Case - Mont Adventure Equipment Pty Ltd v Phoenix Leisure Group Pty Ltd  FCAFC.
Emmett, Bennett & Jagot JJ
This case was an appeal from a single judge of the Federal Court whose judgement was reported in my post of 19 March 2009.
The relevant dates are as follows:
October 2004 disclosure of "travel pack" destroys the novelty of the invention.
May 2005 - Parent standard application ("complete application") filed disclosing, but not claiming the travel pack.
November 2006 - Divisional patent application ("complete application") filed claiming the travel pack.
Mont Adventure failed to defend a cross claim for invalidity on the basis that a complete application for the invention was filed within 12 months of the disclosure, making use of Australia's grace period.
The question to be determined was whether the filing date of the complete application was a) the filing date of the standard patent application; or b) the filing date of the divisional patent application?
The single judge held that it was the filing date of the divisional.
This case has generated a lot of interest. So much so that the Institute of Patent and Trade Mark Attorneys (IPTA) intervened.
The decision of the single judge was overturned.
According to the Patent Regulations, if a specification is a complete specification filed in respect of a divisional application and a relevant claim of the divisional is "fairly based" on matter disclosed in the specification of the parent application, the priority date of that claim is the date that would have been the priority date of that claim had it been included in the specification of the parent application. However, there is no requirement for a divisional application to be "fairly based" on the parent application. The only requirement is that the invention claimed in the divisional be "disclosed" in the specification of the parent application.
According to Phoenix, the legislators intended to deprive a divisional application of the benefit of the grace period to ensure that the divisional application does not have the benefit of the grace period in respect of a claim that is not "fairly based" on matter disclosed in the parent specification even though it is "disclosed" in the parent.
However, Emmett J said that it was more likely that the legislators assumed that there was no distinction in substance between the concept of an invention "disclosed" in the specification of a parent and a claim for an invention being fairly based on matter disclosed in the specification of the parent. Furthermore, "the phrase "the filing date of the complete application" must be construed in the context of all the provisions of the 1990 Act and the Regulations, so as to give a harmonious result achieving the apparent goal of the provisions. To construe the phrase as referring to the Parent Application and not to the Divisional Application achieves that result."
I empathise with the comment that "the drafting of the Regulations is not a model of clarity". Indeed, the same can be said of the whole Act.
In Bennett J's opinion, the "overriding purpose of the Act and Regulations", including the amendments to the Regulations in 2002 (introducing the grace period), is to maintain the system whereby a divisional application "travels with" its parent.
The relevant legislation indicates that the intention was to give divisional applications the same protection as the parent application in the same circumstances.
Clause 2.2(1A) of the Regulations, which governs the circumstances under which the grace period is activated, forms part of a broader statutory scheme. It should be construed in context so that it is consistent with the language and purpose of all of the provisions of the Patents Act and Regulations. Citing Project Blue Sky v Australian Broadcasting Authority  HCA 28, the statutory provisions are intended to give effect to harmonious goals.
The construction put forward by Phoenix results in a situation which would be prima facie inconsistent with the treatment of divisional applications in all other parts of the Act and Regulations.
Jagot J pointed out that the 12 months used for the establishment of a priority date and the 12 months used for the grace period are congruent.
Phoenix had argued that the legislators had used the word "disclose" to link a divisional and a parent, and the words "fairly based" to impart a priority date to the divisional, this allowing a different interpretation for priority date requirements and grace period requirements. However, as cited in ICI chemicals & Polymers Ltd v The Lubrizol Corporation Inc (2000) FCR 214, "it would be a rare case indeed where a claim which claims matter in substance disclosed in the specification as filed is not, equally, fairly based on the matter described in the specification (and vice versa)."
The explanatory statement for the 2002 amending regulations that introduced the grace period sets out that: "Item 8 of Schedule 1 inserts some new provisions into regulation 2.3. These new provisions ensure that divisional applications filed under sections 79B or 79C of the Act are encompassed by circumstances prescribed for subsection 24(1) of the Act." This would indicate that the draftsperson had divisional applications in mind for the purpose of those amendments. It is unlikely that the amendments were intended to treat divisional applications inconsistently with the balance of the Act and Regulations.
It is fortunate that sanity has prevailed. For us practitioners it is somewhat of a relief not to have to worry about another deadline. Hopefully, some attention will be paid to the pressing need to clarify the Act and Regulations, not only in respect of grace period.