Wimmera Industrial Minerals Pty Ltd v RGC Mineral Sands Ltd
[1997] FCA 317
•2 MAY 1997
CATCHWORDS
PATENTS - Infringement proceeding - Application to court to amend specification - No damages and no account of profits in respect of infringement before date of amendment unless court satisfied that specification before amendment framed in good faith and with reasonable skill and knowledge - Whether amendment application to be dealt with before or at infringement hearing - Whether any usual practice exists - Whether usual practice to be followed.
Patents Act 1990 ss40(2), (3), 102, 105, 114, 115
Federal Court Rules O 58 r 10
Terrell on the Law of Patents 14th ed (1994)
Norsk Hydro AS's Patent [1997] RPC 89
Smith Kline & French Laboratories Ltd v Evans Medical Ltd [1989] 1 FSR 561
WIMMERA INDUSTRIAL MINERALS PTY LTD (ACN 004 302 139) v RGC MINERAL SANDS LIMITED (ACN 008 763 666) and RGC MINERAL SANDS LIMITED v WIMMERA INDUSTRIAL MINERALS PTY LIMITED and THE COMMISSIONER OF PATENTS VG 215 of 1994
COURT:Sundberg J
PLACE:Melbourne
DATE:2 May 1997
IN THE FEDERAL COURT OF AUSTRALIA )
VICTORIA DISTRICT REGISTRY ) No VG 215 of 1994
GENERAL DIVISION )
BETWEEN:WIMMERA INDUSTRIAL MINERALS PTY LTD (ACN 004 302 139)
Applicant
and
RGC MINERAL SANDS LIMITED (ACN 008 763 666)
Respondent
AND:
RGC MINERAL SANDS LIMITED
Cross-Claimant
and
WIMMERA INDUSTRIAL MINERALS PTY LIMITED
First Cross-Respondent
and
THE COMMISSIONER OF PATENTS
Second Cross-Respondent
COURT:Sundberg J
DATE:2 May 1997
PLACE:Melbourne
MINUTES OF ORDER
The Court orders that the motion notice of which was filed on 20 January 1997 be heard prior to the principal application, on a date to be fixed.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
VICTORIA DISTRICT REGISTRY ) No VG 215 of 1994
GENERAL DIVISION )
BETWEEN:WIMMERA INDUSTRIAL MINERALS PTY LTD (ACN 004 302 139)
Applicant
and
RGC MINERAL SANDS LIMITED (ACN 008 763 666)
Respondent
AND:
RGC MINERAL SANDS LIMITED
Cross-Claimant
and
WIMMERA INDUSTRIAL MINERALS PTY LIMITED
First Cross-Respondent
and
THE COMMISSIONER OF PATENTS
Second Cross-Respondent
COURT:Sundberg J
DATE:2 May 1997
PLACE:Melbourne
REASONS FOR JUDGMENT
SUNDBERG J:
By an amended application filed on 16 December 1994 the applicant seeks an injunction restraining the respondent from infringing Australian Petty Patent No 649,946 and Australian Standard Patent No 639,089. The applicant also seeks damages or an account of profits and other relief. There is an issue about whether the respondent's process will or will not infringe those patents, and there are issues about the validity of the patents.
By notice of motion dated 20 January 1997 the applicant sought an order under s105 of the Patents Act 1990 that the Standard Patent be amended in accordance with the amendments attached to the Notice. On 11 February Merkel J ordered that the applicant provide a statement of the grounds relied on in the proposed amended claims, and a statement setting out which of the proposed amended claims it alleges are infringed by the respondent's process. He also ordered that the respondent provide a statement of grounds and particulars of objection to the proposed amendments and a statement in response to the applicant's statement of infringements. His Honour adjourned the matter for further hearing before me. The parties complied with his Honour's orders.
Section 105(1) empowers the Court, in any relevant proceeding in relation to a patent, on the application of the patentee, to direct the amendment of the patent, the patent request or the complete specification in the manner set out in the order. The patentee must give notice of the application to the Commissioner, who is entitled to appear and be heard, and who must appear if the court so directs: sub-s(3). Sub-section (4) provides that the court is not to direct an amendment that is not allowable under s102.
