23 November 2007

An Excellent Article on Software Patents

Thanks to Peter Zura's 271 Patent Blog, I came across an excellent article published in the US by Business Week.

Those of you who read my posts will know how I feel. What I like about this article is that it quite rightly points out that continued prejudice by the US Patent Office and pressure groups to de-value software patents only makes them more expensive to obtain. As a result, the benefits of such Intellectual Property will become limited to corporations able to afford the excessive legal costs associated with obtaining registration.

As the author points out, there is fundamentally no difference between software and hardware, as they are often expressed in terms of each other. It's time for the detractors to understand that there is no reason for an inventor of a software product to be treated any differently to an inventor of a product in any other field of engineering.

21 November 2007

Article on Early Patent Enforcement

IPFrontline have kindly published an article I wrote entitled "Early Patent Enforcement Down Under". It describes how a Divisional Application for an Innovation Patent can be used to achieve early enforcement of patent rights.

20 November 2007

Lockwood Recovers Costs

Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (No.2) [2007] FCAFC 172 (16 November 2007)

Those of you who have been following the Lockwood v Doric saga may be interested to learn that the Full Federal Court has awarded Lockwood costs on a party and party basis, subject to a discount of 15 per cent on the costs of the trial and 20 per cent on the costs of the second Full Court appeal.

Doric was successful in the second Full Court case in establishing that it did not infringe certain claims. That finding was not challenged by Lockwood in the second High Court appeal. Their honours held that Doric should have the benefit of its success on those issues, hence the discount.

See my posts of 14 July 2007 and 30 January 2006 related to this matter.

15 November 2007

Delegate Covers Some Key Patent Principles

On 8 November 2007, the Delegate of the Commissioner of Patents handed down Go 4 Mining Pty Ltd v CMTE Development Limited [2007] APO 37.

This case is useful because the Commissioner refers to a number of principles that have shaped Australian patent practice.

Clarity of Claims

The opponent, CMTE, said that the words "said outer boom sheave being supported by a boom sheave support arm to one side of a longitudinal axis of said excavator boom..." rendered claim 1 unclear. The Delegate called that feature "X".

The Delegate disagreed and said that it simply means that the axis does not pass through the sheave. The Delegate considered the other known constraints and decided that one of the possible interpretations would lead to an unlikely construction.

The lesson is that the claims are to be interpreted in the shoes of a person skilled in the art and applying common sense.

Fair Basis

CMTE said that there was no real and reasonably clear disclosure of X, which appears only in the claims and consistory clauses (i.e. paragraphs in a summarizing portion of the specification).

The High Court considered Fair Basis in Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [2004] HCA 69. The test is:

(a) whether the claim travels beyond or is inconsistent with the disclosure of the specification as a whole; and

(b) whether there is a real and reasonably clear disclosure of the claimed invention in the specification.

The Delegate was unable to "detect anything in the specification that is inconsistent with respect to this feature". He also said that the drawings provided the necessary "real and reasonably clear disclosure".


The Delegate referred to some old classic cases when setting out the basic rules for novelty testing as follows:

To deprive a claim of novelty, the prior art document must:

(a) clearly teach all the essential features of the claim; and

(b) provide "clear and unmistakable directions" to do what is claimed.

It became necessary for the Examiner to assess which features of the claim were essential. He cited the well-worn British case of Catnic Components v Hill & Smith [1982] RPC 183. The judges in that case concluded that a feature is essential to a claim if:

(a) it was essential to the working of the invention or if it materially affected the way in which the invention worked; or

(b) the applicant or patentee regarded the feature as essential.


This matter is worth reading if only as a reminder of some of our basic principles.

09 November 2007

Is the USPTO being tougher on software?

Peter Zura's 271 Patent Blog has an interesting report. This appears to be in line with what we have recently been experiencing when dealing with the USPTO. Dennis Crouch's Patenly-O blog also comments here on the USPTO's hardline on business method/software inventions.

This is not surprising given the large number of software patent applications being filed at the USPTO. However, being busy is no excuse for prejudice against software inventions.

07 November 2007

Divisional Avoids Issue Estoppel

The Full Federal Court in E I Du Pont de Nemours & Co v Imperial Chemical Industries PLC [2007] FCAFC 163 has ruled that just because a Parent Patent was found invalid due to lack of novelty, it did not follow that a Divisional Patent based on the Parent was also invalid.

