To celebrate International Women in Engineering day (23 June 2020), Shelston IP would like to highlight our outstanding female patent attorneys and patent engineers qualified in this field.

With 30 years of experience in the patent profession, Caroline Bommer is the female engineer that we aspire to be. She provides a wonderful example of the possibilities for our young female attorneys and is appreciated by all of her clients, particularly in her effective communication and her ability to understand their business strategies. Caroline’s mechanical engineering expertise is also extensive, including practical knowledge acquired prior to joining the patent profession in the industries of building, transport, aerospace, and defence. She has a keen interest in green technologies, with many years of personal involvement in solar car racing. Ask her to take you for a spin!

Tam Huynh works in the fields of electrical engineering and information technology patents. Growing up, Tam would find any excuse to integrate electronics into her arts and crafts projects. This included raiding her Dad’s electronics kit to make LED greeting cards for her family. She went on to study Computer Engineering at University and undertook a project exploring the use of solar power technologies and their application with mobile devices. Tam now assists with the ongoing management of patent portfolios in a range of fields, including electrical power systems, information and software systems, mining and automation, and medical devices. Tam also holds a Bachelor of Commerce degree and her accounting background adds additional depth to her handling of financial-system related inventions.

With childhood memories of jumping off a red billy cart and yelling “Newton’s third law”, Allira Hudson-Gofers brings her enjoyment of physics and engineering into her role as the head of Shelston IP’s Engineering and ICT Patents Group. Allira studied both mechatronics and biomedical engineering at University, going on to develop particular expertise in research, product development, regulatory affairs, and intellectual property in the medical technology space. She now applies this expertise, together with her recent MBA studies, to help her clients protect and commercialise their innovations.  

Connie Land had her interest in the human body and medical devices sparked in high school, which lead her to pursue a degree in Biomedical Engineering. Connie started her career with hands-on experience maintaining, repairing, and programming medical devices.  Last year, after discovering that the role of a patent attorney was a career option for engineering graduates, she hung up her tools and joined Shelston IP as a Patent Engineer. Connie now works with medical devices in a different capacity and uses her passion and knowledge of medical devices and technology to help her clients navigate the path to obtaining patent and design protection. She is currently studying a Masters in Intellectual Property and is looking forward to becoming a registered patent attorney in Australia and New Zealand. 

Authored by Allira Hudson-Gofers, Caroline Bommer, Tam Huynh and Connie Land

Welcome to Shelston’s wrap-up of the most notable patent decisions in Australia and New Zealand delivered during 2019. It was a busy year for patent jurisprudence with some interesting themes emerging – in particular, it has been a banner year for decisions on the “manner of manufacture” requirement for patentable subject matter.

Read our full report

  • An expanded Full Federal Court clarified the “manner of manufacture” test for computer-implemented methods to be patentable (Encompass), a topic that was also central to several other Federal Court (TettmanRepipeWatson) and Patent Office (Apple) decisions.
  • There were also important “manner of manufacture” decisions in the life sciences space, with single judges finding both a diagnostic method involving a process of detecting genetic material (Sequenom) and use of genetic information to infer traits (Meat & Livestock Australia) to be patentable subject matter.
  • The Full Court confirmed there is no doctrine of patent exhaustion in Australia, the critical distinction being between repairs permitted by implied or express licence terms brought home to the purchaser of a product, and the impermissible re-making of the product beyond the scope of any licence (Calidad (No. 1)).
  • The Full Court confirmed that a permanent injunction framed in general form by reference to the claims of an infringed patent is generally appropriate and may be ordered in addition to a specific injunction describing products or conduct found to infringe (Calidad No. 2).
  • The Full Court overturned an award of additional damages for flagrant patent infringement on the basis that the infringer had believed, on objectively reasonable grounds, that its conduct did not infringe the patent (Oxworks).
  • The tide continued to turn against pharmaceutical patentees being granted interlocutory injunctions (MylanSanofi-Aventis).
  • Patentees learned some harsh lessons as the Full Court dismissed infringement claims based on the construction of the terms “contains” (construed exhaustively in Nichia) and “recognise” (construed broadly in Davies).
  • There were several applications by patentees to amend patent claims and specifications after commencing infringement proceedings (Meat & Livestock AustraliaNeurimBlueScope), with mixed success.
  • Consideration was given in the Patent Office to Australia’s “raised bar” requirements for support and sufficiency (Gary CoxUniversal Polymers).
  • Both clinical trial patient consent forms (InterPharma) and academic conference posters (Regeneron) were considered prior art documents in life sciences cases.
  • There were further decisions regarding families of patents that have been litigated for a decade or more (GlobaltechSNF).
  • There were also decisions regarding the admissibility of “WayBackMachine” evidence (Dyno Nobel), summary dismissal of an infringement case (Pilkin), a successful application for preliminary discovery (MMD), a failed cross-claim for unjustified threats (Liberation), a failed attempt to withdraw admissions relating to infringement (Juno), a “strawman” opponent to a patent application having to pay security for costs in an appeal despite winning the opposition (Toolgen) and a party commencing infringement proceedings despite not being a proper exclusive licensee having to pay indemnity costs (Vald).
  • Two recent decisions issued by the Intellectual Property Office of New Zealand provide new hope that, in certain circumstances, it may be possible to obtain an extension of time to file a divisional patent application (PrimapakMagic Leap).

