Patents

The undertaking as to damages: Cth v Sanofi

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The High Court (by 3:2) has dismissed the Commonwealth’s attempt to claim $325 million from Sanofi on the undertaking as to damages Sanofi gave when granted an interlocutory injunction against Apotex’ introduction of generic clopidogrel.

In the High Court, the main point was when it is appropriate for the High Court to overturn concurrent findings of fact by the primary (trial) judge and the intermediate court of appeal (here, the Full Federal Court). Apart from that (somewhat rarefied) issue, there are two more generally applicable points to consider.

Some background

Sanofi had a patent in Australia (amongst other places) for the drug clopidogrel which Sanofi marketed as Plavix and was used for the treatment of heart attacks and stroke.

Around the time Apotex obtained registration of its generic clopidogrel in the Australian Register of Therapeutic Goods (ARTG), it began Court proceedings against Sanofi seeking revocation of Sanofi’s patent. Sanofi cross-claimed for infringement and sought an interlocutory injunction.

On 25 September 2007, Gyles J granted Sanofi the interlocutory injunction restraining Apotex from infringing the patent pending trial on Sanofi giving “the usual undertaking as to damages”.[1] Earlier, in the course of the hearing on the interlocutory injunction application, Apotex in effect gave an undertaking not to apply to register its clopidogrel in the Pharmaceutical Benefits Scheme (PBS) if Sanofi was granted the interlocutory injunction against infringement.

After the trial on substantive issues, Gyles J found Sanofi’s patent valid and infringed. In August 2008, therefore, Gyles J granted a final injunction against Apotex infringing the patent.

On appeal, however, the Full Court found Sanofi’s patent invalid so it was revoked and the injunction was rescinded.

First, Apotex claimed damages on the undertaking on the basis that it had lost sales as a result of the interlocutory injunction. Sanofi and Apotex reached agreement compromising that claim without a Court determination.

Secondly, although it was not a party to the litigation, the Commonwealth also brought a claim under the undertaking. The basis of its claim was that Sanofi’s clopidogrel was listed in the PBS. Therefore, the Commonwealth paid pharmacists a subsidy for each prescription of clopidogrel.

When the first generic product was listed in the PBS, however, that would automatically trigger a 12.5% reduction in the subsidy payable for prescriptions of the drug.[2]

Because Apotex did not apply to list its generic clopidogrel in the PBS, those price reductions were not triggered. Accordingly, the Commonwealth claimed that it had suffered loss by reason of the granting of the interlocutory injunction amounting to (for present purposes) the 12.5% price reduction that did not occur multiplied by the volume of Sanofi’s sales between the date of the interlocutory injunction and the patent being declared invalid. Something like:

$ = (P – 0.875P[3]) x Q

where:

P = the price payable by the Commonwealth to phatmacies by subsidy through the PBS; and

Q = the volume or number of units sold by Sanofi between 1 April 2008 and 1 April 2010 when Apotex was finally granted a listing in the PBS. (1 April 2008 was the earliest date, but for the interlocutory injunction, Apotex could have been listed in the timings of these things.)

The Courts below

Both Nicholas J and the Full Federal Court dismissed the Commonwealth’s application.

The Commonwealth’s claim was dismissed because Nicholas J found that the Commonwealth did not prove Apotex would have sought PBS listing and commenced selling its generic clopidogrel if the interlocutory injunction had not been granted.

The Commonwealth failed on this point because as the claimant it had the onus of proving that it had actually suffered loss. However, it failed to discharge that onus because it did not call as a witness, Dr Sherman, who was the founder and CEO of the Apotex group of companies and, the evidence showed, it would have been his decision whether or not Apotex would launch “at risk” of being sued for infringement.[4] There was some evidence in February 2007 Dr Sherman had directed Apotex proceed with launching its product in Australia. There was some further evidence from June / July 2007, however, suggesting some doubt whether Apotex would in fact launch especially in light of litigation between the parties in the USA and Canada (which Apotex eventually lost).

The High Court

The decisive issue in the High Court was whether or not the circumstances warranted the High Court intervening to overturn concurrent findings of fact made by the primary judge and not disturbed by the Full Federal Court on appeal.

At [1], the plurality (Gordon A-CJ, Edelman and Steward JJ) summarised the principle:

The principled approach taken by this Court, reaffirmed in these reasons, is common to many ultimate appellate courts in the common law tradition. That principle is that, absent special or exceptional circumstances such as plain injustice or clear error, this Court will not engage in a detailed review of concurrent factual findings of lower courts.

Their Honours went on to find that the appeal did “not concern any individual rights, nor expose any plain injustice or clear error.” At [44] – [123], their Honours reviewed the findings and concluded at [124] that the facts found in the lower courts were “not only open and free from clear error but also are compelling.”

On the other hand, both Jagot J and Beech-Jones J considered there had been such an error.

Some observations of significance

Although the Court’s conclusions meant it was unnecessary to deal with Sanofi’s notice of contention, all Judges expressed views on some aspects “because it is important to do so”.

The Commonwealth was entitled to claim under the undertaking as to damages

The first significant point is that all judges considered the Commonwealth was a “person” which could legitimately claim the losses it claimed to have suffered on the undertaking as to damages even though it was not a party to the litigation.

Sanofi had argued that the losses claimed by the Commonwealth did not “directly flow” from the grant of the interlocutory injunction and so were outside the scope of the undertaking.

All judges were concerned that the test for who could claim on the undertaking not be rigidly confined to a formulaic approach. As the plurality explained at [169], the losses claimed by the Commonwealth (if they had been proved) fell plainly within the scope of the undertaking as to damages:

…. If, absent the interlocutory injunction, Apotex would have applied for listing of its clopidogrel products on the PBS (which the concurrent findings below were that it would not have) then it was common ground at the time of the hearing of the interlocutory injunction that it would have been inevitable that Apotex’s products would have been listed and that, consequently, there would have been a 12.5% price reduction for clopidogrel products listed on the PBS and subsidised by the Commonwealth. As Sanofi accepted in this Court, Sanofi, Apotex and Gyles J knew that a loss that the Commonwealth might suffer as a result of the interlocutory injunction would be loss arising from this price reduction. This was therefore the very loss to third parties “adversely affected” that was reasonably contemplated at the time the interlocutory injunction was granted and therefore within the scope of the undertaking. ….

How much could the Commonwealth have claimed for

The second point of has wider ramifications as applies to any interlocutory injunction and does not turn on the Commonwealth’s role in subsidising the price payable for medicines.

While the Commonwealth claimed $358 million, the plurality explained that if the Commonwealth had proved Apotex would have launched “at risk”, the Commonwealth’s losses would have been $11 million only.

This was because the undertaking as to damages applied only to losses flowing from the grant of the interlocutory injunction. In this case, however, the interlocutory injunction was extinguished by the grant of the final injunction in August 2008. So the Commonwealth could not claim damages after the final injunction was granted and the undertaking as to damages released.

