion, the argument would mean that because a wide range of uses was referred to, nothing within that range was referred to."
This is a reference in the articles to film and in particular to shrink and stretch film and coextruded film which necessarily involves multi layered product. There is also reference in a number of places in the articles to the fact that a conventional LDPE or LLDPE extrusion equipment can be used. The articles make both a general comparison with EVA and state that it may be possible to better its performance but they make particular reference to the possible uses of VLDPE as film. These observations of his Honour are supported by the evidence.
His Honour continued:
"It may be that the producers of heat shrinkable multi-layer packaging film inhabit but a small and remote province of the empire of thermo plastics. But in assessing the impact which the Union Carbide articles might make upon appropriately skilled addressees in that province, one has to look at the articles from their point of view and assume that they are only interested in generalities insofar as they bear on their own particular art. A brief reference which might seem at best oblique or even cryptic to the general reader may well spark in the provincial reader's mind the thought that these new products might have something for him, that they may be 'worth trying'."
What his Honour says in this passage, as we read it, is that he is looking at the impact of the article upon the hypothetical skilled addressee in the field of multi-layer packaging films, who would be most interested in the article insofar as it relates to and discloses matters relevant to that particular field of expertise. His Honour is not approaching the matter with hindsight as counsel for the appellant suggested. We do not read this passage (in particular in the light of the passages that follow it) as indicating, as counsel for the appellant suggested, that his Honour misstated the test of obviousness by saying that it was sufficient that it may be worthwhile to "try" these new products as distinct from whether the skilled addressee would say that it would be worthwhile. His Honour's conclusion plainly was that the hypothetical skilled addressee having read these articles, would consider VLDPE worth trying.
His Honour continued:
"The articles say nothing specifically about the use of the new products in the heat sealing layer of a multi-layer heat shrinkable film. But Grace's case that neither the articles as a whole, or any particular passage in them, suggest to the skilled addressee anything relating to the claimed invention is somewhat weakened at the outset by the fact that the draftsman of the specification in suit has made explicit reference to the two articles in 'Plastics Technology' (see para. (6))."
His Honour's reference to the explicit reference to the two articles in "Plastics Technology" in the patent in suit is a reference to pages 2 and 3 of the specification where, following a description of the VLDPEs and the differences between them and LLDPEs in terms of lower density, the specification proceeds:
"Some properties of VLDPE have been described in Plastics Technology. September 1984, page 113 and October 1984, page 13 as well as in a company brochure published in February 1984 by DSM in the Netherlands and entitled 'Stamilex PE'. Their properties are said to be a unique combination between those of standard polyethylene and polyolefinic rubbers. Their sealability and their compatibility with other polymers has been mentioned."
The specification does refer to VLDPEs, presumably on the assumption by the draftsman that the reference is relevant to the invention. Plainly they are relevant to the invention because they relate directly to the claims.
His Honour then proceeded:
"It seems to me important that these articles are to be read in a setting where multi-layer packaging film in a heat shrinkable sealing layer is produced for the purpose of, amongst other things, the packaging of food products. The setting also is one in which the material EVA is commonly used for that heat sealing layer. When therefore a new product is promoted to converters as being better than EVA, I think that the hypothetical skilled addressee who happened to be working in the particular field of multi-layer heat shrinkable films would think of it as something 'worth trying'. That general impression is I think reinforced by an examination of some of the detail contained in the articles."
Again counsel for the appellant criticized this passage from the judgment. Indeed, counsel criticized the previous passage on the basis that it was said to show that his Honour engaged in an exercise of hindsight; but this is not an accurate analysis of the reasoning process of his Honour. Another criticism advanced on behalf of the appellant was with respect to the sentence commencing "The setting also ...". Counsel submitted that the sentence is true, so far as it goes, in stating that only the appellant used the material EVA. It is plain that the product of the appellant did in fact use EVA as the heat sealing layer and the evidence supports this conclusion that EVA was the resin commonly used for the heat sealing layer in Australia.