As 2020 gets underway, we hope this provides a useful and practical resource and, of course, please do not hesitate to take the opportunity to contact our authors, all subject-matter experts in their respective fields, for advice on the issues raised by these important decisions.

Authored by Dr Roshan Evans, Duncan Longstaff and Onur Saygin

A strong IP strategy is a vital part of any business, especially in the resources sector where innovation has historically provided key competitive advantages.

Shelston IP provide insights into the strategic role of IP for entities operating in the resources sector.

To read the full article, which appeared in the June 2018 edition of ‘AusImm’ please click here.

Authored by Allira Hudson-Gofers

ESCO Corporation v Ronneby Road Pty Ltd [2018] FCAFC 46

We previously reported the Federal Court decision in Ronneby Road Pty Ltd v ESCO Corporation [2016] FCA 588  in which all claims of ESCO Corporation’s (“ESCO”) patent application AU 2011201135 for a Wear Assembly were found to lack utility on the basis that none of the claims were for an invention which achieved each and every one of six promised benefits listed in the specification.

By way of background, the claims of the patent application at issue relate to wear members having a certain lock mechanism for attaching to excavating equipment.  The specification includes the following paragraph (“paragraph 6”):

The present invention pertains to an improved wear assembly for securing wear members to excavating equipment for enhanced stability, strength, durability, penetration, safety and ease of replacement.

The specification then proceeds to describe several different aspects of the invention, some directed to the wear assembly and some to components thereof (such as wear members), where each different aspect is described as providing certain benefits – some of which are listed in paragraph 6 and some of which are not.

Ronneby Road Pty Ltd asserted (and it was accepted by the primary Judge) that the list of advantages in paragraph 6 constituted a “composite” promise, and that accordingly, each of the six promises must be achieved by the invention in every claim in order for the invention to be useful.  ESCO’s position was that the list of advantages in paragraph 6 was a statement of purpose and did not constitute a promise at all.  Instead, ESCO submitted that the advantages described specifically in relation to the lock mechanism elsewhere in the specification constituted the true “promises” of the invention.

The Court’s job was thus to find the correct “promise” of the specification and then to ask whether the invention as claimed did what was promised by the patentee.  In the end, their Honours agreed with ESCO and found that the true promises were to be found by looking at the body of the specification and the claims to find what the Court termed “degree[s] of symmetry” between the two. In this case, significance was placed upon the fact that there were two ‘clusters’ of claims, relating to the wear assembly and the wear member respectively, so that the relevant promise for each ‘cluster’ needed to be identified. The specific promise for claim 1 and its dependent claims was identified in other paragraphs of the specification, and that promise was achieved by the invention of the relevant claims.

Interestingly, as part of this decision, the Court reviewed Australian case law on utility and noted that if a specification, when properly construed, contains a composite promise, each and every advantage in that composite promise must be attained by the claims to meet the utility requirement.  That is, under Australian law, a claim will lack utility if the invention fails to attain any one of the elements of a relevant composite promise.

