11 min read

Axent Holdings Pty Ltd t/a Axent Global v Compusign Australia Pty Ltd [2020] FCA 1373 (25 September 2020) 

This decision of Kenny J of the Federal Court of Australia considers many issues including the Crown use defence; whether information published by the Crown (and made available to it by a patentee) can be novelty defeating; and the effect that requesting an extension of time to renew a patent outside of the renewal fee grace period has on the relevant period during which the patent is taken to have ceased before it is restored.

The Background

Axent Holdings Pty Ltd, trading as Axent Global (Axent), commenced proceedings against Compusign Australia Pty Ltd and Compusign Systems Pty Ltd (together Compusign) as well as Hi-Lux Technical Services Pty Ltd (Hi-Lux) (the respondents) for infringing Australian Patent No. 2003252764 titled “Changing Sign System” (764 Patent). The 764 Patent claimed an earliest priority date of 4 October 2002 and was granted on 26 June 2008. The respondents filed a cross claim asserting the 764 Patent was invalid. Except for any issues under ss 22A and 138, the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth) (Raising the Bar Act) did not apply.

The invention related to a changing sign system for use as a variable speed limit sign (VSLS) on roadways. The VSLS could be used to display a lower hazard speed limit instead of the normal maximum safe speed when a certain condition is detected. When the hazard speed limit is displayed, a portion of the sign is varied to conspicuously indicate the change of conditions.

Independent claims 1, 17 and 20 described an electronic variable speed limit sign, which has a plurality of lights forming the central speed limit numerals and annulus rings around those numerals. The specification explains that a change of conditions is indicated by flashing some of the annulus outer rings while always retaining one ring on, to fulfil the criteria of being a speed display sign, that is, by always showing a number in a circle on a display panel. Dependent claims 2 to 16, 18 to 19 and 21 to 27 specified a number of further features, and claim 28 was an omnibus claim.

In September 2001, Mr Fontaine, the director of Axent and named inventor of the 764 Patent, met with Mr Bean, who worked for VicRoads, to view a demonstration of Axent’s variable speed limit sign with a partly flashing annulus. Mr Fontaine stated that he subsequently received tender documents which included a VicRoads specification (the September 2001 specification), which contained a requirement, for variable speed limit signs, that part of the inner diameter of the annulus should be capable of flashing on and off.

The issues

Product or method claims

A preliminary question arose as to whether the claims were product or method claims for the purposes of determining infringement. Axent pleaded that the claims were to a product. The respondents submitted that the claim integers formed part of a method of using a variable speed limit sign. Her Honour rejected Axent’s submissions that the claims were framed in terms of capabilities, yet still construed the majority of the claims as product claims limited by result. Claims 12, 14 and 16 were construed as method claims which describe the operation of the claimed sign system.


The respondents contended that independent claims 1, 17 and 23 lacked clarity because of the use of the terms “normal speed”, “input criterion” and “change in conditions”. Her Honour considered that when the claims were read as a whole, in the context of the specification, the skilled addressee would have no real doubt about what is intended by the above features and that the claims were clear.

Direct Infringement

Axent’s case was in substance that the supply by Hi-Lux and Compusign of their respective variable speed limit signs infringed all the claims of the Patent. Axent was unable to establish that either the Hi-Lux signs or the Compusign signs included relevant features of the product claims or that Hi-lux or Compusign performed the relevant claimed method in making their signs. Thus, the product and method claims were not infringed.

As omnibus claim 28 was narrowed “with reference to the examples”, and the specification included no ‘examples’, her Honour considered that there can be no infringement or alternatively that claim 28 was invalid for lack of clarity.

