Williams Advanced Materials Inc v Target Technology Co LLC

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FEDERAL COURT OF AUSTRALIA

Williams Advanced Materials, Inc v Target Technology Company LLC
[2004] FCA 1405

INTELLECTUAL PROPERTY – PATENTS  – novelty – reverse infringement – no suggested advantage or difference between materials in possible range – reverse infringement – equal in practical utility – clear directions in prior art to work within claimed ranges or proportions – no suggestion that specified proportions or ranges other than arbitrary – claim construction and disclosure in prior art a matter for expert evidence only to the extent of special meaning to skilled reader – obviousness – reliance on evidence of skilled worker with no common general knowledge in Australia for inventive step – mental logic of the notional team constituting the skilled addressee – evidence given without knowledge of the patent – no hindsight analysis – test in Astra – not a question of worthwhile to try – inventive step is the choice of metal alloys in the combination that was otherwise common general knowledge and acknowledged as known in the specification – no suggestion that initiation of inventive step in other than the choice of the new alloys for use in the reflective layers by reference to known requirements – dependent and omnibus claims – incorporates the invalidity of the independent claims to the extent of dependence on that claim – lack of sufficiency of description

COSTS – O 62 r 11(2) – gross sum – evidence of detailed bill of costs – no appearance by respondent – further expense and delay – success by applicant – award of costs – amount logical, fair and reasonable

PRACTICE AND PROCEDURE – default judgment – revocation of patent – patentee chooses not to defend patent monopoly – Federal Court Rules O 10 r 7(1)(b) – O 11 r 23(1)(b) – O 33 r 3 (repealed) – s 190(3) Evidence Act – discretion in s 190(3) applied – relevance of O 33 r 3 (repealed) to s 190(3) – translations of prior art Japanese patent not a certified translation

Federal Court Rules O 10 r 7(1)(b); O 11 r 23(1)(b); O 33 r 3 (repealed); O 62 r 11(2)
Evidence Act 1995 (Cth) s 190(3)
Patents Act 1990 (Cth) ss 7(2), 40(2)(a)

Aktiebolaget Hassle v Alphapharm Pty Ltd [1999] FCA 628
Aktiebolaget Hassle v Alphapharm Pty Limited (2002) 212 CLR 411
Aus Fence Hire Pty Ltd v Thomas [2004] FCA 557

Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119
Datadot Technology Ltd v Alpha Microtech Pty Ltd [2003] FCA 1449
Eichengrun’s Application [1932] 49 RPC 435

Gambro Pty Limited v Fresenius Medical Care Australia Pty Limited [2004] FCA 323
General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd [1972] RPC 457
Hill v Evans (1862) 6 LT 90; (1862) 1A IPR 1
Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd  (2001) 207 CLR 1
Maxims Entertainment Pty Ltd v Chinatown Enterprises Pty Ltd [1998] FCA 1707
Meyers Taylor Pty Ltd v Vicarr Industries Ltd (1977) 137…

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Details
Case
[2004] FCA 1405
Decision Date

CaseChat Overview and Summary

In Williams Advanced Materials Inc v Target Technology Co LLC, the applicant sought a declaration that certain claims of a patent were invalid. The patent in question related to reflective layers or semi-reflective layers used in optical storage media, such as CDs and CD-Rs. The applicant argued that the patent claims were anticipated by prior art patents, which disclosed the same or similar reflective layer compositions. The case was heard by the Federal Court of Australia.

The primary legal issue before the court was whether the claims of the patent were invalid due to anticipation by prior art. The applicant relied on evidence, including translations of Japanese patents, to demonstrate that the prior art patents disclosed the same or similar reflective layer compositions as those claimed in the patent. The court had to determine whether this evidence was admissible and whether it was sufficient to prove that the claims were anticipated.

The court held that the discretion under section 190(3) of the Evidence Act 1995 (Cth) could be exercised to allow the admission of the uncertified translations and other evidence. The court found that the prior art patents did indeed disclose the necessary integers of the claims, effectively anticipating the patent. The court noted that the prior art patents contained directions that would lead a person skilled in the art to work within the ranges or proportions selected by the patentee. The court concluded that the claims were anticipated by the prior art and therefore invalid.