This finding did not substantially influence the outcome of the present case since the composite promises, once correctly identified, were all satisfied by the claimed invention. It is, however, a reminder of the importance of carefully drafting patent specifications (or reviewing and amending during prosecution) to avoid composite promises, and where possible, exercising restraint when promising advantages in a patent specification, as any variation between what is promised and what is achieved could lead to a finding of inutility.

Authored by Katrina Crooks

The Australian Government has announced an independent review of the Defence Trade Controls Act 2012. Local inventors (and indeed, patent attorneys) may think “so what? Unless I’m looking to patent a weapon, how is this remotely relevant to me?” Well, if your invention falls into what’s termed the “dual use” category – inventions having potential downstream military application (remembering it is the Government that decides this – not you, and not us), then please read on…

Review of the Defence Trade Controls Act 2012

The Government has announced the appointment of Dr Vivienne Thom AM to conduct an independent review of the Defence Trade Controls Act 2012 (“the DTC Act”), which will be guided by the Terms of Reference.  The review is largely to determine if the DTC Act is meeting its purpose.  Submissions are due by 31 May 2018.

Insofar as the DTC Act relates to locally-originating patent applications, Shelston IP has been fully compliant since the 2015 amendments (prescribing criminal sanctions for breaches) took effect.  Our local clients have benefitted from such compliance on our part.  On this basis, there’s possibly not a great deal that our clients may wish to feed back to the Government by way of submission.  However, the review does place this little-known piece of legislation squarely in the public eye and provides an opportunity to issue a reminder as to the scope and significance of the DTC Act.

The 2015 amendments – criminal sanctions for non-compliance

The Defence Trade Controls Amendment Act 2015 entered into Australian federal law on 16 May 2015.  The (criminal) sanctions for non-compliance took effect from 2 April 2016.  In regulating the extent to which one can communicate new technologies overseas – and in providing criminal sanctions for non-compliance, the legislation stands to impact significantly upon the day-to-day activities of Australian patent attorneys – and their clients.

The DTC Act regulates the overseas supply and publication of Defence and Strategic Goods List (DSGL) technologies and the brokering of DSGL goods and technology.

Shelston IP actually worked closely with the Defence Export Controls Office (DECO) throughout the 2015 public consultation process, and as a consequence, our internal systems are fully compliant with the restrictions imposed.  In short, when dealing with Shelston IP, local clients can rest assured that we fully understand the situation and will have taken the necessary steps to minimise any risks to the parties involved.

Criminalising non-compliance

As patent attorneys, the communication and publication of “technology” is a staple of our everyday work.  Often, such communications are sent offshore.  Other times, we communicate new technology in the form of patent specifications to our local clients, who in turn, send these documents overseas.  Depending on the nature of the “technology”, the DTC Act stands to criminalise such activities.

Because the offence provisions for supplying and publishing DSGL technology and for brokering DSGL goods and technology took effect from 2 April 2016, individuals and organisations are required to seek permits for any otherwise-offending activities.

Why have export controls in the first place?

The DTC Act is a little-known document having significant, wide-reaching consequences.  Australia’s export control system aims to stop goods and technology that can be used in military applications from being transferred to individuals, states or groups of proliferation concern.  As a member of various international export control regimes, Australia is part of a global effort to regulate the export of items of concern, many of which have potential terrorism or weapons of mass destruction applications.

Australia already regulates the physical export of certain military and dual‐use items under Regulation 13E of the Customs (Prohibited Exports) Regulations 1958.  However, the DTC Act is Australia’s means of closing any gaps that have appeared in the interim (as required by the Wassenaar Arrangement, to which Australia is a signatory).

Accordingly, the DTC Act regulates three main activities:

  • The intangible supply (transmission by non‐physical means, such as e-mail) of controlled technology from a person in Australia to a person outside of Australia;
  • Publishing controlled military technology; and
  • Brokering (akin to enabling another to communicate overseas) controlled military goods or technology.

How do I know if my technology is covered under the DTC Act?