David Shavin KC points out that in Sigma v Wyeth (No 3), the Full Court (Bennett, Nicholas and Yates JJ) explained that any release from the undertaking as to damages should be stayed pending the outcome of any appeal. In response to the primary Judge and a subsequent single Judge sitting in the appellate jurisdiction on an interlocutory basis, their Honours said at [10]:

The effect of the primary judge’s orders was to release the respondents from the undertakings as to damages even though the appellants made clear an appeal would be brought and there existed the possibility that the injunctive relief granted by the primary judge might be set aside on appeal. In such circumstances we think it would seldom, if ever, be appropriate to order that a party be released from an undertaking as to damages. The preferable course is for the undertaking to be left in place to operate in accordance with its terms.

Wyeth argued that the supersession of the interlocutory injunction by the final injunction and the release from the undertaking as to damages followed as a result of the primary judge’s findings that the patent was valid and infringe. At [13], Bennett, Yates and Nicholas JJ rejected this bluntly:

The respondents were unable to point to any authority in support of this submission. In our opinion it must be rejected. The respondents’ submission seeks to give the usual undertaking as to damages an operation that has the potential to cause substantial injustice in circumstances where an interlocutory injunction is obtained on the basis of a case which cannot be sustained on appeal. In the present case, the primary judge released the respondents from the undertakings as to damages on the basis that they had in each case established an entitlement to injunctive relief on a final basis. Once it was determined, as it was on appeal, that the respondents were not entitled to such relief then there can be no basis for not setting aside the primary judge’s order releasing the respondents from their undertaking as to damages.

Subsequently, Nicholas J refused to release an undertaking as to damages pending any appeal. In a different proceeding, Yates J specifically ordered that the undertaking as to damages remain in place “until further order”.

If you have the benefit of an undertaking as to damages and lose the trial but may be appealing at the very least therefore seek to preserve the undertaking as to damages until further order.

Commonwealth of Australia v Sanofi [2024] HCA 47

  1. GPN-UNDR: the applicant undertakes to the Court “to submit to such order (if any) as the Court may consider to be just for the payment of compensation, (to be assessed by the Court or as it may direct), to any person, (whether or not that person is a party), affected by the operation of the order or undertaking or any continuation (with or without variation) of the order or undertaking” and to pay the compensation so assessed.  ?
  2. Further reductions could and would be triggered when other events happened.  ?
  3. The 12.5% was just the initial reduction on the listing of the first generic product in the PBS. A cascading series of reductions came into play as other events occurred.  ?
  4. Dr Sherman and his wife appear to have died in suspicious circumstances but that was in December 2017 some months after the hearing on the Commonwealth’s claim and well after deadlines for filing evidence.  ?

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Copyright, designs and sufficiency for patents

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I shall be presenting the annual Copyright and Designs Update for IPSANZ in Melbourne on 17 October 2024.

For those attending in person, lunch from 12:30 pm with the talk from 1:00 pm to 2:00 pm.

There is also an online option – but I hope to see you there in person.

Details and registration here.

and a Patents talk

On 24 October 2024, Craig Smith SC and Dr Claire Gregg from Davies Collison Cave Law are presenting on ‘Patent Claims – Support, Sufficiency and ‘Relevant Ranges‘.

Details and registration here.

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Aristocrat lives to fight another day

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O’Bryan J has granted Aristocrat leave to appeal Burley J’s decision ruling that the remitted claims were not patentable subject matter.

Recap

O’Bryan J sets out a convenient summary of how the case came to be before him and IPwars has had a few goes including here and here but in case the meaning of “manner of manufacture” for the purposes of the Patents Act 1990 is not tattooed over you heart, a brief recap:

  1. The Commissioner rejected Aristocrat’s innovation patents over an electronic gaming machine (EGM) with a new software-implemented feature game and trigger.
  2. Burley J allowed Aristocrat’s appeal, pointing out it was accepted on all sides that the claims would have been patentable if implemented in the traditional mechanical way rather than software implementation.
  3. The Full Federal Court allowed the Commissioner’s appeal restoring the rejection of the claims. Although agreed in the result, the reasoning was divided. Middleton and Perram JJ held at [26] that it was first necessary to decide if the claimed invention was for a computer or computer-implemented. If so, it was then necessary for the claim to result in an advance in computer technology. In the result (and subject to any appeal to the High Court), after setting aside Burley J’s orders, the Full Federal Court ordered: The proceedings are remitted to the primary judge for determination of any residual issues in light of the Full Court’s reasons including any issues which concern the position of claims other than claim 1 of Innovation Patent No. 2016101967 (referred to at [8] of the reasons of the primary judge dated 5 June 2020) and the costs of the hearings before the primary judge.
  4. The High Court memorably failed to reach a decision, with three judges dismissing the appeal while the other three judges would have allowed Aristocrat’s appeal (a seventh judge was unable to sit). Consequently, under Judiciary Act 1903 s 23(2)(a), the decision of the Full Federal Court was affirmed.
  5. On remitter, Burley J considered he was bound by the Full Federal Court’s decision and ruled that the dependent claims of Aristocrat’s patents were also invalid.

Leave to appeal

As Burley J was hearing and determining an appeal from a decision of the Commissioner, Aristocrat needed leave to appeal to the Full Court under s 158(2).

Often where leave is being sought by the patentee or applicant for the patent rather than an opponent, one might expect leave would be granted as otherwise the patent is dead. As O’Bryan J explained at [50]:

The guidance that emerges from the above cases may be summarised as follows. Section 158(2) evinces a legislative policy against the bringing of appeals against a judgment or order of a single judge of the Federal Court in the exercise of its jurisdiction to hear and determine appeals from decisions or directions of the Commissioner except where the court, acting judicially, finds reason to grant leave. The discretionary power to grant leave is not constrained by express legislative criteria and the Court should not lay down rigid rules that would restrict the exercise of the discretion given the diversity of cases to which s 158(2) will potentially apply. In determining whether to grant leave, it is relevant to consider: whether the decision is attended with sufficient doubt to warrant it being reconsidered on appeal; whether the issues proposed to be raised by the appeal are of general application; and the consequences of a refusal to grant leave – particularly whether the refusal will finally determine the matter. None of those considerations is determinative in and of itself and the considerations are interrelated. The cases make clear that the degree of doubt with respect to the decision that would warrant a grant of leave is affected by the consequences of a refusal to grant leave. In a pre-grant opposition proceeding, where there have been two hearings with the opposition dismissed, and where the opponent of the patent will still be able to institute revocation proceedings, leave to appeal will often be granted only where the opponent has demonstrated a clear prima facie case of error in the decision appealed from. In contrast, where an opponent has been successful such that the decision will be final with respect to the grant of the patent, leave to appeal would ordinarily be granted where the grounds are arguable.

O’Bryan J appears to have had some reservation in granting leave this time around. His Honour described the application as “finely balanced”.

The two main areas that seem to have been particularly troubling were that, as the Commissioner characterised it, the parties had agreed that Burley J’s determination of claim 1 in the first hearing would guide the determination of the other claims. Secondly, the innovation patents in question had expired and Aristocrat still had applications for standard patents covering the same subject matter pending.

Ultimately, his Honour found in favour of granting leave in the “unusual circumstances” of this case.

The factor that appears to have tipped his Honour in favour of granting leave was not just that the High Court had divided 3:3 in its previous decision. O’Bryan J was sceptical that this was just Aristocrat trying to have a “second go”. Rather, the additional factor is how s 23 of the Judiciary Act should apply in circumstances where all six judges of the High Court appear to have rejected the majority view in the Full Federal Court.