The court granted the applicant's application for a declaration of invalidity of the patent claims. The final orders included a declaration that certain claims of the patent were invalid and that the patent was to be revoked to the extent of those claims. The respondent did not appear or respond to the application, leading the court to infer that the respondent had abandoned the challenged claims.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

It is not suggested by counsel for the applicant that it is not necessary for the applicant to prove its case. To the contrary, counsel submits that as an applicant for default judgment, under the then existing rule, such proof is necessary. That is clearly correct.The nature of the evidence to which the discretion is to be applied The applicant relies upon, for example, translations of Japanese patents which are not certified translations in Australia. The reliability of the translations are asserted in an affidavit and text books said to be standard text books. The availability of those books in libraries is proved by hearsay evidence which is, in turn, not in proper form. It seems to me that it is entirely appropriate to exercise the discretion in s 190(3) of the Evidence Act to permit the evidence to be read. I note that an uncertified translation is the very example given by Burchett J in Maxims Entertainment Pty Ltd v Chinatown Enterprises Pty Ltd [1998] FCA 1707 as appropriate for the exercise of discretion under O 33 r 3.THE PATENTThe background of the invention The alleged invention relates to reflective layers or semi-reflective layers used in optical storage media. Pages 1 to 7 of the patent set out the background of the invention and matters said to have been known as at the priority date. The patent states that four layers are generally present in the construction of a single layer conventional, pre-recorded, optical disc (a CD) as follows:(a) the first layer is made from optical grade polycarbonate resin;(b)an optically reflective layer is placed over the first layer. This is usually made of aluminium or an aluminium alloy and is deposited by a vapour deposition technique such as sputtering or thermal evaporation;(c)next, a solvent-based or ultraviolet curing-type resin is applied over the reflective layer to protect it from handling and the ambient environment;(d)the fourth layer is a highly reflective coating on the disc to reflect the laser light (used to read the disc) from the disc in order to read the presence of changes in light intensity which form the basis of stream of digital data. This reflective layer is usually aluminium, copper, silver or gold, all of which have an optical reflectivity of more than 80 per cent. Aluminium and aluminium alloys are commonly used because of their lower cost and adequate corrosion resistance. The patent states that, although gold satisfies all the functional requirements for a highly reflective layer, it is comparatively more expensive than aluminium. The background of the invention, having recited the use of gold as a reflective or as a semi-reflective layer says:‘Therefore, what is needed are some new alloys that have the advantages of gold when used as a reflective layer or as a semi-reflective layer in an optical storage medium, but are not as expensive as gold. This invention addresses that need.’ Recordable compact discs, or CD-Rs, have a similar structure to a single layer disc, but have a layer of organic dye between the polycarbonate layer and the reflective layer. The key component of the CD-R is the organic dye. As the dye may contain halogen ions or other chemicals that can corrode the reflective layer, many commonly used reflective layer materials, such as aluminium, may not be suitable to give the CD-R disc a reasonable life span. Gold has therefore been frequently used to manufacture CD-Rs as it satisfies all of the functional requirements of CD-Rs, but it is a very expensive solution.