For those of you who might not be familiar with Divisional Patents, here's a quick lesson. Often, while a patent application is still pending, IP Australia may reject the application because it attempts to cover or define two inventions in the claims. The applicant will then have the option to delete the offending claims and to file a Divisional Patent Application with the deleted claims. In effect, the patent application is divided into a Parent and a Divisional. There are a number of other situations that can give rise to Divisionals, but I won't discuss them here.

In this case, Du Pont had been successful in opposing ICI's Parent Application which had been found to lack novelty. However, Du Pont had previously filed a Divisional Patent Application based on the opposed Parent. Du Pont argued that because the Parent Application had been successfully opposed, issue estoppel should apply effectively finding that the Commissioner of Patent should not have accepted the Divisional for grant.

In DSV Silo-und Verwaltungsgesellschaft mbH v Owners of The Sennar [1985] 2 All ER 104 Lord Brandon formulated the doctrine of issue estoppel as follows:

"...in order to create an estoppel of that kind... three requirements have to be satisfied. The first requirement is that the judgment in the earlier action relied on as creating an estoppel must be (a) of a court of competent jurisdiction, (b) final and conclusive and (c) on the merits. The second requirement is that the parties... in the earlier action relied on as creating an estoppel and those in the later action in which that estoppel is raised as a bar must be the same. The third requirement is that the issue in the later action in which the estoppel is raised as a bar must be the same issue as that decided by the judgment in the earlier action."

In this particular case, the Full Court found that the third requirement was not met.

02 November 2007

Limitation on U.S. Continuation Patent Applications on Hold

I am pleased to report that GlaxoSmithKline and an individual named
Triantafyllos Tafas have succeeded in persuading a court in Virginia
to stop the U.S. Patent and Trade Mark Office (USPTO) from
implementing its new rules concerning continuation applications

A continuation application is effectively a further application based
on an initial or parent application. The continuation application is
used to cover an invention that is described in the parent, but has
not been claimed in the parent. The Australian equivalent is called a
divisional application.

The USPTO rules would have limited the number of continuations that
could be filed from one parent application. However, many patent
specifications contain descriptions of multiple inventions. It is not
possible to cover more than one invention in a patent application. It
follows that a continuation application is a useful tool for
rightfully extending an inventor's rights.

I and many of my colleagues have maintained that the proposed rules
are arbitrary and capricious. Indeed, the USPTO is battling to cope
with its workload. But that is hardly a reason to limit fundamental
rights of inventors.

It will be fun to see the drama unfold...

26 October 2007

Early Patent Enforcement and Ex Parte Invalidation in Australia

IPtoday has kindly published an article I wrote on how the Australian patent system can be
worked to bypass the interminable prosecution delays. The article also
explains how you can at least narrow down the scope of a published
Australian patent application.

Read it here: http://www.iptoday.com/articles/2007-10-eagar.asp

19 October 2007

Australia Removes Disclosure Requirements for Patent Applications

I am pleased to report that we have seen the light...

On 17 October 2007, the Governor General made Regulations commencing on 22
October 2007, terminating the disclosure requirements in Australia.

The relevant Regulation will read as follows:

(a) under subsection 45 (3) of the Act, an applicant was required
to inform the Commissioner of the result of a documentary search by or
on behalf of a foreign patent office in relation to a patent request;

(b) the applicant did not inform the Commissioner of the result
before 22 October 2007; and

(c) the latest of the following dates had not occurred before 22
October 2007:

(i) the day 6 months after the documentary search is completed
within the meaning of regulation 1.3A;

(ii) the day 6 months after the applicant asked for the examination
in accordance with section 44 of the Act;

(iii) if the patent request and complete specification relating to
the application were accepted (whether before or after 22 October
2007) ― the day 3 months after the notice of acceptance was published
in the Official Journal under paragraph 49 (5) (b) of the Act;

the documentary search is prescribed (so that information need not be
given to the Commissioner).

(3) If:

(a) an applicant asked, in accordance with section 44 of the Act,
for an examination of the patent request and complete specification
relating to the application for a standard patent; and

(b) the applicant asked for the examination on or after 22 October 2007;

all documentary searches by, or on behalf of, a foreign patent office
are prescribed (so that information need not be given to the


My take of this is that if you have not yet filed search results and
are under an obligation to do so, ie, they have become available to
you, you just need to go through (c) (i) to (iii) to see if the
latest date is not after October 22.

