Advanced Building Systems Pty Ltd v Ramset Fasteners

High Court of Australia|1998-03-26|Before: Brennan CJ, Kirby JJ, Gummow JJ, Hill J, Sackville JJ

These proceedings necessitate an examination of the requirements for patentability. The relevant facts and the principal findings of the courts below are set out in the reasons of the majority. It is unnecessary for me to repeat them.

It is worth making some general observations about the approach to the statutory provisions which I regard as applicable:

Patent legislation is not interpreted in a vacuum. The task of this Court is to construe the legislation. However, where there is an ambiguity, it may sometimes be useful to turn to pre-existing judicial law to help resolve the ambiguity. This is because the legislation includes "all the stereotyped pleas long familiar in patent practice which have now been given statutory recognition" [58] .

Legislation for the grant of patents necessarily involves striking a balance between competing, and sometimes conflicting, policy objectives. The Industrial Property Advisory Committee in its 1984 report on patents expressed well the general objective to be attained [59] : Patents are intended to stimulate innovation by offering the possibility of greater profits than could have been obtained if open competition existed. But the benefits gained from innovation fostered by the existence of the patent system must be balanced against the costs to society caused by the restrictions which patents place upon the use of the inventions to which they relate. For while the purpose of the patent system is to provide an incentive to innovation, patents also create entry barriers which prevent or retard the diffusion of innovation by imitation; that is to say, a patent confers a degree of monopoly power which has inherent anti-competitive effects. It has both social benefits and social costs. Exactly where the balance lies between the benefits and costs is determined by the legislature in the terms of the Act. However, this Court cannot be unaware of the implications of changes in the world in which patent law operates. By raising the barriers to patentability, there is a risk that Australian entrepreneurs will be discouraged from research and development in new technology. If the barriers are raised too far, there is a further risk that Australia's standing and the reputation of its market will be diminished in the eyes of the international community where patent law operates. Yet lowering the threshold has its own dangers - chief among them being the possibility that Australia's patent system might be misused as an instrument to secure and protect a particular market share, relevantly where no invention or novel claim has earned that protection.

Whilst, for the reasons explained by the majority, this case is to be decided under the Patents Act 1952 Cth (the 1952 Act), the Court's holding is unlikely to be confined to decisions under the 1952 Act. It is true that there are some structural differences between the 1952 Act and the Patents Act 1990 Cth (the 1990 Act). Nevertheless, it is clear that the 1990 Act was not enacted with the general intention of significantly altering the Australian law on patents. From a comparison of the text of the two Acts, and a consideration of the second reading speeches [60] and the explanatory memorandum [61] which preceded the 1990 Act, it is evident that the general legislative objective in enacting the 1990 Act was substantially to clarify and codify the law and not significantly to amend it. In particular, as the majority in this Court said in N V Philips Gloeilampenfabrieken v Mirabella International Pty Ltd [62] : [T]he combination of s 18(1)(a) of the 1990 Act and Sch 1 thereto (where it defines "invention") continues in force the notion of "manner of new manufacture" present in s 100(1)(d) of the 1952 Act.

Mullard Radio Valve Co Ltd v Philco Radio & Television Corporation of Great Britain Ltd (1936) 53 RPC 323 at 339, per Lord Macmillan. 2. Industrial Property Advisory Committee, Patents, Innovation and Competition in Australia (1984), p 12. 3. Second Reading Speech, House of Representatives, Parliamentary Debates (Hansard), 1 June 1989, pp 3479-3483 (esp p 3483); Second Reading Speech, House of Representatives, Parliamentary Debates (Hansard), 10 October 1990, pp 2565-2567. Because of a legislative backlog, the Bill lapsed when the Parliament was prorogued and then dissolved for the March 1990 election. The Bill was subsequently reintroduced. 4. Senate, Patents Bill 1990. Explanatory Memorandum (1990), pars 1-6. 5. (1995) 183 CLR 655 at 668, quoting with approval from Lockhart J in the Full Court. See Philips (1993) 44 FCR 239 at 263.