Decision

Reasons for decision

BENNETT J
The respondent did not appear. The applicant and its legal representatives have received no correspondence or other communication from the respondent. The applicant submits that the respondent has abandoned the challenged claims of the patent. That seems to be the case. In circumstances where the respondent has not responded to substantive affidavits, I allowed the applicant to read the additional two unserved affidavits.Default judgment On 10 November 2003, Beaumont J ordered that the respondent file and serve its defence by 1 December 2003. Service of the defence was effected in compliance with his Honour’s orders, as subsequently varied by Registrar Hedge. The applicant seeks judgment pursuant to O 10 r 7(1)(b). This was the appropriate rule rather than O 11 r 23(1)(b) of the Federal Court Rules, as an order was made by the Court and not complied with (Aus Fence Hire Pty Ltd v Thomas [2004] FCA 557; My Distributors Pty Ltd v OMAQ Pty Ltd (1992) 36 FCR 578 at 581). Both rules have been repealed since the hearing.Section 190(3) of the Evidence Act It is necessary for the applicant to support its motion for judgment with evidence to prove the facts necessary but the court may exercise its discretion to dispense with the rules of evidence. Section 190(3) of the Evidence Act 1995 (Cth) sets out matters relevant to the exercise of that power:‘(a) the matter to which the evidence relates is not genuinely in dispute; or(b) the application of those provisions would cause or involve unnecessary expense or delay.’Relevantly, s 190(4) provides for the taking into account of:‘(a) the importance of the evidence in the proceeding; and(b)the nature of the cause of action… and the nature of the subject matter of the proceeding; and(c)the probative value of the evidence’in exercising the court’s discretion. In the exercise of the discretion, comments that have been made in respect of O 33 r 3 of the Federal Court rules, now repealed, are apposite. Factors such as notice to the respondent and the opportunity given to the respondent to appear, the fact that the respondent has chosen not to appear to dispute the matters raised in the affidavits, facts not genuinely in dispute and unnecessary and unreasonable expense and delay that would be occasioned by compliance with all of the rules of evidence are all relevant matters. It is also relevant that the subject matter of this application is a patent, giving the respondent a monopoly over the subject matter of the claims, a right that the respondent has chosen not to defend. There is also a public interest in ensuring that only valid patents remain in force and that a challenge to a patent not be delayed and a monopoly continue because a patentee has chosen not to defend the claim for revocation. While there may be a number of reasons why such a choice is made, including, for example, commercial considerations, it may also be the case that the patentee considers that no defence can be raised to the claim for revocation. Such an inference may be drawn where, as here, the patentee has been given ample opportunity to present its case and has, without explanation, chosen not to comply with the order to file a defence (Eichengrun’s Application (1932) 49 RPC 435).

Ratio Decidendi

Legal Principle Established

Established by: BENNETT J

Mr Lichtenberger has identified in each of the European patent, the first Japanese patent and the second Japanese patent, each of the essential integers of claim 9 and claim 10. He has identified the additional essential integers of claims 12 and 13 in the European patent and the additional essential integers of claim 16 in each of the first Japanese patent and the second Japanese patent.Consideration The evidence of Mr Lichtenberger includes an analysis of the European patent, the first Japanese patent and the second Japanese patent, in that it identifies in each of the prior art documents disclosures or descriptions of compact discs that are said to satisfy the reverse infringement test for the claims in question, that is, disclosures or descriptions of reflective layers containing each of the essential integers of the claim (Nicaro Holdings Pty Ltd v Martin Engineering Co (1990) 91 ALR 513 at 527-8; Ramset Fasteners (Aust) Pty Ltd v Advanced Building Systems Pty Ltd (1999) 44 IPR 481, (1999) 164 ALR 239 at [22]). Where that integer is a range of possible materials, such as the group of precious metals identified in claim 16, Mr Lichtenberger points to a medium containing, inter alia, one of the members of that group. Where, as here, there is no suggestion that there is any advantage or any difference between the members of the group or any reason for the particular range of compounds chosen as set out in the claim, the prior art disclosure constitutes a reverse infringement of the claim (Meyers Taylor Pty Ltd v Vicarr Industries Ltd (1977) 137 CLR 228 at 235). That disclosure is, for the purposes of practical utility, equal to that given by the patent (Hill v Evans (1862) 6 LT 90; (1862) 1A IPR 1 at 7). The prior art patents contain directions which would clearly lead persons who put those disclosures into practice into working within the ranges or proportions selected by the patentee (General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd [1972] RPC 457 at 485-6). As was the case in NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd (1992) 24 IPR 1 (‘Philips’), neither the patent nor the evidence suggest that the proportions or ranges ‘reflect any discovery or new scientific insight by the patentees…[n]o doubt the choices were carefully calculated….but the stipulated figures are arbitrary, in the non-perjorative sense of depending upon the will or discretion of the patentees’ (per Wilcox J at 35). Indeed, there is nothing in the specification that suggests that the proportions or the ranges of the metals in the alloys are in any way part of the invention, other than the mere reference to them. It is a case of ‘parameteritis’. Mr Lichtenberger has, conveniently, set out the relevant prior art disclosures. To the extent that the language used does not convey a special meaning to those skilled in the art, the question of whether the prior art discloses the necessary integers is a matter for the court, not for expert evidence. To the extent that the disclosure is of special meaning to a skilled reader, that is a matter for expert evidence.