The DTC Act applies to different stakeholders, depending on whether their activities involve military or “dual‐use” items listed in the DSGL.  The DSGL, accessible here, is a 350-page legislative instrument defining as “dual use” a broad range of otherwise fairly benign-sounding technologies.  As such, potentially one could assume a technology was exempt on the basis that it had no immediately or apparent primary military end use.  It is important to note that secondary or incidental military applications may suffice, hence the term “dual use” technologies.

International export control regimes are generally conscious of their impact upon people’s day-to-day activities, and so the controls are designed to only capture what is considered necessary.  For example, the DSGL lists computers that are specifically designed to operate below ‐45 °C or above 85 °C.  The DTC Act controls only apply to the technology which is necessary for the computer to operate at these extreme temperatures.  Technology that does not influence the computer’s ability to function at these temperatures is not controlled.  Using the above example, an Australian inventor who has created such technology for the primary purpose of, say, exploring the surface of Mars, would need to be acutely aware of the restrictions imposed by the DTC Act – as would his/her patent attorneys.

Non-compliance is a criminal offence

As mentioned, the offence provisions specified in the DTC Act came into force from 2 April 2016.  Although the sanctions for non-compliance are criminal in nature, this should be tempered with the knowledge that being hit with the full extent of the sanctions (10 years’ imprisonment) would require prosecutors to prove the requisite levels of intent, knowledge, recklessness and negligence.  The operation of the Criminal Code Act 1995 means that a person who mistakenly supplies, publishes or brokers controlled technology contrary to the DTC Act after diligently following institutional compliance processes would be unlikely to be prosecuted, much less to the full extent of the law.  The Code applies general principles of criminal responsibility to Commonwealth offences; in particular, the knowledge requirement is akin to having received fair warning.

If the goods or technology at issue are listed in the DSGL, a permit or approval may be required from DECO.  The qualifier “may” is dependent upon:

  • The activity being undertaken (“supply”, “brokering”, or “publication”); and
  • Whether it is a military or a “dual‐use” DSGL technology; and
  • Whether an exemption applies (such as “basic scientific research” or material that has been lawfully placed into the public domain).

As readers will appreciate, a simple “yes/no” answer as to whether a permit is likely to be required is necessarily dependent upon the unique circumstances that each scenario presents.

Patent-specific exemptions

As mentioned, a staple of our day-to-day activities as patent attorneys is the exchange of information relating to “technology”.  We communicate technology internally, domestically and internationally on a daily basis – and our clients do the same.  It is useful, therefore, to understand the activities that will be exempted under the DSGL regulations.

Firstly, the “pre-publication” exemption amounts to recognition, on DECO’s part, that they cannot regulate the publication of information.  As such, the communication of information contained in a patent document that will later be published (e.g., a draft convention application or a draft PCT application) appears to fit comfortably within the definition of “pre-publication”.  On the other hand, provisional patent applications do not appear to fit within this category – and as such, another exemption must be invoked.

To this end, the “patent application exemption” covers activities “directly related to seeking a patent”:

This exemption applies to the supply of DSGL technology where it is done for the purpose of “seeking a patent” in Australia or overseas. “Seeking a patent” includes lodging a patent application and the supply of DSGL technology to a person or organisation (e.g., a Patent Office, patent attorney, research collaborator or a patent review panel) that is directly associated with the lodging (or potential lodging) of a patent application, or as a result of the patent examination process.

Supply for a purpose that is not directly related to seeking a patent will require a permit (unless other exemptions apply). This includes supply of DSGL technology to a research collaborator located overseas before a decision is made to seek a patent. Once a provisional patent application is filed, any supplies of DSGL technology to further develop an invention prior to preparing/submitting a complete patent application will require a permit. Supplies of DSGL technology to locate investors and determine overseas markets (including forwarding a recently-filed provisional application) will require a permit.

The process of publishing a patent (or an unsuccessful application) into the public domain is covered by this exemption. Until such time as that information exists in the public domain, it is still controlled and would require a permit to be supplied if it is not for the purpose of “seeking a patent” and no other exemptions applied.

As such, DECO would appear to have intentionally extricated the acts of overseas communication for the purposes of preparing a patent application (exempt) and communication with a view to ancillary business activities such as seeking investor funding (not exempt).