So, if you have search results that you received more than six months
before October 22, but have filed an RFE less than six months before
October 22, those don't have to be submitted ((ii) is later than (i)
and (iii) doesn't apply).

It would appear that if an RFE has not been filed, then information
need not be supplied ((ii) is later than (i)). I think you have to
consider that (ii) would be later than (i) even though (ii) does not
have a starting point. Otherwise, the drafters would have used "if" as
they did in (iii).

Where (i) would kick in is where an RFE had been filed more than 6
months ago and then search results were made available to you. If it
then looks like 6 months from the day on which those search results
were made available will pass before October 22, then it will be
compulsory to submit the search results.

I hope that helps. If I receive any interpretative snippets, I will be
sure to let you know.

14 July 2007

Lockwood Finally Stops Doric


On 23 May 2007, the High Court finally found for Lockwood in Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (No 2) [2007] HCA 21. It restrained Doric from infringing certain claims of Lockwood's Australian patent no. 702534.

The patent is also the subject of an important decision handed down by the High Court in connection with the requirement of fair basis (Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [2004] HCA 58).

In that case, the High Court remitted matters concerning inventive step back to the Full Federal Court to decide infringement, insufficiency and obviousness.

This case relates to the appeal to the High Court by Lockwood. The Full Court found that independent claim 1 and a further important claim, claim 13, both lacked inventive step.

The Patent

It's useful to recite claim 1 here, broken up into integers:

A latch assembly including,

(i) a casing,

(ii) a latch bolt mounted on the casing so as to be movable relative thereto between an extended latching position and a retracted release position,

(iii) a first actuator operable from an inner side of the assembly to cause movement of the latch bolt to said release position,

(iv) locking means operable from said inner side of the assembly to adopt an active condition and thereby render said first actuator inoperable,

(v) a second actuator operable from an outer side of the assembly to cause movement of the latch bolt to the release position, and

(vi) lock release means which is responsive to said operation of the second actuator so as to thereby render said locking means inactive.

Integers (i) to (v) were the integers of a patent, also owned by Lockwood and the closest prior art presented.

It was Doric's contention always that the invention defined by the above claim was obvious in the light of the previous Lockwood patent. Doric held that integer (vi) did not result in an invention that involved an inventive step.

Some background will help. The previous Lockwood patent covered an improvement to a latch assembly that could easily be unlocked from the inside. It was the type that locks automatically when the door closes.

The problem that led to the previous Lockwood patent was that criminals could get out through the door with large, expensive items. Thus, with the previous patent, once the door locked, it required a key to get out from the inside. That can be seen in integers (i) to (v).

But if the door was locked and there was an emergency, you would need to find the key to get out in a hurry.

So Lockwood came up with integer (vi). The latch bolt was released if the door had been opened with the key from the outside. You could then open the door from the inside without the key.

The Main Issues

The Full Federal Court had raised the concept of an "implicit corollary submission". In the background section of the Lockwood patent: "...key operation of the latch from the outside of the door will not release the lock. That can lead to serious problems in circumstances where the door needs to be opened urgently from the inside."

The Full Court reasoned that the specification admitted that it was common general knowledge that the outside key did not release the lock. The Full Court accepted Doric's contention that the
specification contained the "implicit corollary admission" that a solution to the deficiency of the prior art was common general knowledge.

A claim must not define an invention which is obvious to a person skilled in the art. The test is made at the priority date. Reference is made to the common general knowledge at the priority date. You can consider material that the skilled person would have "ascertained and
understood" as being relevant.

Admissions made in a specification are consistent with conventional drafting practice. They highlight the invention in light of the prior art. They facilitate an understanding of the relevant inventive step. The Court must weigh admissions with evidence from skilled persons.

You can consider an admission that some integers are common general knowledge. You can consider it with witnesses' evidence whether others are also common general knowledge. But they will not necessarily be conclusive. The trial judge must weigh all the evidence. It is a contradiction in terms to say a solution is obvious if the problem is well-known but no-one has mentioned the solution.