Indirect Infringement

Axent also relied on s 117 of the Patents Act 1990 (Act) to allege indirect infringement initially on the sole basis that the supply of a sign is, in and of itself, a supply that attracts the operation of s 117. Axent subsequently sought to broaden their case for indirect infringement to instances where the invention was for a method, rather than a product. Axent also sought leave to elicit from the respondents’ witnesses in cross-examination evidence as to the directions given and steps taken by the respondents when supplying their signage. The respondents submitted that it would be unfair to permit Axent to seek to make out an infringement case based on s 117 that it had not opened or properly foreshadowed. Her Honour agreed and held Axent to the case on which it opened. The evidence given by the respondents’ witnesses by way of cross-examination was admitted, however, it was limited in its use so that it could not be used to form the basis of an infringement case by reference to s 117. Axent was not able to make out its case of indirect infringement against the respondents.

Crown use defence

Hi-Lux submitted that each of VicRoads, the South Australian Department of Planning, Transport and Infrastructure, and the City of Greater Geelong was an authority of a State for the purposes of s 163 of the Act which provides that exploitation of an invention by or for the services of the Commonwealth, or a State is not an infringement of any patent rights.

Her Honour considered that each of the organisations were an Authority of the state and that the exploitation of the sign was for the services of each Authority. However, this was subject to s 163(3) which required that the exploitation of the invention was necessary for the proper provision of the services within Australia. Her Honour considered it may be that exploitation was not strictly necessary in the sense contemplated by s 163(3) because alternative signage was available and widely used. However, this was not considered further, in any event, as Hi-Lux failed to satisfy her Honour that the infringement  was authorised in writing by an authority of the State.

In particular, the documents in relation to Hi-Lux’s supply of signs to VicRoads and the City of Greater Geelong left open the possibility that Hi-Lux had a choice as to the electronic speed sign supplied, leaving it free to perform the relevant contract without infringing the claims of the Patent. It was clear that Hi-Lux was under no contractual obligation to supply an infringing item.

The contract for the supply and installation of variable speed limit signs between the Commissioner of Highways and Hi-Lux included a specification which set out the requirements for the variable speed limit signs. Her Honour noted the possibility this contract may have required a product that infringed the 764 Patent and thus, the infringing acts may well have been authorised for the purposes of s 163. However, in the absence of submissions or evidence to this effect, her Honour was not satisfied that the contract with the Commissioner required Hi-Lux to supply goods that necessarily infringed the patent in suit. Accordingly, Hi-Lux’s defence under s 163 of the Act did not succeed.

Innocent infringement

Compusign argued that they were not aware and had no reason to believe that a patent existed for the invention before receiving the letter of demand from Axent. Compusign gave evidence to the effect that they had not expected a patent to exist in relation to the requirements of the roads authorities’ specifications without the specifications referring to the patent. Her Honour considered that there was nothing in the relevant roads authorities’ specifications that would put a reader on notice of the existence of a relevant patent. Axent did not address the issue of innocent infringement.

Accordingly, if it were necessary to do so, her Honour would have provisionally refused to make an award of damages or an order for an account of profits in respect of any infringement by Compusign prior to the date of the receipt of the letter of demand.

Lapse of patent

Axent did not pay the renewal fees for the 764 Patent by the due date of 6 October 2015; nor did it pay the fees by 6 April 2016, within the 6 month renewal fee grace period. Axent applied for an extension of time which was granted on 1 September 2016 and the renewal fees were then applied to the 764 Patent. The 764 Patent therefore ceased to be registered for a period for the non-payment of fees.

The respondents submitted that Axent could not assert infringement of the patent from the day after that on which the renewal fee for the 764 Patent was due, 7 October 2015, to the day on which an application to extend the time to pay the renewal fee was granted, 1 September 2016. Axent submitted the relevant period began on 5 April 2016 (that is, approximately 6 months after 7 October 2015) and concluded on 1 September 2016. The commencement of the relevant period turns on the construction of reg 13.6 of the Patents Regulations 1991 (Cth), which relevantly provides that the period in which the renewal fee must be paid is the period ending at the last moment of the anniversary, however, if the renewal fee is paid within 6 months after the end of the relevant anniversary the period is taken to be extended until the fee is paid. The respondents submitted, and her Honour accepted, that the period is only “taken to be” extended if the condition of the renewal fee being paid within the 6 month grace period is satisfied. Had Axent paid the renewal fee at any time before the end of the 6 month grace period, the 764 Patent would never have ceased as the prescribed period would have been extended by reg 13.6(2)(a) to end on the day Axent paid the fee. However, Axent did not pay the renewal fee before 5 April 2016, and in consequence reg 13.6(2)(a) had no application.