We turn now to the passage in his Honour's judgment last recited commencing "When therefore a new product ..." to the end of the paragraph. The appellant criticized this on the basis that it was an unfair characterization of the Union Carbide articles, because nowhere do those articles make a particular comparison of sealing qualities of EVA and VLDPE. We do not read his Honour as saying that any specific comparison between them is made in the article. He is saying that on the basis of the general impression of the promotional material asserting that VLDPE is better than EVA, and given that the relevant addressee would understand that the recommended applications include film (shrink and stretch and co-extruded), and given the fact that such a person would be accustomed to experimenting with new products, the relevant addressee could reasonably be regarded as a person who would take the view that it would be worthwhile trying the new products.
The next passage in his Honour's judgment proceeds thus:
"The September and October 1984 articles in 'Plastics Technology' suggest use in extrusion of film on conventional extruder systems (without distinguishing between monolayer or multi-layer) and, by reference to 'FDE clearance for food contact' film destined for one particular application of the film the subject of the patent in suit (see para. (2)). The articles make direct comparison with EVA (note the table of properties in the October issue) which was of course already used as a heat-sealing layer in multi-layer films. The data given for tensile strength and elongation of the new Union Carbide product is quite closely comparable to that given for 10% EVA. This would suggest that the new material had similar stretch characteristics. The reference to elastomeric qualities comparable to those of EVA (September issue) together with details of the respective melting points (October issue), the new product being higher than EVA, indicates good heat shrinkability."
We accept as correct the submission of counsel for the respondent that the evidence of the witnesses Mr Hamer and Dr Solomon supports the passages relating to the direct comparison with EVA made by the articles and the reference to elastomeric qualities being comparable to those of EVA.
The next passage in his Honour's judgment reads as follows:
"The '(l)ogical uses' suggested by the October article include squeeze tubes and drum liners which suggests a capacity for good sealability and seal strength, important properties for the type of film and bag the subject of the patent in suit."
The correctness of this proposition was said by counsel for the appellants to be doubtful, but in our opinion it is plainly correct. The evidence of the witness Mr Eustace supports it.
A little later in his reasons his Honour said:
"It was significant that Sig. Quacquarella admitted that if he had received information of the Union Carbide 1137 resin by means of receipt of this article, he would 'undoubtedly have tried the material as the heat sealing layer and (sic, presumably 'in a') multi-layer laminate structure."
Sig. Quacquarella did in fact make a concession in substantially the terms referred to by his Honour; but the basic criticism of counsel for the appellant of this passage was that his Honour erred in regarding Sig. Quacquarella as the relevant skilled addressee. We agree with the submission of counsel for the respondent that Sig. Quacquarella in substance does answer the description for this purpose of the hypothetical skilled addressee. It is true that he was a research and development scientist in Europe, but he was not familiar with this particular VLDPE. Sig. Quacquarella chose the particular substance because he was told of it by Mr Gillio-Toss and decided he should try it. He did do so and it worked and that is in essence his evidence on this point. The evidence does not suggest that there was anything in Sig. Quacquarella's qualifications or expertise that led him to make the particular choices which he did and perform the tests that he did. The general import of the article would suggest a favourable comparison of VLDPE with EVA is that the hypothetical skilled addressee in Australia would have received from the article substantially the same kind of information as Sig. Quacquarella received and would have proceeded to test it.
A little later in his Honour's reasons for judgment he stated his conclusions on the question of obviousness. He commenced this part of his judgment with the following sentence:
"Given the addition to common general knowledge that was made by the Union Carbide articles, I do not think the steps which were taken by Grace amount to inventiveness in the relevant sense."
Counsel for the appellant attacked this passage on the basis that the relevant person is the hypothetical skilled addressee in Australia, not the appellant or one of its employees in Italy. This passage must be read in conjunction with other passages in his Honour's judgment such as one a little later where he refers to the judgment of Aicken J. in Minnestoa Mining and Manufacturing Co v Biersdorf (Aust) Ltd (1980) 144 CLR 253 at 293. It is obvious that his Honour had in mind the relevant addressee as being the hypothetical person in Australia skilled in the art or science. It is not correct to take isolated passages from the reasons and divorce them from their context. His Honour is really saying that the steps taken by the appellant were routine. The question is whether it would be routine steps to be taken by the hypothetical skilled addressee in Australia. He answered this question in the affirmative.