The nominal skilled person is key to inventive step. Would adding an integer be regarded as technically possible and practical to him? A court cannot substitute its own deduction or proposition.

In short, use of an "implicit corollary admission" is erroneous. It ignores the rule that the claim has to be interpreted in the shoes of the skilled person in light of the common general knowledge.

As it turned out, claim 1 was found to define an invention that was not new. A storeroom lock assembly was found that could be described by the integers of claim 1.

Note the distinction between novelty and inventive step. Claim 1 could lack novelty. But it could still incorporate an inventive step.

However, Lockwood was happy to let claim 1 go. It was accepted that Doric had been infringing a lock assembly covered by claim 13. Claim 13 was dependent on claim 1 and was more specific. It described a rim mounted lock. It had a detent mechanism that moved radially.

The storeroom latch assembly had a detent mechanism that moved axially. As a result, the storeroom latch assembly was in a different category of lock to that described by claim 13.

For Lockwood and Doric, the critical issue was whether claim 13 defined an inventive step or not.

Doric tried to argue that the storeroom lock should be considered for inventive step. It held that it was relevant for claim 1 and therefore should be relevant for claim 13. Doric relied on its incorrect submission that claim 1 was invalid for lack of inventive step.

But each claim must be considered on its own merits. What is relevant for claim 13 must be considered with reference to claim 13. A dependent claim is to be regarded as defining an invention in its own right. Dependency is just a tool for reducing excessive verbiage.

A person skilled in the art would not consider the storeroom lock as being relevant. Because the skilled person would not apply an axially operating detent mechanism to a problem with a rim mounted lock.

Also, none of the witnesses mentioned using the storeroom lock.

Claim 13 was therefore valid and enforceable. The storeroom lock was the only prior art found that addressed a similar problem. However, it did not qualify as either common general knowledge or information that would be relevant to the skilled person.


You will immediately note the divergence with US practice. Admissions induce paranoia in US practitioners. It's a relief to me that we have taken a common-sense approach.

It's a basic and often misunderstood rule. Read the claims through the eyes of the nominal skilled person. Subjectivity has no place in testing claims for lack of inventive step. It raises the issue of whether or not patent examiners should actually be permitted to examine for inventive step. But that's for another post.

29 May 2007

Federal Court Construes "Parallel"


This matter arose as a result of an allegation of infringement by KD Kanopy and others against Insta Image and others of Australian Patent No. 656757.

Keifel J. dealt with Infringement, Fair Basis, Clarity, Novelty and Obviousness in concluding in favour of the patentee.

For the purpose of this post, I will deal with Infringement (i.e. claim interpretation) and fair basis. I noticed an interesting dismissal of evidence regarding obviousness that I would also like to share with you.

The Patent

The Patent was directed to a collapsible canopy. In particular, the independent claims were directed to "an expandable framework structure adapted to be folded and stored in a collapsed state and erected in an expanded state on a support surface whereby said framework structure may support a canopy covering above said support surface, ..."

I won't set out the relevant independent claims here as they are extensive. However, the focus in the proceedings was on the references in claim 1 to "parallel sidewall portions"; "end portions" received in sockets "in a close-fitted engagement between the parallel facing sidewall portions". The focus was also on how those references act together "to resist lateral and torsional deflections" of edge scissor assemblies.

The Skilled Person

No decision involving claim interpretation can be correctly made without considering the person to whom the patent specification is directed. That notional person is referred to as the skilled person or addressee. He or she is a hypothetical, skilled but non-inventive, worker in the field covered by the patent to whom the invention would be of interest. The patent specification must be interpreted in the shoes of such a person as at the filing date of the patent in question.

In Kimberly Clark Australia Pty Ltd v Arico Trading International Pty Ltd (2001) 207 CLR 1; [2001] HCA 8, such a person is a person acquainted with the surrounding circumstances of the state of the art and manufacture at the relevant time.

Kiefel J. said that persons working in the awning, tent and shade structure business might be interested in how the edge scissor assemblies are attached. However, it seemed to him that the patent was directed to a person "called upon to design such a structure and its components."


The golden rule is that the respondent must take each and every one of the essential integers of a claim to infringe upon the patent rights imparted by that claim - Olin Corporation v Super Cartridge Co Pty Ltd (1977) 180 CLR 236 at 246.