As the majority have pointed out in this appeal, the grounds of objection to the validity of the patent in suit had narrowed somewhat by the time the appeal came before the Court. In the course of the litigation, the following challenges were abandoned, rejected or put to one side:

A challenge on the grounds of obviousness was abandoned at trial [63] , and has not been renewed.

The Full Federal Court rejected a challenge on the grounds of lack of novelty [64] . That issue has also not troubled this Court.

Having found the patent invalid on the basis that the invention claimed in the specification was not an "invention" within the meaning of the 1952 Act (s 100(1)(d)), the Full Court held that it was unnecessary to deal with two other grounds of challenge [65] , namely that the letters patent were obtained upon false suggestions and representations [66] , and that the person who applied for the patent was not a person who was entitled to do so [67] . These challenges have likewise not been pressed in this appeal.

Advanced Building Systems Pty Ltd v Ramset Fasteners (Aust) Pty Ltd (1993) 26 IPR 171. 2. Ramset Fasteners (Aust) Pty Ltd v Advanced Building Systems Pty Ltd (1996) 66 FCR 151 at 164. 3. Ramset Fasteners (Aust) Pty Ltd v Advanced Building Systems Pty Ltd (1996) 66 FCR 151 at 169. 4. Contrary to the 1952 Act, s 100(1)(k). See Ramset Fasteners (1996) 66 FCR 151 at 163. 5. Contrary to the 1952 Act, s 100(1)(a). See Ramset Fasteners (1996) 66 FCR 151 at 163-164.

Thus, the only issue before this Court is whether or not the invention claimed in the specification was an "invention" within the meaning of the 1952 Act then applicable.

Section 100(1)(d) of the 1952 Act provides, relevantly, as follows:

(1) A standard patent may be revoked on one or more of the following grounds, but on no other ground:

(d) that the invention, so far as claimed is not an invention within the meaning of this Act;

"Invention" is defined in s 6 of the 1952 Act as follows:

"invention" means any manner of new manufacture the subject of letters patent and grant of privilege within section 6 of the Statute of Monopolies, and includes an alleged invention; It is worth observing, in elaboration of the comment made above, that these provisions are, for relevant purposes, indistinguishable from the corresponding provisions in the 1990 Act [68] . 1. 1990 Act, s 18(1) (a patentable invention is an invention ) and the definition of invention in Sch 1 (which is identical to that in the 1952 Act).

The majority of this Court in Philips [69] summarised the main issue on "invention" there arising in the following terms:

In essence, Philips' argument is that the members of the Federal Court fell into error by failing to recognise that s 18(1)(b)'s requirements of novelty and inventive step (when compared with the identified applicable prior art base) are exclusive and exhaustive in so far as inventiveness (whether of step or idea) is concerned with the result that, if those requirements are satisfied, it is simply irrelevant that the subject matter of the claim as identified in the specification lacks the quality of inventiveness required by the principles which have been developed for the application of s 6 of the Statute of Monopolies. Expressed in other words, Philips' argument is that the fact that a claimed use is "nothing but a new use of an old substance" and therefore "outside the whole scope of what is known as an invention" under traditional principles of patent law will not of itself preclude it from being a proper subject of letters patent under the Act. In our view, Philips' argument should be rejected. Our reasons for rejecting it diverge, however, from the reasons advanced in Mirabella's primary argument which focused upon the phrase "manner of manufacture" in par (a) of s 18(1). The primary focus of inquiry should, as we have indicated, be upon the opening words (" a patentable invention is an invention that ") of that sub-section which impose a threshold requirement which must be satisfied before one reaches that contained in the body of par (a). 1. (1995) 183 CLR 655 at 663 (footnotes omitted).