At [65], O’Bryan J explained:

Having taken all of the foregoing factors into account, I have determined on balance that leave to appeal should be granted. Ultimately, two factors weigh marginally in favour of the grant of leave: that the effect of the primary judgment is to determine finally that the innovation patents in suit will not be granted, and that the grounds of appeal sought to be raised by Aristocrat are arguable (raising novel questions about the operations of s 23(2)(a) in the unusual circumstances of this case). If Aristocrat is able to persuade an appellate court that the primary judge’s application of s 23(2)(a) of the Judiciary Act in this case was erroneous, Aristocrat should be entitled to have the residual claims adjudicated in accordance with the legal principles that the appellate court determines are applicable.

What happens next

Having been granted leave to appeal, Aristocrat has foreshadowed an application under Judiciary Act s 40 requesting the High Court to hear and determine the appeal without the need for a further hearing in the Full Federal Court. This is of course a very unusual step. In this case, however, the foundational question can really be answered only by the High Court: how does s 23(2)(a) operate when the decision under appeal is affirmed but all the High Court judges sitting on the appeal appear to have rejected the reasoning of the “affirmed” decision?

Who know, we might even get something approaching a settled test for “manner of manufacture” (again).

Aristocrat Technologies Australia Pty Limited v Commissioner of Patents [2024] FCA 987

Aristocrat lives to fight another day Read More »

Aristocrat 2 or 3 or 4 or

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After Burley J dismissed Aristocrat’s remitted claims for innovation patents over an electronic gaming machine (EGM), Aristocrat has now sought leave to appeal.[1]

To recap

Aristocrat had three innovation patents – AU 2016101967, 2017101629 and 2017101097 – for an EGM with a new, free feature game and trigger. The Commissioner revoked the patents on the ground that they not a manner of manufacture on the basis that the substance of the invention was merely a game or the rules of a game.[2]

Burley J allowed Aristocrat’s appeal, finding that the claim 1 was a mechanism of a particular construction and so was a practical embodiment rather than a mere, abstract scheme.

Although it was accepted before their Honours that the claimed invention would be a manner of manufacture if the game had been implemented in a device made in the “traditional” way utlising cogs and spinning wheels rather than software, the Full Federal Court unanimously upheld the Commissioner’s appeal, albeit for different reasons.

As it had been sufficient for Burley J to deal with claim 1 only and Aristocrat contended there were further issues raised by the dependent claims, the Full Federal Court ordered that:

The proceedings are remitted to the primary judge for determination of any residual issues in light of the Full Court’s reasons including any issues which concern the position of [the residual claims] and the costs of the hearings before the primary judge. (emphasis supplied)

Before that could happen, however, the High Court subsequently granted leave to appeal – unusually for that time, on the papers. As I am sure you no doubt recall, three Judges (Kiefel CJ, Gageler and Keane JJ) of the High Court would have dismissed the appeal; three other Judges (Gordon, Edelman and Steward JJ) would have allowed it; Gleeson J was apparently unable to sit.

The High Court being equally divided, the decision of the Full Federal Court was affirmed.[3] Even the the three judges who would have dismissed the appeal, however, appeared to reject the principle propounded by the majority in the Full Federal Court. At [77], Kiefel CJ, Gageler and Keane JJ said:

…. the two?step analysis proposed by their Honours unnecessarily complicates the analysis of the crucial issue. As explained in Myriad, the crucial issue is as to the characterisation of the invention by reference to the terms of the specification having regard to the claim and in light of the common general knowledge. It is not apparent in the present case that asking whether the claimed invention is an advance in computer technology as opposed to gaming technology, or indeed is any advance in technology at all, is either necessary or helpful in addressing that issue. As Nicholas J explained, the issue is not one of an “advance” in the sense of inventiveness or novelty. In conformity with the decision in N V Philips, the issue is whether the implementation of what is otherwise an unpatentable idea or plan or game involves some adaptation or alteration of, or addition to, technology otherwise well?known in the common general knowledge to accommodate the exigencies of the new idea or plan or game. (citation omitted)

As the tied result in the High Court meant the Full Federal Court’s decision was affirmed, that in turn meant that the patentability of Aristocrat’s claimed invention was remitted to Burley J for determination of any residual issues.

On remitter

On remittal, Burley J rejected Aristocrat’s invitation to adopt the reasons of the three Judges in the High Court who would have allowed the appeal.

Burley J considered it was inappropriate to search for a principle, or principles, which a majority of the High Court judges had agreed on. Rather, pursuant to s 23(2)(a) of the Judiciary Act, the Full Federal Court’s decision had been affirmed and, accordingly, he was required to decide the residual issues in accordance with the order remitting those issues to him to be decided in light of the [majority’s] reasons.

His Honour concluded that the additional features specified in the dependent claims did not make any technical contribution that could be described as an advance in computer technology. Therefore, in accordance with the majority’s conclusions in the Full Federal Court, the claims with the additional features were still nonetheless not patentable subject matter.

Although patents are supposed to be available for any inventions in all fields of technology and without discrimination as to the field of technology,[4] Middleton and Perram JJ had ruled at [25] that, in a case of the kind before their Honours, it was not appropriate to inquire whether the claimed invention was a scheme as that “may reduce the richness of analysis called for.” Paradoxically given the narrowness of the approach compared to that of Nicholas J, their Honours held at [26] that the issue fell to be determined by two questions:

(a) Is the invention claimed a computer-implemented invention?

(b) If so, can the invention claimed broadly be described as an advance in computer technology?

In the case of claim 1, the Full Federal Court found that it was only the integers comprising the feature game (see features 1.10 to 1.12 below) that distinguished the EGM from the state of the art. However, the implementation of the feature game did not involve any advance in computer technology and so claim 1 was not a manner of manufacture.

Claim 5 of the 967 Patent

Burley J identified the features of claim 5 of the 967 Patent (as you will appreciate, those numbered “1.” are from claim 1):

(1.0) A gaming machine comprising:

(1.1) a display;

(1.2) a credit input mechanism operable to establish credits on the gaming machine, the credit input mechanism including at least one of a coin input chute, a bill collector, a card reader and a ticket reader;

(1.3) meters configured for monitoring credits established via the credit input mechanism and changes to the established credits due to play of the gaming machine, the meters including a credit meter to which credit input via the credit input mechanism is added and a win meter;

(1.4) a random number generator;

(1.5) a game play mechanism including a plurality of buttons configured for operation by a player to input a wager from the established credits and to initiate a play of a game; and

(1.6) a game controller comprising a processor and memory storing (i) game program code, and (ii) symbol data defining reels, and wherein the game controller is operable to assign prize values to configurable symbols as required during play of the game,

(1.7) the game controller executing the game program code stored in the memory and responsive to initiation of the play of the game with the game play mechanism to:

(1.8) select a plurality of symbols from a first set of reels defined by the symbol data using the random number generator;

(4.1) wherein each reel of the first set of reels comprises configurable symbols and non-configurable symbols and

(4.2) wherein the game controller is configured to assign prize values to each displayed configurable symbol.