We will keep abreast of any changes to, or unusual interpretations of this new exemption.  As it is, it is clearly important to the manner in which we – and our clients go about our everyday professional activities.

Shelston IP’s proactive approach to the DTC Act restrictions

At Shelston IP, being aware of the potential impact of the DTC Act, we closely monitored progress throughout the public consultation process (dating back to 2014).  We have liaised with DECO on a regular basis and have developed an internal best practice guide.  Adherence to such best practice will protect not only our interests, but also those of our clients.  This, in turn, means that clients dealing in controlled or dual-use technologies can be assured that their interests are in safe hands.

Based on our experience and understanding, compliance with the DTC Act can be as easy as following a few simple rules.  In some instances, a deeper consideration of the specific circumstances and legislative requirements will be necessary.  Those concerned about their own internal procedures under the DTC Act are invited to make contact with their Shelston IP patent attorney.

Authored by Gareth Dixon, PhD

It’s World Intellectual Property Day on April 26 and this year celebrates the brilliance, ingenuity, curiosity and courage of the women who are driving change around the world and shaping our common future.

In that spirit, an invention by three Melbourne schoolgirls has the potential to solve a global problem on the world’s tennis courts: keeping track of the score in social games.

Thirteen year-olds Alice Wilson, Susannah Lutze and Mikayla Lee, who are all in year 8 at Camberwell Girls Grammar School, have developed a simple device that straps to the throat of a tennis racquet that could resolve the constant question that bedevils amateur players everywhere: ‘What’s the score?’

The students, with the guidance of the Girls Invent program and pro bono work from intellectual property specialists at Shelston IP, are well advanced in securing IP protection over their invention, the Score Buddy, which has a potential global market.

Girls Invent runs specifically designed workshops to help guide girls to develop new products, from idea generation through to commercialisation and market entry. They currently operate programs in 150 Australian schools. CEO Mark Glazebrook said, “The Score Buddy team are a great example of the core ingredients for success: passion, determination, smarts and magnetism to bring people along with them. The Girls Invent program in partnership with the school creates the creative space for every girl to thrive and not just accept what others think they can do.”

Shelston IP has supported Girls Invent through its pro bono program since 2016. Senior Associate Allira Hudson-Gofers (herself a mechatronics and biomedical engineer and an Australian representative player in handball and beach handball) said the girls’ development work on Score Buddy was extremely impressive. A provisional patent application has been filed and discussions are underway about which other territories to file for IP protection. “All of the girls I’ve spoken with through the Girls Invent program are incredibly enthusiastic and have some great ideas. They’ve put together prototypes and thought ahead about the next steps in developing their inventions. It’s really encouraging for these girls to be innovating and seeing the potential for STEAM subjects to lead to practical results and opportunities.”

One of the Score Buddy inventors, Susannah Lutze, said, “We are really excited because we recently visited Tennis Australia’s innovation centre and in a few weeks we are visiting an engineering company to possibly help us with the next stage.”

The young inventors are seeking financial backers and, with help from a Dutch industrial design company, hope to have a working prototype completed by the end of the year.

Principal of Camberwell Girls Grammar School, Debbie Dunwoody, believes that an education focused firmly on the future is vital. “We want our students to develop entrepreneurial skills and we know that they will need to create their own opportunities in the future. Girls Invent is a really inspiring and accessible program for our girls to learn about and understand their capacity to be creative innovators. The program really connects them to all elements of STEAM (Science, Technology, Engineering, Arts, Mathematics) and focusses them on ‘design thinking’.

Authored by Katrina Crooks

Seiko Epson Corporation v Calidad Pty Ltd [2017] FCA 1403
Infringement Repair v rebuild Implied licence Mechanical Electrical

Burley J

In this first instance Federal Court of Australia proceeding, Burley J considered the tension between the rights of the purchaser of a patented product, and the rights of the patentee to maintain control of the product in order to determine under what circumstances the importation and sale of refilled printer cartridge will infringe patent rights applicable to the original cartridge. Ultimately his Honour confirmed the “implied licence” approach applied in National Phonograph Co of Australia Ltd v Menck (1911) 12 CLR 15 and cast a new test to determine whether the repair or refurbishment of a patent product will extinguish the implied licence.