Identifying the "essence" of an invention for the purposes of determining infringement is an incorrect approach. See Fresenius Medical Care Australia Pty Limited v Gambro Pty Limited [2005] FCACF 220, which was reported on in my post of 28 October 2005. As pointed out by his honour, Fresenius reiterates that the correct approach is to identify the essential integers and that the form and wording of the claim are determinative.

Importantly, as set out in the Full Federal Court decision Populin v HB Nominees 41 ALR 471, the essential integers are to be determined by a common sense assessment of what the words used convey in the context of the then existing published knowledge and not by an abstract and uninformed construction.

In what is perhaps the most well-worn case in Australian patent law, Catnic Components Ltd v Hill and Smith Ltd [1982] RPC 183, a UK case, Lord Diplock said that: "'…a patent specification is a unilateral statement by the patentee, in words of his own choosing, addressed to those likely to have a practical interest in the subject matter of his invention (ie 'skilled in the art'), by which he informs them what he claims to be the essential features of the new product or process for which the letters patent grant him a monopoly. It is those novel features only that he claims to be essential that constitute the so-called 'pith and marrow' of the claim. A patent specification should be given a purposive construction rather than a purely literal one derived from applying to it the kind of meticulous verbal analysis in which lawyers are too often tempted by their training to indulge …" It's a classic statement and worth repeating.

However, in Nicaro Holdings Pty Ltd v Martin Engineering Company (1990) 91 ALR 513, Gummow J. did not think that Catnic created some new category of non-textual infringement. Rather, as pointed out by his honour in this matter, the solution proposed by Lord Diplock was a construction that "gave effect to what the skilled addressee would understand to be the protection claimed.

It is interesting that in the Catnic case the point at issue was an integer that set out a "rear support member" that extended "vertically". The alleged infringer had the member inclined at 6 or 8 degrees from the vertical. The inclination had very little effect on the function and the House of Lords found infringement.

In this case, a similar question that arose was whether a so-called "Product B" infringed the Patent. More specifically, the main question was whether or not the integer of "parallel facing sidewalls" of claim 1 was taken by parts A, B and C of the mount of Product B (shown above). For that to occur, "parallel" would have to be interpreted as having to be as close to true parallel as possible.

However, his honour said that was not necessary for the required function of the mount. He said that the skilled addressee would understand that "substantially parallel" would suffice. The variation in Product B would have no effect on the function of the sidewall on the end portion of the scissor assembly.

Fair Basis

The respondents argued that if the claims are to be interpreted as covering walls that are just reasonably parallel and do not create one planar surface, they cannot be fairly based on the matter described in the specification.

His honour referred to Synthetic Turf Development Pty v Sports Technology International Pty Ltd (2005) 67 IPR 475, reported in my post of 3 February 2006. The question is whether there is a real and reasonably clear disclosure in the body of the specification of what is claimed. Or, does the body of the specification describe the invention as claimed in a general sense?

In this case, the description of the preferred embodiment did make it clear that the sidewalls are required to be parallel. It also mentioned that planar contact surfaces are formed.

However, his honour held that the specification should not be construed as disclosing an invention limited to the preferred embodiment. It is possible for a consistory clause to be treated as disclosing the invention. The relevant consistory clause describes sockets of the mounts as having "spaced-apart facing sidewall portions".

Evidence for Obviousness

The use of hindsight is strictly forbidden in Australia. See my post of 1 September 2005.

One of the respondent's witnesses was given a design task prior to him seeing the patent in suit. However, the court held that the description of the task and the questions arising in its course were such that he was effectively directed to the use of brackets and sockets having parallel facing sidewalls. At one point he was asked to "explain the general engineering principles behind using parallel facing sidewalls in sockets". If they improved strength, he was asked to explain how.

His honour did not consider that his evidence could carry any weight.


It appears that we do have purposive construction but we just don't call it that. It does appear, though that it is always important to interpret the claims in the shoes of the person to whom the specification is addressed.

Thus, when preparing patent specifications, try not to use words that might indicate that a particular integer is textually essential.

Also, make sure that the Summary of the Invention (the "consistories") has plenty of broad paragraphs.