Later in the same section of his Honour's judgment he said:
"That decision having been taken, it does not appear that what Grace did in the course of construction and testing films with the new materials involved any new or inventive techniques."
The appellant criticized this passage on the ground that his Honour was there dissecting piece by piece the relevant research and development of the appellant in finding that no inventive techniques were involved and that in any event it was an exercise in hindsight. We see no substance in any of these criticisms. What his Honour is saying there (when read in the context of the rest of his judgment) is that no step that was taken involved anything resembling an inventive step.
In the next paragraph his Honour said:
"Thus the ascertainment of comonomer content and the consequences of using certain proportions of comonomer was routine work. The blending extrusion and testing of samples are not suggested to have involved any new process. Nor did it take very long. The internal disclosure from Grace Italy to Grace's Patent Department in South Caroline claiming discovery of an invention was made on 4 December 1984, the first step in the evaluation process having been taken on 19 November."
Counsel for the appellant did not attack the correctness of the statements of fact in this paragraph, but said that they were rather taken out of context and involved an unfair compression of material. We see no substance in this criticism.
We have extracted these various sentences and paragraphs from his Honour's judgment because it is necessary to do so to deal with the submissions of the appellant. We have dealt with the substance of the criticisms made by the appellant.
In our opinion, whether the criticisms of the appellant of his Honour's reasons are taken singly or linked together, they do not support the submissions made on behalf of the appellant. His Honour's conclusion that it was obvious to use VLDPEs as a sealing layer was plainly open to him on the evidence and is clearly supported by the disclosures made in the Union Carbide articles. There is no reason why this Court should reach any other conclusion. Invention - s. 6 of Statute of Monopolies
His Honour found for essentially the same reasons as those discussed in relation to obviousness, that the patent in suit was not an invention within the meaning of s. 6. He referred to Microcell and said there was no more than a new use of a particular known product, the known attributes of which would make it suitable for that purpose.
The relevant principles governing s. 6 of the Statute of Monopolies and therefore s. 6 of the Act are well established: see Microcell; and Werner v Bailey (1989) 25 FCR 565 at 571-2. Section 6 requires that there be some inventive idea sufficient to warrant the grant of a monopoly. To be patentable, a manner of manufacture must not only be new, it must also not be something which would suggest itself in the ordinary course to anyone using an invention already known. A manner of manufacture must be something discovered which is not included in the already existing stock of public knowledge and must be the result of independent invention.
His Honour's findings with respect to invention and obviousness essentially were that the patent in suit is the result of a process of the routine testing of commercially available new resins which cannot support the monopoly claimed; and that in substance what the appellant seeks to acquire as its monopoly is a conventional multi-layer packaging structure with routinely tested UC1137 or DSM resins included in the sealing layer, a claim lacking inventive merit.
The submission of counsel for the respondent is correct, namely, that the VLDPE was a known product. The specification in suit acknowledges this as a commercially available lower density LLDPE which was known to have good sealability. The specification itself acknowledges the sealability of VLDPE. It was the sealability of VLDPE which made it suitable for use as a heat sealing layer in a heat shrinkable multi-layer packaging film. Other characteristics of VLDPE published in the Union Carbide articles made it especially suitable for this purpose. Also the articles suggested substitution of VLDPE for EVA as a heat sealing layer. All that was done in this case was for the appellant to test an available new resin as part of its ordinary activities as an organization that routinely tests new resins when they become available. It was tested as a sealing layer which was an obvious thing to do, as Sig. Quacquarella himself conceded, and found that it worked as a sealing layer. This is a routine matter. It would have been routine in Australia just as it was in Italy. It is not an invention simply to take the product and to apply it in the routine fashion as the sealing layer on a multi-layered film.