The majority in Philips acknowledged the internal tension in a legislative scheme which, in effect, imposes a threshold requirement of "newness" or "inventiveness", and then proceeds to impose more specific requirements of novelty and of an inventive step [70] . However, the majority justified this scheme on two bases. First, their Honours stated that there was no construction of the provisions which was not susceptible to some legitimate criticism. Secondly, they pointed out that the interpretation favoured accorded with traditional principles of patent law.

In formulating the threshold test of "newness", the majority [71] referred to Re BA's Application [72] , in which it was held that a claim which is "nothing but a claim for a new use of an old substance " is a claim which lies outside the scope of an "invention". Their Honours also referred [73] to the holding in Commissioner of Patents v Microcell Ltd [74] , to the effect that a "claim for the use of a known material in the manufacture of known articles for the purpose of which its known properties make that material suitable cannot be subject matter for a patent".

Philips (1995) 183 CLR 655 at 661. 2. (1915) 32 RPC 348 at 349, quoted with approval in Commissioner of Patents v Microcell Ltd (1959) 102 CLR 232 at 247 and National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252 at 262 (emphasis added). 3. Philips (1995) 183 CLR 655 at 661. 4. (1959) 102 CLR 232 at 251.

In my view, this Court's holding in Philips is determinative of the present appeal. In so concluding, I consider that, for the reasons which the Full Court gave, the judges there correctly decided the following points:

The patent was not a true combination patent - but a mere collocation of well-known integers [75] .

In determining whether an alleged invention was a "manner of new manufacture" within the statutory definition, a court is not confined to the face of the specification itself. Such a test is consistent with the broad interpretation of "newness" which has been adopted by this Court in past cases [76] . As the majority in Philips [77] stated:

[I]t would border upon the irrational if a process which was in fact but a new use of an old substance could be a "patentable invention" if, but only if, that fact were not disclosed by the specification.

Two arguments may be raised against such a contention. The first is that the phrase "so far as claimed in any claim of the complete specification" in s 100(1)(d) confines the decision-maker to considering only the specification. This proposition can be rejected quite readily. Sections 100(1)(e) (inventive step) and 100(1)(g) (novelty) also contain the phrase "so far as claimed in any claim of the complete specification". Yet it is plain that, in considering whether an alleged invention is obvious or novel, it is necessary to go beyond the face of the specification in determining these qualities. If the phrase does not restrict the inquiry under ss 100(1)(e) and 100(1)(g), it can hardly be said to restrict the inquiry under s 100(1)(d).

The second argument against going beyond the face of the specification when considering s 100(1)(d) is that the construction of s 100(1) specifically authorises the decision-maker to go beyond the specification when considering novelty and inventive step. This Court, it is argued, should prefer a construction of the legislation which preserves a discrete role for s 100(1)(d) to one in which there is overlap between it and the tests of novelty and inventive step. Accordingly, as the legislature has clearly indicated those materials outside the specification which may be taken into account under ss 100(1)(e) and 100(1)(g), the inquiry under s 100(1)(d) should be confined to the face of the specification.

The chief flaw in this argument is the presumption that it is possible to determine, without going beyond the specification, whether an alleged invention satisfies s 100(1)(d), and hence, within s 6, is a "manner of new manufacture the subject of letters patent and grant of privilege within section 6 of the Statute of Monopolies ". Yet s 6 of the Statute of Monopolies 1623 Imp (21 Jac I c 3) states a broad test indeed. It provides that a patent shall only be granted if the alleged invention:

[B]e not contrary to the Lawe nor mischievous to the State, by raisinge of the prices of Comodities at home, or hurt of Trade, or generallie inconvenient. Such an investigation could not be undertaken without regard being had to matters outside the specification. The s 100(1)(d) test is one of substantial breadth. Inevitably, it must overlap with the tests of novelty and inventive step.

For these reasons, it is my view that in deciding whether the alleged invention is a manner of new manufacture, ie has the necessary qualities of "newness" as explained, a court may look to prior publications, including the three published advertisements to which the Full Court directed its attention in this case [78] .