(1.9) control the display to display the selected symbols in a plurality of columns of display positions during play of a base game;

(1.10) monitor play of the base game and trigger a feature game comprising free games in response to a trigger event occurring in play of the base game,

(1.11) conduct the free games on the display by, for each free game, (a) retaining configurable symbols on the display, (b) replacing non-configurable symbols by selecting, using the random number generator, symbols from a second set of reels defined by the symbol data for symbol positions not occupied by configurable symbols, and (c) controlling the display to display the symbols selected from the second set of reels, each of the second reels comprising a plurality of non-configurable symbols and a plurality of configurable symbols, and

(3.1) wherein the second set of reels comprises individual reels each corresponding to an individual display position.

(5.1) wherein the game controller is configured to increase a number of free games remaining in response to the selection of one or more additional configurable symbols in at least one of the free games.

(1.12) when the free games end, make an award of credits to the win meter or the credit meter based on a total of prize values assigned to collected configurable symbols.

Then his Honour held:

[135] Having regard to the findings of the majority decision of the Full Court, in my view, the only conclusion available is that dependent claim 5 of the 967 patent provides no additional features that would warrant a conclusion different to the conclusion reached by the majority decision in respect of claim 1 of the 967 patent. Having regard to dependent claim 5 of the 967 patent as set out above, integers 4.1 and 4.2 add features relating to the use of “configurable symbols” in the “first set of reels” for the first or base game identified in integer 1.8. Integer 3.1 adds that the second set of reels identified in integer 1.11 comprises individual reels each corresponding to an individual display position. Integer 5.1 refers to the game controller (identified in integer 1.6) being configured to increase a number of free games remaining in response to the selection of one or more additional configurable symbols in one or more of the free games.

[136] Taken collectively, the additional integers of dependent claim 5 of the 967 patent impose additional features or limitations on the conduct of the game referred to in claim 1. None, to adopt the language of the majority decision at [63], may be said to pertain to the development of computer technology. Each leaves it to the person designing the EGM to do the programming which gives effect to the family of games (or rules) which those integers define.

Similar reasoning applied for the other patents.

Aristocrat Technologies Australia Pty Limited v Commissioner of Patents (No 3) [2024] FCA 212

  1. Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents, NSD506 / 2024, filed on 26 April 2024. As Burley J’s decision is on appeal from the Commissioner, an appeal is not as of right but requires leave: Patents Act 1990 (Cth) s 158(2).  ?
  2. Patents Act s 18(1A)(a) and, for standard patents, 18(1)(a).  ?
  3. Judiciary Act 1903 (Cth) s 23(2)(a).  ?
  4. TRIPS art. 27.1  ?

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Support and sufficiency apply to (mechanical) patents DownUnder

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The High Court has refused Jusand’s application for special leave to appeal [1] the Full Federal Court’s affirmation that Jusand’s patent was invalid on sufficiency and support grounds under the Raising the Bar tests.

In refusing special leave, the High Court simply stated:

The proposed appeal does not have sufficient prospects of success. Otherwise, the proceedings are not a suitable vehicle for the point of principle the proposed appeal seeks to raise.

I think Perram J’s reasons in the Full Federal Court were the first detailed consideration of the operation of these “new” provisions at the appellate level and so they will continue to provide guidance on the meaning and application of the sufficiency and support requirements. (Although one wonders if the second sentence of the High Court’s refusal indicates there may still be some doubt.)

Background

Jusand was the owner of Australian Innovation Patent No. 2019100556 entitled ‘Safety System and Method for Protecting Against a Hazard of Drill Rod Failure in a Drilled Rock Bore’. It had sued Rattlejack alleging that Rattlejack’s SafetySpear infringed claim 1 of the Patent. The trial Judge held there was no infringement and also upheld Rattlejack’s cross-claim that the Patent was invalid and ordered revocation.

According to the specification, the usual practice in underground mining is to excavate a shaft under the ore that is to be mined and then drill up from the shaft to the ore. The bore holes can vary in length from 20m to 60m. The bores are drilled by stringing together lengths of hollow steel tube – drill rods – to make a “string” of drill rods or drill string. Because of the forces involved and the variable geology, however, the drill string may break. The broken or loose drill rod components may become stuck or may fall out unexpectedly.

Evidence at the trial[2] indicated that broken drill string sections could be up to 20m long, weighing 500kg. The impact load of such a falling “projectile” would be 67,000kg.

Thus leaving the mine shaft unsafe; all the more so as the broken drill string might fall unexpectedly.

The Patent proposed a system involving an anchor and an impact reduction member to, in effect, plug the bore hole. The impact reduction member could be tapered along its length up the bore hole so that the force of the falling drill component was translated from the vertical sideways to the horizontal and so acted as a braking force.

Claim 1 in terms stated:

A safety system for protecting against a hazard of drill rod failure in a drilled rock bore above horizontal, and especially a hazard posed by a broken drill rod section within the bore, comprising:

an anchor member configured to be fixed in a proximal end region of the bore adjacent to a rock-face; and

an impact reduction member for reducing an impact of the broken drill rod section striking the anchor member in the proximal end region of the bore, wherein the impact reduction member is configured to be located in the proximal end region of the drilled bore and to extend within the bore above the anchor member to be impacted or struck directly by the broken drill rod section falling within the bore.

You will notice that the “anchor member” and the “impact reduction member” are uncharacterised: the material(s) from which they are made are not specified. Although the claim was for an uncharacterised anchor member and impact reduction member, the Specification relevantly disclosed only things made from steel. It was this lack of specification which led the trial judge and the Full Court on appeal to find the Patent was invalid as lacking sufficiency and support.

Perram J’s reasoning

Perram J gave the judgment, Nicholas and McElwaine JJ agreeing.

Sections 40(2)(a) and 40(3) relevantly provide:

(2)A complete specification must:

(a) disclose the invention in a manner which is clear enough and complete enough for the invention to be performed by a person skilled in the relevant art [the sufficiency requirement]; and

…

(3) The claim or claims must be clear and succinct and supported by matter disclosed in the specification.

Perram J began consideration of the issues by noting at [161] that the terms of the section offered no guidance about how much disclosure would be ‘complete enough’ nor what quantum of ‘support’ was required. Accordingly, the meaning of the provisions was ambiguous.

As a result, it was permissible to resort to extrinsic materials to resolve the ambiguities.[3].

Prior to the Raising the Bar amendments, section 40(2)(a) had only required the complete specification, relevantly, to describe the invention fully and s 40(3) had only required the claim to be fairly based on the matter described in the specification.

In Lockwood No 1, the High Court held that these requirements would be met if the patent explained how to perform the invention in at least one way – to make at least one “thing” falling within the scope of the claims. (Perram J noted that under this test the Jusand Patent would be valid.)

In that respect, Australian law had diverged from the law in the UK but the High Court in Lockwood No 1 had explained that was a result of the UK acceding to the European Patent Convention and adopting the different standards sufficiency and support standards rather than fair basing.

Referring to the Explanatory Memorandum, Perram J noted the intention of the amendments had been to overrule Lockwood No 1 and align Australian law with “overseas jurisdictions”, specifically referring to the approach taken in the UK under Patents Act 1977 s 14(3) and (5) and art.s 83 and 84 of the European Patent Convention. Thus, statements in the Explanatory Memorandum included that ‘support’ picked up two concepts:

• there must be a basis in the description for each claim; and

• the scope of the claims must not be broader than is justified by the extent of the description, drawings and contribution to the art.