It follows that his Honour's judgment has not been shown to be incorrect with respect to the questions of obviousness and invention and that the appeal must therefore be dismissed.
It is not strictly necessary to examine the arguments raised in the respondent's notice of contention except to the extent that it is necessary to deal with the question of costs; but as full argument was advanced on those matters we shall deal with them, though briefly.
Novelty
86. His Honour posited the correct test to be applied and referred to the relevant cases. He stated the basic test for anticipation or want of novelty as the same as that for infringement, namely, to ask the question whether the alleged anticipation would, if the patent were valid, constitute an infringement (the reverse infringement test), a reference to the judgment of Aickin J. in Meyers Taylor Pty Limited v Vicarr Industries Limited (1977) 137 CLR 228 at 235. His Honour stated the classic test as to the standard of disclosure required where prior documents are relied upon as constituting anticipation, namely, that of Lord Westbury in Hill v Evans (1862) 31 L.J. Ch 457 at 463:
"... the information as to the alleged invention given by the prior publication must, for the purposes of practical utility, be equal to that given by the subsequent patent. The invention must be shown to have been before made known. Whatever, therefore, is essential to the invention must be read out of the prior publication."
Essentially his Honour found that the Union Carbide articles (which were the critical materials relied upon by the respondent to support its argument of novelty) do not contain "clear and unmistakable directions" to use Union Carbide's new resins as the heat sealing layer in a multi-layer shrinkable packaging film. At best his Honour thought that the articles might provide a "signpost" upon the road to the patentee's alleged invention, but the prior inventor had not "planted his flag at the precise destination" to use the words of Saachs L.J. in General Tire. His Honour said the same could be said in his view of the Japanese patents.
In essence his Honour found that, in order to constitute want of novelty, the Union Carbide articles must contain clear and unmistakable directions to do something that would fall within the claim of the patent in suit. His Honour said that they presented a "signpost" along the way, but did not take one to the final destination.
We have read the Union Carbide articles carefully. We must say having done so, we find much force in the submission of counsel for the respondent. Each of the articles directs the relevant skilled addressee to try VLDPE as a substitute for EVA which was widely used as a heat sealing layer in multi-layer film. A skilled addressee would be more likely to use VLDPE in place of EVA as a heat sealing layer because VLDPE is described in the articles as a new lower density LLDPE. The articles make the point that the new resin had characteristics which make it suitable for use as a heat sealing layer in multi-layer films. It was for all practical purposes conceded by Mr Hamer in evidence that the articles recommend VLDPE as the heat sealing layer in a film, although he did stress that in his view only mono-layer films were the subject of this recommendation in the articles. But in our view the articles convey to the relevant reader a recommendation to use the new resin VLDPE as a heat sealing layer in a multi-layer laminate. As the addressee is someone involved in the manufacture of heat shrinkable film the recommendation seems to me necessarily to be that the new resin should be used as the heat sealing layer in that film.