Therefore, the prescribed period for renewal ended on 7 October 2015 being the point after the last moment of the anniversary date for the Patent. It follows that the Patent ceased on that day. The Patent was restored on 1 September 2016, when the extension of time for the renewal fee application was granted.

Prior use

The respondents relied on s 119(1) by way of defence to Axent’s infringement case. In the absence of evidence that either Hi-Lux or Compusign Australia was “making” an infringing product or “using” an infringing process before the priority date, neither could satisfy the requirements for the prior use defence required by s 119(1) prior to the Raising the Bar Act changes.

Invalidity of the Patent

The respondents submitted the claims were not novel because the invention was disclosed by the September 2001 specification and as part of the installation process for the Western Ring Road Project. Axent submitted that the September 2001 specification was merely a “wish list” that provided insufficiently direct disclosure and in any event was excluded from being considered for the purposes of novelty and inventive step because of s 24(1)(b) and/or s 24(2). Relevantly, s 24(1)(b) provides that, when assessing novelty and inventive step, the person making the decision must disregard any information derived from the patentee and made publicly available without their consent. Under s 24(2), the person making the decision must disregard any information given by, or with the consent of, the patentee, to the Crown, but to no other person or organisation.

Axent argued that it had disclosed its invention to VicRoads confidentially and never consented to VicRoads on-disclosing it in the September 2001 specification. The respondents contended, and her Honour agreed, that s 24(2) did not apply because the September 2001 specification was a disclosure made by, and not to, the Crown and the language of s 24(2) did not support the “reach-through effect” that Axent had argued.

There was still the further question as to whether s 24(1)(b) operated. A central issue was whether the information was made publicly available without the consent of Axent. Whilst there was no evidence that Axent expressly gave consent, having regard to the circumstances and the evidence, her Honour was satisfied that Axent positively consented to the inclusion of the claimed invention in the September 2001 specification. Accordingly, s 24(1)(b) did not apply.

Kenny J rejected the contention that the September 2001 specification was part of the common general knowledge or that it could be combined with the common general knowledge. Accordingly, the critical question was, whether each of the claims lacked inventive step by reference to common general knowledge alone. The evidence was clear that, apart from the flashing annulus feature, the other features of the claims were obvious as at the priority date. However, there was clear evidence that the skilled worker was aware of a flashing annulus feature well before the priority date.

Her Honour considered that no problem was overcome or barrier crossed by the adoption of the flashing annulus feature and that the evidence indicated a person skilled in the art would have taken the steps leading from the prior art to the claimed invention as a matter of routine. The 764 Patent was found invalid for lack of inventive step by reference to the common general knowledge alone, and claims 1, 9, 10, 14, 15, 17, 20 and 27 were invalid for want of novelty in light of the disclosure of September 2001 specification.

The Decision

Ultimately, Axent failed in its infringement case, even if it had succeeded, Compusign succeeded in its innocent infringement defence and all respondents succeeded on the lapsed patent defence. The Crown use and prior use defences failed.


The decision clarified that the prescribed period to pay a renewal fee to prevent a patent ceasing is only taken to be extended to the date of payment, if the fee is paid within the 6 month grace period. Accordingly, when the renewal fee is paid after the 6 month grace period by relying on an extension of time, the patent is taken to have ceased from the point after the last moment of the anniversary of the patent.