Section 102 is in part as follows:
(1)An amendment of a complete specification is not allowable if, as a result of the amendment, the specification would claim matter not in substance disclosed in the specification as filed.
(2)An amendment of a complete specification is not allowable after the specification has been accepted if, as a result of the amendment:
(a)a claim of the specification would not in substance fall within the scope of the claims of the specification before amendment; or
(b)the specification would not comply with subsection 40(2) or (3).
Section 40(2) and (3) are as follows:
(2)A complete specification must:
(a)describe the invention fully, including the best method known to the applicant of performing the invention; and
(b)where it relates to an application for a standard patent - end with a claim or claims defining the invention; and
(c)where it relates to an application for a petty patent - end with a single claim, or a single independent claim and not more than 2 dependent claims, defining the invention.
(3)The claim or claims must be clear and succinct and fairly based on the matter described in the specification.
The procedure relating to applications under s105 is contained in O58 r10 of the Rules of Court. The applicant must give the Commissioner notice of intention to apply, accompanied by an advertisement setting out the particulars of the amendment sought: sub-rule (1). The Commissioner must publish the advertisement in the Official Journal: sub-rule (2). The application may be instituted by filing a notice of motion in the relevant proceeding before the end of 50 days after the date of publication of the advertisement: sub-rule (4). On the hearing of the motion the Court may give any direction it thinks fit for the conduct of that proceeding, including directions of the type in fact given by Merkel J, and directions
(c)determining that the motion will be heard with the relevant proceedings or separately and, if separately, fixing the date for hearing the motion;
(d)determining the manner in which evidence will be adduced and, in the case of evidence by affidavit, fixing the times within which the affidavits must be filed and served.
The Commissioner was satisfied that the amendments "complied with" s102, and an advertisement was placed in the Journal. The notice of motion was then issued.
The applicant seeks an order that the motion be heard separately and before the infringement proceeding and directions for the filing of affidavits on the motion. See sub-rule (6)(c) and (d) above. The request for a separate hearing was prompted by what appeared in the respondent's notice of opposition given pursuant to Merkel J's order. That notice was in three parts. The first set out the grounds upon which the respondent contends that the amendment is not allowable under s102. The second part sets out the grounds upon which it is contended that the amendment should be refused in the exercise of the Court's discretion. The third part reads as follows:
If the amendments are directed to be made, the patentee is not entitled to damages or an account of profits in respect of any infringement of the patent before the date of order directing the amendment.
PARTICULARS
By section 115(1) the onus is on the patentee to show that the specification without the amendment was formed (sic) in good faith and with reasonable skill and knowledge.
(a)For the reasons set out in 11, it was not.
(b)Section 114(1) applies to each of the claims both before and after amendment.
Section 115(1) is as follows:
Where a complete specification is amended after becoming open to public inspection, damages shall not be awarded, and an order shall not be made for an account of profits, in respect of any infringement of the patent before the date of the decision or order allowing or directing the amendment:
(a)unless the court is satisfied that the specification without the amendment was framed in good faith and with reasonable skill and knowledge; or
(b)if the claim of the specification that was infringed is a claim mentioned under subsection 114(1).
Section 114(1) provides:
Where a claim of a complete specification claims matter that was in substance disclosed as a result of amending the specification, the priority date of the claim must be determined under the regulations.
The applicant's concern, and the reason it seeks an early hearing of the amendment application, is that if at or immediately before the infringement hearing it secures the amendment but fails on the good faith and reasonable skill issue, it will be unable to recover any damages or profits even though it establishes infringement, whereas if it secures the amendment but fails on that issue at an earlier stage, it will be able to recover damages or profits suffered or made thereafter if at the main hearing it establishes infringement.
Mr Catterns QC for the respondent submitted that in accordance with what he said was the usual practice, the amendment application should be dealt with at the same time as the main case. He relied on the following passage from Terrell on the Law of Patents 14th ed (1994) at 242 dealing with amendments under the Patents Act 1949 (UK):
The usual practice in recent years has been for the court to order the motion and the trial of the action to be heard concurrently since this avoids duplication of evidence and the necessity to "educate" the court twice in the art. If there are a large number of opponents it may exceptionally be more convenient to hear the motion separately from the action but even in such cases it is usually more convenient to hear the trial immediately after the motion.