The proceeding also covered issues of trademark infringement, misleading and deceptive conduct and breach of contract.

Background

Seiko Epson Corporation (Seiko) is a global manufacturing company which manufactures and sells printer products, including printer cartridges under the trademark Epson. Epson products are sold within Australia via its exclusive distributor, Epson Australia Pty Ltd. (EAP).

The respondents, comprising the Calidad group of companies (Calidad), purchased “refilled” Epson cartridges from Ninestar Image (Malaysia) SDN. BHD (Ninestar) and imported the refilled cartridges into Australia for resale as Calidad branded cartridges fully compatible with Epson printers (Calidad cartridges).

The process used by Ninestar to refill the cartridges is relatively complex requiring more than simply replenishing the ink reservoir with ink. Each cartridge includes a memory chip which records and stores data indicative of the amount of ink in the cartridge. This ink data is used to prevent printing if the amount of ink remaining in the cartridge falls below a threshold level. The chip also acts as an inbuilt restriction since simply refilling a depleted cartridge will not restore it to a functional state. Accordingly, Ninestar’s process necessarily made an un-trivial modification to the cartridge to either “reset, reprogram or replace” the memory chip.

Issues and decision

The proceedings brought by Seiko and EAP against Calidad contended that the importation and sale of the Calidad cartridges infringed the claims of its Australian patents (Australian Patents Nos. 2009233643 and 2013219239).

Both patents relate to a printing ink cartridge adapted to be attached to an inkjet printer by means of a plurality of electrical terminals. The patents propose “a structure for preventing the information storage medium [or memory] from shorting and becoming damaged due to a drop of liquid being deposited on the terminals connecting the printing apparatus with the storage medium”.

Calidad did not dispute that the refilled cartridges fall within the relevant claims of the patents. Rather, Calidad submitted that under principles established in National Phonograph it is the beneficiary of an implied licence to use the cartridges including the right to resale.

The central dispute in these proceedings concerns the intersection of a patentee’s rights to control the use of patented goods after sale with the rights of the purchaser as the owner of those goods to deal with them.

Implied Licence

In some jurisdictions, this tension is dealt with by a “doctrine of exhaustion” under which the patent right is said to be exhausted following the first sale (eg, the recent landmark United States Supreme Court decision in Impression Products, Inc. v Lexmark Intern., Inc.137 SCt 1523 (2017)). However, under Australian law, the most relevant authority is National Phonograph, in which the Privy Council adopted the implied licence approach.

Under this approach, where the sale of goods is made without any restriction by the patentee, (sale sub modo) the purchaser or subsequent owner of a patented product is conferred an unrestricted right of use or an implied licence, which covers at least the rights to import, use and dispose of the product. In his Honour’s view, as supported by more recent Australian judgments (Austshade Pty Ltd v Boss Shade Pty Ltd[2016] FCA 287; (2016) 118 IPR 93), this remains the correct approach under Australian law.

Burley J noted that while the implied licence approach allows the patentee to impose limitations on the implied licence, the onus lies upon the patentee to notify the purchaser of those restrictions at the time of sale otherwise they may not hold. Furthermore, any restriction or limitation notified by the patentee does not reside or run with the goods so that any restriction will not be encumbered on subsequent owners unless they are made aware of the restrictive conditions upon taking title.

Significantly his Honour saw no difficulty, with reference to the authorities, of implying the licence where the patented goods are first sold outside of the patent area (that is, broadly, outside Australia). Having examined and established the above law and principles, his Honour found that the initial sale of the Epson Cartridges to purchasers overseas granted an implied licence to those purchasers to dispose of the cartridges as they wished, including giving or selling them to another party. Furthermore, his Honour was not satisfied by Seiko’s submission that the cartridges included an “inbuilt restriction” by virtue of the technical limitations imposed by the memory chip. Therefore, the implied licence was without restriction and could be attached to cartridges imported and sold in Australia irrespective of the original sale being made elsewhere or that the cartridges may have been discarded by the original purchaser and collected by Ninestar.

When do modifications extinguish an implied licence?