Regarding the Crown Use defence, the decision indicated that written authorisation by the Crown to exploit an invention may be explicit or implied, but the authorisation must be specific such that the necessary exploitation of the invention is authorised and that alternatives are not possible.

For information made available to the Crown by a patentee and subsequently published by the Crown, the decision indicated s 24(2) did not provide a “reach-through effect” to exclude such a publication from the prior art when considering novelty and inventive step.

The decision also offers guidance on the evidence required to establish innocent infringement in the case that a defendant was not aware, and had no reason to believe, that a patent for the invention existed.

Authored by Tam Huynh and Dean Bradley

10 min read

Vehicle Monitoring Systems Pty Ltd v SARB Management Group Pty Ltd [2020] FCA 408

This decision forms part of an ongoing battle between two Australian companies over patented technology for improving the efficiency by which authorities monitor and manage access to public parking.  In this decision, the Federal Court of Australia provides some helpful guidance on the approach to assessing whether or not a claimed invention involves an inventive step (i.e. is not obvious) under the current provisions of Australian patent law.


Vehicle Monitoring Systems Pty Ltd (VMS) developed a Parking Overstay Detection System (the POD system), which uses in-ground sensors to detect changes in the earth’s magnetic field when a vehicle enters a parking space (or bay).  A message is sent wirelessly to a device carried by a parking officer who can then issue an infringement notice, as required.

VMS sought to collaborate with SARB Management Group Pty Ltd (SARB) to advance the POD system technology.  SARB is the designer and distributor of software popularly used with generic handheld PDAs for issuing parking infringement notices by council officers.  However, no collaboration eventuated from these discussions.  Instead, SARB developed its own vehicle detection system which was also based on the use of a sensor to detect changes in the earth’s magnetic field when a vehicle enters a parking space.

More specifically, SARB’s system incorporated a vehicle detection unit (VDU) using a magnetic sensor capable of detecting occupancy of a vehicle space by a vehicle; a storage device carrying parameters which define notifiable vehicle space occupancy events; and a processor operable to initiate a communication from the VDU to a supervisory device (such as a PDA) upon occurrence of a notifiable event (such as a parking violation), wherein the communication includes data items pertaining to the notifiable event and is communicated in a format suitable for pre-population into infringement issuing software.

SARB’s system became the subject of Australian Patent Application No. 2013213708, entitled ‘Vehicle Detection’ (SARB application).  Relevantly, VMS opposed the SARB application on the grounds that the claimed invention lacked an inventive step and that SARB was not entitled to the grant of a patent for this invention under the Patents Act 1990.

An opposition hearing was conducted before the Australian Patent Office (Vehicle Monitoring Systems Pty Ltd v SARB Management Group Pty Ltd [2017] APO 63).  The Patent Office rejected each of these grounds as advanced by VMS, determining that claims 1-24 should proceed to grant (but claims 25-28 should not be granted).

VMS appealed this decision to the Federal Court of Australia and the present decision concerns the outcome of this appeal.


VMS submitted that claims 1-24 of the SARB application lacked an inventive step in light of the common general knowledge and five sources of prior art information, including: a published PCT application (filed by VMS); a published Australian patent, a published journal article; slides of a presentation given at an industry conference in 2005; and details of an oral presentation given at an industry conference in 2006.

Additionally, VMS submitted that SARB is not entitled to be the person to whom the patent is granted because Mr Welch of VMS, or alternatively Mr Welch and Mr Gladwin of Maribyrnong City Council conceived of all or part of the invention disclosed in the SARB application and communicated it to Mr Del Papa of SARB, and in doing so sufficiently contributed to the invention to be named as inventors.


The decision involved a comprehensive assessment of facts, technical details, claim construction, and a determination of the common general knowledge involving expert witnesses and submissions from both parties.