In light of this his Honour concluded at [172]:

It will be seen therefore that the European and United Kingdom provisions are relevantly the same as ss 40(2)(a) and (3). I would conclude from that equivalence, the clear statements made to both Chambers by the Ministers who moved for the bill’s second reading and the Explanatory Memorandum that the purpose of the amendments was to ensure that the Australian law of sufficiency and support developed along the same lines as the law of the United Kingdom and the members of the European Union (each of which is a signatory to the European Patent Convention).

To determine whether the requirements of sufficiency and support under s40(2)(a) and (3) were met, therefore, Perram J accepted at [186] and [190] – [195] that the eight principles propounded by Lord Briggs at [56] in Regeneron[4] as explained by Birss J in Illumina were appropriate.

Application to Jusand’s Patent

As the anchor and impact reduction members were uncharacterised, there were a range of materials which could potentially be used within the scope of the claims.

In seeking to invalidate the Patent, Rattlejack invoked proposition (vii) from Regeneron:

(vii) Nor will a claim which in substance passes the sufficiency test be defeated by dividing the product claim into a range denominated by some wholly irrelevant factor, such as the length of a mouse’s tail. The requirement to show enablement across the whole scope of the claim applies only across a relevant range. Put broadly, the range will be relevant if it is denominated by reference to a variable which significantly affects the value or utility of the product in achieving the purpose for which it is to be made. (emphasis supplied)

In Illumina at [277] (in what Perram J described at [190] as “a celebrated discussion of a teapot” illustration), Birss J had explained the concept of relevance for these purposes as turning on the technical contribution or inventive concept. Thus, where a hypothetical claim was to a new teapot with a spout shaped in a new way so as not to drip, while the material from which the teapot was made was relevant to its function as a teapot, that was not relevant in the Regeneron sense as what gave the claimed invention value, utility and purpose was the design of the spout.

This in turn required consideration of what made the claim “inventive” and what its technical contribution to the art is.

At [201], Perram J pointed out that these could be two different things. Echoing Hicton’s Patent, Perram J pointed out that the inventive contribution to a claimed invention may be an abstract idea. However, that was not the patentable subject matter. What the monopoly conferred by a patent was granted for was the claimed invention – the practical implementation of the idea.

From this, it followed that the technical contribution to the relevant art was the product claimed or at [205], in the case of a method, the explanation of how to perform the method disclosed in the specification.

As noted above, the first factual finding was that claim 1 was not limited only to anchors and impact reduction members made from steel. It extended to such things made from anything.

However, relevantly, the Specification disclosed only anchors and impact reduction members made from steel.

Next, based on the evidence before her, the trial judge had held that identifying other suitable materials would involve the person skilled in the art in the exercise of inventive skill.[5]

Claim 1 therefore failed both the sufficiency and support requirements.

At [215], Perram J explained:

…. The invention as claimed was the Safety System which disclosed only a method using an anchor member and a tapered impact reduction member made from steel. Its innovative step was the idea of converting downward weight force into lateral braking forces using the interaction of an anchor member with a tapered impact reduction member. Its technical contribution to the art was taking that idea and explaining how to use it in a Safety System utilising steel. I would therefore see the essence or core of the invention, in terms of Illumina, as involving a consideration of each of these concepts.

His Honour explained that the purpose of the claimed invention was to prevent drill rod sections falling into the shaft. Given the potential forces that such a falling drill rod section could generate, the material(s) from which the anchor and impact reduction member were made significantly affected the utility of the system. As the identification of appropriate materials (other than steel) involved inventive effort, the sufficiency requirement was not satisfied.

Correspondingly, the claim was not enabled across its full scope and the claim was not supported by the description. For example, at [222]:

…. The invention as claimed was a Safety System able to be constructed from a range of materials but the specification showed only how to make it from steel. Thus the monopoly defined by the claims exceeded the technical contribution made to the art. Effectively, if this patent were upheld it would confer upon the Appellant a monopoly over a range of Safety Systems which it has simply not invented. This would reward the patentee for something it has not done and it would prevent others of an inventive disposition from discovering how to make ingenious systems of anchor and impact reduction members from other materials including materials not yet known.

A comment

So far as I am aware, this is the first case in Australia in which the sufficiency and support requirements have operated to invalidate a mechanical patent – these requirements typically arising in cases where classes of chemical compounds and the like have been claimed.

Regeneron’s propositions #5 and #6 are:

(v) A claim which seeks to protect products which cannot be made by the skilled person using the disclosure in the patent will, subject to de minimis or wholly irrelevant exceptions, be bound to exceed the contribution to the art made by the patent, measured as it must be at the priority date.

(vi) This does not mean that the patentee has to demonstrate in the disclosure that every embodiment within the scope of the claim has been tried, tested and proved to have been enabled to be made. Patentees may rely, if they can, upon a principle of general application if it would appear reasonably likely to enable the whole range of products within the scope of the claim to be made. But they take the risk, if challenged, that the supposed general principle will be proved at trial not in fact to enable a significant, relevant, part of the claimed range to be made, as at the priority date. (emphasis supplied)

What will happen in mechanical (or for that matter any other art’s) patents which are not drafted with this precision. For example, to borrow from Birss J’s celebrated teapot example: a patent for a teapot made from a suitable material.

In his Lordship’s hypothetical and unlike Jusand, Birss J assumed the selection of suitable material did not involve inventive skill. That may be sufficient.

As I understand matters, the risk flagged in Regeneron proposition #6 motivated IPTA to file an amicus curiae brief in support of the special leave application.

Dr Claire Gregg and Will Hird at DCC have reported that IP Australia is increasingly raising sufficiency and support objections against such patents. James Lawrence and John Hogan, patent attorneys at, respectively, Addisons and FB Rice provide some recommendations for drafting practices – at least for new applications.[6]

Jusand Nominees Pty Ltd v Rattlejack Innovations Pty Ltd [2023] FCAFC 178 (Perram J, Nicholas and McElwaine JJ agreeing)

  1. Jusand Nominees Pty Ltd v Rattlejack Innovations Pty Ltd [2024] HCASL 104.  ?
  2. Jusand FCAFC at [216].  ?
  3. s 15AB(1) and (2) of the Acts Interpretation Act 1901.  ?
  4. For ease of reference, the eight propositions have been extracted here.  ?
  5. At [212], Perram J summarised the trial judge’s reasoning: “Since it was a plausible working of the claims of the patent to carry out the invention in materials apart from steel, the trial judge reasoned that to do so the skilled addressee would need to engage in the two endeavours identified by her Honour at J [475]-[479] (set out above): first, the skilled addressee would need to select a material which would be suitable for the Safety System’s construction having regard to the enormous forces to which it would be subjected during the impact event; and secondly, the skilled addressee would need to design the Safety System having regard to the physical qualities of the material thus selected. As the trial judge explained, this was because different materials had different degrees of elasticity and stiffness (‘modulus’) (J [420]-[427]), different compressive strengths (J [428]-[432]), different coefficients of friction (J [433]-[435]), different degrees of ductility (J [436]-[437]) and different behaviours when it came to shearing and galling (J [438]-[440]), as well as having different melting points (J [441]-[442]) (noting that the impact event generates heat).”  ?
  6. James Lawrence and John Hogan, ‘Sufficiency and the Patent Bargain Post-Jusand v Rattlejack: How Much Disclosure is Enough?’ (2024) 135 Intellectual Property Forum 9 at 18 – 19.  ?