In the present case however, the Epson cartridges had been refilled and the memory reset, reprogrammed or replaced by Ninestar to restore the original function. Ordinarily, such a modification might be regarded as a question of either repair to, or the “making” of, a patented product – whereby the former is permissible and the latter an infringement. However, since the modification to the cartridges had been made outside the Australian jurisdiction, the modification could in no way amount to a “making” infringement of the Australian claims, irrespective of degree.

Thus, the critical question was not based on a repair / making analysis, but rather whether Calidad could rely on the umbrella of the original implied licence attached to the cartridges at sale, or whether the modifications were such that the implied licence could be considered as extinguished.

Having not found any authority directly addressing the issue, Burley J was of the view that the threshold question to be considered is “whether or not the modified product is materially the same embodiment of the invention as claimed as the product that the patentee sold without restriction.”

His Honour further explained that in order “to assess whether or not the implied licence continues after modifications are made one must consider the significance of modification work done on a product and how the modifications in question relate to the features of the patented product that are defined by the claim. Where that work done, or alteration made, does not concern a claimed feature, then the work is irrelevant to the analysis. That is because the patentee’s rights to limit the use of the patented product arise because the product represents an embodiment of the claimed features” [178]

Furthermore, Burley J applied a three stage test as follows:

  1. What is the scope of the invention as claimed?
  2. What is the manner in which the patentee’s product is an embodiment of the invention as claimed?
  3. To what extent do the modifications made affect the patented product insofar as it represents an embodiment of the claims?

The Calidad Cartridges

His Honour applied the three step test to the Calidad cartridges. In respect of the claimed invention, the parties had agreed that the trial should be focused entirely upon claim 1 of Australian Patent No. 2009233643. That claim and its relevant features, is broadly summarised by Burley J at [201]:

“It may be seen that the features of the product claimed, broadly, are that it is an ink cartridge that can be attached to a printer by inserting it, with both the ink cartridge and printer having a plurality of terminals. The ink cartridge must have a memory driven by a memory driving voltage (integer [2]), an electronic device driven by a higher voltage (integer [3]), terminals electrically connected to the memory and terminals electrically connected to the electronic device (integer [4]), and contact portions for the terminals which are arranged in a particular way (integers [5]-[11]).”

His Honour interpreted the “memory” feature as being a hardware component rather than information or data.

The modifications made by Ninestar involved eleven different types of Epson cartridges and nine different refilling processes. As previously noted, a key step to refilling the cartridges and restoring them to a functional state was to “reset, reprogram or replace” the memory so that it would not indicate the cartridge as being depleted. Ninestar accomplished this by either:

  • Re-writing the memory without physical replacement of the unit; or
  • Replacing the memory chips entirely – a process which involved cutting out the printed circuit board (including the memory chip) from the cartridge; replacing the memory chip on the board with a generic chip; and refitting the board to a cartridge (which in all likelihood was a different cartridge).

In the former case his Honour found that re-writing the memory did not materially alter the product as it represented an embodiment of the claims of the Seiko Patent. However, where the chips had been replaced with a generic chip, his Honour found that the modifications materially affected, and changed, the embodiment, and thereby represented a material change to the embodiment that Seiko sold. In such cases the implied licence was extinguished by the modification.

Burley J found another modification in Ninestars refilling process which extinguished the implied licence from the original sale. This was where Ninestar’s refilling process included a step of cutting off a physical interface pattern used to “key” the cartridges to a particular model of printer. His Honour noted that the modification to the interface pattern was borderline in the context of the present analysis. He concluded that since the claim recited “A printing material container adapted to be attached to a printing apparatus by being inserted in an insertion direction” the modification fell on the wrong side of the line and would serve to terminate the implied licence.

Implications

The decision provides a contemporary review of the correct legal approach for determining the purchaser’s rights to use a patent good under Australian law.  In particular:

  • The presumption that the sale of a patented good provides the purchaser (and any subsequent owner) with an unrestricted right of use – even across jurisdictional boundaries.
  • Patentees wishing to maintain control of patented goods after sale must clearly and expressly communicate limitations at the time of acquisition. Any limitations do not automatically pass from the initial purchaser to a subsequent owner.

Furthermore, the case breaks new ground by establishing a test for determining the scope of modification which would extinguish an implied licence by linking the modification made to the embodiment of the invention as claimed.