The point is clearly understood when reference is made to the article in Plastics World of October 1984 which was exhibit 2. The whole article needs to be read carefully, but we mention in particular the following paragraphs:-
". The materials, he says, 'offer end users the flexibility previously available only in generally lower strength materials, such as EVA, EEA and plasticized PVC, together with the toughness and broader operating temperature range of LLDPE.' . The unique properties of VLDPE make it suitable for a wide range of end-use applications including squeeze tubes and bottles, flexible hose and tubing, drum liners and film. VLDPE is also expected to find wide use as a blending or alloying resin. (First column of first page of article) . He says that although VLDPE will compete wherever soft, flexible thermoplastics are required, the new resins would be positioned as specialty materials with primary penetration expected to come at the expense of higher loaded EVAs. (Third paragraph of first page of article) . Among the suggested applications for VLDPE, Norwalk says, are squeeze tubes and bottles, drum, box and carton liners, caps, cap liners, closures, shrink and stretch wraps, coextruded films, alloys and blends, concentrates and masterbatches, wire and cable, flexible hose and tubing, monofilaments, toys, gaskets, pond liners, sheets and profiles. (First paragraph of second page) . For blown film applications, VLDPE is readily extruded on conventional equipment. (First column second page) . A new generation of very low density polyethylene resins (VLDPE) known as UCAR FLX has been announced by Union Carbide. The linear PE resins have strength and flexibility unmatched by the lower-strength ethylene copolymers such as EVA, EMA, and EEA, as well as plasticized PVC. At the same time, they have the toughness and operating temperature range of LLDPE. (First column third page) . The FLX resins are processable by all the common plastics processes - blown and cast film, profile and sheet extrusion, and injection and blow molding. Available grades have excellent stress-crack resistance, flex life, and low-temperature toughness, properties that are highly useful in squeeze bottles, squeeze tubes, tubing and corrugated hose. In film, the resins deliver good toughness, high elongation, high impact strength ... (First and second columns on third page)
. DFDA-1137 has a 0.906 density and a 0.8 melt index; DFDA-1138 has still lower values, 0.900 density and 0.4 melt index. In molding and thick extrusion, DFDA-1137 Natural 7 is recommended for moderate clarity applications requiring low haze and high gloss for food contact uses. It produces a smooth surface that's particularly suited for lamination. (Second column of third page) . In film extrusion, USAR FLX resins process much like 2 MI LLDPE or a 0.5 MI LDPE and can be extruded on blown film lines that currently process either type of PE. (Second and third columns of third page) . Sealing characteristics and hot-tack characteristics are said to be excellent over a broad range of temperatures and pressure settings. Downstream handling is similar to that of standard and linear-low polyethylenes. (Third column of third page).
In our opinion the articles, of which the portions extracted above are but samples, do contain a clear recommendation to the skilled addressee to use the new VLDPE as the heat sealing layer in a multi-layer film as a substitute for EVA. The respondent should succeed on the issue of novelty.
Utility
92. His Honour correctly observed that this ground of objection was linked with the question of construction which he held against the appellant, in our opinion correctly. We are not persuaded that his Honour is shown to have erred with respect to his findings on utility.
Want of definition - s. 40(1)(b)
93. His Honour observed correctly that much of the attack raised on this question was dealt with in his discussion of the construction of the specification. We are not persuaded that his Honour erred in his findings on this question. Fair basis - s. 40(2)
His Honour correctly posed the tests to be applied in determining whether claims are fairly based on matter described in the specification, namely:-
(a) is the invention broadly (in the sense of generally) described in the specification?
(b) is the description of the invention inconsistent with the claims?
(c) does the claim include as a characteristic of the invention a feature as to which the specification was wholly silent?
His Honour correctly observed that much of the case of the respondent on this question is resolved by the view he took as to the construction of the specification. He rejected the submission of counsel for the respondent that there was insufficient support in the body of the specification for the claim that a film gave "reliable seals even when contaminated" in that no method of testing such ability or reference point for comparison was given. His Honour said the specification clearly gives examples of the invention which achieved that object and referred to paragraphs 27 and 29. A further objection taken before his Honour was that the accuracy of the upper and lower limits of the specified range are not shown for either butene or octene, so that the specified weight range of comonomer was merely speculative and lacked scientific foundation. To this objection his Honour said that the respondent had not established that the claimed invention:
"... is in a field of science where relevant properties suddenly emerge or disappear as a precise numerical point is reached. The boundary marked out by the claim includes only films of the invention. If the test of the specification is satisfied - viz. improved combination of properties - it is irrelevant that the claims might have been slightly broader or narrower."
His Honour referred to the aptness of certain observations of Graham J. in Olin Mathieson Chemical Corporation v Biorex Laboratories Limited (1970) RPC 157 at 193.
In our opinion his Honour's findings have not been shown to have been in error.
Conclusion
97. We would dismiss the appeal. The respondent should succeed in our view on its challenge to the findings of the primary Judge as to novelty, but this is relevant only on the question of costs of the proceeding at first instance and on appeal. We are not persuaded that his Honour's order as to costs should be varied. As to the costs of the appeal, the appellant must pay the respondent's costs of the appeal.
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