Support and sufficiency apply to (mechanical) patents DownUnder Read More »

Eight propositions to test support and sufficiency from Regeneron

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Reflection upon those European and UK authorities yields the following principles:

(i) The requirement of sufficiency imposed by art. 83 of the EPC exists to ensure that the extent of the monopoly conferred by the patent corresponds with the extent of the contribution which it makes to the art.

(ii) In the case of a product claim, the contribution to the art is the ability of the skilled person to make the product itself, rather than (if different) the invention.

(iii) Patentees are free to choose how widely to frame the range of products for which they claim protection. But they need to ensure that they make no broader claim than is enabled by their disclosure.

(iv) The disclosure required of the patentee is such as will, coupled with the common general knowledge existing as at the priority date, be sufficient to enable the skilled person to make substantially all the types or embodiments of products within the scope of the claim. That is what, in the context of a product claim, enablement means.

(v) A claim which seeks to protect products which cannot be made by the skilled person using the disclosure in the patent will, subject to de minimis or wholly irrelevant exceptions, be bound to exceed the contribution to the art made by the patent, measured as it must be at the priority date.

(vi) This does not mean that the patentee has to demonstrate in the disclosure that every embodiment within the scope of the claim has been tried, tested and proved to have been enabled to be made. Patentees may rely, if they can, upon a principle of general application if it would appear reasonably likely to enable the whole range of products within the scope of the claim to be made. But they take the risk, if challenged, that the supposed general principle will be proved at trial not in fact to enable a significant, relevant, part of the claimed range to be made, as at the priority date.

(vii) Nor will a claim which in substance passes the sufficiency test be defeated by dividing the product claim into a range denominated by some wholly irrelevant factor, such as the length of a mouse’s tail. The requirement to show enablement across the whole scope of the claim applies only across a relevant range. Put broadly, the range will be relevant if it is denominated by reference to a variable which significantly affects the value or utility of the product in achieving the purpose for which it is to be made.

(viii) Enablement across the scope of a product claim is not established merely by showing that all products within the relevant range will, if and when they can be made, deliver the same general benefit intended to be generated by the invention, regardless how valuable and ground-breaking that invention may prove to be.

Regeneron Pharmaceuticals Inc v Kymab Ltd [2020] UKSC 27 at [56] (Lord Briggs) cited with approval by Perram J in Jusand Nominees Pty Ltd v Rattlejack Innovations Pty Ltd [2023] FCAFC 178 at [186] but at [188] – [195] subject to the clarification by Illumina

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UKSC rejects Thaler and DABUS

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The United Kingdom Supreme Court has ruled that DABUS is not an inventor for the purposes of UK patent law and so Dr Thaler’s applications for a patent claimed to be invented by DABUS have failed.

You will recall that Dr Thaler has applied in the UK (and many other parts of the world) for the grant of patents in his name for inventions said to have been generated by a machine acting autonomously and powered by the artificial intelligence, DABUS.

Section 7 of the UK Patents Act 1977 provides in part:

7 Right to apply for and obtain a patent.

(1) Any person may make an application for a patent either alone or jointly with another.

(2) A patent for an invention may be granted—

(a) primarily to the inventor or joint inventors;

(b) in preference to the foregoing, to any person or persons who, by virtue of any enactment or rule of law, or any foreign law or treaty or international convention, or by virtue of an enforceable term of any agreement entered into with the inventor before the making of the invention, was or were at the time of the making of the invention entitled to the whole of the property in it (other than equitable interests) in the United Kingdom;

(c) in any event, to the successor or successors in title of any person or persons mentioned in paragraph (a) or (b) above or any person so mentioned and the successor or successors in title of another person so mentioned;

and to no other person.

(3) In this Act ‘inventor’ in relation to an invention means the actual deviser of the invention and ‘joint inventor’ shall be construed accordingly.

(4) Except so far as the contrary is established, a person who makes an application for a patent shall be taken to be the person who is entitled under subsection (2) above to be granted a patent and two or more persons who make such an application jointly shall be taken to be the persons so entitled.

Further, section 13 reinforced the centrality of the position of “the inventor” in the scheme of the Act.

Lord Kitchin pointed out that s 7(2) read with s 7(3) provides an exhaustive code for determining who is entitled to a patent. And, just like s 15(1) of the Patents Act, that is the inventor or someone claiming through the inventor.

Unlike the Australian Act, section 7 of the UK Act also includes s 7(4) which defines the inventor as “the actual deviser of the invention”.

Unlike the approach taken by the Australian High Court, Lord Kitchin (with whom Lords Hodge, Hamblen, Leggatt and Richards agreed) considered it was entirely proper for the Comptroller-General to take Dr Thaler’s statements at face value.

Accordingly, at [56], Lord Kitchin ruled that an inventor for the purposes of the Patents Act 1977 must be a natural person and, as DABUS was not a person, it was not the inventor.

In my judgment, the position taken by the Comptroller on this issue is entirely correct. The structure and content of sections 7 and 13 of the Act, on their own and in the context of the Act as a whole, permit only one interpretation: an inventor within the meaning of the 1977 Act must be a natural person, and DABUS is not a person at all, let alone a natural person: it is a machine and on the factual assumption underpinning these proceedings, created or generated the technical advances disclosed in the applications on its own. Here I use the term “technical advance” rather than “invention”, and the terms “create” or “generate” rather than “devise” or “invent” deliberately to avoid prejudging the first issue we have to decide. But it is indisputable that DABUS is a machine, not a person (whether natural or legal), and I do not understand Dr Thaler to suggest otherwise.

As in the Australian cases, Dr Thaler advanced an alternative claim based on the “doctrine of accession”. Thus, Dr Thaler claimed he was entitled to the patent as the owner of DABUS and so entitled to any fruits of its production.

At [83], Lord Kitchin explained Dr Thaler’s contention based “purely” on ownership of the machine:

The DABUS inventions are, he says, the fruits of (in the sense they were produced by) the DABUS machine that he owns and further, that DABUS was designed to make inventions and so these fruits were by no means unexpected. He also contends that he was and remains the first person to possess the inventions and this provides a proper basis for their ownership. In short, he contends that he derived title by operation of a rule of law (the doctrine of accession) that satisfied the terms of section 7(2)(b) of the Act and conferred on him the right to apply for and secure the grant of patent protection for any inventions made by DABUS.

This contention failed. First, as DABUS was not an inventor, at [84] it gave rise to no rights which could be claimed. That was sufficient for the application to fail.

Secondly, in any event, Dr Thaler’s invocation of the doctrine of accession was entirely misplaced. The doctrine of accession applied to new tangible property (e.g. a calf) produced by an existing tangible property (e.g. a cow), not intangible property such as inventions. At [88] – [89], Lord Kitchin explained:

We are not concerned here with a new item of tangible property produced by an existing item of tangible property, however. We are concerned with what appear (and which for present purposes we must assume) to be concepts for new and non-obvious devices and methods, and descriptions of ways to put them to into practice, all of which, so Dr Thaler maintains, have been generated autonomously by DABUS. There is no principled basis for applying the doctrine of accession in these circumstances.