11 April 2007


Patent Application No. 749848 in the name of Lynx Engineering Consultants Pty Ltd and opposition under section 59 by Bradken Resources Pty Limited

Claim 1 of the patent application filed by Lynx Engineering read:

A container for transporting bulk material including two side walls, two end walls and a base, wherein at least one said side wall includes at least one internal ridge (my emphasis) running along said at least one side wall between said end walls, and wherein said ridge is integrally formed within (my emphasis) said at least one side wall and the distance from which said ridge projects from said side wall is greater than the thickness of said side wall.

Grant of the patent was opposed by Bradken on a number of grounds.

Bradken's Assertions (amongst others)

Bradken said that the invention was not a "manner of new manufacture within the meaning of section 6 of the Statute of Monopolies" See
my article on software and business methods for the necessary background. Bradken said that the invention merely resided in the new use of an old product. If it did, it would not be "a manner of new (my emphasis) manufacture ..."

Bradken also said that the patent specification did not comply with section 40(3) because a number of the terms used in the claims couldn't be given a clear meaning.


Threshold Requirement of Newness

The Delegate cited a landmark case. The majority view of the High Court in N V Philips Gloeilampenfabrieken v Mirabella International Pty Ltd 32 IPR 449 was that section 18(1)(a) requires a general threshold requirement of “newness” or “inventiveness”. Merely a new use of an old product would not overcome that threshold.

Citing Bristol-Myers Squibb Co v F H Faulding & Co Ltd 46 IPR 553, the Delegate said that if the invention was obvious or did not involve an inventive step on the face of the specification then the threshold would not be crossed.

Going beyond the specification would be applying the test for inventive step under section 18(1)(b)(ii), which was not the question being considered. As explained by the Delegate with reference to Dyno Nobel Asia Pacific Ltd v Orica Australia Pty Ltd 47 IPR 257 at 300, one will not trespass upon the proper operation of section 18(1)(b)(ii) if focus is kept on the meaning of the specification.

To sum up: The invention will fail to qualify as proper subject matter if the invention as claimed is obvious in view of the patent specification itself, without reference to any material outside of the patent specification.

The Integrally Formed Internal Ridge

The integrally formed internal ridge was key to the invention. According to the specification, it resulted in a container that was lighter than conventional containers while maintaining the strength of conventional containers.

The Delegate could find no suggestion in the specification itself that the invention was merely taking advantage of the state of knowledge such that there was a new use of an old product.
Thus, he held that the invention was a "manner of manufacture" for the purposes of
section 18(1)(a).


It is necessary to consider the principles of claim construction to resolve questions of clarity.
Kimberley-Clark Australia Pty Ltd v Arico Trading International Pty Ltd 177 ALR 460 at 466 the High Court said that terms in the claim which are unclear may be defined or clarified by reference to the body of the specification.

In Populin v HB Nominees Pty Ltd 41 ALR 471 at 476-477, the court said that the specification should be understood by adopting a common sense approach to what the words used would have meant in context of the published knowledge existing at the time of filing the patent application.

"Integrally formed within"

The meaning of "integrally formed within" was at the heart of the dispute. The parties developed some intricate arguments about the meaning of these words.

The Delegate said that the claim was not bad just because there was disagreement between the experts on the meaning of the words used in the claim.

Also, citing Finkelstein J in Root Quality Pty Ltd v Root Control Technologies Pty Ltd 49 IPR 225 at 237, he said that there will be cases where expert evidence is not admissible on the question of interpretation or construction. Such a case would be where the relevant terms are in a language with which all lawyers are familiar. In such a case, the court can determine the construction for itself.

There was nothing in the expert evidence to suggest that "integral" had some special meaning or was used in a way that would give it a special meaning.

Citing the Macquarie Dictionary (Australia's standard) the Delegate said that the term "integral" refers to something "made up of parts which together constitute a whole". Thus, in one view, the ridge constitutes an intrinsic portion or element of the side wall. However, it also includes the possibility that the ridge is formed separately from, and subsequently attached to the side wall.

Because there were two possible meanings, the Delegate resorted to the body of the specification for clarification. In the specification the internal ridge was said to act as an "in-built longitudinal structural stiffener". The Delegate said that this strongly implied that the internal ridge was not something that was added to the container side wall as with conventional stiffeners, but formed an intrinsic part of the side wall.

Accordingly, the Delegate found that there was no lack of clarity in the claims.