Claim construction

For ease of reference, claim 1 is reproduced below:

  1. vehicle detection unit (VDU) comprising:
    1. magnetic sensor able to sense variations in magnetic field and for outputting a sensor signal caused by occupancy of a vehicle space by a vehicle;
    2. storage device carrying parameters which define notifiable vehicle space occupancy events;
    3. processor (a) operable to process the sensor signal to determine occupancy status of the vehicle space, and (b) operable to compare the occupancy status of the vehicle space with the parameters in order to determine whether a notifiable event has occurred, and (c) operable to initiate a communication from the vehicle detection unit to a supervisory device upon occurrence of a notifiable event, wherein the communication includes (i) data items pertaining to the notifiable event and (ii) communicated in a format suitable for pre-population into infringement issuing software.

There were contentions over the construction of the scope of claim 1, particularly as to whether the VDU initiates a communication only upon the occurrence of a notifiable event or whether the claim includes that the VDU is operable (i.e. able) to initiate a communication at a time other than when a notifiable event has occurred.  The Court preferred the latter construction advanced by VMS as to do otherwise would inappropriately add a limitation to the claim that is not present – that is, inserting the word ‘only’ before ‘operable’.  Additionally, the Court considered that data items pertaining to the notifiable event did not include ‘all’ data items as the plain language of the claim simply refers to ‘data items’ not ‘all data items’.

Furthermore, there was consideration of the feature ‘communicated in a format suitable for pre-population into infringement issuing software.’  VMS submitted that this required the data communicated from the VDU to the supervisory device to be able to be pre-populated into the data fields in the infringement issuing software without further data processing by the supervisory device.  SARB largely accepted this construction but submitted that the language of claim 1 does not preclude additional necessary processing at the supervisory device; for example to receive and organise the data packets.  The Court agreed with VMS’s construction and SARB’s qualification.

Inventive step

In Australia, an invention is taken to involve an inventive step when compared with the prior art base unless the invention would have been obvious to a person skilled in the relevant art in the light of the common general knowledge as it existed before the priority date of the relevant claim.  The assessment can be made against the common general knowledge separately or together with certain other pieces of prior art information.

Accordingly, when assessing whether or not a claimed invention involves an inventive step it is first necessary to establish the relevant common general knowledge of the trade.

The prior information that can be used to supplement the common general knowledge to support an assertion of lack of inventive step is provided by section 7(3) of the Patents Act 1990 as follows:

(a)  any single piece of prior art information; or

(b)  a combination of any two or more pieces of prior art information that the skilled person could, before the priority date, be reasonably expected to have combined.

Section 7(3)(a) enables any publicly available single item of prior art information to be added to the common general knowledge for the purpose of considering whether or not an invention involves an inventive step.  Section 7(3)(b) facilitates the addition of a combination of two or more (publicly available) pieces of prior art information to supplement the common general knowledge for the consideration of invention step, subject to the condition that the skilled person could be reasonably expected to have combined them.

The requirement that the prior information merely be publicly available for it to be available for the consideration of inventive step represents a significant departure from the more rigorous requirements that existed before the changes to Australian patent law introduced by the Raising the Bar Act.  Previously, no prior art information could be added to the common general knowledge unless the skilled person could, before the priority date, be reasonably expected to have ascertained, understood, and regarded it as relevant.

Despite this framework, there was some dispute between the parties as to the proper approach to be taken when seeking to combine two or more pieces of prior art information under s 7(3)(b).  The Court reviewed the submissions from each party and summarised the relevant law before stating:

‘It follows that I do not accept that it is necessary for VMS to demonstrate any more for the purpose of s 7(3)(a) than that the prior art information has been made publicly available. Once it has done so, such information is notionally supplied to the person skilled in the art within s 7(2). For combining two or more pieces of prior art information, s 7(3)(b) deems that if those pieces of information are ‘publicly available’, they are be made available to the person skilled in the art. It will be a question of fact whether or not they may be reasonably be expected to be combined.’