For these reasons and those given by the Court of Appeal, I am satisfied that the doctrine upon which Dr Thaler relies here, that of accession, does not, as a matter of law, operate to confer on him the property in or the right to apply for and obtain a patent for any technical development made by DABUS.

As the Comptroller-General was entitled to take Dr Thaler’s claims at face value, the Comptroller-General was entitled to reject the applications as they were obviously defective: they did not identify anyone who could be the inventor or any basis on which Dr Thaler could claim to derive title from an inventor.

It should be noted that Lord Kitchin was at pains to point out that the Court was concerned with a narrow question: the meaning of section 7 and associated provisions in the UK Act. It was not concerned, he considered with broader, policy questions. His Lordship explained at [48] – [50]:

The Comptroller has emphasised, correctly in my view, that this appeal is not concerned with the broader question whether technical advances generated by machines acting autonomously and powered by AI should be patentable. Nor is it concerned with the question whether the meaning of the term “inventor” ought to be expanded, so far as necessary, to include machines powered by AI which generate new and non-obvious products and processes which may be thought to offer benefits over products and processes which are already known.


These questions raise policy issues about the purpose of a patent system, the need to incentivise technical innovation and the provision of an appropriate monopoly in return for the making available to the public of new and non-obvious technical advances, and an explanation of how to put them into practice across the range of the monopoly sought. It may be thought that the rapid advances in AI technology in recent times render these questions even more important than they were when these applications were made.


This appeal is concerned instead with the much more focused question of the correct interpretation and application of the relevant provisions of the 1977 Act to the applications made by Dr Thaler. This was the approach taken by the Comptroller, the High Court and the Court of Appeal, and rightly so.

Dr Thaler having failed to identify an inventor through whom he could claim entitlement, the Comptroller-General had been right to deem the applications withdrawn.

Thaler v Comptroller-General of Patents, Designs and Trade Marks [2023] UKSC 49 (20 December 2023)

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To be estopped or not …

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O’Bryan J has ruled that Vehicle Management Systems (VMS) is not estopped from seeking revocation of Orikan’s patent despite earlier opposition proceedings in which VMS could have raised the allegations, but did not.

Under the pre Raising the Bar versions of the Patents Act, it was clearly established that an unsuccessful opponent was not estopped from subsequently seeking revocation on the same grounds. This was at least because of the different onus: an opponent had to show that it was “practically certain” the patent application was invalid to succeed whereas a party seeking revocation only had to satisfy the balance of probabilities standard.[1] The Raising the Bar amendments, however, sought to change the burden at the examination and opposition stages to the balance of probabilities standard. The debate since then has been whether this meant an unsuccessful opponent was estopped from seeking revocation on the same grounds.

Overview

Orikan is the registered owner of Australian Patent No. 2013213708 titled “Vehicle Detection”, having been assigned the patent by SARB Management Group. It has sued VMS for infringement. In addition to denying infringement, VMS has cross-claimed seeking revocation of the Patent. So, this is another campaign between VMS and SARB-related entities over competing systems and apparatus to detect cars which have overstayed parking.

In this particular application, Orikan was seeking to have VMS’ cross-claim stayed on grounds of Anshun estoppel or, alternatively, as an abuse of process.

Some background

Back in happier days, VMS and SARB had explored jointly developing systems for detecting vehicles which were parked without paying the fee or after the alotted time had expired.

Things didn’t work out and, by a decision handed down in 2013, VMS successfully sued SARB for infringement of one of VMS’ patents for vehicle detection systems.

In 2008, however, SARB had applied for its own patent. That application led to two divisional patents: Australian Patent No. 2011101179 (Innovation Patent), which was filed in 2011, and secondly the Patent the subject of these proceedings, which was filed in 2013. As you might suspect, there was considerable overlap between the claims of the Innovation Patent and the Patent.

In 2012, SARB sued VMS for infringement of the Innovation Patent. VMS defended, including a cross-claim for invalidity on grounds including lack of novelty, secret use and lack of sufficiency and best method. This proceeding settled before trial in 2014.

In 2016, VMS opposed the grant of the Patent. That opposition failed in both the Office and the Court.[2] The Opposition Proceeding in the Court involved extensive evidence and 5 days’ trial. According to O’Bryan J, however, it did not involve the grounds of invalidity or particulars that VMS sought to argue in this proceeding.

In addition to challenging the priority date, clarity and sufficiency grounds, VMS sought to revoke the Patent in this proceeding on grounds of lack of novelty, secret use and failure to disclose the best method.

Given this prior history, Orikan contended VMS’ cross-claim should be stayed on grounds of either Anshun estoppel or abuse of process.

Legal tests

The parties were not really in dispute about the principles.

Anshun estoppel

At [26], O’Bryan J explained:

Anshun estoppel operates to preclude the making of a claim, or the raising of an issue of fact or law, in a subsequent proceeding if the claim or issue was so connected with the subject of an earlier proceeding that it would have been unreasonable, in the context of the earlier proceeding, for the claim not to have been made or the issue not to have been raised in that proceeding …. [3]

Thus, at [28] his Honour considered three conditions needed to be satisfied:

(1) the relevant cause of action, defence or issue must be one that could have been raised in the earlier proceeding;

(2) the same or substantially the same facts must arise for consideration in the second as in the first proceeding; and

(3) it must have been unreasonable in all the circumstances for the party not to have raised the issue in the first proceeding – i.e. it is not enough that the issue could have been raised; in all the circumstances it should have been raised.

The third requirement means the test has an element of discretion and evaluation.

The requirement of “unreasonableness” is a “severe test” and not to be made lightly. O’Bryan J noted one situation where unreasonableness was likely to be established is where a judgment or order made in the second proceeding was likely to conflict with a judgment or order in the earlier proceeding. But, the doctrine is not limited only to such situations.

Abuse of process

Abuse of process is not capable of explanation in terms of closed categories. At [38], O’Bryan J noted the principles governing its application are broader and more flexible than those governing estoppels.

In general terms what needs to be shown is that the use of the Court’s procedures would be unjustifiably oppressive to the party or would bring the administration of justice into dispute. At [39], O’Bryan J noted that this brought into play considerations of the overarching purpose of civil litigation as set out in s 37M.

Why O’Bryan J dismissed Orikan’s application

At [71], O’Bryan J accepted that Orikan, as the assignee of the rights in the Innovation Patent and the Patent, could take the benefit of an Anshan estoppel arising from the earlier proceedings. It had not been a party to the earlier proceedings but, as the assignee, was a “privy” of the SARB entity which had been.

It was not in dispute between the parties that VMS could have raised the invalidity issues it now wished to argue in the earlier Opposition Proceeding. The matters VMS now sought to rely on were either known to it or it ought to have been aware of them. In fact, the grounds and particulars had been asserted by VMS in the Innovation Patent Proceeding and, while they were different patents, they were both derived from the same parent and the claims were substantially similar.

Nonetheless, O’Bryan J considered that it was not unreasonable for VMS not to have raised the issues it now sought to agitate in the Opposition Proceeding.[4]

First, at [75] his Honour considered there was not a relevant risk of inconsistent judgments. His Honour accepted that a finding that the Patent was invalid in this proceeding would be inconsistent with the result in the Opposition Proceeding. As the grounds and particulars relied on in this proceeding were different, however, the basis of an invalidity finding in this proceeding would be different to the basis of the findings in the Opposition Proceeding.