Adopting this approach, the alleged invention does not satisfy the test set out in s 100(1)(d) of the 1952 Act [79] , in light of the interpretation by this Court in Philips of the corresponding provision in the 1990 Act. In particular, it fails to do so when the three advertisements [80] , referred to by the Full Court, are taken into account. These publications could not be taken into account in considering the issue of obviousness, as they cannot be shown to have entered the body of common general knowledge in Australia. But in determining newness, in the sense of a manner of new manufacture, the decision-maker is permitted to go beyond the face of the specification.

Ramset Fasteners (Aust) Pty Ltd v Advanced Building Systems Pty Ltd (1996) 66 FCR 151 at 168. 2. Commissioner of Patents v Microcell Ltd (1959) 102 CLR 232 at 251; N V Philips Gloeilampenfabrieken v Mirabella International Pty Ltd (1995) 183 CLR 655 at 661-664. 3. (1995) 183 CLR 655 at 667. 4. Ramset Fasteners (Aust) Pty Ltd v Advanced Building Systems Pty Ltd (1996) 66 FCR 151 at 167-169. 5. Ramset Fasteners (Aust) Pty Ltd v Advanced Building Systems Pty Ltd (1996) 66 FCR 151 at 166-167. 6. Ramset Fasteners (Aust) Pty Ltd v Advanced Building Systems Pty Ltd (1996) 66 FCR 151 at 167.

In the present case, the alleged invention was "the provision of an elongated lever arm to which a remote release cable was attached, for use in face-lift tilt-up applications" [81] . The elongated lever arm had the advantage of ensuring that the bolt could not release the wall section being lifted into position during the hoisting operation. Putting the three advertisements to one side, the elongated lever arm would arguably satisfy the test of newness. However, once the advertisements to which I have referred are taken into account, it is clear that the provision of an elongated lever arm was not "new" in the required sense. I therefore agree with the Full Court's finding that "the clutch as claimed in the Australian patent was not a manner of new manufacture at the priority date" [82] . It thus lacked the defined quality necessary to be an "invention". That fact justified revocation of the patent.

Ramset Fasteners (Aust) Pty Ltd v Advanced Building Systems Pty Ltd (1996) 66 FCR 151 at 166. 2. Ramset Fasteners (Aust) Pty Ltd v Advanced Building Systems Pty Ltd (1996) 66 FCR 151 at 168.

The only point upon which I would, with respect, differ with the reasoning of the Full Court is in the way in which that Court expressed its finding on issue (3) above. The joint reasons describe what I would term a lack of "newness" as an absence of "inventive merit" [83] . The latter term should, in my opinion, be avoided. It has the potential to be confused with a challenge to a patent on the basis that it did not involve an "inventive step". The problem is compounded by their Honours' use of the phrase "inventive step" [84] in the course of considering whether the alleged invention satisfied s 100(1)(d) of the 1952 Act.

Ramset Fasteners (Aust) Pty Ltd v Advanced Building Systems Pty Ltd (1996) 66 FCR 151 at 166, 167. 2. Ramset Fasteners (Aust) Pty Ltd v Advanced Building Systems Pty Ltd (1996) 66 FCR 151 at 167.

The tests of newness and inventive step are distinct. In considering whether an inventive step is involved, the decision-maker's attention is directed towards the issue of whether the claimed invention would have been obvious to a non-inventive operative in the field, equipped with the common general knowledge in that field as at the priority date [85] . The test of newness is directed to whether the alleged invention is nothing more than the new use of an old substance [86] . In answering the second question, the Court is not restricted to consideration of materials forming part of the common general knowledge in a particular field. It may take into account just the kinds of publications to which the Full Court paid attention.

Wellcome Foundation Ltd v V R Laboratories (Aust) Pty Ltd (1981) 148 CLR 262 at 270. 2. Commissioner of Patents v Microcell Ltd (1959) 102 CLR 232 at 247.