In the respective approaches to inventive step, there was general agreement on the common general knowledge of electrical engineers with respect to wireless sensor networks.  However, there was some disagreement over whether or not the POD system formed part of the common general knowledge and, if so, what information concerning that system was known at the time.

The Court considered that the broad working of the POD system formed part of the common general knowledge in the art but did not accept that the common general knowledge would include a detailed understanding of the mechanisms of the POD system, or experience of using the POD system. In particular the means of communication between the in-ground sensor and the various remote terminals was not considered common general knowledge nor was the manual entry problem of transcription errors when using the POD system.

VMS first relied on the combination of the PCT application with information contained in an article on the POD system entitled ‘PODS – the Next Big Thing’.  However, the article did not consider pre-population of data items into infringement issuing software, which was a crucial item of detail absent from the disclosure of the PCT application.

VMS also cited a PowerPoint presentation, by Mr Gladwin, only as a publication of the slides.  The meaning of the slides, shorn of detail provided during the presentation, was opaque and the information in them was not considered to be of any practical use in the implementation of the PCT application.

Additionally, VMS cited a presentation given by Mr Welch at a conference in November 2006.  However, VMS faced insurmountable hurdles in proving the content of the presentation was made publicly available.  The Court noted the intrinsic danger in relying on an unaided recollection of events.  Whilst it was agreed Mr Welch was doing his best to assist the Court, it was noted that memories fade and, as such, it was unlikely that he would recall what he said with any reliable accuracy.

In considering inventive step, the Court was conscious that the question is whether the combination, not each integer, is obvious.  On this basis, the Court identified four points of uncertainty for the skilled team seeking to implement a system or method as disclosed in the PCT application.  Referring to the four identified points of uncertainty, the Court considered that each point required decisions on how to proceed which would involve prototype testing and evaluation. The Court noted the following:

“In my view, whilst the number of alternative solutions is relatively limited, there is no single line of logic that leads to the invention as claimed such that it can be concluded that the combination arrived at was ‘very plain’, or obvious. In my view the qualitative evaluation weighs sufficiently in favour of SARB to arrive at this conclusion.”

Accordingly, the Court held that VMS had not discharged its onus of demonstrating, on the balance of probabilities, that the invention claimed in claim 1 lacks an inventive step in view of the prior art PCT Application.  The remaining prior art information relied on by VMS was also not successful in demonstrating that the claimed invention lacked an inventive step, as they did not touch upon the most material aspects of the claimed combination.


Regarding VMS’s claim that SARB lacked entitlement to the invention, there was some dispute over the content of the conversations between Mr Del Papa, Mr Gladwin and Mr Welch when proposing the collaboration between VMS and SARB.

The Court found that the message conveyed to Mr Del Papa was, at its highest, the idea that the POD system could possibly be adapted in the way suggested by Mr Welch and Mr Gladwin. In the Court’s view the invention disclosed in the specification and the subject of the claims was not that obvious, high level idea, but rather a more prosaic, practical implementation. It was the reduction of that concept to a working apparatus that is the invention. The Court considered that neither Mr Welch nor Mr Gladwin played any role in arriving at the solution and rejected that Mr Welch or Mr Gladwin should be named either as the sole inventor or as a co-inventor.


The Court found that the grounds of opposition to the grant of a patent on the SARB application, as advanced by VMS, had not been made out.  Accordingly, the appeal was dismissed and it was ordered that claims 1-24 of the SARB application proceed to grant.


This decision provides some helpful clarification that publicly available prior art information can be readily added to the common general knowledge when assessing whether or not a claimed invention possesses an inventive step, following changes made to Australian patent law under the Raising the Bar Act.  This decision also highlights the practical difficulties that can arise when relying on non-documentary publications such as presentations and lectures, particularly the difficulty in determining precisely what information was made publicly available by such events over time.

For further information, please contact Dean Bradley and Greg Whitehead.

Authored by Dean Bradley and Greg Whitehead