Secondly, O’Bryan J considered at [76] there was a fundamental difference between the nature and consequences of an opposition proceeding and a revocation proceeding. The Opposition Proceeding involved an election by VMS to challenge the Patent on limited grounds. In contrast, in this proceeding, VMS was being sued for infringement and so compelled to come to court. Later, at [80] O’Bryan J noted that his conclusion might have been different if VMS had initiated the proceedings rather than being the respondent.

O’Bryan J also noted that the Innovation Patent Proceeding had not proceeded to trial and so the invalidity claims had not been tested in court.

Thirdly, O’Bryan J considered that allowing the invalidity claims to go forward in this proceeding would not result in more costs and delay than would have been the case if the claims had been brought in the Opposition Proceeding.

There was one overlap with the Opposition Proceeding in that one of Orikan’s witnesses, a Mr Del Papa, had been cross-examined about a particular document and both Mr Del Papa and the document were involved in this proceeding. However, the relevance and cross-examination in the Opposition Proceeding was limited to an issue of entitlement, not in issue in this proceeding.

Finally, O’Bryan J did not place “significant weight” on the public interest in the integrity of the Register or the fact the Act specifically provided for pre-grant oppositions.

O’Bryan J dismissed the abuse of process attack for essentially the same reasons.

An observation

Interestingly, while O’Bryan J did have regard to the in rem nature of patents, the public interest in the integrity of the Register and the specific provision in the Act for pre-grant opposition (and the change in onus), his Honour did not give those considerations much weight. His Honour eschewed adopting a general principle and instead applied an approach very heavily based on the particular facts of the case.

For example, it is often said (as is the case) that defeating an opposition is not a guarantee that the patent is valid. That is also true of an unsuccessful revocation proceeding. The fact one person’s revocation proceeding failed does not preclude anyone else seeking to revoke the patent. And there are cases where the second challenger succeeded despite the failure of the first.

In considering the fundamental difference between the nature and consequences of opposition proceedings and infringement/revocation proceedings, O’Bryan J emphasised VMS’s choice to fight the Opposition Proceeding on limited grounds in light of the nature and purpose of opposition proceedings. At [76], his Honour explained:

But the Opposition Proceeding involved an election by VMS to challenge the validity of the Patent. It did so on limited grounds, and did not raise the grounds and particulars of invalidity that had been raised in the earlier Innovation Patent Proceeding. There is no proper basis to criticise that election. …. The election made by VMS confined the scope of the issues in dispute in the Opposition Proceeding and therefore the costs and time required for its determination. That course was consistent with the overarching purpose of civil litigation expressed in s 37M of the Federal Court of Australia Act 1976 (Cth). It was also consistent with the character and purpose of pre-grant opposition proceedings, which are intended to provide a swift, economical means of settling disputes: Genetics Institute at [19]. Although it is desirable to avoid a multiplicity of proceedings and to ensure that parties address, as far as possible, the issues arising between them in a single proceeding, parties ought not to be encouraged to raise each and every possible claim or issue irrespective of the time and cost associated with doing so. Anshun estoppel must operate conformably with the demands of s 37M, as well as the substantive statutory context in which it is said to arise. (Emphasis supplied)

This suggests his Honour’s conclusion might reflect a reaction to Beach J’s heartfelt paragraph 1784. It is also consistent with a number of extra-judicial comments encouraging some effort on the part of parties to simplify proceedings. It does seem a little odd, however, that an opposition proceeding taking up 5 days’ of the Court’s time and a carefully reasoned 274 paragraph judgment might qualify as a swift economical means of resolving the dispute between the parties especially when the consequences lead to a further infringement proceeding with what promises to be an even more involved revocation component.

Orikan Group Pty Ltd v Vehicle Monitoring Systems Pty Limited [2023] FCA 1031

  1. In at least one case (which I haven’t been able to find again in the time available), the judge did warn the opponent / revoker that it was at risk of indemnity costs if its revocation action also failed.  ?
  2. There was also an appeal to the Full Court which, by the time of the hearing, was limited to the issue of entitlement.  ?
  3. Citing Anshun at 598, 602–3 (Gibbs CJ, Mason and Aickin JJ); Tomlinson v Ramsey Food Processing Pty Limited (2015) 256 CLR 507 at [22] (French CJ, Bell, Gageler and Keane JJ).  ?
  4. Yes I realise that double negatives are “awkward” (to say the least) but that the point!  ?

To be estopped or not … Read More »

ToolGen’s CRISPR/Cas9 patent application rejected

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Nicholas J has ruled that ToolGen’s application for a patent, AU 2013335451, for “what is now a well-known gene editing system known as the CRISPR/Cas9 system” for editing target DNZ sequences in eukaryotic cells. His Honour has allowed ToolGen until 11 August 2023 to bring any application for leave to amend pursuant to s 105(1A).

As the complete specification was filed after 15 April 2013, the Patents Act in the form amended by the Raising the Bar Act applied.

The matter came before his Honour on ToolGen’s “appeal” from an opposition in which the Commissioner’s delegate found that all but one of the claims should be refused but allowed ToolGen 2 months to amend.

At [13], Nicholas J summarised his Honour’s findings:

For the reasons that follow I have concluded:

(a)          None of the claims are entitled to priority based on P1 (s 43(2A)). 

(b)          All of the claims lack novelty or do not involve an inventive step (s 18(1)(b)).

(c)          The complete specification does not provide an enabling disclosure of the invention (s 40(2)(a)).

(d)          The claims are not supported by matter disclosed in the specification (s 40(3)).

(e)          Claim 19 lacks clarity (s 40(3)).

More detailed consideration will have to wait for another day.

ToolGen Incorporated v Fisher (No 2) [2023] FCA 794

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Some talks (not me)

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Coming up to the end of the year, there are events on reforming patent litigation practice and domain name disputes in review.

Patent litigation practice

Calling it “A very IPRIA Christmas”, IP Australia and IPRIA are hosting on 7 December at 5:30 pm an end of year celebration exploring “a wish list of practice reforms for making patent litigation in Australia (including appeals from the Office) more expeditious and cost effective.”

The event will be chaired by Justice Rofe and features Clare Cunliffe and David Shavin KC from the Bar and Lisa Taliadoros from the solicitors’ side of the profession.

Registration is free and attendance can be in person or online – although to assist catering they do ask that you register by the end of Monday 5 December if you are planning to attend at the Law School in Carlton in person.

Domain names

If domain name disputes are more your thing, the Hon. Neil Brown KC is also presenting an “Annual round-up on Domain Name Arbitration”. Topics Neil intends to cover include:

  • how the domain name process works
  • latest trends emerging from the decisions of arbitrators
  • what evidence do you need and how to collect the best evidence
  • the procedures to lodge a claim and how to defend one
  • traps for new players.

While Neil and I haven’t always seen eye to eye in particular cases, Neil has lots of experience both in the UDRP and a number of other regional and country-specific dispute resolution processes.

Neil is giving his talk online via Zoom at 10:00 am (Melbourne time; i.e. UTC +11) also on 7 December 2022.

According to his brochure, there is no need to register; just log-in. I am afraid I cannot reproduce the link so you are probably best just to email him directly.

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