It is desirable that I indicate briefly why I disagree with the majority's findings in this appeal:

In my respectful view, the majority's reasoning is founded on an overly narrow reading of the holding in Philips. The use of the phrase "inventive merit" by the Full Court was unfortunate, as I have agreed. But what the Full Court there had in mind was clearly not that the patent was obvious, nor that it lacked novelty. As I have pointed out, the Full Court had already put both of these grounds to one side and so their Honours were clearly not referring to those grounds. Instead, the ground upon which they determined invalidity was that explained by this Court in Philips - namely that the alleged invention did not satisfy the general threshold test of "newness", ie the necessary quality of inventiveness involved in a manner of new manufacture within the Statute of Monopolies.

It is disingenuous, in my respectful opinion, to suggest that the Full Court's use of the word "new" should be interpreted as a reference to novelty, as the majority suggest. The test of newness was explicitly stated by this Court in Philips [87] . As this Court has made clear, the test of newness is distinct from the test of novelty. It is the former that the Full Court proceeded to apply. It was not only that Court's duty to do so. It was a correct application of the law.

As a corollary of this distinction, it follows that the same matters might fall to be considered both when deciding newness, and when addressing novelty and inventive step. The overlap of the grounds stated in the legislation has long been recognised [88] and is acknowledged by the majority themselves. A notion of newness is inherent in the concept of novelty (s 100(1)(g)) as it is in the concept and definition of "invention" itself (s 100(1)(d)). The test of newness is, in this respect, a threshold one. Thus, the same matters that might be relevant to a consideration of newness might, if that test be satisfied, also be taken into consideration in determining the issues of novelty and inventive step. Likewise, simply because a matter might be relevant to the issue of novelty or inventive step, it does not follow that it cannot arise when newness is being assessed for the purpose of deciding whether an item of manufacture reaches the threshold test of being an "invention" at all.

(1995) 183 CLR 655 at 663-664. 2. Sunbeam Corporation v Morphy-Richards (Aust) Pty Ltd (1961) 180 CLR 98 at 112.

In my opinion the Full Court was correct both in its approach and in the result which it reached. Accordingly, I would dismiss the appeal with costs. Since the Full Court determined the cross-appeal to that Court in the respondent's favour, and as the issues so determined are not raised in the appeal, it is unnecessary for me to interfere with their Honours' findings in that regard.

High Court of Australia Brennan CJ Gaudron, McHugh, Gummow and Kirby JJ Advanced Building Systems Pty Ltd v Ramset Fasteners (Aust) Pty Ltd (S19/1997) [1998] HCA 19

Minnesota Mining & Manufacturing Co v Beiersdorf (Australia) Ltd (1980) 144 CLR 253 at 289. 2. American Cyanamid Co (Dann's) Patent [1971] RPC 425 at 435-436. 3. Wellcome Foundation Ltd v V R Laboratories (Aust) Pty Ltd (1981) 148 CLR 262 at 272. 4. [1971] RPC 425 at 436; cf Biogen Inc v Medeva Plc [1997] RPC 1 at 31-32, 41-42. See also the discussion by Aickin J in Minnesota Mining & Manufacturing Co v Beiersdorf (Australia) Ltd (1980) 144 CLR 253 at 289-291. 5. Patents Act 1949 UK, s 32.

Assuming, therefore, the idea is original that the best conditions are fermentation short of putrefaction, still without some practical means of carrying out that idea so as to add to the sum of human art - not merely human discovery - the idea is not patentable. On the other hand, manufacture in s 6 is not restricted to vendible processes or their products and may include agricultural and horticultural processes involving the selective use of herbicides [44] . 1. Joos v Commissioner of Patents (1972) 126 CLR 611 at 623. See also as to the phrase "generally inconvenient" Rolls-Royce Ltd's Application (Manner of Manufacture) [1963] RPC 251 at 255. 2. Carpmael, The Law of Patents for Inventions, 5th ed (1852), p 34. 3. (1914) 18 CLR 423 at 429. 4. National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252 at 277-279.

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