Appeal

Calidad have recently appealed the decision on grounds of non-infringement and that the implied licence of Seiko’s patent rights was not extinguished by the modifications they made in refilling the cartridges.

Authored by Duncan Longstaff

Sandvik Intellectual Property AB v Quarry Mining & Construction Equipment Pty Ltd [2017] FCAFC 138

Summary

  • Applicants should include the best method(s) of performing the invention known at the time of filing a patent application, withholding better or superior embodiments or features can result in invalidity of the granted patent.
  • Novelty destroying prior use does not always need to be corroborated by contemporaneous documentary evidence.
  • Experts need to be carefully selected as an unsuitable expert will be less persuasive on inventive step issues.
  • Claims are invalid for inutility where they include embodiments that are not useful.

Background

This is a decision of the Full Federal Court of Australia (FFC) on an appeal from a judgement at first instance on the validity of Australian Patent Number 744870 (the Patent) in the name of Sandvik Intellectual Property AB (Sandvik) and its alleged infringement by Quarry Mining & Construction Equipment Pty Ltd (Quarry).  The Patent and claims were directed to an extension drilling system for drilling holes to insert cable bolts in underground mines.

At first instance, it was held that claims 1 to 4, 6 and 7 of the Patent were not infringed and were invalid on the grounds of failing to describe a best method of performing the invention, lack of novelty, lack of inventive step and inutility.  Sandvik appealed on all grounds.

The appeal decision

In respect of best method, the claims of the Patent did not define a water seal.  However, evidence indicated that a water seal was a “real issue that needed to be overcome” for the invention to work.  The Patent had only described a horizontal type seal member, whereas at the time of filing of the Patent, Sandvik had developed a superior seal member having upper and lower sections.

Sandvik submitted that the best method requirement should be assessed against the claimed invention or having regard to the “promise” of the invention relative to the problem to be solved.  The FFC disagreed with both submissions, holding that the best method relates to the invention as described in the Patent.  On this basis, the embodiments of the invention as described (not as claimed) omitted the superior seal member.  Thus, the Patent was invalid for not meeting the best method requirement.

On novelty, three witnesses for Quarry provided evidence of invalidating prior use based on their personal recollection of a system 25 years before the priority date.  No supporting evidence was provided, such as drawings, photographs, samples or documents.  The FFC held that the absence of supporting evidence did not render the prior use evidence unreliable and referred to the trial judge’s opinion that the witnesses were credible under examination and cross-examination.  Thus, the claims of the Patent in suit were also invalid for lack of novelty.

Sandvik was successful on the inventive step ground.  The FFC held that the trial judge gave too much weight to one of Quarry’s experts, where that expert was shown not to be aware of information the parties had agreed was common general knowledge in the art and had mischaracterised other information as being common general knowledge when it in fact was not.

Dependent claim 4 recited that an extension rod could have a hexagonal or round cross-section that is driven by a chuck or an adaptor.  However, evidence showed that if the extension rod had a round cross-section, it could not be driven either way to make the invention work.  Accordingly, the trial judge held it lacked utility.  On appeal, Sandvik sought to rely on a person skilled in the art would construe the claim using the principle of purposive construction in order to exclude this non-working embodiment.  The FFC held that the proposed purposive construction could not overcome the plain and unambiguous meaning of the words in the claim.  Thus, claim 4 was invalid for inutility.

Conclusion

This case provides a warning to applicants to ensure that the description of embodiments in a patent specification is updated prior to filing, especially when the application is claiming priority to an earlier patent application.  Sandvik’s failure to include the superior sealing member rendered the Patent invalid even the sealing member was not claimed.

The case also demonstrates the importance of witnesses and experts.  A credible witness can enable prior use evidence to invalidate a patent even where it is not corroborated by other contemporaneous documentary evidence. Similarly, an expert shown not to be a suitable person skilled in the art will undermine any inventive step arguments relying on that expert’s evidence.

The finding of inutility of claim 4 demonstrates that Applicants should be careful in drafting claims that include within their scope embodiments that do not work; otherwise the entire claim will be rendered invalid.

Authored by Andrew Lowe