Barry Eagar - 9 April 2007

15 February 2007


The 2006 international patent application filing figures have just
been reported in WIPO's (http://www.wipo.int/pct/en
) latest PCT newsletter.

In short, the number of international patent applications filed in

2006 was 145,300. That's an increase of 6.4% over 2005.

The top four countries from which these originate are:

1. United States – 34.1%.
2. Japan – 18.5%.
3. Germany – 11.7%.
4. Republic of Korea – 4.1%.

Japan, Korea and China showed the most growth. With its 5,935 international applications, Korea grew by 26.6%.

China (3,910) grew by an astonishing 56.8%

The top 10 applicants were:

1. Philips Electronics (Netherlands) – 2,495
2. Matsushita (Japan) – 2,344
3. Siemens (Germany) – 1,480
4. Nokia (Finland) – 1,036
5. Bosch (Germany) – 962
6. 3M (US) – 727
7. BASF (Germany) – 714
8. Toyota (Japan) – 704
9. Intel (US) – 690
10. Motorola (US) – 637

Bear in mind, though, that companies like Philips and Siemens sources its intellectual property from around the world. An invention of Philips may be conceived and developed in Silicon Valley, while the patent application lists the Netherlands address.

25 January 2007


Collins v Northern Territory of Australia [2006] FCA 1698 (8 December 2006)


The Collins are the owners of Australian Patent No.742711. The Patent covers a method of producing essential oils from bark and wood of timber.

The Northern Territory gave permits to the Australian Cypress Oil Company (ACOC) to harvest timber from an area called Howard Springs. ACOC agreed to pay a license to the Northern Territory from oils or any other products derived from the Timber.

For the purposes of this case, it was assumed that the patent is valid and infringed by ACOC. The Collins allege that the Northern Territory has also infringed the patent by virtue of
section 117
of the Patents Act, which provides for contributory infringement.


Section 117 reads as follows:

"(1) If the use of a product by a person would infringe a patent, the supply of that product by one person to another is an infringement of the patent by the supplier unless the supplier is the patentee or licensee of the patent.
(2) A reference in subsection (1) to the use of a product by a person is a reference to:(a) if the product is capable of only one reasonable use, having regard to its nature or design – that use; or
(b) if the product is not a staple commercial product – any use of the product, if the supplier had reason to believe that the person would put it to that use; or(c) in any case – the use of the product in accordance with any instructions for the use of the product, or any inducement to use the product, given to the person by the supplier or contained in an advertisement published by or with the authority of the supplier."
The Collins ended up relying on section 117(2)(b) to be read with section 117(1). In other words, they alleged that the timber was not a staple commercial product and the Northern Territory had reason to believe that the product would be put to the infringing use.


There were three main issues to be decided. The first issue was whether the grant of the license amounted to "supply". The second issue was whether the timber was a "staple commercial product". The third issue was as to the extent of knowledge of the Northern Territory necessary to show that it had "reason to believe". The evidence clearly showed that the Northern Territory had such "reason to believe". so the third issue was settled quickly.


The license agreement that ACOC had with the Northern Territory was "permissive". ACOC was permitted to go onto Northern Territories land and harvest the trees.

The term "supply" as defined in Schedule I of the Patents Act requires a positive act in the form of either selling, exchanging, leasing, hiring or hire-purchasing. Just allowing ACOC to go onto land was not such an act.

Thus, the court held that the grant of the licenses did not amount to the "supply" of the timber to ACOC.


The Act doesn't define "staple commercial product". However, the Collins accepted that the timber would have been a staple commercial product if it had not been "written off" as a commercial crop for use as timber.

The court held that a crop does not lose its character as a staple commercial product because it is not being harvested for its initial purpose. Clearly the timber retained commercial value. In fact, the license fee paid by ACOC was a royalty payment on the blue cypress oil which ACOC produced.

The court pointed out that the Collins had also approached the Northern Territory for a license to harvest the timber to extract essential oils.

Clearly then, to all parties, including the Collins, the trees had significant commercial value and could be regarded as a staple commercial product for the extraction of at least essential oils.


The Collins therefore failed in their bid to show that the Northern Territory was liable for infringement.

This case is interesting in that it provides working definitions for "supply" and "staple commercial products" for our provisions relating to contributory infringement. Given the short supply of cases dealing with contributory infringement, this decision is welcome.