A similar statement is made in the Chartered Institute of Patent Agents Guide to the Patents Act 4th ed (1995) at 650. Mr Catterns told me he was not aware of any case in this Court in which the amendment issue had been heard separately and before the trial. He accepted, however, that the cases in which he had been involved, where no separate hearing had been ordered, had not involved a s115(1)(a) issue, where deferring consideration of the amendment until the trial of the principal proceeding could cause injustice to an applicant.
There is no reference in and around the Terrell passage relied on by Mr Catterns or the Guide passage to the bearing the existence of a s115(1)(a) issue may have on the separate trial question.
The starting point must be O58 r10(6)(c) itself. On the hearing of the motion the Court may determine that the motion will be heard with the principal proceeding or separately. So there is an unfettered discretion to take whichever course is appropriate in the circumstances. Indeed Terrell, in a passage immediately following that relied on by Mr Catterns, acknowledges this. He says:
Which course is to be adopted is entirely in the discretion of the judge before whom the motion comes, and the Court of Appeal will not review it. See British Celanese Ltd v Courtaulds Ltd (1932) 49 RPC 345.
And, demonstrating that departure from the "usual procedure in recent years" is not unheard of, Terrell continues:
If the motion is heard separately from the trial, affidavit evidence is almost invariably ordered with liberty to cross-examine.
The Guide too states that "the procedure is flexible and will be adapted by the court to fit particular circumstances": at 651. In what might be called the usual case, where, for example, the application to amend is made as a reaction to cited prior art (cf Norsk Hydro AS's Patent [1997] RPC 89 at 96-97), it may well be that separate hearings are inappropriate or unnecessary. But the s115 issue removes the present case from the scope of any general rule. I have taken into account the reason Terrell gives for the general rule, which in the usual case has much to commend it. As a result of separate hearings, there would in the present case be some duplication of evidence and consequent additional expense, but that is capable of remedy by an appropriate order. I do not accept Mr Catterns' contention that the separate hearing will become a mini-trial, and that he will have to run his entire case on invalidity. The issues on the motion are narrow. They are the three raised by s102 (whether as a result of the amendment the specification would claim matter not in substance disclosed in the specification as filed, whether as a result of the amendment a claim of the specification would not in substance fall within the scope of the claims of the specification before amendment, and whether as a result of the amendment the specification would not comply with s40(2) or (3)), and the discretionary issues, as to which see Smith Kline & French Laboratories Ltd v Evans Medical Ltd [1989] 1 FSR 561.
The need to "educate" the court twice in the art, which might result from separate hearings, is of less significance where, as in the present case, the motion and the principal proceeding will be before the same judge.
The factor which in my view outweighs those pointing to a composite hearing is that to delay consideration of the amendment until trial has the potential to deprive the applicant of all entitlement to damages or an account of profits when, for all I know, the applicant may, but for s115, have a strong case for that relief. It was common ground that it would be years
before the full infringement and revocation proceedings are finally disposed of. It could work a serious injustice to leave the applicant in the position where, having established infringement, its victory might be rendered futile because it was not afforded an early hearing of its motion. It is perhaps relevant to mention that the potential injustice that can result from s115 is greater than under the comparable provision of the 1949 Act to which Terrell's observation about the usual practice relates. The comparable section of the 1949 Act (and the current Act of 1977) deprives an amending applicant of the right to damages only. He may obtain an account of profits even if unable to show reasonable skill and knowledge: Terrell at 247. Section 115 deprives him of both if he is unable to show reasonable skill and knowledge.
I propose to order that there be a separate hearing of the amendment application. I will hear counsel on a timetable for the filing of affidavits and contentions.
I certify that this and the preceding seven pages are a true copy of the reasons for judgment of the Honourable Justice Sundberg
........ ........ ........ ........ ........ ........ .
Associate
2 May 1997
Counsel for the Applicant: J McL Emmerson QC and J Beach
Solicitors for the Applicant: Arthur Robinson & Hedderwicks
Counsel for the Respondent: D Catterns QC
Solicitors for the Respondent: Allen Allen & Hemsley
Date of Hearing: 9 April 1997
Place of Hearing: Melbourne
Date of Judgment: 2 May 1997
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